Supreme Court Upholds Mumbai Port Trust’s Prospective Customs Liability for Pilfered Goods
New Delhi, 25 August 2026: The Supreme Court has upheld the validity of a Customs notification approving Mumbai Port Trust as custodian of imported goods and clarified that an approved custodian can be liable for customs duty when goods are pilfered from its custody.
Neutral citation: 2026 INSC 919
Case number: Civil Appeal No. 4477 of 2010
Bench: Justice B.V. Nagarathna and Justice Manmohan
Decision date: 25 August 2026
What the Court decided
The Court held that the Commissioner of Customs validly exercised power under Section 45(1) of the Customs Act, 1962 when issuing the notification dated 11 October 2000 approving Mumbai Port Trust as custodian of the notified customs area. It set aside the Bombay High Court’s ruling to the extent that the High Court had quashed that notification.
The judgment explains that where imported goods are pilfered after unloading but before clearance, warehousing or transhipment, Section 45(3) can fasten the duty liability on the person approved as custodian under Section 45(1). The fact that a port trust also derives custody-related powers and duties from the Major Port Trusts Act, 1963 does not invalidate the Customs approval.
No retrospective liability imposed
The appeal did not revive the four show-cause-cum-demand notices concerning pilferage during the period before 11 October 2000. The Union’s counsel did not press that part of the challenge because liability under Section 45(3) could not arise before an approval under Section 45(1). The Court therefore left the High Court’s quashing of those pre-notification demands undisturbed.
Why the ruling matters
The decision distinguishes ordinary statutory custody from the specific Customs Act approval that activates a custodian’s duty liability for pilfered imported goods. Major ports and other customs-area custodians should assess whether a valid approval is in force and the date from which it operates before liability is asserted.
Read the official Supreme Court judgment.
This report is for legal information only and does not constitute legal advice.