Customs penalty for short landing is unsustainable where shortage is bona fide and not shown as deliberate default.

Section 116 of the Customs Act makes a carrier liable only where short landing or deficiency is not satisfactorily accounted for. Where cargo had been handed over to port authorities, proper tallying and documentation were lacking, and the shortage was not shown to stem from deliberate default, penalty could not be imposed mechanically. The article applies the principle that penalty proceedings are quasi-criminal and should not be sustained for technical or venial breaches, or for bona fide conduct lacking contumacious or dishonest intent. On that basis, the penalty orders against the carrier were quashed.

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Issues: Whether the penalty imposed on the carrier under section 116 of the Customs Act, 1962 for short landing of goods was sustainable when the shortage could not be satisfactorily accounted for because the cargo had been removed and dealt with by the port authorities without proper documentation, and whether penalty could be imposed mechanically without considering the surrounding circumstances.

Analysis: Section 116 makes the carrier liable only where the failure to unload the goods or the deficiency is not accounted for to the satisfaction of the customs authority. The record showed that the goods had been handed over to the port authorities, that proper tallying and documentation had not been maintained, and that the alleged shortages were not attributable to deliberate default by the carrier. The Court applied the principle that penalty proceedings are quasi-criminal in nature and that penalty is not to be imposed merely because it is lawful to do so. Penalty must be refused where the breach is technical, venial, or arises from bona fide conduct without contumacious or dishonest intent.

Conclusion: The penalty was not legally sustainable against the carrier, and the impugned orders imposing penalty were quashed.

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