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TMI BlogWarehousingX X X X Extracts X X X X X X X X Extracts X X X X ..... payment of Customs duty is permitted in terms of Chapter IX of the Customs Act, 1962. Further, where necessary the Manufacture and Other Operations in Warehouse Regulations, 1966 provide the procedure to be followed for manufacture under bond. On their part, Warehoused Goods (Removal) Regulations, 1963 provide the procedure for movement of the goods from one warehouse to another. 3. Warehousing Stations: 1.1 Public or Private bonded warehouses can be operated only at places which are declared as warehousing stations under Section 9 of the Customs Act, 1962. This also applies to the operations in Customs bonded warehouses like EOU/EHTP/STP units. 1.2 As per provisions of Section 9 of the Customs Act, 1962, Board may declare places as warehousing stations at which alone public warehouses may be appointed and private warehouses may be licensed. Board has vide Notification No. 34/94 (NT)- Cus, dated 1-7-1994 delegated these powers to the Chief Commissioners of Customs or Chief Commissioners of Customs and Central Excise, as the case may be. Also, in respect of setting up of EOUs, the powers for declaring places as warehousing stations have been delegated to the jurisdictional C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are required on a continuous basis or on payment of Merchant Overtime/Supervision Charges, as the case may be Licensing of Private Warehouses. 5. Appointment of Private Warehouses: 5.1 As per Section 58 of the Customs Act, 1962, at any warehousing station, the Assistant Commissioner of Customs or Deputy Commissioner of Customs may license private warehouses for depositing without payment of duty following types of goods: (i) Dutiable goods imported by the licencee; or (ii) Dutiable goods imported on behalf of the licensee; or (iii) Any other goods imported by other importers in respect of which specialized storing /handling facilities are required and such specialized storing /handling facilities for deposit are not available in a public warehouse. The specialized facilities are like liquids in bulk, hazardous goods, explosive goods, goods requiring controlled temperature conditions etc. 5.2 The main conditions for granting Private Bonded Warehouse licences are: (i) The applicant is financially sound and credible and the proprietor or partner or any of the Directors have not been involved in any Customs or Central Excise duty evasion cases or smugg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... they shall be solvent for an amount of Rs.10 lakhs and should possess a good record. The double duty bond as per Section 59 of the Customs Act, 1962 shall be sufficient for bonding of non-sensitive goods without a cash deposit/bank guarantee. However, if concerned Assistant/Deputy Commissioner of Customs is not satisfied about the transactions of a particular licencee, a suitable bank guarantee may be obtained. (c) As a measure of relaxation to the Central/State Government Undertakings, all Central and State Public Sector Undertakings shall be exempt from furnishing Bank guarantee or other form of security for storing sensitive goods in the duty free shops operated by them. The execution of a double duty bond and other requirements would, however, remain. [Refer Circulars No. 99/95-Cus, dated 20-9-1995, No.20/96-Cus, dated 4-4-1996, No. 13/02-Cus., dated 22-2-2002, No. 34/02-Cus., dated 26-6-2002, No.18/2007-Cus, dated 24-4-2007 and No. 26/2012 dated 10-09-2012] 7. Cancellation/suspension of licences for Private Bonded Warehouses: 7.1 Section 58(2) of the Customs Act, 1962 provides that the Assistant/Deputy Commissioner of Customs may cancel a license, if the license ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s in a warehouse. 9.2 The goods should be stored in a Bonded Warehouse only after due examination. Reverse of the Bill of Entry must conform the veracity of the declared description with distinctive identification marks of the subject goods. 10. Period for which goods may remain warehoused: 10.1 As per section 61 of the Customs Act, 1962, the warehousing period of goods deposited in a warehouse or in any other warehouse to which they may be removed, is as under: (i) Capital goods intended for use in any EOU, may be kept for five years; (ii) Goods other than the capital goods intended for use in any EOU, may be kept for three years; (iii) Any other goods may be kept for one year. However, if the goods are likely to deteriorate, the period of one year may be reduced by the Commissioner of Customs to such shorter period as he may deem fit: 11. Extension of warehousing period: 11.1 In the case of any goods which are not likely to deteriorate, the warehousing period, on sufficient cause being shown, be extended- (i) In the case of such goods intended for use in any EOU, by the Commissioner of Customs, for