Vedanta Power Limited Vs Assistant Commissioner (Chhattisgarh High Court)
Summary: The High Court of Chhattisgarh at Bilaspur allowed the writ petition filed by Vedanta Power Limited challenging the rejection of its application for a licence under the Manufacture and Other Operations in Warehouse (No. 2) Regulations, 2019 (MOOWR, 2019). The petitioner was setting up a 1200 MW thermal power plant at Janjgir-Champa, Chhattisgarh, and had applied on 3 February 2024 for the requisite licence and permission. Its application was ultimately rejected on 31 January 2025. The rejection was principally based on the view that electricity, being the resultant product of the proposed operations, could not satisfy requirements relating to removal of resultant goods, including affixing a one-time-lock to the load compartment of the means of transport.
The authority also relied upon Instruction No. 13/2022-Customs dated 9 July 2022, Regulation 20 of the Manufacture and Other Operations in Warehouse (no. 2) Regulations, 2019, Notification No. 86/2024-Customs (N.T.) dated 16 December 2024 and Circular No. 34/2019-Customs dated 1 October 2019. The petitioner contended that Instruction No. 13/2022-Customs was applicable to solar energy cases and had subsequently been struck down by the Delhi High Court. Reliance was also placed on a licence granted to another similarly situated company and on the decision in Acme Heergarh Powertech Private Limited Vs Central Board of Indirect Taxes And Customs & Anr.
The respondents opposed the petition, contending that the petitioner had failed to fulfil the requisite norms, that the Delhi High Court decision was under challenge before the Supreme Court, that the other licence was granted for a different purpose and that an alternative remedy was available. The High Court noted that Instruction No. 13/2022-Customs had already been struck down by the Delhi High Court and that the petitioner’s application had been rejected solely on the basis of that instruction. The Court also considered the fact that a licence had been granted to another company.
It consequently quashed the rejection order dated 31 January 2025 and directed respondent No. 1 to decide the petitioner’s application afresh, keeping in mind the Delhi High Court order and the order dated 13 April 2026 placed on record as Annexure-RJ/1. The exercise was directed to be completed within 60 days. The Court further held that the writ petition was maintainable notwithstanding the alternative-remedy objection because the grounds raised by the petitioner in its application had not been duly considered.
Cases Discussed
- Acme Heergarh Powertech Private Limited Vs Central Board of Indirect Taxes And Customs & Anr. – Delhi High Court decision concerning the validity and application of Instruction No. 13/2022-Customs in the context of MOOWR.
FULL TEXT OF THE JUDGMENT/ORDER OF HIGH COURT OF CHHATTISGARH AT BILASPUR
1. The petitioner has filed this petition seeking the following relief(s):-
“10.1 Issue a writ of certiorari or a writ in the nature of certiorari or any other writ, order or direction thereby quashing and setting-aside the Impugned Order bearing DIN 202501690K000091969B dated 31 January 2025 which was received by the Petitioner on 6 March 2025 via an electronic mail; AND
10.2 Issue a writ or an order or a direction thereby declaring and holding that there is no restriction under Sections 58 and 65 of the Customs Act, 1962, or under Manufacture and Other Operations in Warehouse (no. 2) Regulations, 2019, or under Notification No. 86/2024 Customs (NT) dated 16 December 2024, which disentitles the Petitioner’s thermal power generating plant from being granted a license under the Manufacture and Other Operations in Warehouse (no. 2) Regulations, 2019; AND
10.3 Issue a writ of mandamus or a writ in the nature of mandamus, or any other writ, order or direction thereby directing the Respondents to forthwith issue a license to the Petitioner for its thermal power generating plant located at Janjgir, district Champa, Chhattisgarh under the Manufacture and Other Operations in Warehouse (no. 2) Regulations, 2019 from the date of submission of the documents mentioned in Part IV of the Circular bearing number 34/2019 dated 1 October 2019, which evidences the Respondents satisfaction on Petitioner’s eligibility to obtain a license under MOOWR; AND / OR
10.4 Issue a writ of mandamus or a writ in the nature of mandamus, or any other writ, order or direction thereby declaring the Impugned Order dated 31 January 2025 rejection the Petitioner’s application for issuance of a license under the Manufacture and Other Operations in Warehouse (no. 2) Regulations, 2019, as bad in law and consequentially directing the Respondents to refund the duties / taxes deposited by the Petitioner under protest at the time of importing goods / equipment for its thermal power generating plant located at Janjgir, district Champa, Chhattisgarh under the Manufacture and Other Operations in Warehouse (no. 2) Regulations, 2019 along with interest; AND
10.5 Issue a writ or an order or a direction thereby setting-aside the Impugned Order and also holding that the Petitioner is entitled to claim the benefit accrued to it under the Manufacture and Other Operations in Warehouse (no. 2) Regulations, 2019 from the date of submission of the documents mentioned in Part IV of the Circular bearing number 34/2019 dated 1 October 2019, which evidences the Respondents satisfaction on Petitioner’s eligibility to obtain a license under MOOWR; AND
