Customs Act, 1962 › Chapter IX — Warehousing

Section 65. Manufacture and other operations in relation to goods in a warehouse

Customs Act, 1962

Bare Act

Manufacture and other operations in relation to goods in a warehouse.

(1) With the permission of the Principal Commissioner of Customs or Commissioner of Customs and subject to the provisions of section 65A and such conditions as may be prescribed, the owner of any warehoused goods may carry on any manufacturing process or other operations in the warehouse in relation to such goods.

(2) Where in the course of any operations permissible in relation to any warehoused goods under sub-section (1), there is any waste or refuse, the following provisions shall apply: -

(a) if the whole or any part of the goods resulting from such operations are exported, import duty shall be remitted on the quantity of the warehoused goods contained in so much of the waste or refuse as has arisen from the operations carried on in relation to the goods exported:

Provided that such waste or refuse is either destroyed or duty is paid on such waste or refuse as if it had been imported into India in that form;

(b) if the whole or any part of the goods resulting from such operations are cleared from the warehouse for home consumption, import duty shall be charged on the quantity of the warehoused goods contained in so much of the waste or refuse as has arisen from the operations carried on in relation to the goods cleared for home consumption.

Judgments on Section 65

  • Jms Mining Pvt Ltd vs Commissioner Of Customs-Indore — CESTAT, 6 Jan 2026. A private bonded warehouse licence under section 58 can be cancelled under section 58B only if the licensee violates the Act, Rules or a condition of the licence — the Commissioner cannot review his own or his…
  • Larsen And Toubro Limited vs Ahmedabad — CESTAT, 5 Dec 2024. A curative amendment to a Section 58 bonded warehouse licence operates retrospectively from the date of the original licence where the department had full knowledge of the practice, the goods were not diverted, and…
  • Shiv Probuild Pvt Ltd vs Commissioner Of Customs-New Delhi Acc… — CESTAT, 6 Aug 2024. Violations of bonded warehouse licence conditions that are merely typographical, curable, or not breaches of any legal provision are not serious enough to warrant cancellation of the licence under section 58B, and…
  • Shm Shipcare P Ltd vs Mumbai-Air Cargo Import — CESTAT, 16 Feb 2024. Manufacture in a customs bonded warehouse under Sections 58 and 65 is a duty-deferment scheme: import duty on raw materials consumed in the final product is payable only on clearance of the final product under Section…
  • Larsen And Toubro Limited vs Union Of India — Gujarat High Court, 20 Mar 2019. Goods issued from a bonded warehouse for manufacture under Section 65 are subsumed in the manufacturing process, so their retention in the warehouse beyond one year without extension does not breach Section 61(2)(ii)…
  • Tonira Pharma Ltd vs The Union Of Inida — Gujarat High Court, 18 Jun 2026. Excise duty paid on clearing goods into the DTA cannot be adjusted or abated against customs or anti-dumping duty liability, the two levies being distinct in nature with no statutory provision permitting such…
  • Veetech Infoline Private Limited vs The Additional Commissioner Of Customs — Karnataka High Court, 24 Nov 2025. A cryptic, non-speaking adjudication order that reiterates a previous order without application of mind or cogent reasons violates principles of natural justice, and such violation permits writ interference under…
  • Jj Glastronics Pvt Ltd vs Bangalore-I — CESTAT, 30 Aug 2024. Where a 100% EOU has fulfilled its export obligation and the excess waste remains available in the unit with no allegation of diversion, mere generation of wastage in excess of SION norms cannot be treated as improper…
  • Kundan Care Products Ltd vs Commissioner Of Customs-New Delhi Acc… — CESTAT, 31 Jul 2024. A penalty imposed under section 112 of the Customs Act for 'contravention' of statutory provisions is not a penalization for an 'offence', since offences and penalties are distinct categories; therefore, a licensee who…
  • Al Amin Exports vs Commssioner Of Central Excise… .Opponent — Gujarat High Court, 27 Jan 2014. A mere assertion that the appeal has an excellent case on merits, without pleading and proving undue hardship, does not justify complete waiver of pre-deposit under Section 129E, as an arguable point in appeal is not…
  • (Ii) U. B. Venkatesh, Managing Director vs The Commissioner Of Customs — CESTAT, 1 Jul 2011. Where duty-free import benefits under a notification are availed by assessment to nil rate of duty and its conditions are violated, the resultant short levy must be demanded under Section 28(1) of the Customs Act, and…
  • Responsive Industries Ltd vs Commssioner Of Cgst & Central Excise… — CESTAT, 22 Dec 2023. A case of diversion of duty-exempt goods cannot be made out without evidence of the actual movement of the goods alleged to have been diverted, and standard input output norms (SION) are per-material ceilings or…