*****4% AD Refunds

A Comprehensive Manual

(As on 1-4-2011)

*****

******Compiled by

Ravi Kiran Edara, IRSAsst. Commissioner (Refund - Air)

Index1. The Customs Tariff Act, 1975

2. Notifications

3. CBEC Circulars

4. DGFT PN’s / Circulars

5. Public Notices / Facility Circulars

THE CUSTOMS TARIFF ACT, 1975Section 3 (5) If the Central Government is satisfied that it is necessary in the public interest to levy on any imported article [whether on such article duty is leviable under sub-section (1) or, as the case may be, sub-section (3) or not] such additional duty as would counter-balance the sales tax, value added tax, local tax or any other charges for the time being leviable on a like article on its sale, purchase or transportation in India, it may, by notification in the Official Gazette, direct that such

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imported article shall, in addition, be liable to an additional duty at a rate not exceeding four per cent. of the value of the imported article as specified in that notification.

Explanation. — In this sub-section, the expression “sales tax, value added tax, local tax or any other charges for the time being leviable on a like article on its sale, purchase or transportation in India” means the sales tax, value added tax, local ta x or other charges for the time being in force, which would be leviable on a like article if sold, purchased or transported in India or, if a like article is not so sold, purchased or transported, which would be leviable on the class or description of articles to which the imported article belongs, and where such taxes, or, as the case may be, such charges are leviable at different rates, the highest such tax or, as the case may be, such charge.

Section 3 (6) For the purpose of calculating under sub-section (5), the additional duty on any imported article, the value of the imported article shall, notwithstanding anything contained in sub-section (2), or section 14 of the Customs Act, 1962 (52 of 1962), be the aggregate of —

(i) the value of the imported article determined under sub-section (1) of section 14 of the Customs Act, 1962 (52 of 1962) or the tariff value of such article fixed under sub-section (2) of that section, as the case may be; and

(ii) any duty of customs chargeable on that article under section 12 of the Customs Act, 1962, (52 of 1962), and any sum chargeable on that article under any law for the time being in force as an addition to, and in the same manner as, a duty of customs, but does not include —

(a) the duty referred to in sub-section (5); (b) the safeguard duty referred to in sections 8B and 8C; (c)the countervailing duty referred to in section 9; and (d)the anti-dumping duty referred to in section 9A.

Notification No. 19/ 2006-Customs 10 Phalguna, 1927 (Saka)New Delhi, the 1st March, 2006

G.S.R. (E).- In exercise of the powers conferred by sub-section (5) of section 3 of the Customs Tariff Act, 1975 (51 of 1975), the Central Government, on being satisfied that it is necessary in the public interest so to do, and in supersession of the notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 19/2005-Customs, dated the 1st March, 2005[number G.S.R. 117(E), dated the 1st March, 2005], hereby directs that all goods specified under the Chapter, heading, sub-heading or tariff item of the First Schedule to the said Act, having regard to the sales tax, value added tax, local tax and other taxes or charges leviable on sale or purchase or transportation of like goods in India, when imported into India, shall be liable to an additional duty of customs at the rate of four percent. ad valorem.

[F.No.334/3/2006-TRU](S.Bajaj), Under Secretary to the Government of India

Notification No. 20/2006-Cus., dated 1-3-2006

Additional duty in lieu of State Taxes/VAT — Exemption to specified goods

In exercise of the powers conferred by sub-section (1) of section 25 of the Customs Act, 1962 (52 of 1962), the Central Government, on being satisfied that it is necessary in the public interest so

3

to do, hereby exempts the goods of description specified in column (3) of the Table below, falling within the Chapter, heading, sub-heading or tariff item of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) as are specified in the corresponding entry in column (2) of the said Table, when imported into India, from so much of the additional duty of customs leviable thereon under sub-section (5) of section 3 of the said Customs Tariff Act, as is in excess of the amount calculated at the rate specified in the corresponding entry in column (4) of the Table aforesaid :-

Table

S. No.

Chapter, heading, sub-heading or tariff item of the First Schedule

Description of goods Standard rate

(1) (2) (3) (4)

1. Any Chapter All goods which are exempt from the whole of the duty of customs leviable thereon or in case of which "Free" or "Nil" rates of duty of Customs are specified in column (4) under the First Schedule of the Customs Tariff Act, 1975 (51 of 1975) and which are also exempt from the whole of additional duty of customs leviable thereon under sub-section (1) of section 3 of the said Act, or on which no amount of the said additional duties of customs is payable for any reason.

Nil

2. 27 Petroleum crude, kerosene for Public distribution scheme, liquefied petroleum gas for domestic household consumers, petrol, diesel, coal, coke and petroleum gases and fuels

Nil

3. 9803 00 00 All goods Nil

4. 31 or any other Chapter

Fertilizers and all goods for manufacture of fertilizers

Nil

5. 4701 to 4706 All goods for manufacture of Newsprint

Nil

6. 4801 All goods Nil

7. Any Chapter All goods produced or manufactured in a Special Economic Zone (SEZ) unit and cleared in the Domestic Tariff Area (DTA) for home consumption, provided such goods are not exempted from sales tax or value added tax (VAT)

Nil

8. 2616 Gold concentrate Nil

9. 71 (except 7113)

All goods other than Articles of jewellery

Nil

10. 8908 00 00 All goods Nil4

11. 9801 Goods specified in item (iv) and item (vi) against S. No. 399 of the Table annexed to notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 21/2002-Customs, dated the 1st March, 2002 [G.S.R. 118(E), dated the 1st March, 2002]

Nil

12. 84 or any other Chapter

Goods specified in List 44 appended to notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 21/2002-Customs, dated the 1st March, 2002 [G.S.R. 118(E), dated the 1st March, 2002]

Nil

13. 8201 Manually operated or animal driven agricultural implements, their spare parts, components and accessories

Nil

14. Any Chapter Aid and implements used by handicapped persons

Nil

15. 23 Aquatic feed, poultry feed and cattle feed including grass, hay and straw, supplement and husk of pulses, concentrates and additives, wheat bran and de-oiled cake

Nil

16. 1404 90 40 Betel leaves Nil

17. 4901, 4902, 4903 or 4904

Books, Periodicals and journals including maps, charts and globes

Nil

18. 27 or 4402 Charcoal Nil

19. 10 Coarse grains other than paddy, rice and wheat

Nil

20. 4014 10, 3006 60

Condoms and Contraceptives Nil

21. 5004, 5005, 5006

Cotton and silk yarn in hank and cone Nil

22. 0403, 0406 10 00

Curd, Lassi, butter mil and separated milk

Nil

23. 68 Earthen pot Nil

24. 4401 10 Firewood except casurina and eucalyptus timber

Nil

25. 5608 11, 54, 55

Fishnet, fishnet fabrics and fish seeds, prawn or shrimp seeds

Nil

26. 0401 Fresh milk and pasteurized milk Nil

27. 0602, 0603 Fresh plants, saplings and fresh flowers

Nil

28. 7, 8 Fresh vegetables and fruits Nil5

29. 0703 20 00, 0910 10

Garlic and ginger Nil

30. 3926 40 11, 3926 40 19, 7018 10 00

All bangles except those made of precious metals

Nil

31. 3002 90 10, 3002 10

Human blood and blood plasma Nil

32. 33 Kumkum, bindi alta and sindur Nil

33. 2, 3, 0407, 5 Meat, fish, prawn and other aquatic products when not cured or frozen; poultry, eggs and livestock and animal hair

Nil

34. 63 National Flag Nil

35. 3101 Organic manure Nil

36. 5101 Raw wool Nil

37. 0511 Semen including frozen semen Nil

38. 5001 00 00, 5002

Silk worm laying; concoon and raw silk

Nil

39. 6815 Slate and slate pencils. Nil

40. 0801 19 10 Tender green coconut Nil

41. 1905 Bread (branded and unbranded) Nil

42. 25 01 00 10 Common salt (Processed or un-processed)

Nil

43. 2201 90 90, 2202 90 90

Water other than(i) aerated, mineral, distilled, medicinal, ionic, battery, de-mineralized water, and(ii) water sold in sealed container

NilNil

44. 27 Compressed Natural Gas (CNG) for use in the Transport sector.

Nil

45. 6913 90 00 Idols made of clay Nil

46. 6914 90 00 Clay lamps Nil

47. 0801 10 Coconut in shell and separated kernel of coconut

Nil

48. 4911 Religious Pictures not for use as calendars

Nil

49. 0713, 1001, 1006

Paddy, rice, wheat and pulses Nil

50. Any Chapter All goods specified in the First Schedule to the Additional Duties of Excise (Goods of Special Importance) Act, 1957 (58 of 1957)

Nil

51. 1101 00 00, Flour Atta, Maida, Besan and Suji Nil

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1102 00 00

52. 1209 All seeds other than oil seeds Nil

53. 1701 11 10 Gur and Jaggeri Nil

54. 27 Items covered under Public Distribution System, (except kerosene)

Nil

55. 2106 90 99 Papad and Vadi Nil

56. 1301 10 Lac Nil

57. 3915 Plastic waste Nil

58. 7001 00 10 Scrap glass or scrap glass bottles Nil

59. 4707 Paper waste Nil

60. 8524 31 11, 8524 40 11, 8524 91 12, 8524 91 13

All goods Nil

61. 7113 Articles of jewellery 1% ad valorem

Notification No. 29/2010-Cus., dated 27-2-2010

Spl. CVD — Exemption to specified goods

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In exercise of the powers conferred by sub-section (1) of section 25 of the Customs Act, 1962 (52 of 1962), the Central Government, on being satisfied that it is necessary in the public interest so to do, hereby exempts the goods of description specified in column (3) of the Table below, falling within the Chapter, heading, sub-heading or tariff item of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) as are specified in the corresponding entry in column (2) of the said Table, when imported into India, from so much of the additional duty of customs leviable thereon under sub-section (5) of section 3 of the said Customs Tariff Act, as is in excess of the amount calculated at the rate specified in the corresponding entry in column (4) of the Table aforesaid :-

TABLE

S. No. Chapter, heading, sub-

heading or tariff item of the First Schedule

Description of goods Standard rate

(1) (2) (3) (4)

1. Any Chapter All pre-packaged goods intended for retail sale in relation to which it is required, under the provisions of the Standards of Weights and Measures Act, 1976 (60 of 1976) or the rules made thereunder or under any other law for the time being in force, to declare on the package thereof the retail sale price of such article

