Holding

The Customs authorities, not the Port Trust, are liable for the loss of the confiscated goods and must compensate the importer.

Summary

Oswal Spinning & Weaving Mills Ltd imported 58 bales of woollen rags, which Customs officials later identified as acrylic rags and confiscated under the Customs Act. The importer was offered the option to pay a redemption fine under section 125; the fine was reduced by the Board and the goods were ordered to be mutilated and released on payment of duties. The importer appealed to the Supreme Court under section 130‑E, contending that part of the consignment was missing and that the Calcutta Port Trust, not Customs, should be liable for the loss. The Court held that the goods remained under the control of Customs officers in the customs area, vested in the Central Government under section 126, and were never handed over to the Port Trust; consequently the Customs authorities were liable to compensate the importer for the loss. The Court directed the Appellate Tribunal to determine the amount of compensation, and disposed of the appeal without ordering costs.

Issues considered

Whether the Customs authorities or the Calcutta Port Trust are liable to account for and compensate the importer for loss of goods after confiscation.
Whether the importer is entitled to recovery of the value of the missing bales under the Customs Act.
Whether the Court can determine the monetary value of the lost goods in the appeal.

Legislation cited

Customs Act, 1962s. 111(d), s. 111(m), s. 125, s. 126, s. 141, s. 45, s. 47
Imports and Exports (Control) Act, 1947
Imports (Control) Order, 1955
Major Port Trusts Act, 1963s. 42, s. 43

Subjects

customs confiscationredemption fineliabilitycompensationport trustimported goodssection 130-ECustoms ActMajor Port Trusts Act

Judgment

OSWAL SPINNING & WEAVING MILLS LTD. A
v.
COLLECTOR OF CUSTOMS & ANR.

APRIL 19, 1988
B
[R.S. PATHAK, C.J., RANGANATH MISRA AND
B.C. RAY, JJ.I

- ~- Customs Act, 1962-Challenging order of penalty for release of
goods imported through canalised agency and confiscated by Collector
of Customs under lll(d) and (m)-Of-Whether it is liability of
._\,.
Customs authorities or Port Trust authorities to account for and c
compensate if imported goods are not traceable after confiscation-
Determination of question.

This was an appeal under Section 130-E of the Customs Act, 1962
against the judgment and order of the Customs Excise and Gold
(Control) Appellate Tribunal, New Delhi. D

The appellant imported 58 bales of Woollen rags from Canada,
,,.. and filed the bill of entry for release of the goods, described as woollen
rags. The goods were found by the Customs authorities to be acrylic
rags and not woollen rags. The Collector of Customs ordered confisca-
tion of the goods under section lll(d) and (m) of the Customs Act, but E
in lieu of confiscation, the appellants were given the option under section
125 of the Act to clear the goods on payment of redemption fine of
Rs.50,000. The appellants appealed to the Central Board of Excise and
·--t Customs which sustained the order of confiscation but reduced the
redemption fine to Rs.20,000, and also directed that the goods be
released after they were mutilated to the satisfaction of the Collector of F
Customs so as to render them unfit for use except as rags, and after
payment of appropriate duty. The appellants moved a revision against
the Board's order, whereon the Customs, Excise and Gold (Control)
Appellate Tribunal passed an order, directing that the goods be re-
leased on payment of customs and other related duties with countervail-
ing duty Ieviable under the Central Excise Tariff and subject to Board's G
;)..
order about payment of redemption flue and mutilation of the goods.
The appellants then moved this Court for relief by this appeal under
Section 130-E of the Customs Act.

Disposing of the appeal the Court,
H

601
602 SUPREME C::OURT REPORTS 11988] 3 S.C.R.

