IGCR Conditions Must Be Met at Import Stage: CAAR Delhi

In re Sunwoda Electronic India Private Limited (CAAR Delhi)

Material Facts

The applicant, M/s. Sunwoda Electronic India Private Limited, manufactures lithium-ion battery packs for cellular mobile phones in a Manufacturing and Other Operations in Warehouse (MOOWR) facility established under Sections 58 and 65 of the Customs Act, 1962. For this purpose, it imports lithium-ion cells and other inputs under tariff heading 8507 60 00 by filing warehousing Bills of Entry.

At the time of filing the warehousing Bill of Entry, the applicant claimed the benefit of Serial No. 325 of Notification No. 45/2025, which provides a concessional basic customs duty rate of 10% for specified goods falling under tariff item 8507 60 00 other than those covered by Serial Nos. 322 and 324 and power banks. The applicant stated that, at the warehousing stage, it could not determine whether the manufactured battery packs would be transferred to another MOOWR unit or cleared into the Domestic Tariff Area (DTA).

For DTA clearances, the applicant proposed to claim the benefit of Serial No. 320 of Notification No. 45/2025 while filing the ex-bond Bill of Entry. Serial No. 320 provides a concessional 5% basic customs duty for lithium-ion cells used in the manufacture of batteries or battery packs for cellular mobile phones, subject to compliance with the Customs (Import of Goods at Concessional Rate of Duty or for Specified End Use) Rules, 2022 (IGCR Rules).

Procedural History

The applicant filed applications before the Customs Authority for Advance Rulings (CAAR), New Delhi, under Section 28H of the Customs Act seeking an advance ruling on its eligibility to claim the benefit of Serial No. 320 at the ex-bond stage. Comments were obtained from the jurisdictional Customs authorities at Noida, ACC Import and NS-V. The applicant also filed additional submissions and a personal hearing was conducted on 18 June 2026.

Legal Issue

The issue before the Authority was whether the applicant could claim the concessional basic customs duty under Serial No. 320 of Notification No. 45/2025 while filing the ex-bond Bill of Entry for home consumption after having imported the goods under Serial No. 325 at the warehousing stage.

Relevant Statutory Provisions

The order refers to:

• Sections 12, 15, 25, 47, 58, 65 and 68 of the Customs Act, 1962.
• Sections 28E, 28H and 28I of the Customs Act relating to advance rulings.
• Notification No. 45/2025-Customs, particularly Serial Nos. 320, 322, 324 and 325.
• Customs (Import of Goods at Concessional Rate of Duty or for Specified End Use) Rules, 2022.
• CBIC Circular No. 26/2024-Customs dated 21 November 2024.
• Instruction No. 16/2024 dated 25 June 2024.

Applicant’s Submissions

The applicant submitted that:

• Under Section 15(1)(b) of the Customs Act, the applicable rate of duty for warehoused goods is the rate in force on the date of filing the ex-bond Bill of Entry.
• The effective rate of duty includes exemption notifications applicable on the date of ex-bond clearance.
• It was entitled to claim the more beneficial exemption available under Notification No. 45/2025 at the ex-bond stage.
• MOOWR units are permitted to avail IGCR benefits simultaneously, subject to compliance with applicable conditions.
• Since the imported lithium-ion cells were used only for manufacturing battery packs for cellular mobile phones and the applicant intended to comply with the IGCR Rules, it should be allowed to claim the benefit under Serial No. 320.

Departmental Comments

The Noida and NS-V Commissionerates stated that the applicant appeared eligible to claim the benefit under Serial No. 320 at the ex-bond stage, subject to compliance with the conditions prescribed under the IGCR Rules. ACC Import agreed that the applicable duty is determined on the date of filing the ex-bond Bill of Entry but observed that the concession under Serial No. 320 is confined to lithium-ion cells covered by that entry.

Findings and Reasoning

The Authority examined the operation of both the MOOWR and IGCR schemes and compared their statutory requirements. It observed that:

• Under the MOOWR scheme, customs duty is deferred until goods are cleared for home consumption.
• Under the IGCR scheme, concessional duty is available subject to compliance with specified procedural and end-use conditions, including advance intimation, execution of continuity bond, maintenance of records, filing of monthly statements and compliance with utilisation requirements.

The Authority accepted that Section 15(1)(b) provides that the applicable rate of duty for warehoused goods is the rate prevailing on the date of filing the ex-bond Bill of Entry. However, it held that Serial No. 320 is a conditional exemption requiring compliance with the IGCR Rules from the stage of import itself.

The Authority observed that the applicant had imported the goods by claiming Serial No. 325, which does not prescribe end-use conditions or compliance with the IGCR Rules. Since the applicant had not imported the goods under Serial No. 320 and had not undertaken the statutory obligations attached to that entry at the time of import, it could not subsequently claim the benefit of Serial No. 320 while filing the ex-bond Bill of Entry.

The Authority also noted that although CBIC Circular No. 26/2024 permits simultaneous availment of MOOWR and IGCR benefits, the importer must satisfy all conditions of both schemes. It further observed that the judicial precedents relied upon by the applicant were distinguishable on the facts of the case.

Final Ruling

The Customs Authority for Advance Rulings held that the applicant cannot avail the benefit of Serial No. 320 of Notification No. 45/2025 at the time of filing the ex-bond Bill of Entry for goods imported under Serial No. 325 at the warehousing stage. It ruled that the applicant is not eligible to claim the concessional basic customs duty under Serial No. 320 at the ex-bond stage without complying with all procedures prescribed under the Customs (Import of Goods at Concessional Rate of Duty or for Specified End Use) Rules, 2022.

