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of <h1>Successful revision application reduces penalty under Customs Act for short landing of goods, emphasizes carrier liability.</h1> <h3>In RE: KHEMKA & CO. (AGENCIES) PVT. LTD.</h3> In RE: KHEMKA & CO. (AGENCIES) PVT. LTD. - 1995 (76) E.L.T. 235 (G. O. I.) Issues:1. Imposition of penalty under Section 116 of the Customs Act for short landing of goods.2. Discrepancy in penalty amount compared to the duty involved.3. Interpretation of liability in cases of pilferage on board a vessel.4. Applicability of exemption notifications in penalty calculations.Analysis:1. The revision application was filed against the penalty imposed on the applicants for short landing 22 drums of Iodine. The Assistant Collector imposed a penalty of Rs. 4,13,000 under Section 116 of the Customs Act, which was upheld by the Collector (Appeals).2. The applicants argued that the penalty amount was higher than the duty involved, as indicated in the show cause notice. They contended that the penalty should have been limited to the value of one drum that was short-landed, not for all 22 drums. The Government found merit in this argument and reduced the penalty to Rs. 2,10,000, aligning it with the figures in the original show cause notice.3. Regarding liability in cases of pilferage on board a vessel, the Government emphasized that the carrier is responsible for safeguarding goods until properly handed over to the recipients. Merely informing suspected thieves without involving the Police does not absolve the carrier of liability. The judgment clarified that the liability extends even when goods are pilfered on board the vessel, unlike cases of theft post-landing.4. The Government also addressed the issue of applying higher penalty rates based on exemption notifications. It was noted that the penalty should be proportionate to the duty involved, and the noticee must be aware of the potential penalty. In this case, the penalty amount was reduced to align with the duty amount indicated in the show cause notice, highlighting the importance of transparency and adherence to legal procedures in penalty imposition.Overall, the revision application succeeded in reducing the penalty amount based on the discrepancies identified in the penalty calculation and ensuring that the penalty aligns with the duty involved as per legal provisions.
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