10.6 That the cost of the Petition be provided for; AND / OR
10.7 Issue any other or direction as deemed fit by this Hon’ble Court in the interest of justice.”
2. The facts, in brief, are that the petitioner is a company registered under the Companies Act and is in the process of setting up a Thermal Power Plant in District Janjgir-Champa, Chhattisgarh, with a planned capacity of 1200 MW. The petitioner moved an application on 3.2.2024 before respondent No.1 seeking a license and permission under the Manufacture and Other Operations in Warehouse (No. 2) Regulations, 2019. The petitioner was directed from time to time to cure the deficiencies, and subsequently, its application was rejected vide order dated 31.1.2025 on various grounds. The grounds assigned by respondent No. 3 in its order are as under:
“3.1 Regulation 15 (removal of resultant goods from the warehouse for export) of MOOWR, 2019 requires affixing one-time-lock to the load compartment of the means of transport in which such goods are removed from the warehouse. As per Instruction No. 13/2022-Customs dated 09.07.2022, the said regulation is applicable in case of resultant goods to be removed for home consumption also.
3.2 Since, in case of your resultant goods i.e., electricity, it is not possible affixing one-time-lock to the load compartment of the means of transport, it appears your resultant product i.e., electricity falls squarely outside the scope of MOOWR, 2019 because of inability to satisfy the essence of the prescribed condition.
3.3 Moreover, the Regulation 20 of MOOWR, 2019 states that having regard to the nature of goods, their manner of transport or storage, the Board may exempt a class of goods from any of the provisions of the MOOWR, 2019. In this regard, the electricity generated by thermal power plants has not been exempted by the Board from any provisions of the MOOWR, 2019.
3.4 Besides, the resultant goods i.e., electricity in your case, is also not ordinarily capable of being deposited in a warehouse, which also appears to be mandatory to avail the benefit of MOOWR scheme.
4.0 In this regard, your attention is also invited to Instruction No. 13/2022-Customs dated 09.07.2022 issued by CBIC on the subject “Warehousing of solar power generating units or items like solar panel, solar cell etc. for power plants with resulting goods ‘electricity In-applicability of Manufacture and Other Operations in Warehouse (no.2) Regulations, 2019 under section 65 of the Customs Act, 1962 regarding.
4.1 Despite the said instruction no. 13/2022-Customs dated 09.07.2022 talks about solar power generating units only, in light of the discussion made therein, the said instruction appears to be fairly applicable in case of other power generating units also.
5.0 Moreover, explanation to the Notification No. 86/2024-Customs (N.T.) dated 16.12.2024 also clarifies that “the restriction is applicable when electricity is resulting from the manufacturing processes and other operations in relation to the warehoused goods under section 65 of Customs Act, 1962 (52 of 1962)”, which also appears to be applicable in all cases where resultant goods is electricity.
6.0 Further, as per para 7 Circular No. 34/2019-Customs dated 01.10.2019, it is evident that the duty deferred on goods imported under the scheme, will be waived of only when the goods are exported. However, in the present case, the resultant product i.e., electricity cannot be exported.
