Statutory provisions :
Rule 20 of the Central Excise Rules 2002, contains provisions relating to warehousing.
Under Rule 20(1), the Central Government is authorised to extend the warehousing provisions by issue of notifications for the goods specified therein. Warehousing allows removal of specified goods from factory to warehouse or from one warehouse to another warehouse without payment of duty.
The facility under sub-rule (1) is available subject to such conditions, including penalty and interest, limitations, including limitation with respect to the period for which the goods may remain in the warehouse, and safeguards and procedure, including in the matters relating to dispatch, movement, receipt, accountal and disposal of such goods, as may be specified by the Board [Sub-rule (2)].
The consignee is responsible for payment of duty on goods removed from factory to warehouse or one warehouse to another [Sub-rule (3)]. If the goods dispatched for warehousing or re-warehousing are not received in the warehouse, the liability to pay duty will be on the consignor [Sub-rule (4)].
At present, the warehousing provisions are applicable in respect of the following:
(a) (i) benzene, toluene and xylene (ii) Goods transferred to customs bonded warehouse as stores to a foreign going vessel or aircraft [The goods are cigarettes, aerated waters, prepared and preserved foods, aluminium foil covers, stainless steel cutlery, butter and cheese] – Vide Notification No.17/2004 CE(NT) dated 04.09.2004
(b) Goods removed by exporters who are Status Holders, foreign departmental stores of repute and the automobiles manufacturers who have signed MOU with DGFT for subsequent exports under rule 18 or 19 of the Central Excise Rules, 2002 – Vide Notification No.46/2001 CE(NT) dated 26.06.2001 as amended
(c) Excisable goods removed without payment of duty for storage in godown/retail outlet of a Duty Free Shop in the Departure Hall/Arrival Hall of International Airport, appointed/licensed as „warehouse‟ under sections 57 or 58 of the Customs Act, 1962 and for sale therefrom, against foreign exchange to passengers going out of India or to the passengers or members of crew arriving from abroad – Vide Notification No. 7/2013 CE (NT) dated 23.05.2013