Sections 44 and 45 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Section 44 says Chapter VII does not apply to baggage or to goods imported or exported by post. Section 45 then deals with imported goods unloaded in a customs area: they stay in the custody of a person approved by the Commissioner, the custodian keeps a record and sends a copy to the proper officer, goods leave only on written permission, and the custodian pays duty if goods are pilfered.
This article follows the Customs Act, 1962 as per the text on the CBIC portal updated to 30 March 2022. Later Finance Acts must be checked for changes to these sections before you act on them.
Imported goods unloaded in a customs area stay with a custodian approved by the Principal Commissioner or Commissioner until they are cleared for home consumption, warehoused or transhipped. The custodian keeps a record, sends a copy to the proper officer and lets nothing leave except on the proper officer's written permission or as prescribed. If goods are pilfered while in the custodian's custody, the custodian is liable to pay the duty.
Section 44: what Chapter VII does not cover
The provisions of Chapter VII shall not apply to (a) baggage, and (b) goods imported or to be exported by post. Chapter VII is the Chapter on clearance of imported and export goods, covering sections 44 to 51, so the bill of entry and shipping bill machinery in sections 46 to 51 is not what applies to baggage and postal goods. Other chapters of the Act deal with them separately.
Section 45(1): who holds the goods
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 Principal Commissioner of Customs or Commissioner of Customs, until they are:
- cleared for home consumption; or
- warehoused; or
- transhipped in accordance with the provisions of Chapter VIII.
The designation of the approving officer is footnoted as substituted w.e.f. 6-8-2014 by section 78 of the Finance (No.2) Act, 2014 (25 of 2014). The important point for importers is that, until one of these three things happens, the goods are in the custody of the approved person and not in the importer's control.
Section 45(2): the custodian's duties
Custodians and importers who are unsure where the line of responsibility falls can start with a legal consultation.
The person having custody of any imported goods in a customs area, whether under sub-section (1) or under any law for the time being in force:
| Clause | Duty |
|---|---|
| (a) | Shall keep a record of such goods and send a copy of it to the proper officer |
| (b) | Shall not permit such goods to be removed from the customs area or otherwise dealt with, except under and in accordance with the permission in writing of the proper officer, or in such manner as may be prescribed |
The words "or in such manner as may be prescribed" were inserted w.e.f. 29-3-2018 by section 75 of the Finance Act, 2018 (13 of 2018), as footnote 2 prints. So there are now two routes out: the proper officer's written permission, or the manner prescribed.
What this means in practice
A custodian, such as a terminal operator or a cargo handling agency approved under the Act, is a gatekeeper. It must know what is in its custody, tell the proper officer, and refuse to release goods without the written permission or the prescribed manner. The text does not name the kinds of custodians; the approval is "such person as may be approved".
Section 45(3): pilferage
This sub-section was inserted w.e.f. 26-5-1995 by section 58 of the Finance Act, 1995 (22 of 1995), as footnote 3 prints. Notwithstanding anything in any law for the time being in force, if any imported goods are pilfered after unloading in a customs area while in the custody of a person referred to in sub-section (1), that person is liable to pay duty on those goods at the rate prevailing on the date of delivery of an arrival manifest or import manifest or, as the case may be, an import report to the proper officer under section 30 for the arrival of the conveyance that carried the goods.
Points to notice:
- The liable person is the custodian. The sub-section names "that person", meaning a person referred to in sub-section (1).
- The trigger is pilferage after unloading. The loss must happen in the customs area while the goods are in the custodian's custody.
- The rate is fixed by a date. The date is the date of delivery of the manifest or import report under section 30, not the date of the theft. The Act prints no rate here, and this article states none. Duty rates are in the Customs Tariff Act, 1975 and notifications.
- It overrides other law. The opening words are "Notwithstanding anything contained in any law for the time being in force".
For the manifest and its delivery, see our article on sections 30 and 30A. For remission of duty on goods lost or destroyed before clearance, see our article on sections 13, 22 to 24.
The regulations on custodians
The copy consulted of the Handling of Cargo in Customs Areas Regulations, 2009 is dated 1 April 2019 (file date; the regulations' own first lines show an issue date of 17 March 2009). Its table of contents lists regulations on definitions, application and the conditions to be fulfilled by a customs cargo service provider. This article takes no rule-wise detail from it, and a custodian should read the current text.
How sections 44 and 45 connect to the rest of Chapter VII
Section 45 is the first section under the heading "Clearance of Imported goods". After custody comes the bill of entry (section 46), clearance for home consumption (section 47), and sales or warehousing of uncleared goods (sections 48 and 49). Our articles on section 46 and sections 48 and 49 take those in turn.
A worked example
Tidewater Container Services is approved as custodian at a customs port. A consignment of electronics for Navkar Gadgets is unloaded in the customs area. Tidewater keeps a record of the consignment and sends a copy to the proper officer, as sub-section (2)(a) requires. Navkar Gadgets files its bill of entry and later asks for delivery. Tidewater releases the goods only after the proper officer's written permission, or in the manner prescribed. Had the goods been pilfered from Tidewater's yard before clearance, Tidewater would be liable to pay duty on them at the rate prevailing on the date of delivery of the import manifest under section 30, for the vessel that carried them.
A different case: a passenger's checked baggage arrives by air. Section 44 excludes baggage from Chapter VII, so the bill of entry machinery of that Chapter does not apply to it.
Practical points
- Importers: know who your custodian is. The goods are in the custody of the approved person until clearance, warehousing or transhipment.
- Custodians: keep and share the record. Send a copy of the record to the proper officer.
- Custodians: release only on written permission. The exception is removal in the prescribed manner.
- Custodians: secure the goods. Pilferage exposes the custodian to duty at the section 45(3) rate-date.
- Check separate provisions for baggage and post. Section 44 takes them out of Chapter VII.
Need help with custody and clearance questions?
If goods are held in a customs area and you are unsure about permission to remove them, or if you are a custodian reviewing your duties, we can go through the position in a legal consultation.
Key takeaways
- Section 44 excludes baggage and goods imported or to be exported by post from Chapter VII.
- Imported goods unloaded in a customs area remain in the custody of an approved person until cleared for home consumption, warehoused or transhipped.
- The custodian keeps a record, sends a copy to the proper officer and allows removal only on written permission or in the prescribed manner.
- A custodian is liable to pay duty on pilfered goods at the rate prevailing on the date of delivery of the manifest or import report under section 30.
- Duty rates are not stated in the Act's section; they sit in the Customs Tariff Act, 1975 and notifications.
Read next
- Sections 42 and 43: no conveyance to leave without written order
- Section 46: bill of entry and entry of goods on importation
- Sections 48 and 49: goods not cleared within thirty days and storage pending clearance
- Customs clearance process for imports, step by step
Disclaimer: Based on the Customs Act, 1962 as published on the CBIC Tax Information Portal, updated to 30 March 2022 (amended up to the Finance Act, 2022), as consulted on 2 October 2026. Finance Acts of 2023 and later, and the current rules, regulations and notifications, should be checked. This article is general information, not legal advice; check the official text before acting.