Mumbai Customs Re-warehousing/Bonding Procedures for EOUs

[Mumbai Customs Public Notice No. 02 dated 21^st January 2015]

Sub: Procedure for verification of the Procurement Certificate received from Central Excise /Customs Authorities and Monitoring of the receipt of Re-warehousing Certificates in respect of the imports cleared under EOU Scheme.

The facility of duty exemption is available to the EOU/STPS/EHTP as per the Letter of Permission (LOP) issued by the Development Commissioner. However, quantity and goods of such class and description eligible for duty exemption are to be restricted as per the particulars mentioned in each Procurement Certificate (PC) issued by the Central Excise authorities. Hence, it becomes necessary to verify the geniuness of the PCs received from the concerned authorities, as these amounts to special authorizations based on which the duty exemption is allowed. Instances have come to the notice that procurement certificate have been issued even for those items which were not mentioned in the LOP. Further, many times import details do not corresponds with the goods particulars mentioned in the PCs in terms of description and quantity. It appears that there is a common perception that there is no revenue implication in respect of the clearance made under EOU scheme which had led to laxity in terms of the procedures to be followed and cautions to be exercised. Therefore, it is decided that a random check of PCs will be conducted as to verify their genuiness from the concerned issuing authorities. In case of first time importers under EOU scheme, the verification of PC will be compulsory. However, to facilitate the smooth clearance of the imports under the EOU scheme, the Procurement Certificate issued from jurisdiction Central Excise/Customs authorities, recommending for duty free import to the EOUs, will be accepted by hand only if they are brought in sealed cover. Fax copy of the P.C. will also be entertained under special circumstances. The same will also be cross verified with the copy received by registered post.

2. Though the import of goods are allowed without payment of duty on the basis of the particulars in the Procurement Certificate, the fulfillment of the conditions of duty exemption under EOU will become complete only when Re-warehousing Certificates (RWCs) are received from the concerned jurisdictional Central Excise Authorities. The Board vide Circular No. 14/98 dated 10.03.1998 had prescribed maximum period of 90 days from the date of issuance of Procurement Certificate (PC) for the submission of the RWC. Also, the Board vide Circular No. 07/06 – Cus dated 13.01.2006 and Circular No. 19/2007–Cus dated 03.05.2007 has prescribed the procedure to be followed for Re-warehousing of goods imported and /or procured indigenously by EOU/EHTP/STP/BTP units.

3. There are basically two procedures in place for warehousing /bonding of duty free imported goods at the premises of the EOU. The first procedure relates to warehousing by the Customs/ Central Excise officer concerned and this applies to the majority of the EOUs. The second procedure is newly introduced with effect from 03.05.2007 and is specific to EOUs that have an export turnover over of Rs. 15 Corers or above and clean record as conformed by the jurisdictional Commissioner of Customs/ Central Excise. This procedure envisages self-bonding/ warehousing by the EOUs own nominated/authorized person. In general, the warehousing procedure is as follows:-

(a) The Deputy/Assistant Commissioner of Customs at the port of import will send the import documents regarding dispatch of the imported goods to the Deputy / Assistant Commissioner of Customs and Central Excise, in charge of the EOU. This is done in terms of the Warehoused Goods (Removal) Regulations, 1963.

(b) The EOU must give intimation regarding the arrival of the goods to its jurisdictional Deputy / Assistant Commissioner or Superintendent of Customs and Central Excise and furnish the following documents :

(i) Copy of Into Bond Bill of Entry.

(ii) Invoice

(iii) Packing list

(iv) Certificate of Origin

(v) Bill of Lading

(vi) Import permission from Development Commissioner

(vii) Any other documents, as may be required by the Deputy / Assistant Commissioner/ Superintendent.

(C) Upon receipt of intimation regarding the arrival of the imported goods at the EOU, the Bond Officer will first inspect the packages and their marks and numbers to ensure these are intact and there are no shortages. Thereafter, the goods will be inspected to confirm that their quantity, description etc. tallies with the Bill of Entry and transit documents. In case of any discrepancy the matter will be informed to the jurisdictional Superintendent / Assistant Commissioner for necessary action.

(d) In case there is no discrepancy, the goods will be warehoused and suitable endorsement made on the Bill of Entry including the serial Number of the Bond Register. The Inspector will also make suitable entry in the register of Bill of Entry and Bond register.