Cases Discussed

• Patanjali Foods Ltd. Vs. Union of India, and Anrs. (Bombay High Court), 2024 (7) TMI 426 – BOMBAY HIGH COURT
• Essar Power Gujarat Ltd Versus C.C. – Jamnagar (prev) (Vice-Versa) (CESTAT Ahmedabad), 2022 (12) TMI 484 – CESTAT Ahmedabad
• Share Medical Care Versus Union of India (Supreme Court of India), 2007 (2) TMI 2 – Supreme Court
• UniChem Laboratories Ltd. v. Collector of Central Excise, Bombay, (2002) 7 SCC 145 : 2002 (6) SC 547
• K.C.L. Limited v. Collector of Customs, New Delhi (Supreme Court of India), (2001) 130 E.L.T. 405 (S.C.)
• Collector of Central Excise, Baroda v. Indian Petro Chemicals, (1997) 11 SCC 318
• Poppadal Shah vs. The State of Madras, Union of India and Anrs. (Supreme Court of India), 1953 AIR 274
• Prakash Cotton Mills (P) Ltd vs B. Sen & Ors. (Supreme Court of India), 1979 AIR 675
• Union of India & Ors. v. Dindigul Spinners Association (Madras High Court), W.A. Nos. 1552 to 1573 of 2013

FULL TEXT OF THE ORDER OF CUSTOMS AUTHORITY OF ADVANCE RULING, Delhi

M/s. Sunwoda Electronic India Private Limited, D-204, Sector 63, Noida, Gautam Buddha Nagar, Uttar Pradesh- 201301 (herein referred to as “applicant”), having 1EC No. 0516000361 submitted applications dated 11.03.2026 before the Customs Authority for Advance Rulings, New Delhi (CAAR, New Delhi in short) for obtaining Advance Ruling under Section 28H of the Customs Act, 1962, to seek clarity on the classification on the import of lithium-ion cells’ to India. The application was accordingly registered 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 anyplace 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 Applicant holds a private warehouse license under Section 58 and the permission under Section 65 of the Customs Act for operating as a MOOWR warehouse, wherein it undertakes the operations pertaining to the manufacturing of lithium-ion battery packs of cellular mobile phones.

1.5 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.

1.6 At the time of filing warehousing BoE, the Applicant mentions the S. No. 325 of the NN 45/2025 which provides for `10%’ concessional rate of duty on “all goods other than the goods mentioned at S. Nos. 322 and 324 of the NN 45/2025 and Power Bank”. Relevant entry of NN 45/2025 is provided below for ease of reference:

S. No. S.	Chapter or sub- heading or tariff item	Description of goods	Standard rate	Integrated Goods and Services Tax (IGST)	Condit ion No.
322	8507	Battery pack for use in the manufacture of electrically operated or hybrid vehicle	15.00 %	–	3
324	8507 60 00	Lithium-ion battery or battery pack of cellular mobile phones	15.00 %	–	–
325	8507 60 00	All goods other than the following namely: – (i) goods mentioned against S. Nos. 322 and 324; (i) Power Bank	10.00 %	–	–

1.7 It is pertinent here to mention that at the time of filing the warehousing BoE, the Applicant mentions S. No. 325 of NN 45/20205 as the Applicant is not aware of whether the lithium-ion battery packs manufactured using imported lithium-ion cells will be removed to any other MOOWR unit or will be cleared for home consumption.

1.8 After manufacture, the Applicant undertakes sale of the manufactured finished goods i.e., lithium-ion battery packs for cellular mobile phones, to —

a. Contract manufacturers engaged operating as MOOWR units and engaged in manufacture of the cellular mobile phones [MOOWR to MOOWR transfers] . In case of such transfer no duty is leviable as per MOOWR regulation read with Instruction No. 16/2024 dated 25^th June 2024; and

b. Other cellular mobile phone manufacturers located in the Domestic Tariff Area (`DTA’) [DTA sales]. In such DTA sales, the Applicant ought to discharge relevant customs duty on the inputs (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 Services 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 have effect after the 3 IS` March 2028.	5.00 %	–	3

–

Condition No.	Condition
3	If the importer follows the procedure set out in the Customs (Import of Goods at Concessional Rate of Duty or for Specified End Use) Rules, 2022.

1.10. It is imperative to highlight that the Applicant imports these lithium-ion cells, and other inputs & parts only for the purpose of use in the manufacturing lithium-ion battery packs of mobile phones. The Applicant does not import any inputs or parts for any purpose other than manufacturing of lithium-ion battery packs of cellular mobile phone. To this extent, the applicant is duly compliant with the end use condition and complies with the due procedure as laid down in the 1GCR Rules 2022.

The Applicant qualifies as an ‘applicant’ under Section 2814c) of the Customs Act, 1962 (`Customs Act’)

1. 11 Section 281 (c) of the Customs Act reads as under:

“(c). “applicant” means any person —

(i) holding a valid Importer-exporter Code Number granted under section 7 of the Foreign Trade (Development and Regulation) Act, 1992; or

(ii) exporting any goods to India; or

(iii) with a justifiable cause to the satisfaction of the Authority, who makes an application, for advance ruling under section 2811; “

(Emphasis supplied)

1.12 The Applicant is a company registered in India and is holding a valid Importer-Exporter Code (`IEC) Number 0516000361. Copy of the I EC certificate is enclosed herewith as Appendix 2. Thus, the Applicant is rightly covered under the definition of ‘applicant’ as provided under Section 28E(c)(i) of the Customs Act for making this application.

Question raised in the application for advance ruling by the Applicant squarely falls within the ambit of Section 28H(2)(a) of the Customs Act

1.13 Section 28H of the Customs Act provides for the questions in respect of which an advance ruling may be sought by an applicant. Section 28H of the Customs Act reads as under:

“2811. Application for advance ruling —

(1) An applicant desirous of obtaining an advance ruling under this Chapter may make an application in such form and in such manner and accompanied by such fee as may be prescribed, stating the question on which the advance ruling is sought.

(2) The question on which the advance ruling is sought shall 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. 320 of NN 45/2025 on import of lithium-ion cells, at the time of filing the BoE for home consumption (i.e., ex-Bond BoE), as detailed out in Annexure II. Therefore, the questions raised by the Applicant falls within the purview of the provisions of Section 28H(2)(b) and Section 28H(2)(d) of the Customs Act.

