TaxTMI 
TaxTMI 
2026 (7) TMI 1287
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.... under Application No. 213/2025-26, 214/2025-26 and 215/2025-26 dated 11.03.2026. STATEMENT OF RELEVANT FACTS HAVING A BEARING ON THE QUESTION (S) ON WHICH ADVANCE RULING IS REQUIRED 1.1 The application is being preferred by M/s. Sunwoda Electronic India Private Limited ('Applicant') a company incorporated in India and having its registered head office located at Noida. 1.2 For the purposes of the present application, the Applicant is presently engaged in the business of manufacturing of lithium-ion battery packs of cellular mobile phones. For manufacturing of lithium-ion battery packs, the Applicant imports lithium-ion cells, and various other inputs and parts. 1.3 The said activity is duly stated in the object clause of Memorandum of Association of the Applicant. The relevant excerpt of the Memorandum of Association is reproduced below: "To carry on the business at any place in India or elsewhere of sale, purchase, import, export, trading, manufacturing, assembling, repairing, operating, altering, installing, servicing, exchanging of all types of electronic related products such as batteries, dome-switch ......... " 1.4 For this purpose, the Applic....
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....nputs (lithium-ion cells) used in manufacture of the finished goods, i.e., lithium ion battery packs for cellular mobile phone, in accordance with provisions of Section 68 of the Customs Act. 1.9 In the present application, the question pertains to the DTA sales of lithium-ion battery packs. In case of DTA sales, the Applicant while filing BoE for home consumption (i.e., ex-bond BoE), intends to avail concessional benefit under S. No. 320 of the NN 45/2025. The said S. No. of the NN 45/2025 provides for '5%' concessional rate of duty on "Lithium-ion cell for use in manufacture of battery or battery pack of cellular mobile phone". This benefit of concessional rate of duty is also subject to end use condition, requiring compliance with IGCR Rules 2022. Relevant entry of the exemption notification is furnished below for ease of reference: S. No Chapter or Heading or sub-heading or tariff item Description of goods Standard rate Integrated Goods and Service tax (IGST) Condition No. 320 8507 60 00 Lithium-ion cell for use in manufacture of battery or battery pack of cellular mobile phone: Provided that nothing contained in this S. No. shall ....
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....all be in respect of, - (a) classification of goods under the Customs Tariff Act, 1975 (51 of 1975); (b) applicability of a notification issued under sub-section (1) of section 25, having a bearing on the rate of duty; (c) the principles to be adopted for the purposes of determination of value of the goods under the provisions of this Act. (d) applicability of notifications issued in respect of tax or duties under this Act or the Customs Tariff Act, 1975 (51 of 1975) or any tax or duty chargeable under any other law for the time being in force in the same manner as duty of customs leviable under this Act or the Customs Tariff Act; (e) determination of origin of the goods in terms of the rules notified under the Customs Tariff Act, 1975 (51 of 1975) and matters relating thereto. (f) any other matter as the Central Government may, by notification, specify." (Emphasis supplied) 1.14 The Applicant wishes to obtain the advance ruling on questions relating to applicability of exemption notification issued under subsection (1) of Section 25 of the Customs Act, i.e., eligibility to avail benefit at concessional rate under S. No. 3....
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....ew Delhi for kind consideration. 1.21 The Applicant humbly submits that the Hon'ble CAAR may kindly grant an opportunity of personal hearing at earliest convenient and issue the advance ruling addressing the questions of law raised in the present application at an early date. 1.22 The Applicant reserves its rights to add, delete, modify, withdraw any of the above submissions. The Applicant shall be pleased to provide any additional documents/ information in support of the submissions if required by your good office . STATEMENT CONTAINING APPLICANT'S INTERPRETATION OF LAW AND/OR FACTS, AS THE CASE MAY BE, IN RESPECT OF THE QUESTION(S) ON WHICH ADVANCE RULING IS REQUIRED 1.23 The Applicant is presently engaged in the business of manufacturing of lithium-ion battery packs of cellular mobile phones. For this purpose, the Applicant inter alia imports lithium-ion cells and various other inputs & parts by filing the warehousing BoE for undertaking the manufacture of battery packs of cellular mobile phones in its MOOWR facility. For the present application, the proposed activity pertains to the import of lithium-ion cells, and other inputs & parts for the aforesaid purp....
