A request has been received from an unit engaged in the business of design and construction of various categories of vessels which are thereafter exported, for grant of a greater period of warehousing, given the nature of their activity which has long gestation period, to obviate the need for approaching the Customs for extension of warehousing period, every three months. The matter has been examined by the Board.

2. As per the proviso to Section 61 of Customs Act, 1962:

(i) in the case of any goods which are not likely to deteriorate, the period specified in clause (a) or clause (aa) or clause (b) may, on sufficient cause being shown, be extended:

(A) …………………….. ; and

(B) In any other case, by the Commissioner of Customs, for a period not exceeding six months and by the Chief Commissioner of Customs for such further period as he may deem fit;

2.1 Thus, as per the provisions of Section 61 of the Act, ibid, in the case of any goods which are not likely to deteriorate, the Chief Commissioners can grant extension of warehousing for a period they deem fit.

3. However, as per Circular No. 47/2002-Cus dated 29/07/2002 of CBEC, Commissioner of Customs can extend the period of warehousing for a period not exceeding six months, on sufficient cause being shown and further extensions as deemed fit can be granted by the Chief Commissioner of Customs. As per para 3 of the Circular, such extension is to be granted in deserving cases for a period not exceeding three months at a time. The conditions for granting extension, as stated in para 4 of circular are that the goods are not likely to deteriorate during the extended period of warehousing and that interest accrued on the goods in the preceding period should be collected.

4. Para 5 provides that a liberal approach may be adopted in granting extension of warehousing period in respect of specified categories of goods , which include goods used for units operating under ‘ manufacture in bond’ scheme and goods imported for building and fitment to ships. Thus units that import goods for ship building are covered under the categories specified in Para 5 of the above Circular. The goods imported by such units would generally be required to be warehoused for a longer period of warehousing, before they are cleared for use. In such cases, it would be burdensome for the trade, if each such extension of warehousing period is for a three month period only and they have to approach the department for extensions repeatedly. This would also place undue strain on the department to process the extension requests multiple number of times in close proximity.

5. In view of the foregoing, for goods falling under categories ( v ) and ( vi ) of para 5 of Circular 47/2002 - Customs, the Chief Commissioner of Customs may consider granting the extension of warehousing period for a period even greater than 3 months , if she/ he is satisfied that the said goods are in good condition and are not likely to deteriorate in quality in the proposed period of extension and also if interest accrued on the goods in the preceding period is realized. The period of extension would be subject to the overall period of warehousing permitted under Section 61 for the relevant category of goods.

Yours faithfully,

Sd/-

(Rajendra Meena)
OSD (LC)


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