HELD: Per Ranganath Misra, J. (on behalf of R.S. Pathak, CJ.
A
and on his own behalf)--On 17th December, 1986, this Court had
directed waiving of the redemption fine. The appellants complained
that a part of the goods was not traceable, whereupon notice was issued
to the Calcutta Port Trust which was joined as respondent No. 2 to the
appeal. The only question surviving for examination was as to the
B availability of the goods, return whereof had to be made to the appel- J.
lants, and in case the whole or part of the goods was not traceable, in
what waycthe direction of the Tribunal for return of the goods had to be
worked out. [605G-H]
.-
In view of the provisions of the Act, viz sections 45, 47, 125 and
126, there can be little scope to dispute that until the goods are cleared
c for home. consumption, the scheme of the Act requires the goods
to'. remain in the hands of the Customs authorities and obviously the
statutory authority to account for the goods would be of the autho-
rities under the Act charged with the responsibility of keeping the
goods. l606G-H]
D
19 bales were alleged to be missing and parts of some of the
av.ailable goods were alleged to have been taken out and made into
independent bales. These allegations were not accepted by the resp.in-
dent No. 1. The Respondent No. 2 denied any liability. In case, it was
ultimately found that the Customs authorities by themselves had the
E total liability to account for the goods or in case their said liability had
to be shared by the Calcutta Port Trust and even though one or both
were liable to account for the goods and they had failed to do so, in what
manner the appellants would be compensated were matters which
required factual consideration, warranting reception of evidence. This
proceeding before the Court was not appropriate for looking into this
F part of the grievance. In this situation, the order of the Tribunal as
modified by this Court for the return of the goods could not be fully
-+··
given effect to. The Court considered it appropriate to require the
Tribunal to finally dispose of this question. In case the goods were not
finally traceable and the liability to account for the goods was fixed
on one or both of the respondents, the Tribunal would decide what
G amount of compensation in lieu of the goods should be payable to the
appellants. [607A-E]

Per B.C. Ray, J.

On 17th December, 1986, this Court had passed an order, direct-
H ing inter alia the waiving of the demand of penalty, and also directing
OSWAL MILLS v. COLLECTOR OF CUSTOMS 603
~
the Port Trust authorities, to which notice had been issued, to disclose
A
the location of the goods. The Port Trust Authorities stated in their
counter-affidavit that out of the 58 bales only 45 bales were landed,
short of 13 bales, and that the Collector had confiscated the entire
consignment and removed 6 bales from I.K.P.D. to their confiscated
godown and balance 39 bales had been lying at different points of
docks, at .the sole risk of the customs. l6IOD, Fl B
i
The appellant contended that it was prepared to pay the custom•

- ~· duty as demanded in compliance with the order of this Court and to take
delivery of the goods but as the goods had been lost and were not traceable
from the control and custody of the Customs authorities, the customs
authorities were liable to pay the value of 39 bales of woollen rags on
l C .I.F. basis. The customs authorities submitted that the value of the
c
imported goods could not he determined in this appeal as a suit had to
be brought for such issue, and that it was the responsibility of the Port
Trust to indemnify the appellant for the loss. l6I IC-E]

The imported goods had been unloaded from the ship in the D
Customs area. The Collector of Customs had confiscated the goods.
Goods in the Customs area are under the Control of the officers of the
Customs as per the provisions of section 141 of the said Act. After
confiscation of the goods in dispute, the same had vested in the Central
~ Government in accordance with the provisions of section 126 of the Act.
The Calcutta Port Trust, respondent No. 2, had averred that the goods E
remained in the Customs area and were subsequently confiscated by the

- Collector of Customs. The said goods were not handed over to the
custody of the Port Trust. 161JG-H;612A-B]

' --+ It was the Customs authorities who were in possession and control
of the said goods and they were.liable to pay the value of the goods to the F
. appellant as damages to compensate the appellant. Not a single document
was produced before the Court by the Customs Authorities showing
that the goods had been handed over to the custody and possession of
the Board of Trustees and that the Board had issued any receipt for that
as required by Section 42 read with section 43 of the Major Port Trusts
Act, 1963. Under no circumstances could the Board of Trustees be held G
responsible for the loss or destruction of the said imported goods. The
.;.. respondent No. 1 was liable for the loss or damage caused to the appel-
lant by the destruction of the said goods in the custody and possession of
the Customs authorities. l612B-F]

It was not possible for this Court while hearing the appeal under H
604 SUPREME COURT REPORTS [1988] 3 S.C.R.