1.15 Hence, the application for advance ruling is being filed in confinity with the provisions of Section 28H of the Customs Act.

Question raised under the present advance ruling application is not pending before any officer of customs, the Appellate Tribunal or any Court.

1.16 As per Section 281 (2)(a) of the Customs Act regarding procedure on advance ruling application, no application for advance ruling will be accepted if the question raised in the application is already pending before any forum. Relevant extracts of the provision are reproduced below:

“281. Procedure on receipt of application. —

(1) ……

(2) The Authority may, after examining the application and the records called for, by order, either allow or reject the application:

Provided that the Authority shall not allow the application where the question raised in the application is —

(a) already pending in the applicant’s case before any officer of customs, the Appellate Tribunal or any Court,

(b) the same as in a matter already decided by the Appellate Tribunal or any Court.” (Emphasis supplied)

1.17 The Applicant submits that questions raised in the Application (as in Annexure II) are not already pending before any officer of Customs, the Appellate Tribunal, or any court in relation to the Applicant. Further, the questions raised in the present case, have not already been decided by the Appellate Tribunal or any court in the Applicant’s case.

1.18 Accordingly, the present application should not be considered as pending before any Court as neither the show cause notice has been issued nor the Bill of Entries have been provisionally assessed.

1,19 Thus, relying on the above the facts of the current case, Applicant submits that in its case, the application shall be accepted for hearing on merits by the Hon’ble CAAR.

1.20 The Applicant wishes to obtain the advance ruling on the questions listed down in form CAAR-1. Hence, the Applicant has proceeded to file this application before the Hon’ble CAAR, New 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 inkr alia imports lithium-ion cells and various other inputs & parts by filing the warehousing 13oE 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 purpose.

1.24 At the time of filing warehousing BoE, the Applicant mentions the S. No. 325 of the NN 45/2025 which provides for `10%’ concessional rate of duty. Thereafter, while effecting the DTA sales of manufactured battery packs of cellular mobile phones, the Applicant intends to file the BoE for home consumption, i.e., ex-bond BoE by availing the 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.

1.25 For reference’s sake, the Applicant is re-iterating the relevant entries of the NN 45/2025 hereunder:

S. No.	Tariff Item	Description	Rate	Condition	Condition No.
322	8507	Battery pack for use in the manufacture of electrically operated or hybrid vehicle	15.00%	–	3
324	8507 60 00	Lithium-ion battery or battery pack of cellular mobile phones	15.00%	–	–
325	8507 60 00	All goods other than the following namely:(i) goods mentioned against S. Nos. 322 and 324;(ii) Power Bank	10.00%	–	–

Condition Table

Condition No.	Condition
3	If the importer follows the procedure set out in the Customs (Import of Goods at Concessional Rate of Duty or for Specified End Use) Rules, 2022.

1.26 Thus, there is change in the entry number in which the Company wishes to avail concessional duty benefit at the time of filing of warehouse BoE and at the time of filing of ex-bond BoE. As discussed in the facts above, this change in entries is owing to the fact that at the time of filing warehousing BoE, the Applicant is not aware of whether the lithium-ion battery packs manufactured using imported lithium-ion cells will be removed to any other MOOWR unit or will be cleared for home consumption [DTA sales] .

1.27 In this background, the question in respect of which the present advance ruling has been sought by the Applicant is as under:

I. Whether the Applicant is eligible 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 rate of duty and tariff valuation of imported goods. Section 15 (1) (b) of the Customs Act reads as under:

“Section 15 – Date for determination of rate of duty and tariff valuation of imported goods (1) The rate of duly and tariff valuation, if any, applicable to any imported goods, shall he the rate and valuation in force, –

(a) in the case of goods entered for home consumption under section 46, on the dale on which a bill of entry in respect of such goods is presented under that section;

(h) in the case of goods cleared from a warehouse under section 68, on the date on which a hill of entry for home consumption in respect of such goods is presented under that section;

(Emphasis supplied)

1.31 As understood from the above, Section 12 of the Customs Act states that customs duty is applicable at the time of clearance of goods for home consumption. Further, Section 15 of the Customs Act lays down the rules for determining the applicable rate of duty on imported goods. As per Section 15 (I) (a), the rate of duty will be the rate applicable on the date when Bill of Entry for home consumption has been filed. Further, as per clause (I) (b) of Section 15, in case of goods are cleared from a warehouse under Section 68, the relevant rate of duty and tariff valuation shall be the rate as on force on the date when Bill of Entry for home consumption, i.e., Ex-Bond Bill of Entry, is presented in respect of such goods. Accordingly, a conjoint reading of these provisions indicates that the rate of duty applicable will be the rate prevailing on the date of filing the Bill of Entry for home consumption, irrespective of whether the goods are cleared directly from the customs port or from a bonded warehouse.

1.32 In the present case, the goods imported by the Applicant are brought to its MOOWR facility for manufacture of lithium-ion battery packs of cellular mobile phones. At the time of filing the Bill of Entry for home consumption (i.e., ex-Bond BoE), the goods are cleared from the warehouse in accordance with the provisions of Section 68 of the Customs Act. In such circumstances, the statutory framework under Section 15 of the Customs Act is unambiguous: the applicable rate of duty must be determined strictly with reference to the date on which the Bill of Entry for home consumption is filed at the time of Ex-Bonding. 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 IW.A.Nos.1552 to 1573 of 20131

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 the four Ex-Bond BoEs were presented and self-assessed prior to the issuance of the Notification in the e-Gazette. Accordingly, the applicable duty rate was held to be the effective rate which was in force at the time of presentation/ filing of four Ex-Bond BoEs.

1.35 Further, Section 68 of the Customs Act contains provisions for clearance of warehoused goods for home consumption. Section 68 of the Customs Act reads as under:

“Section 68 — Clearance of warehoused goods for home consumption

Any warehoused goods may be cleared from the warehouse] for home consumption, V—

(a) a bill of entry for home consumption in respect of such goods has been presented in the prescribed form;

(b) the import duty, interest, fine and penalties payable in respect of such goods have been paid; and]

(c) an order for clearance of such goods for home consumption has been made by the proper officer.

