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Instruction regarding warehousing -Grant of in-bond manufacture facility
under section 65 of the Customs Act, 1962
Circular No. 132 dated 22nd
December 1995
I am directed to
state that a review of the existing policy with regard to grant of in-bond
Manufacture facility under section 65 of the Customs Act, 1962 has been
conducted by the Board. Consequent to the review, it has been decided that the
requests for grant of in-bond Manufacture facility under section 65 of the Act
will henceforth be considered and decided at the level of the Commissioners
without making any reference to the Board. The following guidelines may,
however, be kept in view while deciding such requests.
2. The
Board's policy has been to extend the facility mainly to export oriented units
so that unnecessary difficulties to pay duty and later claim drawback can be
avoided. In order to whether an Industrial unit is export-oriented or not, the
following figures may be compared -
a) Total
value of goods manufactured by using imported raw materials;
b) Total
value of such finished goods exported; and
c) Total
value of such finished goods retained for domestic sale.
3. Flexible approach
may, however, be adopted in the matter so that there is no instance that the
exports have to be less than 50% of imported materials. Further the
Manufacture-in-bond operations are required to be carried out under customs
supervision on cost recovery basis. The Commissioner may carefully securities
the application for grant of in-bond manufacture facility and if the applicant
is financially secured, has goods credibility, and has not been involved in
Customs or Excise duty evasion in the preceding 5 years in the normal course, an
in-bond manufacture licence under section 65 may be granted. This would, of
courser, be subject to the condition that the promises are suitable and
adequately secured. While granting the request, the provisions of the
Manufacture and other operations in Warehouse Regulations, 1966 have also to be
complied with.
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