Page 74 - ELT_15th July 2020_Vol 373_Part 2

T22 EXCISE LAW TIMES [ Vol. 373

Response : No. There is no physical control of a unit licensed
under Section 65 and Section 58 of the Customs Act, 1962, on a
day to day basis. The unit will be subject to risk based audits.
6. Can the license under Section 65 and Section 58 of the Customs
Act, 1962, be obtained on bare land with identified boundaries or
a built structure is imperative for obtaining the said license?
Response : The regulations do not mandate that a fully enclosed
structure is a pre-requisite for grant of license. What is important
is that the site or building is suitable for secure storage of goods
and discharge of compliances, such as proper boundary walls,
gate(s) with access control and personnel to safeguard the
premises. Moreover, depending on the nature of goods used, the
operations and the industry, some units may operate without fully
closed structures. The Principal Commissioner/Commissioners of
Customs will take into consideration the nature of premises, the
facilities, equipment and personnel put in place for secure storage
of goods, while considering grant of license.
7. Do we need to renew license under Section 58 or permission under
Section 65?
Response : The license and permission granted is valid unless it
is cancelled or surrendered, or the license issued under Section 58
is cancelled or surrendered. Thus no renewal of the license under
Section 58 or permission under Section 65 is required.
8. Can a unit undertaking manufacture and other operations in a
bonded warehouse import capital goods without payment of
duty? If yes, whether only BCD or both BCD and IGST on imports
is covered? For how long is duty deferment available? Is interest
payable after some time?
Response : A unit licensed under Sections 58 and 65 can import
capital goods and warehouse them without payment of duty.
Manufacture and other operations in a bonded warehouse is a
duty deferment scheme. Thus both BCD and IGST on imports
stand deferred. In the case of capital goods, the import duties
(both BCD and IGST) stand deferred till they are cleared from the
warehouse for home consumption or are exported. The capital
goods can be cleared for home consumption as per Section 68 read
with Section 61 of the Customs Act on payment of applicable duty
without interest. The capital goods can also be exported after use,
without payment of duty as per Section 69 of the Customs Act.
The duty deferment is without any time limitation.
9. Would any customs duty be payable on the goods manufactured
in the bonded premises using the imported capital goods (on
which duty has been deferred) and sold into the domestic tariff
area?
Response : The payment of duty on the finished goods is
clarified in Paras 8 and 9 of the Circular No. 34/2019. Duty on the
capital goods would be payable if the capital goods itself are
cleared into the domestic market (home consumption). Thus the

EXCISE LAW TIMES  15th July 2020  74