Manufacturing in Bond under Section
65 of Customs Act – New Notification 69/2019 - Customs (NT) dated 1-10-2019 Released
to Lay Down Detailed Procedure
[Customs
Notification No. 69 (Non Tariff) dated 1st October 2019]
You
may recall that manufacturing under Bond u/s 65 of the Customs Act was opened
up the issue of notification 44/2019- Customs (NT). Under this, manufacturing
under bond was allowed upfront with the only condition that: “ a License as a
private bonding warehouse u/s 58 of the Customs Act backed by a bond” is
required. Further to this, these
regulations supersedes either by another regulation making the action more
broad-based. Copy of the same is enclosed.
Highlights
of the revised regulations are as below:
|
S/No |
Highlight |
Reference |
|
1 |
Clearance
from the warehouse to DTA will be charged duty under a BOE. Only inputs used
in the manufacture will be liable to duty. In other words, the final product
after manufacture will not be charged duty. |
Rule
14 – Removal of resultant goods for home consumption |
|
2 |
The
application has to be referred to the jurisdiction Commissioner of Customs along
with bond. Input/
Output norms have to be informed to the Commissioner. No approval is
required. A
qualified warehouse keeper and computerized accounting and proper management
is required. There
is no requirement of posting a full time Customs Officer in the premises. |
Rules
7 & 8 |
|
3 |
Goods
movement from Custom station to warehouse requires one-time lock to be placed
by the custom officer. For Oher cases of movement from warehouse to
warehouse, a one-time lock by the warehouse keeper is sufficient, Regular
reporting in simplified form is required. Warehousing under other procedures
is excluded. |
Rules 10, 11, 12 & 13 |
|
4 |
Movement
for Exports requires the filing of Shipping Bill and a one-time lock. |
Rule 15 |
|
5 |
Other
Rules on maintenance of record and penalty – Special rules for certain class
of goods can be made by the Board. Powers to exempt same have been given to
the Board. |
Rule 19 & 20 |
Manufacture and Other Operations
in Warehouse (No. 2) Regulations, 2019 Notified
1.
Short title and commencement
2.
Definitions
3.
Scope
4.
Eligibility for application for operating under these regulations
5.
Grant of permission
6.
Validity of permission
7.
Appointment of warehouse keeper
8.
Facilities, equipment and personnel
9.
Conditions for transport of goods
10.
Receipt of goods from customs station
11.
Receipt of goods from another warehouse
12. Receipt of domestically procured goods
13. Transfer of goods from a warehouse
14. Removal of resultant goods for home consumption
15. Removal of resultant goods for export
16. Conditions for due arrival of goods
17. Maintenance of records in relation to warehoused goods
18. Audit
19. Penalty
20. Power to exempt
The current notification 69/2019-Customs (N.T.)
Dated 1st October, 2019 supersedes previous Regulation 2019 by notification
44/2019-Customs (NT) dated 19.06.2019
[Notification
No. 69/2019-Customs (N.T.) Dated 1st October, 2019]
In exercise of the powers conferred by section 157,
143AA read with section 65 of the Customs Act, 1962 (52 of 1962), and in supersession of the Manufacture and Other Operations in Warehouse
Regulations, 2019, except as respects things done or omitted to be done before
such supersession, the Central Board of Indirect Taxes and Customs hereby makes
the following regulations, namely: -
1. Short title and commencement
(1) These regulations may be called the Manufacture and Other Operations in Warehouse
(no. 2) Regulations, 2019.
(2) They shall come into force on the date of their
publication in the official gazette.
2. Definitions
(1) In these regulations, unless the context otherwise
requires, -
(i) "Act"
means the Customs Act, 1962 (52 of 1962);
(ii) "bond
officer" means an officer of customs
in charge of a warehouse;
(iii) "Controller
of Certifying Authorities" means the authority appointed
under sub-section (1) of section 17 of the Information Technology Act, 2000 (21
of 2000);
(iv) "Form"
means the form appended to these regulations;
(v) "section"
means the section of the Act.
(2) The words and expressions used herein and not defined
in these regulations but defined in the Act shall have the same meanings respectively
as assigned to them in the Act.
3. Scope
These regulations shall apply to such units that operate
under section 65 of the Act or to the units applying for permission to operate under
section 65 of the Act.
4. Eligibility for application
for operating under these regulations
(1) The following persons shall be eligible to apply
for operating under these regulations, -
(i) a
person who has been granted a licence for a warehouse under section 58 of the Act,
in accordance with Private Warehouse Licensing Regulations, 2016.
(ii) a
person who applies for a licence for a warehouse under section 58 of the Act, along
with permission for undertaking manufacturing or other operations in the warehouse
under section 65 of the Act.
(2) An application for operating under these regulations
shall be made to the Principal Commissioner of Customs or the Commissioner of Customs,
as the case may be, along with an undertaking to, -
(i) maintain
accounts of receipt and removal of goods in digital form in such format as may be
specified and furnish the same to the bond officer on monthly basis digitally;
(ii) execute
a bond in such format as may be specified; and
(iii) inform
the input-output norms, wherever considered necessary for raw materials and the
final products and to inform the revised input-output norms in case of change
therein.
