Debonding in cases where SCN is pending for Adjudication - Central Excise Practice Manual (OLD) - Central Excise

Debonding in cases where SCN is pending for Adjudication In cases where any show cause notice or demand of duty is pending against the unit, the unit is allowed to debond on furnishing an undertaking on stamp paper to the effect that it would not dispose of its land, building, capital goods etc. till such time the show cause notice is adjudicated and the amount confirmed, if any, paid. This undertaking would be backed by a bank guarantee of, say, 10% of the amount involved in the show cause notices. Before accepting the undertaking certain additional factors should also be kept in mind, e.g. whether the land/building is owned or leased, whether the capital goods are hypothecated to a bank or are free from any encumbrances, etc. Even where the above facility is extended and the unit allowed to debond it should be ensured that duty on the non-duty paid raw materials, non-duty paid capital goods and finished manufactured goods, is discharged before the unit is allowed to debond. In the cases, where Government has lost in the Tribunal and has preferred an appeal to Apex court, the amount involved in the SCN issued on same issue is not to be taken into consideration for computing 10% Bank Guarantee of the amount of such demand. Where security has been furnished in form of bank guarantee along with B-17 bond , then assessee may request for adjustment as required to be furnished in terms of Circular No.8/2004-Customs . [Ref: Appendix 14-I-L of HOP , CBEC Circular Nos.8/2004-Cus.Dated 28-1-2004 , 14/2004-Cus. Dated 13-2-2004 and 55/2004-Cus., dated 14-10-2004 , 12/2008-Customs dated 24-7-2008 ].