(Emphasis supplied)

1.36 Additionally, Section 47 of the Customs Act contains provisions for clearance of goods for home consumption which reads as under —

“Section 47 — Clearance of goods for home consumption Where the proper officer is satisfied that any goods entered for home consumption are not prohibited goods and the importer has paid the import duty, if any, assessed thereon and any charges payable under this Act in respect of the same, the proper officer may make an order permitting clearance of the goods for home consumption:

(Emphasis supplied)

1.37 Reading the two provisions together, it is evident that Section 68 is analogous to Section 47 of the Customs Act, as both deal with clearance of goods for home consumption pursuant to an order of clearance issued by the proper officer. The key distinction is that Section 47 pertains to clearance of goods from the port, whereas Section 68 governs clearance of goods from a warehouse. In both scenarios, the assessee is required to file a Bill of Entry for home consumption, which is thereafter assessed based on the particulars furnished by the assessee. Consequently, in terms of Section 15 of the Customs Act, the applicable rate of duty will be the rate in force on the date of filing the Bill of Entry for home consumption, i.e., the ex-bond BoE in the case of warehoused goods.

1.38 Further, reliance in this regard is placed on ease of Essar Power Gujarat Ltd Versus C.C. – Jamnagar (prey) (Vice-Versa) (2022 (12) TM1 484 – CESTAT Ahmedabad) wherein the issue was with respect to whether a change in classification is permissible at the time of tiling 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 (I) of the Customs Act reads as under:

(1) kale Central Government is satisfied that it is necessary in the public interest so lo do, it may, by notification in the Official Gazette, exempt generally either absolutely or subject to such conditions (to he fulfilled before or after clearance) as may he specified in the notification goods of any specified description from the whole or any part of duly of customs leviable thereon.”

1.41 Section 25(1) of the Customs Act, 1962 empowers the Central Government to issue notifications in the Official Gazette and extend exemption from customs duty (fully or partially), whenever it believes it is necessary for the public interest. This means the Government can legally reduce, remove, or control the customs duty payable through such exemption notifications.

1.42 Further, it is pertinent to note that various Supreme Court and High Courts have re-enforced the principle of interpretation that a ‘statue has to be read as a whole’ which means that while interpreting a Section, care has to be maintained to interpret the Section as per the legislative intent, carefully reading all the constituent parts or a statute together and each word, phrase or sentence of the statute has to be considered in the light of the general purpose and object of the statute (refer case law — Poppadal Shah vs. The State of Madras, Union of India and Anrs. 11953 AIR 274 —Supreme Court])

1.43 Thus, it is evident that when Section 15 is read together with Section 25 as part of a unified statutory scheme, the term “rate of duty” must be understood to mean the effective rate, i.e., the tariff rate as modified by any exemption notification under Section 25 that is in force on the date the BoE is presented for clearance of goods into domestic market of India.

1.44 Hence, in view of the above, the Applicant is of the opinion that the ‘rate of duty’ means the rate effective at the time of ex-bonding. Thus, customs duty liability stands inclusive of exemption notification which forms the rate of effective duty.

1.45 The above understanding of the Applicant stands corroborated by borrowing support from the judgment mentioned above i.e. Patanjali Foods Limited (supra) wherein the Authority held that under Section 15 of the Customs Act, the applicable duty rate is the one in force at the time the bill of entry is presented in the EDI system. Since 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 filing warehouse BoE, the Applicant is mentioning S. No. 325 of NN 45/20205 which provides for concessional duty rate at 10%. This is because, at the time of warehousing, the Applicant is not certain regarding the quantum of manufactured goods to be removed to any other MOOWR unit or sold to cellular mobile phone manufacturers in DTA.

1.48 However, at the time of sale of finished goods to the DTA mobile phone manufacturers, the Applicant intends to avail the concessional benefit under S. No. 320 of NN 45/2025 at the time of filing the BoE for home consumption (ex-bond BoE) which attracts the concessional duty rate at 5%. Further, S. No. 320 remains subject to compliance with the conditions prescribed under the IGCR Rules conditions. In this background, applicant is of the view it is permissible to file the BoE for home consumption (ex-bond BoE) under S. No. 320 of the NN 45/2025, subject to compliance with the end use-based condition.

1.49 In this regard, reliance is placed on the case of landmark judgment Share Medical Care Versus Union of India, 12007 (2) TMI 2 – Supreme Court] wherein the Hon’ble Apex Court held that if the assessee is entitled to benefit under two different Notifications or under two different Heads, the assessee can claim more benefit and it is the duty of the authorities to grant such benefits at any point in time.

“12. In Collector of Central Excise, Baroda v. Indian Petro Chemicals, (1997) 11 SCC 318, this Court held that if two exemption notifications are applicable in a given case, the assessee may claim benefit of the more beneficial one. Similarly, in KC. L. Limited v. Collector of Customs, New Delhi, (2001) 130 E.L.T. 405 (S.C.), this Court relying upon Indian Petro Chemicals, held that where there are Iwo exemption notifications that cover the case in question, i. the assessee is entitled to the benefit of that exemption notification which may give him greater or larger relief In UniChem Laboratories Ltd. v. Collector of Central Excise, Bombay, (2002) 7SCC 145 : 2002 (6) SC 547, the appellant was a manufacturer of bulk drugs. Exemption was granted to him under one item. He, thereafter, filed a revised classification list categorizing its bulk drugs under the other Head claiming more benefit. The claim was rejected on the ground that the appellant had not claimed the benefit of exemption at the time of filing 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 fior 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 iling 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 (). f the Revenue. They must act reasonably and tidily”.

(Emphasis Supplied)’

1.50 Basis this judgement, we understand that an assessee be it an importer clearing the goods from port for home consumption or an assessee clearing the goods from a bonded warehouse, the benefit of any exemption notification which may be applicable to the product under consideration is allowed so long as any additional condition is being complied with.

