(1) Upon an application being made to license a private warehouse, the Principal Commissioner of Customs or Commissioner of Customs, as the case may be, may issue a licence to the applicant who, –
(a) is a citizen of India or is an entity incorporated or registered under any law for the time being in force;
(b) submits an undertaking to comply with such terms and conditions as may be specified by the Principal Commissioner of Customs or Commissioner of Customs, as the case may be;
(c) furnishes a solvency certificate from a scheduled bank for an amount to be specified by the Principal Commissioner of Customs or Commissioner of Customs, as the case may be:
Provided that the condition of furnishing a solvency certificate shall not be applicable to an undertaking of the Central Government or State Government or Union territory.
(2) The Principal Commissioner of Customs or the Commissioner of Customs, as the case may be, shall not issue a licence to an applicant if, -
(a) he has been declared an insolvent or bankrupt by a Court or Tribunal;
(b) he has been convicted for an offence under any law for the time being in force;
(c) he has been penalised for an offence under the Act, the Central Excise Act, 1944 (1 of 1944) or Chapter V of the Finance Act, 1994 (32 of 1994);
(d) he is of unsound mind and stands so declared by a competent Court; or
(e) the Principal Commissioner of Customs or the Commissioner of Customs, as the case may be, is satisfied that-
(i) the site or building of the proposed private warehouse is not suitable for secure storage of dutiable goods;
(ii) the site or building of the proposed private warehouse is not suitable for general supervision by officers of customs;
(iii) bankruptcy proceedings are pending against the applicant; or
(iv) criminal proceedings are pending against the applicant and the offences involved are of such nature that he is not a fit person for grant of licence.