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....igible to avail the benefit of concessional rate of duty under S. No. 320 of NN 45/2025 dated at the time of filing of BoE for home consumption (i.e., ex - Bond BoE)? QUESTION I: WHETHER THE APPLICANT IS ELIGIBLE TO AVAIL THE BENEFIT OF CONCESSIONAL RATE OF DUTY UNDER S, NO. 320 OF NN 45/2025 AT THE TIME OF FILING OF BOE FOR HOME CONSUMPTION (EX-BOND BOE)? 1.28 At the outset, the Applicant submits that it is eligible to avail to avail the benefit of concessional rate of duty under S. No. 320 of NN 45/2025 at the time of filing of Ex-Bond Bill of Entry to clear lithium - ion battery packs. In this regard, the Applicant wishes to make the following submissions - A. The rate of duty applicable will be the rate of duty prevailing on the date of ex-bonding 1.29 The import and export of goods into and out of India is regulated by the Customs Act. Section 12 of the Customs Act is the charging section which stipulates that duties of customs shall be levied on all goods imported into India or exported out of India at such rates as may be specified under the Customs Tariff Act. 1.30 Further, Section 15 of the Customs Act contains provisions for date for determination of ....
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....ding. This position makes it clear that the date of sending the goods to bonded warehouse, i.e., when the Warehousing BoE is filed, has no bearing on the determination of the applicable duty rate. Instead, the decisive factor for computing the customs duty liability is the date on which the goods are cleared from the warehouse for home consumption. 1.33 The principle enunciated in Section 15 has been re-affirmed and re-iterated by Hon'ble Supreme Court and jurisdictional High Courts in various cases such as - * Prakash Cotton Mills (P) Ltd vs B. Sen & Ors. [1979 AIR 675 - Supreme Court] * Union of India & Ors. v. Dindigul Spinners Association, Madras High Court [W.A.Nos. 1552 to 1573 of 2013]. 1.34 Reliance in this regard is also placed on the case of Patanjali Foods Ltd. Vs. Union of India, and Anrs. [2024 (7) TMI 426 - BOMBAY HIGH COURT]. In this case, the issue was with respect to whether the enhanced tariff value could be applied to four Ex-Bond Bills of Entry that had already been self-assessed earlier the same day, before a notification altering the duty structure was issued later on the same day. Here, the Hon'ble Bombay High Court, held that ....
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....ssar Power Gujarat Ltd Versus C.C. - Jamnagar (prev) (Vice-Versa) (2022 (12) TMI 484 - CESTAT Ahmedabad) wherein the issue was with respect to whether a change in classification is permissible at the time of filing ex-bond BoE. Here, the Tribunal, held that classification can be changed at the time of filing ex- bond BoE because assessment becomes final only at the time of ex-bond clearance. Further, it was held that the warehousing BOE is only to secure duty and is not conclusive; the final duty leviable is only determined at the time of filing ex-bond BoE as per Section 15(1)(b). 1.39 Thus, in view of the above submissions, it is evident that that the rate of duty shall be determined with reference to the rate in force at the precise time of filing the Ex-Bond Bill of Entry. B. The rate of duty will be the rate 'effective', giving due consideration to the concession/ exemption available vide any notification, at the time of filing of BoE for home consumption (Ex-bond BoE) 1.40 The Applicant further wishes to place reliance to Section 25 of the Customs Act which contains provisions regarding power to grant exemption from duty. Section 25 (1) of the Customs Act rea....
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....ince the petitioner's bills of entry were filed before the new notification (with enhanced tariff) came into force, the earlier notification was considered, and the enhanced tariff could not apply. The Court therefore quashed the reassessment orders and permitted Patanjali to seek a refund of the excess duty paid under protest. Given the factual matrix of the Patanjali Food case and the rationale laid, it is clear that the eligibility to consider the notification was not contested and at the time of filing ex-bond BoE, the applicable tariff was considered giving due consideration to the notification prevailing then. C. Applicant has the option to select most beneficial exemption available 1.46 It is evident that the rate of duty applicable at the time of ex-bond clearance is the rate in force on that date. Consequently, any exemption notification that remains in effect at the time of ex-bonding must be given full effect, and the importer is entitled to avail the benefits of all such exemptions at the stage of ex-bond assessment, provided that all prescribed conditions are duly satisfied by the importer. 1.47 Given the business model of the Applicant, at the time of fil....