Nil

2 61 (excluding 6117 90 00), 62 (excluding 6217 90)

All goods Nil

3 8517 12 All goods Nil

4 9101, 9102 All goods Nil

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[TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART II, SECTION 3, SUB-SECTION (i)]

GOVERNMENT OF INDIAMINISTRY OF FINANCE

(DEPARTMENT OF REVENUE)

Notification No. 102/2007-CustomsNew Delhi, the 14th September, 2007

  G.S.R. (E).- In exercise of the powers conferred by sub-section (1) of section 25 of the Customs Act, 1962 (52 of 1962), the Central Government, on being satisfied that it is necessary in the public interest so to do, hereby exempts the goods falling within the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), when imported into India for subsequent sale, from the whole of the additional duty of customs leviable thereon under sub-section (5) of section 3 of the said Customs Tariff Act (hereinafter referred to as the said additional duty).   2. The exemption contained in this notification shall be given effect if the following conditions are fulfilled:(a)    the importer of the said goods shall pay all duties, including the said additional duty of customs leviable thereon, as applicable, at the time of importation of the goods; (b)    the importer, while issuing the invoice for sale of the said goods, shall specifically indicate in the invoice that in respect of the goods covered therein, no credit of the additional duty of customs levied under sub-section (5) of section 3 of the Customs Tariff Act, 1975 shall be admissible;(c)    the importer shall file a claim for refund of the said additional duty of customs paid on the imported goods with the jurisdictional customs officer; (d)   the importer shall pay on sale of the said goods, appropriate sales tax or value added tax, as the case may be; (e)    the importer shall, inter alia, provide copies of the following documents alongwith the refund claim: 

(i)      document evidencing payment of the said additional duty;(ii)    invoices of sale of the imported goods in respect of which refund of the said additional duty is claimed;(iii)   documents evidencing payment of appropriate sales tax or value added tax, as the case may be, by the importer, on sale of such imported goods.

  3. The jurisdictional customs officer shall sanction the refund on satisfying himself that the conditions referred to in para 2 above, are fulfilled.   

F.No. 354/129/2007-TRU (S.Bajaj)

Under Secretary to the Government of India

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[TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART II, SECTION 3, SUB-SECTION (i)]

(DEPARTMENT OF REVENUE)

New Delhi, the 1st August, 2008

Notification No.93/2008-Customs

G.S.R. (E).- In exercise of the powers conferred by sub-section (1) of section 25 of the Customs Act, 1962 (52 of 1962), the Central Government, on being satisfied that it is necessary in the public interest so to do, hereby makes the following amendments in the notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 102/2007-Customs, dated the 14th September, 2007 which was published in the Gazette of India, Extraordinary, vide number G.S.R. 598(E), dated the 14th September, 2007, namely:-

In the said notification, in paragraph 2, for sub-paragraph (c), the following shall be substituted, namely,-

“(c) the importer shall file a claim for refund of the said additional duty of customs paid on the imported goods with the jurisdictional customs officer before the expiry of one year from the date of payment of the said additional duty of customs;”.

[F.No. 356/129/2007-TRU (Pt)]

(S.Bajaj), Under Secretary

GOVERNMENT OF INDIANotification No. 35/2007-Central Excise (N.T.)

New Delhi, the 14th September, 2007G.S.R. (E). In exercise of the powers conferred by section 37 of the Central Excise Act, 1944 (1 of 1944) and section 94 of the Finance Act, 1994 (32 of 1994), the Central Government hereby makes the following rules further to amend the CENVAT Credit Rules, 2004, namely:-   1. (1) These rules may be called the CENVAT Credit (Ninth Amendment) Rules, 2007. (2) They shall come into force on the date of their publication in the Official Gazette.   2. In the CENVAT Credit Rules, 2004, in rule 9, after sub-rule (1), the following proviso shall be inserted, namely:-

“Provided that the credit of additional duty of customs levied under sub-section (5) of section 3 of the Customs Tariff Act, 1975 (51 of 1975) shall not be allowed if the invoice or the supplementary invoice, as the case may be, bears an indication to the effect that no credit of the said additional duty shall be admissible; ”

F.No. 354/129/2007-TRU (S.Bajaj)

Under Secretary to the Government of India

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GOVERNMENT OF INDIA

Notification No. 36/2007-Central Excise (N.T.)

New Delhi, the 14th September, 2007

G.S.R. (E). In exercise of the powers conferred by section 37 of the Central Excise Act, 1944 (1 of 1944), the Central Government hereby makes the following rules further to amend the Central Excise Rules, 2002, namely:-

1.    (1) These rules may be called the Central Excise (Fourth Amendment) Rules, 2007.       (2) Save as otherwise provided in these rules, they shall come into force on the date of their publication in the Official Gazette.  

2. In the Central Excise Rules, 2002 (hereinafter referred to as the said rules), in rule 11, after sub-rule (7), the following provisos shall be inserted, namely:-

“Provided that in case of the first stage dealer receiving imported goods under an invoice bearing an indication that the credit of additional duty of customs levied on the said goods under sub-section (5) of section 3 of the Customs Tariff Act, 1975 (51 of 1975) shall not be admissible, the said dealer shall on the resale of the said imported goods, indicate on the invoice issued by him that no credit of the additional duty levied under sub-section (5) of section 3 of the Customs Tariff Act, 1975 shall be admissible;Provided further that in case of the second stage dealer receiving imported goods under an invoice bearing an indication that the credit of additional duty of customs levied on the said goods under sub-section (5) of section 3 of the Customs Tariff Act, 1975 (51 of 1975) shall not be admissible, the said dealer shall on the resale of such imported goods, indicate on the invoice issued by him that no credit of the additional duty levied under sub-section (5) of section 3 of the Customs Tariff Act, 1975 shall be admissible.”

 F.No. 354/129/2007-TRU

(S.Bajaj) Under Secretary to the Government of India

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Refund of 4% Spl. CVD on sale of imported goods — Procedure

M.F. (D.R.) Letter F. No. 354/129/2007-TRU, dated 14-9-2007

Government of India

Ministry of Finance (Department of Revenue)

Central Board of Excise & Customs, New Delhi

Subject : Refund scheme for the 4% additional CV duty levied under Section 3(5) of the Customs Tariff Act, 1975 - Regarding

Government has notified a scheme for refund of 4% additional duty of customs levied under Section 3(5) of the Customs Tariff Act, in respect of goods which, after importation, are sold and appropriate Sales tax or Value Added Tax (VAT), as the case may be, is paid on such sale. Suitable mechanism has also been provided that in such cases, no credit of such additional duty paid under Section 3(5) will be available. Notification Nos. 102/2007-Customs, 35/2007-Central Excise (N.T.) and 36/2007-Central Excise (N.T.), dated 14th September, 2007 have been issued today in this regard.

This exemption will operate through a 2.1 refund mechanism, wherein the importer would have to first pay all the duties of customs, including the aforesaid additional duty of customs, at the time of importation of the goods. He can thereafter claim refund of the said additional duty of customs at the jurisdiction port/airport/ICD etc. The notification prescribes the procedure for claiming such refunds.While claiming the refund importer will have to, inter alia, furnish copies of :

(i) documents evidencing payment of the aforesaid additional duty on the imported goods. This obviously will be the relevant bill of entry.

(ii) documents showing that appropriate Sales tax or VAT has been paid on the sale of the imported goods, in respect of which refund is claimed by him. Appropriate Sales tax or VAT means Sales tax or VAT in case of intra-State sales and Central Sales tax in case of inter-State sales;

In respect of goods for which the importer 2.2 claims refund of aforesaid additional duty, Notification No. 102/2007-Customs makes it mandatory for the importer to make an endorsement on the sale invoice that no credit of the 4% additional duty of customs levied under Section 3(5) of the Customs Tariff Act shall be admissible.

Suitable amendment has also been made to the Cenvat Credit 3. Rules, 2004 so as to provide that no credit of the aforesaid additional duty of customs shall be admissible against invoices bearing the aforesaid endorsement. [Notification 35/2007-Central Excise (N.T.) refers]. Amendments have also been made to the Central Excise Rules, 2002, so as to make it mandatory for the first stage dealers and second stage dealers to make a similar endorsement on invoices issued by them in respect of goods received by them against invoices bearing such an endorsement. [Notification 36/2007-Central Excise (N.T.) refers]. Obviously, any violation of these provisions will attract consequences which apply for wrong availment of credit/abetment towards wrong availment.

*******

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Circular No.6 /2008-Customs

F. No. 401/104/2007-Cus.IIIGovernment of IndiaMinistry of Finance

Department of RevenueCentral Board of Excise and Customs

  North Block, New Delhi.

28th April, 2008. To   All Chief Commissioners of Customs / Customs (Prev.). All Chief Commissioners of Customs & Central Excise. All Commissioners of Customs / Customs (Prev.). All Commissioners of Customs & Central Excise. Principal Chief Controller of Accounts (C&CE). The Chief Departmental Representative, CESTAT. All Directorates under CBEC.

Subject: Procedure to be adopted for refund of 4% Additional Duty of Customs in pursuance of Notification No.102/2007-Customs dated 14.9.2007 – regarding.

 ***

 Sir / Madam,     I am directed to state that various representations from importers, exporters, trade and industry associations and references from some of the Customs field formations have been received in the Board seeking clarification regarding refund of 4% Additional Duty of Customs leviable under sub-section (5) of Section 3 of the Customs Tariff Act, 1975 in pursuance of Notification No.102/2007-Customs dated 14.9.2007.   2. The Board has examined this matter in consultation with the Customs field formations. The following procedure may be adopted by the field formations in order to settle expeditiously the refund claims arising out of the exemption provided vide Notification No.102/2007-Customs dated 14.9.2007.   3. Manner of refund and its receipt:

Your attention is invited to the instructions communicated vide F.No.354/129/2007-TRU dated 14.9.2007 at the time of issue of the Notification No.102/2007-Customs dated 14.9.2007. It is reiterated that the scheme of refund of 4% Additional Duty of Customs has been notified through an exemption notification, and hence, the conditions as prescribed only in the said notification will apply. All refund applications under the aforesaid notification shall be received by the concerned field formations in their Centralized Refund Section, and the applicants would be given proper acknowledgement. The status of these refund claims shall also be displayed in the online database of customs duty refunds maintained by the respective Commissionerates.

