Supreme Court Holds Port Trust Liable for Customs Duty on Pilfered Goods Under Section 45(3) of Customs Act

Case Snapshot

• Case Name: Union of India & Others v. Board of Trustees of the Port of Bombay

• Citation: 2026 INSC 919

• Bench: Justice B.V. Nagarathna and Justice Manmohan

• Date of Judgment: August 25, 2026

• Area of Law: Customs Law, Port Trust Law, Interpretation of Statutes

The Judgment in One Line

Port Trust approved as custodian under Customs Act is liable to pay duty on pilfered goods despite separate statutory custody regime.

Why This Judgment Matters

This judgment is significant as it clarifies the interplay between the Customs Act, 1962, and the Major Port Trusts Act, 1963, regarding liability for customs duty on pilfered goods. The Supreme Court held that the saving clause in Section 45(1) of the Customs Act does not preclude the Commissioner from approving a Port Trust as custodian, nor does it exempt it from liability under Section 45(3). The Court distinguished between civil liability as a bailee under the Port Trusts Act and statutory liability to pay customs duty under the Customs Act. This will impact all major ports and custodians handling imported goods.

Background

The respondent, Mumbai Port Trust, was issued show cause notices between 1996-2000 demanding customs duty on goods pilfered while in its custody. The Commissioner of Customs (Import)

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