Section 130-E of the Customs Act against the order of the Appellate
A Tribunal to ascertain/determine the money value of the goods lost or
destroyed from the possession and custody of the Customs authorities.
The appellljllt might take appropriate proceedings for determination of
the damages and recovery of the same in accordljllce with law. I612F -GI

R State of Bombay (11ow Gujarat) v. Memon Mahomed _,
Haji Hasam. [1967] :3 SCR 938, relied upon · by the appel-
lant.

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 4102
of 1984.
J..i,
I
-
c From the Order dated 31. 7 .1984 of the Customs Excise and Gold
(Control) Appellate Tribunal, New Delhi in Appell! No. CD(SB)(T)-
817/82(D).

Harish N. Salve and N .D. Garg for the Appellant.
D
B. Datta, Additional Solicitor General, R.P. Srivastava, D.N.
Mukherjee and Ms. S. Relan for the Respondents.

The following Judgments of the Court were delivered:

E RANGANATH MISRA, J. We have had the benefit of reading
the judgment proposed by our learned Brother Ray. J. We agree with
the conclusion that the respondent No. 1 is liable for the loss or
damage to the goods and would like to briefly indicate the reasons for
such conclusion.

F The appellants imported 58 bales of woollen rags through the
State Trading Corporation from Canada. When the goods arrived at
Calcutta, the Customs authorities called upon the appellants to show
cause as to why the same may not be confiscated under the provisions
of the Customs Act (hereafter referred to as the Act). After hearing
the appellants, as also the State Trading Corporation, respondent
G No. 1, to which a notice was also issued, the Collector of Customs by
his order of 12th March, 1981 directed confiscation of the goods in
exercise of power under section 111(d) and (m) of the Customs Act but
in lieu of confiscation, the appellants were given the option under
section 125 of the Act to clear the goods on payment of redemption
fine of Rs. 50,000. The appellants appealed to the Central Board of
H Excise and Customs which sustained the order of confiscation but
OSWAL MILLS v. COLLECTOR OF CUSTOMS [MISRA, J.I 605
-r
reduced ,th~ redemption fine to Rs.20,000 and directed: A

" ... : .... ". after the goods are mutilated to the satisfaction
· of Collector of Customs, Calcutta, by the importers at their
. _• cost and under customs supervision so as to render them
unfit for use except rags ·and'after payment of appropriate B
duty, 'the goods be released on payment of a fine of
Rs.20,000 within three months hereof."

-~· The appellants then moved the Central Government in revmon
against the Board's order and in due course the revision was transfer-
red to the Customs, Excise and Gold (Control) Appellate Tribunal.
The Tribunal by its order dated 31st July, 1984 gave the following C
direction while disposing of the appeal:

" ........ the goods be released on payment of customs
and other related duties, under T.I. 63.02, wiih counter-
vailing duty as leviable under corresponding entry in the
0
Central Excise Tariff. This is subject to Board's order
about payment of redemption fine of Rs.20,000 and mutila-
tion of the goods to the satisfaction of the Collector, at the
cost of the appellants and under the supervision of the
Customs authrities."
E
The appellants then moved this Court by way of appeal under
section 130-E of the Customs Act. On 17th December, 1986 this Court
directed waive of the redemption fine. Mr. Salve for the appellant
agreed to pay the duty, as directed, when delivery was to be taken of
the goods. When appellants complained that a part of the goods was
not traceable, notice was issued to the Calcutta Port Trust authorities F
and.it has been joined as respondent No. 2 to this appeal.

In view of the order waiving the demand of redemption fine and
the appellants' agreeing to pay the demand of appropriate duty as
directed by the Tribunal, the only question that survives for examina-
tion is as to the availability of the goods return whereof has to be made G
to the appellants and in case the whole or part of the goods is not
traceable, in what way the direction of the Tribunal for return of the
goods has to be worked out. It is not disputed that 58 bales of the
goods in question had been received; nor is there any dispute that the
entire goods had been confiscated under the Act. Section 45 of the Act
provides: H
., '

606 SUPREME COURT REPORTS [1988] 3 S.C.R.

"45. Restriction on cJstody and removal of imported goods.
A
(1) Save as otherwise provided in any law for the time
being in force, all imported goods unloaded in a customs area
shall remain in the custody of such person as may be
approved by the Collector of Customs until they are
cleared for home 'consumption or are warehoused or are
B transhipped in accordance with the provisions of Chapter ~
VIII.

