Section 29 in The Special Economic Zones (Customs Procedures) Regulations, 2003
29. Security.
(1)On the basis of the Letter of Permission issued by the Development Commissioner of the zone, the zone unit shall execute a bond with the proper officer, in the Form I as annexed to the Special Economic Zone Rules, 2003 and such surety or security shall be given as per procedure specified hereinafter in this regulation.(2)The bond, in respect of a limited company, shall be executed by the Managing Director of the company or the Director(s) who have been duly authorised for this purpose by a resolution of the Board of Directors of the Company and shall be affixed with the common seal of the company.(3)Where the unit is a partnership firm, the Bond shall be executed by the all the partners of the unit.(4)[ The bond amount shall be equal to the twenty five per cent. of the duty leviable on the imported and indigenous capital goods plus duty forgone on raw materials to be held in stock for three months by the zone unit.] [Substituted by Notification No. G.S.R. 306(E) dated 11.5.2004 (w.e.f. 22.7.2003)](5)The zone unit shall furnish surety for the bond amount or furnish five per cent. of the bond amount as bank guarantee or any other security as approved by the Central Government and in case of surety, the solvency of sureties shall be certified by any Chartered Accountant or the Banker of the Surety, as the case may be.(6)The Directors or Members of the limited company may stand as surety in their personal capacity for the company and other corporate bodies included limited companies may also stand as surety for the unit.(7)[ Notwithstanding anything contained in sub-regulation (5), where the zone unit have a turnover of rupees one crore or above, or where the zone unit is in existence for more than a period of three years with an unblemished track record, such unit shall not be required to furnish surety or security.] [Substituted by Notification No. G.S.R. 306(E) dated 11.5.2004 (w.e.f. 22.7.2003)](8)Where the value of the bond executed with the custom officers is initially worked out on the projected value of goods imported and the value of such bond falls short of duty forgone on goods admitted duty free in the unit, then the unit shall be required to submit a revised bond and furnish additional security or surety, as the case may be, and in case of sub-contracting of production process or production in domestic tariff area, if the security given with the bond is not sufficient to cover duty leviable on goods being taken into domestic tariff area, the unit shall be required to give additional security.(9)[ The bond shall be a running bond and shall be debited for an amount equal to duty forgone on the goods imported or procured by the zone unit, and credited for an equal to duty forgone on the raw materials used in the manufacture of finished products where such manufactured goods are wither exported or cleared into domestic tariff area on payment of duty as per the provisions of the Act or rules and regulations, made there under and such debiting and crediting of bond shall be done once at the end of every three months.] [Substituted by Notification No. G.S.R. 306(E) dated 11.5.2004 (w.e.f. 22.7.2003)](10)In respect of the capital goods or infrastructure materials, surety or security shall not stand discharged on arrival of the capital goods or infrastructure materials within the unit and the surety or security shall not be discharged as long as the capital goods are in the zone unit or the capital goods of the unit are not debonded.(11)The duty for debiting the bond amount in respect of capital goods or infrastructure materials or raw materials shall be as per the duty foregone amount given in the bill of entry or shipping bill, as the case may be.(12)After execution of the bond, the proper officer shall retain the original copy of the bond and provide a certified copy to the unit for its record.(13)Notwithstanding anything to the contrary, in case the zone unit is engaged in manufacture and export of gem and jewellery, the effective rate of duty as specified in notification No 80/97-Customs of the Government of India in the Ministry of Finance ( Department of Revenue), dated 21st October, 1997, shall be taken instead of tariff rate of duty, for the purpose of calculation of bond amount in case of import of gold or silver.[30. Monitoring of Performance. - Performance of the zone unit shall be monitored by the Unit Approval Committee in which the Commissioner of Customs having jurisdiction over the zone or his nominee shall be a member.] [Substituted by Notification No. G.S.R. 306(E) dated 11.5.2004 (w.e.f. 22.7.2003)]
