Manufacturing in Bond (Bonded Manufactory)

MANUFACTURING IN BOND (BONDED MANUFACTORY)

The licence is issued from office of the Excise Commissioner of the State for alcohol. Application should be made two months in advance prior to date of manufacturing along with requisite fee as indicated.

The application should include:

1. Name, addresses, and site of bonded laboratory if it is a firm name and address of every partner of the firm; if it is a company, its registered name, address of the Managing Director and Directors.

2. Capital to be invested for bonded preparation.

3. Number and description of apparatus, machinery, still and maximum amount of alcohol to remain at one time.

4. Approximate date of starting manufacturing; requirement of excise officer, either whole time or part-time.

5. List of preparations containing alcohol; licence number issued by Licensing Authority under DCA.

6. Elevation plan, plan of different rooms, details of doors and windows, and quarters for excise staff are to be provided.

7. In case of firm, partnership deal and in case of companies, list of association and latest balanced sheet of the company.

The Licensing Authority shall enquire into the purpose of manufacturing of such formulations containing alcohol and narcotic drugs; qualifications of the staff employed, previous experience of technical personnel; suitability of the proposal; and financial position of the applicant. The Licensing Authority shall also look into the equipment, requirement of alcohol and fix an amount of security. After satisfying all conditions, the Licensing Authority issues licence for one year relating to the premises approved after inspection and for manufacturing of product containing alcohol or narcotic drug. Separate licence is issued for each premises and the licence is not transferable.

The licence issued should be displayed properly in the premises. Licensing Authority may amend or alter the conditions of licence. Renewal of licence should be done before one month of expiry or else 25% extra fee is charged. Conviction of violation of provision of the Act is possible under sections 109 or 116 of Indian Penal Code. Before cancelling or suspending the licence, sufficient opportunity is given to the licensee to explain his/her position.

(i) Structures of the Bonded Manufactory

A separate plain spirit store is required to be provided in the bonded premises. There should be only one entrance to the laboratory, only one door for each of its compatments, a separate room for manufacturing of medicinal preparations, one or more rooms for storage, a separate room for manufacturing of toilet preparations and their storage, and a room for excise officer incharge near the entrance with furniture. The bonded laboratory should be opened and closed in presence of excise officer incharge and secured with excise ticket locks. Every window in the bonded laboratory should be provided with iron rods not less than 19 mm in thickness set apart at a distance of not more than 102 mm. The iron rods should be embodied in brick construction to a depth of 51 mm at each end. The windows should be covered from inside with strong wire netting, the aperture of which should not exceed 25 mm in diameter. Each room in bonded laboratory should have a board indicating name and a serial number of the room and the purpose for which it is used, painted in oil colour. The pipes from sinks in the laboratory should be connected to closed drainage ultimately, forming part of general drainage system. The gas and electric supply should be arranged in such a way that they are cut off at the end of day's work from one place. All the regulators or switches should be securely locked. Permanent vessels in bonded laboratory should bear the serial number and statement of full capacity of the vessel.

The spirit should be obtained from the spirit warehouse approved by the Excise Commissioner. The indent should be sent in duplicate in prescribed form counter-signed by the officer in charge of the laboratory. Alcohol is issued in duly sealed containers and under intimation to the Excise Officer concerned. No wastage during transhipment is permissible and for any loss due to negligence of the manufacturer, excise duty has to be paid.

(ii) Verification and Storage of Alcohol

On its arrival in bonded laboratory, alcohol is measured in volume and strength. Entries are made in register and stored in spirit store room under excise lock with perfect coordination between excise officer incharge and officer of manufacturing unit. The alcohol is issued from spirit store from time to time in accordance with the procedure laid down under Rules.

(iii) Issue of Alcohol from Store

The manufacturer should calculate requirement of alcohol and hand it over to the excise officer. All ingredients should be kept ready and on receipt of alcohol, the solvent should be mixed immediately in presence of excise officer. The percolators or other vessels containing alcohol during the process of manufacturing and storage should be labeled with the name of the product, batch number, description, quantity of alcohol used, date of manufacture and quantity of preparation removed. The preparation should be immediately removed to the store, measured and stored in vessels provided, entered in register and given a batch number. Upto 200 ml from each batch is permitted to be withdrawn without payment of duty for determination of alcoholic strength of preparation. A separate account of amount of samples used by the manufacturer for purpose of analysis is maintained. Any amount of preparation left after analysis should be returned and mixed with the main batch. All entries must be initialed by the excise officer incharge. The excise officer may also withdraw two samples from each batch (not more than 150 ml) for sending one sample to the chemical examiner and retaining other sample until the report is received. If the report of the chemical examiner indicates that the strength of alcohol in the preparation is more than the one declared by the manufacturer, the strength reported by the chemical examiner is entered in stock book and duty for excess strength of alcohol has to be paid by the manufacturer. Any preparation wherein strength beyond tertiary proof is established, it is either destroyed, reprocessed or disposed off as per the instructions of Excise Commissioner. The Excise Commissioner may exempt payment of duty, if convinced of any accidental loss of alcohol except, theft during the manufacturing or storage. The wastage limit for alcohol is fixed by the Central Government or State Government.

Bulk storage of preparations is done in jars or bottle of not less than 2.25 litres in volume. The container is labeled with batch number, content, strength of alcohol, etc. This preparation should be distributed in containers of not less than 50 ml capacity. However, in special cases, Excise Commissioner may authorize use of small containers. The containers with all necessary particulars are arranged in racks in the Bonded Laboratory. Any deficiency detected should be brought to the notice of excise officer who shall keep record and report to Excise Commissioner. The Excise Commissioner mayor may not ask manufacturer to pay duty for such deficiencies, depending upon the merit of the case.

(iv) Issue from Bonded Laboratories

The manufacturer makes application to excise officer and pays excise duty or it can be adjusted against any advance duty payed by him. Only on payment of calculated duty, the goods containing alcohol and narcotic drugs are permitted to be taken out of bonded laboratory by the excise officer.

Exemptions: The preparations supplied to Government hospitals, dispensaries and charitable hospitals, and institutions which supply medicines to poor as certified by the district medical officer are exempted from payment of excise duties.

Penalties: For contraventi~n of provisions of the Act or evasion of excise duties or failure to supply required information, the punishment is imprisonment for six months with or without fine. The court may order seizure of dutiable goods and handing it over to the Government. The owner of the land should inform the magistrate, excise officer or police or land revenue officer of any illegal manufacturing taking place in his/her place, otherwise, he/she is liable for imprisonment upto six months with or without fine.

Any officer without reasonable ground detaining the goods with an intention of harassment or torture may be fined upto rupees two thousand.

Any officer who refuses to perform duties unless he has obtained permission to withdraw shall be punishable with three months imprisonment with or without fine.

The Central Government may order that from a specified date no person shall engage in production of dutiable goods or part thereof.

Any officer authorized by the Excise Commissioner shall have free access at all reasonable times to any licensed premises for thorough inspection. If obstructed to discharge of duties of the officer, there is provision for penalty of rupees five hundred. Any authorized excise officer may arrest any person whom he/she has reason to believe that the person has violated provisions of the Act and is liable to be punished under this Act.