Chapter 14

CUSTOMS PREVENTIVE MANUAL (CENTRAL)

VOLUME I (GENERAL)

CHAPTER FOURTEEN

WAREHOUSING
PREMILINARY:
Warehousing in relation to the Customs Act means the storage
upto a period of one year or for reduced period as the case may be as prescribed by
Section 61 of the Customs Act, pending clearance for home consumption on payment of Duty
under Sec. 68 or the re-export to any foreign port without such payment under Section 69 or as
provisions and stores for the use on board any vessel proceeding to a foreign port under Section
86 , of any dutiable goods on their first importationin a place situated at a specified Customs port subject to Customs control and other
regulations made under the provisions of Chapter IX, Customs Act.
The object of warehousing is to allow the trade the facility of deferring payment of Duty on
imported goods for one year or reduced period as the case may be till their actual clearance for home
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consumption or their re-export without payment of the Duty to any foreign port. Warehousing of articles
imported by air in a Public or Private Bonded warehouse along with the goods imported by sea is
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permissible.
[ Govt. of Indias letter No. 55/12/51-Cus I/IV dated 20.06.1956]

WAREHOUSING
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As per the definitions given in Section 2(43), 2(44) and 2(45) of the Customs Act, 1962Warehouse -means a public warehouse appointed under Section 57 or private warehouse licensed
under Section 58,
Warehoused goods- means goods deposited in a warehouse,

Warehousing station- means a place declared as a warehousing station under Section 9.
The legal provisions for warehousing imported goods are contained in Chapter IX, i.e., Section 57
to 73 of the Customs Act, 19652. Under Section 9, the Central Board of Excise and Customs may issue
a notification declaring any place to be a warehousing station. At such warehousing stations an Assistant
Commissioner of Customs can appoint a public warehouse under Section 57 and he can licence a private
warehouse under Section 58 of the Act. These are also known as Bonded warehouses.
Bond literally means a document executed by the importer to bind himself in a sum equal to
twice the amount of Duty assessed on imported goods under Section 59 of Customs Act, 1962. We use
the word `Bond in day to day work in the sense of Bonded Warehouse.
And when the importer
warehouses the imported goods in the Bonded Warehouse without payment of Duty after execution of
Bond under Section 59 of Customs Act, 1962, the goods stored therein become Bonded goods or
warehoused goods.
WAREHOUSING STATIONS
Section 9 of the Customs Act, 1962, prescribes that
The Board may declare places to be warehousing stations at which alone public warehouses may
be appointed and private warehouses may be licensed.
Thus, a warehousing station means a place declared as a warehousing station under Section 9
of the Customs Act, 1962. Goods can be stored only at
warehousing them.
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such places, where
facilities exist for
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344
Warehousing Stations In Interiors

There should be as few a number of places which should be declared as warehousing stations
as possible having regard to the proximity to the Port, the requirement of the Trade and Industry, the
availability of Customs expertise etc. The warehousing stations should be so chosen that the industrial
units located in the interior, uniformly and without discrimination, get the benefit of the facilities. If the
number of places is kept minimal and uniform, it will be possible to cater better to the needs of the staff
for exercising powers in regard to warehoused goods. It should also be possible to keep the number of
warehouses to the minimum and yet cater to the needs of the industry adequately if, instead of a number
of private warehouses, a single public warehouse is appointed at an appropriate station. Supervisory
audit and other checks would also be possible more easily and expeditiously if this approach of having
only public warehouses is adopted.
[ Para 4 of Boards letter F. No. 473/147/79-Cus. VII dtd. 7.7.80 ]
BONDED WAREHOUSES
There are two types of Bonded Warehouses viz. PUBLIC BONDED WAREHOUSES AND
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PRIVATE BONDED WAREHOUSES Public Bonded Warehouses
Though statutorily the Deputy Commissioner of Customs or Assistant Commissioner of Customs
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can appoint (at any warehousing station) a Public Warehouse wherein dutiable goods may be stored, the
Board vide Letter F. No. 473/147/79-Cus VII dt.7.7.80 [Para 5] has decided that once a place is declared
to be a Warehousing Station, the concerned Commissioner himself will exercise the power to appoint the
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Public Warehouse.
As a regards appointment of open space as a Public Bonded Warehouse the Board vide letter
3/65/65-Cus VII dt.9.2.66. Circular No. 4/66 (Warehousing) has informed that it is not the intention to
encourage Bonding in open spaces. However, when in the individual judgement of the jurisdictional
Commissioner, the circumstances warrant that such open spaces may be permitted as Bonded
warehouses, he may appoint such open spaces as Bonded warehouses.
Private Bonded Warehouses:
Private warehouses belong to individual private firms of importers.

Authority competent to issue licence:
Private Bonded warehouse are licensed as such under Section 58(i) Customs Act by the Dy.
Commissioner / the Assistant Commissioner of Customs.
Application for licence:
Every application for a licence for a private warehouse under Section 58(i) of the Customs Act
should be in writing and in the form C.B.R. Cus. 202 which will be supplied by the Custom House.
When an application for licence may be refused:
No licence for a private Bonded warehouse should be issued if suitable and sufficient
accommodation can be provided in any Public (Port Trust) Warehouse. Assistant/Dy. Commissioner of
Customs would also be fully justified in refusing at his discretion, the licensing of a Private Bonded
Warehouse, if general trade conditions seem unsettled and the financial stability of the applicant firm is
subject to suspicion or is reported to be unreliable.
Request for holding a Private Bonded Warehouse should not be turned down on the mere
reasons of availability of space in a Public Bonded warehouse of the Port Trust. If an applicant is
otherwise fit to hold a licence, and be shown that it would be highly inconvenient or would definitely
handicap his business, if he had to operate in a public Bonded warehouse of the Port Trust, it can
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345
ordinarily be held that there is sufficient justification for issuing a licence for a private Bonded warehouse
to such an applicant.
[ C.B.R. Letter No. F.3/30/60-Cus. VII dated 6.9.60. ]
While licensing private warehouses under Section 58 the Asst./ Dy. Commissioner has to ensure
that there is no risk to Customs revenue. He has also to ensure that the applicant is solvent, that the
place is a secure one for storing non-Duty paid imported goods and that there is no danger of theft, loss
or deterioration due to natural causes like weather conditions etc. He has also to take into consideration
the volume of imported goods likely to be deposited in the warehouse, the total amount of Customs Duty
on such goods etc. before issuing the licence. While licensing private Bonded warehouses at inland
places, points such as non-availability of public Bonded warehouses of the Central Warehousing
Corporation, problems likely to arise in assessments of goods that may be deposited in and later on
cleared out of the warehouses, are also taken into account. The licence is issued by the Asstt. / Dy.
Commissioner normally for a period of one year and can be cancelled by him after giving one month
notice to the licensee. It can also be cancelled, after giving him an opportunity to represent, if the licensee
commits any contravention of the Customs Act, 1962, Rules and Regulations made thereunder,.
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Further, pending an enquiry, whether a licence granted should be cancelled, the Dy.
Commissioner or Asstt./Dy. Commissioner is empowered to suspend the licence as per Sub Clause (3) of
Section 58 of the Customs Act, 1962.
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APPOINTMENT OF PUBLIC BONDED WAREHOUSES & LICENSING OF PRIVATE BONDED

WAREHOUSES- GUIDELINES
Review of the existing policy with regard to appointment of public Bonded warehouses and
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licensing of private Bonded warehouses has been conducted by the Board. Consequently, it has been
decided to liberalise the procedure on the lines indicated in the succeeding paragraphs.
2.0
Appointment of Public Bonded Warehouses: -
2.1
The existing policy of appointing only Central Warehousing Corporation and State Warehousing
Corporations as the custodians of the public Bonded warehouses, formulated in 1980, will undergo a
change in the context of liberalisation of the economy. Considering the fact that the management of CFSs
and ICDs has been entrusted to private operators, in line with the existing policy of privatisation and with
a view to raising the efficiency of warehousing services, private operators would now be allowed to be
appointed as custodians of the public Bonded warehouses. This relaxation may have the way for more
number of public Bonded warehouses coming up in interior locations where these are needed.
2.2
The concerned Commissioner should, however, ensure that while appointing any private operator
as a custodian for public Bonded warehouse, the application submitted by the letter is very carefully
scrutinised and factors such as the feasibility and financial viability of the warehouse operator, his
credibility, his financial status, his past record to comply with Customs & Excise Laws, his expertise in
warehousing field, etc. should be given due consideration. Besides, operational requirements such as,
suitability and security of the premises, availability of Customs expertise, proximity to the users etc. are
also to be taken into account while appointing the custodians for the public Bonded warehouses. The
applicant should agree to take the services of the Customs officers on cost-recovery basis, if the services
of the officer are required on a continuous basis (i.e. 9 AM to 6 PM), or on payment of MOT/Supervision
charges, as the case may be.
3.
Appointment of Private Bonded Warehouses: Furthermore, it has been decided that the requests for grant of licence for private Bonded
warehouses will be considered and decided at the level of the Commissioners without making any
reference to the Board. The private Bonded warehouse licences may allowed without any restrictions
regarding the type of goods to be warehoused. Hitherto, private Bonded warehouse licences were
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allowed only in respect of goods which required specialised storage/handling facilities, e.g., liquid in bulk,
hazardous goods, explosive goods, goods requiring controlled temperature conditions, etc. From now
onwards, irrespective of whether the goods fall in the above categories or not, the private Bonded
warehouse licences may be granted. The existing practice of allowing only industrial rawmaterials/components to be warehoused in inland areas is also being relaxed. The Commissioners may
carefully scrutinise the applicant is financially sound, has good credibility, and has not been involved in
custom or excise Duty evasion in the preceding 5 years, in the normal course, a private Bonded
warehouse licence may be granted. This would, of course, be subject to the condition that the premises
are suitable and adequately secured and the applicant agrees to take the services of the Customs officers
on cost-recovery basis, if the services of the officer are required on a continuous basis (i.e. 9 AM to 6 PM)
or on payment of MOT/Supervision charges, as the case may be.
[ Boards Circular No. 68/95 Dated 15/6/95 in F. No. 473/61/94-LC ]
Further guidelines on Private Bonded Warehouses

Attention is drawn to the instructions contained in Boards circular of even number dated 15th
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June, 1995 [Customs Circular No. 68/95]. Certain doubts have been expressed in some quarters
regarding methodology to be followed for licensing of private Bonded warehouses. Accordingly, further
guidelines for grant of such licences are issued and Commissioners are advised to ensure that these
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guidelines are followed in respect of the existing private Bonded warehouse licences by giving them
suitable time for compliance with the fresh requirements. The time limit may be fixed two months from the
date of issue of Public Notice/Trade Notice.
The applications for private Bonded warehouse licences may be classified in two categories. The
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2.
first category being of those who want to store sensitive goods such as liquors, cigarettes, foodstuffs,
consumables, etc. The second category is of those who do not store sensitive goods but store nonsensitive goods.
3.
Guidelines for Storing Sensitive Goods
(i)
The new applicants who are intending to store sensitive goods should be asked to produce a
solvency certificate (not a reference or confidential certificates) from a scheduled Bank of repute
(i.e., other than a cooperative bank which has operations limited to a city, etc.) for a value of not
less than rupees fifty lakhs (Rs.50 lakhs);

(ii)
Such warehouses should not be located in residential areas;
(iii)
The premises must be carefully checked to ensure that they are secured against theft, pilferage
or other risks and are easily accessible for the departmental officers for any surprise checks.
In respect of existing licences their location and other requirements should be reviewed and
action should be taken in case it is found wanting in certain requirements. They should be given notices
of say 90 days to either shift or give additional provisions that are required from the Departments point of
view:
(iv)
It may be ensured that there are adequate provisions for fire fighting operations.
(v)
It may be ensured that the goods deposited in the warehouses are fully insured by the
warehouse-keeper against theft, pilferage, fire accidents, other natural calamities, risks against
rioting, etc. at least for a value equal to the Customs Duty by a comprehensive Insurance Policy
and drawn in favour of the Commissioner of Customs.
In respect of goods already warehoused, ensure that this coverage is also being made by the
existing warehouse-keepers.
(vi)
It may be ensured that in respect of new applicants, their record is clean and that the proprietor or
partner or any of the directors are not involved in any Customs Duty evasion or smuggling
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offences (other than technical offences), Commissioners may deny licences to such applicants.
(vii)
In respect of existing warehouse-keepers, if their track record has not been found satisfactory or
cases have been registered for illegal removal or improper compliance of the rules and
regulations, immediate action should be taken to cancel their licences after observing the
principles of Natural Justice. Where Duty evasion is found to be more than one lakh, either in
individual case or in a series of offences, the cases of such licences should be reviewed for
action.
(viii)
In respect of individual consignments to be warehoused, the licencees are to give a
double Duty Bond as required under the law. In respect of sensitive goods, we may take a cash deposit
or Bank Guarantee equal to 25% of the Duty liability (effective Duty foregone) for each consignments.
However, where a warehouse-keeper wants to have revolving Bond with a single bank guarantee for a
higher amount, it can be accepted and a suitable credit/debit system for each consignment
warehoused/cleared can be operated.
4.
For Non-Sensitive Goods
(i)
The applicant should be solvent and has a good record. There is no need to insist on a solvency
(ii)
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certificate of Rs.50 lakhs but should be solvent for Rs.10 lakhs.
All other provisions regarding security of the place, location of the place, insurance to be taken
indicated in para 3 above would mutatis mutandis apply to non-sensitive goods. Normally, the
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double Duty Bond with surety would be sufficient. However Commissioners may ask for a bank
guarantee where they are not satisfied about the transactions of a particular Bonder.
Transit Bond for Transfer or Bonds to Interiors
(i)
Where the imported goods are stored in a private Bonded warehouse within the same
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5.
metropolitan city, the regulations allow it to be sent under escort. In such cases, there is no need
for a transfer Bond.
(ii)
Where the goods have to go outside the city, a transfer Bond is required to be taken but where a
transfer takes place within the territorial jurisdiction of the Commissioner of Customs and is within
a reasonable distance say upto 50 kms, he may wave the bank guarantee if he is satisfied with
In respect of sensitive goods, the Duty should be secured by a transit Bond backed by a bank
(iii)
the bona fides of the party and the goods are sent under escort;
guarantee or a cash security for 50% of the Duty involved. In respect of non-sensitive goods
transit Bond would be covered by a bank guarantee or a cash security for 25% of Duty revolved.
The Commissioners may demand bank guarantee/security up to the value of Duty amount, if they
consider it necessary in certain cases.
[ Circular No. 99/95 Dt.20.9.1995 in F. No. 473/61/94-LC ]
Grant of Licences to Private Bonded Warehouses- sensitive items

Attention is drawn to Commissioner of Customs, Ahmedabads letter F.No.VIII/40-13/Cus. (T)/95
dated 22.12.95 regarding grant of licence to private Bonded warehouses under section 58 of the Customs
Act, 1962 and to say that the sensitivity of a product may change from time to time depending upon the
rates of duties and the licensing aspect involved. Therefore, no comprehensive list of sensitive items
should be drawn for guidance of the Commissioners. The Board, therefore, desires that the
Commissioners should themselves decide as to what is sensitive and what is not, after taking into
consideration the nature of the commodity, the rates of duties and the licensing aspects involved.
However, difficulties, if any, faced may be brought to the notice of the Board.
[ Circular No. 20/96-Cus. Dated 4.4.96 in F. No. 473/3/96-LC ]
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Availability of space certificate from Public Bonded Warehouse not required

Attention is drawn to the instruction issued by the Board vide letter of even number dated 15th
June, 1995 [ Customs Circular No. 68/95 ] and to say that a doubt has arisen whether no objection is
required from Public Bonded Warehouse for availability of space there before granting licence for Private
Bonded Warehouse (in the same area where the Public Bonded Warehouse exists) under section 58 of
the Customs Act, 1962.
2.
The Board has examined the matter further and it is hereby clarified that there is no precondition
of obtaining a no objection from the Public Bonded Warehouse for considering the applications for
licencing private Bonded warehouse. Therefore, the applications for private Bonded warehouse licence
may be decided on merits without considering the aspect of availability of space in the Public Bonded
Warehouse.
[ Circular No. 1/96-Cus. Dated 1/1/96 in F. No. 473/61/94-LC ]
Preliminary enquiries to be made before grant or renewal of a licence

Before any licence for a private Bonded warehouse is granted or any existing licence is renewed,
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it is incumbent on the Custom House to be satisfied that the applicant for a licence is a person of good
financial standing who can be relied upon. An enquiry as to the financial status of the applicant should
Commissioner of Customs (Bonds) for orders.
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therefore be made confidentially with his bankers. The information should be submitted to Assistant / Dy.
Conditions which a building to be appointed a private warehouse under Section 58 (i) Customs
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Act, must fulfil:

(i)
The walls should be well built.
(ii)
If the warehouse includes a whole building or is on a upper floor, the roof should be well
and strongly terraced or tiled, the rafters in the latter case being ceiled with planks, strong cloth or
matting.
(iii)
If the floors of any part of a warehouse are continued over a gateway, the latter should be
There should be sufficient number of windows in each room to supersede, as far as
(iv)
ceiled with planks if not already arched with brick and mortar.
(v)
practicable, the necessity of using lamps should the light from the open door be insufficient.
Windows - whether on upper or lower floors - must be secured by stout iron bars deeply
fixed in the brick work, and those on the ground floor- by shutters made to open internally with strong
hinges and with a cross bar in addition to the iron bars already mentioned.
(vi)
All superfluous windows opening into private yards of other buildings should be closed
up with brick work as solid as the walls themselves.

