Statutory port lien prevails over customs claim to cargo sale proceeds under the Major Port Trusts Act.

Port dues under the Major Port Trusts Act were held to have priority over a Customs claim to cargo sale proceeds. The text states that, even if any customs penalty or fine was payable, the Calcutta Port Trust's statutory lien for rates under Section 59 ranked first, and Section 63 required sale proceeds to be applied initially toward port charges before any other claim. It further notes that the relevant sale under Section 63 is the sale conducted under Sections 61 or 62 by the Port Trust. On that basis, the Customs Authorities had no legal basis to appropriate the proceeds, which were payable to the Port Trust for statutory application.

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Issues: (i) Whether the Customs Authorities had a superior claim to the sale proceeds of the cargo over the Calcutta Port Trust under the Customs Act, 1962 and the Major Port Trusts Act, 1963.

Analysis: The sale proceeds were claimed by the Customs Authorities on the footing that confiscated cargo could be sold and the proceeds appropriated by them. The Court held that even assuming any penalty or fine was payable under the Customs Act, the lien of the Calcutta Port Trust for its rates under Section 59 of the Major Port Trusts Act, 1963 had priority. Under Section 63 of that Act, sale proceeds are to be applied first towards port charges before any amount is applied towards other claims. The sale contemplated by Section 63 is the sale under Sections 61 or 62 of the Major Port Trusts Act, 1963, in which the Port Trust has the relevant right. Accordingly, the Customs Authorities had no legal basis for claiming the proceeds.

Conclusion: The claim of the Customs Authorities to the sale proceeds was rejected, and the proceeds were held payable to the Calcutta Port Trust for application in accordance with Section 63 of the Major Port Trusts Act, 1963.

Ratio Decidendi: Where port dues are recoverable and the Port Trust has a statutory lien, the proceeds of sale of cargo must be applied first towards port charges in priority to any customs claim.

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