5. Grant of permission
Upon due verification of the application made as per
regulation 4, the Principal Commissioner of Customs or Commissioner of Customs,
as the case may be, shall grant permission to operate under the provisions of these
regulations.
6. Validity of permission
Any permission granted under regulation 5 shall remain
valid unless it is cancelled or surrendered, or the license issued under section
58 is cancelled or surrendered, in terms of the provisions of the Act or the rules
and regulations made thereunder.
7. Appointment of warehouse keeper
(1) A person who has been granted permission under regulation
5 shall appoint a warehouse keeper who has sufficient experience in warehousing
operations and customs procedures to discharge functions on his behalf.
(2) The warehouse keeper shall obtain a digital signature
from authorities licensed by the Controller of Certifying Authorities for filing
electronic documents required under the Act or the rules and regulations made thereunder.
8. Facilities, equipment and personnel
A person who has been granted permission under regulation
5 shall provide at the warehouse, -
(i) signage
that prominently indicates that the site or building is a customs bonded warehouse;
(ii) a
computerized system for accounting of receipt, storage, operations and removal of
goods; and
(iii) such
facilities, equipment and personnel as are sufficient to control access to the warehouse,
provide secure storage of the goods in it and ensure compliance to these regulations
by officers of customs.
9. Conditions for transport
of goods
(1) Where the goods are transported from the customs
station of import to a warehouse or from one warehouse to another warehouse or from
the warehouse to a customs station for export, the load compartment of the means
of transport shall be securely sealed with a one-time-lock:
Provided that the Principal Commissioner of Customs or Commissioner
of Customs, as the case may be, may having regard to the nature of goods or manner
of transport, permit transport of such goods without affixing the one-time-lock.
(2) where the goods to be warehoused are removed, from
the customs station of import to a warehouse, the one-time-lock as per sub-regulation
(1) shall be affixed by the proper officer of customs.
(3) where the warehoused goods are removed from one
warehouse to another warehouse the one-time-lock as per sub-regulation (1) shall
be affixed by the licencee.
(4) where the warehoused goods are removed, from the
warehouse to a customs station for export, the one-time-lock as per sub-regulation
(1) shall be affixed by the licencee.
10. Receipt of goods from customs station
(1) Upon receipt of goods at a warehouse from a customs
station, the licensee shall, -
(i) verify
the one-time-lock affixed by the proper officer at the customs station on the load
compartment of the means of transport carrying the goods to the warehouse;
(ii) inform
the bond officer immediately if the one-time-lock is not found intact, and refuse
the unloading of the goods;
(iii) allow
unloading, provided the one-time-lock is found intact and verify the quantity of
goods received by reconciling with the bill of entry for warehousing;
(iv) report
any discrepancy in the quantity of the goods within twenty-four hours to the bond
officer;
(v) endorse
the bill of entry for warehousing with the quantity of goods received and retain
a copy thereof;
(vi) acknowledge
the receipt of the goods by endorsing the transportation document presented by the
carrier of the goods and retain a copy thereof; and
(vii) take
into record the goods received.
(2) Upon taking into record the goods received in the
warehouse, the licensee shall cause to be delivered an acknowledgement to the proper
officer referred to in sub-section (1) of section 60 and to the bond officer regarding
the receipt of the goods in the warehouse.
11. Receipt of goods from another warehouse
Upon receipt of goods from another warehouse, the licensee
shall, -
(i)
verify the one-time-lock
affixed on the load compartment of the means of transport carrying the goods to
the warehouse;
(ii) inform
the bond officer immediately if the one-time-lock is not found intact and refuse
the unloading of the goods;
(iii) allow
unloading, provided the one-time-lock is found intact and verify the quantity of
goods received by reconciling with, -
(a) in case
of goods received from a unit operating under section 65, the Form appended to these
regulations;
(b) in case
of goods received from a warehouse not operating under section 65, the Form as prescribed
under the Warehoused Goods (Removal) Regulations, 2016;
(iv) report
any discrepancy in the quantity of the goods within twenty-four hours to the bond
officer;
(v) endorse
the Form for transfer of goods from a warehouse with quantity received and retain
a copy thereof;
(vi) acknowledge
the receipt of the goods by endorsing the transportation document presented by the
carrier of the goods and retain a copy thereof;
(vii) take
into record the goods received; and
(viii) cause
to be delivered, copies of the retained documents to the bond officer and to the
warehouse keeper of the warehouse from where the goods have been received.
12.
Receipt of domestically procured goods
Upon
receipt of the domestically procured
goods, the licensee shall take into record the goods
received.
13.
Transfer of goods from a warehouse
(1) A licensee
shall allow transfer of
warehoused goods to another warehouse or to a customs station for export, with due intimation to the bond officer on the Form for transfer of goods from
a warehouse.
