Where is the B- 4 Bond?

 

VIJAY. K. KUMAR

MA, B.Ed,BL,MBA

Superintendent of Central Excise, Hyderabad

 

 

1. The other day, a colleague rang me up in frantic anxiety and asked me if I could help him in finding the proforma of the B-4 Bond. Obviously he had to arrange for provisional release of some seized goods and all his search operations in the several published documents relating to Central Excise did not yield results. He could successfully "search" a factory or a vehicle and seize goods and vehicle, but when it came to releasing the vehicle, he did not know, under what bond he should do so. I told him that there was no need for any search by him or me for the simple reason that the bond simply did not exist.!!!!!!!! Then why the confusion?
   

 

1. Para 2.2 of Chapter 14 of the CBEC's Excise Manual of Supplementary Instructions as on 1.9.2001, states,
   

 

2.2        The following are the types of bonds, which are presently in vogue:             

1. B-1 Surety / Security (General Bond) - for export of goods without payment of duty under Rule 19;
   
2. B-2 Bond Surety / Security(General Bond) for provisional assessment;
   
3. B-3 Bond Surety / Security) - to obtain matches Central Excise stamp on credit;
   
4. B-4 Bond Surety/Security for provisional release of seized goods (provided in this Manual by instruction); and
   
5. B-17 Bond (General) Surety / Security -composite bond for EPZ/ 100% EOUs for assessment, export, accounting and disposal of excisable goods obtained free of duty [continuation of the Format as specified under the erstwhile Central Excise Rules, 1944].
   

1. This B-4 Bond was supposed to have been provided in the manual by instruction. You search the manual a hundred times; you will not find it - for IT SIMPLY IS NOT THERE.
   
2. Somebody who was supposed to have included the bond in the manual obviously missed it. Proof reading and comparison being outdated virtues especially in our offices flooded with computers (with no computerisation at all) used as type machines, these types of omissions go un noticed. And with frequent changes in the law and procedure, no body is seriously reading the changed laws. I think they are all waiting for the next change and may be for the provisions to settle down finally, for if they master the rules now, there may be some changes soon and this unlearning process especially during the latter years of one's career is a disturbing and difficult proposition. And the younger ones are advised not to waste their time mastering the rules which are going to be changed anyway. So one hears people talking about basic concepts, common sense (not really very common), but not the law. Please forgive me for the digression( if any), but coming back to the binding force (or the lack of it) of our bonds:-
   
3. On what bond, are seized goods released provisionally? The Manual is not totally silent on this. Para 3.2 of Chapter 17 of the manual says, "3.2 :   The power to release seized goods emanates from power to seize itself. The goods seized may be released provisionally under bond in the Format specified under erstwhile Central Excise Rules, 1944 [B-8 bond] along with 25% security or surety by the officer who is normally competent to adjudicate the case.
   
4. By the time Chapter 17 came to be written, B-4 Bond mentioned in Chapter 14 was forgotten and a new bond is prescribed, not exactly a new bond. We are told to use an old bond prescribed under the old Central Excise Rules 1944. Even this is not a bad arrangement – only if the bond mentioned was correct. The B – 8 Bond under the erstwhile rules was brought in by a notification in 1945, yes 1945 and the bond was to be entered into by person licensed to obtain without payment of the whole or part of the duty, excisable goods to be used for special industrial purposes. That is the erstwhile Chapter X procedure or the present Central Excise (Removal of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 2001. It is anybody's guess as to how a bond for receipt of goods without payment of duty can be used for getting goods released provisionally. ( The logic might be that the goods got seized because they were got without payment of duty)
   
5. But then what happens to the goods seized? Do they ever get released? Or do they remain with the department for want of a bond?
   
6. The erstwhile rules (actually the erstwhile to the erstwhile rules) had a bond called B –11 to be entered into by person seeking release of goods seized pending adjudication. So what the manual means by B-8 Bond is perhaps the B- 11 Bond. A small typographical mistake which went un noticed!! . I think that solves my colleague's problem and I told him, "don't throw away your old books, they would be useful when you search for the elusive bond in the new manual"
   

But
my bond story does not end here. As per the manual, the Bond B-3 is - to obtain matches Central Excise stamp on credit; ( Please see para 2 of this article). But Board, in Circular No.581/18/2001-CX dated 29.6.2001 prescribed a Bond called B-3 for the due despatch of excisable goods removed for warehousing and export there from to a foreign country without payment of duty. And
there of course is a bond for obtaining Central Excise stamps on credit by match manufacturers prescribed as annexure to Notification No. 50/2001 – CE (NT) dated 28.6.2001. This bond is not given any number but the manual confuses it with the B-3 bond for warehousing of export goods! But elsewhere in the manual, precisely in para 2.1 of Part II Chapter 10, the exporter is required to furnish a Bond B-3!!!. As per the manual as shown in para 2 of this article, there are only five bonds in vogue now. But the Central Excise (Removal of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 2001 in rule 3 requires that the manufacturer shall execute a general bond with surety or security. It is not mentioned anywhere what this bond is. This is actually the Bond B-8 under the erstwhile CE Rules 1944.

Confusing?

 

EXCISE LAW TIMES – 01.08.2002– A 221