Improper Removal and the End of Warehousing

In one line

Section 71 forbids any removal not authorised by the Act, and section 72 supplies the consequence: a demand for the full duty and interest as if the goods had been improperly removed. Precisely: section 71 is the prohibition; section 72 lists the four cases of improper removal and empowers the demand and sale; section 73 provides for cancellation and return of the bond; and section 73A deals with custody and removal of warehoused goods after the 2016 reform.

Why the chapter needs a deemed removal

Because the real mischief is inertia as much as theft. An importer who simply leaves goods in a warehouse and never clears them defeats the whole scheme just as effectively as one who takes them out at night: the duty is never paid, the bond is never called, and the goods sit untaxed indefinitely.

So the Act does not wait for a physical removal. Section 72 treats four situations as improper removals, one of which is purely temporal: goods that overstay the period permitted under section 61 are deemed to have been improperly removed, and the demand follows automatically.

That deeming is what makes the period in section 61 enforceable, and it is the doctrinal link to Kesoram Rayon, which fixed the rate of duty by the date of the deemed removal.

The provisions

Section 71, goods not to be taken out of warehouse except as provided by this Act. No warehoused goods shall be taken out of a warehouse except on clearance for home consumption or export, or for removal to another warehouse, or as otherwise provided by this Act.

The section is one sentence and it is the hinge. Sections 67, 68 and 69 are the permitted exits; section 71 makes everything else unlawful; and section 72 supplies the consequence.

Section 72, goods improperly removed from warehouse, etc. In any of the following cases, that is to say:

(a) where any warehoused goods are removed from a warehouse in contravention of section 71;

(b) where any warehoused goods have not been removed from a warehouse at the expiration of the period during which such goods are permitted under section 61 to remain in a warehouse;

(c) where any warehoused goods have been taken under section 64 as samples without payment of duty;

(d) where any goods in respect of which a bond has been executed under section 59 and which have not been cleared for home consumption or export are not duly accounted for to the satisfaction of the proper officer,

the proper officer may demand, and the owner of such goods shall forthwith pay, the full amount of duty chargeable on account of such goods together with all penalties, rent, interest and other charges payable in respect of such goods.