AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2026 (1) TMI 342
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....ORDER No. 03/Tech/MOOWR/JMS/Churcha/2025-26 DATED 17.06.2025 Relevant Period 04.10.2021 - 17.06.2025 31.01.2024 - 17.06.2025 Location of MOOWR Unit Chhatarpur Mine No. 1, Chhatarpur Sub Area, Pathakhera Area, Madhya Pradesh - 460 449. Churcha RO underground Mine, Shivpur Block, Baikunthpur Area, Churcha, Chhattisgarh - 497 339. Details of MOOWR Application Application No. 263489041021BM dated 04.10.2021 was filed by the Appellant for grant of permission for Chhatarpur mines at Pathakhera to be operated as a MOOWR Unit in terms of Section 58 and 65 of the Customs Act. The license was granted to Appellant after proper scrutiny of all the documents and physical verification. Application No. 359197071122BM dated 07.11.2022 was filed by the Appellant for the grant of permission for Churcha Mines at Baikunthpur to be operated as a MOOWR Unit in terms of Section 58 and 65 of the Customs Act. The said application was denied upon due physical verification for the reason that the area mentioned in the application did not match with the area identified during inspection Appellant corrected its mistake and filed a second MOOWR Application bearing No. 3892261011....
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....the rules or regulations made thereunder or breaches any of the conditions of the licence. 6. Section 65 of the Act stipulates the owner of any warehoused goods may carry on any manufacturing process or other operations in the warehouse in relation to such goods with the permission of the Commissioner. MOOWR, 2019 regulate such operations. As per MOOWR, 2019, one may apply for permission to the Commissioner under Regulation 4 and the Commissioner may grant permission under Regulation 5 which shall, as per Regulation 6 remain valid unless it is cancelled or surrendered, or the license issued under section 58 is cancelled or surrendered, in terms of the provisions of the Act or the rules and regulations made thereunder. 7. After manufacture or carrying out other operations, the goods so manufactured can, as per Regulation 14 of MOOWR 2019, be removed for home consumption after filing a Bill of Entry for Home Consumption for so much of the imported goods as are contained in the goods manufactured. 8. In this case, the appellant was given contracts to carry out mining operations in Chhatarpur mines at Pathakhera by Western Coalfields Limited [WCL] and in Churcha Mine by the So....
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....ify the manufacturing processes and other operations in relation to a class of goods that shall not be permitted in a warehouse. Neither mining nor services have been notified under this section. (iii) The Central Government has issued only Notification No. 86/2024-Customs (N.T.) dated 16.12.2024 under section 65(1) of the Act as per which, only "goods imported for solar power generation projects which supply electricity" have been excluded and are not permitted to be undertaken in a MOOWR Unit. Further, the Explanation provided thereunder also clarifies that the restriction is applicable only when electricity is resulting from the manufacturing process and other operation undertaken in relation to the warehoused good(s) under Section 65 of the Customs Act. (iv) The Principal Commissioner placed reliance placed on Instruction No. 13/2022 which has been quashed by the Delhi High Court in Acme Heergarh Powertech Pvt. Ltd. vs Central Board of Indirect Taxes and Customs [2025 (391) ELT 198 (Del.)] . (v) The statutory provisions nowhere mandate for the licensee to own the premises where the manufacture or other processes are undertaken. (vi) The impug....
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....e. (xi) Both appeals may be dismissed. Findings 13. We have considered the submissions advanced by both sides and perused the records. 14. Section 58 empowers the Commissioner to issue a licence for private bonded warehouse in which the goods imported by the licencee can be kept. This section does not require the premises to be owned by the licencee and therefore, the ownership of the land or premises is irrelevant. 15. Section 58B provides for cancellation of the licence if the licencee contravenes any of the provisions of this Act or the rules or breaches any condition of licence. It does not empower the Commissioner to review his own decision to issue the licence and cancel it. Unless the licencee contravenes the Act or Rules or any condition of the licence, the Commissioner has no power under Section 58B to cancel the licence. Section 58B reads as follows: "Section 58B. Cancellation of licence. - (1) Where a licensee contravenes any of the provisions of this Act or the rules or regulations made thereunder or breaches any of the conditions of the licence, the Principal Commissioner of Customs or Commissioner of Customs may cancel the licenc....
