TaxTMI 
TaxTMI 
MF(DR)Circular No.42/2007 Customs dated 30.11.2007 granting exemption from furnishing of Bank Gaurantee to Central/State Government undertaing. My query is; Whether transfer of goods from Mumbai Port to warehouse at Gujarat is covered under the above circular or not? Relevant extract of the circular is reproduced as under: it is clarified that all Central and State Public Sector Undertakings shall be exempt from furnishing Bank guarantee or other form of security for inter-city transfer of goods from one bonded warehouse to another, including transfer of goods from Sea/ Dryland port. The transit would, however, be continued to be executed.
Clarification - MF(DR)Circular No.42/2007
29 Jul 2008 
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Exemption from bank guarantee for inter-city bonded transfers limited; port-to-warehouse transfer not covered under circular.
The circular exempts Central and State Public Sector Undertakings from furnishing Bank guarantee or other security for inter-city transfer of goods between bonded warehouses, including transfers from sea or dryland ports, while preserving the need for transit to be executed. Applying a plain reading, a transfer characterized as from a port to a warehouse in another city does not fall within that exemption and therefore remains subject to the requirement to furnish bank guarantee or equivalent security. (AI Summary)
The circular exempts Central and State Public Sector Undertakings from furnishing Bank guarantee or other security for inter-city transfer of goods between bonded warehouses, including transfers from sea or dryland ports, while preserving the need for transit to be executed. Applying a plain reading, a transfer characterized as from a port to a warehouse in another city does not fall within that exemption and therefore remains subject to the requirement to furnish bank guarantee or equivalent security. (AI Summary)