OFFICE OF THE COMMISSIONER OF CUSTOMS (EXPORT PROMOTION), NEW CUSTOM HOUSE,BALLARD ESTATE,MUMBAI-400038 STANDING ORDER NO.7413 Date: 20.11.1998 Subject: Execution of a single bond by all 100% EOU and units in EPZ In lieu of different bond being executed at present. ********************* Attention of all the Officers of Customs and Central Excise dealing with imports under Notification no.53/97-cus dated 03.06.97 and other similar Notifications pertaining to 100% EOU,s/EPZ units is invited to Public Notice no.36 dated 10.07.97 wherein it is stipulated that at the time of assessment of into-bond Bill of Entry, single Bond in lieu of three different Bonds shall be accepted by this Custom House. Similar instructions were issued by the Board for execution of bonds for the goods procured under CT-3 certificate by such units vide Notfn.No.1/95-CX dated 4 th January,1995. Instructions also exist for execution of bond when the goods are in-transit from the port of import to the Unit. The goods sent out for job work, are also required to be covered by the bond coupled with the bank guarantee as per Board s instruction. In response to persistent representations from the Trade and Industry, and after an in-depth examination of the issue, a new format of Bond covering liabilities, both under Customs & Central Excise Acts, to be executed by 100% EOU and the units situated in EPZ/FTZ or STP/EHTP schemes or stand alone 100% STP/EHTP units has been notified vide Notfn. No.6/98-CE(NT) dated 02.03.98. This bond is called B-17 (General Surety/Security) Bond and is enclosed as Annexure B to this Standing Order. In future only one bond will be taken from all the above said units for all purposes. All previous instructions issued in the behalf may be treated as modified to this extent. This bond will be executed before the Assistant Commissioner of Customs/Central Excise or Assistant Commissioner of Customs & Central Excise in whose jurisdiction the unit is situated. Although, the bond is devised to be executed as surety or security bond, it has also been decided that only surety bond has to be taken from such units. The bond amount will be equivalent to the duty leviable on the sanctioned requirement of imported and indigenous capital goods plus the duty on the raw materials to be held in stock for six months only. The amount of duty on the capital goods and the raw material may be calculated and certified by the unit itself. It has also been decided that the units would be required to give either surety for the bond amount or furnish 5% of the bond amount as bank guarantee or any other approved Government security. It is further decided that the solvency of sureties, may also be certified by a Chartered Accountant or the Bankers of the surety. And, since in the law, a Limited Company is a distinct legal entity and the Members of the Company, 1
:2: including the Directors are distinct from the company, there will be no objection to allow the Directors of the EOU/EPZ units etc. which are Limited Companies, to stand as surety in their personal capacity for the said Companies. In addition, other corporate bodies including Limited Companies may also stand as surety for the unit. The B-17 Bond would be executed before the Assistant Commissioner of Customs and Central Excise incharge of the Unit and the Supdt. Of Customs/Excise incharge of the unit would issue a Certificate in the format given at Annexure A, stating that the bond has been executed by the Unit in his charge. THIS CERTIFICATE WILL BEAR THE FULL ADDRESS OF THE OFFICE OF SUPERINTENDENT OF CUSTOMS AND CENTRAL EXCISE HAVING JURISDICTION OVER THE UNIT. THE EOU WILL SUBMIT THE COMPLETE AND ACCURAGE ADDRESS OF THE ASSTT.COMMISSIONER AND SUPDT.INCHARGE OF THE UNIT DULY ATTESTED BY SUPDT I/C UNIT ONCE IN EVERY SIX MONTHS. On the strength of this Certificate, the goods will be allowed clearance under the exemption notification as applicable from this Custom House/another EOU/STP/EHTP unit in EPZ or Bonded Warehouse to the EOU unit. Also on the strength of this bond, the bond Officer will permit goods for job work outside the unit. The value and quantity of goods to be imported will be monitored by the jurisdiction(assistant Commissioner of Customs/Central Excise and, in the Certificate, only the description and classification of the goods has to be indicated. Where the duty amount on a particular import increases because of the reclassification under a different heading by the assessing Appraiser as against the heading indicated in the certificate issued by Supdt.,Central Excise, the Bill of Entry has to be assessed at the higher rate of the duty and intimation has to be given to the jurisdictional Assistant Commissioner who would take the necessary action to ensure that the bond executing is sufficient to cover the higher amount on duty assessed. The bond shall be executed with the Assistant Commissioner incharge of the Unit and the execution of three-in-one bond by the Head office of the unit in the Custom House should not be entertained. It is reiterated that after duty free clearance of the goods from Port/Airport/WH/EOU/ICD. A separate independent letter must be sent to the Supdt. Incharge of the EOU, intimating the said despatch and it would be the duty of the Appraiser/Supdt./A.C.allowing such duty free clearance to watch the receipt back of the Re-warehousing Certificate. The Supdt. I/C Unit will ensure that the Rewarehousing Certificate as per Annexure C is promptly issued on receipt of goods and is received within three months by the EOU section of this Custom House. In case, the Rewarehousing Certificate is not 2