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....reach of any of the conditions of the licence : Provided that before any licence is cancelled under clause (b), the licensee shall be given a reasonable opportunity of being heard. (3) Pending an enquiry whether a licence granted under sub -section (1) should be cancelled under clause (b) of sub -section (2), the Assistant Commissioner of Customs or Deputy Commissioner of Customs may suspend the licence." 17. Insofar as cancellation of licences is concerned, the two important legislative changes brought in by Finance Act 2016 are: (a) the power to cancel the licence which was earlier with the Assistant Commissioner or Deputy Commissioner has been vested in the Commissioner; and (b) the power to cancel a licence with one month's notice has been taken away and the licence once issued, can be cancelled only in case of violation of Act or Rules or conditions of the licence. 18. Therefore, from the year 2016, a private bonded licence once issued, cannot be cancelled unless there is a contravention of the Act or Rules or conditions of licence by the licensee. If the Commissioner issues a licence under section 58 and thereafter feels that he had w....
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....ny warehouse wherein manufacture or other operations have been permitted under section 65, till their clearance from the warehouse; (b) in the case of goods other than capital goods intended for use in any hundred per cent. export oriented undertaking or electronic hardware technology park unit or software technology park unit or any warehouse wherein manufacture or other operations have been permitted under section 65, till their consumption or clearance from the warehouse; and (c) in the case of any other goods, till the expiry of one year from the date on which the proper officer has made an order under sub-section (1) of section 60: ****** 20. What needs to be noted is that the amended section 61 treats warehouses where MOOWR licences are issued differently from the other custom bonded warehouses. It does not stipulate that the permission to warehouse capital goods until they are cleared and other goods until they are consumed or cleared will be confined to only certain types of capital goods or other goods indicated in the MOOWR licence. 21. There is also no restriction on what types of goods can be warehoused in a warehouse with MOOWR licence ....
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....ive the Commissioner the discretion to stipulate which goods can be imported for the operations. A comparison of Regulation 5 of MOOWR 2019 and Regulation 5 of the erstwhile MOOWR 1966 will make this position very clear. "Regulation 5 of MOOWR 2019 Regulation 5. Grant of permission. - Upon due verification of the application made as per regulation 4, the Principal Commissioner of Customs or Commissioner of Customs, as the case may be, shall grant permission to operate under the provisions of these regulations. Regulation 5 of MOOWR 1966 5. Grant of sanction.- On execution of the bond, in the manner hereinbefore provided, the Assistant Commissioner of Customs or Deputy Commissioner of Customs shall accord sanction to the applicant to carry on such manufacturing process or other operations specifying: (a) the manufacturing process or other operations permitted to be carried on in the warehouse; (b) the types and nature of imported and other goods permitted to be used; (c) the period for which the sanction is valid; and (d) the conditions, if any, subject to which the manufacturing process or other operat....
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....ns'. Mining of coal carried out by the appellant qualifies, in our opinion, as 'other operations' which can be permitted under section 65. 28. We also find from the chronology of events that the licence was issued to the appellant after a lot of correspondence and after physical verification of the premises. The Commissioner had, apparently applied his mind when issuing a licence under section 58 of the Act permitting operations under section 65 and under MOOWR, 2019. It is not open to the Commissioner to review his own or his predecessor's decision to grant permission under MOOWR, 2019 and to grant a private bonded licence under section 58 of the Act. Neither the MOOWR, 2019 Regulations nor the Customs Act confers any such power on the Commissioner. Section 58B can be invoked to cancel the private bonded warehouse licence only if there is violation of the Act or Rules or conditions of the licence and it is not the case of the Revenue that the appellant had violated any provisions of the Act or Rules or the conditions of the licence. 29. To sum up: i) After the amendments made by Finance Act, 2016, the Commissioner has the power to grant a licence for private bonded ....
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....warehouse licenced under section 58 with permission under MOOWR 2019 and they are not contained in any of the goods which are manufactured and cleared from the warehouse, no duty needs to be paid. For instance, if the licencee imports food and drinks or other goods into the warehouse and these are consumed within the warehouse, they will not become part of the goods manufactured and cleared from the warehouse. No duty needs to be paid. viii) Unlike it's predecessor MOOWR 1966, MOOWR, 2019 do not restrict either the operations or the goods which can be imported into the warehouse and used in them. Unlike in Special Economic Zones, the operations need not be authorised and the goods manufactured therein are not subjected to import duty (import duty has to be paid by filing a Bill of Entry only on the quantity of the imported inputs which are contained in the goods which are manufactured and cleared). Unlike in Export Promotion Capital Goods Scheme, there is no obligation whatsoever to export goods manufactured using the capital goods. Unlike in other export promotion schemes in MOOWR, 2019 there is no export obligation against any goods, whatsoever, which may be imported and....