Supreme Court rules Port Trusts liable for customs duty on pilfered goods

This case concerns whether the Union of India can recover customs duty from the Board of Trustees of the Port of Bombay for goods pilfered while in the Port Trust's custody, specifically challenging the validity of a 2000 notification that designated the Port Trust as a custodian under the Customs Act.

Who it concerns: Appellants: Union of India & Others; Respondent: The Board of Trustees of the Port of Bombay; Bench: Justice Nagarathna.

What the court decided

• The Court identified the core legal question as whether the Notification dated 11.10.2000, which approved the respondent-Port Trust as the custodian of the notified customs area under Section 45(1) of the Customs Act, is valid.
• The Court noted that the controversy is confined to the correctness of the High Court's declaration that the 2000 Notification was without jurisdiction and ultra vires Section 45(1) of the Customs Act.
• The Court acknowledged that demands for duty raised for the period prior to the 2000 Notification cannot be sustained because the respondent had not been approved as a custodian during that time.

Also in the document

• The Bombay High Court had previously allowed the Port Trust's writ petition, setting aside orders confirming duty and holding the 2000 Notification to be without jurisdiction.
• The Union of India argued that the saving clause in Section 45(1) does not exclude the Customs Commissioner from approving a person as custodian merely because another statute (Major Port Trusts Act) also places goods in their custody.
• The respondent argued that the Commissioner had no power to approve the Port Trust because its custody was already governed by the Major Port Trusts Act, making the 2000 Notification ultra vires.