Custodian liability for short-landed imports requires proof of pilferage; absent evidence, duty and penalty cannot be shifted.

Custodian liability for customs duty on short-landed imported goods depends on proof that the shortage resulted from pilferage while the goods were in its custody. In the absence of any complaint, allegation, or evidence of pilferage, duty liability cannot be shifted from the importer to the custodian. Applying the same principle as in earlier decisions on identical facts involving the same appellant, the Tribunal held that the custodian was not liable for the duty demand or penalty and that the impugned order could not stand.

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Issues: Whether the custodian of imported goods was liable to pay customs duty for shortages noticed before out-of-charge in the absence of any allegation or proof of pilferage.

Analysis: The liability of a port trust or other custodian to answer for duty on short-landed imported goods turns on proof that the loss occurred by pilferage while the goods were in its custody. Where there is no complaint, allegation, or evidentiary material showing pilferage, the duty liability cannot be shifted from the importer to the custodian. The Tribunal followed its earlier decisions on identical facts involving the same appellant and applied the same principle to the present appeals.

Conclusion: The custodian was not liable for the duty demand or penalty in the absence of proof of pilferage, and the impugned order was liable to be set aside.

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