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Public Warehouses:

  • Public Warehouses are appointed by the Asst./Dept. Commissioner at the customs stations.
  • Goods imported by any importer can be stored there.

Private Warehouses:

Licensed by the Asst./Dept. Commissioner

To be situated only at the customs stations

Goods of licensee can be deposited. However, if facilities in public warehouse are not available, even other goods can be stored.

The license can be cancelled by the A/DC in following 2 ways:

By giving 30 days notice


Without such notice if the licensee has contravened the Customs Act, Rules, Regulations or has violated the conditions of the license. (However, sufficient opportunity of being heard to be given)

Warehousing Bond:

Also called double duty bond.

Every person who intends to warehouse goods shall undertake the bond with sufficient security/surety.

Undertake to complete all the formalities of Act/Rule, etc.

Undertake to pay duty, interest, rent, etc.

Undertake to pay penalties if any for contravention of provisions.

GENERAL BOND may also be permitted by the Asst./Dept. Commissioner for a particular period.

The liability of the bonder will continue even after transfer of goods to another person or to different warehouse. However if the transferee executes a new bond, the liability of the old bond shall be proportionately reduced by the amount of new bond.



Capital Goods 100% EOU

Other Goods 100% EOU

Other Goods

Period for which goods can remain

5 years

3 years

1 year

Extension of warehousing period

Commissioner can extend as much as he thinks fit.

Commissioner can extend as much as he thinks fit.

Commissioner can extend for further 6 months.

Chief Commissioner can extend as much as he thinks fit.

Reduction in warehousing period

No reduction permissible.

No reduction permissible.

Commissioner may reduce if the goods are likely to deteriorate

Interest (On the duty amount)

15% after 5 years

15% after 3 years

15% days after 90 days.

Other Notes:

1. The Board in public interest, may waive such interest.

2. If duty payable is NIL, then no interest is payable i.e. at the time of removal, when goods are exempted from duty, then no interest can be charged. [Pratibha Processors Vs. UOI (1996) (SC)]

No interest payable u/s 47(2) [CC vs. Acalmar Oils & Fats Ltd. (2009) (Tri Bang) and CBEC Circular # 15/2009-Cus., dt. 12-05-2009] (Amendment)

  • Interest u/s 47(2) is payable if importer fails to pay import duty within 5 working days from the date on which the Bill of Entry for Home Consumption is returned to him. The use of expression home consumption in section 47 makes it amply clear that section 47 applies only when goods are entered for home consumption be filing bill of entry for home consumption.
  • Once the goods are deposited in the warehouse, the ex-bond bill of entry is files u/s 68, which doesn t provide for any levy of interest. The only interest imposable in respect of warehoused goods is as provided u/s 61. Therefore after return of ex-bond bill of entry, the duty is not paid within 5 days, the interest u/s 47(2) can t be imposed.

Owner s right with the warehoused goods:

  1. Inspect the goods
  2. Show for sale
  3. Separate damage/deteriorated goods
  4. Deal with goods and containers in such a manner to prevent loss due to deterioration/damage.
  5. Sort the goods or change their containers for preservation, sale, export or disposal
  6. Take samples without entry for home consumption and if the proper officer permits, without paying duty.

Manufacturing/ Other operations on warehoused goods:

Can be done

With the permission of the Asst/Dept Commissioner

Subject to prescribed conditions

Subject to payment of prescribed fees

Waste/Refuse after manufacture:

Can be exempted from duty if the whole production exported and such waste is destroyed.

If not exported, pay duty

If not destroyed, pay duty.

If partially exported, pay duty in proportion.

Relevant date for duty on such waste is payment of duty

Remission in case of volatile goods:

There is a loss in quantity at the time of removal,

On account of natural loss

Such goods are notified by the CG

Then, the duty payable on such lost portion can be remitted.

Removal of bonded goods:

1. Transfer to another warehouse:

2. To be done within 3 months or such extended period as allowed.

a. Same town:

To be done under the supervision of proper officer.

Cost of supervision to be met by the importer.

b. Other town:

Execute bond same as duty amount (not double)

2. Clearance for home consumption:

File Ex-bond bill for home consumption

Pay outstanding duty, interest, charges, rent and penalties if any.

Proper office will make an order for clearance of such goods for home clearance.

3. Clearance for exports:

File shipping bill or bill of export

Pay outstanding duty, interest, charges, rent and penalties if any.

Proper office will make an order for clearance of such goods for exportation

Relinquishment of title on warehoused goods..

Can be done before the proper office makes an order for clearance of goods.

All interest, rent, charges, penalties, etc. shall be paid

After it, the importer will not be required to pay duty.

HOWEVER, no relinquishment is possible in case of goods under offence.


What is Improper Removal

1. Goods removed in contravention of section 71

2. When goods permitted to be warehoused u/s 61 for specific period, they are not removed after expiry of such specified period

3. Goods taken out as samples u/s 64 withouth payment of duty

4. Goods are not duly accounted


If the owner fails to pay the amount of duty, interest, rent and other charges in reply of the notice by the proper officer, such proper officer can detain and sell such portion of goods as he may select . HOWEVER, he has to exercise theses powers only when no other remedy is left. Before selling or detaining the goods, it is necessary to give notice to its owner.

Deemed Removal (Amendment):

SC in Kesoram Rayon Vs CC (1996) has decided that once the permitted warehousing period get over, then the relevant date for determination of rate of duty gets frozen at the date of deemed removal i.e. the date of expiry of permitted period.

If an application for extension of permitted period is received after the expiry of permitted period, then even if it is allowed, the relevant date shall remain the same i.e. the date of deemed removal, not the date of payment of duty.

The department has confirmed the view taken by the apex court vide. Public Notice No. 60/2009, dt. 31-08-2009

Parth Dave


Published by

Parth - CA,CS,CMA
Category Excise   Report

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