Customs bonding - CBEC's Customs Manual 2023 - Customs

6. Customs bonding: 6.1 The premises of EOU were earlier required to be approved as a Customs bonded warehouse under the warehousing provisions of the Customs Act. The manufacturing and other operations were carried out under customs bond and the unit bears appropriate charges for officers on cost recovery basis. In case of units in Aquaculture, Horticulture, Floriculture, Granite quarrying etc exemption from bonding was given for administrative reasons with certain other safeguards being put in place to check that duty free benefits where availed are not abused. The EOUs were required to execute a multipurpose bond with surety/ security with jurisdictional Central Excise and Customs officers. [Refer Circular No. 15/95-Cus., dated 23-2-1995] 6.2 Recognizing the potential role of these units in the Make in India initiative and as a measure of improving the ease of doing business, it was decided to do away with the need to comply with warehousing provisions by these units. For this purpose, notification 44/2016 Customs dated 29th July 2016 was issued (effective from 13th August 2016) amending the principal notification 52/2003-Customs dated 31st March 2003. As a consequence, these units stand de-licensed as warehouses under Customs Act, 1962, with effect from 13th August, 2016. However EOUs are still required to execute a multipurpose bond with surety /security with jurisdictional Customs and Central Excise officers. [Refer Circular No.35/2016-Customs dated, the 29th July 2016]