A division bench of the Delhi High Court has admitted a petition challenging instruction issued by the Central Board of Indirect Taxes and Customs (CBIC) with regards to the inapplicability of the Manufacturing and Other Operations in Warehouse (no. 2) Regulations, 2019 (MOOWR Scheme) on solar power generating units and stayed the recovery proceedings by the customs officer.
A bench of Justice Rajiv Shakdher and Justice Tara Vitasta Ganju issued notice and restrained the customs officer from taking any coercive action against the petitioners assailing the legality of Board Instruction No. 13/2022 dated 9.07.2022.
The petitioner, M/s ACME Heergarh Powertech Private Limited approached the Court contending that if the circular is allowed to operate, its consignment for import of solar modules would be subjected to customs duty and IGST, contrary to the provisions of the 2019 Regulations. It was also submitted that the customs duty and IGST leviable on capital goods is deferred, till such time they are not removed for home consumption. It was further contended that insofar as electricity is concerned, it is neither subject to duty under the Customs Act or tax under the Central Goods and Services Tax Act, 2017, nor even tax under the State Goods and Services Tax Act, 2017.
“To our minds, the petitioner has set up a prima facie case. The balance of convenience also appears to be in favour of the petitioner, since the petitioner has operated under the scheme captured in the 2019 Regulations and up until now, has obtained deferral of customs duty and IGST to the extent indicated above,” the Court said.
Allowing the petition, the Court added that “We are presently of the view that coercive measures, if any, taken by the respondents, at this juncture, when the petitioner’s import consignment is due to arrive in the country, will cause detriment to the petitioner’s interest. In the meanwhile, the respondents are restrained from taking any coercive measures against the petitioner till the next date of hearing.”
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