(2) The person having custody of any imported goods in a J-
customs area, whether under the provisions of sub-section -l
( 1) or under any law for the time being in force,
c (a) shall keep a record of such goods and send a copy
thereof to the proper officer;

(b) shall not permit such goods to be removed from
the customs area or otherwise dealt with, except
D under and in accordance with the permission in writ-
ing of the proper officer."

Under section 47, provision for clearance of the goods for home con-
sumption is made. Section 49 makes provision for storage of imported
goods in warehouse pending clearance but such storage is permissible
E only when the importer applies for it. Section 125 provides that:

"Whenever confiscation of any goods is authorised by this
Act, the officer adjudging it may, in the case of any goods,
the importation or exportation whereof is prohibited under
this Act or under any law for the time being in force, and
F shall, in the case of any other goods, give to the owner of
the goods an option to pay in lieu of confiscation such fine
as the said officer thinks fit .......... "

Where such option is not given or even if such option is given it is not
availed of, under section 126, the goods are confiscated and upon
G confiscation they vest in the Central Government.

In view of these provisions in the Act, there can be little scope to
dispute that until the goods is cleared for home consumption, the
scheme of the Act requires the goods to remain in the hands of the
Customs authorities and obviously the statutory liability to account for
H the goods would be of the authorities under the Act charged with the
responsibility of keeping the goods.
• OSWAL MILLS v. COLLECTOR OF CUSTOMS !MISRA, J.] 607

. 19 bales, as alleged, appear.to be missing and 39 bales are said to A
be available. The appellants have·contended that the goods have not
been properly preserved and parts of some of the· bales have been
taken out to be made into independent bales. These allegations have
not been accepted by .the respondent No. 1. Respondent .No. 2 has
. totally denied any liability in the matter. In case it is ultimately found
B
~ that the Customs authorities by themselves have the total liability to
account for the goods or in case their liability in that behalf has to be
shared by the Calcutta Port Trust and even though one or both are
- liable to account for the goods and they fail to do so, in what manner
·~. the appellants would in such eventuality be compensated are matters
which require factual consideration and would warrant reception of
._ evidence. This proceeding before us is thus not appropriate for looking c
into this part of the grievance. A situation has now arisen where the
order of the Tribunal as modified by this Court for the return of the
goods cannot be fully given effect to. We think it appropriate to
require the Tribunal to finally dispose of this question. Appellants'
counsel has relied upon a decision of this Court in State of Bombay
D
(now Gujarat) v. Memon Mahomed Haji Hasam, [1969] 3 SCR 938 As
the matter is being left open to be dealt with by the Tribunal, we do
not propose to refer to this decision at any length. The Tribunal would
give reasonable opportunity to the appellants as also the two respon-
dents in the matter of adjudication of this aspect of the dispute. In
-,.. case, the goods are not finally traceable and the liability to account for
the goods is fixed in the hands of one or both of the respondents, the E
Tribunal would do well to examine and decide what amount of

- compensation in lieu of the goods should be payable to the appellants.
This should be done within three months from today. Costs to be in the
discretion of the Tribunal.
. _,+-
B.C. RAY, J. This appeal under Section 130-E of the Customs F
Act, 1962 is against the judgment and order No. 434/84·0 dated 31st
July, 1984 of the Customs Excise and Gold (Control) Appellate

·• Tribunal, New Delhi whereby the Appellate Tribunal directed the
release of the imported woollen rags to the appellant on payment 9f
customs and other related duties, under T.l. 63.02, with countervailing
duty as leviable under corresponding entry in th.e Central Excise G
Tariff. It was also directed by the said order that the appellant will
~,>, have to comply with the order of the Board about payment of redemp-
~
tion fine of Rs.20,000 and mutilation of the goods to the satisfaction of
the Collector at Lite cost of appellant and under the supervision of the
customs authorities.
H
608 SUPREME COURT REPORTS [19881 3 S.C.R.

