1984 (1) TMI 73

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....poration. The pipeline along which the fuel travelled is above 17 kilometres in length. 3. Almost six months after, the petitioners received from the Assistant Collector of Customs a notice which stated that the outturn of the vessel disclosed shortages. The petitioners were called upon to show cause within 15 days why a penalty should not be imposed upon them under Section 116 of the Customs Act, 1962. The quantity short-landed was stated to be 31.846 M.Ts. On 25th May 1978 the petitioners asked the Assistant Collector of Customs for extension of time by one month from 27th May 1978 to reply to the said notice. On 28th September 1978 the Deputy Collector of Customs passed an ex parte order stating that the vessel had arrived from Iran h....

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.... be set aside. The Collector held that the determination of the quantity by ullage was meant only for discharging the carrier's liability towards the suppliers and receivers and had nothing to do with the requirements under the Customs Act. The deficiency for Customs purposes was determined by comparing the manifest quantity with the actual discharge quantity. Though the fuel had travelled 17 kilometres by pipeline there was no finding of any possible leakage on record. The discharge through the pipeline and the receipt of the fuel in shore tanks belonging to the importers of the fuel had the full approval of the Customs authorities. The shore tanks had been calibrated and were approved by the Customs authorities. In view of this, the appea....

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....ble on the goods not unloaded or the deficient goods, as the case may be, had such goods been exported." For the imposition of penalty under Section 116 the Assistant Collector of Customs must find (a) that the quantity of the goods unloaded is short of the quantity that should be unloaded and (b) that the shortage is not accounted for to his satisfaction. 7. It was submitted by Mr. Venkteswaran, learned Counsel for the petitioners, that, for the purposes of determining whether there was a deficiency, the quantity that should be taken into account was the quantity that was discharged by the vessel and not the quantity which was stored and measured in the shore tanks of the importers of the fuel after the fuel had travelled 17 kilometr....