- All control of EOU/EHTP/STP/BTP units have been placed under Administrative control of Central Excise formations
- The administrative control over Large Tax Payer EOU is with Large Tax Payer Unit (LTU). Although specific functions for such units where the presence of officer is required, are dealt with the commissioner of Central Excise who has concurrent jurisdiction over the Large Tax Payer.
- Custom Bonding
An EOU has to operate under custom bonds as per the conditions mentioned under FTP and Custom/Central Excise Act.
For Issuance of Custom Warehousing License, application accompanied with relevant documents/ Information is to be made to Assistant Commissioner/ Deputy Commissioner of Central Excise.
If the EOU has inter linkage with DTA then it shall also obtain Registration under Central Excise Act.
2. Procedure of Bonding
Except where otherwise provided, the operations of EOU are to be carried out in Bonded Areas, License under section 58 of Custom Act for private warehousing is to be obtained by the EOU.
In case of fraud of suppression of facts, license can be cancelled before the expiry of 5 years’ term.
3. Manufacture in Bond
EOU can decide upon their working hours and the manufacturing and operations are not physically supervised by the Central Excise Officer.
4. B-17 Bond
For duty free import, domestic procurement, provisional assessment, for export without payment of duty, disposal/accountable of dutiable goods, a single Mother Bond in Form B-17 is required to be executed.
This bond also covers following activities:
- Duty free transhipment of import/export goods between ports of import/export
- Warehousing/processing of goods in unit
- Movement of duty free goods job work and its return
- Temporary clearance for repair, display in exhibitions
- Transfer of goods from one warehouse to another
Although it doesn’t cover differential duty amount in case of Advance DTA sale, a separate bond is required.
5. Bond Amount
The Bond amount shall be total of following
- 25% of duty foregone on capital goods of both indigenous or imported as per sanctioned requirement including duty free capital goods installed
- Duty forgone on 3 months’ requirement of raw material and consumables including raw material utilised in un-exported finished goods
As when the bond is not sufficient to cover the duty foregone, additional/revised bond is required to be executed.
6. Execution of Bond
The bond is required to be executed on non-judicial stamp paper by the MD or Director of the company duly authorised.
Same procedure for the company or the person standing as surety is required to be followed for the bond amount, otherwise Bank guarantee of 5% of bond amount is required to be given.
In case of partnership firm, the bond is required to be revised/re-executed every time when there is a change in constitution of the firm.
7. Waiver of Bank Guarantee
Following units are exempted from furnishing bank guarantee or surety
- Existed for more than 3 years with unblemished track record
- Had export turnover of rupees five crores or above
8. Acceptance of Bond
Bond to be executed before Jurisdictional Assistant Commissioner/Deputy Commissioner of Central Excise.
9. Bond Register
Original Bond is to be kept safely in the office of Jurisdictional Assistant Commissioner/Deputy Commissioner of Central Excise after allotting bond numbers and values are to be mentioned in bond register for the purpose of debit/credit of duty foregone on importation of goods.
Monitoring of bond is done by Jurisdictional Assistant Commissioner/Deputy Commissioner of Central Excise and ensures that the bond is discharge at the time of final debonding of unit.
10. Re-warehousing of goods imported or procured indigenously by EOUs
CBEC has clearly laid down physical verification before issuing re-warehousing certificate in case of duty free import and duty free procurement of goods from DTA vide Circular No. 07/2006-Customs, dated 13.01.2006
In case units that are having export turnover of 15 crores or above in the preceding financial year and having a clean track record alternate procedure of self-bonding/warehousing has been prescribed vide Circular No. 19/2007-Customs, dated 3.5.2007.