(vii)
All the entrances into the warehouse should have doors and strong locks. The doors
should be furnished with screw staples having each screw secured by a nut and riveted on the inside to
prevent the fastening being drawn.
(viii)
The entrance doors must open into a street or other public way so as to be at all times
accessible for the easy examination of lock and fastenings without passing through other doors or gates.
(ix)
Any holes required in the walls for the admission of air are not to exceed 9 inches in
diameter and to be secured by stout cross iron bars deeply fixed in the brick work.
(x)
There must be no private communication whatever with any Bonded warehouse.
(xi)
The department should satisfy itself that if there be windows in the adjoining premises
from which access might be had to the roof of the warehouse the security of the warehouse is not
thereby diminished.
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(xii)
If the applicant has already one or more warehouses the department should satisfy itself
that their capacity is fully taken up.

(xiii)
The licensee of a private warehouse should pay the cost of purchasing a Chubbs lock of
the size of 2 or more required for locking the warehouse. He must also bear any charges incurred in
repairing the lock when it gets out of order. The lock should be purchased by the Customs Department so
that the keys do not go into the hands of the licensee. The duplicate keys of such locks should be
forwarded in sealed envelopes to the Chief Accounts officer for custody. The original keys are kept by the
Preventive Department.
(xiv)
If the warehouse is intended for warehousing matches or other easily combustible
materials, it should be provided with a sufficient number of fire-extinguishers and other appliances; such
as buckets of water, sand etc, for putting out fire.
Premises to the licenced- inspection thereof

Before granting a licence, it is necessary to verify that the building that is to be licenced as a
private Bonded warehouse is in sound condition i.e. suitable and safe for depositing goods. On receipt of
by filling the questionnaire form in Appendix A.
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APPENDIX A
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the application, therefore, the building will be examined by a Preventive Supdt, who will submit his report
(Questionnaire to be filled in by the Officer inspecting the premise to be licensed as a

Private Bonded Warehouse).
Nature of walls.
2.
Nature of roof.
3.
Lighting.
4.
Are all windows and ventilation spaces properly barred or secured with strong shutters that can
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1.
be fastened firmly from inside?

5.
Arrangements for locking door. In particular, are all hasps and staples so secured that they
Are all the doorways other than those to which Customs locks are to be affixed, bricked up or
6.
cannot be unscrewed or otherwise easily withdrawn from outside?
7.
otherwise blocked more securely than by bolting or locking of doors?

Precautions against fire.
Certified that the proposed premises have been verified by me and found suitable for Customs
Bonded Warehouse.
Superintendent of Customs
I/c. Bonded warehouse.
The premises have been verified personally by me and is quite suitable and is recommended for
issue of a warehouse licence.
Assistant Commissioner of Customs
Renewals
The above procedure shall be followed for renewals also. The financial status of each licensee
will be reviewed every year. For this purpose, it will not be necessary in all cases to make any written
reference to the Bank.
Register of Licences
The Bond Clerk shall maintain a register showing the list of licences granted for private Bonded
warehouses and shall issue a warning notice to the licensees a month prior to the expiry of the licences.
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The list should be kept posted upto-date and all alternations and corrections made on it initialed, dated
and countersigned by the Office Superintendent Imports.
Validity of Licence
A licence for a private warehouse shall be valid for one year and shall accordingly be renewable
annually, save in exceptional cases in which the Assistant Commissioner decides otherwise. A licence
may be cancelled by the Asst. Commissioner for the reasons given in the Section 58 (3) of Customs Act,
1962. A licencee has a legal claim to have his licence cancelled before the expiry period of its validity,
provided Duty has been paid on the whole of the goods stored in the warehouse. Section 58 (3) specifies
the circumstances in which the Assistant Commissioner may cancel a licence otherwise than on the
application of the licensee. It does not purport to render, not to have the effect of rendering the Asst.
Commissioner incompetent to cancel a licence at any time on the application of the licensee.
When a licence is so cancelled on an application from the licensee, the date on which the
cancellation of the licence takes effect should be taken to be the date of actual removal of the goods
Fees
PRIVATE WAREHOUSES working of
Control over private warehouse
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No fees should be charged for the grant of licence.
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therefrom the purpose of Section 15(b) Customs Act.
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The warehouse should be under double lock, one of the Custom House and the other of the
licensee. The Custom House locks should be Chubbs or Godrej lock and they should be purchased at
the expense of the licensee. The set of keys in actual use shall be in charge of the Preventive
Department and their duplicates shall be retained in the Customs Treasury.
Periodical verification of stocks in Private warehouse
The Preventive Supdt. (Bonds) shall be deputed to verify the stocks in private warehouses
periodically. He will satisfy himself that the contents of the packages are intact and agree with the
description given in the relative records, by examining 2% of the packages of each consignment, subject
to a minimum of 1 and the maximum of 25 packages. It will be sufficient, in the case of the bagged cargo
such as sugar, to check the contents by probing the bags and in the case of packages containing motor
cars and parts thereof, to remove a plank of the case and inspect the contents through the opening. In the
report submitted by him, the Preventive Supdt. (Bonds) will make a note as to the scope of each visit of
inspection. The Asst. Commissioner (Bonds), should pay at least six surprise visits in a year to such
private warehouses is to provide a check on the records of the Bond Department.
The inspection of private Bonded warehouses and checking of Bonded stocks by surprise visits
will be carried out by the Bond Supdt. A register will be maintained by the Bond Supdt. Wherein the dates
Of such surprise visits, particulars of Bonded Warehouse and stock will be shown.
Maintenance of the Records of Stocks in Private Bonded Warehouse

In order that the exact stocks in a private warehouse on any date (i.e. the balance remaining after
deliveries have been given to the Bonders) may be disclosed, the Bond Department shall maintain, at the
end of each volume of a Bond register, a summary in form at Appendix B showing a detailed record of
packages received in the warehouses and the quantity delivered therefrom, from time to time. The
Preventive officer supervising the storage of any goods into, or deliveries from, any private warehouse
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shall endorse on the respective duplicate into-Bond or ex-Bond Bill of Entry the date and location of the
goods so stored or delivered under his supervision and forward the documents to the Bond Department.
The particulars endorsed on these documents will be transcribed in the summary and attested by the
Senior Clerk in the department. When half yearly inspection reports are received in the Bond Department,
Bond Clerk will check them with the entries in the register and report discrepancies, if any, to Asst.
Commissioner, Bonds, for orders.
APPENDIX B
Bond No.
Date of Receipt
Total No. of
No. of Packages
Date of
& Date
of goods
packages
cleared
clearance
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Clerks initials
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The licensees of the private Bonded warehouses will maintain a Stock Account Book in form at
Appendix C.
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Types of goods to be stored in a private warehouse and the manner of their storage
A licence for a private Bonded warehouse should be granted on the condition that the warehouse
shall be used by the licensee normally for warehousing his own goods only and that the goods stored
therein shall be stacked in such a manner as to enable easy access, whenever necessary, to every
package or parcel therein. In special cases where facilities for depositing imported goods in the public
warehouse are not available, the goods, imported by other than the licensee may be allowed in the
licensees warehouse provided the Bond under Section 59 of the Customs Act 1962 is executed by the
importer of the goods and the license of the warehouse jointly.
Cost of Custom House Establishment

The cost of any Custom House Establishment employed at a private Bonded warehouse,
permanently or occasionally, should be defrayed by the licencees.
APPENDIX C
Receipts
Bond S.
Date of receipt
Vessels name
Packages
Quantity and
No. and
of goods in
& whence
marks &
/ or weight
date
warehouse
imported
numbers
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Description
Value of
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Issues
Operations
Date of clearance
No. of
B/E Cash
Amount of
Shipping
performed in Bond
of goods
packages of
number and
Duty paid
Bill No.
Qty. cleared
date
10
11
under sec. 64 of the
and date
C.A. with full

detailed results
8
Name of vessel and Rot.
Balance
12
Preventive Officers
Remarks
Signature
15
16
17
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Number
13
Warehousing of Goods in Public warehouse
(1) An into-Bond Bill of Entry, in duplicate containing such particulars, as may be prescribed in the
directions issued from time to time on the subject, will be presented by the Bonder to the receiving clerk in
the Import Department who will (i) verify that all the columns therein are properly filled in, and (ii) give a
serial number to the Bill of Entry. The Bill of Entry, in duplicate will then be passed on the party for
presentation in the Appraising Department.
(2) The procedure followed in the Appraising Department in regard to the Examination and
assessment of the goods will be the same as that followed in the case of bills of entry for home
consumption with the following difference. The Appraisers will see that-(i) all the particulars are correctly
entered in both the copies of the into-Bond Bill of Entry (ii) record on both of them in words and figures,
the quantities or values on which Customs Duty is leviable and the rate of Duty and (iii) also initial both
the copies (which will also be counter-initialed by the Principal Appraiser in-charge of his section). The
particulars ascertained in survey made on behalf of the Ships Agents should be recorded on both the
copies.
Apportioning of value and quantity in into-Bond Bill of Entry furnishing of:

It is permissible for a consignment consisting several packages covered by an into-Bond Bill of
Entry to be removed from the warehouse piece-meal i.e. in one or more lots either for home consumption
under cover of one or more ex-Bond Bills of Entry or under cover one or more Shipping Bills for shipment
to foreign ports. It is essential, therefore, that the total values and quantity of the consignment as declared
in the into-Bond Bill of Entry should be appointed correctly amongst the various ex-Bond Bills of Entry and
Shipping Bills, if and when they are presented in the Bond Department. To enable the Bond Department
to do this and to certify the values and quantities in the relative ex-Bond Bills of Entry or Shipping Bills,
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the Bonder must, at the time of the presentation of the into-Bond Bills of Entry or Shipping Bills in the
Appraising Department show on the reverse of the original copy thereof the quantity and value (both in
foreign and Indian Currency) of the consignment, except when he does not wish to clear the consignment
piecemeal but in one lot only, in which case he must subscribe a declaration to that effect on the intoBond Bill of Entry. The assessing Appraiser will attest the values and quantities in token of his having
checked them and also show the rate of Duty leviable on the goods. When however, the contents of all
piece-goods containing equal number of pieces of identical quantity and consequently of uniform value or
bags of sugar or uniform weight and in consequence of uniform value, the assessing Appraiser need only
make the following endorsement on the reverse of the into-Bond Bill of Entry viz., Contents Uniform. The
Duty calculated in the Appraising Department will verify (i) that the invoice value of each individual
package has been noted by the Bonder on the reverse of the into-Bond Bill of Entry and attested by the
assessing Appraiser, (ii) that the equivalent in Indian Currency of such values has been correctly
calculated by the Bonder (iii) that the total value shown by him on the obverse of the Bill of Entry
corresponds with that shown on its reverse. This will enable the Bond Department to deduce and certify
on the ex-Bond bills of entry or Shipping Bills, the exact average value, number and/or weight of
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individual packages from the total assessed value, number and/or weight and there would be no occasion
for any shortage or excess in respect of these particulars to be adjusted finally.
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After assessment of the goods, the Bill of Entry will be handed over to the Comptist for calculation
of the Duty. Thereafter the into-Bond Bill of Entry shall be forwarded to I.A.D. for pre-audit.
After pre-audit the into-Bond Bill of Entry shall be forwarded to the Bond Clerk in the Bond
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Department. He will retain the original into-Bond Bill of Entry and hand over the duplicate Bill of Entry to
the importer or his agent for execution of a Bond under Section 59 of the Customs Act, 1962.
On presentation of the Bill of Entry and a Bond required under Section 59, Customs Act, the Bond
Clerk will compare them with the original Bill of Entry and (i) endorse on the face of the duplicate intoBond Bill of Entry compared with the pre-audited original into-Bond Bill of Entry. (ii) note on both the
copies of the Bill of Entry the period within which the goods should be warehoused. (iii) enter the Bond
and all the particulars including the rate of Duty in the Bond register. (iv) note the Bond number on the
Bills of Entry, and (v) take all the Bond registers to the Superintendent/ Bonds, with the Exchange Control
copy and the Bond, who will initial the Bond and sign the Bond register and also three copies of Bill of
Entry, permitting the goods to be warehoused within the time specified. The Bond (alone) will then be
submitted to Assistant/Dy. Commissioner, Bonds, for his signature in token of its acceptance.
Fourteen working days excluding the date on which the pass order is granted shall be allowed
for the purpose of removal. Extension of this period will be allowed free of fee by the Assistant
Commissioner, Bonds, whenever applications are received from the Bonders with satisfactory reasons
adduced to justify the extension.
The Bond Clerk will then (i) retain the Bond, (ii) forward the original into-Bond Bill of Entry on the
first working day of the next week (along with similar other original into-Bond Bills of Entry collected during
the week) to the Statistical Department for registration and return, (iii) return the duplicate Bill of Entry to
the importer as the authority for the removal of the goods from the port Trust premises to the warehouse
under Preventive supervision, (iv) obtain the signature in the Bond and initials in the Bond Register from
the Asst. / Dy. Commissioner (Imports & Bonds) and forward the same with the register to I.A.D. for
complete checking, and (vi) the original Bond will be forwarded to the Cash Department for safe custody
and the duplicate copy of the Bond will be retained in the Bond Department.
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Procedural irregularities in warehousing of goods delay in grant of Order Under Section 60 of

the Customs Act, 1962 Regarding.
The Audit has brought to the notice of the Board a case where an importer filed a warehousing
Bill of Entry for Bonding certain imported goods and in this direction, he also executed a warehousing
Bond as per Section 59 of the Act. The Bond was accepted by the Customs House. However, since the
importer did not present the documents thereafter for obtaining an order for depositing the goods in a
warehouse as per section 60, the goods were not deposited in the warehouse. Subsequently, the
importer sought clearance of the goods and the said order u/s 60 was obtained at the delayed stage. The
Audit has contended that if the Order under Section 60 had been given by the Customs House
immediately upon acceptance of the warehousing Bond, the warehousing period could have been
determined with reference to the earlier date and the interest on the Customs Duty charged accordingly.
Audits view is that on account of this delay in grant of order u/s 60, there has been a procedural
irregularity leading to revenue loss.
2.
On an examination of the various aspects of the matter it is seen that the warehousing period has
to be determined with reference to the order of the proper officer u/s 60 of the Customs Act, However, the
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Department should take care that this order is given immediately, once the warehousing Bond is
accepted by the Department from the importer. Each Custom House should draw up a suitable procedure
to ensure that the said Order u/s 60 is given immediately after the acceptance of the Warehousing Bond.
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[ Circular No. 30/95 Dtd. 30.3.95 in F. No. 483/9/93-LC ]
Admission of goods into public warehouse Action by Warehouse keeper:
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(a) On receipt of all goods in the public warehouse, the Warehouse keeper will;
(i)
Check the goods with the particulars noted in the duplicate Bill of Entry.
(ii)
Have the number of the Bond and year of Bonding noted on each package and see that
the goods are deposited in due course and properly stacked in the room allotted to the importer for the
storage of goods.
The Bond supervisor, is responsible for seeing that goods are stacked according to their
Enter the particulars of the quantity and the description of the goods received in the stock
(iii)
respective Bond numbers so as to facilitate stock taking and verification of balances under each Bond.
lists (Form CBR Cus. 171), certify on the face of the duplicate Bill of Entry to the effect that the above
mentioned goods which have been duly received in the warehouse have been found to correspond in
particulars with those entered in the Bill of Entry and after noting the date of warehousing therein return
the latter document to the Bond Clerk.
Action by Bond clerk
(i)
On receipt of the duplicate Bill of Entry from the warehouse keeper, the Bond Clerk will
note in the Bond Register the date on which the goods were warehoused and see that all the packages
covered by the Bond have been duly warehoused or have been otherwise duly accounted for.
(ii)He will then register the particulars in the trade posting registers maintained for the purpose of
repairing the monthly statement of stock balances of certain Bonded goods specified in the Form C.B.R.
Cus. 124 and forwards the duplicate into-Bond Bill of Entry to the M.C.D.
Admission of goods to private warehouse
The procedure will be the same as that described above except that when no Customs officer is
permanently posted at the warehouse, the duties in regard to the receipt and storage of the goods in the
warehouse and the entry of the necessary particulars in the stock lists will be performed by the Preventive
officer deputed for the purpose by the Supdt. Preventive Posting section or Bond deptt. on an application
in writing to this effect being made to him by the Bonder of the goods. After receiving goods into a private
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355
warehouse the Bond Officer will obtain the licensees acknowledgement for the receipt of the goods on
the duplicate Bill of Entry. The Bond clerk will see that this is invariably done in all cases and submit a
report to the Asst. Commissioner of any cases of failures on the part of the Bond Officer to obtain the
licensees acknowledgement.
Double Locks
The licensees shall be required to attach their own locks to every door of the licensed warehouse
to which Customs locks are attached. The Customs officers attending the work at the warehouse should
bring to the notice of the Assistant /Dy.Commissioner/ Bonds, cases in which this requirement has not
been complied with.
Slack or deficient packages Surveyed cases

