On August 25, the Supreme Court upheld an order from the Commissioner of Customs designating the Mumbai Port Trust as a “custodian” under the Customs Act regarding duty payments on pilfered goods. This decision clarifies that, despite being governed by the Major Port Trusts Act, the port trust holds liability for losses stemming from pilferage.
A bench comprising Justice BV Nagarathna and Justice Manmohan noted that an importer is exempt from paying duty on pilfered goods unless they reclaim those goods. Instead, the responsibility falls on the custodian approved by the Customs Commissioner, as stipulated in Section 45 of the Customs Act. The Court overturned a Bombay High Court ruling that deemed the Customs notification illegal.
The High Court had argued that the Mumbai Port Trust could not be subjected to customs liability as a statutory body under the Major Port Trusts Act. However, the Supreme Court found the Customs Commissioner justified in issuing the 2000 notification, establishing the Port Trust’s custodian status under the Customs Act.
The judgment, which dismissed the Port Trust’s claims of an added liability, reinforced that while the Major Port Trusts Act addresses losses, pilferage is specifically governed by the Customs Act. The Court ultimately affirmed the Customs notification, cementing the Port Trust’s duty to pay customs on pilfered goods.
