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Section25
The Customs Act, 1962

Power to grant exemption from duty

In force From 01 Feb 1963 Act 52 of 1962 As on 15 Oct 2026

Act 52 of 1962 Ministry Finance Enacted 13 Dec 1962 In force 01 Feb 1963 Cited by 12 provisions Instruments 21

Section 25 of the Customs Act, 1962 deals with power to grant exemption from duty. If the Central Government is satisfied that it is necessary in the public interest so to do, it may, by notification in the Official Gazette, exempt generally either absolutely or subject to such conditions (to be fulfilled before or after clearance) as may be specified in the notification goods of The Act came into force on 01 Feb 1963.

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

1 [(2) If the Central Government is satisfied that it is necessary in the public interest so to do, it may, may, by special order in each case, exempt from the payment of duty, under circumstances of an exceptional nature to be stated in such order, any goods on which duty is leviable.]

2 [(2A) The Central Government may, if it considers it necessary or expedient so to do for the purpose purpose of clarifying the scope or applicability of any notification issued under sub-section (1) or order issued under sub-section (2), insert an explanation in such notification or order, as the case may be, by notification in the Official Gazette, at any time within one year of issue of the notification under sub-section (1) or order under sub-section (2), and every such explanation shall have effect as if it had always been the part of the first such notification or order, as the case may be.]

3 [(3) An exemption under sub-section (1) or sub-section (2) in respect of any goods from any part of the duty of customs leviable thereon (the duty of customs leviable thereon being hereinafter referred to as the statutory duty) may be granted by providing for the levy of a duty on such goods at a rate expressed in a form or method different from the form or method in which the statutory duty is leviable and any exemption granted in relation to any goods in the manner provided in this sub-section shall have effect subject to the condition that the duty of customs chargeable on such goods shall in no case exceed the statutory duty.

Explanation.--Form or method, in relation to a rate of duty of customs, means the basis, namely, valuation, weight, number, length, area, volume or other measure with reference to which the duty is leviable.]

4 [(4) Every notification issued under sub-section (1) or sub-section (2A) shall, unless otherwise provided, come into force on the date of its issue by the Central Government for publication in the Official Gazette.]

5[(4A) Where any exemption is granted subject to any condition under sub-section (1), such exemption shall, unless otherwise specified or varied or rescinded, be valid up to 31st day of March falling immediately after two years from the date of such grant or variation:

Provided that in respect of any such exemption in force as on the date on which the Finance Bill, 2021 receives the assent of the President, the said period of two years shall be reckoned from the 1st day of February, 2021.]

6 * * * * *

7 [(6) Notwithstanding anything contained in this Act, no duty shall be collected if the amount of duty leviable is equal to, or less than, one hundred rupees.]

8 [(7) The mineral oils (including petroleum and natural gas) extracted or produced in the continental continental shelf of India or exclusive economic zone of India as referred to in section 6 and section 7, respectively, of the Territorial Waters, Continental Shelf, Exclusive Economic Zone and Other Maritime Zones

Act, 1976 (80 of 1976), and imported prior to the 7th day of February, 2002 shall be deemed to be and shall always be deemed to have been exempted from the whole of the duties of customs leviable on such mineral oils and accordingly, notwithstanding anything contained in any judgment, decree or order of any court, tribunal or other authority, no suit or other proceedings in respect of such mineral oils shall be maintained or continued in any court, tribunal or other authority.

(8) Notwithstanding the exemption provided under sub-section (7), no refund of duties of customs paid in respect of the mineral oils specified therein shall be made.]

Section 25, The Customs Act, 1962 (Act 52 of 1962).

Cross-references

Extracted from the operative text of the enactments themselves. Every destination below exists in our corpus.

This section refers to

  1. s. 6 Entrustment of functions of Board and customs officers on certain other officers
  2. s. 7 Appointment of customs ports, airports, etc