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.... the classification list and subsequently it could not be done. The appellant approached this, Court." '13. Allowing the appeal and setting aside the order, this Court held that if no time is fixed for the purpose of getting benefit under the exemption notification, it could be claimed at any time. If the notification applies, the benefit thereunder must be extended to the appellant. The Court held that the authorities as well as the Tribunal were not right in holding that the appellant ought to have claimed the benefit of the notification at the time of filing of classification lists and not at a subsequent stage.' The Court then stated. " ... There can be no doubt that the authorities functioning under the Act must, as are in duty bound, protect the interest of the Revenue by levying and collecting the duty in accordance with law - no less and also no more. It is not part of their duty to deprive an assessee of the benefit available to him in law with a view to augment the quantum of duty for the benefit of the Revenue. They must act reasonably and fairly". (Emphasis Supplied)' 1.50 Basis this judgement, we understand that an assessee ....
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.... Circular No.26/2024-Customs dated 21st November 2024 wherein it provided clarifications on the applicability of concessional duty under IGCR Rules, 2022. Para 3.3 states that "the MOOWR unit may avail IGCR exemption along with duty deferment under MOOWR simultaneously, provided that the importer undertakes to comply with the additional conditions prescribed in the Concessional Notification and IGCR Rules therein including time-limit etc., in addition to MOOWR stipulations for those goods while supplying goods from its premises." 1.59 Hence, in view of the above, the Applicant is of the opinion that the benefits available under the IGCR Rules, 2022, extend to units operating under the MOOWR Scheme as well. It is the considered opinion of the Applicant that such units are entitled to avail the benefits simultaneously under both frameworks, namely, concessional duty under IGCR and duty deferment under MOOWR, provided that the Applicant remains fully compliant with the end-use conditions prescribed under the IGCR Rules. The entitlement to exemption under IGCR cannot be denied merely on the ground that the unit operates under MOOWR, so long as the statutory requirements of end-use c....
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....toms at the time of filing the Ex-bond Bill of Entry, notwithstanding that a different serial number, namely S. No. 325, may have been mentioned at the time of filing the into-bond Bill of Entry for warehousing. 2. Product description and proposed use: The applicant is engaged in the manufacture of lithium- ion battery packs for cellular mobile phones and imports lithium-ion cells for use in such manufacture in its bonded warehouse operating under the MOOWR scheme. The issue raised concerns the applicable rate of duty at the stage of clearance for home consumption and the admissibility of the end-use based concessional rate subject to compliance with the Import of Goods at Concessional Rate of Duty or for Specified End Use Rules, 2022. 3. Field's views on the issue: After examining the applicant's submissions and the relevant statutory provisions, the following position emerges: I. Relevant date for rate of duty: In terms of Section 15(1)(b) of the Customs Act, 1962, in the case of warehoused goods cleared under Section 68, the rate of duty and tariff valuation applicable are those in force on the date on which the Bill of Entry for home consumpti....
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....port in respect of application No 214/2025-26: With reference to the advance ruling application No 214/2025-26 preferred by M/s. Sunwoda Electronic India Private Limited, this office has reviewed the applicant's submissions. We beg to submit our statutory comments on the core question raised by the applicant, namely: "Whether the applicant is eligible to avail the benefit of concessional rate of duty under S. No. 320 of NN 45/2025 dated 24th October 2025 (as amended) at the time of filing of BoE for home consumption (i.e.., Ex- bond BoE)?". Regarding the foundational issue of timing, this office completely affirms the applicant's legal position that the final rate of assessment must be strictly governed by the date of clearance for home consumption. For clear legal footing and to establish statutory permanence, the provisions of Section 15 of the Customs Act, 1962, are reproduced below: "Section 15 in The Customs Act, 1962 - 15. Date for determination of rate of duty and tariff valuation of imported goods. (1) The rate of duty and tariff valuation, if any, applicable to any imported goods, shall be the rate and valuation in force, ....