4. Time – Limit:  

4.1. In the Notification No.102/2007-Customs dated 14.9.2007, no specific time limit has been prescribed for filing a refund application. Under the circumstances, a doubt has been expressed that whether the normal time-limit of six months prescribed in section 27 of the Customs Act, would apply. In the absence of specific provision of section 27 being made applicable in the said

13

notification, the time limit prescribed in this section would not be automatically applicable to refunds under the notification. Further, it was also represented that the goods imported may have to be despatched for sale to different parts of the country and that the importer may find it difficult to dispose of the imported goods and complete the requisite documentation within the normal period of six months. Taking into account various factors, it has been decided to permit importers to file claims under the above exemption upto a period of one year from the date of payment of duty. Necessary change in the notification is being made so as to incorporate a specific provision prescribing maximum time limit of one year from the date of payment of duty, within which the refund could be filed by any person. It is also clarified that the importers would be entitled to refund of duties only in respect of quantities for which the prescribed documents are made available and the claims submitted within the maximum prescribed time of one year. Unsold stocks would not be eligible for refunds.  4.2. It is also clarified that only a single claim against a particular Bill of Entry should be permitted to be filed within the maximum time period of one year. Filing of refund claim for a part quantity in a bill of entry shall not be allowed except when this is necessary at the end of the one year period. Further, since the Sales Tax (ST) / Value Added Tax (VAT) is being paid on periodical or monthly basis, even in case of bills of entry where the entire quantity of goods are sold within a month, all such cases shall be consolidated in a single refund claim and filed with the Customs authorities on a monthly basis. In other words, there would be a single refund claim in respect of one importer in a month irrespective of the number of Bills of Entry (B/Es) processed by the respective Commissionerate.   4.3. With the extension of time limit and the requirement to file claims on a monthly basis, Board feels that the number of refund claims should be manageable for disposal within the normal period of three months. Further, in the absence of specific provision for payment of interest being made applicable under the said notification, the payment of interest does not arise for these claims. However, Board directs that the field formations shall ensure disposal of all such refund claims under the said notification within the normal period not exceeding three months from the date of receipt.   5. Documents to be enclosed with refund claim:   5.1. Notification No.102/2007-Customs dated 14.9.2007 prescribes the documents that shall be enclosed along with the refund claim. In order to ensure sanction of refund properly, it is clarified that the document evidencing payment of ST/VAT (in original) duly issued by or acknowledged by the concerned ST/VAT authorities shall be submitted by the importer. A certificate from a Chartered Accountant or any other independent authority certifying payment of ST/VAT would not be acceptable in lieu of the original documents. However, a certificate from the statutory auditor / Chartered Accountant, who certifies the importer’s annual financial accounts under the Companies Act or any statute, correlating the payment of ST/VAT on the imported goods (in respect of which refund is claimed) with the invoices of sale, would be required along with the original tax / duty payment documents as proof of payment of appropriate ST/VAT for the purpose of para 2(d) & (e) of the said notification.   5.2. For the purpose of refund under this notification, it is reiterated that appropriate Sales Tax or VAT means Sales Tax or VAT in case of Intra-State sales and Central Sales Tax (CST) in case of Inter-State sales.

5.3. The exemption contained in the said notification envisages that the importer shall file a refund claim for 4% CVD (“said additional duty of Customs”) paid on imported goods and shall pay on sale of the said goods “appropriate Sales Tax or VAT as the case may be”. Hence, it is clear that there is no stipulation in the notification that the exemption is available only if the rate of ST/VAT is equal to or higher than the rate of additional duty of Customs; nor is there a condition that if the rate

14

of ST/VAT happens to be lower than 4%, the refund would be restricted to the lower amount. As such, it is clarified that it will not be appropriate to reduce the refund amount in such a situation and the entire 4% CVD, if otherwise found eligible, shall be refunded.

6. Unjust enrichment:  

6.1. The 4% CVD exemption under the said notification is operated through a refund mechanism, wherein the importer would have to first pay the said 4% CVD at the time of importation and, thereafter, can claim refund of 4% CVD on production of documents showing that the appropriate ST/VAT has been paid. Hence, the purpose of granting this exemption is to ensure that the importer pays either 4% CVD or the appropriate ST/VAT and not both. It is not the intention of the Government to allow the importer to recover the 4% CVD from the buyer as well as to claim refund of this amount from Customs. Hence, the principle of unjust enrichment needs to be examined in each case before sanction of refund under this notification. However, considering the voluminous transactions and the documents involved in the cycle, from import to sale, it was felt that it would be expedient to allow the importer to submit a certificate from the statutory auditor / Chartered Accountant who certifies the annual accounts of the importer, that the burden of 4% CVD has not been passed on by the importer to the buyer and to fulfill the requirement of unjust enrichment.   6.2. In view of the above, it is clarified that the doctrine of unjust enrichment will apply to 4% CVD refunds Scheme under the said exemption notification issued in terms of Section 25(1) of the Customs Act, 1962. However, importers may produce a certificate from the statutory auditor/Chartered Accountant who certifies the importer’s annual financial accounts under the Companies Act or any statute, explaining how the burden of 4% CVD has not been passed on by the importer and to fulfill the requirement of unjust enrichment. In addition to the aforesaid the importer shall also make a self-declaration along with the refund claim to the effect that he has not passed on the incidence of 4% CVD to any other person.

  7. Other miscellaneous issues:  7.1. As regards the other doubt expressed by certain field formations on the effective date of the operation of refund scheme, it is stated that the said notification No.102/2007-Customs was issued on 14.9.2007. Accordingly, it is clarified that only those cases where 4% CVD was paid on or subsequent to 14.9.2007, will qualify for refunds under this scheme subject to fulfillment of prescribed conditions.   7.2. In respect of the doubt that whether the stamping or hand-writing of declaration in the invoice would be acceptable for the purpose of fulfilling the condition as mentioned in para 2(b) of the said notification, it is clarified that a stamp on the invoice (to state that no CENVAT Credit is admissible) should suffice for the purpose of para 2 (b) of the said notification.   7.3. On the issue that in case of 4% CVD having been paid through DEPB Scrip, whether refund could be paid by cash, it is clarified that instead of refunding the duty in cash, the amount eligible for refund should be re-credited on the relevant DEPB Scrip.

  8. In view of the above clarifications, you are requested to kindly take further necessary action in the matter. The above instructions are being issued so that necessary administrative arrangements are made to deal with 4% CVD refund claims and the refund claims are sanctioned properly. Accordingly, all the concerned Commissioners of Customs / Central Excise may kindly ensure for proper implementation of these instructions of the Board.   9. A suitable Public Notice and Standing Order may be issued for the guidance of the trade and staff.  Difficulties faced, if any, in implementation of the Circular may be brought to the notice of the Board at an early date.

15

  10. Hindi version will follow.  

Yours faithfully, (Aseem Kumar)

Under Secretary (Customs) Tel. 2309 4182

Fax: 2309 2173

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Circular No.16/2008-Customs

F. No. 401/104/2007-Cus.IIIGovernment of IndiaMinistry of Finance

Department of RevenueCentral Board of Excise and Customs

159A, North Block,New Delhi -110 001.13th October, 2008.

To  All Chief Commissioners of Customs / Customs (Prev.). All Chief Commissioners of Customs & Central Excise. All Commissioners of Customs / Customs (Prev.). All Commissioners of Customs & Central Excise. All Directors General under CBEC.Principal Chief Controller of Accounts (Cus & CX). 

 Subject: Clarification on refund of 4% Additional Duty of Customs (4% CVD) in

pursuance of Notification No.102/2007-Customs dated 14.09.2007 – regarding. 

*** Sir / Madam,              Your kind attention is invited to the Board’s Circular No.6/2008-Customs dated 28.4.2008 containing instructions on the procedure to be followed by the Customs field formations while making 4% CVD refund in terms of Notification No.102/2007-Customs dt.14.9.2007.   

2.         Subsequent to the issue of the above circular, the trade and industry associations have raised some more issues needing clarifications and in some cases relaxations of the procedural requirement for expeditious sanction of refund claims. Further, certain field formations have also made references on some of the issues raised by the trade.  The various issues raised in the above references have been examined in the Board and the following clarifications are issued on each of points raised: 

(i)         Time-limit for filing of refund claim:  It was already clarified by the Board that importers will be permitted to file 4% CVD claims upto a period of one year from the date of payment of duty. As stated in para 4.1 of the Circular No.6/2008-Customs, an amending notification to this effect specifically providing for one year period from the date of payment of the additional duty of customs (4% CVD) was issued vide Notification No.93/2008-Customs dated 1.8.2008 amending para 2(c) of the above-said notification.  This may be taken note of and pending refund claims involving more than six months period, if any, may be disposed of accordingly. 

(ii)        Early processing of refund claims:  There have been a number of requests from the trade that the 4% CVD refund claims should be processed within the prescribed period of three months time. This aspect has been explained in detail in para 4.3 of the Board’s Circular No.6/2008-Customs. Hence, the jurisdictional Commissioners and Chief Commissioners at respective Custom Houses / zones may ensure that there is no delay in the disposal of the 4% CVD refund claims in terms of Notification No.102/2007-Customs. Further, the status of the refund claims should be placed on the website of the Commissionerate and updated periodically for monitoring of timely disposal of refund claims. Wherever refund claims are sanctioned

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necessary defacement of the original bill of entry may be carried out in order to ensure that in no case refund is entertained on the same grounds for same goods covered under a bill of entry again.  In case of refund claim not being disposed of in three months, the matter should be reported to the Board within a fortnight mentioning the reason for delay and any area of doubt which needs to be clarified. (iii)       Sale invoices to be submitted in soft form for claiming refund:  It has also been represented that number of copies of sale invoices are required to be produced in view of the Condition No.2 (e) (ii) of the Notification No.102/2007-Customs dated 14.9.2007.  As these are voluminous, it is difficult for the importers as well as the Department to handle such invoices in hard copy.  This issue was examined in specific reference to Section 4 of the Information Technology (I.T.) Act, 2000 which provides that any information or any other matter, which is required under any Law to be made in writing or printed form, could be submitted in an electronic form provided it is accessible for use or subsequent reference.  In view of the fact that this provision applies notwithstanding anything contained in any other law, the legal requirement of submission of copies of sale invoices would be fulfilled if the same is provided in electronic form. In the I.T. Act, 2000, ‘electronic form’ has been defined and it includes information stored in optical or magnetic media.  

