What are the Rules Under Section 58 and Section 65 of the Customs Act?

Introduction
Section 58 and Section 65 of the Customs Act form the legal foundation for bonded warehousing and manufacturing under schemes like MOOWR. These provisions define how goods can be stored and processed without upfront duty payment.

Section 58 Private Bonded Warehousing
Section 58 empowers the Customs authorities to license private warehouses. Under this provision, importers can store goods in a bonded warehouse without paying customs duty at the time of import. The warehouse remains under customs control and goods can be stored for an extended period subject to compliance. The licensee is responsible for security, record keeping and safekeeping of warehoused goods.

Section 65 Manufacturing and Other Operations
Section 65 allows manufacturing and other operations to be carried out on warehoused goods. With customs permission, activities such as assembly, packaging, processing or full scale manufacturing can be undertaken inside the bonded warehouse. Duty liability remains suspended while goods are processed within the bonded premises.

Duty Treatment
Customs duty becomes payable only when goods or finished products are cleared into the domestic market. If goods are exported, no duty is payable on the imported inputs.

Compliance Requirements
Both sections require maintenance of proper records, execution of bonds and adherence to customs supervision and audit provisions.

Conclusion
Section 58 enables duty free storage while Section 65 permits value addition on warehoused goods. Together, they provide the legal framework that makes MOOWR a flexible and business friendly scheme.

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