Shifting from MOOWR to EPCG for Same Import done under MOOWR

[Abhijeet Mane]

I have imported a machine under the MOOWR scheme, and the customs duty was deferred at the time of import. We now find that MOOWR is not useful for our operations and want to shift this same machine from MOOWR to the EPCG scheme.

Is it permissible to switch the same capital good from MOOWR to EPCG without paying the deferred customs duties again, and simply fulfil the EPCG export obligation going forward?

[Sadanand Bulbule]

Capital goods imported under the MOOWR scheme involve only deferment of customs duty, not exemption. If the machinery is removed from the bonded warehouse, the deferred duty must first be paid through an ex-bond clearance. The EPCG scheme, being a duty-exemption scheme linked to export obligation, cannot be applied retrospectively to such goods. Hence, switching the same machine from MOOWR to EPCG without paying the deferred customs duty is generally not permissible.

[Shilpi Jain]

Have a look at this customs ruling in this regard -

2025 (1) TMI 636 - AUTHORITY FOR ADVANCE RULINGS CUSTOMS, MUMBAI - IN RE : BLUE STAR CLIMATECH LTD.

 

[Shilpi Jain]

Also what is the reason for moving out from MOOWR?

AI Summary

Deferred customs duty under warehousing cannot be avoided by switching to a duty-exemption scheme without first paying owed duty.
Capital goods entered under MOOWR receive only deferment of customs duty and, upon removal from the bonded warehouse, the deferred duty must be paid via ex-bond clearance; the EPCG duty-exemption scheme cannot be applied retrospectively to goods imported under MOOWR, so switching the same machine to EPCG without discharging the deferred duty is generally not permissible.