Page 75 - ELT_15th July 2020_Vol 373_Part 2

2020 ] DEPARTMENTAL CLARIFICATIONS T23

duty on the capital goods does not get incorporated on the
finished goods. Thus no extra duty on finished goods cleared into
DTA is payable on account of imported capital goods (on which
duty has been deferred).
10. Can a unit undertaking manufacture and other operations in a
bonded warehouse import inputs 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 : 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 goods other than capital
goods, the import duties (both BCD and IGST) stand deferred till
they are cleared from the warehouse for home consumption, and
no interest is payable on duty. In case the finished goods are
exported, the duty on the imported inputs (both BCD and IGST)
stands remitted i.e. they will not be payable. The duty deferment
is without any time limitation.
11. Is import of raw material without BCD and IGST allowed? Will
there be any interest obligation if IGST is paid when finished
goods are sold in domestic markets?
Response : Inputs/raw materials can be imported and deposited
in the licensed warehouse without payment of BCD and IGST. No
interest liability arises when the duties are paid at the time of ex-
bonding the resultant goods. The duties (without any interest) are
to be paid only when the resultant goods are being cleared for
home consumption.
12. Would it be mandatory to appoint a warehouse keeper in the
factory licensed under Section 65 of the Customs Act? Would all
goods cleared from the said factory be subject to inspection by the
warehouse keeper/ Customs authorities?
Response : A warehouse keeper has to be appointed, for a
premise to be licensed as a private warehouse under Section 58 of
the Customs Act. The warehouse keeper is expected to discharge
duties and responsibilities, maintain accounts and also sign the
documents, on behalf of the licensee. The warehouse keeper is
expected to supervise and satisfy himself about the veracity of the
declaration/accounts that he is signing.
The inspection of goods by customs at the stage of ex-bonding
would be done, only if there is indication of risks and not as a
matter of routine practice. Approval of the bond officer is not
required for clearance of the goods from the warehouse.
13. How frequently is an audit of a unit operating under Section 65 of
Customs Act, 1962 expected?
Response : The audit of units operating under Section 65 would
also be based on risk criteria. There is no prescribed frequency for
such audit.

EXCISE LAW TIMES  15th July 2020  75