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  • Rajesh Audithyan

Have you ever heard about short landing of 230 tons ?? Anything is possible in international trade !

There were 11x20’ FCL containers loaded with Rapeseed (Brassica napus) discharged at Kolkatta port in transit to Nepal. All the containers were apparently intact condition. Seals as per BL affixed on containers door. But out of total 2,46,510 Kgs short landing was 2,30,100 Kgs. The total assessable value of short landed quantity is ₹ 69,67,163/- involving duty of ₹ 52,25,372/-.The Customs Department had imposed a penalty of ₹ 10.00 Lakhs on the Steamer Agent under section 116 of Customs Act, 1962 for short landing of goods.


Let us see what happened later as follows ;


The survey was carried out on noticing the shortage of goods. The joint survey report states ;


“…. on opening the containers (In presence of Customs Authority) it was found that all the containers having 2 to 4 cut/holes (Approx 3” to 6”) on the floor. During inspection of under structure it was found that the holes of floor (both 1st ply and cross member – 4 to 6) of containers were blocked by plywood sheet duly fixed by screws and pointed with black colour …….”


Hence we can understand from the survey report that container’s bottom floor was broken and cargo was stolen. Holes were blocked by plywood sheets again.

In reply to the show cause notice, the Steamer Agent stated that they have fulfilled their obligation under the contract of carriage in this shipment. According to them after the discharge of the containers it is the responsibility of the consignee to comply with the port and customs rule by paying statutory dues and take delivery of goods. They have said that there is a clear endorsement in the Bill of Lading that particular furnished by the Shipper were not checked by the carrier and carrier is not responsible under clause 14 of the Bill of Lading. Therefore, carrier is not held liable for any misdeclaration or fraud made by the exporter/consignee or their agents. According to them cargo is for final destination to Nepal under Transhipment Permit discharged at Kolkata and all these containers were discharged and delivered in seal intact status to consignee and their authorized Customs House Agent.


Also no duty is involved in the case as the cargo was meant for Nepal Transit and not Indian Import. They have also said that they are not the owner of the vessel carrying the consignments and therefore they are not liable for the short shipment as they were acting as agent of the container owner.


In the High Court of Judicature at Bombay in the case of Seahorse Shipping & Ship- Management Pvt.Ltd. Vs. Union of India 2004 (163) E.L.T. 145 (Bom.), whereby it has been held that in case of short landing of goods alleged when seals of containers are found intact, shipping agents cannot be made liable and penalty cannot be levied solely based on the outturn report of port Trust. Penalty was set aside as imposed under Section 116 of Customs Act, 1962.


In the impugned Bill of Lading the term ‘Shippers Load Stow & Count’ is mentioned in the description. As long as the seal has not been altered or tampered with, the carrier cannot be held liable for the shortage because the carrier was not present at the time of the packing of the container and carrier does not know what the shipper loaded, stowed or counted. Bill of Lading shows details that was provided by the shipper.


Hence it is declared by CESTAT that ‘Shipper’s Load Stow and Count’ is the term seen in the description of the Bill of Lading for the shipment. This term absolves steamer agent/carrier of any claim relating to damaged or missing cargo etc.


M/S. MSC AGENCY (INDIA) PRIVATE LIMITED VERSUS COMMISSIONER OF CUSTOMS (PORT) , KOLKATA, CESTAT KOLKATA order pronounced on 11.03.2020

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