The penalty under section 116 of the Customs Act, 1962 is twice the duty payable on the short-landed goods had they been imported and cleared by payment of duty. The exemption under section 25 is not relevant in determining the penalty.

( 1 ) WHAT is meant by the word "chargeable" contained in section 116 of the Customs Act, 1962 (hereinafter referred to as the "said Act") ?

( 2 ) THE above is the moot question involved in the present appeal.

( 3 ) BRIEF facts of the case : national Thermal Power Corporation Limited (hereinafter referred to as "ntpc") imported certain project equipments from abroad by a vessel belonging to India Steamship Co. Ltd. , the respondent abovenamed. When the goods were unloaded at Calcutta Port there had been short landing of a small quantity of the total consignment. As per the surveyors report the entire consignment was off loaded from the vessel whereas as per the Port Trust report there had been short landing. NTPC got the actual quantity of the goods received by them released by payment of customs duty. The duty payable on the consignment was partially exempted under section 25 of the said Act. NTPC got the actual quantity of the goods released upon payment of actual duty payable on the goods after availing the exemption. The customs authority imposed a penalty upon the shipper being India Steamship Ltd. under section 116 of the said Act twice the duty which was payable on the said goods without taking into account the exemption. Before the Assessing Officer it was contended on behalf of the shipper that since the surveyor's report recorded landing of the entire consignment, the shipper was not liable for any penalty. As and by way of alternative submission it was contended that in case the first contention was rejected the authority could at best impose penalty twice than the actual duty payable on the goods short landed after taking into account the exemption.

( 4 ) THE Assessing Officer negated both the contentions.

( 5 ) AN appeal was preferred before the Appellate Authority wherein the appellate Authority rejected the first contention of the shipper to the extent that the shipper was not liable for short landing. The Appellate Authority, however, accepted other contention of the respondent and held that the shipper was only liable for penalty imposed at the rate of chargeable customs duty i. e. at the rate which was supposed to be paid on the goods had those been landed.

( 6 ) ON a review the order of the Appellate Authority was reversed.

( 7 ) THE shipper challenged the order of the Review Authority by initiating the above writ proceedings. The learned Single Judge by his judgment and order dated July 9,1992 set aside the order of the Review Authority and upheld the order of the Appellate Authority. Learned Judge held that no penalty could be imposed at the rate on which customs duty was payable without having any exemption under section 25 of the said Act, 1962.

( 8 ) SECTION 25 and section 116 being relevant herein and are quoted below :"25. Power to grant exemption from duty.- (1) If the Central government is satisfied that it is necessary in the public interest so to do, it may, by notification in the Official Gazette, exempt generally either absolutely or subject to such conditions (to be fulfilled before or after clearance) as may be specified in the notification goods of any specified description from the whole or any part of duty of customs leviable thereon. (2) If the Central Government is satisfied that it is necessary in the public interest so to do, it may, by special order in each case, exempt from payment of duty, for reasons to be stated in such order, any goods, of strategic or secret nature, or for charitable purpose, on which duty is leviable. (3) An exemption under sub-section (1) or sub-section (2) in respect of any goods from any part of the duty of customs leviable thereon (the duty of customs leviable thereon being hereinafter referred to as the statutory duty)may be granted by providing for the levy of a duty on such goods at a rate expressed in a form or method different from the form or method in which the statutory duty is leviable and any exemption granted in rel