I am directed to enclose RBL's letter IBS No. 452/ 23.67.002/ 97-98 dt. 30.8.97 authorising seven Banks as the Nominated Agencies for the import of Precious Metals under various, jewellery Export Promotion Schemes as per the EXIM Policy 1997-2002. For supply of metals for export manufacture under these Schemes, the Board has considered to given the following relaxation within the overall Private Bonded Ware Housing Scheme as a special case to be applicable to this sector.

2.    You attention is invited to Circular No. 27/ 97-Cus. dated 8/7/97 issued from F.N. 305/ 92/ 97-FTT stating inter alia that in case of State Bank of India or any other bank nominated by the Reserve Bank of India, they may be allowed to utilise their own vaults rather than having a separate private bonded warehouse, subject to the observance of Board's existing instructions on setting up such facilities. Instead of present double-lock-system, banks may be allowed to operate such vaults on their own. However, regular random surprise checks may be made to verify the stock of gold. The frequency, and timing of such stock verification may be decided at the level of Deputy commissioner and such verification shall not be less than once a year.

3.    The banks may operate the facility at more than one branch. The storage space (vault) in each branch will be licenced by respective jurisdictional Commissioner under Section 58.

4.    For each branch separate Bonds under Section 59 for ware housing and transit bond for the goods in transit may be given by the concerned branch or its Head Office or coordinating branch of the concerned bank. These bonds will be in existing format covering duty liability on maximum quantity of goods likely to be stored at a time, and will be valid for a year. Transit bond should be similarly for the goods likely to be in transit within 60 days. But they may not submit separate Bank Guarantee for these bonds.

5.    While the precious metals would be stored in bank's own vault, they have to keep separate account of the metals received duty free under these schemes. They should also ensure that the stock of the said metals is kept segregated.

6.    The banks may not be asked for cost recovery charges for the officer as officers' every day presence at the bank would not be required.

7.    Exporters would take clearance from the bank against their own bond and bank guarantee. Running bond account of the exporters may be maintained by Asst. Commissioner of Customs, when asked for, exporter wise and bank wise for ease of correlation.

8.    In addition to bond, some Commissioners are asking for insurance cover on the stocks. It is clarified that once the bond is taken, separate insurance cover is not required to be taken by the bank.

9.    The bond value for the nominated agency as also for the export would be equal to the duty leviable but for the duty exemption. However, the bond given by the exports would be secured by a bank guarantee for 10% of the duty leviable on the metals but for the duty exemption.

10.    The exporters operating under Replenishment Scheme may be permitted to receive gold/ silver / platinum from the bank on submission of E.P. Copy without having to file ex. bond B/E.

11.    It is clarified that the importers who want to avail of the benefits of import of precious metals under Notification No. 144/ 93-Cus. dated 28.6.93 without going through the Bonded Warehouse procedure as prescribed by Circular No. 27/ 97 may be allowed to import the said metals following the conditions prescribed in the said Notification.

12.    It is reiterated that the banks shall intimate the Customs on the expiry of the period permitted to effect exports in the Handbook of Procedures, unless the exporter submits a proof of exports to the bank and to the Customs simultaneously. In case of default the Asstt. Commissioners should take immediate action to recover the amounts of Customs duty leviable on the quantity of gold outstanding and to encash the bank guarantee. He shall also proceed to recover the balance of Customs duty, penalty if any, as per law.

        You are requested to guide the banks in your jurisdiction accordingly.