Short-landing penalty must be reworked on actual weights and supporting evidence, not uniform pro rata assumptions.

Penalty for short-landing under Section 116 of the Customs Act, 1962 should be quantified on a rational and objective basis by first determining the actual weight and CIF value of the missing packages, rather than applying a pro rata assumption of uniform weight and value across all packages. In a project import with numerous packages, packing lists, invoices and claim documents were treated as relevant evidence for ascertaining the missing goods, subject to verification and corroboration. The order was modified and the matter was remitted for de novo consideration, with directions to rework short-landing and penalty on the basis of actual weights and supporting material.

---

---

Issues: Whether the quantum of penalty for short-landing of goods was to be worked out on a rational basis by first determining the actual weight and CIF value of the missing packages, instead of adopting a pro rata value on the assumption of uniform weight and value among all packages.

Analysis: The governing consideration under Section 116 of the Customs Act, 1962 is whether the explanation offered by the importer is objectively examined for proper quantification of the short-landed goods. A uniform allocation of weight or value across all packages was found to be unrealistic in a project import consisting of numerous packages. The available packing lists, invoices and claim documents were treated as relevant material for ascertaining the actual weight of the missing packages, subject to verification and corroboration, and for working out the CIF value and consequential penalty liability on that basis.

Outcome: The order was modified and the matter was sent back for de novo consideration with directions to rework the short-landing and penalty on the basis of the actual weights and supporting evidence.

---