            Therefore, it is clarified that the importers could submit the copy of invoices in electronic form (including the form of CD) as prescribed in Information Technology Act, 2000, for the purpose of fulfillment of the condition in para 2 (e) (ii) of the Notification No.102/2007-Customs dated 14.9.2007. The electronic media containing the information about sale invoices should, however, be submitted along with a paper declaration by the applicant indicating the invoice numbers contained in the media and subscribing to their truthfulness. 

(iv)       Declaration for non-admission of Cenvat Credit:     In terms of condition 2 (b) of the Notification No.102/2007-Customs, the importer who wishes to avail the refund of 4% CVD, is also required to make a specific declaration in the sale invoice that no Cenvat credit would be admissible in respect of 4% CVD. This ensures that there is no double benefit on account of refund to the importer and Cenvat Credit to the purchaser.  Hence, the request for dispensation of such declaration by certain importers who are not registered with Central Excise authorities and to allow 4% CVD refund to these importers on the basis of their status of registration with Central Excise, as non-registered dealer is not found to be acceptable. 

(v)        Payment of ST/VAT by cash or input tax credit:   It has been brought to the notice of the Board that the ST/VAT credit is available with the importer due to credit of ST/VAT paid on local purchase of other products. In such cases, although the imported goods are sold and ST/VAT is being paid on such sale, instead of cash payment, the input tax credit is used. Hence, it was represented that payment of ST/VAT by input tax credit adjustment should be acceptable in lieu of ST/VAT paid challan.   

            In terms of the requirement under para 2(d) of the said notification, it is stated that appropriate ST/ VAT is to be paid by the importer on sale of goods. The importer can then claim the refund of 4% CVD paid at the time of import.  It is noticed that most of the ST/VAT legislations provide for payment of ST/VAT by utilizing the input tax credit.  If the Sales Tax Authorities accept payment of ST/VAT through cash or adjustment of input tax credit, the same shall be treated as effective discharge of ST/VAT payment on imported goods. Further, Board had provided in its earlier Circular that a certificate from statutory auditor/Chartered Accountant correlating the payment of ST/VAT on the imported goods with the invoices of sale, along with supporting documents of proof of payment of appropriate ST/VAT is acceptable for the purpose of 4% CVD refund.  Hence, it is clarified that discharge of ST/VAT liability by the importer,

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through cash or other authorised form of payment to the concerned ST/VAT authority  or input tax credit adjustment, could be accepted by Customs field formations for the purpose of fulfillment of the condition in para 2 (d) considering sanction of refund of 4% CVD.   

 (vi)      Submission of original copy of ST/VAT Challan:    The difficulties expressed by the importers in submission of original Tax paid challans for evidencing payment of ST/VAT at more than one port was examined. Importers pay the appropriate ST/VAT to the concerned State Government where the sale of imported goods is effected.  There is a genuine difficulty in case of importers selling the goods through various States or those importing goods at various ports and subsequently, selling in different States to obtain the original copy of ST/VAT challan evidencing payment of appropriate ST/VAT for the purpose of claiming 4% CVD refund with various Customs Commissionerates at different ports  Further, payment of ST/VAT after adjusting input tax credit is made through different forms such as deposit of cash, cheque, demand draft or other authorised mode of payment through banking channel or payment directly to the ST/VAT Department. In some States, even e-payment is also accepted.             

            The aforesaid request of the trade has been considered and keeping in view the difficulties faced in submitting original challans, it has been decided that alternatively, the importers may submit copies of ST/VAT challan or copies of ST/VAT payment document in different forms evidencing payment made to the bank or ST/VAT Department towards ST/VAT along with a certificate from the Chartered Accountant, who either certifies the importer’s financial records under the Companies Act, 1956 or any ST/VAT Act of the State Government or the Income Tax Act, 1961, confirming the payment against the aforesaid documents.  This would be considered sufficient to fulfill the requirement in terms of para 2(e)(iii) of the Notification No.102/2007-Customs dated 14.9.2007. Hence, the Customs field formations shall accept the copies of ST/VAT challans/documents along with the certificate of the said Chartered Accountant, while receiving the 4% CVD refund claim. However, the importers may be required to submit the original ST/VAT payment challans or other similar documents, in doubtful cases for verification by Customs authorities, which shall be returned to the importer after verification.   

(vii)      Unjust enrichment and its Certification by Chartered Accountants:    It is represented by the trade that for the purpose of satisfying the condition that burden of 4% CVD has not been passed on by the importer to any other person, a certification from an independent Chartered Accountant may be accepted by the Customs authorities.                        In this regard, it is stated that the intention of the Government is not to allow the importer to recover 4% CVD from the buyer and to claim the refund from Customs as well.  The only method to ensure this is to make it conditional to satisfy the principle of unjust enrichment.  In this regard, in the earlier circular, it has been provided that the importer may produce a certificate from the statutory auditor/CA who certifies that Annual Accounts of the importer (under the Companies Act, 1956 or any statute) to the effect that the burden of 4% CVD has not been passed on by the importer to the buyer.  The provisions contained in the various Sales Tax Laws prevailing in various States provide for Audit of the books and accounts for the purpose of ascertaining the correctness of ST/VAT payment / Input Tax Credit.  Further, Section 44AB of the Income Tax Act, 1961 provides that certain persons carrying on business or profession exceeding the prescribed limit are required to get their accounts audited by “an Accountant” explained therein.                         Considering these provisions, it is clarified by the Board that the ‘statutory auditor / Chartered Accountant’ mentioned in para 6 of the earlier Board’s circular refers to “Chartered Accountant” within the meaning of section 2(1)(b) of the Chartered Accountants Act, 1949.  However, it is clarified that the Customs field formations shall accept the certificate given only by such a Chartered Accountant who either certifies the importer’s financial records under the Companies Act, 1956 or any ST/VAT Act of the State Government or the Income Tax Act, 1961, in order to fulfill the requirement of the condition that the incidence of duty burden has not been

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passed on by the importer to any other person for the purpose of refund of 4% CVD.  A certificate by any other independent Chartered Accountant would not be acceptable for this purpose.                        (viii)     Consignment Agents:  It is represented by certain importers who operate through consignment agents / stockists, that the imported goods are held by these agents / stockists in the capacity of bailee.  The goods are sold by them on behalf of the importer and the payment for the sale is made to the importer. These agents also pay the appropriate ST/VAT on behalf of the importer and get the same reimbursed from the principal i.e. importer. Unlike in other transactions, while the bill of entry for imported goods under consignment sale is filed by the importer and the bill of entry will be in the name of the importer, the sale invoices are issued by the said consignment agents / stockists in their own names.  Hence, it has been requested by these importers that refund of 4% CVD in such cases should be allowed to them based on the correlating documents evidencing payment of ST/VAT by their agents / stockists.               It is observed that in ‘consignment sale’ transaction, goods are dispatched to Consignment agents by importer as Principal; and the imported goods remain the property of the importer. Similarly, the responsibility of Stockist is confined to stocking of goods and forwarding such goods to persons and places as instructed by the importer. Hence Consignment agent/stockist sells goods on behalf of the importer. The said agent collects sales proceeds and remits the same to importer; however he may recover his commission, godown charges, insurance charges etc., from the importer.  In terms of the various State ST/VAT laws, ‘sale’ is defined to mean transfer of property in goods for a valuable consideration. For the purpose of ST/VAT, transfer of property involved in the sale of imported goods, through an agent, by whatever name called, whether for cash or for deferred payment or other valuable consideration, shall be deemed to be a sale, by such agent.

Further, consignment agent/stockist who has the authority to sell the goods belonging to the importer/ principal on their behalf is also included in the scope of the term ‘dealer’ under the ST/VAT Act, and the said agent/stockist are required to pay appropriate ST/VAT on sale of such goods. In these transactions, normally, an Agreement is entered into between the importer and agent, which provides for the terms and conditions of sale and offers a commission for the work done by the agent / stockist. Payment of ST/VAT on behalf of the importer may also be specified as one of the arrangement as per such agreement. Since such sale is an accepted form of commercial transaction, payment of ST/VAT made by such agents and submission of ST/VAT challan by the agents on behalf of principal (Importer) is permitted by ST/VAT authorities.   

In view of the above, it is clarified that in case of sale of imported goods by importer through consignment agent/stockist, refund of 4% CVD shall be granted by Customs field formations, subject to the condition that the Consignment agent/ stockist has been authorised to sell the imported goods in terms of the agreement entered into between the importer and consignment agent/stockist and that each of the sale invoices issued by the consignment agent/stockist  indicates that the sale is made by him on behalf of the importer in the capacity of consignment agent/stockist. These conditions shall be verified by the Customs officers before sanction of 4% CVD refund claims in these cases. Further, in such cases, it is also required that the applicant submits a certificate from a Chartered Accountant appointed by the importer, who either certifies the importer’s financial records under the Companies Act, 1956 or any ST/VAT Act of the State Government or the Income Tax Act, 1961, to the effect that appropriate ST/VAT has been paid by consignment agent/stockist on behalf of importer and that the importer, in turn, has paid or reimbursed the ST/VAT to his consignment agent/stockist along with the correlation of ST/VAT payment with 4% CVD paid on imported goods.  

(ix)       Submission of refund claim for part of goods in a consignment: Several importers have represented that the refund claim should be sanctioned even prior to the said one year period in cases of part sale where a significant part is already sold and an undertaking is furnished by the importer that no more refund claim would be filed for the remaining part.  Moreover, in some cases, there may be short landing or part of the consignment is unlikely to be sold due to some

20

defects, damage etc. In such cases too, the importers may prefer to claim refund for such part of consignment that were actually sold. In the earlier circular issued, it was clarified that 4% CVD refund claims shall be filed on a monthly basis.  Further, it was stated that filing of refund claim for part quantity covered in a bill of entry shall not be allowed except when this is necessary at the end of the one year period prescribed.              It is needless to specifically mention that where certain quantity of goods were lost or short-landed or damaged resulting in sale of part quantity and the importer submitting a refund claim for the quantity that was sold along with the declaration that for the remaining quantity they would not claim refund, the claims shall be entertained even for part quantity by the Customs.  However, since some Customs field formations have raised this doubt, it is hereby clarified that in such cases as stated above, the filing of refund claim for part quantity shall be accepted by the Customs field formations during the same month and such cases need not await till the end of the one year period. 

3.         In view of the above clarifications, you are required to take further necessary action in the matter without any delay. All pending 4% CVD refund claims must be attended to and the refund claims sanctioned within the prescribed time limit.  In view of the resentment in the trade on this matter, the Chief Commissioners should ensure that prompt action is taken to dispose of the claims.  A status report about the disposal of claims filed till 30.06.2008 may please be sent to the Board by 15.11.2008.

