Indirect Tax Laws · Warehousing

Owner's Right to Deal with Warehoused Goods (Section 64, Customs Act)

Updated 5 October 2026 · Fact-checked

Section 64 lets the owner of warehoused goods deal with them before clearance. With the proper officer's permission and subject to the prescribed conditions, the owner can sort the goods, show them for sale, or deal with them to prevent loss, deterioration or damage or maintain their good condition. These acts do not clear the goods. To solve questions, identify the act and check permission.

Understand Owner's Right to Deal with Warehoused Goods (Sec 64)

When imported goods are warehoused, duty is not paid at the time of import. The goods sit under customs control until they are cleared for home consumption or export. The owner still owns the goods, and Section 64 gives the owner practical rights over them while they are in the warehouse.

In plain words, the owner may sort the goods, show them for sale, and deal with them in the way needed to prevent loss, deterioration or damage or to maintain their good condition. For example, the owner can separate damaged items from sound ones. These dealings are not free-for-all. They need the permission of the proper officer and must follow the regulations and conditions laid down by the law. Customs keeps control because duty is still unpaid.

One point on samples. Taking a sample is not one of the acts listed in the main part of Section 64. The proviso to Section 64 deals with the removal of samples from the warehouse, and it does not state any rule on duty for samples. Do not write that duty is payable (or not payable) on samples as a Section 64 rule. If a question gives facts on samples, answer from those facts and the permission given.

Keep two ideas apart. Dealing with goods inside the warehouse (Section 64) does not clear them. Clearance for home consumption or export is a separate step, done by ex-bond bill of entry or shipping bill. Manufacture or other operations in a warehouse are governed by a different section (Section 65), and they need their own permission.

The exam usually asks one of three things. What can the owner do? What permission is needed? What is the control consequence of the dealing? Read the facts and match each act to the right provision.

A practical point for cases: any dealing that changes the character of the goods, or takes them out of the warehouse, needs fresh thought. Check whether the question gives the officer's permission. If it does not, say permission is required.

Key rules to remember

Who can act: Owner of warehoused goods (after warehousing); The right arises only once the goods are warehoused. Before warehousing, the right does not apply.
Acts allowed under Section 64: Sort | Show for sale | Deal to prevent loss, deterioration or damage or maintain good condition; These are the acts the section covers. Learn them as a short list for written answers. Do not add 'inspect' or 'take samples' as separate items of this list.
Condition for every act: Permission of proper officer + compliance with regulations and prescribed conditions; Dealing without permission is a violation. The goods remain under customs control throughout.
Proviso to Section 64: Proviso deals with removal of samples from the warehouse → it states no duty rule; Do not write that duty is payable on samples under the proviso. The proviso also does not let the owner take out goods that are not meant for sale or export.
What Section 64 is not: Dealing in warehouse ≠ clearance for home consumption or export; Clearance is an ex-bond bill of entry (Section 68) or shipping bill (Section 69). Duty is paid or export proceeds then.
Manufacture in warehouse: Section 65 (separate permission); Manufacture or other operations is a different right. Do not apply Section 64 to it.

How to solve Owner's Right to Deal with Warehoused Goods (Sec 64) questions

Use this method for any question on the owner's dealings with warehoused goods. Keep your answer in provision, facts, conclusion form.

1Confirm the goods are warehoused. If they are not yet warehoused, Section 64 does not apply.
2Identify who is acting. Section 64 rights belong to the owner of the warehoused goods.
3Name the act: sorting, showing for sale, or dealing to prevent loss, deterioration or damage or maintain good condition.
4Check whether the proper officer's permission is given and whether the regulations and prescribed conditions are met.
5Decide if the act is a dealing inside the warehouse or a removal or clearance. If it is clearance, move to the ex-bond provisions.
6Note the control effect. The goods stay under customs control and duty is still unpaid. If the facts mention samples, remember the proviso deals with their removal and states no duty rule.
7Write the conclusion in one line: the act is allowed with permission, or not allowed and why.

Quickest way: Three-question check

When to use it: Use this for MCQs and for short written parts where you have under four minutes.

Are the goods already warehoused? If not, stop.
Is the act sorting, showing for sale or handling to prevent loss or maintain condition? If yes, Section 64 fits. If it is manufacture, think Section 65. If it is taking the goods out for use or export, think clearance.
Is the proper officer's permission present? No permission means the act is not allowed.

