Interest on warehoused goods becomes payable only after clearance and duty quantification, making premature recovery unlawful.

Interest on warehoused goods is payable only after customs duty becomes quantifiable on clearance, because the applicable rate and duty liability are determined at that stage under Section 61 of the Customs Act, 1962. Where the warehousing period has been extended and clearance has not yet occurred, a demand for interest before quantification of duty is premature. On that basis, coercive recovery measures under Section 72 are inconsistent with the statutory scheme and should be withheld until the appeal is decided.

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Issues: Whether interest could be demanded on warehoused goods before clearance and quantification of duty under Section 61 of the Customs Act, 1962, and whether recovery steps under Section 72 could be pursued meanwhile.

Analysis: Section 61 contemplates interest after the duty has been quantified. In the case of warehoused goods, duty is quantified on the date of clearance, because the applicable rate of duty is determined at that stage. As the warehousing period had been extended and clearance had not yet taken place, the duty was not yet quantifiable; consequently, interest could not be demanded on the basis adopted by the authority. The demand and consequential coercive measures were therefore inconsistent with the statutory scheme.

Conclusion: The demand for interest prior to clearance was not sustainable, and interim coercive action was directed to be withheld pending disposal of the appeal.

Final Conclusion: Interim protection was granted to the appellant by restraining recovery action, as the impugned direction to charge interest before clearance was found contrary to law.

Ratio Decidendi: Interest on warehoused goods becomes exigible only after duty is quantifiable on clearance of the goods; before that stage, a demand for interest and coercive recovery is premature.

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