4.         A suitable Public Notice and Standing Order may be issued for the guidance of the staff and trade.  Difficulties faced, if any, in implementation of the Circular may please be brought to the notice of the Board at the earliest.

Yours faithfully, 

(M.M. Parthiban)  Director (Customs)

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Refund of 4% Special CVD by re-credit on VKGUY, FPS and FMS Scrips

Circular No. 6/2009 -Customs

F. No. 401/104/2007-Cus.IIIGovernment of IndiaMinistry of Finance

Department of RevenueCentral Board of Excise and Customs

159A, North Block,New Delhi -110 001.

Dated 9-2-2009.

Subject : Procedure to be adopted for refund of 4% Special Additional Duty of Customs in pursuance of Notification No. 102/2007-Customs dated 14-9-2007 - Regarding.

Reference is invited to Board Circular No. 6/2008 dated 28th April, 2008 [2008 (225) E.L.T. T3] regarding the procedure to be adopted for refund of 4% Special Additional Duty of Customs (4% CVD) in pursuance of Notification No. 102/2007-Customs dated 14-9-2007. Vide Para 7.3 of the said Circular, it was clarified that in case of 4% CVD having been paid through DEPB Scrip, the amount eligible for refund should be re-credited on the relevant DEPB Scrip.

2. Now, a reference has been received from DGFT that the facility extended to DEPB scrip may also be extended to Vishesh Krishi and Gram Udyog Yojana (VKGUY), Focus Product Schemes (FPS) and Focus Market Schemes (FMS).

3. The matter has been examined in the Board and it has been decided that in case of 4% CVD having been paid through VKGUY, FPS and FMS Scrips, the amount eligible for refund should be re-credited on the relevant VKGUY, FPS and FMS Scrip.

4. In view of the above clarification, you are requested to kindly take further necessary action in the matter.

5. A suitable Public Notice and Standing Order may be issued for the guidance of the trade and staff. Difficulties faced, if any, in implementation of the Circular may be brought to the notice of the Board at an early date.

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Circular No. 15/2010-Customs

F. No.401/73/2010-Cus.III Government of IndiaMinistry of Finance

Department of RevenueCentral Board of Excise & Customs

North Block, New Delhi 29th June, 2010.

ToAll Chief Commissioners of Customs All Commissioners of Customs & Central Excise

Subject: Fraudulent claim of 4% SAD by unscrupulous importers - reg.*****

Madam / Sir,

Attention is invited to Notification No. 102/2007-Cus dated 14.09.2007 which provides exemption in the form of refund of 4% SAD paid on goods imported and subsequently sold on payment of VAT/ST.

2. Instances have come to notice of the Board where some importers of ‘timber logs’ have undertaken certain processes and subsequently sold ‘sawn’ or ‘cut logs’ after payment of VAT. These importers are claiming the refund of 4% SAD paid at the time of importation of goods in terms of Notification No.102/2007-Customs dated 14.09.2007. As per the said Notification, refund of SAD is available only in case the imported goods are subsequently sold on payment of VAT, without carrying out any process. However, at the time of claiming refund of 4% SAD, these importers have manipulated the facts by showing that goods sold were imported timber logs only and not ‘sawn’ or ‘cut logs’. In terms of the classification of the First Schedule to Customs Tariff Act, 1975, round logs/round squares are classified under the heading 4403 whereas the ‘sawn’ woods are classified separately under heading 4407. Thus, there is distinct classification for the imported and the final products that are sold in the market on which VAT is paid. Hence, since the goods imported and subsequently sold were different goods falling under different tariff headings, the benefit of Notification No.102/2007-Customs dated 14.09.2007 by way of refund of 4% SAD is not available to importers.

3. In certain other cases, refund claims have been filed with the department wherein forged documents were submitted for availing the refund envisaged in the notification No.102/2007-Customs dated 14.09.2007. In such cases, it is reported that the importers were preparing duplicate set of invoices of the same serial number. Scrutiny of these two sets of invoices establishes that the invoice submitted to the department shows description of goods as ‘Malaysian round logs’ whereas the invoices obtained from the buyer shows the description of goods as ‘imported timber’. The other difference is that in the invoice submitted to the department the quantity of goods in number / pieces are not mentioned whereas in the invoices of the buyer the quantity in number/pieces is clearly mentioned. This fact of preparing duplicate invoices is further substantiated by the other documents such as related transit passes and lorry receipt. These importers are thus defrauding the government revenue by resorting to this modus operandi of submitting the forged documents for claiming refund fraudulently.

4. It is apprehended that above mentioned modus-operandi may have all India ramifications and may be prevalent in other field formations and are not limited only to a few cases.   In view of the above, all field formations are directed to be alert and vigilant to ensure that unscrupulous importers do not avail fraudulent refunds of 4% SAD in terms of Notification No.102/2007-Customs dated 14.9.2007 by resorting to the above-mentioned modus operandi.

Yours faithfully,

(Vikas)Under Secretary (Cus.III)

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Circular No.18 / 2010-Customs 

F. No. 401/46/2008-Cus.IIIGovernment of IndiaMinistry of Finance

Department of RevenueCentral Board of Excise and Customs

159A, North Block, New Delhi -110001

8th July, 2010. To  All Chief Commissioners of Customs / Customs (Prev.). All Chief Commissioners of Customs & Central Excise. All Commissioners of Customs / Customs (Prev.). All Commissioners of Customs & Central Excise.

 Subject: Refund of 4% Additional Duty of Customs (4% CVD) in pursuance of

Notification No.102/2007-Customs dated 14.9.2007 – Special Drive for clearance of pending 4% SAD refund claims - reg.

***Sir / Madam,              Your kind attention is invited to the Notification No.102/2007-Customs dated 14.9.2007 and Board’s Circulars No.6/2008-Customs dated 28.4.2008 and No.16/2008-Customs dated 13.10.2008 regarding refund of 4% Additional Duty of Customs (4% CVD). Attention is also invited to the Board’s Circulars No.24/2007-Customs dated 2.7.2007, No.22/2008-Customs dated 19.12.2008 and No.7/2008-Customs dated 28.5.2008 which relate to general refund cases. 2.         In this regard, several representations from the trade and industry, associations continue to be received in the Board complaining about the delay in refund of 4% CVD or denial of the refund on one pretext or the other, causing them great hardship.   3.         In view of the fact that all the doubts of the field formations had been clarified by the Board vide above mentioned Circulars, it is viewed that there may not be any difficulty in timely disposal of refund claims.  However, on review of the pending refund claims as on 31.3.2010 at major Custom Houses, it has been noticed that more than 80% of pending claims relate to 4% CVD cases.  Hence, the Board has decided to further simplify the procedure for claiming 4% CVD refund in the following manner. 4.1.       In respect of Accredited Clients registered with Customs in terms of Circular No.42/2005-Customs dated 24.11.2005 (ACP clients), the amount of 4% CVD refund shall be sanctioned in full, on preliminary scrutiny of the following documents: (a) TR-6 Challans (in original) for CVD payment; (b) VAT/ST payment Challans (in original); (c) summary of sale invoices; and (d) certificate of statutory Auditor / Chartered Accountant, for correlating the payment of ST/VAT on the imported goods with the invoices of sale and also to the effect that the burden of 4% CVD has not been passed on by the importer to the buyer.  The procedure for pre-audit for ACP clients shall be done away with and detailed scrutiny should be done only at the stage of post-audit.  The refund claims shall be sanctioned within the maximum time period of 30 days in all such cases.   

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4.2.       Submission of sale invoices shall be required only in electronic form (CD or other media) in respect of 4% CVD refund cases and submission of paper documents is accordingly dispensed with. 5.         In order to enable timely payment of refund in case of 4% CVD, a system of optional facility of directly crediting the applicant’s bank account, through RTGS (Real Time Gross Settlement) or NEFT (National Electronics Funds Transfer) System is being prescribed. This facility is already functioning in Mumbai Customs Zone-II and has been found useful for the trade. Hence, Board has decided to extend this facility on optional basis to all other Customs formations also. Necessary authorisation for payment of refund amount directly to Bank Account may be taken in such cases from the importer/ authorised signatory of the importer in the form annexed. (Annexure-I) 6.                         Some field formations have also raised certain doubts whether the audited Balance Sheet and Profit and Loss Account have to be examined in respect of the current financial year for scrutiny of unjust enrichment aspect.  It is stated that a large number of refund claims relating to the current year were held up for want of such verification.  In this regard, the issue has been examined by the Board and it has been decided that the field formations shall accept a certificate from Chartered Accountant for the purpose of satisfying the condition that the burden of 4% CVD has not been passed on by the importer to any other person. Further, the importer shall also make a self-declaration along with the refund claim to the effect that he has not passed on the incidence of 4% CVD to any other person. Hence, there is no need for insisting on production of audited Balance Sheet and Profit and Loss Account in these cases. It may also be noted that recently the Board has also notified the list of documents required to be filed by the applicant along with the refund claim (Annexure-II) which is also displayed in the departmental website. Hence, other than these aforesaid documents, no other document would be required in the normal course of granting 4% CVD refund. 7.         Board also desires that the Commissioner of Customs shall personally monitor all cases of 4% CVD refund claims pending for more than 30 days so as to ensure that these are disposed of within the overall time limit of three months.   8. A suitable Public Notice and Standing Order may be issued for the guidance of the

trade and staff.  Difficulties faced, if any, in implementation of this Circular may be brought to the notice of the Board at an early date. 

Yours faithfully, Sd./-

 (R. P. Singh)

Director (Customs) Encl:  As stated above.

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Annexure - I

 Authorization for payment of refund amount directly to Bank Account

 I.E.C. No. _______________                                          PAN No. _________________.  M/s ______________________________ Address: __________________________ __________________________________  __________________________________   E-mail address:  Bank Account No.:  __________________   Bank Name:         ______________________  Bank Address:  ______________________  11 digit alphanumeric IFS Code :  ________________               I declare that the above particulars are correct.  I authorize payment of refund amount for my refund claims filed at  ______________________ Custom House to my above mentioned Bank Account through NEFT / RTGS after deduction of Bank’s service charges at the rate of 0.09% and applicable NEFT / RTGS charges as per RBI guidelines.  Name of the Authorised signatory /Representative of the Importer Signature : Date: Place:   

Certified that the above details are correct. 