: 3 : received within 90 days from the issue of the Certificate, the Assistant Commissioner (EOU Section) of this Custom House shall write to the A.C I/c of the EOU to issue demand notice to the EOU for recovery of duty. For procurement of duty free goods from the domestic manufacturers, however, the certificate appended in annexure II of the Notification no.1/95-ce would continue to be used. The existing procedure of Bill of Entry and AR-III.A accompanying the goods shall continue. The Standing Order is issued as per CBEC circular No.14/98 dated 10/3/98 amended by Circular No.42/98 dated 19/6/98 and Circular No.66/98 dated 15/9/98 and as per Board s letter No.305/46/97/FTT dated 23.9.98. This Standing Order comes into immediate effect. Any difficulty faced due to this Standing Order may be brought to the notice of the undersigned. Issued from F.No.S/6-Gen-2024/95-96B S/6-Gen-427/96-97B Sd/- 20.11.98 (RAKESH SHARMA) COMMISSIONER OF CUSTOMS (EXPORT PROMOTION) Attested (V.M. BHENDE) Assistant Commissioner of Customs 100% EOU. Copy to: All Department. 3
ANNEXURE A FULL ADDRESS OF OFFICE OF SUPDT. OF CUSTOMS CEN. EXCISE Certificate for procurement and movement of imported goods/excisable goods without payment of duty. Sr. No: This is to certify that:- (1) M/s.(Name & Address)....is/are registered in this range of division of Central Excise /..Commissionerate. (2) The said registrant has executed a bond prescribed for them for Rs. with appropriate surety. (3) This registration authorizes him/her/them to obtain/clear (name of the product) Falling under Chapter No. heading no of the Central Excise Tariff/ Customs Tariff at nil rate of duty under Notification No. dated 1998 From.Port/ICD/EOU/EHTP/STP/EPZ unit or Bonded warehouse for the manufacture of /use at. (4) The said goods may be allowed clearance of at nil rate of Duty under intimation to the undersigned. Superintendent Of Customs/Central Excise To: (Address of the range Officer/Custom Officer) (Name and Seal) Dated:. 4
ANNEXURE B TO BE PUBLISHED IN PART II SECTION 3, SUB-SECTION(1) OF THE GAZETTE OF INDIA, EXTRAORDINARY, DATED THE 2 ND MARCH,1998. GOVERNMENT OF INDIA MINISTRY OF FINANCE (DEPARTMENT OF REVENUE) ******** New Delhi, the 2 nd March,1998 1919(SAKA) NOTIFICATION No.6/98-Central Excise (N.T) G.S.R.106(E) In exercise of the powers conferred by Section 37 of the Central Excise Act 1944(1 of 1944), the Central Government makes the following rules further to amend the Central Excise Rules,1944 namely:- (I) These rules may be called the Central Excise 3 rd Amendment Rules,1998. (II) They shall come into force on the date of their publication in the Official Gazette. In appendix (I) to the Central Excise Rules, 1944- (a) Under the heading (I) list of Central Excise Forms after Central Excise Series No.32M the entries relating thereto, the following shall be inserted, namely:- Series No. Description of Form Rule No. Short Title 32K General Bond(Surety/Security) to the 9B,13,14 & B-17(General executed by the 100(EOUs/Units in the Chapter X Surety/ EPZ/FTZ/STP/EHTDs etc.for provisional of Central General Assessment of goods to Central Excise Excise Rules. Security) Duty for export of excisable goods to foreign countries without payment of duty & for accounting/disposal of excisable goods procured without payment of whole or part of the duty for use in special Industrial purposes. (b) Under the heading (II) Specimen Form after Central Excise Series 32M, the following form and entries shall be inserted namely, Central Excise Series 32N. 5
FORM B 17(GENERAL SURETY/SECURITY) GENERAL BOND (WITH SURETY/SECURITY) TO BE EXECUTED BY THE 100%EOUs/UNITS IN THE EHTP/STP/FTZ. (RULES 9B, 13, 14 AND 192) WE..having our registered office at..hereinafter referred to as the Obligors and called the surety(ies) (which expression shall, unless repugnant to the context or meaning thereof, include our heirs, successors, executors, administrators, liquidators, legal representatives and assignees) hereby hold and firmly bind ourselves jointly and severally unto the President of India, hereinafter referred to as the Government in the sum of Rs..(Rupees only) for which payment to be well and truly made, we, the obligors, bind ourselves by there presents. WHEREAS we the obligors have been granted by the Government an Industrial licence for setting up a Hundred percent Export Oriented Undertaking for the manufacture of goods for export out of India on the terms and conditions stipulated in the letter of indent no dated and we the obligors have fully accepted the said terms and conditions. AND WHEREAS the Assistant Commissioner of Customs/Central Excise at has licenced /authorised the premises at. As a private warehouse/unit wherein the dutiable goods, imported/sourced indigenously by us from time to time for manufacture of goods as aforesaid could be deposited for a period of 5 years/one year as the case may be without payment of duty on conditions specified in sub-section(1) of section 59 of the Customs Act, 1962, which conditions we the obligors hereby accept. :2: AND WHEREAS on compliance with the provisions of the said section 59 as aforesaid the proper Officer/Assistant Commissioner of Central Excise or such other. Delegated authority, as the case may be, has made an order under section 60 of the Customs Act and under Chapter X of the Central Excise Rules, 1944, permitting us to deposit the aforesaid goods in the said private warehouse without payment of duty. AND WHEREAS we the obligors having been permitted by the Assistant Commissioner Central Excise/Customs at..to purchase from time to time goods not exceeding the quantity listed in the Annexure 1 as may be required for manufacture of goods in his factory annually in the manner specified without payment of whole of the duty. 6