Whenever a survey is held on behalf of ships agents on any slack or deficient packages
comprising a consignment entered for warehousing the Bonder should, prior to the removal of the
packages from the Docks to the Warehouse, repack the deficient packages properly and put a distinctive
mark and/or number of the said packages. The marking should be carried out under Preventive
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supervision on an application to Assistant/Dy. Commissioner Bonds, this will obviate the need for
subsequent re-examination of the goods in the warehouse. When the survey is held under Customs
supervision the Officer deputed for the purpose will make his survey report on the reverse of the into-
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Bond Bill of Entry and show the marks and numbers on the packages surveyed.
Packages with common marks
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If, while examining any consignment entered for warehousing the Examiner finds that some of
the packages covered by the into-Bond Bill of Entry bear common marks but not uniform contents, he
may call upon the Bonder to make another kind of distinguishing marks and/or numbers of such packages
and note the same on the reverse of the into-Bond Bill of Entry of the guidance of Bond Department.
Marks not tallying
When it is found that the marks or numbers of any packages brought to the warehouse do not
correspond with these shown in the relative into-Bond Bill of Entry, the Bonder should be called upon
either to account for the discrepancy or to arrange for its examination to verify whether the package forms
part of the consignment covered by the Bill of Entry. So long as the package in question is not so
examined of the discrepancy accounted for to the satisfaction of the Asst. Commissioner of Customs
(Bonds) it cannot be considered to have been duly warehoused nor will its clearance from the warehouse
be allowed.
All necessary particulars should be transcribed on the reverse of the original warehousing Bill of
Entry as well as in the Bond register from the duplicate warehousing Bill of Entry sent by Bond Officer.
Bond section will retain the Original Bill of Entry and forward the duplicate Bill of Entry to the Manifest
Clearance Department.
Acceptance of Bonds Instructions Section 59:
The importer of any dutiable goods which have been entered for warehousing and assessed to
Duty under Section 17 or Section 18 shall execute a Bond binding himself in a sum equal to twice the
amount of the Duty assessed on such goods; and,
(a) to observe all the provisions of this Act and the rules and regulations in respect of such
goods;
(b) to pay on or before a date specified in a notice of demand all duties, rent and charges claimable on account of such goods under this Act, together with interest on the same from the
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356
date so specified at the rate of six percent per annum or such other rate as is for the time
being fixed by the Board; and
(c) to discharge all penalties incurred for violation of the provisions of this Act and the rules and
regulation in respect of such goods.
For the purpose of sub-section (i) the Asst./Dy. Commissioner may permit an importer to enter
into a general Bond in such amount as the Asst./Dy. Commissioner may approve in respect of the
warehousing of goods to be imported by him within a specified period.
A Bond executed under this section by the importer in respect of any goods shall continue in
force notwithstanding the transfer of the goods to any other person or the removal of the goods to another
warehouse.
Provided that where the whole of the goods or any part thereof are transferred to another person
the proper officer may accept a fresh Bond from the transferee in a sum equal to twice the amount of
Duty assessed on the goods transferred and thereupon the Bond executed by the transferor shall be
enforceable only for a sum mentioned therein less the amount for which a fresh Bond is accepted from
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the transferee.
Bond Its form, Execution and Acceptance

(i)
The Bond to be furnished by the Bonder under section 59 is at Appendix D. All the particulars
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therein shall be duly filled in by the Bonder. It shall be stamped in accordance with the rates
specified in the schedule to the Indian Stamp Act signed by the Bonder and attested by two
witnessess.
The Bond shall be for twice the amount of the Customs Duty assessed on the goods proposed to
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(ii)
be warehoused. It shall be written up properly, all erasures and corrections therein being initialed
by the person signing it. The country whence the goods are consigned will be shown therein after
the words imported by sea from .. appearing at the foot of the form and
the declaration shall correspond with that shown in the into-Bond Bill of Entry.
(iii)
In various places, in the Bond alternative words or expressions, one of which is required to be
scored out according as the party executing the Bond is an individual or a firm. As failure to do
this would result in an ambiguity likely to prejudice the interest of the Customs House in a Court
of Law, if, at any future date, it be deemed necessary to proceed under that Bond that Bonder
must invariably be required to cancel one of these two alternative expressions.
(iv)
If a Bond is found before its acceptance, to be understamped, it should be brought to notice of the
Bonder and the deficiency be made good of. If, however the Bond is over stamped, the fact
should be brought to the notice of the Bonder or his representative so that he may, if he so
chooses put in a fresh Bond properly stamped and obtain a refund. If he does not consider it
worthwhile to do this, the overstamped Bond should be accepted and the following note made
thereon overstamped No action by Bonder.
(v)
If the Bond is found to be correct in respect of al the particulars mentioned above and provided
the Bond Department is satisfied that it is properly and duly executed by the owner of the goods
or his duly authorised agent, its acceptance cannot be withheld and it shall be submitted to
Assistant / Dy. Commissioner (Bond) for affixing his signature thereto in token of its acceptance.If
found otherwise the Bond shall be returned to the Bonder for amendment.
(vi)
Every Bond should be executed for the full period of three years, one year or such period allowed
by the Assistant Commissioner for which goods are to remain in a warehouse under Section 61
Customs Act and shall cover consignments imported.
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357
APPENDIX D
BOND
No. .
19
We, No. of .and of the same

place, are jointly and severally bound to the President of India in the sum of Government Rupees
to be paid to the said President of India in which payment we jointly and severally bind
ourselves and our legal representatives.
Date
The above Bonder having applied to the Commissioner of
Custom House at .. for a period of one year in the following Goods that is to say
(DESCRIPTION OF GOODS)
(TO BE ENTERED)
imported by sea from on board S.S / M.V. and entered in
the Custom House Books as No. on the Register of goods
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imported by sea.
The condition of the Bond is that
If the said .. or their legal representatives shall observe
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all the Rules prescribed in the Customs Act, 1962 to be observed by owners, of goods warehoused, and
by persons obtaining permission to warehouse goods under the provisions thereof.
And if the said or their legal Representatives shall pay to
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the Commissioner of Customs House at the port of .. all dues, whether Custom duties
warehouse dues, rend or other lawful charges which shall be demandable on the said goods or on
account of penalties incurred in respect of them. Within one year from the date of this Bond, or within
such of further time as the Commissioner of Customs shall allow in that
behalf together with interest ion every such sum at the rate of 6 (six) percent, per annum from the
demand thereof being made in writing by the said Commissioner of Custom House.
And if, within the term so fixed or enlarged the said goods or any portion thereof having been
removed from the said Warehouse for Home consumption, or exportation by sea, the full amount of all
Customs duties, warehouse dues, rend and other lawful charges, penalties and interest demandable as
aforesaid shall have been first paid on the whole of the said goods, this obligation shall be void.
Otherwise and on breach or failure in the performance of any part of this condition the same shall
be in full force. We agree that any amount becoming due by us under this Bond may be recovered in the
manner laid down under sub section 142(1) of the Customs Act, 1962 without prejudice to any other
mode of recovery.
STATION :
Date
Witnesses :
ACCEPTED FOR AND ON BEHALF OF THE
PRESIDENT OF INDIA
Assistant / Dy. Commissioner of Customs
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358
General Bonds under Section 59(2) Customs Act,1962 - Procedure for allowing warehousing of
goods under
For the purpose of permitting warehousing of goods under general Bonds, the following
procedure should be followed:
(i)
When an importer applies to the Assistant / Dy. Commissioner of Bonds for warehousing
goods under a general Bond under section 59 (2) of the Customs Act,62, an application containing full
particulars viz. General description, quantity, value of the good, intended to be warehoused for the next
four years, the purpose for which warehousing facilities are sought, the quantity and value of the goods
imported by the party during the preceding year; and the amount for which the Bond is sought to be
executed should be put up to the Assistant / Dy. Commissioner Bonds, for orders. The Assistant / Dy.
Commissioner should see whether the Bond amount proposed will cover the goods to be imported by the
party during the next four years. After obtaining the Assistant / Dy.Commissioners approval, the importers
should be asked to execute a general Bond in the proforma at Appendix E and the Bond put up when
received for pre-audit to I.A.D.
(ii)
On acceptance of the Bond by Assistant Dy. Commissioner ( Bonds ), it should be
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registered in a supplementary register, in the proforma set out in Appendix F. After it is registered, the
Bond will be forwarded to Cash Department for safe custody. The maintenance of this supplementary
register will not in any way change or interfere with any other registration that may be required under the
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existing procedure. Once the Bond has been duly registered in the supplementary register and assigned
a number, it will be intimated to the importer who will thereafter be allowed to warehouse imported goods
during the period specified in the Bond so long as there is sufficient balance to cover the value of the
him to the Bond Department.

(iii)
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imported goods. The importer will quote the general Bond number and date on all references made by
Although there will not be individual Bonds, under section 59 (1) the existing procedure of
assigning Bond serial numbers for each consignment warehoused and corresponding entry in the main
Bond register will continue. This number will be quoted in the into-Bond bills of entry. The importers also
quote the Bond serial number on all the ex-Bond clearance documents etc. The audit check will as usual
When the goods covered by a particular Bond serial number are cleared or accounted for
(iv)
be conducted for the into-Bond and ex-Bond clearances.
to the satisfaction of the proper officer, such Bond serial number should be cancelled. The relevant
documents relating to such cancelled Bond serial number should be upto I.A.D. and Customs Revenue
Audit for their audit check as on the case of 59 (1) Bonds, so as to avoid duplication of work by sending
the same to these departments at the later stage of the cancellation of the relative general Bond on expiry
of its validity period.
(v)
With a view to keep a watch over the balance of Bond amount the Bond clerk should
make clear and suitable debit and credit entries in the relevant columns of the supplementary register,
each time an entry is made for warehousing or clearance and strike the balance. Therefore when the
duplicate into-Bond Bill of Entry is received back from the warehouse keeper or Preventive Officer after
completion of warehousing, the Bond clerk should satisfy himself that the quantity warehoused
corresponds to the quantity in the into-Bond Bill of Entry. If there is any difference, he should make
suitable entries in the supplementary register.
(vii)
Similarly all clearances from the warehouse should be noted in the supplementary register
immediately on receipt of the duplicate Bill of Entry, Shipping Bill, or advice from other port in the
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359
case of transfer under Section 67 of the Customs Act, etc. All entries in the supplementary register,
should be initialled by the Bond clerk and the Superintendent Bonds, who shall check the relevant entries
and balances with reference to the entries made in the Main Bond Registers and in the relevant
documents. The balance column of the register will give the complete picture to indicate whether the
amount in balance would be adequate to cover any further consignment to be warehoused. Where the
value of the goods required to be warehoused exceed the balance available in the Bond, the importer
should be asked to execute either an individual Bond or a general Bond at his option. The consignment
however should not be permitted to be split over two Bonds. If the importer elect to execute another
general Bond, it should also be for a sufficiently large amount so that the earlier general Bond could be
cancelled alter all the consignments Bonded thereunder have been cleared or otherwise duly accounted
for to the satisfaction of the Asst. / Dy. Commissioner (Bonds). The importer will not be permitted to
warehouse any more consignment under the first general continuing Bond.
(vii)
The general Bond along with the supplement register will be put up for audit and
thereafter to Assistant / Dy. Commissioner (Bonds) for cancellation.

There should be no difficulty as to the stamp Duty payable on a general continuing Bond
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(viii)
under Section 59 (2) of the Customs Act. As for the other Bonds the stamp Duty will be governed by the
(ix)
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respective State enactments as may be applicable.
It has been a uniform practice not to take a surety for warehousing Bonds since the
warehouse goods themselves are a security in kind. There is no necessity to deviate from this practice
(x)
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merely because a general continuing Bond is taken.
Since this is a general Bond, each Bonder will have to decide the amount of Bond that he
thinks will suit his requirement. If the value of the goods deposited in the warehouse at any one time
exceed the maximum permissible as fixed by the amount of Bond, he will not be able to warehouse any
(xi)
further goods, till a balance is available in the general Bond.
Even under a general Bond each individual consignment will be entitled to have a life of
one year in Bond. The minimum period of Bond therefore, has to be fixed at something in excess of Bond
period, with provision to terminate the same on either side with three months notice. Such notice shall
operate to suspend fresh warehousing after the period of notice but all consignments warehoused till then
shall stand covered by the Bond upto a period one year or a reduced period from the date of warehousing
unless of course the licence for private warehouse itself is revoked.
[ Boards letter F. No. 3/29/60 Cus. VII dt.2-7-63 Instruction No. 27 of 1963-Bonds & Guarantee ]
[F. No. 473/82/78 Cus. VII dt.20-4-78]
APPENDIX E
Form of General Bond in respect of warehousing of goods under Section 59 (2), Customs Act 62.
The Bond should be executed on a non-judicial stamped paper of appropriate value to be locally
ascertained.
KNOW ALL MEN BY THESE PRESENTS THAT
1. These descriptions should be used when the
importer is the sole proprietor and the
description 2 & 3 are to be deleted in such a
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1.
Shri residing at
.. and carrying on business
under the sole proprietor thereof at
VOLUME I (GENERAL)
360
3. These descriptions are to be used when the

importers is a limited company and the
description 1 and 2 are to be deleted in such a
case.
Hereby
jointly
severally
bind
and
my/our/heirs,
myself/ourselves
executors, administrators, successors
upto the President of India for the payment
of Rs.for which payment I/We
jointly and severally bind ourselves heirs,
executors, administrators and our legal
representatives.
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(A) these words are to be used when the importer

is the sole proprietor and the words marked (B)
and (C) are to be deleted in such case.
(B) these words are to be used when importers are
partners and the words (A) and (C) are to be
deleted in such a case.
(C) these words are to be used when the importer
is a limited company and the words marked (A)
and (B) are to be omitted in such a case.
these underlined words are to be used only
when a partnership firm is the importer. In other
words are to be deleted.
.
We, Shri residing at
Shri
.
.residing at all
carrying on business at ..
under
the
name
and
style
of
M/s. in partnership as partners.
3. M/s a company
incorporated under the Companies Act and
having
its
registered
office
at
.. hereafter called the
obliger (s) which expression shall unless
repugnant to or excluded by the context
mean and include.
(A)
his heirs, executors, administrations and
legal representatives, (B) each one of us
and partners for the time being of the said
M/s
and
the
survivors of them and us and his/our/their
respective
heirs,
executors
and
administrators, (C) its successors.
2.
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case.
2. These description are to be used when the
importers are partners and the descriptions 1 &
3 are to be deleted in such a case.
Dated at this ..day of (month/year)

