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2009 Supreme(Bom) 933
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
FERDINO I. REBELLO & D.G. KARNIK, JJ.
The Board of Trustees of the Port of Bombay .. Petitioners
Versus
The Union of India & Ors. ..Respondents
WRIT PETITION NO. 1278 OF 2003
Decided On : 28TH JULY 2009
Mr. E.P. Bharucha, Senior Advocate with Mr. Umesh Shetty, Mr. Kamal
Katha and Mr. Motiwala i/b Motiwala & Co. for the Petitioner.
Mr. P..S. Jetly wit Mr. Rohit Pardeshi for the respondents.
The duty liability under the Customs Act applies only to the person approved by the Commissioner of Customs, excluding other bodies with custody under different enactments.
Headnote:
Port Trust - Liability to Pay Duty - Major Port Trusts Act, 1963, Customs Act - 45(1), 45(2), 45(3), 42, 43, 160(9)
Fact of the Case:
The petitioners, a Major Port Trust, sought to quash orders demanding customs duty for pilfered goods in their custody. They argued that their custody was under the Port Trust Act, not as an approved person under the Customs Act. The respondents contended that the duty liability under the Customs Act applied to both the petitioners and the approved person.
Finding of the Court:
The court examined the scheme of the Customs Act and the Port Trust Act, concluding that the duty liability under section 45(3) of the Customs Act applies only to the approved person, excluding a body like the petitioners. The court held that the impugned orders were without jurisdiction and liable to be struck down.
Issues: The main issue was whether the Port Trust was liable to pay duty on pilfered goods in their custody under the Customs Act.
Ratio Decidendi: The duty liability under section 45(3) of the Customs Act applies only to the person approved by the Commissioner of Customs, excluding a body like the petitioners under the Port Trust Act.
Final Decision: The petition was allowed, and the Rule was made absolute, quashing the impugned orders and declaring the notification as null and void.
Per Ferdino I. Rebello
1. The question for our consideration in the petition is as follows:
“Is the Port Trust liable to pay duty on goods pilfered while in their possession?”
2. The petitioners are a Major Port Trust, constituted under the Major Port Trusts Act, 1963 (hereinafter referred to as the “Port Trust Act”). The respondents issued several show cause notices as to why customs duty should not be recovered from them for goods which were pilfered whilst in their custody. An order of assessment thereafter came to be passed confirming the duty demanded in terms of the said show cause notices. By the present petition, the petitioners pray that the orders dated 6th November 1997, 2nd October 1997, 6th October 1997, 17th May 2001 and 30th July 2002 be quashed and set aside. Relief is also sought against the notification dated 11th October 2000 whereby the Commissioner of Customs (Import) in exercise of powers conferred under section 45(1) of the Customs Act, 1962 (hereinafter referred to as “the Customs Act”) had approved MbPT as a custodian of the area notified under section 8 of the Customs Act for statutory duties and responsibility prescribed under section 45(2) and 45(3) of the Customs Act.
3. The petitioners are a body corporate under the section 5 of Port Trust Act. The Port Trust Act specifies under section 42 the performance of service by the Board or other persons. We may gainfully refer to the provisions of section 42(1) of the Port Trust Act.
“42 Performance of services by Board or other person.
(1) A Board shall have power to undertake the following services:
(a) landing, shipping or transhipping passengers and goods between vessels in the port and the wharves, piers, guays or docks belonging to or in the possession of the Board;
(b) receiving, removing, shifting, transporting, storing or delivering goods brought within the Board’s premises;
(c) carrying passengers by rail or by other means within the limits of the port or port approaches, subject to such restrictions and conditions as the Central Government may think fit to impose;
(d) receiving and delivering, transporting and booking and despatching goods originating in the vessels in the port and intended for carriage by the neighbouring railways, or vice versa, as a railway administration under the Indian Railways Act, 1890 (9 of 1890);
(e) piloting, hauling, mooring, remooring, hooking, or measuring of vessels or any other service in respect of vessels;
(f) developing and providing, subject to the previous approval of the Central Government, infrastructure facilities for ports.”
4. The next relevant provision is section 43 of the Port Trust Act.
The same reads as under:“
Responsibility of Board for loss, etc. of goods.
(1) Subject to the provisions of this Act, the responsibility of any Board for the loss, destruction or deterioration of goods of which it has taken charge shall,
(i) in the case of goods received for carriage by railway, be governed by the provisions of the Indian Railways Act, 1890 (9 of 1890); and
(ii) in other cases, be that of a bailee under sections 151, 152 and 161 of the Indian Contract Act, 1872 (9 of 1872), omitting the words “in the absence of any special contract” in section 152 of that Act; [Provided that no responsibility under this section shall attach to the Board
(a) until a receipt mentioned in subsection (2) of section 42 is given by the Board, and
(b) after the expiry of such period as may be prescribed by regulations from the date of taking charge of such goods by the board.]
(2) A Board shall not be in any way responsible for the loss, destruction or deterioration of, or damage to, goods of which it has taken charge, unless notice of such loss or damage has been given within such period as may be prescribed by regulations made in this behalf from the date of taking charge of such goods by the Board under subsection(2) of section 42.”
5. The relevant provisions of the Customs Act may now be adverted to. Sect