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.... of duty under SI No. 320 of NN 45/2025 dated 24/10/2025 dated (as amended) at the time of filing of BoE for Home consumption (i.e Ex-Bond BoE) on import of inputs & parts (including lithium-ion cells), for use in manufacture of battery packs of cellular mobile phones. 2. About the applicant engagement in business The Applicant is presently engaged in the business of manufacturing of lithium-ion battery packs of cellular mobile phones. For manufacturing of lithium-ion battery packs, the applicant imports lithium-ion cells, and various other inputs and parts. In this regard, the relevant port of import is Nhava Sheva-V, Jawaharlal Nehru Custom House (JNCH), Taluka Uran, District Raigad, Maharashtra - 400707 (INNSA1). Accordingly, the Applicant imports lithium-ion cells under tariff heading 8507 60 00, and various other inputs and parts by filing the warehousing BoE for manufacturing of lithium-ion battery packs of cellular mobile phones in its MOOWR facility. 3. ISSUE REQUIRING ADVANCE RULING It is informed by applicant in application CAAR-I, that after manufacture, the Applicant undertakes sale of the manufactured finished goods i.e., lithium-ion....
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.... applicable in respect of those goods which are going to be imported in future and not to those which are already imported if any. 3. Additional Submissions of the Applicant: Further, the applicant vide letter dated 23.04.2026 asked for the ruling/order to be confidential. Content of the letter is as below: 3.1 We, M/s Sunwoda Electronic India Private Limited ('Company' or 'Applicant'), holding IEC 0516000361 and having the registered office at D-204, Sector 63, Noida, Gautam Buddha Nagar Uttar Pradesh- 201301. The Company is presently engaged in the business of manufacturing of lithium-ion battery packs of cellular mobile phones. For manufacturing of lithium-ion battery packs, the Company imports lithium-ion cells, and various other inputs and parts. Background 3.2 In furtherance of its business activities, the Company has submitted an Application for Customs Advance Ruling (Application No. 214/2025-26 filed dated 11.03.2026) ['CAAR application'] under Section 28H of the Customs Act, 1962 ('Customs Act') regarding eligibility to avail benefit of concessional rate of duty under S. No. 320 of Notification Number 45/2025 dated 24.10.2025 (as....
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.... stage of import of inputs, in accordance with conditions prescribed under said Notification. Therefore, the subsequent clearance of manufactured finished goods does not, in any manner, dilute the eligibility to avail exemption on inputs. 3.7 It is pertinent to note that as per Section 15(1)(b) of the Customs Act, as acknowledged and concurred by concerned Port Authority, provides that in cases where goods are warehoused in a bonded facility, the applicable duty on the imported goods is to be determined at time of clearance from warehouse for home consumption. 3.8 In this context, it is imperative to mention that Company is duly licensed to operate a private bonded warehouse under Section 58 of the Customs Act and has also been granted permission under Section 65 to function as a Manufacturing and Other Operations in Warehouse Regulations ('MOOWR') unit. 3.9 In such capacity, the Company undertakes manufacturing operations relating to lithium-ion battery packs for cellular mobile phones. The Company imports lithium-ion cells classifiable under tariff heading 8507 60 00, along with various other inputs and components, by filing Warehousing Bills of Entry ('Into ....
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....nal hearing at the earliest convenient. 4. Personal Hearing: A personal hearing in the matter was conducted on 18.06.2026. During the hearing, the authorized representatives of the applicant, namely Sh. Pawan Varshney, Sh. Gautam Khattar, and Ms. Yashi Srivastava, appeared and reiterated the submissions already made in the application as well as those contained in the additional submissions filed by the applicant. No representative from the Department appeared or attended the personal hearing. 5. Discussion, Findings & Conclusion: Having examined the CAAR-1 application, the comments received from the jurisdictional Customs Commissionerate's, the record of personal hearing held on 18.06.2026, and the applicable legal framework, I find the application to be valid in terms of the Customs Act, 1962 and the CAAR Regulations, 2021. I therefore allow the application in terms of Customs Act & CAAR regulations and proceed to determine the eligibility to avail concessional duty benefits of the proposed imports of lithium-ion cells on the basis of the information on record. Product Description: 5.1 On going through the application, I find that the applicant is engaged in the....
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....urers, currently the Applicant discharges duty on the inputs (lithium-ion cells) used in manufacture of the finished goods by filing BoE for home consumption under S. No. 325 of the Notification No. 45/2025-Customs. ISSUE OF AVAILMENT OF NOTIFICATION BENEFIT 5.4 Upon perusal of the application and the submissions made thereunder, I observe that the applicant has sought an advance ruling on the applicability of the appropriate serial number of Notification No. 45/2025-Customs at the time of filing the Ex-Bond Bill of Entry for clearance of lithium-ion battery packs into the Domestic Tariff Area (DTA) only, where the said lithium-ion cells had initially been warehoused after availing the benefit under Serial No. 325 of Notification No. 45/2025-Customs at the time of filing the Warehouse Bill of Entry. 5.4.1 Further, I observe that no customs duty is leviable or payable at the time of transfer of the lithium-ion battery packs manufactured for cellular mobile phones by the applicant to contract manufacturers operating under the Manufacture and Other Operations in Warehouse Regulations (MOOWR) units and engaged in manufacture of the cellular mobile phones, in terms of the said ....