6.1 In this case, the resultant product i.e., electricity, has been exempted from levy of GST vide Entry No. 104 of the Notification No. 02/2017-Central Tax (Rate) dated 28.06.2017, the benefits of the duty deferment on capital goods imported under the scheme cannot be given to you.
7.0 Further, you have also submitted vide letter dated 04.07.2024 that the raw materials for generation of electricity may procure locally within India or imported depending on demand/operational factor. It indicates that raw material may also be imported by you in coming days.
7.1 In this regard, Regulation 4(2)(iii) of MOOWR, 2019 requires the applicant to inform the input-output norms, wherever considered necessary for raw materials and the final products. Further, it also appears necessary to intimate that how the waste will be treated in your case, as Section 65 of Customs Act, 1962 prescribes that in case of clearance of goods from warehouse for home consumption, import duty should have been paid on the quantity of warehoused goods contained in so much of the waste or refuse be arisen form the operations carried on in relation to the goods cleared for home consumption.
7.2 However, no input-output norms or any other documents regarding treatment of waste have been provided.”
The petitioner has challenged the said order by filing this petition.
3. Learned Senior Advocate appearing for the petitioner would contend that respondent No.1 wrongly applied Instruction No.13/2022-Customs dated 9.7.2022, whereas the said instruction was applicable only in cases relating to solar energy and, subsequently, the said circular was struck down by the High Court of Delhi. It is also contended by learned Senior Advocate that respondent No.1 granted a license to a similarly situated company. He has placed the said order on record as Annexure-RJ/1 along with the rejoinder and the description of the goods proposed to be imported reads as under:
| Description of goods | Classification as Customs Tariff |
|---|---|
| Battery Energy Storage System containing Lithium-ion Accumulator) |
85076000 |
| Power Conditioning Systems (Inverters) |
85044090 |
4. Learned Senior Advocate would contend that respondent No.1 may be directed to reconsider the application moved by the petitioner in light of the order passed by the High Court of Delhi in the case of Acme Heergarh v. Central Board of Indirect Taxes & Customs, W.P.(C) No.10537 of 2022, and the order passed in favour of another company. Learned Senior Advocate would further contend that the grounds raised in the application for grant of license were not duly considered by respondent No.1 and, thus, there was a violation of the principles of natural justice. Therefore, the order contained in Annexure-P/1 is bad in law.
5. On the other hand, learned counsel appearing for the respondents would oppose the submissions made by learned counsel for the petitioner. He would submit that the petitioner Company failed to fulfill the requisite norms and, therefore, the application moved by the petitioner was rejected. He would contend that the order passed by the High Court of Delhi has already been assailed by filing an SLP before the Hon’ble Supreme Court, which is still pending consideration. He would further contend that the license was granted to another company vide Annexure-RJ/1 for a different purpose after considering various other aspects, and the petitioner has no right to claim parity. He would further submit that an efficacious alternative remedy is available to the petitioner and, therefore, the present petition is not maintainable. He would also contend that the present petition is misconceived and deserves to be dismissed.
6. I have heard learned counsel for the parties and perused the documents available on record.
7. Having considered the fact that Instruction No.13/2022-Customs dated 9.7.2022 has already been struck down by the High Court of Delhi, and that the application of the petitioner for grant of a license under the Manufacture and Other Operations in Warehouse (No. 2) Regulations, 2019 was rejected solely on the basis of the said instruction, and further that respondent No.1 has granted a license to establish a plant to another company, this petition is hereby allowed. The order contained in Annexure-P/1 dated 31.1.2025 is hereby quashed.
Respondent No.1 is directed to decide the application moved by the petitioner for grant of a license afresh, keeping in mind the order passed by the High Court of Delhi and the order dated 13.4.2026, which has been placed on record as Annexure-RJ/1. The entire exercise shall be completed within a period of 60 days.
8. With regard to the ground of alternative remedy raised by learned counsel for the respondents, since the grounds raised by the petitioner in its application were not duly considered, in my opinion, the present petition would be maintainable.
9. With the aforesaid observation(s), this writ petition is disposed of.