Signed, sealed and delivered by Shri .duly constituted attorney of
. Limited in the presence of .
WHAREAS (i) the obliger(s) has/have applied to the Assistant Commissioner of Customs at the
Customs Port of hereinafter called the said authority for permission to enter into a
general Bond for the purposes of sub-section (2) of Section 59, Customs Act,1962 (52 of 1962)
hereinafter referred to as the said Act in respect of the warehousing of goods to be imported by him/them
during the period commencing from . and ending on and (ii)
the said authority has given under sec. 59 of the said Act permission in respect of goods to be imported
by obliger(s) during the period from to (both days inclusive)
hereinafter referred to as the permitted period.
2. Now the conditions of the above written Bond are such that: (i)
If the said obliger(s) shall within days from the date of arrival of each
shipment of goods intended to be warehoused give notice in wiring to the proper officer of Customs
stating full particulars of the goods;
(ii)
And if the obliger(s) shall observe in relation to the goods (a) which the obliger(s) may
import from time to time within the permitted period and (b) which the obliger(s) may be permitted from
time to time to deposit in the said warehouse under section 60 of the said Act (hereinafter called the said
goods) all the provisions of the said Act and the rules and regulations to be observed by obliger(s)
warehouse goods in respect of such goods:
(iii)
And if the obliger(s) shall on or before the date or dates specified in notice of demand (as
the case may be) pay to the proper officer of the Customs Port at all duties, rent
and charges claimable whether by way of Customs duties, warehouse charges, rent or other charges if
any, which shall be claimable on the said goods together with interest on the same from the date or dates
so specified in the said notice or notices of demand at the rate of 6% per annum or at such other rate as
is for the time being fixed by the Central Board of Revenue constituted under the Central Board of
Revenue Act, 1924;
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361
(iv)
And if the obliger(s) shall discharge all penalties imposed for violation of the provisions of
the said Act and the rules and regulations in respect of the said goods;
THEN THE ABOVE WRITTEN BOND SHALL BE VOID; otherwise the same shall remain in force
and virtue.
IT IS AGREED AND DECLARED BY THE OBLIGER(S) FOLLOWS: (a)
This Bond shall continue in full force not withstanding the transfer of the goods
warehoused under this Bond to any other person or the removal of the goods to another warehouse,
(b)
Any amount due under this Bond may be recovered in the manner laid down in subsection (i) of Sec. 142 of the said Act without prejudice to any other mode of recovery.
(iii)
This attestation clause is to be used when

the importer is proprietary concern.
IN WITNESS WHEREOF (i) Shri

the sole proprietor of the said M/s has
hereunto set his hand (ii) Shri and Shri
.. as such partners as aforesaid
have hereunto set their hands and (iii) the common
seal of the said M/s .hereunto affixed
in the presence of Directors of
the Company who have here unto set and
subscribed their hands on this .day of
(month/year)..
1.
2.
Signed and delivered by Shri in

the presence of witness:
** Signed and delivered by the said Shri

.and Shri . as such
partners as aforesaid in the presence of ..
Witness:
1.
2.
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** This attestation clause is to be used if the

importer is a partnership firm.
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(ii)
These words will apply if the importer is

a proprietary concern.
a partnership firm.
a limited company.
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(i)
@ This attestation clause is to be used when

the importer is a Limited company.
@ The common seal of the said M/s. is

affixed hereto pursuant to a resolution of the Board
of Directors of M/s dated .
This .. day of in the
presence of Shri .. .. and Shri
..
Directors who have signed these presents in the
presence of:
Witness:
1.
2.
Accepted by Shri .. for and on behalf of the President of India, this

.. day of 19
.
Signature and Designation
APPENDIX F
Form of supplementary Register to be maintained by the Bond Department in the Custom House
in cases where consignment are imported under continuing and general Bonds.
Name and address of Importer:

Name and address of Clearing Agent (if any):
Number of acceptance by the Assistant Commissioner:
Date of Expiry: (in red ink).
Value of the Bond: (a) .. (in figures)
(b)(in words)
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362
Sl
No.
Date
Reference
to the
Main
Bonds
Register
Value of
the
goods
warehou
sed
(Debit
entries.)
Value of the
goods
cleared (i.e.)
home
consumption
shipment exBond or
transferred in
Bonds (Credit
entries).
5
Balance
Initials of
Bond
clerk
Initials of
Superinten
dent
(Bonds)
Remarks
Warehousing Bond-Ship Stores

The Government of India having permitted some Steamer agents to import controlled food-stuff
for purposes of re-export whenever required for the use of ships crew and having also permitted them as
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a special case, to store these articles separately in their Bonded warehouse, it has been decided that the
normal Bond procedure applicable to warehouses where Preventive Officers are exclusively posted,
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should be followed in such cases with the only exception that the prescribed under Section 59 Customs
Act will not apply to these goods and that the applicant will execute ITC Bond to the appropriate
authorities.
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Fraudulent availment of exemption from payment of import Duty under Section 90 and Notfn. No.
211/83 on ship spares and stores for ships
It has come to the notice of the Board that many parties had fraudulently cleared imported cargo
from Bonded warehouses under Sec. 90 of the Customs Act, 1962 Duty free for delivery to Naval Ships.
Similar clearances were also noticed Duty free under Notifn. No. 211/83 for use as ship spares. The
modus operandi in both the cases were to clear the goods from the Bonds and divert them to the local
market. Though they were destined to Shipping Corporation of India and Naval Ships, goods never
reached there.
In all these cases, it was observed that the mandatory provisions for escorting the goods were not
2.
3.
adhered to which facilitated diversion of the goods to domestic market.

Board desires that the provisions regarding clearance and escorting of goods imported as ship
stores or ship spares should be unscrupulously followed. The suitable actions may kindly be taken to
guard against this type of frauds, necessary standing orders to all departmental officers may be
isused/reiterated.
[ Boards Circular No. 8/98 dated 11.2.1998 in F. No. 450/13/98 Cus. IV ]
WAREHOUSING OF BULK OIL

When any of the tanks authorised for receipt/storage of dutiable petroleum in bulk or any
other liquid bulk cargo under Sec. 8(a) of the Customs Act, 1962 are intended as Private Bonded
Warehouse for storage of bulk oil under the provisions of Chapter IX of the Act, the owner is required to
submit application in the following format.
FORM OF APPLICATION FOR GRANT/RENEWAL OF LICENCE FOR PRIVATE BONDED
WAREHOUSE VIDE SECTION 58 OF CUSTOMS ACT,1962
(1)
Particulars of Licence
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363
(i)
(ii)
For an `Individual OR
Incorporate Company
a) Name
b) Address
c) Nature of Business
For a Firm
a) Name of Firm
b) Address
c) Nature of Business
a) Name
b) Address
c) Description
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And the following particulars in respect of each person having any proprietary interest in the firm.
Description of goods to be
warehoused
(3)
Whether the Goods other than those :

Belonging to the licence or for which :
he is an Agent are interested to be :
Warehoused
Particulars of maximum stock :
intended to be held in the warehouse :
at any one time
:
TANK NO. :
..
Quantity
b)
Value C.I.F.
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a)
(4)
A.V.
M.T.
APPROX.
: Rs.
APPROX.
: Rs.
APPROX.
Duty (at rates in force at : Rs.

the time of application)
APPROX.
c)
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(2)
NOTE : In the case of spirit intended for denaturation, this should be separately specified.
(5)
Particulars of maximum stock actually held at any one time under the expiring licence (for use in
case of renewals only.)
(6)
(7)
a)
Date
b)
No. of packages
c)
Value
d)
Duty
Particulars of any changes in

proprietorship of the firm since :
dated of last renewal (to be filled in
only by firms applying for renewal)
Particulars of premises to be
licensed
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:
:
VOLUME I (GENERAL)
364
a)
Name and Address of owner
b)
Place at which situated :
c)
Dimensions
i) Diameter
ii) Height
Distance from the Custom

House
d)
NOTE : If more than one godown is to be licensed, separate particulars should be given for each if
necessary in separate sheet.
(8)
Name & Address of Banker

or other person to whom reference
may be made regarding the financial
status of the licences
:
:
:
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We declare the above particulars to be true and apply for the grant/renewal of the licence under Section
58 of the Customs Act, 1962 in accordance therewith.
DATE
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PLACE :
:
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Along with the format, the applicant should submit, Solvency Certificate issued by Bank Insurance
Policy, empty dip memo Duty certified by the Preventive Officer, & valid calibration chart.
The concerned Asst. Commissioner should grant licence for tank on partys compliance of
conditions as laid down in Circular Nos. 68/95 dtd. 15.6.95 and 99/95 dtd. 20.09.95 issued in F.No.
473/61/94 LC and Circular No. 28/96 dtd. 14.05.96 issued in F.No. 473/14/96 LC.
As regards, warehousing of the bulk oil, please see Chapter on oil for procedure in respect of
discharge and clearance of liquid cargo in bulk for home consumption/warehousing in Bonded
warehouse.
PERIOD FOR WHICH GOODS MAY REMAIN WAREHOUSED

Section 61 of Customs Act,1962 stipulates that
(1) Any warehoused goods may be left in the warehouse in which they are deposited or in any
warehouse, to which they may be removed, (a) in the case of capital goods intended for user in any hundred per cent export oriented
undertaking, till the expiry of five years; and
(b) in the case of any other goods, till the expiry of one year, after the date on which the proper
officer has made an order under Section 60 permitting the deposit of the goods in a
warehouse;
Provided that
(i)
in the case of any goods which are not likely to deteriorate, the period specified in Subsection(1) may, on sufficient cause being shown, be extended by the Commissioner of
Customs for a period not exceeding six months and by the Chief Commissioner of
Customs for such further period as he may deem fit;
(ii)
in the case of any goods referred to in clause (b), if they are likely to deteriorate, the
aforesaid period of one year may be reduced by the Commissioner of Customs to such
shorter period as he may deem fit:
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Provided further that when the licence for any private warehouse is cancelled, the owner of any
goods warehoused therein shall, within seven days from the date on which notice of such cancellation is
given or within such extended period as the proper officer may allow, remove the goods from such
warehouse to another warehouse or clear them for home consumption or exportation.
(2) Where any warehoused goods
(i)
specified in sub-clause (a) of sub-section (1), remain in a warehouse beyond the period
specified in that sub-section by reason of extension of the aforesaid period or otherwise,
interest at such rate as is specified in section 47 shall be payable, on the amount of Duty
payable a the time of clearance of the goods in accordance with the provisions of section
15 on the warehoused goods, for the period from the expiry of the said warehousing
period till the date of payment of Duty on the warehoused goods;
(ii)
specified in sub-clause (b) of sub-section (1), remain in a warehouse beyond a period of

six months, interest shall be payable at such rate or rates exceeding the rate specified in
section 47, as may be fixed by the Board, on the amount of Duty payable at the time of
clearance of the goods in accordance with the provisions of section 15 on the
payment of Duty on the warehoused goods:
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warehoused goods, for the period from the expiry of the said six months till the date of
Provided that the Board may, if it considers it necessary so to do to in the public interest, by order
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and under circumstances of an exceptional nature, to be specified in such order, waive the whole or part
of any interest payable under this section in respect of any warehoused goods:
Provided further that the Board may, if it is satisfied that it is necessary so to do in the public
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interest, by notification in the Official Gazette, specify the class of goods in respect of which no interest
shall be charged under this section.
Explanation.- For the purpose of this section, hundred per cent export oriented undertaking has
the same meaning as in Explanation 2 to sub-section (1) of section 3 of the Central Excises Act, 1944.
DUTY ON GOODS AFTER EXPIRY OF WAREHOUSING PERIOD

Attention is drawn to Boards instructions as contained in F. No. 473/206/87-Cus-VII dated
1.
12.7.89 on the above mentioned subject wherein it was clarified that on expiry of the permissible or
extended warehousing period the goods kept in a warehouse cease to be warehoused goods and
therefore, their removal from the warehouse cannot be regarded as covered by the provisions of section
15 (1) (b) of the Customs Act. It was also noted that there was no specific legal provision to determine the
rate of Duty in such cases of warehoused goods where the Bond period has expired. It was accordingly
concluded that the residual clause of Section 15 (1) (c) of the Customs Act could apply after expiry of the
warehousing period and that the rate of Duty in such cases shall be the rate prevalent on the date of
payment of Duty.
2.
The issue has been re-considered in the light of Honble Supreme Courts judgement (in Civil
Appeal No. 4459 of 1989) delivered on August 23, 1996 in the case of Kesoram Rayon vs.
Commissioner of Customs, Calcutta 1996 (66) report. In the said judgement the Honble Apex Court
has held that goods which are not removed from a warehouse within the permissible or extended period
are to be treated as goods improperly removed from the warehouse. In such a case the importer is
required to pay the full amount of Duty chargeable on the goods together with interest, penalties, rent and
other charges. It was further held that the Duty would be chargeable at the rate applicable on the date of
their deemed removal from the warehouse, that is, the date on which permitted or extended period
expired.
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3.
In other words, a clear interpretation of the Honble Supreme Courts judgement is that the date of
payment of Duty in the case of warehoused goods removed after the expiry of the permissible or
extended period would henceforth be the date of expiry of the warehousing period or such other extended
period as the case may be and not the date of payment of Duty.
4.
The amended instructions in the light of the Honble Supreme Courts judgement as aforesaid
under para 2 and 3 may be implemented with immediate effect. These instructions supersede Boards
instructions issued vide F.No. 473/206/87-Cus VII dated 12th July,1989.
[ Boards Circular No. 31/97 dtd. 14.08.97 in F.No. 473/29/97-LC ]
APPLICATION BEFORE EXPIRY OF WAREHOUSED PERIOD

Section 61 of the Customs Act, 1962 lays down the period for which the imported goods can be
warehoused. The first proviso to this Section provides that the period of warehousing prescribed, on
sufficient cause being shown, can be extended for a period not exceeding 6 months by Commissioner of
2.
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Customs. Further extension in the period can be granted by the Chief Commissioner of Customs.
A doubt has arisen whether extension in the warehousing period can be granted when the
61 of the Customs Act, 1962 is silent on this issue.
In order to arrive at a uniform practice in granting such extensions, the matter was examined in
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application for extension is moved after the expiry of the initial or extended warehousing period. Section
consultation with Ministry of Law. Consequently, it has been decided that the importers may be advised
to file such application for extensions in the warehousing period to the proper authority well before the
expiry of initial/extended period of warehousing.
4.
However, in cases of exceptional circumstances, the extensions in the warehousing period can
be considered and granted even after the expiry of initial/extended warehousing period. In all such
cases, the jurisdictional Chief Commissioner may himself decide the request for extension after taking
into consideration the exceptional circumstances, the nature of the commodity, the rate of duties,
involved etc.
particularly, whether the same results in loss of revenue to the Government, the licensing aspects
[ Boards Circular No. 12/98 Cus dtd. 5.3.1998 in F.No. 473/30/97-LC ]

WAREHOUSING LEVY OF INTEREST ON THE CUSTOMS DUTY UNDER SECTION 61 OF THE
CUSTOMS ACT, 1962
Vide Finance Act, 1994, Section 61 of the Customs Act, 1962 was amended and the normal
warehousing period in respect of capital goods warehoused by 100% EOUs have been fixed for five
years which is further extendable. Further, the Board has been vested with powers under section 61(2) to
specify class of goods in official Gazette in which no interest on Duty shall be chargeable consequent to
the amendment in the Finance Act, 1994 representations have been received from different sectors of the
industry requesting for issuing necessary notification under Section 61(2) exempting their warehoused
goods from payment of interest on Customs Duty.
2.
The Board has examined the matter and identified certain class of goods in which cases interest
on Duty would not be chargeable at the time of their clearance from the warehouse.
Accordingly,
notification No. 67/95 (NT)-Customs dtd. 1.11.95 payable on the goods warehoused under Chapter IX of
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the Customs Act, 1962 and specified in the Table to the above mentioned notification at the time of
clearance from the Customs Bonded warehoused under Section 68 ibid.
3.
After issue of the notification, a doubt has arisen as to whether the goods which have been
warehoused prior to the amendment of the Customs Act and issue of the notificatio0n and intended to be
cleared for home consumption are eligible for exemption from payment of interest on Duty under the
aforesaid notification at the time of clearance from the warehouse. The matter has been examined by the
Board in the light of the opinion given by the Ministry of Law on 11.3.85 and decided that since the
warehoused goods have not been cleared for home consumption as on the date of amendment to
Customs Act, 1962 (1994-95) as well as the issue of notification, the benefit of notification No. 67/95
(NT)-Customs, dated 1.11.95 should be extended to these goods. However, the capital goods imported
by 100% EOUs and de-bonded prior to amendment of section 61 of the Customs Act, 1962 vide Finance
Act, 1994 would continue to be governed by the old provisions.
4.
5.
( Not reproduced here )

Representations have also been received by the Board from various quarters of trade and
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industry for discontinuation of practice of issuing interest demand notices issued at the time of extension
in warehousing period or otherwise. It has been represented that the interest on the Customs Duty is to
be collected only at the time of clearance of the goods from the warehouse for DTA and as such the
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demand notice appears necessary only at the stage of clearance and not each time the extension is given
to the Bond period.
The matter has, accordingly, been examined by the Board. It has been observed that the practice
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6.
of issuing the interest demand notices at the time of granting extension of warehousing period would not
be proper because consequent to coming into force of the Finance Act, 1994-95 interest on warehoused
goods is to be calculated with reference to the Duty payable at the time of clearance of goods from the
warehouse. Accordingly, it has been decided that the interest may be collected at the time of clearance of
the goods from the warehouse. In cases where there is a policy to waive interest in terms of Boards
circular F. No. 475/82/92/LC dated 27.12.93, demand notices may be issued but may not be enforced till
the issue of waiver of interest is decided. The instructions of the Board contained in circular F. No.
475/42/91-Cus VII dated 6.6.91, F. No. 475/37/92-LC dated 2.12.92 and F. No. 475/59/92-LC dated
16.2.93 are no more relevant in view of the fact that the interest amount will also be nil in cases where the
3.
Duty payable at the time of clearance of goods from the warehouse is nil. Further, in any case, interest
can be quantified only at the time of clearance of goods from the warehouse. All the field formations may
be suitably advised in this regard.
7.
The Board has also decided that the demand notices already issued may be decided in terms of
the instructions contained in Boards circular F. No. 475/82/92-LC dated 27.12.93 & 10.2.94 laying down
the guidelines for waiver of the interest by the Chief Commissioner of Customs & Central Excise, any
difficulties arising on account of these instructions may be brought to the notice of the Board immediately.
[ Boards Circular No. 31/96 Dtd.7.6.96 in F. No. 475/32/94-LC ]
Fixation of interest on the warehoused goods not cleared within six months
Attention of the trade, and more specifically of the 100% EOUs the importers and exporters and
CHAs is invited to Boards instructions issued vide F. No. 473/24/97-LC dated 12.5.99 on the subject
matter of interest to be charged on warehoused goods.
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368
Public Notice No. 75/99 dated 01.07.99 is issued in pursuance of order conveyed by Board vide
telex F. No. 473/24/97-LC dated 12.05.99.
Rate of interest chargeable on the good warehoused but not cleared within six months from the
date of warehousing will be as below:
Sr. No.
Duration of Warehousing
Rate of interest
1.
6 to 09 months
12% p. a.
2.
9 to 12 months
16% p. a.
3.
Beyond 12 months
20% p. a.
[ Public Notice No. 75/99 dated 01.07.99 issued by Commissioner of Customs (EP) Mumbai in F.
No. S/6-Gen-21/99 EOU ]
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Waiver of interest on the Customs duty