Signature of Bank Branch Manager along with the official Seal

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Annexure - II  

Sl.No. Type of refund claim

Section / notification under which filed

Illustrative list of documents to be filed by applicant along with Application for refund claim in prescribed form (Customs Series Form No.102 as given in Part 5 of Customs Manual)  

 3

 Refund of 4% SAD

 Notification No. 102/2007-Customs dated 14.9.2007

 1. Document evidencing payment of the Special Additional Duty (SAD).  2. Invoices of sale of the imported goods in respect of which refund of the said SAD is claimed.  3. Documents evidencing payment of appropriate sales tax or value added tax, as the case may be, by the importer, on sale of such imported goods.  4. Certificate from a statutory auditor / CA who certifies the final accounts in respect of correlation of VAT payment, payment of 4% SAD amount and unjust enrichment as prescribed in Board’s circular No.6/2008-Customs dated 28.4.2008 and 16/2008-Customs dated 13.10.2008.  5. Copy of the Consignment Sale Agreement. (in case of sale through consignment agents / stockists).  6. Self-declaration / Affidavit (for e.g. in case of submission of invoice in soft form in lieu of paper documents, in case of fulfillment of the doctrine of unjust enrichment to the effect that the applicant has not passed on the incidence of 4% SAD to any other person).  7. Any other document considered necessary in support of the claim.

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Circular No.23 / 2010-Customs

F.No.401/104/2007-Cus.IIIGovernment of IndiaMinistry of Finance

Department of RevenueCentral Board of Excise and Customs

159A, North Block, New Delhi -110001.

29th July, 2010. To

All Chief Commissioners of Customs / Customs (Prev.). All Chief Commissioners of Customs & Central Excise. All Commissioners of Customs / Customs (Prev.). All Commissioners of Customs & Central Excise.

Subject: Refund of 4% Additional Duty of Customs (4% CVD) in pursuance of Notification No.102/2007-Customs dated 14.9.2007 – Disposal of claims in respect of cases where assessments are provisional – reg

***Sir / Madam,

Your kind attention is invited to the Notification No.102/2007-Customs dated 14.9.2007, Notification No.93/2008-Customs dated 1.8.2008 and Board’s Circulars No. 6/2008-Customs dated 28.4.2008, No.16/2008-Customs dated 13.10.2008, No.6/2009-Customs dated 9.2.2009 and No.18/2010-Customs dated 8.7.2010 containing instructions on the procedure to be followed by the Customs field formations in case of 4% CVD refund claims.

2. References have been received by the Board pointing out that divergent practices are being followed as regards sanction of 4% CVD refund claims in the cases where assessments are provisional. It has been reported that in some Custom Houses, ‘date of payment’ of duty is being considered as date for determining the prescribed period of one year in terms of the Notification No.93/2008-Customs dated 1.8.2008, whereas in other Customs Houses, the relevant date is the date of finalization of provisional assessment and accordingly, the importers in those Customs Houses are filing refund claim within one year of finalization of assessment. It was requested that a suitable clarification be issued by the Board in order to ensure uniformity in procedure.

3. The matter has been examined in the Board. As per the Board Circular No.6/2008-Customs dated 28.4.2008, the limitation of time under Section 27 of the Customs Act, 1962 is not applicable in cases relating to refund claims of 4% CVD. The refund of 4% CVD is admissible in terms of Notification No.102/2007–Customs dated 14.9.2007 read with Notification No.93/2008-Customs dated 1.8.2008 issued under Section 25(1) of the Customs Act, 1962 subject to fulfillment of certain conditions as envisaged in the said notifications. The time limit prescribed for the purpose of 4% CVD refund claim is one year from the date of payment of duty as per the said Notifications. Hence, in cases where the assessment is provisional, for the purpose of sanction of refund of 4% CVD, the date of payment of duty would be, the date of payment of CVD at the time of import of goods and not the date of finalization of provisional assessment. The Importer, therefore, would be eligible to get the

28

refund, if the claim is filed within one year of the date of actual payment of 4% CVD i.e. the date of payment of duty at the time of clearance of imported goods.

4. Board, has, accordingly decided that all pending 4% CVD refund claims under Notification No.102/2007-Customs dated 14.9.2007 and Notification No. 93/2008-Customs dated 1.8.2008 should be disposed of despite the fact that the assessment continues to be provisional without awaiting for finalization of assessments.

5. A suitable Public Notice and Standing Order may be issued for the guidance of the trade and staff. 

6. Difficulties faced, if any, in implementation of this Circular may be brought to the notice of the Board at an early date.

Yours faithfully,

(R. P. Singh) Director (Customs)

29

Circular No.27 / 2010-Customs

F.No.401/46/2008-Cus.IIIGovernment of IndiaMinistry of Finance

Department of RevenueCentral Board of Excise and Customs

159A, North Block, New Delhi -110001.

13th August, 2010. To

All Chief Commissioners of Customs / Customs (Prev.). All Chief Commissioners of Customs & Central Excise. All Commissioners of Customs / Customs (Prev.). All Commissioners of Customs & Central Excise.

Subject: Refund of 4% CVD (SAD) in terms of Notification No.102/2007-Customs dated 14.9.2007 by re-crediting the DEPB scrip / reward scheme scrips – regarding.

***Sir / Madam,

Your kind attention is invited to the Notification No.102/2007-Customs dated 14.9.2007, Notification No.93/2008-Customs dated 1.8.2008 and Board’s Circulars No. 6/2008-Customs dated 28.4.2008, No.16/2008-Customs dated 13.10.2008, No.6/2009-Customs dated 9.2.2009, No.18/2010-Customs dated 8.7.2010 and No.23/2010-Customs dated 29.7.2010 regarding procedure to be followed by the Customs field formations in case of 4% CVD refund claims.

2. Circular No.6/2008–Customs dated 28.4.2008 provides that the refund of 4% CVD paid at the time of import through DEPB scrips shall be disbursed by re-credit of the sanctioned refund amount to the relevant DEPB Licence. Further, Circular No.6/2009–Customs dated 9.2.2009 extends the facility of similar re-credit to the relevant scrip for disbursing SAD refund in respect of other scrips like Vishesh Krishi and Gram Udyog Yojana (VKGUY), Focus Market Scheme (FMS) and Focus Product Scheme (FPS) also.However, it has been represented by the trade and industry that existing EDI facility does not allow re-credit of the amount of 4% CVD refund sanctioned in respect of these schemes in the relevant scrips and as a result of that, a large number of refund claims are held up in different customs houses.The matter was referred to DGFT for resolving the same.

3. DGFT have subsequently issued a Public Notice No.38/2009-2014 dated 3.2.2010 and also a Policy Circular No.22/2009-14 dated 3.2.2010 for extending the validity of Duty Credit Scrips. Accordingly, concerned Commissionerates of Customs are required to issue a consolidated certificate indicating total amount sanctioned as refund (4% CVD). As per Public Notice, concerned DGFT / Regional Licensing Authorities (RLA) are required to issue necessary re-credit on the scrip on the basis of consolidated certificate issued by Commissionerate. Policy Circular No.22/2009-14 dated 3.2.2010 issued by DGFT also provides for sending a copy of such duty scrips where re-credit was allowed along with the details of original duty scrips so that the Customs authorities can compare the details before allowing clearance of import consignment against the scrips.

4. It has come to the notice of the Board that even after issue of the Public Notice and Policy Circular by DGFT on the issue of re-crediting DEPB scrips on account of 4% CVD

30

refund, difficulties are still being faced by trade and industry as EDI, at present, does not have facility to register such re-credited scrips issued by DGFT in the system.

5. The matter has been examined in the Board. Board has considered the difficulties associated with change in EDI System to allow re-credit of scrips in case of 4% CVD refund and also the view of DGFT that modification in software at the end of DGFT for the purpose of re-credit of 4% CVD through Electronic Message System and its transmission to the Customs is not feasible at present.

6. Considering the large scale pendency of such refund claims and in order to address the difficulties in getting 4% CVD refund by re-crediting scrips, it has been decided by the Board that registration of re-credited duty scrips issued by DGFT on the basis of consolidated certificate furnished by Customs should be allowed on manual basis. The facility of manual filing of Bill of Entry for utilizing the amount of re-credited CVD refund for payment of duty is also allowed. This facility has been extended up to 30.12.2010 as a one-time measure with a view to liquidate all such pendencies by that time.

7. The Commissioners concerned are requested to exercise due diligence in order to check that the facility of manual filing of B/E in case of re-credited DEPB scrips / reward scheme scrips on account of refund of 4% CVD is not misused. In this regard, it is also clarified that only those B/Es will be allowed manual processing wherein the duty involved is equal to or less than the balance amount in the re-credited scrip.

8. It has also been decided that importers should be suitably advised that re-credit amount of CVD refund should be used for payment of BCD and CVD only and not for 4% CVD so as to avoid cascading of subsequent re-credit of 4% CVD in the relevant scrips. Further, the Board is of the view that in the interest of ensuring expeditious grant of refund of 4% CVD in cash, the importers may be advised to make the initial payment of 4% CVD in cash.

9. A suitable Public Notice and Standing Order may be issued for the guidance of the trade and staff. 

10. Difficulties faced if any in implementation of this Circular may be brought to the notice of the Board.

Yours faithfully,

(R. P. Singh) Director (Customs)

31

Circular No. 34/2010-Customs

F. No. 354/138/2010-TRUGovernment of IndiaMinistry of Finance

Department of RevenueTax research Unit

153, North Block, New Delhi -110001 Dated 15th September, 2010.

To All Chief Commissioners of Customs & Central Excise  Sir / Madam,

Subject: Refund of 4% Additional Duty of Customs (4% Special CVD) in pursuance of NotificationNo.102/2007-Customs dated 14.9.2007 – Applicability to manufacturers in textile sector - reg.

***             Your kind attention is invited to the Notification No.102/2007-Customs dated 14th September 2007 whereby exemption from Special CVD of 4% leviable under sub-section (5) of Section 3 of the Customs tariff Act, 1975 has been provided subject to the fulfillment of certain conditions. 2.          Representations have been received from trade and industry (especially the textile sector) through the Department of Commerce to allow the benefit of this exemption to manufacturer-importers, especially those who have opted out of the CENVAT Credit Scheme and do not pay excise duty on their final products.