1.51 Hence, in view of the above submission, it is evident that the Applicant is eligible to avail concessional benefit for custom duty under different S. Nos of the notification provided that it complies with underlying condition stated in that notification.

1.52 Hence, in view of the above, the Applicant is of the understanding that the eligibility to claim duty exemption cannot be restricted to a single head of exemption. It is the considered position of the Applicant that, once entitled to exemption is established under law, such entitlement extends to all relevant heads of exemption benefits available under the notification.

1.53 In addition to the foregoing submissions, it is respectfully asserted that the rate of duty, together with all relevant exemption notifications prevailing at the time of filing the ex-bond BoE, shall constitute the effective rate of duty applicable to the subject goods.

1.54 In light of the above-mentioned submissions, the Applicant is of the view that it is permissible to seek customs duty exemption under different Serial Numbers of the same notification, as the product under consideration in respect of which the exemptions are sought namely, Lithium-Ion cells remain identical across the applicable entries.

D. The Applicant is eligible to, avail the benefit under S. No. 320 of NN 45/2025 as it is complying with the IGCR requirement stipulated in the notification

1.55 As discussed in Annexure I above, S. No. 320 of NN 45/2025 is subject to compliance with the IGCR requirements. These conditions are intrinsically linked to the end-use conditions prescribed therein.

1.56 Now, here it is pertinent to mention that the Applicant is entitled to avail the benefit, as it already satisfies the requisite IGCR compliance obligations by undertaking manufacturing activities within its MOOWR unit.

1.57 Further, it is also pertinent to mention that it has been explicitly clarified that a MOOWR unit is eligible to simultaneously availing benefit under MOOWR scheme and IGCR.

1.58 In this regard, reliance is placed on the CBIC Circular No.26/2024-Customs dated 21′ 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 compliance are duly satisfied.

1.60 Therefore, in view of the above submissions in toto, it is humbly requested by the Applicant that benefit under S. No 320 of the NN 45/2025 should be made available at the time of filing of Ex Bond Bill of Entry.

1.61 In light of the submissions made in relation to question I, the Applicant understand that benefit under entry no. 320 of NN. 45/2025 should be available to the Applicant at the time of filing BoE for home consumption (ex-bond BoE)

1.62 In view of the above, the Applicant humbly submits that the Hon’ble Authority may kindly issue the advance ruling as prayed at an early date.

PRAYER

1.63 In the light of the above, a ruling is sought from the Hon’ble CAAR, New Delhi as follows:

A. The Applicant is eligible to avail concessional benefit of BCD under S. No. 320 of Notification Number 45/2025 at the time of filing of BoE for home consumption (i.e. ex-bond BoE).

B. The Applicant craves leave to alter, amend or modify any of the aforesaid grounds or submissions made herein this application and make such additional submissions without prejudice to the submissions made herein, at the time of hearing of the said application.

C. The Applicant also craves leave to produce and provide any such further additional documents in support of its submissions at the time of hearing and before conclusion of the proceedings.

1.64 The Applicant further prays for an opportunity of being heard in person.

2. Comments of Custom Port Commissionerate:

2.1 As per the provision of CAAR Regulation, 2021, the complete applications of the applicant were provided to the concerned Custom Ports, and requested to furnish the requisite comments in the instant matter. The port authority i.e. Noida, ACC Import and NS-V vide their letter dated 16.04.2026, 03.06.2026 and 21.04.2026 furnished their comments respectively, which are reproduced as under:

2.2 Comment of port authority i.e. Noida in respect of App No. 213/2025-26:

1. The applicant has sought confirmation as to whether lithium-ion cells, imported for use in the manufacture of lithium-ion battery packs for cellular mobile phones in a unit operating under the Manufacture and Other Operations in Warehouse (MOOWR) scheme, would be eligible for the concessional rate of duty of 5% under S. No. 320 of Notification No. 45/2025-Customs 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 I ithium-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 consumption is presented. Accordingly, the applicable exemption entry is to be examined with reference to the date of filin_g of the Ex-bond Bill of Entry.

II. Availability of concessional entry under Notification No. 45/2025-Customs: S. No. 320 of Notification No. 45/2025-Customs provides concessional duty for lithium-ion cells used in the manufacture of battery packs for cellular mobile phones, subject to Condition No. 3 requiring compliance with the IGCR Rules, 2022. S. No. 325 operates as a residual entry for other goods of the same tariff item attracting a higher rate.

III. Classification and nature of goods: As noted in the departmental examination, both lithium-ion cells and lithium-ion battery packs are classifiable under tariff item 8507 60 00. Chapter Note 3 to Chapter 85 recognizes electric accumulators presented with ancillary components contributing to the function of storing or supplying energy or protecting the accumulator from damage. Therefore, the manufacture of battery packs out of imported cells does not detract from the applicability of the specific concessional entry where the prescribed end use and procedural conditions are fulfilled.

V. Effect of declaration in into-bond Bill of Entry: The mention of S. No. 325 at the stage of filing the into-bond Bill of Entry does not, by itself, defeat the applicant’s claim to the concessional rate at the ex-bond stage, if on the date of filing the Ex-bond Bill of Entry the goods satisfy the description under S. No. 320 and the conditions attached thereto, including compliance with the IGCR Rules, 2022.

1. Recommendation: The applicant’s contention appears legally sustainable in view of Section 15(1)(b) of the Customs Act, 1962, the scheme of Section 68, the provisions of Notification No. 45/2025-Custom. Subject to verification of actual compliance with the conditions prescribed under S. No. 320 and the IGCR Rules, 2022, the applicant appears eligible to avail the concessional rate of duty at the time of filing the Ex-bond Bill of Entry for clearance of the goods for home consumption.

No similar issue is reported to be pending adjudication, appeal or any other proceeding in respect of the applicant on this issue, if so verified from the available records. This issues with the approval of the competent authority.

2.3 Comment of port authority i.e. ACC Import 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,

(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;

(c) in the case of any other goods, on the date of payment of duty Provided that if a bill of entry has been presented before the dale of entry inwards of the vessel or the arrival of the aircraft by which the goods are imported, the bill of entry shall be deemed to have been presented on the date of such entry inwards or the arrival, as the case may he.