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....ibed end-use conditions and compliance with the procedural requirements stipulated under the IGCR Rules, 2022. 5.4.4 Further, I observe that Serial No. 325 of Notification No. 45/2025-Customs prescribes a Basic Customs Duty (BCD) rate of 10% in respect of goods falling under tariff item 8507 60 00, other than battery packs for use in the manufacture of electrically operated or hybrid vehicles covered under Serial No. 322, lithium-ion batteries or battery packs of cellular mobile phones covered under Serial No. 324, and power banks. Accordingly, it is evident that the benefit under Serial No. 325 is available in respect of all other goods classifiable under tariff item 8507 60 00 which are not specifically covered by the aforesaid excluded entries. I further observe that Notification No. 45/2025-Customs does not prescribe any condition or end-use requirement to be fulfilled at the time of import for availing the benefit under Serial No. 325. It is also evident from the scheme of the notification that Serial No. 325 is in the nature of a residual entry, intended to cover all eligible goods falling under tariff item 8507 60 00 that are not specifically covered under Serial Nos. 322....
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....s of how long the goods remain in the bonded warehouse. vii. No time limit for warehousing -Imported inputs and capital goods may remain in the bonded warehouse without a prescribed time limit for duty deferment under the scheme. B-IGCR scheme The IGCR (Import of Goods at Concessional Rate of Duty) Scheme enables eligible importers to import goods at a concessional or nil rate of customs duty for manufacturing, specified end use, or provision of output services, subject to compliance with the Customs (Import of Goods at Concessional Rate of Duty or for Specified End Use) Rules, 2022. Salient features of the IGCR Scheme are :- i. Concessional/Nil customs duty -Eligible goods can be imported at a concessional or nil rate of customs duty under the relevant exemption notification. ii. Specified end use- Imported goods must be used for the purpose specified in the exemption notification, such as manufacturing, provision of output services, or another notified end use. iii. Advance intimation -The importer is required to file advance intimation electronically on the ICEGATE portal before import and obtain an IGCR Identification Number (IIN) (R....
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....erential duty plus interest is recoverable if the conditions of the exemption or IGCR Rules are not met. 5.6 I note that Section 15 of the Customs Act, 1962 lays down the rules for determining the applicable rate of duty on imported goods. Relevant section is as under :- "Section 15 - Date for determination of rate of duty and tariff valuation of imported goods (1) The rate of duty and tariff valuation, if any, applicable to any imported goods, shall be the rate and valuation in force, - (a) in the case of goods entered for home consumption under section 46, on the date on which a bill of entry in respect of such goods is presented under that section; (b) in the case of goods cleared from a warehouse under section 68, on the date on which a bill of entry for home consumption in respect of such goods is presented under that section; ....." 5.6.1 As explicitly mandated under Section 15(1)(b) above, the relevant date for determining the applicable rate of duty for warehoused items is strictly the date of presentation of the Ex- Bond Bill of Entry for home consumption. Therefore, the applicant's choice to alter and claim the benefit under a....
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.... specifically conditional upon compliance with the procedural requirements and end-use conditions prescribed under the IGCR Rules, 2022 from the stage of import itself. Since the applicant did not import the goods under Serial No. 320 and was not subjected to the statutory obligations attached thereto at the time of filing the Warehouse Bill of Entry, the benefit of Serial No. 320 cannot subsequently be claimed at the time of filing the Ex-Bond Bill of Entry. Permitting such a claim would, in effect, allow the applicant to avail a conditional exemption without having complied with the mandatory statutory conditions governing its availability from the time of import. 5.8 I also observe that the jurisdictional ports have commented that this duty exemption benefit under S.No. 320 of the notification 45/2025-Customs, can be availed by applicant for lithium-ion cells only for manufacture of battery or battery pack of cellular mobile phone subject to compliance of condition no. 3 to the Notification 45/2025-Customs which states " If the importer follows the procedure set out in the Customs (Import of Goods at Concessional Rate of duty for specified end use) Rules, 2022". 5.9 I furt....