Customs Act, 1962 › Chapter IX — Warehousing

Section 59. Warehousing bond

Customs Act, 1962

Bare Act

Warehousing bond.

(1) The importer of any goods in respect of which a bill of entry for warehousing has been presented under section 46 and assessed to duty under section 17 or section 18 shall execute a bond in a sum equal to thrice the amount of the duty assessed on such goods, binding himself-

(a) to comply with all the provisions of the Act and the rules and regulations made thereunder in respect of such goods;

(b) to pay, on or before the date specified in the notice of demand, all duties and interest payable under sub-section (2) of section 61; and

(c) to pay all penalties and fines incurred for the contravention of the provisions of this Act or the rules or regulations, in respect of such goods.

(2) For the purposes of sub-section (1), the Assistant Commissioner of Customs or Deputy Commissioner of Customs may permit an importer to execute a general bond in such amount as the Assistant Commissioner of Customs or Deputy Commissioner of Customs may approve in respect of the warehousing of goods to be imported by him within a specified period.

(3) The importer shall, in addition to the execution of a bond under sub-section (1) or sub-section (2), furnish such security as may be prescribed

(4) Any bond executed under this section by an importer in respect of any goods shall continue to be in force notwithstanding the transfer of the goods to another warehouse.

(5) Where the whole of the goods or any part thereof are transferred to another person, the transferee shall execute a bond in the manner specified in sub-section (1) or sub-section (2) and furnish security as specified under sub-section (3).

Judgments on Section 59

Mumbai Travel Retail Private Limited vs Mumbai-Air Cargo Import — CESTAT, 9 May 2025. A monetary penalty under Section 112(a) of the Customs Act for a wrong claim of exemption is a civil contravention, not a penalty 'for an offence under the Customs Act' within Regulation 3(2)(c) of the Special Warehouse…
Ganesh Benzoplast Ltd vs Commissioner Of Customs-Nhava Sheva-I — CESTAT, 22 Apr 2024. Storage or unloading of imported goods, even in non-bonded tanks or through pipelines into a bonded warehouse, attracts no confiscation, redemption fine or penalty where it is done with the prior permission of the…
Shm Shipcare P Ltd vs Mumbai-Air Cargo Import — CESTAT, 16 Feb 2024. Manufacture in a customs bonded warehouse under Sections 58 and 65 is a duty-deferment scheme: import duty on raw materials consumed in the final product is payable only on clearance of the final product under Section…
Sundaresh Bhatt vs Central Board Of Indirect Taxes And… — Supreme Court of India, 26 Aug 2022. Once the Adjudicating Authority (NCLT) approves the Liquidator's decision to sell the movable/immovable assets of the corporate debtor in liquidation by adopting a particular mode of sale, there is no provision in the…
Union Of India vs M/S. Associated Container Terminal Ltd. — Supreme Court of India, 14 Feb 2020. Where warehoused goods are sold for non-payment of rent or warehouse charges, customs duty is to be computed by backward calculation on the sale proceeds as cum-duty price and appropriated per the priority in Section…
Sandeep Patil vs Union Of India And Ors — Bombay High Court, 7 Oct 2019. For imported warehoused goods, the taxable event is the crossing of the customs barrier, i.e., filing of a bill of entry for home consumption under section 68 of the Customs Act; until then, sales of warehoused goods…
Larsen And Toubro Limited vs Union Of India — Gujarat High Court, 20 Mar 2019. Goods issued from a bonded warehouse for manufacture under Section 65 are subsumed in the manufacturing process, so their retention in the warehouse beyond one year without extension does not breach Section 61(2)(ii)…
N.K. Bapna vs Union Of India And Ors — Supreme Court of India, 14 May 1992. Clandestine removal of goods from a bonded warehouse without the permission of the proper officer amounts to 'smuggling' even after assessment of duty, because import is not complete until clearance from the warehouse…
Glamstone Cosmetics Pvt. Ltd. Thr… vs The Union Of India And Ors — Bombay High Court, 9 Mar 2026. Goods importable only subject to statutory conditions (such as CDSCO registration for cosmetics) become prohibited goods under Section 11 read with Section 125 of the Customs Act when imported without compliance, and…
Veetech Infoline Private Limited vs The Additional Commissioner Of Customs — Karnataka High Court, 24 Nov 2025. A cryptic, non-speaking adjudication order that reiterates a previous order without application of mind or cogent reasons violates principles of natural justice, and such violation permits writ interference under…
Akshay Logistics vs Commissioner Of Customs-Nhava Sheva-I — CESTAT, 7 Jul 2025. Confiscation under section 111(j) fails unless the goods are established to have been removed from the warehouse after bonding without the proper officer's permission or in breach of its terms, and minor, rectified…
Kundan Care Products Ltd vs Commissioner Of Customs-New Delhi Acc… — CESTAT, 31 Jul 2024. A penalty imposed under section 112 of the Customs Act for 'contravention' of statutory provisions is not a penalization for an 'offence', since offences and penalties are distinct categories; therefore, a licensee who…
Industrial Dev.Bank Of India Through… vs Superintendent Of Central Excise And Customs — Supreme Court of India, 18 Aug 2023. Government dues under the Customs Act, even when preferential under Section 530 of the Companies Act, do not override the overriding preferential payments under Section 529A, so prior secured creditors may enforce their…
Elan Electronics India vs Commissioner, Customs-New Delhi — CESTAT, 4 Jan 2023. Where imported goods are re-exported without ever being cleared for home consumption, the amount deposited in the name of customs duty is not 'duty' but an unauthorisedly retained deposit, so the limitation of section…
(Ii) U. B. Venkatesh, Managing Director vs The Commissioner Of Customs — CESTAT, 1 Jul 2011. Where duty-free import benefits under a notification are availed by assessment to nil rate of duty and its conditions are violated, the resultant short levy must be demanded under Section 28(1) of the Customs Act, and…
Sri Vishnupriya Industries Ltd. (In… vs Superintendent Of Central Excise And Customs — Andhra HC (Pre-Telangana), 3 Sep 2004. A detention and sale of warehoused goods under Section 72(2) of the Customs Act without a proper demand under Section 72(1) and notice to the owner is non est and void ab initio, and where no sale has been effected…
Mr. Damodar Narcinva Naik, Mr. Narcinva… vs Union Of India (Uoi) And Ors.,… — Bombay High Court, 15 Sep 2005. A dispute as to whether goods lying in a bonded warehouse are imported or indigenous is itself a dispute covered by the Kar Vivad Samadhan Scheme, and the department cannot reject a declaration under KVSS by relying on…