Reference correspondence resting with the Boards instructions of even number dated
27.12.1993 on the subject mentioned above and to say that in para 3 of the said instructions it has been
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sated that in respect of goods imported by 100% EOUs waiver of interest shall be considered on
completion of the export obligation period. It has, however, been observed by the Board that certain
100% EOUs do not fulfill their export obligation and are allowed pre-mature debonding by the competent
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authority (SIA). Since waiver of interest is considered based on the principle that the imported goods are
ab-initio not cleared/intended to be cleared for home-consumption on payment of duty and are meant for
export out of India, in the circumstances where the unit was pre-maturely debonded without going into
production or without export, the Board had decided that in such cases, interest waiver does not merit
consideration. Only in very exceptional circumstances the interest waiver would be considered in such
cases.
It is, therefore, requested that the above decision may be kept in mind while deciding the cases
for waiver of interest in respect of goods imported by 100% EOUs.
[Boards letter F. No. 475/82/92-LC, dated 10.02.1994
CONTROL OVER WAREHOUSES/ WAREHOUSED GOODS

Section 62 of the Customs Act, 1962 stipulates that
(1) All warehoused goods shall be subject to the control of the proper officer.
2) No person shall enter a warehouse or remove any goods therefrom without the permission of the
proper officer
(3) 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.
(4) The proper officer shall have access to every part of a warehouse and power to examine the goods
therein.
Section 63 of the Customs Act, 1962 stipulates that

(1) The owner of any warehoused goods shall pay to the warehouse-keeper rent and warehouse charged
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.
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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
sufficient portion of the goods as the warehouse-keeper may select.
Section 64 of the Customs Act, 1962 prescribes that

With the sanction of the proper officer and on payment of the prescribed fees, the owner of any
goods may either before or after warehousing the same (a) inspect the goods;
(b) separate damaged or deteriorated goods from the rest;
(c) sort the goods or change their containers for the purpose of preservation, sale, export or
disposal of the goods;
(d) deal with the goods and their containers in such manner as may be necessary to prevent loss
or deterioration or damage to the goods;
(e) show the goods for sale; or
permits, without payment of Duty on such samples.
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Section 65 of the Customs Act, 1962 prescribes that
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(f) take samples of goods without entry for home consumption, and if the proper officer so
(1) With the sanction of the [Assistant Commissioner of Customs] and subject to such conditions and on
payment of such fees as may be prescribed, the owner of any warehoused goods may carry on any
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manufacturing process or other operations in the warehouse in relation to such goods.
(2) Where in the course of any operations permissible in relation to any warehoused goods under subsection (1), there is any waste or refuse, the following provisions shall apply: (a) if the whole or any part of the goods resulting from such operations are exported, import Duty
shall be remitted 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 exported.
Provided that such waste or refuse is either destroyed or Duty is paid on such waste or
refuse as if it had been imported into India in that form;
(b) if the whole or any part of the goods resulting from such operations 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.
MANUFACTURE AND OTHER OPERATIONS IN WAREHOUSE REGULATIONS, 1966

In exercise of the powers conferred by section 157 of the Customs Act, 1962 (52 of 1962), the
Central Board of Excise and Customs hereby makes the following regulations, namely: 1. Short title and commencement. These regulations may be called the Manufacture and Other
Operations in Warehouse Regulations, 1966.
(2) They shall be deemed to have come into force on the 4th day of June, 1966.
2. Definitions. For the purpose of these regulations, unless the context otherwise requires
(i)
Act means the Customs Act, 1962 (52 of 1962);
(ii)
manufacturer means the owner of any warehoused goods to whom sanction has been
accorded under regulation 5;
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370
(iii)
proper form means such form as the Assistant / Dy. Commissioner of Customs may
require to be adopted.
3. Owner to make applications. (a) The owner of any goods warehoused under the Act
intending to undertake any manufacturing process or other operations in the warehouse in relation to
such goods shall make an application to the Assistant / Dy. Commissioner of Customs in the proper form
and furnish inter alia (i)
information regarding the nature of the manufacturing process or other operations;
(ii)
particulars of imported and other goods proposed to be used in the manufacturing

process or other operations;
(iii)
the detailed plan and description of the warehouse; and
(iv)
data regarding the volume of trade anticipated of the manufacturing process or other
operations; and
(v)
the applicant shall, on being called upon to do so, furnish such other information as may
be required.
4. Execution of Bond : The Assistant / Dy. Commissioner of Customs may, if he is satisfied that
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the applicant has carried out such alternations to the warehouse premises as may be required for this
purpose and that the volume of trade and other considerations justify grant of sanction direct the applicant
to file a Bond, undertaking inter alia toobserve all the provisions of these regulations;
(ii)
maintain detailed accounts of all imported and other goods used in the manufacturing
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(i)
process or other operations in the proper form and to produce such accounts for
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inspection by the proper officer;
submit detailed statements of all imported and other goods used in the manufacturing
(iii)
process or other operations and those remaining in stock, at any time the proper officer
directs;
provide to the officers of Customs office space, wherever required, and access to
(iv)
warehouse, for control and supervision of the manufacturing process or other operations
Customs;
or imported and other goods as may be specified by Assistant/ Dy. Commissioner of
pay all the charges including pay, allowance, leave and pensionary charges of such
(v)
officers as may from time to time be posted by the Assistant / Dy. Commissioner of
Customs in the warehouse for supervision and control of the manufacturing process or
other operations, or imported and other goods;
comply with such conditions as may be imposed by the Assistant / Dy. Commissioner of
(vi)
Customs from time to time for carrying out the purpose of these regulations and the Act.
5. Grant of sanction. On execution of the Bond, in the manner hereinbefore provided, the
Assistant Commissioner of Customs shall accord sanction to the applicant to carry on such manufacturing
process or other operations specifying:
(a) the manufacturing process or other operations permitted to be carried on in the warehouse;
(b) the types and nature of imported and other goods permitted to be used;
(c) the period for which the sanction is valid; and
(d) the conditions if any, subject to which the manufacturing process or other operations may be
carried on in the warehouse.
(e) the input-output norms, wherever considered necessary, for the raw materials and the
finished goods.
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6. Conditions that may be imposed by the Assistant / Dy. Commissioner of Customs. The
Assistant / Dy. Commissioner of Customs may from time to time:
(i)
Omitted
(ii)
determine the number of Customs officers that may be attached to the warehouse for
purpose of supervising the manufacturing process or other operations;
(iii)
fix the sum payable by the manufacturer towards the cost of such establishment and the
extra charges payable towards the overtime services, if any, performed by such
establishment at the request of the manufacturer; and
(iv)
Omitted
7. Omitted
8. Omitted
9. Maintenance of accounts. The manufacturer shall maintain accounts relating to stocks, raw
materials, goods in process, finished goods, waste and refuse in proper form:
Provided that where the manufacturer maintains for his own purpose such detailed accounts and
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has carried out such alternations in the form of accounts as may be required in this behalf, the Assistant /
Dy. Commissioner of Customs may in his discretion direct such forms of accounts to be adopted as the
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proper form.
10. Accounts to be accessible to Customs Officer. The proper officer may, at any time,
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inspect or call for the accounts and connected records for scrutiny.
11. Special audit in certain cases:
(i)
The Chief Commissioner of Customs may, for reasons to be recorded in writing, direct a
manufacturer to get the accounts of his warehouse, office, stores, godowns, factory,
depot, or other establishment audited by a Cost Accountant, nominated by him in this
behalf.
The Cost Accountant, shall submit the audit report duly signed and certified by him within
(ii)
the period specified by the Chief Commissioner of Customs, or such extended period as
may be allowed by him, to the Commissioner, giving therein such other information or
particulars as may have been asked for by the Chief Commissioner.
(iii)
The provisions of sub-regulation (I) shall be in addition to, and not in derogation of any
other law for the time being in force.
(iv)
The expenses of, and incidental to, such audit (including the remuneration of the Cost
Accountant) shall be determined by the Chief Commissioner and paid by the
manufacturer and in default of such payment shall be recoverable from the manufacturer
in the manner provided in section 142 of the Customs Act, 1962 (52 of 1962).
(v)
The manufacturer shall be given a copy of the audit report conducted in pursuance of
sub-regulation (1) who may make a representation, if he so likes.
Explanation: For the purpose of this regulation Cost Accountant shall have the meaning
assigned to it in clause (b) of sub-section (1) of section (2) of the Cost and Works Accountant Act, 1959
(23 of 1959).
13. Manufacturer to give notice before suspending or discontinuing the manufacturing
process or other operations. No manufacturer shall suspend or discontinue the manufacturing process
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372
or other operations authorised to be carried on in the warehouse without giving in writing to the Assistant /
Dy. Commissioner of Customs one months notice of his intention so to do:
Provided that in any particular case the aforesaid period of one month may, on sufficient cause
being shown, be reduced by the Assistant / Dy. Commissioner of Customs by such period as the
Assistant / Dy. Commissioner may deem fit:
14. Cancellation and suspension of sanctions. If the manufacturer or any person in his employ
commits a breach of the provisions of the Act or the terms and conditions imposed by or under these
regulations or if the particulars furnished in the application for sanction are false or incorrect, or if any
undertaking given in the Bond is not fulfilled the Assistant / Dy. 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:
Provided that before the sanction is cancelled the manufacturer shall be given reasonable
opportunity of being heard.
15. Repeal. The rules and Regulations specified in the Schedule to these regulations appended
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SCHEDULE
(see Regulation 15)
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below shall cease to be in force except as respects things done or omitted to be done before such cesser.
1. Rules prescribed for the purpose of operation on goods in a warehouse Wines and Spirits
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vide late C.B.R. Notification No. 56, dated the 2 July, 1927, as amended by notification No. 29-Cus.,
dated the 16th May, 1931 and No. 11-Cus., dated the 22nd January, 1938.
2. Rules for the manufacture of cigarettes in Bond from unmanufactured foreign tobacco imported
and warehoused under the provisions of section 92 of the Sea Customs Act at an inland Bonded
warehouse - late C.B.R. Notification No. 34-Cus., dated the 30th May, 1942.
3. Rules for the manufacture of cigarettes or tobacco in Bond from unmanufactured foreign
tobacco imported and warehoused under the provisions of section 92 of the Sea Customs Act (late
C.B.R. Notification No. 54-Customs, dated the 25th October, 1941, as amended by Notification No. 8Customs, dated the 17th April, 1943 and No. 62-Customs, dated the 8th July, 1950).
4. Rules for manufacture of complete Gramophone machine (including electric gramophones) in

Bond late C.B.R. Notification No. 9-Customs, dated the 13th July, 1946).
5. Rules for the free-entry at the Madras Custom House of unmanufactured foreign tobacco
imported for the manufacture of cigars intended for export to foreign ports (Notification dated the 1st
November, 1910, published on page 1685-86 of Part II of the Fort St. George Gazette, dated the 8th
November, 1910 as amended by Notification dated the 22nd May, 1920 published on page 1051 of Part II
of the Fort St. George Gazette, dated the 1st June, 1920, late C.B.R. Notification No. 79-Customs, dated
the 5th December, 1936, Notification No. 12-Customs, dated the 22nd January, 1938 and No. 47-Customs,
dated the 12th October, 1940).
6. Rules to regulate the canning of motor spirit and kerosene oil from the stock imported and
warehoused in a Bonded tank at Bombay (late C.B.R. Notification No. 5-Customs, dated the 5th
January, 1935 as amended by Notification No. 70-Customs, dated the 26th March, 1938).
7. Rules for the manufacture or repairs of vessels from material imported by the Hindustan
Shipyard Ltd., Visakhapatnam etc. (late C.B.R. Notification No. 78 -Customs, dated the 7th August, 1954
as amended by C.B.R. Notification No. 63-Customs, dated the 3rd June, 1961).
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8. Motor Vehicles (Manufacture-in-Bond) Rules, 1956-(late C.B.R. Notification No. 97-Customs,

