No Bank Guarantee Exemption in Customs If Advance Authorisation Holder Record Not Clean

Key Points

· The notice draws attention to CBIC Circular No. 58/2004 dated 21.10.2004, which governs Bank Guarantee (BG) exemption for Advance Authorisation and EPCG Authorisation holders.

· Under Para 3.2(c) of the Circular, BG exemption is available only if the licence holder has not been penalized during the previous three financial years under:

o Customs Act, 1962

o Central Excise Act, 1944

o Foreign Exchange Management Act (FEMA), 1999

o Foreign Trade (Development and Regulation) Act, 1992

· To avail BG exemption, Authorisation Holders (AHs) and Customs Brokers (CBs) are required to submit a declaration/affidavit confirming that no such penalties have been imposed during the relevant period.

Issue Identified

· Customs authorities have observed several cases where AHs failed to disclose penalties imposed under the Customs Act, 1962 in their declarations.

· Such omissions were often discovered during scrutiny of registration requests.

· In many cases, AHs later submitted revised affidavits after being confronted with the penalty details.

Customs' Observation

· The Customs administration relies on self-declarations in a trust-based facilitation regime.

· Even where there is no malicious intent, submission of incomplete or incorrect declarations amounts to misrepresentation before Customs authorities.

Directions to Authorisation Holders and Customs Brokers

· AHs and CBs must exercise due diligence and ensure that declarations/affidavits are:

o Complete

o Accurate

o Truthful in all respects

· Any penalty imposed during the previous three financial years under the specified laws must be disclosed.

Mandatory Disclosure Format

The following information must be furnished along with the declaration/affidavit:

Particulars

Serial Number

Order-in-Original Number and Date

Issuing/Passing Authority

Penalty Amount

Relevant Section under which penalty was imposed

Status of Order (Appealed/Penalty Paid)

Appeal Details, if appealed

Consequences of False Declarations

· Submission of incorrect, false, incomplete, or misleading declarations may attract penal action under the Customs Act, 1962.

· Customs has specifically highlighted the possibility of action under Section 117 of the Customs Act, 1962 against the Authorisation Holder and/or Customs Broker.

Operational Effect

· The Public Notice will function as a Standing Order for officers and staff of the Jawaharlal Nehru Custom House (JNCH) regarding processing of such cases.

Significance for Trade

· Importers, exporters, Advance Authorisation holders, EPCG authorisation holders and Customs Brokers must now carefully verify their compliance history before submitting BG exemption declarations.

· Full disclosure of penalties—even if appeals are pending—is necessary to avoid allegations of misrepresentation and possible penal action.

[JNCH Public Notice No. 68/2026 dated 04.06.2026]

Sub:- Declaration of Authorisation Holder for claiming exemption from Bank Guarantee/Cash Security for registration of Advance Authorisation/EPCG Licenses.

Attention of all the Authorisation holders (AH)/ Custom Brokers (CB) concerned is invited to CBIC Circular No. 58/2004 dated 21.10.2004 (as amended).

2. Para 3.2 (c) of the aforesaid Circular provides that BG exemption as specified in Para 3.1 thereof shall be admissible subject to the conditions, inter alia, that the License holders should not have been penalized under the provisions of the Customs Act, 1962, the Central Excise Act, 1944, the Foreign Exchange Management Act (FEMA), 1999 or the Foreign Trade (Development and Regulation) Act, 1992 during the previous three financial years.

3. In pursuance thereto, AHs/CBs submit declaration/affidavit stating that they have not been penalized under the provisions of the Customs Act, 1962, the Central Excise Act, 1944, the Foreign Exchange Management Act (FEMA), 1999 or the Foreign Trade (Development and Regulation) Act, 1992 during the previous three financial years.

4. There have been several instances where, during processing of requests for registration and scrutiny of such declarations, it is noticed that the AH has been penalized under the provisions of Customs Act, 1962 but has not so declared the same in the declaration/affidavit submitted to customs. On being pointed out, the AHs/CBs submit a revise declaration / affidavit by incorporating the details of such orders imposing penalty under the Customs Act, 1962.

5. It may be noted that in a trust based facilitative governance regime, it is paramount that the AHs/CBs ensure due diligence while submitting self-declarations / affidavits. Such declarations are relied upon while processing requests for registration of Advance Authorisation/EPCG Authorisation and for determining the eligibility for exemption from BG under the Circular ibid. Submission of false/incorrect declarations/affidavits, though bereft of malafide, amounts to misrepresentation before the Customs authorities.

6. In view of the above, Authorisation Holders and Customs Brokers are hereby directed to exercise due diligence and ensure that the affidavits/declarations submitted by them are complete, true, and correct in all respects. Any past penalty imposed under the Customs Act, 1962, the Central Excise Act, 1944, FEMA, 1999, or the Foreign Trade (Development and Regulation) Act, 1992 during the previous three financial years shall be truthfully disclosed as per the following fo1mat along with the declarations/affidavit filed: -

Sr.No.

Order in Original & Date

Issuing/ passing authority

Penalty Amount

Section under which the penalty imposed

Status of Order in Original (whether appealed/penalty paid)

If appealed against then appeal details

7. It is further informed that submission of incorrect, false, or misleading declaration may. invite penal action under the relevant provisions of the Customs Act, 1962 including section 117 thereof against the Authorisation Holder and/or Customs Broker.

8. The contents of this Public Notice shall operate as a Standing Order insofar as officers and staff of JNCH are concerned.

9. Difficulty, if any, in implementation of this Public Notice may be brought to the notice of the undersign ed at commr-ns2@gov.in and/or apmainexp@jawaharcustoms.gov.in.