Sections 116 and 117 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Section 116 puts a penalty on the person in charge of a conveyance when imported, transhipped or coastal goods are not unloaded at their destination in India, or are short, and the shortfall is not accounted for to the satisfaction of the officer. Section 117 is the residual penalty for contravening the Act where no express penalty is provided. This article follows the text on the CBIC portal updated to 30 March 2022.
Under section 116, if goods loaded for importation, goods transhipped under the Act, or coastal goods are not unloaded at their destination in India, or the quantity is short, and this is not accounted for to the satisfaction of the Assistant Commissioner or Deputy Commissioner of Customs, the person-in-charge of the conveyance is liable to a penalty not exceeding twice the duty that would have been chargeable. Under section 117, any contravention or abetment of a contravention, or failure to comply, where no express penalty is provided elsewhere, carries a penalty as printed in the section.
The text consulted is the CBIC copy last updated on 30 March 2022 (the Act as amended up to the Finance Act, 2022). Later Finance Acts are not in that copy; check any later change to these sections before acting.
Section 116: goods that do not reach their destination
The section concerns three kinds of goods:
- goods loaded in a conveyance for importation into India;
- goods transhipped under the provisions of the Act; and
- coastal goods carried in a conveyance.
The trigger is either that the goods are "not unloaded at their place of destination in India" or that "the quantity unloaded is short of the quantity to be unloaded at that destination". The second step is the officer's satisfaction: the failure or deficiency must be "not accounted for to the satisfaction of the Assistant Commissioner of Customs or Deputy Commissioner of Customs". The footnote prints that these words replaced "Assistant Commissioner of Customs" by the Finance Act, 1999 (27 of 1999), with effect from 11.05.1999.
If both steps are met, "the person-in-charge of the conveyance" is liable. Note that the person named is not the importer or the owner of the cargo, but the person in charge of the conveyance, such as the master of a vessel. Shipping lines, airlines, agents of carriers and coastal operators should therefore keep manifests, unloading records and short-landing reports ready. If the carrier's agent has received a notice under this section, our legal dispute resolution team can help you prepare the reply.
The two penalty limbs
| Clause | Goods | Penalty not exceeding |
|---|---|---|
| (a) | Goods loaded for importation into India, or goods transhipped under the Act | Twice the amount of duty that would have been chargeable on the goods not unloaded or the deficient goods, had they been imported |
| (b) | Coastal goods | Twice the amount of export duty that would have been chargeable on the goods not unloaded or the deficient goods, had they been exported |
Both limbs work on a "would have been chargeable" basis. The duty need not have been actually levied; the calculation asks what duty would have applied "had such goods been imported" or "had such goods been exported". The rate of duty is not set by this section, and this article quotes no rate.
An example with invented names: the vessel MV Sagar Rani is to unload 500 cartons at a port in India, but only 450 are unloaded and the master cannot account for the missing 50 to the satisfaction of the officer. The penalty is not exceeding twice the duty that would have been chargeable on the 50 cartons had they been imported. If the master satisfies the officer with a proper account of the shortage, the condition for section 116 is not met.
Section 115(1)(e), covered in our article on confiscation of conveyances, deals separately with a conveyance carrying imported goods that is found with them missing. Section 116 is the penalty route against the person in charge; section 115 is the confiscation route against the conveyance.
Section 117: penalty where nothing else applies
Section 117 is a catch-all. It applies to "any person" who:
- contravenes any provision of the Act;
- abets any such contravention; or
- fails to comply with any provision of the Act with which it was his duty to comply,
and does so "where no express penalty is elsewhere provided for such contravention or failure". The consequence is a liability to a penalty "not exceeding" the amount stated in the section.
The condition at the end is the key. If another section of the Act already provides an express penalty for the contravention, section 117 does not apply to that contravention. It is the residual provision, for what other sections leave out.
A printing point on the amount
The text of section 117 prints "four lakh rupees". The footnote then reads: "words 'one lakh rupees' substituted for the words 'four lakhs rupees'", citing section 77 of the Finance (No. 2) Act, 2019 (23 of 2019) with effect from 1-8-2019, and it names earlier substitutions of ten thousand rupees (Act 18 of 2008) and one thousand rupees (Act 14 of 1999). The footnote's wording does not match the amount printed in the section. This article follows the section as printed, "four lakh rupees", and flags the difference; the amount should be confirmed on the official text before it is relied on.
Who is covered
The section says "any person", so it can reach an importer, an exporter, a customs broker, a warehouse licensee, a carrier or any other person. The words "abets" and "fails to comply with any provision of this Act with which it was his duty to comply" make both active and passive conduct fall within it. A missed filing, a failure to follow a direction under the Act or a contravention without a dedicated penalty can therefore land here. Whether a particular obligation has its own penalty must be checked in each case.
Procedure
Neither section prescribes procedure. Penalties in Chapter XIV are adjudged under section 122, and section 124 requires notice and an opportunity before an order imposing a penalty. See our articles on adjudication and burden of proof and the show cause notice. For a penalty linked to short-levied duty, compare section 114A. For an overview of the penalty group see Penalties under the Customs Act, sections 112 to 117.
Practical points
- Carriers should reconcile manifest quantities with unloading records on arrival, since section 116 turns on whether a shortage is accounted for to the officer's satisfaction.
- Keep the account of a shortage in writing, with supporting records, before any notice arrives.
- When a notice cites section 117, ask which provision is said to have been contravened and whether that provision has its own express penalty.
Need help with a penalty notice under section 116 or 117?
Both sections often arise from record-keeping gaps, and a clear account of the facts at the start usually shapes the whole case. Our team can review the notice and your records and help prepare a reply; see our legal dispute resolution service for customs matters and get in touch before the date given in the notice.
Key takeaways
- Section 116 penalises the person in charge of the conveyance for imported, transhipped or coastal goods not unloaded or short, if not accounted for to the officer's satisfaction.
- The ceiling is twice the duty that would have been chargeable; for coastal goods it is twice the export duty.
- Section 117 applies only where no express penalty is provided elsewhere for the contravention.
- The amount printed in section 117 is "four lakh rupees", but the footnote's wording does not match; confirm on the official text.
Read next
- Section 115: confiscation of conveyances
- Sections 118 to 121: confiscation of packages, concealing goods and sale proceeds
- Sections 122 and 123: adjudication and burden of proof
- Penalties under the Customs Act, sections 112 to 117
Disclaimer: Based on the Customs Act, 1962 as published on the CBIC Tax Information Portal, updated to 30 March 2022 (amended up to the Finance Act, 2022), as consulted on 2 October 2026. Finance Acts of 2023 and later, and the current rules, regulations and notifications, should be checked. This article is general information, not legal advice; check the official text before acting.