Penalty for not accounting for goods
Section 116 of the Customs Act, 1962 deals with penalty for not accounting for goods. If any goods loaded in a conveyance for importation into India, or any goods transhipped under the provisions of this Act or coastal goods carried in a conveyance, are not unloaded at their place of destination in India, or if the quantity unloaded is short of the quantity to be unloaded at that des The Act came into force on 01 Feb 1963.
If any goods loaded in a conveyance for importation into India, or any goods transhipped under the provisions of this Act or coastal goods carried in a conveyance, are not unloaded at their place of destination in India, or if the quantity unloaded is short of the quantity to be unloaded at that destination, and if the failure to unload or the deficiency is not accounted for to the satisfaction of the 1[Assistant Commissioner of Customs or Deputy Commissioner of Customs], the person-in-charge of the conveyance shall be liable,--
(a) in the case of goods loaded in a conveyance for importation into India or goods transhipped under the provisions of this Act, to a penalty not exceeding twice the amount of duty that would have been chargeable on the goods not unloaded or the deficient goods, as the case may be, had such goods been imported;
(b) in the case of coastal goods, to a penalty not exceeding twice the amount of export duty that would have been chargeable on the goods not unloaded or the deficient goods, as the case may be, had such goods been exported.
Section 116, The Customs Act, 1962 (Act 52 of 1962).
Cross-references
Extracted from the operative text of the enactments themselves. Every destination below exists in our corpus.
Related judgements & precedents
These are some judgments that construed this section, and hold precedence value. They hold authority on how to read, interpret and use this section.
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British Airways Plc vs Union of India
Court's Decision & Legal Precedent
An aircraft carrier engaged in the business of international air transport, though not technically the 'person incharge' as defined in Section 2(31) of the Customs Act, 1962, can be held liable under Section 116 for penalties regarding shortage in unloaded cargo, when the carrier's representatives physically handle the cargo, prepare the segregation report, account for goods against the cargo manifest, and represent themselves to customs officers as agents of the person incharge and are accepted as such. The issuance of a departure order under Section 42(2)(e) does not preclude subsequent penalty proceedings under Section 116, as these sections address different contingencies and involve different authorities with different objects.
On this section: Penalty for not accounting for goods. Core provision imposing liability on person incharge for shortage or non-unloading. Court held that 'person incharge' under this section includes those acting as their agents/representatives.
The holding above is the ratio decidendi as extracted from the judgment by eCourts India, reproduced unaltered — it is a rendering of the court's reasoning, not a substitute for its words. Read the order itself before relying on it.
Judgments citing this section
These may be obiter dicta or a precedent, for you to study. These are the judgments where this section is quoted.
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… an aircraft, the commander or pilotin-charge of the aircraft; - (c) in relation to a railway train, the conductor, guard or other person having the chief direction of the train; - (d) in relation to any other conveyance, the driver or other person-in-charge of the conveyance". (emphasis supplied) Thus as per Section 116 of the Customs Act, the person in charge of the conveyance is responsible for short-landing. This has to be read with Section 148, which deals with the liability of an agent appointed by the person in charge of a conveyance. It lays down that where the Act requires anything to be done by the person in charge of a …
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… are required to Show cause to the undersigned as to why a penalty equal to twice the amount of duty involved in the above case as detailed in the pre-paras should not be levied for not accounting for the above said 1099.660 MTs of MS Plates Ex stock and MS Steel Scrap, which has been not landed/short landed, under Section 116 of the Customs Act' 62." 3.4. A reply to the show cause notice dated 24.3.2010 was submitted and an Order-in-Original came to be passed by the Joint Commissioner of Customs (MCD) on 29.10.2010. The third respondent, while referring to the statement of K.M.Ravi Varma, Line Manager of the Steamer Agent under …
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… October, 2008 and the order in Revision passed by the Joint Secretary to the Government of India on 26<sup>th</sup> December, 2011 whereby the Revision Application filed by the Petitioners has been dismissed. 3. The grievance of the Petitioners is that the Adjudicating Authority has imposed penalty under Section 116 of the Customs Act, 1962 based on the out turn report of the Port Trust without considering the quantity actually discharged as per the Tallysheet. According to the Petitioners, the Tallysheet would show that the quantity actually discharged is in consonance with the Bill of Lading and there is no short lading. …
Made under this section, and citing it
5 instruments name this provision in its title or its text without being made under it.