dated the 6th November, 1956).
9. Rules for the manufacture or re-manufacture of cigarettes or tobacco in Bond from indigenous
or imported Duty paid tobacco or cigarettes and unmanufactured imported tobacco warehoused under the
provision of section 92 of the Sea Customs Act (late C.B.R. Notification No. 22-Customs, dated the 29th
June, 1957).
10. The handicrafts (Manufacture-in-Bond) Rules, 1958 (C.B.R. Notification No. 229-Customs,
dated the 13th August, 1958).
11. The manufacture-in Bond (General) Rules, 1960 (late C.B.R. Notification No. 15-Customs,
dated the 27th February, 1960).
[ Notfn. No. 155/66-Cus. dated 30.7.1966 as amended by Notfn. No. 44/98- Cus. dated 2.7.1998 ]
Grant of In-Bond Manufacture facility Under Section 65 of The Customs Act, 1962
It is to state that a review of the existing policy with regard to grant of in-Bond Manufacture facility
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under Section 65 of the Customs Act, 1962 has been conducted by the Board. Consequent to the review,
it has been decided that the requests for grant of in-Bond Manufacture facility under Section 65 of the Act
will henceforth be considered and decided at the level of the Commissioners without making any
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reference to the Board. The following guidelines may however, be kept in view while deciding such
requests.
2. The Boards policy has been to extend the facility mainly to export oriented units so that
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unnecessary difficulties to pay Duty and later claim drawback can be avoided. In order to decide whether
an Industrial unit is export-oriented or not, the following figures may be compared; (a) Total value of goods manufactured by using imported raw materials;
(b) Total value of such finished goods exported; and
(c) Total value of such finished goods retained for domestic sale.
3. Flexible approach may, however, be adopted in the matter so that there is no instance that the
exports have to be less than 50% of imported materials. Further the Manufacture-in-Bond operations are
required to be carried out under Customs supervision on cost recovery basis. The Commissioners may
carefully scrutinise the applications for grant of in-Bond manufacture facility and if the applicants
financially secure, has good credibility, and has not been involved in Customs or Excise Duty evasion in
the preceding 5 years in the normal course, an in-Bond manufacture licence under Section 65 may be
granted. This would, of course, be subject to the condition that the premises are suitable and adequately
secured. While granting the requests, the provisions of the Manufacture and other operations in
Warehouse Regulations, 1966 have also to be complied with.
[ M.F. (DR) Circular No. 132/95-Cus. dt.22.12.1995 in F. No. 473/61/94-LC ]
Power to exempt imported materials used in manufacture of goods in warehouse
As per Section 66 of the Customs Act,1962 if any imported materials are used in accordance
with the provisions of section 65 for the manufacture of any goods and the rate of Duty leviable on the
imported materials exceeds the rate of Duty leviable on such goods, the Central Government, if satisfied
that in the interests of the establishment or development of any domestic industry it is necessary so to do,
may, by notification in the Official Gazette, exempt the imported materials from the whole or part of the
excess rate of Duty.
REMOVAL OF GOODS FROM ONE WAREHOUSE TO ANOTHER
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374
As per Section 67 of the Customs Act, 1962 the owner of any warehoused goods may, with the
permission of the proper officer, remove them from one warehouse to another, subject to such conditions
as may be prescribed for the due arrival of the warehoused goods at the warehouse to which removal is
permitted.
(i)
Application for removal of goods from one warehouse to another under the provisions of Section
67 of the Customs Act will be presented in the prescribed form vide Appendix 11 to the Bond clerk.
(ii)
The Bond clerk will see that the particulars in the application agree with the entries in the Bond
Register, note therein the receipt of the application and submit it to the Assistant Commissioner for his
orders. The orders will be endorsed on the application which will then be returned to the owner.
(iii)
If permitted, the file will be forwarded to the Preventive Department to depute, on receipt of an
application from the owner, an officer to supervise the transfer of the goods, if no Customs officer is
posted in charge of the warehouse, to or from which the goods are to be removed.
(iv)
The owner will present the application to the Officer, if any, in charge of the warehouse from
which the goods are to be removed or to the officer deputed to supervise the removal. This officer will
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allow delivery of the goods, endorse the application and make a note in the stock list to that effect and
the goods will be transported under the supervision of the Officer deputed for the purpose.
(v)
On arrival of the goods at the warehouse where the goods are to be deposited, the supervising
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Officer or the Officer in charge, if there be one, will see that the goods covered by the application are
duly stored in the warehouse and will make an endorsement to that effect on the application which will
then be returned by the supervising Officer to the Bond Clerk.
The Bond Clerk will make a note of the transfer of the goods in the Bond register and forward the
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(vi)
application in the usual course to the warehouse keeper to be filed with the relative original into-Bond Bill
of Entry.
(vii)
In the case of bulk oil transfers the Bond Clerk will, on receipt of the file from the oil Appraiser,
note the complete particulars of the transfer in the Bond Register and make necessary endorsements
forwarded to IAD for scrutiny.
On receipt of the oil transfer files, the Bond Clerk will recover Duty on the unaccountable loss and
(viii)
the transfer loss and if there be any gain, proceed with the refund when a claim is received from the
Bonders.
He will finally note the amount of Duty recovered in the Bond register with full particulars of the bill
(ix)
number and date and forward the file to records to be filed with relative Bond documents.
Removal of goods by sea under Section 67 of the Act
In case of goods to be shipped from Bond under the provisions of Section 67 of the Customs Act,
the following procedure will be observed.
(a)
The owner will prepare a Shipping Bill in triplicate in the prescribed form with the words `From
Bond written prominently in red ink at the top of each copy and present the documents to the Bond Clerk
along with a Bond in the prescribed. One Bond is sufficient for all goods shipped by the same Shipper by
the same ship even though the goods are covered by more than one Shipping Bill (vide C.B.R. Letter D.
Dis. No. 15-Cus.1/40 dated the 29th January, 1940). The Bond Clerk will
(i)
satisfy that the goods are entered for shipment to a warehousing port; and that the warehousing
licence at the other end is valid and would accommodate the goods sought to be transferred. (A
certificate to this effect should be obtained from the Asst. Commissioner of Customs/Central
Excise/Superintendent (Customs)/Central Excise in charge of the warehouse and present along with the
transfer application);
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375
(ii)
compare and record the particulars of goods entered for shipment against the entries in
the Bond register;
(iii)
check the Bond to see that it is correctly prepared and stamped;
(iv)
take necessary action to recover charges, if any, leviable on the goods; and
(v)
endorse and initial the order in the Shipping Bill permitting shipment of the goods under
Section 67 and submit the documents with the Bond to the Assistant Commissioner for
signature of the order and acceptance of the Bond.
(b) (i) On receipt of the duplicate and triplicate shipping bills from the Export Department, the
owner will obtain form the Preventive Department, the services of an officer to supervise the removal and
shipment of the goods, and will present the documents to the warehouse keeper, or in the case of a
private warehouse, to the officer to issue the goods therefrom.
(ii) The warehouse keeper or the officer deputed to issue the goods will allow delivery after
satisfying himself that rent has been recovered, if leviable and that Duty on deficient contents, if any,
found after examination of the outwardly defective packages has been collected, note the clearance of
the goods on the relative stock list and on the duplicate Shipping Bill and hand over the duplicate and
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triplicate Shipping Bill to the supervising officer.
(iii) The supervising officer should satisfy himself as to the condition of the packages before
removal and if found to be in good order, he should make an endorsement to that effect on the reverse of
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the Shipping Bill. If, on the other hand, any package is found to be broken or tampered with, then he
should open and examine the package in the presence of the shipper or his representative, prepare a list
of the contents thereof and note therein the condition of the package and should sign and date the list
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and should also get the shipper or his representative to sign the list. He should thereafter proceed with
the shipment. The list with the report as to the condition of the packages should be forwarded to the Bond
clerk in the Import Department who should obtain the invoice for the package to ascertain whether there
is any shortage on which Duty should be recovered under the Bond.
(iv) After the goods have been shipped under supervision, the supervising officer will make a
note of the fact on the reverse of the Shipping Bill, hand over the triplicate copy of the ships officer and
send the duplicate to Bond Department.
(v) The Bond clerk will deal with the Shipping Bill as in the case of free goods and prepare an
advice in the prescribed form (C.B.R. Cus.33) for despatch to the Customs officer at the port of
destination after verifying whether the goods have been actually shipped.
(vi) On receipt of intimation regarding the due arrival and rewarehousing or clearance of the
goods at the port of destination, the Bond Clerk should
(a) after audit put up the Bond to the Assistant Commissioner to cancellation;
(b) complete the entries in the Bond Register and submit the Shipping Bills with the register to
the Superintendent Import & Bond Department, for check of the clearance posted and initial
of the register in token thereof;
(c) send the Shipping Bills to the I.A.D. with the registers.
Removal of goods by inland carriage under Section 67
(i) The procedure is the same as described in preceding paragraph except that the Customs
Officer deputed for supervision will accompany the goods to the Booking Office and after they are
consigned to the Officer in charge of the warehouse where the goods are to be deposited send the
railway receipt with the application to the Bond Clerk.
(ii) The Bond clerk will despatch the railway receipt with a covering advice signed by he Assistant
Commissioner to the officer to whom the goods are consigned.
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376
(iii) On receipt of the intimation from the officer in charge of the warehouse to which the goods are
consigned regarding the arrival of and rewarehousing of the goods, the Bond filed under section 67 of the
Act will be cancelled by the Assistant Commissioner.
Detection of irregularities in clearance of goods from bonded warehouse
Several instances of irregularities in the clearance of goods from Bonded Warehouses have
come to the notice of the Board.
2.
Board desires that suitable instructions may be issued to all field officers to be alert against any
such irregularities and in particular follow the following procedure:

(i)
The goods should be stored in Bonded Warehouses only after due examination. Reverse of the
Bill of Entry must confirm the veracity of the declared description with the distinctive identification
marks of the subject goods.
(ii)
At the time of actual removal of the goods from the warehouse, the declared description of the
goods recorded on the Warehousing Bill of Entry, should be tallied with the description declared
(iii)
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on the ex-bond (Green) Bill of Entry.
There should be regular audit and inspection by the senior officers and the Customs House audit
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parties so that the nature, quantity, number and other relevant particulars with reference to the
concerned documents are verified. The exercise could be once in six months for audit parties
supported by surprise checks by senior officer.
The records of bonded goods in the Customs Houses, as far as possible, should be
computerised.
(v)
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(iv)
It should also be made mandatory for the Central Warehousing Corporation and other
warehouses to submit status report as regard the consignments pending for one year and above.
The position can then be cross checked in the Customs House where the warehousing Bills of
Entry had originated.
Action under Section 72 of the Customs Act, 1962 must be initiated on expiry of the warehousing
(vi)
period.
All cases where goods continue to lie in the warehouse after the expiry of warehousing period
(vii)
should be specially taken up for scrutiny by the audit parties and other checks in order to guard
against deterioration, substitution or any other unlawful removal.
[ Boards Circular No. 52/98-Cus., dated 27.07.1998 from F. No. 473/13/98-LC ]
Transport of goods in Bond from the warehousing Port to another by motors, trucks or lorries:
This concession should be allowed only in special cases and to firms and carriers of repute. The Custom
House should satisfy itself about the standing of the Transport Company and their security arrangements
before allowing any particular consignment to be transported by road. It should also exercise due care at
the time of accepting the sureties for the Bonds, that the Government revenue is adequately safeguarded.
The Bonders should also be asked to furnish a Bond to cover the I.T.C. penalty in cases, where
an I.T.C. licence had not been produced at the time of warehousing.
[ Boards letter F. No. 3/53 58-Cus. VII dated 5.11.1959 ]
Transfer of imported goods for re-warehousing from major port to inland warehousing station
( A ) Please refer to the correspondence resting with Boards letter F. No. 473/25/90-CUS-VII,
dated 30.09.1991 on the above subject and to say that as a measure of further relaxation it has been
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377
decided that only 5% bank guarantee alongwith the transit bond equal to the amount of duty may be
insisted from 100% EOU / EHTP / EPZ units in respect of capital goods and raw material / components /
consumables etc. for the first three years of operation, on the condition that re-warehousing certificates in
respect of the consignment cleared should be produced within three weeks of the despatch, failing which
the next consignments may be allowed only on transit bond supported by 100% Bank Guarantee. Further,
if the unit concerned has properly installed the capital goods, produced and exported goods in terms of
the requirements, and also produced re-warehousing certificates as stipulated above, then on the basis of
the recommendation of the Commissioner of Customs / Central Excise (as the case may be) the unit may
be allowed in-bond movement on furnishing a Bond without Bank guarantee for subsequent imports,
whether of capital goods or other goods. This would, however, again be subject to the condition that the
unit continues to provide the re-warehousing certificate within three weeks of despatch.
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2.
The Boards instruction dated 30 November, 1991 may be considered modified to the above
extent.
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[ Boards Circular No. 29/95, dated 29.03.1995 from F. No. 473/6/95-LC ]
( B ) Please refer to Boards Circular No. 29/95, dated 29th March, 1995 (issued from F. No.
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473/6/95-LC) on the above subject and to say that as a measure of further relaxation, it has been decided
to do away with the requirement of 5% Bank Guarantee in the case of imported goods of 100% E.O.Us /
EHTP / STP and EPZ Units. However, a transit bond or an insurance policy equivalent to the amount of
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duty involved may be obtained on the condition that re-warehousing certificate would be submitted within
a period of 30 days from the date of despatch of the goods from the port / airport of import. Where the
party fails to produce the re-warehousing certificate within 30 days consecutively for more than three
consignments, he would be required to support their Bond with 100% Bank Guarantee.
2.
The Boards instructions dated 29th March, 995 may be considered modified to the above extent.
You are, therefore, requested to issue suitable instructions to the field formation.
[ Boards Circular No. 41/97-Cus., dated 19.09.1997 from F. No. 473/31/97-LC ]
REMOVAL OF WAREHOUSED GOODS

The importer (or owner) may clear the warehoused goods for home consumption on payment of
Duty warehouse rent, interest etc. (if any). For this purpose, he is required to file a green Bill of Entry
under Section 68. This Bill of Entry is filed in the Import Department. After assigning admission number
and date it is transferred to the Bonds Department where the Bond Clerk verifies the declared particulars
with the particulars already entered in the Warehouse Register from the into-Bond Bill of Entry.
Thereafter, the Appraising Group assesses the Bill of Entry. The importer pays the Duty and obtains out
of charge order on the reverse of the duplicate Bill of Entry from the office Superintendent of the
Cash/Accounts Department. He then produces this duplicate Bill of Entry to the Bond Officer or
Warehouse Keeper and clears the consignment from the warehouse. Under Sec. 15 (1) (b), the rate of
Duty applicable to such goods is the rate prevailing on the date of actual removal of the goods from the
warehouse. Hence the warehouse keeper or Bond Officer endorses the date (or dates) on which the
goods are physically removed from the warehouse. If any further Duty has become due on account of a
change in the rates of Duty before such removal, the Bond Clerk who receives the duplicate Bill of Entry
from the warehouse keeper shall initiate necessary action.
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More than one clearance of a single
VOLUME I (GENERAL)
378
warehoused consignment can also be effected by filing different green bills of entry under Sec.68. As far
as the rate of exchange is concerned, the same rate that prevailed on the date of filing of the into-Bond
Bill of Entry by the importer is applicable to all clearance ex-Bond.
Warehoused Goods (Removal) Regulations, 1963
In exercise of the powers conferred by Section 157 of the Customs Act, 1962, the Central Board
of Revenue hereby makes the following regulations, namely: Short title: The regulations may be called the Warehoused Goods (Removal) Regulations, 1963.
(i) Conditions for transport of warehoused goods to another town: Where the goods are to be
removed from one warehouse to another in the same town, the proper Officer may require that the
transport of the goods between the two warehouses be under the supervision of an Officer of Customs,
the owner meeting the cost of such supervision.
(ii) Where the goods are to be removed from one warehouse to another in a different town, the
proper officer may require the person requesting the removal to execute a Bond in a sum equal to the
amount of import Duty leviable on such goods and in such form and manner as the proper officer deems
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fit.
(iii) Terms of the Bond to be executed: The terms of the Bond shall be that if the person executing
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the Bond produces to the proper officer, within three months or within such extended period as such
officer may allow, a certificate issued by the proper officer at the place of destination that the goods have
arrived at that place, the Bond shall stand discharged; but otherwise an amount equal to the import Duty
leviable on the goods in respect of which the said certificate is not produced shall stand forfeited.
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(iv)Surety or security to be furnished : The proper officer may require that the Bond shall be with
surety or security or both as is acceptable to him.
[ Ministry of Finance, Deptt. of Revenue Notification No. 59/63 Cus dtd. 01.02.1963 ]
Bonded warehousing Remission of Duty on legal breakage
The question of remission of Duty on warehoused goods lost or destroyed in transit from one
warehouse to another has been examined and the Board has ruled that so long as loss or destruction of
goods takes place before the clearance of the goods for home consumption as specified in section 23 of
the Customs Act, 1962 remission of Duty has to be allowed.

(i)
The Bond taken under Section 67 of the Customs Act, 1962, a suitable provision should be made
permitting remission of Duty on genuine losses in transit.
`Loss for this purpose does not include
pilferage which is covered by section 13 of the Customs Act, 1962.

(ii)
Normally transit losses are very nominal.
For liquor bottles, breakage during transit do not
appear to exceed % and in the case of first importation at port losses should be much less. Because of
the wide spread use of pilfer-proof caps it is easy to establish whether the loss is legal or not. For the
purpose of establishing losses in transit, the examination should be carried out under the supervision of
Gazetted Officers and the necks of the bottles with pilfer proof-caps intact should be submitted to the
Asst. Commissioners for destruction along with the examination reports.
(iii)
Where breakages in excess of % for liquor bottles are noticed, such breakages should be
properly looked into in order to check malpractice and the warehouse keepers should be asked to take
steps to reduce the breakages. Where such cases of breakages persist steps should be taken to cancel
the warehouse licence.
[ Boards letter F.No. 473/8/71- Cus VIII dtd. 31.01.72 ]
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CLEARANCE OF GOODS FOR EXPORTATION

Section 69 of the Customs Act 1962, stipulates that (1) any warehoused goods may be
exported to a place outside India without payment of import Duty if
(a) a Shipping Bill or a bill of export has been presented in respect of such goods in the
prescribed form;
(b) the export Duty, penalties, rent, interest and other charges payable in respect of such goods
have been paid; and
(c) an order for clearance of such goods for exportation has been made by the proper officer.
(2) Notwithstanding anything contained in sub-section (1) of the Central Government 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.
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Application of Section 69 and Chapter X to Stores-Section 88 of Customs Act
The provisions of Section 69 and Chapter X shall apply to stores (other than those to which
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Section 90 applies) as they apply to other goods, subject to the modifications that
for the words exported to any place outside India or the word exported wherever they occur,
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the words taken on board any foreign going vessel or aircraft as stores shall be substituted;
Clearance of goods for shipment under Sections 69 & 88 of Customs Act,1962

When goods are entered for shipment to a foreign port or as provisions, etc., for use on board a
vessel proceeding to a foreign port, the procedure is as follows: (a) The owner of the warehoused goods will present a Shipping Bill in triplicate in the prescribed
The Bond clerk will see
form with the words form Bond written prominently in red ink at the top of each copy to the Bond clerk.
that the goods are entered for shipment to a foreign port.
(ii)
compare and record the particulars of goods entered for shipment against the entries in
(i)
the Bond Register.