Referred to by 12

  1. s. 27 Claim for refund of duty
  2. s. 28H Application for advance ruling
  3. s. 159 Rules, certain notifications and orders to be laid before Parliament
  4. Finance Act s. 85 Amendment of notification issued under sub-section (1) of section 25 of Customs Act retrospectively
  5. Finance Act s. 92 Amendment of notification issued under section 25 of Customs Act
  6. Finance Act s. 101 Amendment of notification issued under sub-section (1) of section 25 of Customs Act and sub-section (12) of section 3 of Customs Tariff Act, retrospectively
  7. Finance Act, 2019 (No. 2) s. 83 Amendment of notifications issued under sub-section (1) of section 25 of Customs Act, retrospectively
  8. Finance Act, 2019 (No. 2) s. 84 Amendment of notification issued under sub-section (1) of section 25 of Customs Act and sub-section (12) of section 3 of Customs Tariff Act, retrospectively
  9. Finance Act, 2019 (No. 2) s. 85 Retrospective effect of notification issued under sub-section (1) of section 25 of Customs Act and sub-section (12) of section 3 of Customs Tariff Act
  10. Finance Act s. 91 Amendment of section 25
  11. Finance Act, 2024 (No. 2) s. 104 Retrospective effect to notification issued under sub-section (1) of section 25 of Customs Act, read with sub-section (12) of section 3 of Customs Tariff Act
  12. Finance Act, 2024 (No. 2) s. 105 Retrospective amendment of notification issued under sub-section (1) of section 25 of Customs Act read with section 124 of Finance Act

Related judgements & precedents

These are some judgments that construed this section, and hold precedence value. They hold authority on how to read, interpret and use this section.

  1. Hillman Woolen CO vs Union of India

    Supreme Court of India 24 Aug 2016 Binding (SC) - Landmark Precedent On Treaty Implementation And Statutory Notific Reportable

    Court's Decision & Legal Precedent

    An exemption notification under the Customs Act that enlarges the scope of an earlier exemption notification by including a new duty introduced after the original notification cannot be treated as retrospective merely because the underlying international treaty predates the new duty. A notification is clarificatory only if the earlier notification remotely suggested the exemption. When a new duty is introduced by statute after a treaty is signed, a subsequent notification granting exemption from that new duty is prospective in operation and does not retroactively apply to periods before the notifying act, unless the notification explicitly provides for retrospectivity or there is clear evidence of rectification of a proven mistake or omission. The Customs Act, 1962 and the Customs Tariff Act, 1975 are independent statutes with independent duty regimes; basic customs duty, additional duty equal to excise duty, and special additional duty are three distinct levies under Sections 2, 3 and 3A respectively.

    On this section: Cited as the source of power for the Government to exempt specified goods from all duties of customs or from Sections 3 or 3A of the Tariff Act

    Read the full order on eCourts India

  2. Sbec Sugar Limited vs Union of India

    Supreme Court of India 07 Feb 2011 Binding (SC) Reportable

    Court's Decision & Legal Precedent

    The benefit of duty exemption granted under EPCG Scheme notification is available only in respect of those goods which are cleared under Section 68 of the Customs Act (i.e., within the initially permitted warehouse period or during permitted extended period). Goods not removed from warehouse within the permitted period are deemed improperly removed under Section 72(1)(b) and the importer must pay customs duty at the rate applicable on the date of expiry of the permitted period. Section 15(1)(b), which prescribes duty computation at the rate applicable on date goods are actually removed from warehouse, applies only to clearance under Section 68 and not to goods deemed improperly removed under Section 72. Consequently, when goods are deemed improperly removed under Section 72, interest accrues from the date of expiry of the permitted period till actual clearance, irrespective of subsequent grant of duty exemption notification. Any other interpretation would render Section 72 otiose and create unintended amnesty benefits contrary to principles of harmonious statutory construction.

    On this section: Grants power to Central Government to issue notifications for extension of export promotion schemes, used here for extending EPCG Scheme to agro-based industries

    Read the full order on eCourts India

  3. Gammon India LTD vs Commnr. of Customs, Mumbai

    Supreme Court of India 06 Jul 2011 Binding (SC) Reportable Reported in SCC - citation to be confirmed from official law reports

    Court's Decision & Legal Precedent

    Where a contract for construction of roads has been awarded by NHAI to a joint venture entity, the benefit of an exemption notification conditioning exemption on import by 'a person who has been awarded a contract' is available only to the joint venture entity or someone importing provably on its behalf, not to an individual partner company importing in its own name and making payment from its own account, even if that partner is designated as lead partner. Individual partners cannot claim exemption benefits intended for the joint venture entity by simply asserting a legal relationship without concrete evidence of acting as agent for the joint venture. The language of exemption conditions must be strictly construed, and the person claiming exemption must clearly establish compliance with all conditions.

    On this section: Powers conferred on Central Government to issue exemption notifications

    Read the full order on eCourts India

  4. Rexnord Electronics and Controls LTD vs Union of India

    Supreme Court of India 04 Mar 2008 Binding (SC)

    Court's Decision & Legal Precedent

    The jurisdiction of the Settlement Commission under Section 127H of the Customs Act to grant immunity from interest is limited to interest payable under the provisions of the Customs Act itself. Interest payable under a contractual bond executed in terms of an exemption or duty notification, though issued under statutory authority, retains its contractual character and falls outside the Settlement Commission's powers of waiver or immunity. The Settlement Commission lacks the authority to grant immunity from such contractual obligations without the consent of both parties to the contract.