(e) The Deputy/Assistant Commissioner of Customs/Central Excise (or the Superintendent of Customs/ Central Excise wherever authorized) will suitably endorsed the Bill of Entry with the warehousing Certificate. This marks the formal warehousing of the goods. The stack cards in the warehouse will also be suitably endorsed.

(f) The jurisdictional Superintendent of Central Excise & Customs/ EOU will certify on the reverse of the Duplicate Bill of Entry that the goods are warehoused as per the Bill of Entry, which is then to be returned to the Deputy/Asst. Commissioner (EOU) at the port of import along with the warehousing certificate.

(g) Superintendent of Central Excise / Customs will issue warehousing certificate along with duly endorsed duplicate Bill of Entry to the Deputy/Asst. Commissioner of Customs (EOU) at the port of import by registered A.D. post or hand over the RWCs along with the copy of duly endorsed duplicate Bill of Entry to the EOU/CHA in sealed cover bearing the seal and stamp of the respective jurisdictional Superintendent of Central Excise / Customs.

(h) Triplicate copy of Bill of Entry will be returned to the EOU.

(i) The Quadruplicate copy of the Bill of Entry will be kept with the Deputy/Assistant Commissioner’s office for record.

3.1 The warehousing procedure as prescribed in the Board Circular No. 14/98-Cus shall also apply to capital goods (jigs, moulds, dies etc.) that are produced/manufactured in house by the EOUs for use within the unit. For this purpose the value of such capital goods would be assessed as per the computed value method in terms of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 which means accounting for the raw material captivity consumed in there manufacture. Further, such goods would be liable to duty as applicable in case of clearance outside the unite or de-bonding or exit from EOU scheme as per instruction issued by CBEC in this regard. The Board has also instructed that the warehousing (including re-warehousing) shall be done by the Customs/Central Excise officers within one day.

3.2 As regard self-bonding/warehousing procedure by the EOUs that have an export turnover of Rs.15 Crores or above and a clean record (as determined by the jurisdictional Commissioner of Customs/Central Excise), the following procedure shall be followed.

a) The EOU shall intimate the particulars of person(s) authorized for examination and certification of re-warehousing to the jurisdictional Deputy/Asstt. Commissioner of Customs /Central Excise.

b) On arrival of the imported goods at EOU, the authorized person shall verify number, quantity, weight, description, value, rate and amount of duty etc. with what is mentioned in the Bill of Entry.

c) If no discrepancy is found upon verification, the authorized person shall warehouse the goods after making suitable entry in the account/register containing details of Bill of Entry for warehousing, date of receipt and warehousing, description of goods including marks and number, quantity, value, rate and amount of duty and affix his/her signature.

d) The authorized person shall endorse certificate of warehousing on all copies of the Bill of Entry after which the goods can be used by the EOU for the intended purpose. The format of the certificate of warehousing is enclosed as Annexure-A to this public Notice.

e) In case of manual Bill of Entry, the EOU shall within one working day of arrival of goods send Duplicate and Triplicate copies of Bill of Entry duly endorsed with certificate of warehousing to the jurisdictional Superintendent of Customs/Central Excise who shall countersign with relevant entries on the said Bill of Entries. Thereafter, the jurisdictional Superintendent of Customs/ Central Excise shall send Duplicate copy of Bill of Entry to the port of import along with warehousing certificate, within one working day and return Triplicate copy of Bill of Entry to the EOU for its record. Warehousing certificate and photocopy of triplicate copy of Bill of Entry shall be kept in the office of jurisdictional Superintendent of Customs/Central Excise for record.

f) In case of electronic Bill of Entry (EDI), the EOU shall within one working day of arrival of goods, send Duplicate copy of Bill of Entry duly endorsed with certificate of warehousing to the jurisdictional Superintendent of Customs/Central Excise and retain Triplicate copy for his record. The jurisdictional Superintendent of Customs/Central Excise shall countersign the Duplicate copy of Bill of Entry and issue re-warehousing certificate. The jurisdictional Superintendent of Customs/Central Excise shall send warehousing certificate within one working day to port of import and return Duplicate copy of Bill of Entry to the unit for its record. Warehousing certificate and a photocopy of Duplicate Bill of Entry shall be kept in the office of the jurisdictional Superintendent of Customs/Central Excise for record.

g) Ten percent of the consignments, subject to minimum of two, received in a month will be randomly selected, spread over the entire month, for verification by Bond Officer of the EOU after the receipt of ARE-3 and manual or electronic Bill of Entry, as the case may be. A report of verification and warehousing detail shall be furnished by the officer in respect of consignments selected for verification in all copies of ARE-3 or Bill of Entry.