AND WHEREAS the said Assistant Commissioner has permitted obligor to clear duty free imported goods from Ports/Airport/In Land Container Depots or Bonded Warehouses as the case may be to export oriented unit. AND WHEREAS, pursuant to sub-section (1) of section 65 of the said Customs Act, the said Assistant Commissioner of Customs/Central Excise has accorded sanction to us the obligors on payment of the prescribed fee of..(rs only) and on prescribed conditions hereinafter set-out which conditions we the obligors hereby accept, to carry on manufacturing operations in relation to the said imported goods. AND WHEREAS the Assistant Commissioner of Central Excise, Customs or proper Officer under section 67 of the Customs Act, or Assistant Commissioner of Central Excise or such other delegated authority, as the case may be, under rule 13 of the Central Excise Rules, 1944 has permitted the obligors to remove the said goods from the said unit without payment of duty and despatch the same by air, sea, rail or road for export to foreign countries without payment of duty and when required bonafide to do so, or other EOUs/warehouses subject to the prescribed conditions set out for the due arrival of the said goods at the said warehouse. AND WHEREAS the Assistant Commissioner of Customs/Central Excise has permitted the obligors to remove the goods sourced imported/domestically or goods partially manufactured or processed there from to the any other place in India without payment of duty subject to such conditions and limitations as may be specified by him for the purpose of repair, refining, processing, testing job work or display and to be returned to the unit thereafter. :3: AND WHEREAS the Assistant Commissioner of Customs/Central Excise had permitted provisional assessment of goods manufactured/warehoused by the above obligors from time to time which could not be finalised for want of full information as record to value/desoriation/quality or of the proof thereof or for the non-completion of the chemical or other tests in respect thereof, or otherwise, as per the provisions contained in the Central Excise Rules, 1944 as per request of the obligor. AND WHEREAS the Commissioner of Central Excise or such other delegated authority as the case may be, has required the obligor to deposit as security for the amount of this bond, the sum of Rs (Rupees..) in cash (the securities as hereinafter mentioned of a total value of Rs.(Rupees.) endorsed in favour of the President of India and accepted for and on behalf of the President of India by the Commissioner,Deputy Commissioner, Assistant Commissioner, Superintendent of 7
Central Excise, namely.) and whereas the obligor has furnished such guarantee by depositing the cash/securities as aforementioned. NOW THE CONDITIONS OF THE ABOVE WRITTEN BOND ARE THAT. 1. We, the obligors shall, observe all the provisions of the Customs Act, 1962, Central Excise Act,1944 and the rules and regulations made thereunder in respect of the said goods. 2. We, the obligors shall pay on or before a date specified in a notice of demand all duties, rent and charges claimable on account of the said goods under the Custom Act 1962. Central Excise Act,1944 and rules/regulations made thereunder together with interest on the same from the date so specified at the rate applicable. 3. We, the obligors shall, discharge all duties and penalties imposed for violation of the provisions of the Customs Act, 1962, Central Excise Act 1944 rules and regulations in respect of the said goods not removed within one year or 5 years as the case may be from the date of the order permitting the deposit of the said goods at the said warehouse/eou, or within such further time as may be extended by the Chief Commissioner, Commissioner of Customs Central Excise or by the Central Board of Excise or Customs, on a specific request made by us, the obligors and also pay interest at a rate applicable from the expiry of the above said period till the date of the clearance of the goods. :4: 4. We, the obligors shall, furnish to the Assistant Commissioner of Customs/Central Excise at Port/Air-Port/International Container Depot/warehouse evidence to his satisfaction within a period of three months from the date of dispatch from any warehouse or unit, that the said goods have duly arrived at the unit or the warehouse as the case may be. 5. We, the obligors, shall be wholly and solely responsible for ensuring the there shall be no pilferage during transit of the said goods when dispatched from the place of Import, the factory of manufacture, or from the warehouse to the unit and, vice versa, and we, the obligors, shall pay the duty on pilfered goods, if any.. 6. We, the obligors, shall observe and comply with all the provision of the manufacture and other operations in warehouse Regulation, 1966 Warehoused 8
