Manufacture and Other Operations in Special Warehouse (section 58A warehouse) - CBEC's Customs Manual 2023 - Customs

22. Manufacture and Other Operations in Special Warehouse ( section 58A warehouse): 22.1 Under Section 65 , the Board has prescribed Manufacture and Other Operations in Special Warehouse Regulations, 2020 . These regulations provide for eligibility conditions for grant of licence under Section 58A of the Act for warehousing of specified goods, notified by Board under sub-section (2) of section 58A (refer Para 5.3),along with permission for undertaking manufacturing or other operations in the warehouse under Section 65 of the Act, conditions of the bond to be executed by the licensee, maintenance of accounts, appointment of warehouse keeper, provision for facilities, equipment and personnel, maintenance and operation of strong room, conditions for transport and receipt of goods from custom station, from another warehouse, domestically procured goods, transfer of goods from a warehouse, removal of resultant goods for home consumption and export, maintenance of records and conduct of audit etc. 22.2 The form of application to be filed by an applicant before the jurisdictional Principal Commissioner / Commissioner of Customs, the form of accounts and the bond to be executed to be maintained by a special warehouse ( section 58A ) unit operating under section 65 is prescribed under Circular No. 36/2020-Customs dated 17.08.2020. The Circular also covers the procedure for, receipt, storage and removal of goods, maintenance of accounts, conduct of audit etc. in a section 58A unit undertaking manufacturing or other operations under section 65. The licensees manufacturing or carrying out other operations in a bonded warehouse shall be required to maintain records as per the form prescribed under the circular (Annexure B). Regulation 4 of the MOOSWR, 2020 , provides that the applicant under section 65 shall undertake to execute a bond in such format as specified. Further, Section 59 of the Customs Act requires the importer of the warehoused goods to furnish security and execute a triple duty bond for the warehoused goods. Thus, the bond prescribed under the Circular as per Annexure C serves the requirements of both MOOSWR, 2020 and Section 59 of the Customs Act. Additionally, the licensee will furnish security by way of a bank guarantee equivalent to the duty involved on the warehoused goods. [Refer to Notification No. 75/2020-Cus (NT) d.t 17.08.2020 and Circular No. 36/2020-Customs dated 17.08.20 ] 22.3 To bring in greater regulatory clarity and certainty for members of the trade and industry Board has clarified the following, detailed in the circular referred below. (a) Job work for a section 65 unit. (b) Job work for others by a Section 65 Unit (c) Whether a section 65 unit can procure goods from FTWZ [Refer to Circlular No. 48/2020-Customs dated 27.10.2020 ]