In bond manufacturing

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The Rattle Snake (Querist)

09 January 2015 Whether it is mandatory for an assesse to be under schemes such as EOU,STP,EHTP etc. in order to apply license for manufacturing in bonded warehouse?

Kindly clarify along with relevant provisions/rules/notifications.

RAMESH KUMAR VERMA

RAMESH KUMAR VERMA (Expert)

17 January 2015 The concept of 'bonded warehousing' was first tried out at Whitefield (Bangalore). The importers could store cargo and effect partial releases thereby deferring duty payment to Customs, and at the same time releasing the international (ISO) container in which the cargo is imported.

Special Economic Zone (SEZ) is a specifically delineated duty free enclave and shall be deemed to be foreign territory for the purposes of trade operations and duties and tariffs.

SEZ units may procure goods required by it without payment of duty, from bonded warehouses in the DTA set up under the Policy and/or under Section 65 of the Customs Act and from International Exhibitions held in India.

After obtaining LOP, the unit has to approach Customs for obtaining the facilities of duty free import and excise - duty free procurement of indigenous goods of the raw material and capital goods required for the manufacture of finished products in Bonded warehouse u/s 58 & 65 of Customs Act, 1962 for the purpose of 100% export out of India.

The unit has to furnish following documents for applying to Deputy / Assistant Commissioner to grant a license of Customs Bonded warehouse and permission for manufacturing in Bonded warehouse u/s 58 & 65 of Customs Act, 1962.

List of documents required to be furnished are as follows:

Application for grant of licence u/s 58 & 65 of Customs Act, 1962 (Refer to format)
FORM B-17 Bond …….. (Refer to B - 17 bond format)
Bank Guarantee …… (Refer to B.G. format)
Insurance Policy for Fire & Burglary …… (For capital goods)
Supplementary Terms and Conditions
Affidavit with respect to non envolvement in Customs & Central Excise Cases (Refer to format given)
DoE/STPI letter of approval vide ref. no. ………………………..
List of proposed plant, machinery & capital goods
Agreement with STPI / SEEPZ for Export Commitment
Process of Manufacture
Green Card No……………………………………………………
Self Removal Procedure approval request letter
Solvency Certificate
List of Board of Directors
Lease Agreement of premises
Ground Plan of premises
IEC Certificate
PAN
Memorandum & Articles of Association

The specimen form for B-17 Bond and Bank Guarantee to be submitted by unit & its Banker are given as annexures ‘A’ & ‘B’.

For the purpose of renewal of licence, only following documents are required to be furnished -

Application for renewal in the prescribed Performa.
Solvency Certificate.
Export Statement.
B-17 Bond on Rs. 100/- Stamp Paper duly notarized irrespective of the fact whether the unit intended to make any import or not (if any enhancement of capital / indigenous goods limit or change of address)
Bank Guarantee (if earlier expired)
Supplementary terms and conditions duly accepted on Rs.100/- stamp paper duly notarized.
Lease Agreement duly registered with the area sub - register. (Stamps)
Declaration for customs.
Insurance Policy (for Fire / Burglary)

For the import of duty free capital goods or raw materials, unit has to make an application to Customs alongwith copy of invoice duly attested, packing list, Import certificate from STPI in case of STP, HTPI units, IGMS & Airway Bill or Bill of lading. The department will issue a serial numbered Procurement Certificate for duty free imported goods.
For procurement of duty free indigenous goods, purchase order & import certificate from STPI (in case of STP, HTPL units) is to be produced. The department will issue a CT-3 form to enable duty free procurement of indigenous goods.
THE UNITS ARE ELIGIBLE FOR THE FOLLOWING FACILITIES UNDER VARIOUS LAWS AND GOVT.AUTHORITIES.

IN THE LIGHT OF FOREIGN TRADE POLICY AND POLICY PROCEDURES The unit shall execute a legal undertaking with the Development Commissioner concerned and in the event of failure to achieve positive foreign exchange earning it shall be liable to penalty in terms of the legal undertaking or under any other law for the time being in force.

FURTHER INFORMATION READ Following circulars in following links:

https://bangalorecustoms.gov.in/notice11.htm

https://www.cbec.gov.in/customs/cs-circulars/cs-circulars06/17-2006-cus.htm

https://164.100.9.245/exim/2000/procedures/bchap-07.html

https://dgftcom.nic.in/exim/2000/policy/hbppol1/2009-2010/chap06.htm

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