B-17 Bond, Bond Amount, Execution of Bond, Waiver of Bank Guarantee, Acceptance of the Bond, Bond Register - Central Excise Practice Manual (OLD) - Central Excise

B-17 Bond A single Bond referred to as Mother Bond in the Form B-17 (Gen. Surety /Security) is required to be executed for duty free import, domestic procurement, provisional assessment, for export without payment of duty, for due accountal /disposal of dutiable goods. Format of the bond has been prescribed vide notification No. 6/98-CE (N.T), dated 2.3.1998 and the bond covers following activities:- (a) Transshipment of import/export goods between the port of import/export and unit s premises, Duty free import/domestic procurement of goods, (b) Warehousing/processing of goods in the unit, (c) Movement of duty free goods for job work return, (d) Temporary clearance for repair, display in exhibitions, testing/approvals etc. (e) Movement of goods against ARE-l , ARE-3 , CT-3 and transfer from one warehouse/EOU unit to another. However, it does not cover differential duty amount in the case of Advance DTA sales for which a separate bond is required to be executed. The units are required to give either surety for the bond amount or furnish 5% of the bond amount as Bank Guarantee or any other Govt. approved security. The solvency of surety may be certified by a Chartered Accountant or banker of the surety. A Limited Company is a distinct legal entity and the members of the Co., including its Directors are distinct from the Company, the directors of EOUs, are allowed to stand as surety in their personal capacity. Other corporate bodies of the EOU/SEZ units may also stand surety for a unit. Bond Amount The required bond amount is equal to A+B, where A is 25% of the duty foregone on the Capital Goods, whether indigenous or imported as per sanctioned requirement including duty free Capital Goods installed. B is duty foregone on the raw material, consumables etc. required for 3 months, including raw material utilized in un-exported finished goods. As and when bond amount is not sufficient to cover the duty foregone, additional/revised bond is required to be executed. Execution of Bond The bond is required to be executed on non-judicial stamp paper by the Managing Director or the Director of the company who have been duly authorised for this purpose by a resolution of Board of Directors. Same procedure is followed for Company or person standing as surety provided they are solvent to the extent of Bond amount, otherwise Bank Guarantee @ 5% of bond amount is required to be given. In the case of firms, all the partners are required to sign the bond. Bond is required to be revised (re-executed) whenever there is a change in ownership of unit or change in the constitution. Waiver of Bank Guarantee Units in existence for last three years with unblemished track record having export turnover of rupees five crores or above, are exempted from furnishing Bank Guarantee etc. or Surety along with B-17 bond . Acceptance of the Bond Bond complete in all respects, is to be executed before the jurisdictional Assistant Commissioner/Deputy Commissioner of Central Excise. Bond Register Original Bond is to be kept safely in the office of jurisdictional Assistant Commissioner / Deputy Commissioner after allotting Bond Nos. and bond values to be mentioned in the bond register for the purposes of debit/credit of duty foregone on the goods imported/procured duty free. Debits for duty foregone are to be made at the time of issue of every procurement Certificate for import or issuance of CT-3 . For debit of bond in case of import/ procurement of Capital Goods, only 25% of the duty foregone should be taken and not the entire duty amount. Similarly credits of duty foregone may be allowed for the duty contained in inputs used in the manufacture of finished goods exported or cleared in DTA on payment of applicable duties or destroyed as per permission of proper officer or transferred to other warehouses/ EOU/SEZ units or in case of duty free donation of computers. Monitoring of Bond is to be done by AC/DC of Central Excise and it is to be ensured that Bond is discharged at the time of final debonding of the unit.