- Filing of Import Manifest before arrival of the vessel or aircraft - Circular No.30/2004-Customs, dated 16.4.2004Circular 2004
- Assessment of bulk liquid cargo - ship ullage survey report Vs shore tank receipt - Supreme Court's order dated 20.2.2002 in Civil Appeal No.6764/1999 in the case of Commissioner of Customs (Import), Mumbai Vs M/s. National Organic Chemical Industries Ltd.(NOCIL). - Circular No.96/2002-Customs, dated 27.12.2002Circular 2002
- Procedure for collection of duty on ship stores consumed during coastal run.- Circular No.58/1997-Customs, dated 6.11.1997Circular 1997
- Procedure for identification of goods pilfered after the unloading in a customs area until they are cleared for home consumption or for warehousing or are transshipped, and recovery of duty thereon from the Custodians as laid down under section 45 of the Customs Act, 1962 - Circular No.58/1996-Customs, dated 29.11.1996Circular 1996
- Procedure for identification of goods pilfered after the unloading in a customs area until they are cleared for home consumption or for warehousing or are transshipped, and recovery of duty thereon from the Custodians as laid down under section 45 of the Customs Act, 1962 - Circular No.58/1996-Customs, dated 29.11.96Circular 1996
Questions about Section 116
What have the courts held on Section 116 of the Customs Act?
British Airways Plc vs Union of India (06 Nov 2001) is the leading judgment on this section among those set out below: Penalty for not accounting for goods. Core provision imposing liability on person incharge for shortage or non-unloading. Court held that 'person incharge' under this section includes those acting as their agents/representatives.
How do I find court cases under Section 116 of the Customs Act?
In judgments and charge sheets this section is written several ways, and each form finds a different set of orders. These search the full text of every order eCourtsIndia holds, best matches first: Customs Act 1962 116, section 116 Customs Act 1962, section 116 of the Customs Act. Each opens the full list of orders on eCourtsIndia, where it can be narrowed by court, year and outcome. 1 reported judgment on this section is set out on this page, beginning with British Airways Plc vs Union of India (06 Nov 2001).
What should I read with Section 116 of the Customs Act, and has it changed?
2 other provisions in this corpus refer back to it. 5 instruments name it without being made under it, most recently Filing of Import Manifest before arrival of the vessel or aircraft - Circular No.30/2004-Customs, dated 16.4.2004 (2004), then Assessment of bulk liquid cargo - ship ullage survey report Vs shore tank receipt - Supreme Court's order dated 20.2.2002 in Civil Appeal No.6764/1999 in the case of Commissioner of Customs (Import), Mumbai Vs M/s. National Organic Chemical Industries Ltd.(NOCIL). - Circular No.96/2002-Customs, dated 27.12.2002 (2002).
When did Section 116 of the Customs Act come into force?
Section 116 of the Customs Act, cited as Customs Act 1962 116, came into force on 01 Feb 1963, having been enacted on 13 Dec 1962. It is in force as at the date shown on this page.
Other sections of this Act
- 28. Recovery of duties not levied or not paid or short-levied or short-paid or erroneously refunded2145 words
- 2. Definitions1638 words
- 129A. Appeals to the Appellate Tribunal1170 words
- 27. Claim for refund of duty1060 words
- 127C. Procedure on receipt of an application under section 127B1056 words
- 138C. Admissibility of micro films, facsimile copies of documents and computer print outs as documents and as evidence872 words
Source and method. Compiled from the enactments of Parliament and of the State legislatures as published on India Code, and republished together with commentary and other original matter under section 52(1)(q)(ii) of the Copyright Act, 1957. Structured, cross-referenced and maintained by eCourtsIndia. Text as in force on 15 Oct 2026. This page is not a substitute for legal advice.