The matrix of the case is that in accordance with the import
A
policy of 1979-80 which provided for import of certain items including
woollen rags through canalised agency, the appellant company placed
order to the State Trading Corporation, the canalised agency, for
import of mutilated woollen rags in which the contents of wool would
be minimum 80% under the order of allocation issued by the Textile
B Commissioner, Bombay in the name of the appellant. On 4.4.1979 the
foreign suppliers namely M/s. Gorodensky Regd., 8, Queen Street,
Montreal, Canada entered into a contract for the supply of old rags of
woollen textile fabrics (including knitted and crocheted fabrics) which
Jre. required for manufacture of shoddy yarn and not consist of articles
of furnishing or clothing or other clothing so worn out, soiled or torn
as to be beyond cleaning or repair. Fumigation Certificate from
c Government or Municipal Health Authorities was to be provided by
suppliers at their cost with the State Trading Corporation. The speci-
fication of the goods was stated to be "CM-old original .mutilated
woollen hosieries, 60% dark, 40% fancy-minimum 80% wool
contents", @ 65 US cents per kg. C.LF. quantity 20,000 kg. The
D suppliers sent the goods comprising of 58 bales of wonllen rags through
the State Trading Corporation on 1.5.979 to be delivered at Calcutta
Port and the invoice was drawn in favour of State Trading Corporation
(allocation to the appellant herein). Along with it there was a certifi-
cate from the suppliers to the effect that "goods shipped are in con-
formity with contract No. STC/CI/247/WR/239/78-79 dated 4.4.1979."
E It further certified that "the minimum wool content is 80% in each
bale". These documents were transferred to the appellant by the State
Trading Corporation (in short STC) on High Sea Sales basis. The
appellant imported 58 bales of woollen rags through the STC and in
order to have the same released filed the bill of entry stating the goods
as woollen rags on the basis of the aforesaid documents of the foreign
F suppliers. The goods however on testing the same drawn from the said
consignment by the Customs authorities were found to have wool con-
tent only 6 to JO% and acrylic fibre contents in the rags were about 60
to 70% besides other synthetic fibres. It appeared to the Customs
authorities that the imported rags were acrylic rags and not woollen
rags. A show-cause notice was issued to the appellant on 2.1.1980 that
•
I
G the goods imported were in contravention of clause 3(1) of Imports
(Control) Order, !955 as amended read with Section 3 of the Imports
and Exports (Control) Act, 1947 as amended and calling upon the
appellant to show cause why the goods (58 bales of woollen rags) be
rt
not confiscated under Section ll!(d) and ll!(m) read with Section 11
of the Customs Act, 1962 and why penalty be not imposed under i
H Section 112 of the Customs Act, 1962. The Collector of Customs after
\
OSWAL MILLS v. COLLECTOR OF CUSTOMS [MISRA, J.] 609
),
considering the reply of the app~llant and hearing.both_ the appellant
A
and the STC confiscated the aforesaid goods under Section lll(d) and
JI J(m) of the Customs Act, 1962. In lieu of confiscation, the appellant
was given the option under Secti_on 125 to clear th~ goods on payment
of redemption fine of Rs.50,000" within one month from. the date of
receipt of the order or any other period that may be extended on

• sufficient cause being shown. The Collector further stated in his orct.er
"]refrain from imposing any penalty under Section 112 of the Customs
Act, 1962 as there was no force to show the complicity of either the
STC or the Appellant in_ arranging for import of goods which are
B

)..c different from what had been ordered."