(iii)
Endorse and initial the order in the Shipping Bill pertaining shipment of the goods to the
Assistant / Dy. Commissioner (Bonds) for signature.
(b)
After obtaining Assistant / Dy. Commissioners orders permitting shipment ex-Bond, the Shipping
Bill is forwarded to the Export Department for numbering and date stamping. The original Shipping Bill is
detained in the Export Department. On receipt of the duplicate and triplicate of the Shipping Bills from the
Export Department the owner will obtain from the Preventive Department the services of an Officer to
supervise the removal and shipment. The duplicate Shipping Bills are forwarded along with the E.G.M.s
after shipment to Export Department. The triplicate Shipping Bills are received by Bond Clerk from the
Preventive Department who will finally note in the Bond register the particulars of shipment. In places
where triplicate Shipping Bills are not filed, the duplicate Shipping Bill after shipment of the goods is
received in the Bond Department from Export Department. The duplicate Shipping Bill is endorsed by the
Export Department as compared in the E.G.M. The particulars of shipments are entered in the Bond
register.
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380
Stores supplied ex-Bond to Government Vessels

Provisions & stores including wines, and spirits may be shipped ex-Bond to ships of the Indian
Navy irrespective of whether their destination is a foreign port or otherwise.
(a)
This concession is also admissible in respect of aircraft proceeding direct to other foreign
destinations.
[ Govt. of India, Ministry of Finance (R.D.) C.No.91(28)Cus 1/49 dated 12.04.1950 ]
(b)
The Govt. of India have no objection to the supply of liquor and consumable stores ex-Bond from
the warehouses maintained by the Air companies subject to the following conditions, namelyThat such supplies will be made only when the plane is taking off on an onward flight for a foreign
destination and will not touch an intermediate Indian Airport.
The supplies will be kept under seal until the plane takes off. An endorsement that the seals
were found in tact at the time of departure will be made by the Customs Officer.
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[ Govt . of India, Ministry of Finance (R.D.) Letter No. 70(23) Cus 1/54 Cus III dtd. 22.8.55 ]
SHIPMENT OF LIQUID FUEL UNDER SECTION 88 OF THE CUSTOMS ACT,1962
(i)
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For the shipment of liquid fuel , the following procedure shall be followed:-
The oil company will first present in the Preventive Department the Shipping Bill, with Bond
number and date noted therein or an application requisitioning an officer for supervising
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shipment. The Preventive Department will obtain the Assistant / Dy. Commissioners orders
sanctioning the staff required.
(ii)
The Shipping Bill will then be presented in the Bond Department for admission and for putting up
endorsement to obtain the Assistant / Dy. Commissioners orders for permission to ship the
goods under Section 88 of the Customs Act. The Bond Clerk will make an entry in the Bond
register and assign an issue number to the Shipping Bill.
After the Assistant / Dy.
Commissioners orders have been obtained, the Shipping Bill will be forwarded to the Export
(iii)
Clerk to be dealt with under usual procedure.

It will thereafter be forwarded to the Preventive Officer concerned, who, after bunkering is
completed and the quantity verified with the Chief Engineers log book and with that arrived at
after measuring the tank, will certify the quantity so verified on the Shipping Bill.
(iv)
The Bond Clerk will then note in the register the actual quantity bunkered and transmit the
Shipping Bill to the Export Department which will return the Shipping Bill to the Export
Department which will return the Shipping Bill to the Bond Clerk after the usual check with the
manifest.
(v)
The entries in the register will then be completed and the register submitted to the Superintendent
for initials. The registers with the Shipping Bills will thereafter be forwarded to the Audit
Department for checking the entries as required by the rules.
(vi)
Liquid fuel supplied to Coasting Vessels: When vessels in the coasting run are to be bunkered
from stocks in Bond, the oil company should in addition to the presentation in the Export
Department of a Shipping Bill for the quantity of oil required to be shipped, file in the Import
Department a green Bill of Entry (ex-Bond Bill of Entry) for the same quantity. Duty on this
quantity should be collected before the oil is allowed to be pumped. After bunkering is over,
action should be taken for the recovery of Duty on any shipment of excess quantity and for the
grant of refund on the quantity short-shipped on receipt of shippers application.
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381
Consumption in Indian Waters of ships stores Shipped from Bond

The expression any vessel proceeding to a foreign port in Section 112 of Sea Customs Act
(Section 88 of the Customs Act,1962) should not be construed as referring to any vessel engaged in the
Foreign trade so as to allow shipments of provisions or stores to be made for use on board the vessel
while lying in port before the commencement of the outward journey. The concession envisaged (Section
88 of the Customs Act,1962) would therefore be available only when the vessel leaves an Indian port with
a foreign port as its destination. The fact that the vessel has to call, enroute, on some other Indian ports
or it will have to pass through the Indian waters for some time would not justify the prevention of use of
such stores on board the vessel while lying in such other Indian ports or passing through the Indian
waters. What is important is that the destination of the vessel should be a foreign port and it is irrelevant
that on the way the vessel is to commence its voyage from a port say X to a foreign port, she cannot
claim the benefit of Section 112 Sea Customs Act (Section 88 of the Customs Act 1962) as long as she
remains anchored at the port X but should been entitled to obtain shipment of stores without payment of
Duty for use after she leaves port X and if she has to touch Indian ports say Y and Z in the course of
her journey she will be entitled to use the stores while lying at the ports Y and Z without having to pay
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Duty.
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[ Boards letter No. 55 (16)-Cus.1/54 dated 11.10.54 ]
Supply of Bonded stores of Steamers quantity restrictions
The Board considers that there should be no restriction on the quantities of ex Bond shipment
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under Section 112 Sea Customs Act (Section 88 Customs Act). Nor is there any justification for doing so
in view of the wording of the Section viz. for use on vessel proceeding to a foreign port, which implies that
the quantities should be allowed in a liberal way, subject to the criterion of for use on Board. The
restriction envisaged in Section 28 Sea Customs Act (Section 89 Customs Act) cannot be applied in the
case of imported goods. The only case where restriction on the quantity of goods sought to be shipped
stores under Section 112 Sea Customs Act (Section 88 Customs Act) would be applicable is where the
quantities are so large that they cannot conceivably be intended for use as stores and/or there is reason
to suspect that such article would be surreptitiously landed.
[ Boards letter F. No. 3/27/59-Cus III dated 14.1.69 ]
RESHIPMENTOF GOODS WITHOUT PHYSICAL REMOVAL INTO A WAREHOUSE

(a) The Govt. of India do not agree to adopting the procedure of constructive warehousing i.e. of
taking a Bond and into-Bond Bill of Entry allowing clearance for reshipment without the goods having
been physically removed into a warehouse as this would be an evasion of Section 128 Sea Customs Act
(Section 54 Customs Act 62) in that it would authorise what amounts to transhipments in circumstances
where transhipment is not allowed by that section.
[ Govt. of India, Com. Department D.O. No. 2053 dated 14/17th April 1923 ]
(b) In modification of the instructions in clause (a) above, the Govt. of India have authorised the
Commissioner of Customs to relax, in deserving cases, the requirement of physical warehousing under
section 93 Sea Customs Act (Section 60 Customs Act 62) and to allow ex-Bond shipment in exceptional
circumstances in anticipation of their approval.
[ Ministry of Finance (R.D.) F. No. 55/4/52-Cus. I dated 27.5.1952 ]
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(c) Physical warehousing waving of the condition of There are cases where after landing
of goods in the Docks, the importer seeks for Bonding of the goods, but before physically warehousing
can take place, he seeks clearances for exports or home consumption or even removal from the
warehouse to another warehouse in another town. In exceptional and genuine circumstances, the waiver
of actual physical warehousing at the port of importation used to be permitted by the Custom Houses
subject to ex-post facto approval of Board. This practice was stopped and Board issued the following
revised instructions under F. No. 473/16/88-Cus.VII dt.15.6.88.
2.
The Board have decided to terminate the practice of granting ex-post facto approval of waiver of
the requirement of physical warehousing at the port of importation. The instructions issued in F. No.
173/157/74-Cus.VII dated 23.4.75 are, therefore, rescinded.
3.
In the following cases, Asstt./Dy. Commissioners of Customs may grant waiver of physical
warehousing with the approval of the Commissioner, if necessary, ex-post-facto.
(i)
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(a) Constructive warehousing under Section 60:

Merchanting trade i.e., goods imported for supply to other foreign countries. This sort of
merchanting trade is permitted by the RBI as per Chapter 13 of the Exchange Control
(ii)
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Manual.
Cases where duties are not collected i.e., stores, spare parts, fuel for vessels etc. or
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stores as defined in Section 2 (38) of the Customs Act, 1962.

(b) Constructive warehousing under Section 67:
(i)
Equipment, machinery and raw materials for 100% EOUs located outside the port city
and therefore, in urgent need of equipment.
(ii)
Companies with manufacture-in-Bond permissions under Section 65.
(iii)
Bulky, heavy and dangerous and delicate items, which require special handling or air-
Goods belonging to reported companies which have urgent reasons for immediate
(iv)
conditioning.
clearance.
Ex-Bond ship stores when the vessel does not proceed to a foreign port
(i) The Ministry of Law, who were consulted in the matter, have advised that since the stores
were shipped under Section 112 Sea Customs Act (Section 88 of the Customs Act, 1962) for use on
board of the vessel. When it was intended that it should proceed to a foreign port, and as the vessel did
not so proceed, but instead that it should proceed to a foreign port, and as the vessel did not to proceed,
but instead put into an Indian Customs port, the concession of Section 112 Sea Customs Act (Section 88
of the Customs Act, 1962) was not available. In the circumstances, the Duty was payable on the stores at
the Indian port and that on arrival the stores should have been landed and Bonded at that port under a
fresh Bond.
(ii) The proper course in such cases, is, however, to take a Bond under Section 130 Sea Customs
Act (Section 54 Customs Act) so that if the conditions attaching to the export are not fulfilled suitable
action may be taken in terms of such a Bond.
[ Boards F. No. 21/7/55-Cus. IV dated 12-6-1956, Instruction No. 6/56 Misc. ]
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Warehousing of goods imported under savings clause 3 (d) of the Foreign Trade (Exemption from
Application of Rules in Certain Cases) Order, 1993
(i) The question of imports of goods under saving Clause 3 (d) of the Imports (Control) Order,
1955, their warehousing in Bond and subsequent release to Diplomats has been considered in
consultation with the Department of Economic Affairs and the Ministry of External Affairs.
(ii) It has been decided that with immediate effect imports under the said Saving Clause should
be permitted only of: (i) bonafide ships stores items; and (ii) items like provisions, liquors, cigarettes and
tobacco. In no case should the imports of non-consumable items like Air-conditioners, Refrigerators, Tape
Recorders etc. be allowed.
[Based on Boards letters F. No. 3/5/66-Cus. VII dated 23.5.66 & 16.6.66 ]
CLOSING OF BOND
Cancellation and return of warehousing Bond Section 73 Customs Act, 62
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When the whole of the goods covered by any Bond executed under Section 59 have been
cleared for home consumption or exported or are otherwise duly accounted for and when all amounts due
on account of such goods have been paid, the proper officer shall cancel the Bond as discharged infull,
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and shall on demand deliver it, to the person who has executed or is entitled to receive it.
Cancellation of Bonds: -
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(a) When a Bond is ripe for cancellation, all documents relating thereto original into-Bond Bill of
Entry, ex-Bond Bill of Entry and Shipping Bills which should always be kept by the Bond Clerk with the
relative Bond, who should maintain form the purpose a key-book to facilitate the tracing of these
documents subsequently) together with the Bond Register, should be sent to the I.A.D. The Audit Clerk
should immediately scrutinise the documents and the entries in the Bond Register and, if these are in
order, should impress his Departments stamp on the Bond and against the entries in the Bond Register
and initial the documents in token of having audited them and return them to the Bond Department. The
the Audit Clerk.
Bond should not be cancelled by the Bond Department unless it bears the I.A.D. stamp duly initialled by
(b) The Office Superintendent, Bonds, will personally check the Bond Register twice a year in
January and July and see that there has been no undue delay in the disposal of completed Bond, and
report to the Assistant Commissioner of his having done so.
Bond file: (a) A Bond file consists of
(i)
Bond under Section 59 Customs Act 62.
(ii)
The original into-Bond Bill of Entry.
(iii)
Original and duplicate ex-Bond Bill of Entry.
(iv)
The original Shipping Bill in respect of goods shipped to a foreign port and duplicate in
case of goods removed to a Customs port.
(v)
Papers relating to the discharge of the Bond under Section 67 Customs Act 62.
(vi)
The Bonders application for removing part contents of packages for home consumption
or re-export or for operations under Section 64 and 65 Customs Act 62.
(vii)
The Bonders application for extension of the time limit for warehousing goods.
(viii)
The Bonders application for removal of goods under Section 67 Customs Act 62.
(ix)
Re-gauge papers in duplicate.
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(b) In the case of intimation received from other ports regarding re-warehousing or otherwise of
the Bonded goods such papers should be filed separately if it refers to more than one Bond.
Audit of Bond Files: (a) Bond Files of the nature specified below should be forwarded to the I.A.D.
through the Assistant Commissioner, Bonds: (i)
those containing inaccuracy of a serious nature or in which any document is missing.
(ii)
those containing ex-Bond bills of entry involving short or excess charge above Rs.25/- in an
individual Bill of Entry, and
(iii)
those containing ex-Bond bills of entry involving short or excess charge below Rs.25/- in an
individual Bill of Entry due to incorrect particulars having been furnished by the Bond Department
when issuing them and detected at the time of sending the Bond file for audit.
(b) All other files should be sent directly to the I.A.D. by the Office Superintendent, Bonds, or the
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Preventive Officer in charge of warehouses.
(c) Bond file should ordinarily be sent for audit within two months from the date of last clearance
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from Bond.
CHECK LISTS FOR WORKING OF BONDED WAREHOUSES
The Directorate of Inspection & Audit, have drawn up and issued Check Lists on various
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warehousing procedures for the guidance of the staff.
These check lists cover procedures from
inspections to be carried out before issuance of licence to auditing of documents.

Though, one may feel the instructions to be repetitive, the same being important, are, however,
reproduced below :-
Verify that the place where the warehouse is proposed to be licensed has been notified as a
1.
Check list I (Before a licence is issued)
warehousing station under Sec. 9 of the Customs Act, 1962.

The application for licence has been made in the prescribed form.
3.
The no. of commodities proposed to be Bonded in each warehouse should not exceed 5 or 6.
4.
The warehouse building should be inspected and it should not be in the residential area.
5.
It should be a pucca building (brick-built)
6.
If the warehouse is on the top-floor, then the terrace should be well and strongly built.
7.
All windows and sky lights should be well secured.
8.
All windows, sky lights should be covered with strong wire-mesh internally.
9.
There should not be more than 1 door.
10.
The door should be screwed and hinged from inside to prevent the fastening being removed from
2.
outside.
11.
The premises must be secured against theft, pilferage, or other risks and must be easily
accesible for the departmental officers for any inspection or checks.
12.
There must be no private communication whatsoever with the Bonded warehouse.
13.
The warehouse should be provided with adequate no. of fire extinguishers and other equipment
such as buckets of water, sand etc., for putting out fire.
14.
The warehouse building should be inspected by a Superintendent.
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15.
A report on the condition of the building shall be prepared and the questionnaire duly filled in
should be submitted to the Asst./Dy. Commissioner.
16.
The applicant shall give in writing his readings to defray the expenses on account of
commissionerates establishment employed at the private Bonded warehouse on a regular basis
or occasionally.
17.
The new applicants who are intending to store sensitive goods should produce a solvency
certificate (not just a reference or a confidential certificate) from a scheduled bank of repute (other
than a co-operative bank or a bank which has operations limited to a city etc.) for a value of not
less than Rupees Fifty Lakhs (Rs. 50,00,000/-)
In respect of non-sensitive goods, the applicant should be solvent for Rs. Ten lakhs (Rs,10,00,000/-)
Check list II (Issuing of a licence and other allied steps)
1.
Licence for a private Bonded warehouse should not be issued if the applicants record is not
clean and that the proprietor , or partner or any of the Directors are involved in any of the Customs Duty
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evasion of smuggling offences and have been subjected to penalty or other action under the Customs or
Central Excise Laws.
A licence shall be valid for one year and may be renewed annually.
Before renewal of the licence the check-list I may again be followed.
3.
Before a licence is cancelled give one months notice in writing to the licensee.
4.
If the licensee has contravened any provisions of the Customs Act, 1962 or the Rules and
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2.
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Regulations or committed breach of any of the conditions of the licence then the licence may be
cancelled after giving reasonable opportunity of being heard.
5.
See that the Proper Officer, in relation to various functions to be performed in respect of
warehousing, is notified under Sec. 2(34) of the Customs Act, 1962.
Importer shall execute a Bond in the prescribed form.
7.
The Bond may be for a single consignment or a general Bond.
8.
In the case of a Bond for a single consignment the amount, for which the importer shall bind
6.
himself, should be equal to twice the amount of Duty assessed on the goods intended to be
Bonded. In respect of sensitive goods, the licence should give a cash deposit or bank guarantee
9.
equal to 25% of the Duty liability for each consignment.

