I am directed to invite your attention to above subject and to say that an Inter Ministerial Group (IMG) headed by Secretary (Revenue) examined various issues relating to simplification of customs procedures. IMG felt that the issues relating to multiplicity of bond and multi-utilization of bond need to be addressed. The Group felt that if the same person is required to file two different bonds to a single Customs authority under different provisions of customs procedures, then one single bond can incorporate all such requirements and the existing Bond module of the EDI should be utilized for all requirements of bond. The Group felt that it would ensure better monitoring and simplification of procedure.

2. In this connection reference is invited to Board’s Circular No. 78 /2001-Cus dated 7th December, 2001 wherein it is prescribed that the custodians of ICDs/CFSs operating as carriers of transhipment cargo between gateway ports and their ICDs/CFSs shall amend the terms and conditions of their bank guarantees executed with Customs for custodianship of ICDs/CFSs to cover safety and security of cargo being transhipped by them. The details of such bank guarantee shall be informed to the Commissioner of Customs having jurisdiction over the gateway port. The custodians of ICDs/CFSs shall be allowed to tranship the cargo against the said bank guarantee and they will not be required to execute a separate bank guarantee for transhipment.

3. Further Board’s Circular No. 34/2000-Cus. dated 3rd May, 2000 provide for ‘mother bond’ in order to avoid multiplicity of bond for same purpose i.e. transshipment. As per the provisions, the carriers may execute Mother Bonds instead of individual bonds. Such bonds will be accepted and maintained by the Commissioners of Customs at the port of origin and these will be like running bonds. These will be credited on receipt of proof of safe landing of containers at the port of destination. The value of Mother Bond can be arrived on the basis of the average number of containers carried in the vessels, time taken for submission of proof of safe landing of containers at the destination ports, frequency of such transhipment as well as the average value for containers.

4. In view of existing circulars efforts should be made to reduce multiplicity of bond. Further EDI system of Customs has a ‘bond module’ which will be fully utilized once ‘message exchange facility’ is operationalised between two ports. The implementation of bond module for re-crediting is in conformity with the Regulation 4 of the Goods Imported (Condition of Transhipment) Regulation, 1995 which provides for discharge of the bond on production of certificate of transfer of goods at the destination. After such discharge of the bond amount covering a particular transaction; the value of mother bond will be credited to that extent. In an online environment, such re-credit to the extent of the bond amount which gets discharged as stated above, would be done automatically in the system on receipt of electronic message between Gateway port and destination port or between two customs stations. Directorate of Systems and Data Management would make efforts to implement the same in electronic environment in time bound manner.

5. The above instructions may be brought to the notice of all concerned for effective implementation.

6. Hindi version follows.

Yours faithfully

(Anupam Prakash)
Under Secretary to the Government of India
Phone No.23094182

F.No.450/66/2005-Cus.IV