. Against this order an appeal. was made to the Central Board of
Excise and Customs. The Central Board of Excise and Customs came c
to the conclusion that the goods imported could not be described as
woollen goods at all as the wool contents were found to be not exceed·
ing 10%. The Board however, considering the fact that the goods have
been imported through the'STC and there was no involvement of the
importers in the importation of wrong goods took a lenient view and D
directed that after the goods are mutilated to the satisfaction of the
Collector of Customs by the appellant at his cost and under Customs
supervision so as to render them unfit for use except rags and after
payment of appropriate duty, the goods be released on payment of a
-:>- fine of Rs.20,000 within three months of the order.
E
Against this order the appellant filed an appeal before the
Customs, Excise and Gold(Control) Appellate Tribunal, New Delhi.
The Appellate Tribunal disposed of the appeal ordering that the goods
be released on payment of customs and other related duties under T .I.
63.02 with countervailing duty as leviable under corresponding entry
in the Central Excise Tariff. The Tribunal also stated that this is sub· F
ject to Board's order about payment of redemption fine of Rs.20,000
and mutilation of the goods to the satisfaction of the Collector, at the
cost of the appellant, and under the supervision of the Customs
authorities.

It is against this order the instant appeal has been filed before G
,.., this Court. This Court on hearing the learned counsels for both the
parties made an order on 17th December, 1986 to the following effect:

"Two questions arise, one relating to the demand of duty
and the other levy of penalty. On the facts, we are satisfied
and the learned Addi. Solicitor General having agreed that H
610 SUPREME COURT REPORTS [19881 3 S.C.R.

there is no scope for levying of penalty. The demand of
A
penalty, is therefore, waived and so far as duty is con-
cerned, Mr. Salve agrees that the duty as demanded is pay-
able and will be paid. The only difficulty is about delivery
of the goods imported. Notice has been issue'd to the Port
Trust Authorities and it is said to have been served, but
B there is no appearance on behalf of the Port Trust. Mr.
Salve suggest that steps should be taken first tci trace the
goodsc The Petitioner would pay the duty as demanded and
take delivery of the materials. The matter be listed on 23rd
January, 1987, and the Port Trust may be again notified of
this date, so that further orders may be passed. The Port
Trust will disclose the Court the location of the goods."
c
In accordance with the directions contained in the said order the
Port Trust Authorities in their counteraffidavit sworn by one Girindra
Bhuson Chakraborty, the Commercia!Supervisor, Calcutta Port Trust
on 18.3.1987 specifically averred that out of 58 bales only 45 bales
D were landed and 13 bales were landed short. It was also further aver-
red in the said affidavit that the appellant did not take steps to remove
the goods from the Port areas and according to the notification
No. G.S.R. 32-F dated !st February, 1975 issued by the Government
of India, Ministry of Shipping and Transport under Section 126 read
with Sections 42 and 43 of the Major Port Trusts Act, 1963, no
E responsibility shall attach to the Board after expiry of a period of
seven clear working days from the date of taking charge of the goods
by the Board, in respect of such goods. It has been further stated that
the Collector of Customs under his order No. S.33/53/79A(GII) dated
2. 1.1980 confiscated the entire consignment of the said imported
goods and removed 6 bales only from 1 K.P.D. to their confiscated
. F godown at Clive Warehouse on 8.8.1981 by P.T.C.G. (Port Trust
Covered Rly. Wagon) No. 1362, and the balance 39 bales have been
lying since its landing at different points of docks in a very deteriorated
condition. It was further stated that the entire consignment was con-
fiscated by the Collector of Customs and only 6 bales were removed
and the balance 39 bales had been lying in the Port premises at the sole
G risk of Customs and the Port Trust had no authority for the disposal of
the goods which were confiscated by the Customs authorities. It has
been stated that the Port Trust has no liability for loss or damage of
these confiscated goods which are in the custody of the Customs
authorities.

H An affidavit has been filed on behalf of the appellant sworn by
• OSWAL MILLS v.COLLECTOR OF CUSTOMS [MISRA, J.I

oile Dharam ·Paul Oswal, Managing Director.of the appellant mill on
611

A
31.3.1987 "stating inter alia that their Manager, Mr. H.K. Goel visited
the Calcuila Port Trust arid Collector of Customs as well as its offiCers.
,,
on 30th Marc_h, 1987 for identification of 39 bales of rags out of con-
signment of s·8b.al~s and for delivery of the saicf 39 bales on payment of

•
duty. It has been further averred ·that the concerned officials supervis-
ing storage/delivery have failed to. show/produce even a single bale B
against the alleged "39 .bales admitted
. to be in their possession before
this Court. It has alsci been stated that instead of 39 bales the Manager

r..,
_, of the appellan_t mill, Mr. H.K. Goel had been directed by C.P.T. and
Customs 'Department to· take delivery of 300 kgs. approximately of
useless sweep waste of ni_l market value .