(2) The provisions of this section shall not apply to baggage and goods imported by post

As explicitly mandated under Section 15(I)(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 different serial member at the ex-bonding stage is statutorily valid, provided all underlying procedural and end-use terms are fully satisfied

Consequently, this office firmly clarifies that this concessional assessment is strictly estricted to raw individual cells only, as explicitly detailed under Serial Number 320 of Notification No. 45/2025-Cus, which reads as follows:

“320, 8507 60 00 Lithium-ion cell for use in the manufacture of battery or battery pack of cellular mobile phone:

Provided that nothing contained in this S.No. shall have effect after the 31st March, 2026.”

Therefore, under no circumstances can this specific benefit be extended to downstream finished products or associated accessories, including but not limited to fully assembled battery packs, battery chargers, or related items. It is respectfully requested that the Honble Authority take these distinct technical specifications, strict item descriptions into account before finalizing the advance ruling.

2.4 Comment of port authority i.e. NS-V in respect of application No 215/2025-26:

1. Question of Law or fact on which Advance Ruling sought

Whether the applicant is eligible to avail the benefits of concessional rate of duty under SI No. 320 of NN 45/2025 dated 24/10/2025 dated (as amended) at the lime 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 (INCH), Taluka Uran, District Raigad, Maharashtra – 400707 (INNSA ). 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 battery packs for cellular mobile phones, to-

a. Contract manufacturers engaged in operating as MOOWR units and engaged in manufacture of the cellular mobile phones (MOOWR to MOOWR transfers). In case of such transfer, no duty is leviable as per MOOWR regulation read with Instruction No. 16/2024 dated 25th June 2024; and

b. Other cellular mobile phone manufacturers located in the Domestic Tariff Area (‘DTA’). In such DTA sales, the Applicant ought to discharge relevant customs duty on the inputs (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.

As the Applicant is not aware whether the lithium-ion battery packs manufactured using imported lithium-ion cells will be removed to any other MOOWR unit or for home consumption. Just because of this at the time of filing the warehousing BoE, the Applicant mentions S. No. 325 of NN 45/2025 which provides for ‘10%’ concessional rate of duty on “all goods other than the goods mentioned at S. Nos. 322 and 324 of the NN 45/2025 and Power Bank.”

As per applicant, 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.

4. COMMENTS FROM THE COMMISSIONERATE

Yes, the applicant is eligible to avail the benefits of concessional rate of duty under Sl. No. 320 of NN 45/2025 dated 24/10/2025 dated (as amended) on import of inputs & parts (including lithium-ion cells), for use in manufacture of battery packs of cellular mobile phones subject to compliance of condition No (3). Which stated as “If the importer follows the procedure set out in the Customs (Import of Goods at Concessional Rate of Duty or for Specified End Use) Rules, 2022”.

As per Section 28(E)(b) of Chapter V-B (Advance Rulings)- these comments are only 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) NAAR 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 amended) [‘INN 45/2025’] at time of filing of Bill of Entry (BoE) for home consumption (Ex-bond BoE) for imported inputs. The application has been filed before three ports namely:

a) Air Cargo Complex, IG1 Airport, New Delhi (INDEL 4) [‘ACC, Delhi’]

b) Nhava Sheva—V, Jawaharlal Nehru Custom House (JNCH), Taluka Uran, District Raigad, Maharashtra — 400707 (INNSA I) [` Nhava Sheva’]

c) ICD Dadri, Gautam Budh Nagar, Uttar Pradesh — 203207 (INDER 6) [‘ICU Dadri’]

Comments received from ACC, Delhi and Company’s justification

3.3 In is submitted that the Company has received favorable comments from two ports, namely Nhava Sheva and ICD Dadri stating that the Company is eligible to avail benefit of concessional rate of duty under S. No. 320 of NN 45/2025 at time of filing of Ex-bond BoE for imported inputs.

3.4 However, ACC Delhi has vide captioned letter dated 03.06.2026 provided the following comments with respect to the CAAR application filed by the Company:

i. As per Section 15(1)(b) of Customs Act, the Applicant’s claim to revise and claim benefit under a different Serial number of NN 45/2025 at time of ex-bonding is statutory valid; and

ii. As per port authorities, the benefit is available for raw individual cells only, as stated under S. No. 320 of NN 45/2025 and cannot be extended to downstream finished products or associated accessories, including but not limited to fully assembled battery packs, battery chargers or related items.

3.5 In relation to the above, the Company respectfully concurs with observation ofACC, Delhi set out in Comment (i) as mentioned above, and in relation to Comment no. (ii) the Company submits that as a matter of fact has not availed / extended the benefit to finished goods and is seeking to avail the benefit only on imported inputs.

3.6 The imported inputs comprise of lithium-ion cells along with various other inputs and components, are stored in a bonded warehouse and utilized in manufacturing process. The Company respectfully submits that it avails benefit of exemption under NN. 45/2025 strictly in respect of imported inputs and does not extend such benefit to downstream finished products (i.e., battery packs). In this regard, it is submitted that eligibility and application of exemption are clearly confined to 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 Onto BoE’) for the purpose of manufacturing within its MOOWR facility. The finished goods (i.e. lithium-ion battery packs for cellular mobile phones) are subsequently either exported or cleared into Domestic Tariff Area (DTA).

3.10 At time of clearance of finished goods (i.e. lithium-ion battery packs for cellular mobile phones) into DTA, the Company in accordance with provisions of MOOWR regulations and as clarified under Circular No. 34/2019, files an ‘Ex-Bond’ Bill of Entry in relation to the imported inputs contained in so much of the finished goods. This legal and procedural position is reinforced by MOOWR FAQs Serial No. 11 and provisions of Circular No. 34/2019 under Para 8 wherein it states that ” “…As regards import duties payable on the imported goods contained in so much of the resultant products are concerned, same shall be paid at the time of supply of the resultant product from the warehouse for which the licensee shall have to file an ex-bond Bill of entry and such transactions shall be duly reflected in the accounts prescribed under Annexure B… “.