such period as he may deem fit; (i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mported by EOUs, (e) Goods used in the units operating under manufacture-in-bond scheme, (f) Machinery, equipments and raw materials imported for building and fitment to ships. (vii) The applications for extension of warehousing period shall, as far as possible, be filed prior to 15 days of expiry of the warehousing period. All such requests should normally be decided by the Customs within this period. The requests for grant of extension of warehousing period can be considered after the expiry of initial or extended period of warehousing, after taking into consideration the exceptional circumstances of the cases, nature of commodity, rate of duties, particularly, whether the same could result in loss of revenue to Government, licencing aspects involved etc. (viii) In case an importer makes a request to permit re-export of the goods under Section 69 of the Customs Act, 1962, the same may be allowed even if the permitted period for bonding has expired and demand notice issued under Section 72, or it has been decided to put the goods under auction. Before permitting re-export, however, it will be necessary to extend the period of warehousing under S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons of Section 47(2) of the Customs Act, 1962 on goods deposited in a warehouse and being cleared for home consumption by filing the Bill of Entry prescribed under Section 68 of the Act, ibid, for delayed payment of duty. In other words, the provision for payment of interest if the importer fails to pay the duty within 2 working days from the date on which such Bill of Entry is returned to him for payment of duty are not attracted in case of clearances made under Section 68 of the Act ibid. 13. Waiver of interest: 13.1 As per Section 61(2) of the Customs Act, 1962, Board may, in exceptional cases, waive the whole or part of any interest payable in respect of any warehoused goods. Board may also by a notification, specify the class of goods in respect of which no interest shall be charged. Accordingly, the interest on warehoused goods imported by EOUs/EHTP/STP units is exempt vide Notification No. 67/95-Cus.(NT), dated 1-11-1995. 13.2 The powers of waiver of interest on Customs duty warehoused goods upto a limit of Rs. 2 crores have been delegated by the Board to the Chief Commissioners of Customs and Central Excise vide Notification No.122/2004-Cus.(NT), dated 25-10- 2004. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (2) of the Customs Act, 1962 has, thus, no independent or separate existence. 14. Control over warehoused goods: 14.1 All warehoused goods shall be subject to the control of the proper officer of Customs and no person shall enter a warehouse or remove any goods therefrom without the permission of the proper officer. 14.2 The proper officer may cause any warehouse to be locked with the lock of the Customs Department and no person shall remove or break such lock. 14.3 The proper officer shall have access to every part of a warehouse and power to examine the goods therein. 15. Payment of rent and warehouse charges: 15.1 The owner of any warehoused goods shall pay to the warehouse-keeper rent and warehouse charges at the rates fixed under any law for the time being in force or where no rates are so fixed, at such rates as may be fixed by the Commissioner of Customs. 15.2 If any rent or warehouse charges are not paid within ten days from the date when they became due, the warehouse-keeper may, after notice to the owner of the warehoused goods and with the permission of the proper officer cause to be sold (any transfer of the warehoused goods notwithstanding) such suffi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ocess or other operations in the proper form and to produce such accounts for inspection by the proper officer; (iii) Submit detailed statements of all imported and other goods used in the manufacturing process or other operations and those remaining in stock, at any time the proper officer directs; (iv) Provide to the officers of Customs office space, wherever required, and access to warehouse, for control and supervision of the manufacturing process or other operations or imported and other goods as may be specified by Assistant/Deputy Commissioner of Customs; (v) Pay all the charges including pay, allowances, leave and pensionary charges of such officers as may from time to time be posted by the Assistant/Deputy Commissioner of Customs in the warehouse for supervision and control of the manufacturing process or other operations, or imported and other goods; and (vi) Comply with such conditions as may be imposed by the D.C./A.C. of Customs from time to time for carrying out the purposes of Manufacture Other Operations in Warehouse Regulations, 1966 and the Act. 17.4 After execution of the bond, Assistant/Deputy Commissioner of Customs shall accord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plication for sanction are false or incorrect/ or if any undertaking given in the bond is not fulfilled, the Assistant/Deputy Commissioner of Customs may, without prejudice to any other action that he may take under the provisions of the Act or these regulations cancel the sanction for carrying on the manufacturing process or other operations after giving reasonable opportunity of being heard. 