Custodian duty liability for unaccounted imported goods in customs custody upheld despite cyclone-loss plea.

Imported goods remaining uncleared in a customs area stayed in the approved custodian's control until clearance, and Section 45 of the Customs Act required proper records and prohibited removal without customs permission. Because the unaccounted quantity was not proved to have been lost or destroyed, and no convincing material supported remission or insurance-based loss, the goods were treated as pilfered while in custody. The Major Port Trust Act and any storage arrangement with the importer did not displace the custodian's statutory liability. The custodian was therefore liable for duty under Section 45(3) of the Customs Act, and the demand was sustained.

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Issues: Whether the custodian of imported goods remaining uncleared in a customs area was liable to pay duty on the unaccounted quantity, and whether the Port Trust could avoid such liability by relying on the Major Port Trust Act and the plea that the goods were washed away in a cyclone.

Analysis: Imported goods unloaded in a customs area remain in the custody of the approved custodian until cleared for home consumption, warehousing, or transshipment. The statutory obligation under Section 45 of the Customs Act, 1962 requires the custodian to keep records and not permit removal except in accordance with customs permission, and sub-section (3) fastens duty liability where goods are pilfered after unloading while in such custody. The plea of loss or destruction was not supported by any convincing record, including any insurance survey or claim for remission under Section 23 of the Customs Act, 1962. The provisions of Sections 42 and 43 of the Major Port Trust Act, 1963 and the storage arrangement with the importer did not displace the customs liability attached to the custodian under the Customs Act. The finding was that the unaccounted goods were to be treated as pilfered while in the custodian's control.

Conclusion: The custodian was held liable to pay duty on the unaccounted imported goods under Section 45(3) of the Customs Act, 1962, and the challenge to the demand failed.

Final Conclusion: The duty demand and allied order were sustained, and the appeal was dismissed.

Ratio Decidendi: Where imported goods are unaccounted for while in the custody of an approved customs-area custodian, and loss or destruction is not proved, the custodian remains liable for duty under Section 45(3) of the Customs Act, 1962 despite any contractual or port-law arrangement with the importer.

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