3.11 In view of the above, it is evident that the Company is discharging customs duty only on imported inputs / raw materials and not on finished goods manufactured under MOOWR scheme. Therefore, Company is proposing to rightfully claim benefit of NN. 45/2025. The finished goods are consequential outputs arising from manufacturing process undertaken within the MOOWR premises. Accordingly, the Company follows the applicable legal provisions and is eligible to avail the said benefit.

Our request

3.12 In light of the above submissions, as the Company discharges customs duty exclusively on imported inputs and not on finished goods manufactured under MOOWR scheme, the benefit of NN. 45/2025 is rightly available to Company, and exemption, if any, is attributable solely to imported inputs / raw materials. The fished goods, being a consequential output, do not attract such considerations. Accordingly, interpretation adopted by Company is legally sound and consistent with applicable provisions.

3.13 Thus, the Company humbly requests your good office to kindly consider Advance Ruling Application filed by us along with its submissions made vide this letter and accordingly provide a suitable ruling.

3.14 We would request your good self to provide us with an opportunity for personal 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, 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 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. For this purpose, the Applicant holds a private warehouse license under Section 58 and the permission under Section 65 of the Customs Act for operating as a MOOWR warehouse, wherein it undertakes the operations pertaining to the manufacturing of lithium-ion battery packs of cellular mobile phones.

Process of Import & Manufacture:

5.2 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. At the time of filing warehousing Bill of Entry, the Applicant mentions the S. No. 325 of the Notification No. 45/2025-Customs. The applicant has informed that they mention S. No. 325 of Notification No. 45/20205-Customs as the Applicant is not aware whether the lithium-ion battery packs manufactured using imported lithium-ion cells will be removed to any other MOOWR unit or will be cleared for home consumption. I also note that the Applicant has informed that they import these lithium-ion cells, and other inputs & parts only for the purpose of use in the manufacturing lithium-ion battery packs of mobile phones.

5.2.1 As per the applicant, after manufacture it undertakes sale of the manufactured finished goods i.e., lithium-ion battery packs for cellular mobile phones, to —

a. Contract manufacturers engaged operating as MOOWR units and engaged in manufacture of the cellular mobile phones IMOOWR to MOOWR transfers }

b. Other cellular mobile phone manufacturers located in the Domestic Tariff Area (`DTA’) IDTA sales/.

5.3 FILING OF BOE FOR HOME CONSUMPTION (EX-BOND ROE) AFTER MANUFACTURE OF LITHIUM-ION BATTERY PACKS:

5.3.1 In case of the transfer of lithium-ion battery packs for cellular mobile phones to contract manufacturers operating as MOOWR units and engaged in manufacture of the cellular mobile phones no duty is leviable and paid by the applicant in terms of MOOWR regulation read with Instruction No. 16/2024 dated 25^th June 2024.

5.3.2 In case of DTA sale of lithium-ion battery packs for cellular mobile phone to other cellular mobile phone manufacturers, 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 tenns of the said Regulations read with Instruction No. 16/2024 dated 25.06.2024. Accordingly, the issue relating to the levy or payment of customs duty at the stage of such transfer has neither been raised nor sought for determination by the applicant in the present application. Consequently, the said issue does not fall within the scope of the present proceedings and, therefore, is not being examined or decided herein.

5.4.2 The Relevant entries of the exemption notification No. 45/2025-Customs are as under:

S. No.	Chapter or Heading or sub-heading or tariff item	Description of goods	Standar d rate	(IGST)	Condit-ion 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 have effect after the 3P( March 2028.	5.00 %	–	3
321	8507 60 00	Lithium-ion cell for use in manufacture of battery or battery pack of electrically operated vehicle or hybrid motor vehicle Provided that nothing contained in this S.No• shall have effect after the 3P’ March 2028.
322	8507	Battery pack for use in the manufacture of electrically operated or hybrid vehicle	15.00 %	–	3
324	8507 60 00	Lithium-ion battery or battery pack of cellular mobile phones	15.00 %	–	–
325	8507 60 00	All goods other than the following namely: (i) goods mentioned against S. Nos. 322 and 324; (ii) Power Bank	10.00 %	–	–

 

Condition No.	Condition
3	If the importer follows the procedure set out in the Customs (Import of Goods at Concessional Rate of Duty or for Specified End Use) Rules, 2022.

5.4.3 Serial No. 320 of Notification No. 45/2025-Customs prescribes a concessional Basic Customs Duty (BCD) rate of 5% in respect of “Lithium-ion cell fbr use in the manufacture of battery or battery pack of cellular mobile phone.” The benefit under the said entry is subject to specific end-use conditions, requiring compliance with the provisions of the Customs (import of Goods at Concessional Rate of Duty or for Specified End Use (IGCR)) Rules, 2022. Accordingly, I observe that the scope of Serial No. 320 is confined to the import of lithium-ion cells intended for use in the manufacture of batteries or battery packs of cellular mobile phones, subject to fulfilment of the prescribed 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. 1 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 notication 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 and 324 or excluded as power banks.

5.5 Prior to addressing the specific question of law raised herein, it is pertinent to evaluate and contrast the legal frameworks governing the Manufacture and Other Operations in Warehouse Regulations (MOOWR) and the Customs (Import of Goods at Concessional Rate of Duty) Rules (1GCR)

A-MOOWR Scheme

Manufacture and Other Operations in Customs Warehouse Scheme was introduced vide the Manufacture and Other Operations in Warehouse (no. 2) Regulations, 2019, (hereinafter referred to as MOOWR, 2019). This program is based upon Section 65 of the Customs Act, 1962, which enables conduct of manufacture and other operations in a Customs bonded warehouse. Under this program a unit can import goods (both inputs and capital goods) under customs duty deferment with no interest liability. There is no investment threshold or export obligation. The duties are fully remitted if the goods resulting from such operations are exported. Import duty is payable only if the resulting goods or imported goods are cleared in the domestic market (ex-bonding).

