31 October 2017
S.45 of the Customs Act, 1945 on Restrictions on custody & removal of imported goods says that custodian is responsible only in respect of Customs duty and not value of goods lost in respect of pilfered goods. My question is that can the custodian be Major or approved be made responsible as to value of goods to importer in the following cases: 1) Under Section 45- When the custodian has no explanation at all to show how the loss occurred in respect of goods in its custody. 2) Not u/s 45- As bailee of goods to importer.?
12 July 2024
Under Section 45 of the Customs Act, 1962 (not 1945), custodians such as Major Port Trusts or Approved Custodians are primarily responsible for the custody and safekeeping of imported goods while they are in their custody. Let's address your questions based on the provisions of the Customs Act:
### 1) Section 45 - Custodian's Responsibility for Loss of Goods
Section 45 of the Customs Act, 1962, outlines the responsibilities and liabilities of custodians for imported goods. According to this section:
- **Responsibility Limited to Customs Duty:** The custodian (Major Port Trust or Approved Custodian) is primarily responsible for the payment of customs duty on imported goods. They are not ordinarily liable for the value of goods lost due to theft or pilferage unless explicitly stated otherwise.
- **Loss Occurrence without Explanation:** If goods are lost while in custody and the custodian cannot provide a satisfactory explanation for how the loss occurred, they may still be responsible for providing compensation. However, this compensation is typically limited to the amount of customs duty paid on the goods and not the full value of the goods themselves.
### 2) Liability as Bailee of Goods to Importer
- **General Principles of Bailment:** Apart from the specific provisions under Section 45 of the Customs Act, if the custodian is also considered a bailee of the goods to the importer (which could be argued based on the custodial relationship), they may have additional responsibilities under common law principles of bailment.
- **Extent of Liability:** Under common law principles of bailment, a bailee (in this case, the custodian) owes a duty of care to the goods entrusted to them. If the goods are lost or damaged due to negligence or breach of this duty of care, the bailee (custodian) could be held liable for compensation beyond just customs duty.
### Conclusion:
1. **Under Section 45:** The custodian's liability is primarily limited to the payment of customs duty. If they cannot explain a loss of goods in their custody, they may still be held accountable for compensation related to customs duty paid.
2. **Not under Section 45 - As Bailee:** As a bailee of goods to the importer, the custodian may have broader responsibilities under general principles of bailment. This could potentially extend their liability to compensate the importer for the value of goods lost due to negligence or failure to exercise due care.
In conclusion, while Section 45 of the Customs Act, 1962, specifies the custodian's responsibilities primarily in terms of customs duty, their liability for the full value of goods lost due to theft or pilferage may vary depending on specific circumstances, including their role as a bailee under common law principles. If you are dealing with a situation where goods have been lost or damaged in custodial care, it may be advisable to consult with legal experts specializing in customs law or commercial law to assess the specifics of your case.
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