Goods (Removal) Regulations, 1963 and such other conditions as may be imposed by the proper Officer/Assistant Commissioner of Central Excise or such other delegated authority, as the case may be for carrying out the purpose of the aforesaid regulations. 7. We, the obligors, shall maintain detailed accounts of all imported and indigenous goods used in the manufacturing processes and operations in proper form including of those remaining in stock and those sent outside under our obligation, and shall produce such accounts for inspection of the proper Officer/Assistant Commissioner of Central Excise or such other delegated authority as the case may be, when directed by him. 8. We the obligors, shall, provide to the Officer of Customs/Excise stationed at the warehouse for control and supervision of the manufacturing processes and other operations such amenities as may be specified by the Assistant Commissioner. 9. We, the obligors, shall pay all charges, including pay, allowance leave and pensioner charges of such Officer. 10. We, the obligor, shall fulfil the export obligation and conditions stipulated in Customs/Central Excise Notifications, as amended under which the specified goods have been imported/sourced, as well as the Import-Export Policy for April, 1997 to 2002, as amended from time to time and to pay on demand an amount equal to the Customs and Central Excise Duties livable on the goods as are not proved to he satisfaction of Assistant Commissioner of Customs Central Excise to have been used in the manufacture of articles for export and any penalty imposed under Customs Act, 1962 or Central Excise Act, 1944 and rules or regulations made thereunder as the case may be. :5: 11. We, the obligors, shall discharge all dues whether Central Excise duty or the lawful charge which shall be demandable on the goods, obtained by us without payment of duty from the domestic tariff area and transported from the place of procurement to our premises for use in special Industrial purpose and shall also pay after final assessment by the proper Officer/Assistant Commissioner of Central Excise or such other delegated authority, as the case may be, which were assessed on provisional basis under Rule 9B of the Central Excise Rules, 1944 all dues within 10 days of the date of demand thereof be being made in writing by such Officers. 12. We, the obligors, shall if the articles so manufactured are and are allowed to be sold in India in such quantity and subject to such other limitations and conditions as may be specified in this behalf by the Director General of Foreign Trade, pay duty of Excise livable on such articles under Section 3 of the Central Excise Act,1944 and shall pay duty of excise livable on such articles under Section 3 of Central Excise Act,1944 and duty of Customs & Central Excise livable on the 9
Raw Materials/Component parts used in the manufacture of such articles as are not allowed to be sold in India in accordance with the provision of Foreign Trade Policy. 13. We, the obligors, shall comply with the conditions and limitations stipulated in the said Import and Export Policy as amended from time to time or the Assistant Commissioner of Customs/Central Excise permitting the goods imported into India or sourced indigenously for the purpose aforesaid or the articles manufactured or package therefrom to be taken outside the undertaking temporarily, without payment of duty, for testing, repairs, reconditioning, processing or display etc. 14. We, the obligors, shall not change the name & style under which we, the obligors, are doing business or change the location of the manufacturing premises except with the written permission of the Assistant Commissioner of Customs/Central Excise at.. If each and every one of the above conditions is duly complied with by us, the obligors, the above written bond shall be void and of no effect, otherwise the same shall remain in full force and effect and virtue. It is hereby declared by us, the obligors and the Government as follows: 1. The above written bond shall continue in force notwithstanding the transfer of the goods to any other person or removal of the said goods from one warehouse to another warehouse: 2. The above written bond is given for the performance of an act in which the public are interested: :6: 3. The Government through the Commissioner of Customs/Central Excise or any other officer of Customs/Central Excise, recover the sums due from the obligors in the manner laid down in sub-section(1) of Section 142 of the Customs Act, 1962 or sub-section (1) of section 11A of the Central Excise Act, 1944. Provided always that the liability of the Surety hereunder shall not be impaired or discharged by reason of any time being granted or any forbearance, act or omission of the Government (whether with or without the knowledge or the consent of the surety) in respect of or in relation to the obligation and condition to be performed or discharged by the obligors nor shall it be necessary to such the obligor(s) before using the surety for amounts hereunder. 10