ADD Levy Determined on Ex‑Bond Date, Not Import Date: CAAR Rules Aluminium Frames Imported Pre-Notification Still Attract Duty on Clearance

The Customs Authority for Advance Rulings (CAAR), Mumbai, has held that anti‑dumping duty (ADD) liability on warehoused goods crystallises at the time of ex‑bond clearance for home consumption, not at the time of initial import. CAAR clarified that Section 15(1)(b) of the Customs Act governs the relevant date for duty determination, making pre‑notification imports liable for ADD if cleared after the levy came into force.

The ruling came in response to an application by Swelect HHV Solar Photovoltaics Pvt. Ltd., which had imported aluminium frames for solar modules before the ADD notification of September 2024 but sought to clear them later.

Swelect HHV Solar Photovoltaics Pvt. Ltd., a Chennai‑based manufacturer of solar panels, operates under the Manufacture and Other Operations in Warehouse (MOOWR) scheme. Between December 2023 and September 2024, the company imported aluminium frames under tariff heading 7610 90 10 without payment of duty, availing the deferment benefit under MOOWR.

On 27 September 2024, the Government issued Notification No. 16/2024‑Customs (ADD), imposing anti‑dumping duty on aluminium frames for solar panels. Swelect sought an advance ruling on whether this ADD would apply to its consignments imported before the notification but still lying in the bonded warehouse, now proposed to be cleared for home consumption.

The applicant contended that MOOWR is a duty deferment scheme, meaning only the duties applicable at the time of import are payable later when goods are cleared. Since ADD was not in force during December 2023–September 2024, they argued that no ADD could be levied on those consignments even if cleared after September 2024.

Swelect relied on CBIC FAQs and Circular 50/2018‑Customs, which describe MOOWR as a deferment scheme without interest liability. They also cited the Madras High Court’s decision in Flextronics Technologies (India) Pvt. Ltd. (2016), which held that ADD attaches at the time of import into SEZs, not when goods are later moved into the Domestic Tariff Area.

CAAR examined the statutory framework under the Customs Act, 1962.Section 68 requires payment of “import duty payable in respect of such goods” before clearance for home consumption. Crucially, Section 15(1)(b) specifies that for warehoused goods, the relevant date for determining the rate of duty is the date of filing the ex‑bond Bill of Entry.

The Authority highlighted that MOOWR is a deferment scheme, not an exemption. Goods remain “imported goods” until cleared for home consumption, and the applicable duty is determined at the ex‑bond stage. Executive FAQs or circulars cannot override the statutory mandate of Section 15.

CAAR also noted that “rate of duty” under Section 15 includes all components of customs duty, including anti‑dumping duty under Section 9A of the Customs Tariff Act, 1975. Therefore, if ADD is in force on the ex‑bond date, it applies to the goods, regardless of whether they were imported earlier.

The Authority distinguished the Flextronics precedent, pointing out that SEZ provisions operate differently, while warehousing under MOOWR is governed directly by Chapter IX of the Customs Act. Supreme Court rulings such as Judicial Precedents including Tamil Nadu Southern Iron & Steel CTo. I.Id. (SISCC)1.) (2001), is a leading authority on the treatment of warehoused goods under Section 15(1 )(b) of the Customs Act.

Similarly, in the matter of M/s W.G. Forge & Allied Industries 1,td. v/s Union of India(1992), the Court upheld the application of the enhanced rate of duty prevailing on the date of ex-bond clearance to warehoused goods, emphasising that the importer cannot insist on the earlier, lower rate prevailing on the date of warehousing import in the face oF Section 15( 1 )(b)

In the matter of M/s Kesoram Rayon v/s Collector of Customs, the Hon’bIc Supreme Court clarified that where goods remain in the warehouse beyond the permitted period and are deemed to have been improperly removed, Section 72 read with the date immediatdly following expiry of the warehousing period becomes relevant.

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The bench of Prabhat K. Ralneshwaram ruled that the anti‑dumping duty imposed by Notification No. 16/2024‑Customs applies to aluminium frames imported by Swelect before 27 September 2024 but cleared for home consumption after that date. The Authority held that Section 15(1)(b) fixes the ex‑bond date as the relevant date for determining duty rates, and MOOWR does not freeze duties at the import stage.

Accordingly, Swelect must pay ADD on clearance of the warehoused aluminium frames into the domestic market, even though the imports occurred before the notification.

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