BOND
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
26 January 2011
What is the function of Bond In Excise?
RAMESH KUMAR VERMA
(Expert)
28 January 2011
Bond is an instrument by which the obligation to pay money is created expressly. It is also a legal agreement whereby a person undertakes to do or not to do anything subject to conditions stipulated in the agreement.
The primary purpose of the bond is to secure due compliance with the rules and procedures laid down under the Excise law.
A bond is a collateral security , which the department is securing to ensure payment of appropriate duty in addition to the statutory provisions available .
As a measure of rationalization and simplification of excise law and procedures the number of bonds have been further reduced. Several bonds, which were in vogue prior to 1 st July, 2001 have since been dispensed with. Care should be taken with regard to bonds, which were executed prior to 1 st July, 2001 while discharging the same. These bonds should be discharged only after the completion/performance of the obligation.
Bonds are basically two types ,i.e. surety and security. Under a surety bond another person stands as surety to guarantee the performance on the part of obligor.
The surety should be for the full value of the bond and the person standing as surety should be solvent to the extent of the bond amount. Under the Contract Act the liability of the surety is co-extensive with that of the principal debtor and hence the department is at liberty to enforce the recovery of the dues either from the obligor or from the surety.
Regards,
The primary purpose of the bond is to secure due compliance with the rules and procedures laid down under the Excise law.
A bond is a collateral security , which the department is securing to ensure payment of appropriate duty in addition to the statutory provisions available .
As a measure of rationalization and simplification of excise law and procedures the number of bonds have been further reduced. Several bonds, which were in vogue prior to 1 st July, 2001 have since been dispensed with. Care should be taken with regard to bonds, which were executed prior to 1 st July, 2001 while discharging the same. These bonds should be discharged only after the completion/performance of the obligation.
Bonds are basically two types ,i.e. surety and security. Under a surety bond another person stands as surety to guarantee the performance on the part of obligor.
The surety should be for the full value of the bond and the person standing as surety should be solvent to the extent of the bond amount. Under the Contract Act the liability of the surety is co-extensive with that of the principal debtor and hence the department is at liberty to enforce the recovery of the dues either from the obligor or from the surety.
Regards,
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