Customs refund for goods lost in custody includes theft or pilferage, with proportionate duty relief for missing cargo.

For customs refund purposes, "lost or destroyed" was treated broadly to include loss by theft or pilferage while goods remained in custody. On the stated facts, a pallet expected to contain 40 bags contained only 6, leaving 34 bags missing, and the missing quantity was treated as not deliverable to the importer. The note states that this brought the case within Section 23(1) of the Customs Act, 1962, entitling the importer to proportionate refund of duty and consequential relief where delivery had become impossible.

---

---

Issues: Whether shortage of goods discovered while the consignments were in the custody of the Port Trust authorities amounted to loss within the meaning of Section 23(1) of the Customs Act, 1962 so as to justify refund of proportionate duty.

Analysis: The Customs examination report showed that one pallet, which should have contained 40 bags, contained only 6 bags, leaving 34 bags missing. On that basis, the missing quantity was treated as not deliverable to the importer and as a case where the goods were lost while in custody, with the possibility of pilferage. The expression "lost or destroyed" was applied in a broad and generic sense, extending to loss caused by theft or pilferage, and not confined to physical destruction alone.

Conclusion: The importer was entitled to refund of proportionate duty for the 34 missing bags, and the claim succeeded.

Final Conclusion: The statutory refund provision was held applicable to goods missing in custody due to loss including pilferage, and the customs authorities were directed to grant consequential relief.

Ratio Decidendi: For purposes of customs refund, "lost or destroyed" includes loss by theft or pilferage while the goods remain in custody, entitling the importer to proportionate refund where delivery becomes impossible.

---