Goods improperly removed from warehouse etc. [Section 72] :
(1) 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 the warehouse;
(c) where any warehoused goods have been taken under section 64 as samples without payment of duty;
(f) 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 exportation 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.
(2) If any owner fails to pay any amount demanded under sub-section (1) the proper officer, may, without prejudice to any other remedy, cause to be detained and sold, after notice to the owner (any transfer of the goods notwithstanding) such sufficient portion of his goods, if any, in the warehouse, as the said officer may select.
Section 72(1) provides for penal action for violation of section 71. As a natural corollary, provision has been made under sub-section (2) of section 72, to collect such penal amounts coercively, if the owner of the warehoused goods does not pay up the amounts voluntarily. In such a situation the proper officer cause, such portion of the warehoused goods belonging to the defaulter, to be detained and sold to realise the amounts due. According to principles of nature justice, a notice will have to be given before such a coercive action is taken.
Mafatlal Fine Spinning and Manufacturing Company Ltd. v. UOI 1987 (27) ELT 19 (Bom.): What will be the position in case the owner relinquishes the title to his goods under section 23(2) of the Customs Act, 1962. In the above case, it was decided that if he relinquishes his title before the order is passed by the Assistant Commissioner under provisions of section 72, no duty need to be paid. If, however, the relinquishment is made after the order is passed, he has to pay the duty.
Effect of goods not being removed from warehouse: Under clause (b) of section 72, goods which are not removed from the warehouse after the expiry of the period permitted for warehousing or extended, are deemed to be improperly removed. The rate of duty applicable will be the rate in force on the date of deemed removal, i.e. the date on which the permitt ed period or its permitted extension comes to an end. When the demand notice is issued is not relevant for determining the rate of duty. Section 15 (1) (b) applies only to the cases where a bill of entry is presented for removal from warehouse under sect ion 68, and the payment of duty, interest, penalty, rent, etc. Section 15 (1) (b) has no application where the goods are removed from warehouse beyond the permitted period of warehousing. [Kesoram Rayon vs CC 1996 (86) ELT 464 (SC)]