Procedure for bonding - Central Excise Practice Manual (OLD) - Central Excise

Procedure for bonding Except where otherwise provided, the operations of an EOU are to be carried out in a Customs Bonded area i.e. a licence under section 58 of Customs Act, 1962 is required to be obtained by EOU. The requirement of physical bonding of the premise of the unit has been exempted in case of horticulture farms, aquaculture farms, granite quarries. In terms of Customs Act, 1962 , licences for Public Bonded Warehouse and Private Bonded Warehouse are issued at a place which has been declared as a warehousing station. The power to issue licence vests with the jurisdictional Assistant/ Deputy Commissioner of Customs Central Excise. Vide notification No. 33/94-Cus. (NT), dated 1.7.94 , the powers to declare places to be warehousing Station under section 9 of Customs Act in respect of EOUs has been delegated to the Chief Commissioner /Commissioner of Customs in their jurisdiction. As per CBEC instruction, the validity period of Private Bonded warehouse licence is required to be co-terminus with the validity period of LOP issued by the DC. However, in case of fraud suppression of facts, action can be taken for cancellation of licence before expiry of five years as per law. Vide Circular No. 9/2008-Customs, dated 25.06.2008 , it has been clarified by the Board that in case of 100% EOUs, the licensing under Section 58 and grant of permission for in-bond manufacturing facility under Section 65 of the Customs Act, 1962 shall be considered and decided by Assistant Commissioner/ Deputy Commissioner in charge of Unit.