Restrictions on custody and removal of imported goods [Section 45]:

Once the imported goods have entered the Customs area, there arises the question of who is responsible for the safe custody of goods.

This section requires that until the imported goods are cleared for home consumption or are warehoused or are exported for transhipment, they shall remain in the custody of such person as may be approved by the Principal Commissioner/Commissioner of Customs [Section 45(1)]. This person is called the custodian. The responsibility of the custodian commences in respect of imported goods the moment the ship is berthed in the harbour or the goods are ready for unloading from the aircraft. In major ports, the custodian is the Port Trust. In other places, the custodian are the ware house keepers. In Inland Container Depots, the Container Corporation of India is the custodian of the imported cargo. In case of air cargo, the custodian is the National Airport Authority. For goods brought by rail, the custodian is the Station Master.

Responsibility of Custodian of goods: During the time the goods are in the custody of the custodians, they have the following responsibilities [Section 45(2)].

1. Maintain a proper record of goods received from the carriers and send a copy of the record to the proper officer.

2. Not to permit such goods to be removed from the customs area or allow them to be dealt with otherwise except under the specific permission in writing of the proper officer.

In pursuance to this responsibility, the custodian is required to tally the particulars of the goods landed by a vessel, and send a report known as out turn statement to the customs authorities. This enables the customs authorities to check whether all goods manifested in the import general manifest for landing in a particular palace have actually been landed. In case of the goods are not so landed, action is taken against the carriers.

Liability of the Custodians [Section 45(3)]: This provision provides that notwithstanding anything contained in any law for the time being in force, if any imported goods are pilfered after unloading in any customs area, while in the custody the custodian, such custodian shall be liable to pay duty on such goods. Therefore, in respect of pilfered goods covered by section 13, the loss of revenue is compensated by the custodian. The duty shall be paid at the rate prevailing on the day of delivery of the import manifest or as the case may be, an import report to the proper officer under section 30 for the arrival of the conveyance in which such goods were carried.

This provision is intended to make the custodian of the imported goods lying in customs area liable for duty even if they are pilfered when they were in their custody. Earlier, in the matter of pilfered goods, the government has been losing the revenue, while the importer’s interest was protected.

Section 45 holds the custodian responsible only in respect of the Customs duty in respect of pilfered goods. It does not extend to the value of goods lost. However in the case of IAAI v. Ashok Dhawan, 1999 (106) E.L.T. 16 (SC), the Supreme Court has held that if the custodian has no explanation at all to show how the loss occurred in respect of goods in its custody, applying the principle res ipso locquitor, the custodian is liable for loss of goods.

In the case of Board of Trustees of the Port of Bombay v. Union of India 2009 (241) ELT 513 Bom, it was held that no demand under section 45(3) from Port trust can be made as Port is not the person approved by the Principal Commissioner/Commissioner of Customs as is required under section 45(1).