Common mistakes in Owner's Right to Deal with Warehoused Goods (Sec 64)

Treating Section 64 dealings as clearance of the goods
Words like 'remove' and 'deal with' sound like the goods leave customs control.
Fix: Remember that Section 64 acts happen under customs control. Clearance needs an ex-bond bill of entry or a shipping bill.
Forgetting the proper officer's permission
Students remember the list of rights but not the condition attached to them.
Fix: Open every answer with 'with permission of the proper officer and subject to the regulations and conditions'.
Applying Section 64 to manufacture or other operations in the warehouse
Both are rights of the owner in a warehouse, so they blur together.
Fix: Manufacture and other operations are covered by Section 65. Section 64 covers sorting, showing for sale and handling to prevent loss or maintain condition.
Assuming the owner can act before the goods are warehoused
The word 'owner' is read without the condition 'warehoused goods'.
Fix: Check the facts for warehousing first. The right starts after warehousing.
Listing 'take samples' as a Section 64 act and stating that duty is payable on samples under its proviso
Students mix up sampling with the acts in the main part of the section and assume the proviso is a duty rule.
Fix: List only sorting, showing for sale and dealing to prevent loss, deterioration or damage or maintain condition. The proviso deals with removal of samples and states no duty rule, so do not write one.

Worked examples

Example 1

Mehta Traders imported a consignment of ceramic tiles and warehoused it in a bonded warehouse. Some boxes were found cracked. Mehta wants to separate the cracked tiles and invite a buyer to see the rest. He asks if he may do this on his own. Advise.

Show the solution

Provision: Under Section 64, the owner of warehoused goods may, with the proper officer's permission and subject to the regulations and conditions, sort the goods, show them for sale, and deal with them to prevent loss or damage.
Facts: The goods are already warehoused. Mehta is the owner. Separating cracked tiles is sorting and handling to limit loss. Inviting the buyer is showing for sale.
Application: Both acts fall within Section 64. But they need the proper officer's permission, and the goods stay under customs control. Mehta cannot act entirely on his own.
Conclusion: Mehta may sort the tiles and show them to the buyer, but only after getting the proper officer's permission and following the prescribed conditions.

Answer: Mehta may sort the cracked tiles and show the goods for sale under Section 64, but only with the proper officer's permission and subject to the conditions. He cannot act without permission.

Example 2

Rao Chemicals has warehoused imported chemicals. The owner applies to take out the goods from the warehouse to use them in his factory, saying that this is covered by his right to deal with warehoused goods under Section 64. Examine.

Show the solution

Provision: Section 64 lets the owner sort, show for sale, and deal with the goods to prevent loss, deterioration or damage or maintain their condition, with permission. It does not clear goods for use.
Facts: Rao wants to take the goods out for use in his factory. That is clearance for home consumption, not a dealing inside the warehouse.
Application: Clearance for home consumption is done by an ex-bond bill of entry under Section 68, with payment of duty and other conditions. Section 64 does not permit it.
Conclusion: Rao cannot rely on Section 64 for this. He must file an ex-bond bill of entry and clear the goods on payment of duty.

Answer: Section 64 does not cover removal of goods for use. Rao must clear the goods for home consumption through an ex-bond bill of entry and pay duty.

Exam tips

Write the list of acts (sort, show for sale, deal to prevent loss or maintain condition) in one line. Do not list 'inspect' or 'take samples' as separate statutory rights under the section.
Always mention the proper officer's permission. It is the condition most often missed.
If a question mentions samples, say the proviso to Section 64 deals with their removal. Do not state that it makes duty payable on samples.
In case scenarios, separate dealing inside the warehouse from clearance. Many questions are built on this contrast.
If a question mentions manufacture, move to Section 65. If it mentions export or home consumption, move to Sections 69 or 68.
Do not quote time limits or duty figures unless the question gives them. Stick to the rule and its conditions.

Practice questions from Warehousing

Owner's Right to Deal with Warehoused Goods (Sec 64): frequently asked questions

What can an owner do with goods in a bonded warehouse under Section 64?

The owner can sort the goods, show them for sale, and deal with them to prevent loss, deterioration or damage or maintain their good condition. Each act needs the proper officer's permission and must follow the regulations and prescribed conditions.

Does Section 64 allow the owner to take goods out of the warehouse?

No. Section 64 covers dealings while the goods remain under customs control. Taking goods out for home consumption needs an ex-bond bill of entry, and for export needs a shipping bill.

What is the difference between warehousing and ex-bond clearance?

Warehousing means storing goods under bond without paying duty at import. Ex-bond clearance means taking goods out of the warehouse for home consumption, on payment of duty, or for export. Section 64 sits between the two, as the owner's right while the goods are stored.

Is the permission of the proper officer always needed?

Yes, treat permission and compliance with the regulations and prescribed conditions as essential for every dealing under Section 64. In an answer, state this explicitly and apply it to the facts.

What does the proviso to Section 64 say about samples?

The proviso deals with the removal of samples from the warehouse. It does not state a rule that duty is payable on samples, so do not write that as the statutory answer. Samples are not one of the acts listed in the main part of the section, which covers sorting, showing for sale and dealing to prevent loss or maintain condition.