In the case of a general Bond the importer shall bind himself in such amount not less than twice
the amount of Duty estimated on the likely quantity of goods to be Bonded within a specified
period.
10.
After the licence has been issued and the Bond has been accepted the importer can be allowed
to Bond dutiable imported goods.
11.
The licensee shall pay the cost of purchasing a strong lock.
12.
Purchase a strong lock for locking the warehouse door.
13.
One key of the lock shall be retained with the officer in charge of administration in a sealed cover.
14.
The other key shall be kept with the Proper Officer in charge of the warehouse.
Check List III (Examination and Bonding of goods)

1.
Examine all packages before Bonding.
2.
Compare with the documents received from the dispatching Commissionerate.
3.
Send an acknowledgement for receipt of the goods to the dispatching Commissionerate.
4.
See that the goods are properly stocked.
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5.
See that the stock card is kept with each stock.
6.
The importer has to file a set of into-Bond bills of entry.
7.
Classify and assess the into-Bond Bill of Entry.
8.
Hand over to the importer his copy of the Bill of Entry.
9.
Do not allow similar type of goods produced indigenously or obtained locally in the same
warehouse.
10.
The goods deposited in the warehouse should be fully insured by the warehouse keeper against
theft, pilferage, fire accidents, other natural calamities, risks against rioting etc. at least for a value
equal to the Customs Duty by a comprehensive insured policy drawn in the favour of the
Commissioner of Customs.
11.
Always lock the door before leaving the warehouse.
12.
Never hand over the key to the importer or any other person.
13.
The key shall be handed over only to the officer-in-charge of administration or to the Proper
Officer in-charge of the warehouse.
Maintain a Bond register in the prescribed form.
15.
Draw a summary in the Bond register at the end of each month showing the no. of packages of
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14.
each type of goods received in the warehouse, quantity of each type delivered therefrom and the
balance in stock.
Put your full signature with date under the summary.
17.
Endorse on the duplicate copy of into-Bond Bill of Entry, the date and location of the goods
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16.
stored.
Empty cases shall not be allowed to be stored in the warehouse.
19.
Empty cases shall be delivered to the Bonder under receipt on the reverse of the into-Bond Bill of
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18.
Entry.
20.
Check the period of strorage to ensure that they do not remain warehoused beyond the period
prescribed in Sec. 61 of the Customs Act.
21.
If the warehoused goods are not reoved at the expiration of the period, issue demand for
Customs Act.
payment of the full amount of Duty chargeable thereon and interest payable under Sec.72 of the
Check List IV (Steps to be taken before sanctioning manufacture and other operations in Bond)
1.
The facility shall be sanctioned with prior approval of the Board.
2.
Facility shall be extended to export oriented manufacture units.
3.
The unit shall produce evidence to show that the export of finished goods is more than 10% of the
product as proposed to be manufactured in Bond.
4.
The total value of goods manufactured by using imported materials is significantly large.
5.
The imported items shall not generally be similar to items produced indigenously which may be
used for making export goods (this may not be applied to items which are technically identical
e.g.copper)
6.
Determine the number of officers of different cadre required to be posted for adequate control and
supervision of manufacture in Bond.
7.
Ensure that the manufacture and other operations in Warehouse Regulations, 1966 as amended
are followed.
8.
The Asst./Dy. Commissioner shall also provide a detailed procedure specifying manufacturing
processes etc.
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387
9.
The procedure shall also prescribe the conditions to be complied with by the manufacturer as
stipulated in Sec. 65(1) read with Rule 5 & 6 of the Manufacture and other operations in
Warehouse Regulations, 1966 as amended.
10.
The procedure shall also include a proforma of the register in which detailed accounts of all
Bonded and other goods used in the manufacture are to be maintained.
11.
Prescribe a form of statement in which details of all Bonded and other goods used in the
manufacture and those remaining in stock are to be submitted.
12.
In case such facility is extended to allow manufacture of goods from same type of materials as
the Bonded materials, which are import Duty paid and/or indigenous material in the same place,
then (I) prescribe suitable conditions for such facility;
(ii) the conditions so prescribed shall include that the manufacturing operations will not be carried
out simultaneously;
(iii)that proper accounts for each verification of goods manufactured from different categories of
materials i.e., (a) Bonded materials and (b) non-Bonded materials are maintained;
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Check List V (Removal of goods from one warehouse to another) :
Check that the application has been made in the prescribed form in duplicate.
2.
Check the particulars in the application to ensure that they agree with the entries in the Bond
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1.
Register.
3.
Submit the application to the proper officer for orders.
4.
The proper officer shall require that the transport of the goods between two warehouses in the
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same town is made under the supervision and escort of an officer of Customs (the owner has to
meet the cost of supervision and escort).
5.
If the goods are to be removed to a warehouse in a different town, see that a Bond in a sum
equal to the amount of import Duty leviable on the goods has been executed by the person
requesting the removal.
Check that the Bond has been furnished in the proper form.
7.
Check that the terms of the Bond include that the person executing the Bond undertakes to
6.
produce a certificate issued by the proper Customs officer at the place of destination that the
8.
goods had arrived at that place.

Check that this term of the Bond also specifies the time (that is within 3 months or within such
extended period as the Asst. / Dy. Commissioner may allow) within which the certificate shall be
produced by the person.
9.
Check that the Bond is backed by sufficient surety or security or both as accepted by the Asst. /
Dy. Commissioner.
10.
Check that the owner submits a Bond Shipping Bill in the prescribed form and presents from
along with the above mentioned form.
11.
Check that the Shipping Bills contain all the necessary information and the columns have been
properly filled in.
12.
Submit the documents to the Asst. / Dy. Commissioner for orders and acceptance of the Bond.
13.
Before allowing delivery of the goods note the clearance of the goods in the godown register and
on the duplicate Shipping Bill.
14.
The goods shall be accompanied by a Customs Officer to the railway booking office.
15.
The Customs officer shall obtain the railway receipt.
16.
Immediately on return to the office arrange to send the railway receipt with the covering advice (in
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VOLUME I (GENERAL)
388
the prescribed form) to the officer to whom the goods have been consigned; get the advice note
signed by the proper officer.
17.
See that the railway receipt and the advice note goes under registered post with
acknowledgement due.
18.
Record the reference number of the advice note and date in the godown register; also keep the
acknowledgement receipt posted suitably in the register.
19.
In the case of transport by road verify that the carriers are of repute and standing.
20.
Seek the permission of the Asst. / Dy. Commissioner to allow transport by a particular transport
company.
21.
Each package is sealed with wire and lead seal.
22.
Record the fact of sealing and the lead seal number in the advice note number.
23.
Follow the checks listed at 1 to 18 above relating to transport by rail.
24.
Keep a watch regarding the receipt of intimation of the arrival of the goods.
25.
Issue a reminder if the intimation is not received in 2 to 3 weeks time from the date of despatch
and bring the fact to the notice of the Superintendent / Asst. / Dy. Commissioner.
On receipt of intimation submit the Bond filed under Sec. 67 to the Asst. / Dy. Commissioner for
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26.
Check list VI (Clearance of warehoused goods)
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cancellation.
The importer shall present Bill of Entry in the prescribed form.
2.
Check that the particulars of the goods given in the Bill of Entry agree with the entry with the entry
in the Bond register.
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1.
3.
Note the quantity to be cleared in the register.
4.
Note the original and duplicate into-Bond Bill of Entry, the issue number below the Bond number
entered on the document by the Bonder.
Reassess the ex-Bond Bill of Entry.
6.
If the goods are tariff value goods, the rate of tariff value shall be the one in force on the day of
5.
actual removal of the goods from the warehouse.

The rate of Duty shall be the one in force on the day of actual removal of the goods from the
8.
warehouse.
7.
Doubly check and make sure that the provisions of exemption notifications are correctly applied.
In case if doubt, get in touch with the concerned Custom House.
9.
After Duty has been paid, get the passed out of Bond order from the Proper Officer (designated
for this purpose by the Commissioner under Sec. 2 (34) of the Customs Act) on the duplicate
copy of the ex-Bond Bill of Entry.
10.
Give delivery of the goods, ensuring that only those covered by the ex-Bond Bill of Entry are
delivered.
11.
After the goods have been delivered endorse the date and time of delivery of the duplicate exBond Bill of Entry and retain it with other records for subsequent audit.
Check list VII (Stock verification)

1.
The Asst. /Dy. Commissioner shall verify the stocks every three months (in case the volume of
goods warehoused is very large, the period may be raised up to one year with the concurrence of
the Commissioner.
2.
He shall satisfy that the contents of packages are in tact by examining 5% of the packages but
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389
limited a maximum of 25 packages of each consignment.

3.
In the case of cargo in bags, such as cement, the check shall be effected by probing the bags.
4.
Verify that the goods agree with the description given in the corresponding into-Bond Bill of Entry.
5.
The stock shall be challenged and the actual number of packages found in the godown recorded
in stock challenge register under signature with date.
6.
The Bond register and other records shall also be verified and signed.
7.
A report on the finding shall be submitted to the Commissioner for information.
Check list VII (Audit of documents and registers)

1.
All documents and register relating to the Customs Bonded warehouse shall be audited regularly
by an audit party (preferably once every month)
2.
All duplicate ex-Bond bills of entry shall be forwarded to the Internal Audit Dept. of the major
Custom House through which the goods were imported for post audit in batches once every
month (address it to the Asst. / Dy. Commissioner, Internal Audit Dept. of the Custom House) by
registered post.
Ensure that audited ex-Bond bills of entry are received back within a reasonable time so as to
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3.
enable you to issue demands within time in case of any short-levy brought out as a result of audit
4.
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scrutiny.
In case of delay in the receipt of audited documents, remind the Custom House for prompt return
of the documents.
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DUTIES OF PREVENTIVE STAFF DEPLOYED IN BOND SECTION/BONDED WAREHOUSES

In the modern times, a lot of Importers utilize the facility of warehousing the imported goods in
Bonded Warehouses, both Private and Public. As is evident from the Rules and Regulations governing,
these Bonded goods have to be under Customs control all the time till clearance. This Customs control is
monitored by the Custom House through the Preventive Staff who are posted at these Warehouses and
also in the Bond Department, to oversee the day to day functioning of these warehouses and movement
of Bonded goods to / from them.
Preventive Officers of Customs are posted as Bond officers in Public / Private Bonded
Warehouses, in term of Sec. 62 of Customs Act, 1962, and Superintendent (Preventive) in-charge of such
warehouse administer supervisory control over the functioning of these Bonded warehouses.
Superintendent (Preventive) incharge Bonded warehouses
The Bond Superintendent (Preventive) in charge of the Bonded warehouse should pay frequent
visits to Public and Private Bonded warehouses and should;
(a)
Inspect the stock of Bonded goods in the warehouse by challenging the stock with the Bond
Register and vice versa and in token of his check should sign the checked entries in the Bond
Warehouse Register and the stock cards.
(b)
Check the Bond Bills of Entry on which the goods have been warehoused into Bond.
(c)
Check the ex-Bond Bills of Entry for the goods cleared for home consumption on payment of
Duty, if any,
(d)
Check ex-Bond Shipping Bills on which Bonded goods are proposed to be shipped, as ships
stores or Bond cargo.
(e)
Wherever necessary he should examine the ex-Bond goods, in the Bonded premises or at the
Gates, which are being taken out for shipment to docks; and should ascertain that the same are
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390
being properly removed from the Bonded warehouse and escorted by the Officers as laid down in
the rules.
(f)
He should also check the expiry dates of the operating Bonds of various Bonded items; and
submit to Assistant Commissioner / Bonds, the information regarding cancellation of Bonds
according to their tenures.
(g)
He should record in his diary all the particulars of such checks carried out. If any irregularity is
noticed, the same should be recorded in the Station Diary, and matter reported to the Assistant
Commissioner /Bond and to the Asstt./Dy. Commissioner of Customs (Preventive).
The Duties of the Preventive Officer posted at Private Bonded Warehouse

(a)
The Preventive Officer deputed to supervise the work in the Private/Public Bonded Warehouse
should check that the date , on or before which the goods are to be passed into Bond, has not
expired.
(b)
The officer shall check the packages to see that they are intact and the marks & nos. tally with
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those entered in Bill of Entry. If any packages intended for deposit in a private warehouse are
found in broken condition, the work should be stopped and a report submitted to Appraising
goods should be escorted to the warehouse.

(c)
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Department for orders. After necessary action has been taken by the Appraising Department, the
After depositing the goods in the Bonded warehouse, the Officer should obtain receipt from the
Bonders or the warehouse keepers, on the reverse of the Bill of Entry , in token of having
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received the goods in the warehouse and should endorse the Bill of Entry as Supervised the removal of ..from .to
M/s.. Pvt. Ltd. Bonded warehouse and their actual storage therein.
(d)
The officer will then make suitable entries in the Bond Register maintained for the purpose and
also in the Stock Card.
(e)
The Bill of Entry should be retained by the officer to be forwarded through transit book to the
He shall supervise removal from one warehouse to another and shall escort goods from the
(f)
Bond Deptt.
(g)
warehouse to Railway Booking office for being despatched in Bond by Rail.

He shall supervise manufacturing operations, under section 65, where such operations are
permitted and carried out.
(h)
He shall supervise scrutiny, sorting, re-packing, and bottling in Bond when sanctioned by the A.C.
Bond Deptt.
(i)
He shall escort goods from any warehouse to the place of shipment for the purpose of being
exported under sec. 69 and 88 of Customs Act, 1962.
(j)
In all cases where records of warehouse are being maintained by the Preventive Officer, care
should be exercised not to release warehoused goods after expiry of warehousing period.
(k)
Whenever there are changes in Tariff valuation or rate of Duty, the Preventive Officer supervising
the delivery of the goods will hold the delivery pending recovery of excess Duty, if any, due to
such changes, between the date of payment of Duty and actual removal of the goods from the
warehouse.
(l)
The Preventive Officer supervising the removal of Bonded goods shall see that the Department
has properly processed the Shipping Bill. He should see before shipment of the goods that the
conditions of the packages are in good order. If any package is broken or found to be tampered
with, he should open and examine the packages in presence of shipper or his representative,
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VOLUME I (GENERAL)
391
prepare list of contents thereof and note there in , the condition of the package and should sign
the list. The shipper or his representative should also sign the said list. The list with report should
be forwarded to Bond Deptt. through the Bond Superintendent.
(m)
The Preventive Officer posted in the Bonded warehouse should prepare and forward through
Supdt. (P) / Bond, such periodical statements as required by the Bond Department, like total
quantity and value of goods Bonded, details of expiring / expired Bonds, details of active Bonds,
.re
fe
re
nc
e
r.i
n
amount of Duty / interest involved, etc.
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CUSTOMS PREVENTIVE MANUAL (CENTRAL)

[ Govt. of Indias letter No. 55/12/51-Cus I/IV dated 20.06.1956]

Warehoused goods- means goods deposited in a warehouse,

And when the importer

such places, where

facilities exist for

CUSTOMS PREVENTIVE MANUAL (CENTRAL)

Warehousing Stations In Interiors

PRIVATE BONDED WAREHOUSES Public Bonded Warehouses

Though statutorily the Deputy Commissioner of Customs or Assistant Commissioner of Customs

warehouses, he may appoint such open spaces as Bonded warehouses.

Private Bonded Warehouses:

Private warehouses belong to individual private firms of importers.

CUSTOMS PREVENTIVE MANUAL (CENTRAL)

APPOINTMENT OF PUBLIC BONDED WAREHOUSES & LICENSING OF PRIVATE BONDED

Appointment of Public Bonded Warehouses: -

CUSTOMS PREVENTIVE MANUAL (CENTRAL)

Further guidelines on Private Bonded Warehouses

Guidelines for Storing Sensitive Goods

less than rupees fifty lakhs (Rs.50 lakhs);

Such warehouses should not be located in residential areas;

CUSTOMS PREVENTIVE MANUAL (CENTRAL)

In respect of individual consignments to be warehoused, the licencees are to give a

For Non-Sensitive Goods

certificate of Rs.50 lakhs but should be solvent for Rs.10 lakhs.

Grant of Licences to Private Bonded Warehouses- sensitive items

[ Circular No. 20/96-Cus. Dated 4.4.96 in F. No. 473/3/96-LC ]

CUSTOMS PREVENTIVE MANUAL (CENTRAL)

Availability of space certificate from Public Bonded Warehouse not required

Preliminary enquiries to be made before grant or renewal of a licence

Commissioner of Customs (Bonds) for orders.

Act, must fulfil:

The walls should be well built.

There should be sufficient number of windows in each room to supersede, as far as

up with brick work as solid as the walls themselves.

There must be no private communication whatever with any Bonded warehouse.

CUSTOMS PREVENTIVE MANUAL (CENTRAL)

that their capacity is fully taken up.

If the warehouse is intended for warehousing matches or other easily combustible

Premises to the licenced- inspection thereof

by filling the questionnaire form in Appendix A.

(Questionnaire to be filled in by the Officer inspecting the premise to be licensed as a

be fastened firmly from inside?

cannot be unscrewed or otherwise easily withdrawn from outside?

otherwise blocked more securely than by bolting or locking of doors?

CUSTOMS PREVENTIVE MANUAL (CENTRAL)

PRIVATE WAREHOUSES working of

Control over private warehouse

No fees should be charged for the grant of licence.

therefrom the purpose of Section 15(b) Customs Act.

Periodical verification of stocks in Private warehouse

Maintenance of the Records of Stocks in Private Bonded Warehouse

CUSTOMS PREVENTIVE MANUAL (CENTRAL)

importer of the goods and the license of the warehouse jointly.

Cost of Custom House Establishment

CUSTOMS PREVENTIVE MANUAL (CENTRAL)

under sec. 64 of the

C.A. with full

Name of vessel and Rot.