Court rules that Steamer Agents are liable under Customs Act for discrepancies in Import General Manifest
In a significant ruling, the Madras High Court has restored the order of the Commissioner of Customs, imposing a penalty on MSC Agency India P. Ltd, a steamer agent, for failing to accurately account for goods declared in the Import General Manifest (IGM). The Division Bench, comprising Dr. G. Jayachandran and N. Mala, held that the agent is liable under Section 116 of the Customs Act, 1962, for discrepancies in the declared goods.
The case arose when the Docks Intelligence Unit discovered significant discrepancies in the weight and contents of imported consignments declared as "shredded steel scrap" and "heavy melting steel scrap." The investigation revealed that many containers contained broken roof tiles instead of the declared goods, leading to a show cause notice and subsequent penalty on the steamer agent.
MSC Agency India P. Ltd contended that they were not responsible for the contents as they acted based on the Bills of Lading provided by the shipper, which included a stipulation that the carrier was not responsible for the accuracy of the contents. However, the Commissioner of Customs had imposed a penalty of Rs. 90,15,924 on the agent for not satisfactorily accounting for the discrepancies.
The Tribunal had previously set aside the Commissioner's order, relying on a precedent from the Bombay High Court. However, the Madras High Court has overturned this decision, emphasizing the importance of the IGM as a verified statement and the agent's role in lodging the manifest. The Court cited the Supreme Court's interpretation of the Customs Act, which allows for penalties on agents who lodge the IGM and act on behalf of the person-in-charge of the vessel.
The ruling clarifies the liabilities of steamer agents under the Customs Act and reinforces the requirement for agents to ensure accuracy in declarations made to customs authorities. MSC Agency India P. Ltd has been directed to comply with the penalty order within twelve weeks.
Bottom Line :
Customs Act - Steamer Agent can be held liable for penalty under Section 116 for failure to make accurate declarations in the Import General Manifest (IGM) and for not satisfactorily accounting for deficiencies in the declared goods.
Statutory provision(s): Sections 2(31), 30, 31, 116, 148 of the Customs Act, 1962
Commissioner of Customs v. MSC Agency India P. Ltd, (Madras)(DB) : Law Finder Doc id # 2958519