(2) Upon intimation to the bond officer as sub-regulation (1), the licensee shall, -
(i)
allow
removal of the goods and their loading onto the means of transport; (ii) affix a one-time-lock to the means of transport;
(iii) endorse the number of the one-time-lock on the Form and retain a
copy thereof;
(iv) endorse the number of the one-time-lock on the transport document and retain a copy
thereof;
(v)
take into record the removal of the goods; and
(vi) cause to be delivered, copies of the retained documents to the bond officer.
14. Removal of resultant goods for home consumption
(1) A licensee may remove
the
resultant goods from warehouse for home consumption:
Provided that a bill of entry for home consumption has been filed in respect of the warehoused goods
contained in so much of the resultant goods and the import duty, interest, fine and penalties payable, if any, in respect of such
goods have been paid.
(2) The licensee shall retain a copy of the bill of entry filed and take
into record the goods
removed.
15. Removal of resultant goods for export
(1) A licensee shall remove the resultant goods
from the warehouse for export, upon, -
(i) filing a
shipping bill or a bill of export, as the case may be;
and
(ii) affixing a one-time-lock to the load compartment of the means of transport in which
such
goods are removed from the warehouse.
(2) The licensee shall take into record the goods removed.
16. Conditions for due arrival of goods
The licensee of the goods shall produce, -
(i) to the proper officer within one month
of the order issued under sub-section (1) of
section 60, or within such extended period as such officer may
allow, an acknowledgement that the goods
have been deposited in the warehouse;
(ii) to the bond officer in charge
of the warehouse, within one month from the date of
removal of the goods from the warehouse or within such extended period as such officer
may allow, an acknowledgement issued by the licensee of the warehouse to which
the goods have been removed, stating that the goods have arrived at that place;
(iii) to the bond officer in charge of the warehouse, within one month from the date of removal of the goods from the warehouse or within such extended period as such officer may allow, an acknowledgement issued by the proper officer at the customs station of export, stating that the goods have arrived at that place,
failing which, the owner of such goods shall pay the full amount of duty chargeable on account
of such goods together with interest, fine and penalties payable under sub-section (1) of section
72.
17. Maintenance of records in relation to warehoused goods
(1) A licensee shall, -
(i) maintain detailed records of the receipt, handling, storing, and removal of any goods into or
from
the warehouse, as the case may be, and produce the same to the bond officer, as and when
required;
(ii) keep a record of each activity, operation or action taken in relation to the warehoused goods; (iii) keep a record of drawal of samples from the warehoused goods under the Act or any other
law
for
the time being in force; and
(iv) keep copies
of the bills of entry, transport documents, Forms for transfer of goods from a warehouse, shipping bills or bills of export or any other documents evidencing the receipt or removal of goods into or from the warehouse and copies of the bonds executed under section 59.
(2) The records and accounts required to be maintained under sub- regulation (1) shall be kept
updated and accurate and preserved for a minimum period of five years
from
the date of removal of goods from the warehouse and shall be made available for inspection by the bond
officer or any other officer authorised under the Act.
(3) A licensee shall also preserve updated digital copies of the records specified under sub-
regulation (1) at a place
other than the warehouse to prevent loss of records due to natural
calamities, fire, theft, skilful pilferage or computer malfunction.
(4) A licensee shall file with the bond officer a monthly return of the receipt, storage, operations
and
removal of the goods in the warehouse, within ten days after the close of the month to
which such
return relates.
18. Audit
The proper officer may conduct audit of a unit operating under section 65 in accordance with the provisions of the Act and the rules made thereunder.
19. Penalty
If a
person contravenes any of the provisions of these regulations, or abets such contravention or fails to comply with any of the provision of these regulations, he shall be liable
to
a penalty in accordance with the provisions of the Act.
20. Power to exempt
The Board, having regard to the nature of the goods, their manner of
transport or storage, may exempt a class of goods from any of the
provisions of these regulations.
F. No: 484/03/2015-LC
FORM
(See clause (iv) of sub-regulation (1) of regulation 2)
Part A
(to be filled at the dispatch warehouse)
Import
details
(1) Bill of Entry No. and date (if applicable).
Details of warehousing
(2) Warehouse
code
and address.
(3) Bond
No. and
date.
Goods
(4) Description
of goods.
(5) Description
and No.
of packages.
(6) Marks and
numbers on packages.
(7) Weight and
quantity.
(8) Value
Purpose of removal
(9) Deposit in another
warehouse
(Furnish warehouse code and
address).
(10) For
export by air or sea
or land
or post (Furnish details of customs station).
Details of despatch of goods
(11) Date
and time of removal.
(12) Registration
No.
and details of
means of transport.
(13) Container No. (if applicable).
(14) One- time-
lock
No.
Signature of licensee or the warehouse keeper at the warehouse of despatch.
Date:
Part B
(to be filled by the recipient)
Details of receipt of goods
(1) Date and time of receipt at the warehouse or customs station.
(2) Whether Registration No. of means of transport is
matching with despatch?
(3) Whether the one-time-lock is found intact?
(4) Remarks
Signature of the licensee or the warehouse keeper at the warehouse of receipt with date.
Or
Signature of the proper officer at the customs station of export with date.
