Customs penalty for short landing turns on proper survey proof, reasonable timing, and reliable determination of cargo deficiency.

Penalty under Section 116 of the Customs Act, 1962 depends on short landing being properly established and the deficiency being unsatisfactorily accounted for within a reasonable time. For bulk liquid cargo, the bill of lading quantity is only prima facie evidence, and the prescribed survey procedure carries particular importance in determining short landing. Where the record lacked a survey report in the required form and there was substantial delay in issuing or adjudicating some notices, interference was justified. The Carriage of Goods by Sea Act did not relieve the importer from customs liability, but the penalty was not sustainable for notices affected by delay and defective determination, while it remained valid for the others.

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Issues: Whether penalty under Section 116 of the Customs Act, 1962 for alleged short landing of imported cargo could be sustained in view of the delay in adjudication, absence of the prescribed survey procedure, and the nature of the cargo.

Analysis: The liability under Section 116 arises only when goods loaded for importation are not unloaded at the destination, or the deficiency is not satisfactorily accounted for. In the case of liquid bulk cargo, the quantity in the bill of lading is treated only as prima facie evidence, and the survey procedure indicated in the relevant customs practice and the cited Bombay High Court guidance assumes importance. On the facts, the records did not show a survey report prepared and signed in the prescribed manner, and for some of the notices there was substantial delay both in issuance and in adjudication. The Court also held that the Carriage of Goods by Sea Act did not assist the petitioner in avoiding liability in the customs proceedings, but the unreasonable delay and the manner in which short landing was determined justified interference in part.

Conclusion: The penalty could not be sustained in respect of the notices where delay and defective determination of short landing were established, but it was sustained for the remaining notices where no such infirmity was shown.

Ratio Decidendi: Penalty under Section 116 of the Customs Act, 1962 cannot be sustained unless short landing is properly established and accounted for to the satisfaction of the customs authority within a reasonable time, particularly in cases of bulk liquid cargo requiring the prescribed survey procedure.

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