3. The matter has been examined. Special CVD is one of the duties specified under sub-rule (1) of rule 3 of the CENVAT Credit Rules, 2004. Credit of this duty, when paid on inputs (imported) used in or in or in relation to the manufacture of excisable goods, is available. This credit can be used for payment of duty on the final product. Hence a textile manufacturer who opts to pay excise duty on his final product can avail of CENVAT credit of 4% Special CVD paid on his inputs. But this benefit obviously cannot be extended to a manufacturer who opts to avail of full exemption (and hence not pay excise duty)) on his final product. Further, if the imported inputs on which 4% Special CVD has been paid are used by such a manufacturer for the manufacture of final products, the benefit of exemption (by way of refund) under notification no 102/2007-Customs dated 14 th

September 2007would also not be available. This is because the condition regarding payment of State VAT on imported inputs cannot be fulfilled in this situation where inputs are consumed and not sold as such

4.       A suitable Public Notice and Standing Order may be issued for the guidance of the trade and staff.  Difficulties faced, if any, in implementation of this Circular may be brought to the notice of the Board at an early date. 

Yours faithfully,

 (Prashant Kumar)Under Secretary to the Government of India.

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Circular No.11/ 2011-Customs

F.No.401/46/2008-Cus.III(Pt.)Government of IndiaMinistry of Finance

Department of RevenueCentral Board of Excise and Customs

North Block, Room No. 253-A,New Delhi, the 24th February, 2011.

. To,

All Chief Commissioners of Customs / Customs (Prev.). All Chief Commissioners of Customs & Central Excise. All Commissioners of Customs / Customs (Prev.). All Commissioners of Customs & Central Excise.

Subject:- Refund of 4% CVD (SAD)-Extension of time upto 30th June, 2011 for using re-credited 4% CVD (SAD) amount in DEPB.

Sir / Madam,

Your kind attention is invited to the Circular No.27/2010-Customs, dated 13.08.2010 regarding procedure on refund of 4% CVD (SAD). The above Circular provides the facility of manual filing of Bill of Entry for utilizing the amount of re-credited 4% CVD (SAD) refunds for payment of duty in case of re-credited DEPB / Reward Scheme scrips upto 30.12.2010. However several representations have been received from trade and industry to extend the time upto 30th June, 2011 for using re-credited 4% CVD (SAD) amount in DEPB as they have not been able to utilize the re-credited DEPB / Reward Scheme scrips within the stipulated time.

2. The matter has been examined in consultation with Ministry of Commerce. Accordingly, it has been decided to extend time limit for using re-credited DEPB / Reward Scheme scrips in case of 4% CVD (SAD) upto 30th June, 2011.

3. A suitable Public Notice and Standing Order may be issued for the guidance of the trade and staff. 

Yours faithfully,

(Vikas)Under Secretary (Customs-III/VI)

Telefax-011-2309 5532Fax-011-2309 2173

E-mail-uscusiii@nic.in

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GOVERNMENT OF INDIAMINISTRY OF COMMERCE AND INDUSTRY

DEPARTMENT OF COMMERCE

PUBLIC NOTICE No. 38 / 2009-14NEW DELHI: the 3rd February, 2010

Subject: Amendment of paragraph 2.13.1, 3.11.7 and 4.50 of HBP Vol. 1 for revalidation of freely transferable Authorization/ Duty credit scrips and re-credit of 4% SAD thereof.

In exercise of powers conferred under Para 2.4 of the Foreign Trade Policy, 2009-14, the Director General of Foreign Trade hereby makes the following amendments in the Handbook of Procedures (Vol.1), 2009-14:-

1. Paragraphs 2.13.1 of HBP Vol. 1 shall be substituted by the following:

2.13.1 However, revalidation of freely transferable Authorisation / Duty credit scrips and stock and sale Authorisation shall not be permitted unless validity has expired while in custody of Customs authority / RA.

2. A new Paragraph 2.13.2A stands added in the HBP Vol. 1 as under:

2.13.2A For the purpose of re-credit of 4% Special Additional Duty (SAD) of customs in the freely transferable Duty credit scrips (including DEPB), revalidation for a maximum period of 6 months from the date of endorsement, shall be allowed in case the balance period of validity is less than 6 months on the date of re-credit.

3. Paragraph 3.11.7 related to validity period of duty credit scrips issued under chapter 3 shall be replaced by the following:

3.11.7 Duty Credit Scrip shall be valid for a period of 24 months & Revalidation of Duty Credit Scrip shall not be permitted unless covered under paragraph 2.13.1 or paragraph 2.13.2 A of HBP v1.

4. Paragraph 4.50 related to revalidation of DEPB shall be replaced by the following:

No revalidation shall be granted beyond original period of validity of DEPB unless covered under paragraph 2.13.1 or paragraph 2.13.2 A of HBP v1.

This issues in public interest.

Sd/- (R.S. Gujral)

Director General of Foreign Trade and Ex-officio Special Secretary to the Government of India

34

GOVERNMENT OF INDIADEPARTMENT OF COMMERCE

DIRECTORATE GENERAL OF FOREIGN TRADEUDYOG BHAWAN, NEW DELHI – 110 011

Policy Circular No. 22 /2009-2014 Dated: 3rd February, 2010.

To

All Regional Authorities;All Commissioners of Customs;Exporting Community.

Subject: Procedure to re-credit 4% Special Additional Duty (SAD) of Customs in DEPB, VKGUY, FPS, FMS, MLFPS scrips in view of the refund facility allowed under Customs Notification No. 102/2007-Customs dated 14th September, 2007 (as amended) to be read with the Customs instructions communicated vide F.No.354/129/2007-TRU dated 14.9.2007, Customs circular No..6 /2008-Customs dated 28th April, 2008 and 6 /2009-Customs dated 9th February, 2009—regarding.

Attention is invited to Customs Notification No. 102/2007-Customs dated 14th September, 2007 (as amended) to be read with Customs instructions communicated vide F.No.354/129/2007-TRU dated 14.9.2007, Customs circular No..6 /2008-Customs dated 28th April, 2008 and 6 /2009-Customs dated 9th February, 2009 on the provision to re-credit the 4% SAD to applicants who qualify for the re-credit subject to compliance of the conditions stated therein. This re-credit facility is available in case of debit of the 4% SAD from the duty credit scrips such as DEPB, VKGUY, FPS and FMS Scrips subject to fulfillment of the conditions.

2. Various representations from importers, exporters, trade and industry associations have been received in this Directorate seeking clarification regarding the procedure for re-credit of 4% Additional Duty of Customs (SAD) leviable under sub-section (5) of Section 3 of the Customs Tariff Act, 1975 in pursuance of Notification No.102/2007-Customs dated 14.9.2007 and the Customs circulars stated above. Department of Revenue have also referred the matter for a corresponding procedure for re-credit for uniform action by the field formations of DGFT and the Customs.

3. These issues have been examined in details in consultation with the Department of Revenue. Accordingly the following guidelines are being laid down for the re-credit of the 4% SAD:

(i) The duty credit scrip holder including the transferee (henceforth referred as Applicant) shall submit the original copy of the relevant Duty credit scrip, scheme wise consolidated certificate (credit note) issued by the customs authority at the port of registration along with the forwarding letter to the Regional Authority (RA) who had issued the scrip. The RA concerned shall make an endorsement in the scrip as follows:

“An amount of Rupees __________ stands credited in the balance duty credit available in the scrip, in terms of consolidated certificate (credit note) No. _____________ dated________ issued by______(name and address of the customs authority at the port of import). “ In case the validity of the scrip is less than 6 months on the date of submission of request to the RA, the scrip may be revalidated for 6 months from the date of endorsement for utilization of the re-credit amount so allowed by the RA. The Customs authority at the Port of Import and the Port of Registration (in case import is from a port other than the

35

port of registration in the original scrip) shall be intimated immediately accordingly for their record and cross verification before allowing clearance of import consignment against the scrip.

(ii) In case, the original duty credit scrip, after partial utilization, has been transferred to another importer and the earlier importer wants to get the re-credit facility for the 4% SAD component, proportionate to imports effected by him, the applicant would be required to produce the attested copy of the duty credit scrip, the proof of having transferred the original duty credit scrip, the consolidated certificate (credit note) issued by the customs authority along with an Indemnity Bond indemnifying to pay the loss (the re-credit amount along with the interest) caused to the exchequer in case of unjustified re-credit detected subsequently. In such cases after due examination, the RA concerned shall process the case manually and issue a duplicate duty credit scrip with the following endorsement along with the other endorsements being made while issuing original scrips as per policy :“An amount of Rupees __________ stands credited in this scrip, in terms of consolidated certificate (credit note) No. _____________ dated_________issued by _________(Name and address of the customs authority at the port of import). This scrip shall have a validity of 6 months only from the date of issuance.”

The scrip shall also have the endorsement of the number and date of original duty credit scrip so as to establish the co-relation. Once such scrip is issued, RA shall send immediately a copy of the same to the Customs authority at the Port of Import and the Port of Registration (in case import is from a port other than the port of registration in the original scrip).

(iii) RA shall endorse the Bills of entry Nos and dates and the credit amount on the scrip along with the name and address of the consolidated certificate (credit note) issuing authority, as per the consolidated certificate (credit note) issued by the customs authority.

(iv) All such applications shall be filed by the applicant within 3 months of issuance of the consolidated certificate (credit note) by the Customs authority. These applications shall be filed scheme-wise and port-wise to the RA concerned who had issued the original duty credit scrip.

(v) Finalization of such applications shall be subject to fulfillment of the prescribed conditions and careful scrutiny of all documents submitted in support of the claim so that no fraudulent applications are approved. This may please be brought to the notice of all concerned.

4. Any difficulty in implementation of the aforesaid guidelines shall be brought to the notice of this Directorate immediately.

This issues with the approval of Competent Authority.

(Tapan Mazumder)Joint Director General of Foreign Trade

Tel: 011-23061050E-mail: tmazumder@nic.in

36

Govt. of IndiaMinistry of Finance

Department of Revenue

Phone: 044-2256 0406Fax: 044-2256 1445

e-mail: chcusair@dataone.in

OFFICE OF THE COMMISSIONER OF CUSTOMS (AIRPORT & AIR CARGO)INTEGRATED CARGO COMPLEX, MEENAMBAKKAM, CHENNAI – 600 027

www.chennaicustoms.gov.in

Public Notice No. 30/2010

Subject: Processing of Refund Claims of 4% Additional Duty of Customs (4% AD) in pursuance of Notification No.102/2007-Customs dated

14.9.2007 as amended and various circulars issued by the Board from time to time – Documentary and procedural requirements to be fulfilled

by the claimants to ensure expeditious disposal of claims – reg.

