Common Bond for Availing Duty Exemption under Export Promotion
Schemes
[CBEC Circular No. 11(A) dated 25th February
2011]
Sub: Execution of a Common Bond for
specified Export Promotion (EP) schemes-reg.
The authorization holders operating under
the Advance Authorization/Duty Free Import Authorization (DFIA) / Export
Promotion Capital Goods (EPCG) schemes are presently, required to execute a
bond and a bank guarantee, as applicable, with the Customs authorities at the
time of each import. Further, this bond is required to be executed separately
for each authorization at different ports in case the goods are being imported
from different ports.
2. In
this regard I am directed to refer to the report of the Task Force on
Transaction Cost in Exports set up by the Government. The report submitted in
January, 2011, recommended that the authorization holders may be permitted to
execute a single running bond with Customs authorities for all their imports
under any Export Promotion (EP) scheme, from any port in India. The
recommendation of the Task Force has since been accepted by the
Government.
3. Since
the authorization holders have to execute bonds against each authorization
under specified EP schemes i.e. Advance Authorization / Duty Free Import
Authorization (DFIA) and Export Promotion Capital Goods (EPCG) scheme, it has
been decided that henceforth the authorization holders may execute only one
common bond for all their exports/imports under the above mentioned EP schemes.
This bond shall be called the “Common Bond for EP schemes”. The bond shall be
executed on the stamp paper of requisite denomination. The salient features of
the facility of the Common Bond for EP Schemes are as under:-
(i) The facility shall be available to all
fresh authorizations issued under the above mentioned EP schemes on or after
1st March, 2011.
(ii) This facility shall be available financial
year wise. In other words, the authorization holder shall be required to
execute one common bond in each financial year. The authorization holders who
avail the facility of common bond by executing a common bond during March, 2011
shall be required to execute a fresh common bond for authorizations issued
after 1st April 2011 during the financial year 2011-12.
(iii) The facility of common bond shall be available
if the
authorization holder imports/ exports all his goods only from Customs ports /
airports / ICDs etc. where the ICES 1.5 is fully implemented and the Customs
location is duly notified by the DGFT as an EDI port (hereinafter referred to
as specified port (s)).
(iv) The common bond should be executed at the
port of registration of the first Authorization issued/to be issued in that
Financial Year for import of goods from a specified port. The common bond shall be applicable for all
authorizations issued in that financial year for imports from specified ports.
(v) The common bonds are required to be
executed IEC wise.
(vi) An authorization holder shall
have a choice of executing either a common bond for all import clearances from
different ports or of continuing with the existing system of executing
different bonds at different ports. However, in case the authorization holder
opts for the common bond facility then all imports against all authorizations(
under the above mentioned EP schemes) issued in that financial year shall be permitted
only under the common bond. In other
words, the authorization holder can opt for the common bond at any point of
time during the financial year; but once the common bond facility has been
opted for, the authorization holder cannot execute separate bonds for
authorizations registered subsequently in that financial year.
(vii) In order to use the common bond facility,
the authorization holder shall execute the bond at the time of registration of
the first authorization for imports through specified ports. The authorization holder shall indicate to
the Customs authorities, at the time of registration of authorization, whether
a common bond has already been registered with the Customs authorities. If so,
then the unique number and the location where such common bond was registered
shall be indicated to the assessing officer. This unique bond number shall be
entered in the system and shall link the authorization with the common bond. If
the common bond has not been executed, then the authorization holder may choose
to do so; or else continue with the present practice of executing different
bonds for different authorizations. The authorization holder shall give an
undertaking to the Customs authorities, at the time of registration, that the
authorization is not registered elsewhere.
(viii) The bond value shall be decided by the
authorization holder keeping in mind the likely imports against authorizations issued
in that financial year. Once a common bond has been executed and the
authorization registered against it, the imports against such authorization
shall be permitted as per the time limits prescribed in the concerned EP
scheme. If the bond value is exhausted, it shall be topped up by the
authorization holder at the port where the common bond was executed. At the
time of topping up, the authorization holder shall ensure that the stamp duty
applicable to new bond is paid. For this purpose, the authorization holder
shall furnish a crossed stamp paper of requisite denomination to the Customs
authorities.