3.3. It is also provided that in the event of any discrepancy in the goods found during examination, the EOU must immediately inform the jurisdictional Superintendent of Customs/Central Excise. In such cases, self-warehousing / bonding procedure shall not be followed.

3.4 The warehousing of the goods is being confirmed on the basis of only the re-warehousing certificate issued by the Superintendent of Customs/ Central Excise in charge of the EOU. A typical re-warehousing certificate contains the following details:

(a) Importers name

(b) CHA Name

(d) B-17 Bond No. and date

(e) Description of goods

(f) Address of EOU

(g) Entry reference in bond register

(h) Whether shortage/discrepancy noticed

(i) Procurement certificate no and date

4) In spite of the time limit of 90 days prescribed by the Boards Circular No. 14/98-Cus dated 10.03.1998, RWCs are not submitted by the Exporters operating under the EOU scheme. In the absence of RWCs, the jurisdictional Central Excise Authorities on being advised by the Customs are under obligation to issue Demand Notices to the concerned EOUs to safeguard the interest of revenue. This office from time to time has been reminding the concerned Central Excise/Customs Authorities to issue and forward the RWCs if goods were already warehoused properly, or to issue Demand Notice to the concerned EOU. However, it seems that the desired response is not forthcoming. It also appears that the EOUs have also become oblivious to the fact that it is their responsibility to produce the RWC from the concerned authorities regarding the duty free imported goods, failing which they will be liable for payment of Customs duties but for the exemption contained in the EOU Notification issued by the Board. Time limit of submission of RWCs from the jurisdictional authorities is 90 days from the day of P.C. issued as per the Boards Circular No. 14/98-Cus dated 10.03.1998 failing which SCNs will be issued against them for recovery of government revenue. No unit having a pendency of more than 10 RWC of more than 6 months age will be allowed duty free clearance expect with the approval of ADC/ JC for one time clearance beyond which they will be required to execute a full B.G. covering the duty of the goods intended to be imported. No duty exemption will be allowed until the authenticity of the warehousing of the goods is proved by the concerned EOUs by way of submitting the required RWCs.

5) To facilitate the importers operating under EOU to close their RWCs pendencies, it has also been decided to accept now onwards, by hand, the RWCs submitted by the EOUs/their authorized CHAs only in cases where the same are brought in sealed cover from Jurisdictional Central Excise/Customs authorities and entries in the Transit Allow Register (TAR) /Procurement certificate register (PCR) may be closed accordingly. The signature on the PC & RWC shall be verified with the specimen signature. In case of specimen signature is not available due to transfer of officer, the officer on duty may accept the same after confirming from the jurisdictional Central Excise authority. In case of unusual deviation, PC/RWC may be verified prior to any further action. Further, it is also decided that the entries in TA Register, for previous pendencies will be closed upon receipt of the copies of pending RWCs duly certified by jurisdictional Central Excise/Customs Authority in Sealed Cover or a Certified Copy of the pending RWC authenticated by the Authorized Signatory of the unit submitted along with original copy of the RWC, forwarded to the unit from Central Excise/Customs.

6) The details of B/E wise duty free imports made under the strength of the PC by the Export Oriented units shall be regularly entered in the Transit Allow Register (TAR) and Procurement Certificate Register (PCR) of the EOU Section. On receipt of the RWC, corresponding entry in Transit Allowance Register (TAR) and Procurement Certificate Register (PCR) shall be closed after verification of the details in the register and those in the RWC.

7) Difficulty, if any faced in the implementation of this Public Notice, may be brought to the notice of the undersigned immediately.

F. No. S/3-Misc - 42/100% EOU/2014/ACC

Annexure-A

Certificate of Warehousing

I…………………as per the permission of self bonding /warehousing granted by the Commissioner of Central Excise /Customs vide File No. ……………………, I do hereby certify that the consignment arrived at………AM/Pm on the day of ……………. 20…….. the goods have been examined by me and found to confirm in all respect to the details given in the Bill of Entry, Invoice, and these goods have been warehoused under entry No. ………. dated……….of the register maintained in the unit.

Place:

Date:

Signature & Stamp

(Name & Designation of the Authorised Person)