If has strenuously been contended on behalf of the appellant that c
.• the appellant is prepared to pay the customs duty as demanded by ihe
Customs authorities in due compliance of the order of this Court and to
take delivery of the goods imported but as the goods have already"been
lost and are not traceable frorri the control and custody of the Customs
authorities, the Customs authorities are liable to pay the value of 39 D
bales Of woollen rags on C.l.F. basis. It-was on the other hand submit-
ted on behalf of the Customs authorities that the value of the imported
goods cannot be determined in this appeal by this Court as it requires
-:).. consideration of facts and the only remedy for the appellant is to bring
a suit for determination of such issue. It was also tried to be contended
that since the goods imported were kept in the dock, it is the responsi- E

-
bility of the Port Trust to indemnify the appellant for the loss of the
imported goods.

• After considering the submissions of the learned counsels and
also considering the facts and circumstances of the case there is no
manner of doubt that the goods were confiscated by the Collector of F
Customs under Section lll(d) and lll(m) of the Customs Act, 1962
and directions were given for collection of redemption fine and for
complying with certain directions contained in the order of the
Collector before the release of goods. Section 126 of the Customs Act
specifically provides that when any goods are confiscated under the
Act such goods shall thereupon vest in the Central Government. It is G
also evident from the provisions of Section 141 of the said Act that
~.
goods in the customs area shall be subject to the control of the officers
' of Customs. Undoubtedly, the \mported goods were unloaded from
the ship in the Customs area. So these were under the control of the
officers of Customs. Moreover after confiscation of the entire consign-
ment of imported goods i.e. 45 bales out of 58 bales of woollen rags, H
A
612 . SUPREME COURT REPORTS .. I1988] 3 S.C.R.
the .same vested in the Central Government in accordance with the
,.....
provisions of Section 126 of the said Act. It is .also clear from the
averments made on behalf of respondent No. 2, the Calcutta Port
Trust, as stated hereinbefore that the imported goods remained in the
Customs area and these were subsequently confiscated by the
Collector of Customs: The imported goods were not' handed over to
B
the custody of the Port Trust. Therefore it is the Customs authorities
who are· in possession and control of the said imported bales of woollen
rags and they cannot shirk their responsibility for the loss and damage
of the said goods and· they are liable to pay the value of the goods to
· the appellant as damages in order to re-compensate the appellant. It is
pertinent to mention in this connection that under Sections 42 and 43
C of the Major Port Trusts Act, 1963 it is only when the goods have been
taken charge of and receipt given for them under Section 42(7) of the
said Act liability for any loss or damages which may oceur to the
person to whom receipt has been given by the Board, arises. In other
words, under the provisions of Sections 42 and 43 Board of Trustees
D under the said Act will be liable to recompense the loss or damages in
respect of goods which have been taken charge of by the Board. In the
instant case as not a single document has been produced before this
Court by the Customs Authorities showing that the goods were handed
over to the custody and possession of the Board of Trustees and that
the Board issued any receipt for that as required under Section 42 read
E with Section 43 of the said Act. Therefore, under no circumstances can
the Board of Trustees be held responsible for the loss or destruction of
the said imported goods. As stated hereinbefore the imported goods
were kept unloaded in the customs area and were confiscated and as
such the respondent No. 1 is liable for the loss or damages that has
been caused to the appellant by the destruction of the imported goods
-
from their custody and possession. It is not possible for this Court
F
while hearing the appeal under Section 13(}-E of the Customs Act
against the order of the Appellate Tribunal to ascertain and determine
the money value of the imported goods which have been lost or
destroyed from the possession and custody of the Customs authorities.
The appellant may take appropriate proceedings for determination of
G the damages and for recovery of the same in accordance with law,

In view of the above findings, this appeal is disposed of. There
will however, be no order as to costs.

S.L Appeal disposed of.