Subject: EOUs/EPZ/EHTP/STP Units---B17 bonds – debit of only 25% of duty foregone

            It is directed to invite your attention to Board’s Circular No. 76/99-Customs, dated 17.11.99, on the above subject and to say that a doubt has beenraised with regard to debiting of bond in case of fresh import or local procurement of raw materials/capital goods. The doubt is in the context of sub-clause (v) of paragraph 6 of the above said Circular wherein it has been mentioned that the duty for debiting bond amount in respect of capital goods/raw materials will be as per duty-foregone amount give in the Bill of Entry/AR-3. However, paragraph 3 of the Circular states that the Bond amount (for B-17 bond) will be equivalent to 25% of the duty leviable on the sanctioned requirement of imported and indigenous capital goods plus duty foregone on the raw materials to be held in stock for three months only. As the bond amount for B-17 bond is worked out on the basis of 25% of the duty foregone on the capital goods, it has been represented by the Trade that debit of the bond to the extent of full amount of duty foregone in case of capital goods as mentioned in Bill of Entry/AR-3, will always result in bond amount falling short, thus requiring execution of another/additional bond.

2.        The matter has been considered. It is clarified that for debiting the bond amount in case of fresh imports or procurement of capital goods only 25% of the duty foregone as mentioned in Bill of Entry/AR-3, should be taken and not the entire duty amount. Board’s Circular No. 76/99-Cus, dated 17.11.99, referred to above stands modified to the above extent.

3.        Wide publicity may be given to the above changes by issue of a Public Notice in this regard.

4.        Difficulties, if any, faced in understanding or in implementation of the above change, may be brought to the notice of the Board at an early date.