(ix) In case any Bank Guarantee is required, the
authorization holder need not furnish the entire Bank Guarantee at the time of
executing the bond. The Bank Guarantee may be furnished as and when the goods
are imported and the benefits of concessional duties availed. While executing
the bond, the authorization holder shall indicate whether the benefits of reduced
Bank Guarantee is being claimed in terms of circular number 58/04-Customs (as
amended). The Customs authority accepting the bond shall check the eligibility
of the authorization holder and indicate the applicable quantum of Bank
Guarantee. The assessing officer at the port of import shall independently
arrive at the quantum of Bank Guarantee to be furnished by the importer /
authorization holder and shall satisfy himself that the authorization holder /
importer has furnished adequate Bank Guarantee before the imports are
permitted. In case it is felt that the importer has to furnish some more bank
guarantee, the importer / authorization holder shall be so advised by the
assessing officer. The additional Bank Guarantee thereafter shall be furnished
by the importer.
(x) The Bank Guarantees shall be furnished by
the authorization holder only at the port where the common bond has been
executed. This is considered mandatory so as to ensure that the common bond and
the Bank Guarantees linked to the common bond are all kept physically together.
The Bank guarantees linked to a Common Bond would not be accepted at Customs
locations other than the location where the Common Bond is executed. The
authorization holder shall ensure that the Bank Guarantee furnished by him to
the Customs authorities remains alive during the life of the bond. The Customs
authorities at the port where the common bond has been executed shall also
monitor the bank guarantees and take action in case the bank guarantee expires.
(xi) Once a Common Bond has been executed along
with the first authorization at a particular Customs port, the subsequent
authorizations need to be registered at the port mentioned on the
authorization. This port may be different from the port where the common bond
was executed.
(xii) The authorization holder, at the time of
import, shall indicate the authorization number against each item in his Bill
of Entry. The EDI system shall check
whether the IEC number of the importer, the IEC of the bond holder (the person
who has executed the bond) and the IEC of the Authorization holder are same and
shall only permit imports, thereafter. The system shall debit the common bond
Authorization wise.
(xiii) The authorization holder, at the time of
export, shall indicate the authorization number in his Shipping Bill. The
authorization holder shall fulfill the export obligation and comply with all
the conditions stipulated in relevant Customs notifications and the Foreign
Trade Policy under which the goods have been imported. Although the primary responsibility of
monitoring the EO under the above mentioned schemes lies with the RA/DGFT
officials, the Customs officers at the port where the authorizations have been
registered shall also monitor the Export Obligation (EO) under these schemes in
terms of the conditions of the relevant Customs Notifications and the Board’s
circulars and instructions issued from time to time. Once the Export Obligation
Discharge Certificate (EODC) is received from the DGFT for an authorization the
Customs officials at the port where the authorization is registered shall, if
required, check the import / export details, close the authorization and inform
the Customs authorities at the port where the common bond was executed so that
the Bank Guarantee can be released and the bond discharged to that extent. The
common bond shall be alive till all the EODCs against all the authorizations
registered against that common bond have been received.
(xiv) In case of default in fulfillment of Export
obligation or non-compliance of the terms and conditions of Customs
Notification(s), the requisite action to safeguard Government revenue shall be
taken by the Customs authorities at the port of registration of the authorization.
For this purpose, the Customs authorities at the port of registration of the
authorization may seek details of the common bond and/ or bank guarantee from
the port where they were executed. The
action to safeguard revenue may include denial of the benefit of exemption from
the bank guarantee for future imports under the above mentioned schemes in
terms of para 3.2 of the circular No. 58/2004-Cus dated 21-10-2004(as
amended).
(xv) The
opinion of Law Ministry on legal implications of a single Bond across different customs locations was sought
in a similar issue. The Ministry of Law and Justice had clarified that since the Bond is executed in favour of President of India, the same is enforceable by
any authorised Commissioner (Customs).