17.9 The waste or refuse arising during the course of manufacture under bond may be disposed by any of the following modes: (i) If goods manufactured in bond are exported, import duty on the quantity of the warehoused goods contained in the waste or refuse shall be remitted provided that: (a) Such waste or refuse is either destroyed; or (b) Duty is paid on such waste or refuse as if it had been imported into India in that form. (ii) If goods manufactured in bond are cleared from the warehouse for home consumption, import duty shall be charged on the quantity of the warehoused goods contained in so much of the waste or refuse as has arisen from the operations carried on in relation to the goods cleared for home consumption. 18. Transfer of goods from on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 17 bond executed by EOUs covers the transit risk also and therefore there is no need of executing a separate transit bond for removal of the goods from a warehouse to an EOU. [Refer Circular No.99/95-Cus, dated 20-9-1995] 18.3 After transfer of goods from a bonded warehouse, to another bonded warehouse, the Customs officer in-charge of the receiving warehouse is required to send a re- warehousing certificate to the Customs officer in-charge of the warehouse which transferred the goods. If the re-warehousing certificate is not received within a period of three months, the action for recovery shall be taken by enforcing the terms of the transit bond or encashment of bank guarantee. 19. Clearance of warehoused goods for home consumption: 19.1 The importer of any warehoused goods may clear them for home consumption after filing an ex-bond (Green) Bill of Entry for home consumption and payment of the import duty leviable on such goods alongwith penalties, rent, interest and other charges, if any. 19.2 At the time of actual removal of the goods from the warehouse, the declared description of the goods recorded on warehousing bill of entry, should be tallied with the descripti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rnment is of opinion that warehoused goods of any specified description are likely to be smuggled back into India, it may, by notification in the Official Gazette, direct that such goods shall not be exported to any place outside India without payment of duty or may be allowed to be so exported subject to such restrictions and conditions as may be specified in the notification. In terms of Section 69 of the Customs Act, 1962, the following notifications have been issued: (i) Notification No.45-Cus, dated 13-2-1963 provides that the warehoused goods shall not be exported to Bhutan, Nepal, Burma, Sikang, Tibet or Sinkiang, However, the warehoused goods can be exported to Nepal in the following circumstances: (a) If goods are exported against an irrevocable letter of credit in freely convertible currency; (b) If goods are exported for supplies to projects financed by any UN Agency or IBRD Association or ADB or any other multilateral agency of the like nature and for which payments are received in freely convertible currency; and (c) If the specified capital goods are supplied against a global tender invited by HMG of Nepal for which payment is r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated 27-7-1998] 23. Recovery of duty from bonded warehouses: 23.1 The Customs Officer in-charge of the bonded warehouse is required to recover the duty from the warehouse owner in the following cases: (i) Where warehoused goods are removed from a warehouse without payment of duty or if transferred to any other warehouse and re-warehousing certificate has not been received within three months period; (ii) Where warehoused goods have not been removed from a warehouse at the expiry of the bonding period; (iii) Where warehoused goods are taken as samples without payment of duty; and (iii) Where any goods which have not been cleared for home consumption or exportation are not duly accounted for to the satisfaction of the proper officer. 23.2 The proper officer shall demand, and the owner of such goods shall forthwith pay, the full amount of duty chargeable on account of such goods together with all penalties, rent, interest and other charges payable in respect of such goods. 23.3 If any owner fails to pay any amount demanded, the proper officer shall detain and sell, after notice to the owner such sufficient portion of his goods, if any, in the ware ..... 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