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Approved customs custodians bear duty liability for pilfered imports only during the period covered by valid approval.
Approval of a Port Trust as custodian of an imported-goods customs area under Section 45(1) of the Customs Act is valid where the Major Port Trusts Act imposes no corresponding customs-duty liability for pilferage. The Port Trust's bailee-like civil liability to goods owners for loss, destruction or deterioration is distinct from its statutory liability to Revenue under Section 45(3). Section 13 relieves the importer of duty on pilfered goods, while Section 45(3) places that liability on an approved custodian. Customs-duty liability therefore arises only for pilferage during the period of valid approval, not before notification.
Customs duty on pilfered imported goods - Liability of approved customs-area custodian - Saving clause and non obstante clause - Overriding effect of non obstante clause - validity of Notification dated 11.10.2000 issued by the Commissioner of Customs (Import) in exercise of the powers conferred under Section 45(1) of the Customs Act Validity of approval of a Major Port Trust as custodian under Section 45(1) of the Customs Act and its consequent liability for customs duty on pilfered imported goods under Section 45(3) - HELD THAT: - The liability of the Port Trust under the Major Port Trusts Act is a conditional civil liability of a bailee towards the owner of goods, whereas the liability u/s 45(3) is an independent statutory obligation owed to the Revenue in respect of pilfered goods. The saving clause in Section 45(1) does not preclude approval of the Port Trust where the other enactment does not impose a corresponding customs-duty liability for pilferage. Section 45(3), introduced to prevent non-recovery of duty after the importer is absolved under Section 13, operates notwithstanding any other law once the person having custody has been approved under Section 45(1). There was therefore no conflict between the two enactments, and a statutory Port Trust, being a juristic person, could validly be so approved. [Paras 6, 7] The notification approving the Port Trust as custodian was valid and the High Court's contrary declaration was set aside. However, the quashing of demands relating to pilferage before the approval was not interfered with, as no liability under Section 45(3) could arise without such approval. Final Conclusion: The notification approving the Port Trust as custodian under the Customs Act was upheld. The pre-approval demands for customs duty on pilfered goods remained quashed.
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