Customs penalty for alleged short-landing fails where contemporaneous records and evidence do not establish the breach.

Penalty under Section 116 of the Customs Act, 1962 requires objective evidence of short-landing or cargo damage. Here, the department's material was found to be belated and insufficient: the tally report showed the pallets had landed, the later out-turn report did not displace contemporaneous records, and the explanation that damage may have occurred after landing was accepted. On that evidentiary basis, the required satisfaction for penalty was not established and the penalty was set aside.

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Issues: Whether penalty under Section 116 of the Customs Act, 1962 was sustainable for alleged short-landing and damage to cargo.

Analysis: The evidence relied upon by the department was found to be belated and insufficient to establish short-landing. The tally report showed that the pallets landed, while the out-turn report was prepared much later and did not displace the contemporaneous material. The goods had also been allocated to the importers after survey, and the explanation that any damage may have occurred after landing was accepted. The satisfaction required under Section 116 had to rest on an objective assessment of the evidence, and the material on record did not justify imposition of penalty.

Conclusion: The penalty under Section 116 of the Customs Act, 1962 was not sustainable and was set aside.

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