    On this section: Provides authority for issuing exemption notifications; conditions in such notifications and bonds executed thereunder become conditions of exemption

    Read the full order on eCourts India

The holding above is the ratio decidendi as extracted from the judgment by eCourts India, reproduced unaltered — it is a rendering of the court's reasoning, not a substitute for its words. Read the order itself before relying on it.

Judgments citing this section

These may be obiter dicta or a precedent, for you to study. These are the judgments where this section is quoted.

  1. Supreme Court of India 05 Nov 2024 SCIN010283202014

    … That notification, subject to the conditions mentioned thereon in entry 400 granted exemption from customs duty for import of goods required for setting up of any Mega Power project if such Mega Power project was an inter-State power plant and if it fulfilled the other conditions mentioned in the notification. Section 25(1) of the Customs Act under which the notification is issued reads as under: "25. Power to grant exemption from duty.- (1) If the Central Government is satisfied that it is necessary in the public interest so to do, it may, by notification in the Official Gazette, exempt generally either absolutely or subject …

    Read this order on eCourtsIndia

  2. Supreme Court of India 26 Jul 2022 SCIN010151342020

    … Strong reliance was placed by the Revenue on the decision of this Court in the Case of M. Jhangir Bhatusha & Ors 13. The subject of this petition was an order passed by the Government under sub-Section (2) of Section 25 of the Customs Act, 1962. By the said order, import of the specified oils by the State Trading Corporation was made liable to customs duty at the rate of 5% only and total exemption from auxiliary and additional duty was granted. On the other hand, import of the same specified oils by private importers was made …

    Read this order on eCourtsIndia

  3. Supreme Court of India 26 Jul 2022 SCIN010161312020

    … Strong reliance was placed by the Revenue on the decision of this Court in the Case of M. Jhangir Bhatusha & Ors 13. The subject of this petition was an order passed by the Government under sub-Section (2) of Section 25 of the Customs Act, 1962. By the said order, import of the specified oils by the State Trading Corporation was made liable to customs duty at the rate of 5% only and total exemption from auxiliary and additional duty was granted. On the other hand, import of the same specified oils by private importers was made …

    Read this order on eCourtsIndia

Made under this section, and citing it

10 instruments state that it was made under this provision — the power to make it comes from here, so a change to any of them changes what this section requires in practice. Newest first.

Another 11 instruments name this provision in its title or its text without being made under it.

All subordinate legislation

Questions about Section 25

What have the courts held on Section 25 of the Customs Act?

Hillman Woolen CO vs Union of India (24 Aug 2016) is the leading judgment on this section among those set out below: Cited as the source of power for the Government to exempt specified goods from all duties of customs or from Sections 3 or 3A of the Tariff Act. Another 3 judgments on this section are set out below, all of them from the Supreme Court. They run from 2008 to 2016.

How do I find court cases under Section 25 of the Customs Act?

In judgments and charge sheets this section is written several ways, and each form finds a different set of orders. These search the full text of every order eCourtsIndia holds, best matches first: Customs Act 1962 25, section 25 Customs Act 1962, section 25 of the Customs Act. Each opens the full list of orders on eCourtsIndia, where it can be narrowed by court, year and outcome. 4 reported judgments on this section are set out on this page, beginning with Hillman Woolen CO vs Union of India (24 Aug 2016).

What should I read with Section 25 of the Customs Act, and has it changed?

Its own text turns on section 6 (Entrustment of functions of Board and customs officers on certain other officers), section 7 (Appointment of customs ports, airports, etc), so none of them can safely be read on its own. 12 other provisions in this corpus refer back to it. The rules and notifications made under it are where it actually bites, and there are 10: most recently Ad hoc Exemption Order No. 4/2021-Customs (2021), then Appointment of State Nodal Authority for grant of Ad hoc Exemption as per Order No 4/2021-Customs, dated 3/5/2021 (2021), and 8 more.

When did Section 25 of the Customs Act come into force?

Section 25 of the Customs Act, cited as Customs Act 1962 25, came into force on 01 Feb 1963, having been enacted on 13 Dec 1962. It is in force as at the date shown on this page.

Other sections of this Act

Source and method. Compiled from the enactments of Parliament and of the State legislatures as published on India Code, and republished together with commentary and other original matter under section 52(1)(q)(ii) of the Copyright Act, 1957. Structured, cross-referenced and maintained by eCourtsIndia. Text as in force on 15 Oct 2026. This page is not a substitute for legal advice.