Page 73 - ELT_15th July 2020_Vol 373_Part 2

2020 ] DEPARTMENTAL CLARIFICATIONS T21

1. Who is eligible for applying for manufacture and other operations
in a bonded warehouse?
Response : The following persons are eligible to apply for
manufacture and other operations in a bonded warehouse, -
(i) A person who has been granted a licence for a warehouse
under Section 58 of the Customs Act, in accordance with
Private Warehouse Licensing Regulations, 2016.
(ii) A person can also make a combined application for licence
for a warehouse under Section 58, along with permission for
undertaking manufacturing or other operations in the
warehouse under Section 65 of the Act.
The persons mentioned have to be a citizen of India or an
entity incorporated or registered in India.
2. Can a factory which is solely into manufacturing goods, which
are to be sold in the domestic market, eligible for applying for
manufacture and other operations in a bonded warehouse?
Response : The eligibility of a factory for manufacture and other
operations in a bonded warehouse does not depend upon whether
the final goods will be sold in the domestic market or exported.
There is no quantitative restriction on sale of finished goods in the
domestic market. Any factory can avail a license under Section 58
of the Customs Act along with a permission under Section 65 if
they intend to import goods without upfront payment of Customs
duty at point of import and deposit them in the warehouse, either
as capital goods or as inputs for further processing.
3. Is an existing factory which solely manufactured goods to be sold
in the domestic market, eligible for application for manufacture
and other operations in a bonded warehouse? How will the
existing capital goods and inputs be accounted?
Response : Yes. Any unit in Domestic Tariff Area (DTA) is
eligible for making an application for manufacture and other
operations in a bonded warehouse i.e. an old factory in DTA is
eligible for applying.
The accounting form prescribed for the units undertaking
manufacture and other operations in a bonded warehouse
provides for accounting of DTA receipts. Thus the existing capital
goods and inputs must be accounted in the accounting form
prescribed. The form also provides for a remarks column in case
certain remarks are to be entered.
4. Is manufacture and other operations in a bonded warehouse
allowed in Public Bonded Warehouse licensed under Section 57 of
the Customs Act?
Response : No. At present, manufacture and other operations in
a bonded warehouse is allowed only in a Private Bonded
Warehouse licensed under Section 58 of the Customs Act.
5. Will a unit licensed under Section 65 and Section 58 of the
Customs Act, 1962, be under the physical control of Customs?

EXCISE LAW TIMES  15th July 2020  73