(xvi) The format of “Common Bond for EP Scheme”
is annexed herewith.
5. The existing Bond sections in the
Custom Houses may be suitably strengthened to implement these instructions.
6. The ICES 1.5 has been suitably modified
to support the proposed scheme. The
Directorate of Systems shall be issuing separate instructions in respect of the
new module for the convenience of the staff.
7. These instructions may be brought to
the notice of the officers and trade by issuing suitable instructions / public
notice. Difficulties faced, if any in implementation of the Instructions may
please be brought to the notice of the Board at an early date.
8. Receipt of this Circular may kindly be
acknowledged.
Annexure
Common Bond for availing duty exemption under
Advance Authorization / Duty Free Import Authorization (DFIA) / Export
Promotion Capital Goods (EPCG) scheme.
[I/We
...................................of............................ hereinafter called
"the
For obligor(s)" and ……………................. of…….…................hereinafter
called "the
surety surety(ies)"
am/are held and firmly bound to the President of India (hereinafter
bond called the
"President") in the sum of.................... rupees to be paid to
the
President for
which payment will and truly to be made/ I/We jointly and severally
bind myself/ourselves
and my/our respective heirs, executors/administrators,
legal
representatives/successors and assigns by these presents] :
I/We.................of....................hereinafter
called "obligor(s)"am/are held and firmly bound to the President of
India (hereinafter called "the
For President") in the sum
of.....................rupees to be paid to the President of India
security for which payment will
and truly to be made, I/We jointly and severally
Bond bind myself/ourselves
and my/our respective heirs/ executors/ administrators/
legal
representatives/successors and assigns by these presents];
Dated
this...................day of....................
WHEREAS the above
bounden obligor(s) has been permitted to
import from time to time the goods without payment of duty/at concessional duty
against the authorizations issued to the obligor(s) from time to time, in terms
of the notification(s) of the Government
of India in the Ministry of Finance, Department of Revenue relating to the
Advance Authorization scheme/ Duty Free Import Authorization (DFIA) scheme/
Export Promotion Capital Goods (EPCG) scheme of the Foreign Trade Policy,
2009-2014 [hereinafter referred to as the said notification(s)] and against the
authorizations issued under the said schemes (hereinafter referred to as the authorizations)
for the import of the goods mentioned therein on the terms and conditions
specified in the said notifications and the authorizations;
AND WHEREAS the
Commissioner has required the obligor to deposit as for security for the amount of this bond/ the sum of ...................... ... rupees in
cash (the securities as hereinafter mentioned of a totalvalue of
............................................ rupees endorsed in favour of the
For President and
accepted on his behalf by the Assistant Commissioner of Customs /
security Customs & Central
Excise or Deputy Commissioner of Customs / Customs&
bond Central Excise,
namely,................................................... and whereas the
obligor has
furnished
securities amounting to
Rs........................by depositing with the officer
aforementioned. The
obligor undertakes to deposit the balance security
as and when he intends
to avail the benefit of duty exemption on goods imported under the said
notifications.
WHEREAS
I/ we the obligor (s) is / are manufacturer exporter (s) holding IEC Code No.
______________ dated and registration No. _____________ dated _____________
with the (name and address of the registering Central Excise authority to be
mentioned) ____________________ .
WHEREAS
I/ we, the obligor (s) is / are merchant exporter (s) holding IEC code No.
___________ dated having M/s _____________ holding registration No.
_____________ dated _____________ with the (name and address of the registering
Central Excise authority to be mentioned) ____________________ as supporting
manufacturers .
WHEREAS
I /we the obligor(s) has/ have undertaken to fulfil the export obligation as
specified in the said notifications and the authorizations and to produce
evidence of having so fulfilled the export obligation within the time period as
stipulated in the relevant Customs
notification from the expiry of the specified Export Obligation period to the
satisfaction of the Government.
Now the conditions of this Bond are that
1. I / we,
the obligor(s) shall observe all the terms and conditions of the said
notification(s) in respect of imports from time to time;
2. I / we,
the obligor(s) shall observe all the terms and conditions specified in the
authorizations.
