Manufacture in bond - CBEC's Customs Manual 2023 - Customs

9. Manufacture in bond: 9.1 EOUs used to be private bonded warehouse under provisions of Section 58 of the Customs Act, 1962. To undertake manufacturing or other operations in the warehouse in relation to warehoused goods, the required permission was granted under Section 65 of the Customs Act 1962, read with Manufacture and Other Operations in Warehouse Regulations, 1966 . The mandatory warehousing has now been done away with w.e.f. 29.07.2016 and EOUs are required to follow the procedure prescribed under Rule 5 of the Customs (Import of Goods at Concessional Rate of Duty) Rules, 2017 for which Notification no. 52/2003-Customs dated 31st March, 2003 has been amended by Notification No. 59/2017-Customs dated 30th June, 2017.The degree of supervision of the Departmental officers on movement of raw materials, components, finished goods and manufacturing process and accounting in an EOU is aimed at providing operational flexibility, easing restrictions and removing practical difficulties faced by EOUs. Accordingly, the manufacture is now allowed without any physical supervision of the Central Excise and Customs authorities, locking of the warehouse premises, control over the issue and return of imported goods. Further, all movements from and to the units like clearance of raw materials/ components to the job worker's premises, return of goods from the job worker's premises, clearance to other EOUs, export and sale into DTA can be made by the manufacturer subject to recording of each transaction in the records prescribed by the Board/Commissioners or their private records approved by the Commissioner. [Refer Circular No. 88/98-Cus, dated 2-12-1998] 9.2 Exports by EOUs are allowed on self-sealing and self-certification basis. [Refer Circular No. 12/2005-Cus dated 4.3.2005] 9.3 The EOUs were allowed self-bonding/self-warehousing without the requirement of physical verification of goods by officers of Customs and Central Excise for both imported as well as indigenously procured goods. This relaxation was available to EOUs with a clean track record having physical export turnover of goods or services is Rs.10 Crores or above in the preceding financial year. [Circular No. 19/2007-Cus dated 3.5.2007 amended by 19/2015 dated 9.6.2015]] 9.4 With the removal of mandatory warehousing, EOUs stand delicensed as warehouses under Customs Act, 1962, with effect from 13th August, 2016. EOUs are no longer required to maintain warehoused goods register. Instead the records of receipt, storage, processing and removal of goods is required to be maintained in a prescribed form in digital manner. A digital copy of Form A, containing transactions for the month, shall be provided to the proper officer, each month (by the 10th of month) in a CD or Pen drive, as convenient to the unit. The requirement of sending re-warehousing certificates has also been dispensed with for all EOUs. Instead, upon receipt of goods in the unit, copy of relevant bill of entry shall be provided to the jurisdictional office who shall reconcile the imports with intimation provided under Rule 5 of Customs (Import of Goods at Concessional Rate of Duty) Rules, 2017. [Refer Circular No.35/2016-Customs dated, the 29th July 2016 and Circular No.29/2017-Customs dated 17th July 2017]