Salient features of MOOWR Scheme with respect to payment of duty:-

i. No upfront payment of import duty -Imported raw materials, components, consumables, and capital goods can be brought into the bonded warehouse without payment of customs duty (BCD and IGST) at the time of import.

ii. Duty is deferred, not exempted-The scheme provides deferment of customs duty, meaning the duty is payable only when the goods are cleared for home consumption (Domestic Tariff Area). It is not a complete exemption.

iii. Payment of duty on domestic clearance -When finished goods are cleared into the domestic market, customs duty on the imported inputs becomes payable at the time of ex-bond clearance.

iv. No duty on exports -If the finished goods are exported directly from the bonded warehouse, the deferred customs duty on the imported inputs is remitted, so no customs duty is payable on those inputs.

v. Capital goods -Duty on imported capital goods is deferred until the capital goods themselves are removed from the bonded warehouse for home consumption. If they remain in use within the warehouse, no duty is payable.

vi. No interest on deferred duty -Unlike normal warehousing provisions, no interest is charged on the deferred customs duty, regardless 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. 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 (I1N) (Rule 4 (1) of IGCR Rules, 2022).

iv. Continuity bond -The importer must execute a continuity bond to safeguard the differential duty that may become payable if the conditions of the scheme are not fulfilled (Rule 4 (2) of^. IGCR Rules, 2022).

v. Maintenance of records -Detailed records of receipt, storage, consumption, and utilization of imported goods must be maintained and produced when required (Rule 6 of IGCR Rules, 2022).

vi. Monthly statement -The importer must submit a monthly statement electronically on the 10EGATE portal regarding the utilization of imported goods.

vii. Time limit for utilization -Goods should be utilized within the period specified in the relevant notification. Where no period is specified, the Rules provide a default utilization period, with provision for extension in eligible cases (Rule 10 of IGCR Rules, 2022).

viii. Recovery on non-compliance -If the importer fails to comply with the conditions or diverts the goods for any other purpose, the differential customs duty along with applicable interest becomes payable (Rule 11 of IGCR Rules, 2022).

C- On comparing both the schemes, I note the following major differences with respect to payment of duty between both the schemes: –

i. No customs duty (BCD + IGST) is paid at time of import and payment of duty is deferred in case of import under MOOWR scheme whereas Concessional or nil customs duty is paid upfront at the time of import as per the applicable exemption notification in case of import under IGCR scheme.

ii. Duty becomes payable only when the goods (or finished goods containing imported inputs) are cleared for home consumption (DTA) in case of import under MOOWR scheme whereas duty is already paid at the concessional rate at import, no further duty is payable ifall the end-use conditions are fulfilled in case of import under IGCR scheme.

iii. No interest is payable on the deferred customs duty, irrespective of the period of warehousing deferred in case of import under MOOWR scheme whereas if the importer violates the conditions or fails to satisfy the specified end use, differential duty along with applicable interest becomes payable in case of import under IGCR scheme.

iv. Deferred duty becomes payable when goods are removed for home consumption in accordance with the MOOWR scheme whereas Differential 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 fir determination of rate of duty and tarty valuation of imported goods

(1) The rate of duly and tariff valuation., if any, applicable to any imported goods, shall he 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 different serial number at the ex-bonding stage is statutorily valid, provided all underlying procedural and end-use terms are fully satisfied.

5.7 I also note that the applicant has referred to CBIC Circular No.26/2024-Customs dated 21″ 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.”

5.7.1 Thus, the aforesaid Circular expressly clarifies that a unit operating under the MOOWR Scheme is entitled to simultaneously avail the benefit of exemption under the IGCR Rules, 2022 as well as the deferment of customs duty under the MOOWR Scheme. However, as per the circular, the unit must satisfy all conditions, time limits, and reporting procedures of both schemes. These additional conditions include but are not limited to Advance intimation of import (Rule 4 (1) of IGCR Rules, 2022), execution of continuity bond to safeguard the differential duty that may become payable if the conditions of the scheme are not fulfilled (Rule 4 (2) of IGCR Rules, 2022), maintenance of detailed records of receipt, storage, consumption, and utilization of imported goods and production of these records when required (Rule 6 of IGCR Rules, 2022) alongwith submission of monthly statement, time limit for utilization of goods within the period specified in the relevant notification (Rule 10 of IGCR Rules, 2022) and recovery of differential customs duty along with applicable interest if the importer fails to comply with the conditions (Rule 11 of IGCR Rules, 2022).

5.7.2 I also note that the applicant imported the subject goods by availing the benefit under Serial No. 325 of Notification No. 45/2025-Customs at the time of filing the Warehouse Bill of Entry. The said entry neither prescribes any end-use condition nor mandates compliance with the provisions of the Customs (Import of Goods at Concessional Rate of Duty or for Specified End Use) Rules, 2022 (IGCR Rules, 2022). In contrast, the benefit under Serial No. 320 of the said notification is 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 7I further note that the Applicant has placed reliance upon various judicial precedents in support of its contentions. However, upon examination of the facts and circumstances of the present case, I find that the said precedents are distinguishable on facts and, therefore, do not advance the Applicant’s case.

6. Having examined both the MOOWR and 1GCR schemes alongwith above mentioned circular, I find that the applicant cannot avail S.No. 320 of the notification No. 45/2025 at the time of filing EX-BOND Bill of Entry in case of DTA sale of lithium-ion battery packs imported under S.No. 325 of the notification No. 45/2025 at the time of filing Warehousing Bill of Entry.

7. In view of above, I hold that the applicant is not eligible to avail concessional benefit of BCD under S.No. 320 of Notification No.45/2025- Customs, as amended, at the time of filing of Bill of Entry for home consumption (i.e. Ex-bond Bill of Entry) without following all underlying procedures set out in the Customs (Import of Goods at Concessional Rate of Duty or for Specified End Use) Rules, 2022.

8. I, rule accordingly.