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Execution of single B-17 Bond in view of the different bonds being
executed at present, by <a href='http://www.eximguru.com/exim/eou/default.aspx'>EOU</a>s/ EPZ/ EHTP/ STP units
Circular No. 66dated 15th
September 1998
I am directed to refer to Board's Circular No. 14/
98-Cus. dated the 10th March, 1998 as modified by Circular No. 42/ 98-Cus dated
the 19th June, 1998 on the above subject.
2. It has been
represented by different Association that the B-17 bond with full surety or bank
guarantee of 5% of the bond amount, instead of simplifying the procedure has
made operations of the unit more expensive due to the requirement of deposit of
5% of the value of the bond amount in the form of bank guarantee or cash
security. The trade had also been representing, that it is difficult for them to
organise surety for the bond amount or 5% bank guarantee of the bond amount
where the units have to make huge investment on capital goods.
3. The issue has
been examined by the Board and it has been decided that the bond amount will now
be equivalent to the duty leviable on the sanctioned requirement of imported and
indigenous capital goods plus the duty on the raw materials to be held in stock
for six months only. The amount of duty on the capital goods and the raw
material may be calculated and certified by the itself.
4. It has also been
decided that the units would be required to give either surety for the revised
bond amount or furnish 5% of the bond amount as bank guarantee or any other
approved government security. It is further decided that the solvency of
sureties, may also be certified by a Chartered Accountant or the Bankers of the
surety. And, since in the law, a Limited Company is distinct legal entity and
the Members of the Company, including the Directors are distinct from the
Company, there should be no objection to allow the Directors of the EOU/ EPZ
Units etc. which are Limited Companies, to stand as surety in their personal
capacity for the said companies. In addition, other corporate bodies including
Limited Companies may also stand as surety for the unit.
5. The circular Nos.
14/ 98 and 42/98-Cus. stand modified of the above extent. The above may be given
wide publicity by issue of Public Notice.
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