Union of India & Others Vs Board of Trustees of The Port of Bombay (Supreme Court of India)
Summary: The Supreme Court considered whether the Commissioner of Customs could validly approve the Mumbai Port Trust as custodian of imported goods under Section 45(1) of the Customs Act, 1962, despite the Port Trust’s custody arising under the Major Port Trusts Act, 1963, and whether the Section 45(3) liability for customs duty on pilfered goods could consequently attach to it.
The respondent, a Major Port Trust, had received show cause-cum-demand notices dated 18.06.1996, 02.04.1997, 28.04.1997 and 24.05.2000 seeking recovery of customs duty under Section 45(3) in respect of goods pilfered while in its custody during 1996–2000. Orders-in-original dated 06.11.1997, 02.10.1997, 06.10.1997 and 17.05.2001 confirmed the demands. The Commissioner of Customs (Appeals), by common order dated 30.07.2002, dismissed the Port Trust’s appeals. The Bombay High Court thereafter allowed Writ Petition No.1278/2003 by order dated 28.07.2009, holding that the recovery could not be made from the statutory Port Trust and quashing the Notification dated 11.10.2000 as without jurisdiction and ultra vires Section 45(1).
The parties’ submissions narrowed the controversy. The appellants contended that the saving words in Section 45(1) did not prevent the Commissioner from approving a person already having custody under another statute and that Section 45(3), with its non obstante clause, imposed the duty liability on the approved custodian. The respondent contended that its custody flowed from the Major Port Trusts Act and that the Commissioner therefore lacked jurisdiction to approve it under Section 45(1). It also submitted that the 11.10.2000 Notification could not retrospectively support demands for earlier pilferage. The appellants fairly accepted that, without approval under Section 45(1), the pre-notification demands could not be sustained, leaving the validity of the Notification as the principal controversy.
