Customs duty on uncleared cargo cannot be fastened on a port trust absent pilferage or statutory liability.

Custody of uncleared imported cargo did not by itself make the Port Trust liable for customs duty, because Section 45(3) applies only where goods are pilfered after unloading while in the relevant custody. The record showed that the cargo was lost in a super cyclone, the importer had notified Customs of the loss, and there was no proof of pilferage. Section 48 did not impose a separate duty liability on the Port Trust, and the port licence conditions placed stored goods at the owner's risk. On that basis, the customs demand and consequential penalty were held unsustainable against the Port Trust.

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Issues: Whether the Port Trust was liable to pay customs duty on imported cargo covered by bills of entry but not cleared by the importer, and whether the consequential penalty could be sustained.

Analysis: The liability under Section 45(3) of the Customs Act, 1962 arises only where imported goods are pilfered after unloading while in the custody of the person contemplated by Section 45(1). The record showed that the balance cargo was lost in a super cyclone, that the importer had informed the Customs authorities of the loss, and that the goods were not shown to have been pilfered. Section 48 of the Customs Act, 1962 did not create any statutory obligation on the Port Trust to bear customs duty merely because uncleared goods remained in its custody. The Port Trust Act and the licence conditions also placed goods stored in open spaces at the owner's risk and excluded port responsibility for loss or damage. In these circumstances, fastening duty and penalty on the Port Trust was legally unsustainable.

Conclusion: The demand of customs duty and the connected penalty could not be sustained against the Port Trust, and the issue was answered in favour of the assessee and against the Revenue.

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