3. I / we,
the obligor(s), shall fulfil the export obligation as specified in the said
notification(s) and the authorizations and shall produce evidence of
having so fulfilled the export obligation within the time period as
stipulated in the relevant Customs
notification from the expiry of the specified export obligation period to
the satisfaction of the Government.
4. In the
event of failure to fulfil full or part of the export obligations as specified
in the said notification(s) and the authorizations, I/ we,
the obligor(s), hereby undertake to pay the customs duty but
for the exemption and also interest at the applicable rates per annum thereon
forthwith and without any demur, to the Government.
5. I/ we,
the obligor(s), shall comply with the conditions and limitations stipulated in
the said Import and Export Policy / Foreign Trade Policy as amended from time
to time.
6. I / we,
the obligor(s), shall not change the name and style under which we, the
obligor(s), are doing business or change the location of the manufacturing
premises except with the written permission of the Government.
7. I / we, the obligor(s), shall keep the bank
guarantees / securities alive during the life of this bond.
8. If each and everyone of the above
condition is duly complied with by us, the obligor(s), the above written bond
shall be void and of no effect; otherwise the same shall remain in full force
and effect and virtue.
It is hereby declared by us, the obligor(s) and the
Government as follows:
1. The above
written bond is given for the performance of an act in which the public are
interested.
2. The
obligation and liability of the importer shall be a continuing one in respect
of all goods imported by the importer from time to time between the period
_______ and _______.
3. The
President through the Commissioner of Customs or any other officer of Customs
shall recover the sums due from the obligor(s) in the manner laid down in
sub-section(1) of the section 142 of the Customs Act, 1962 without prejudice to
any other mode of recovery.
For Provided always that the
liability of the surety hereunder shall not be impaired or
surety discharged
by reason of any time being granted or any forbearance, act or
bond omission of the
Government (whether with or without the knowledge or the
only consent of the
surety) in respect of or in relation to the obligation and condition to
be performed or
discharged by the obligor(s) nor shall it be necessary to sue the obligor(s)
before suing the surety for amounts hereunder;
For AND the
President shall, at his option, be competent to make good all the loss
security and damages from the
amount of the security deposit or by endorsing his rights
bond under the
above-written bond or the both;
only
And the President of
India shall, at his option, be competent to make good all the loss and damage
by endorsing his rights under the above written bond.
In these presents the
words imposing singular only shall also include the plural and vice versa where
the context so requires;
IN THE WITNESS THEREOF
these presents have been signed the day
hereinbefore written by
the obligor(s) and the surety(ies).
In
these presents the words imposing singular shall also include the plural and
vice-versa where the context so requires.
IN
WITNESS HEREOF these presents have been signed this day ______________ of
___________20 _______ herein before written by the obligor(s) and the surety
(ies).
Place:
Date:
(Signature of the Obligor)
|
Witness |
(1)
name and address |
(1) occupation |
(1)
__________________ |
|
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|
|
(2)
name and address |
(2)
occupation |
(2)
__________________ |
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|
(Signature
of the surety) |
|
Witnesses
|
(1)
name and address |
(1)
occupation |
(1)
________________ |
|
|
|
(2) name
and address |
(1)
occupation |
(2)
_____________ |
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|
Signature
and date |
|
|
Name
_________________________________ |
|
|
Designation
____________________________ |
Accepted for and behalf
of the President of India on ___________________day of ____________ 20
______________.
Signature and date
Name
_________________________________
Designation
____________________________
Annexure
Details of the surety and security furnished along
with the Common Bond
1. Common Bond No. & Amount
of Bond.
2. Whether with Surety or
Security.
3. Name of Surety & his
complete address in case of surety bond.
4. Details of securities / Bank
Guarantees as per format given below in case of security bond
|
S.No. |
Details
of security i.e. Bank Guarantee number, date and name of the Bank etc. |
Amount
of security (in Rs.) |
Authorisation
number and date against which the said security has been used |
Expiry
date |
Remarks |
|
|
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