Customs shortage assessment turns on outturn report and shore tank measurements, not ullage survey alone.

For penalty under the Customs Act, the deficiency in liquid cargo was to be measured by reference to the quantity actually landed at the port, not merely the quantity shown as on board in the ullage survey. The outturn report and shore tank measurements were treated as the proper and more reliable basis for determining the shortage, because they reflected the cargo received at the storage tanks. The ullage survey established only vessel contents and did not by itself prove the quantity discharged. On that approach, the shortage was worked out on the outturn basis, subject to the permitted allowance, and the deficiency so determined attracted liability.

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Issues: Whether, for penalty under Section 116 of the Customs Act, the shortage of liquid cargo was to be determined on the basis of the quantity shown by the outturn report and shore tank measurements or on the basis of the quantity found on board and reflected in the ullage survey, and whether the appellants had satisfactorily accounted for the deficiency.

Analysis: The Customs Act cast liability on the person in charge of the conveyance where the quantity unloaded at the destination was short and the deficiency was not satisfactorily accounted for. The majority held that the relevant destination was the port and that the outturn report based on shore tank measurements was the proper basis for determining the quantity landed. The ullage survey showed only the quantity on board the vessel and did not establish the quantity actually received at the storage tanks. Since the outturn report was treated as the statutory and more reliable measure of discharge, the shortage had to be worked out on that basis, subject to the permitted allowance.

Conclusion: The shortage was to be determined with reference to the outturn report and shore tank measurement, and the appellants were liable for the deficiency reflected in that method of accountal.

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