Attention of all importers, exporters and trading public etc. is invited to the issue of granting of refund of 4% Additional Duty of customs levied under section 3(5) of the Customs Tariff Act, 1975 (hereinafter referred as 4% AD).

Government of India has issued Notifications No’s 102/2007 dt. 14.9.2007 & 93/2008 dt. 01.08.2008 mandating various conditions to be fulfilled by the claimants to be eligible for the refund of said 4% AD. Further, the Central Board of Excise and Customs (CBEC) has issued many circulars (No’s 6/2008 dt. 28-4-2008, 16/2008 dt. 13-10-2008, 6/2009 dt. 9-2-2009, 15/2010 dt. 29-6-2010, 18/2010 dt. 8-7-2010, 23/2010 dt. 29-7-2010 & 27/2010 dt. 13-8-2010) on the subject and has since clarified various doubts raised by the field formations. The circulars also elaborated on the mandatory procedural requirements to be complied with by the claimants before the sanction of refund of 4% additional duty of customs. Accordingly, Public Notices have also been issued by Air Cargo Complex, Chennai informing the Trade about the contents of said circulars issued by the Board.

Even after such streamlining of the procedure regarding granting of refund of 4% AD, it is observed in many cases that the claimants are not complying with all procedural requirements prescribed and also not submitting requisite documents in time leading to delay in processing of refund claims. Keeping this in view, the present public notice is being issued for the information and benefit of claimants summarizing important provisions and clarifications issued by the Board (as on date) vide said circulars regarding granting of refund of 4% AD.

A. Checklist of Documents to be submitted along with37

the refund claim for 4% AD:

1. Bills of Entry in original (Importer copy only) & corresponding TR 6 challans / e-receipts in original.

2. Sales invoices in hard copies / CD / DVD. In case of submission of invoices in CD/DVD, necessary paper declaration has to be submitted indicating the invoice numbers contained in the media and subscribing to their truthfulness. (Suggested format of self-declaration enclosed herewith as Annexure-I)

3. (i) Documents evidencing payment of VAT/CST in original (VAT/CST payment Challans & VAT/CST Returns / Acknowledgements for e-payment/cheque/DD’s / VAT/CST Payment certificates issued by concerned VAT/CST authorities & Extracts of Bank statements / Copies of Cheques / DD’s / Documents evidencing any other authorized form of payment of VAT/CST etc. (to show that relevant VAT / CST as per returns has indeed been paid from the claimant’s account (period wise & location wise))

(ii) In case of submission of duplicate copies as evidence for VAT/CST payment, a certificate from the Statutory Auditor / Chartered Accountant (who certifies the Annual Accounts of your Company under the Companies Act / ST/VAT Act / Income Tax Act) shall be submitted confirming that the copies of documents submitted (as evidence of VAT/CST payment) were true copies thereof of the originals. Further, all such copies should be duly certified by the said CA for identification. Alternatively, the CA certificate may include an ABSTRACT containing details of documents (verified by CA) evidencing payment of VAT/CST for relevant states / periods. (Suggested format for CA certificate including the Abstract enclosed herewith as Annexure-III)

4. Certificate from Statutory Auditor / Chartered Accountant who certifies the Annual Accounts of the Company under the Companies Act / ST/VAT Act of the State Government / Income Tax Act covering the following aspects: (Suggested format for CA certificate enclosed herewith as Annexure-II)(i) Correlating the payments of VAT/CST on the imported goods (in respect of which refund is claimed) with the invoices of sale.(ii) Stating that the burden of 4% AD has not been passed on by the importer to the buyer and that the requirement to rule out unjust enrichment is fulfilled.(iii) Explanation as to how unjust enrichment (in the subject claim) is ruled out and the specific grounds/reasons for coming to such conclusion that the burden of 4% AD has not been passed on to any other person.

5. Working Sheet duly certified by Statutory Auditor / Chartered Accountant (who certifies the Annual Accounts of the Company under the Companies Act / ST/VAT Act / Income Tax Act) showing detailed correlation between imports, sales and payment of VAT/CST thereof (in the format given as enclosure to Annexure-II)

6. Extracts of Sales ledger (indicating inter alia, the details of invoices and VAT/CST payments made thereon along with corresponding VAT/CST return) for the relevant months/periods & relevant States/locations (Required only in

38

cases where there is no certification by the Statutory Auditor / CA on the working sheet [containing detailed co-relation between imports, sales and payment of VAT/CST thereof], mentioned at Point No. 5 above)

7. Document/s establishing the fact that the Chartered Accountant who is issuing the above certificate is the statutory auditor for the company or the CA who certifies company’s financial records under the Companies Act / ST/VAT Act of State Govt. or Income Tax Act.

8. A Self-declaration by the claimant to the effect that he has not passed on the incidence of 4% AD to any other person. (Suggested format of self-declaration enclosed herewith as Annexure-V)

9. If the sale is through Consignment Agent / Stockist / Dealer, agreement copy between importer & Consignment Agent / Stockist / Dealer has to be produced along with necessary CA certificate (as per para viii of the Circular 16/2008) (Suggested format for CA certificate enclosed herewith as Annexure-IV)

10. Any other documents relevant for the processing of the claim.

B. Other provisions of the Circulars (important from the Trade point of view) issued by the Board are as follows:

1. Only a single claim against a particular Bill of Entry will be permitted to be filed within the maximum time period of one year. Filing of refund claim for a part quantity in a bill of entry will not be allowed except when this is necessary at the end of the one year period. However, where certain quantity of goods were lost or short-landed or damaged resulting in sale of part quantity and the importer submits a refund claim for the quantity that was sold along with the declaration that for the remaining quantity they would not claim refund, the claims will be entertained even for part quantity. In other words, ordinarily, there would be a single refund claim in respect of each importer in a month irrespective of the number of Bills of Entry (B/Es) processed by the Commissionerate. (Refer Board Circulars No. 6/2008 dt. 28-4-2008 & 16/2008 dt. 13-10-2008)

2. Regarding effective date of the operation of refund scheme, it was clarified by the Board that only those cases where 4% AD was paid on or subsequent to 14.9.2007 will qualify for refunds under this scheme subject to fulfillment of prescribed conditions. (Refer Board Circular No. 6/2008 dt. 28-4-2008)

3. In order to fulfill the requirement of the condition that the incidence of

duty burden has not been passed on by the importer to any other person for the purpose of refund of 4% AD, a certificate issued only by such a Chartered Accountant who either certifies the importer’s financial records under the Companies Act, 1956 or any ST/VAT Act of the State Government or the Income Tax Act, 1961 will be acceptable. As clarified

39

by the Board, certificate by any other independent Chartered Accountant will not be acceptable. (Refer Board Circular No. 16/2008 dt. 13-10-2008)  

4. In case of sale of imported goods by importer through consignment agent/stockist, refund of 4% AD will be granted subject to the condition that the Consignment agent/ stockist has been authorised to sell the imported goods in terms of the agreement entered into between the importer and consignment agent/stockist and that each of the sale invoices issued by the consignment agent/stockist  indicates that the sale is made by him on behalf of the importer in the capacity of consignment agent/stockist. Further, in such cases, it is also required that the applicant submits a certificate from a Chartered Accountant appointed by the importer, who either certifies the importer’s financial records under the Companies Act, 1956 or any ST/VAT Act of the State Government or the Income Tax Act, 1961, to the effect that appropriate ST/VAT has been paid by consignment agent/stockist on behalf of importer and that the importer, in turn, has paid or reimbursed the ST/VAT to his consignment agent/stockist along with the correlation of ST/VAT payment with 4% CVD paid on imported goods. (Refer Board Circular No. 16/2008 dt. 13-10-2008) 

5. An illustrative list of documents to be filed by the applicants along with Application for refund of 4% AD is given in Annexure-II of the Board Circular No. 18/2010 – Customs dt. 8-7-2010. In respect of Accredited Clients registered with Customs in terms of Circular No.42/2005-Customs dated 24.11.2005 (ACP clients), the list of documents to be submitted along with the Refund Application is given in para 4.1 of the said Board Circular No. 18/2010. Also, the procedure for pre-audit for claims of ACP clients has been done away with.

6. In order to enable timely payment of refund in cases of 4% AD, a system of optional facility of directly crediting the applicant’s bank account, through RTGS (Real Time Gross Settlement) or NEFT (National Electronics Funds Transfer) System is being prescribed. Claimants desirous of availing this facility shall furnish necessary authorisation (for payment of refund amount directly to Bank Account) to the AC / DC (Refunds-Air) in the form prescribed under Annexure-I of the Board Circular No. 18/2010 – Customs dt. 8-7-2010.

7. In cases where the assessment is provisional, for the purpose of sanction of refund of 4% AD, it was clarified that the date of payment of duty would be, the date of payment of CVD at the time of import of goods and not the date of finalization of provisional assessment. The Importers, therefore, would be eligible to get the refund, if the claim is filed within one year from the date of actual payment of 4% CVD i.e., the date of payment of duty at the time of clearance of imported goods. (Refer Board Circular No. 23/2010 dt. 29-07-2010) 

8. In case of 4% AD having been paid through Scrips of Duty Entitlement Passbook Scheme (DEPB), Vishesh Krishi and Gram Udyog Yojana (VKGUY), Focus Product Scheme (FPS) and Focus Market Scheme (FMS), the amount eligible for refund will be re-credited on the relevant DEPB / VKGUY / FPS / FMS Scrip. (Refer Circulars No. 6/2008 dt. 28-

40

4-2008 & 6/2009 dt. 9-2-2009). DGFT has since issued Public Notice No. 38/2009-14 and Policy Circular No. 22/2009-2014, both dated 3-2-2010 in this regard.

9. In view of difficulties associated with change in EDI System to allow re-credit of DEPB / VKGUY / FPS / FMS Scrips in case of 4% AD refund and also the view of DGFT that modification in software at the end of DGFT (for the purpose of re-credit of 4% CVD through Electronic Message System and its transmission to the Customs) is not feasible at present, the Board has provided that the registration of re-credited duty scrips issued by DGFT on the basis of consolidated certificate furnished by Customs should be allowed on manual basis. The facility of manual filing of Bill of Entry for utilizing the amount of re-credited CVD refund for payment of duty is also allowed. This facility has been extended up to 30.12.2010 as a one-time measure and it was also clarified that only those B’s/E will be allowed manual processing wherein the duty involved is equal to or less than the balance amount in the re-credited scrip. It was also advised that re-credit amount of CVD refund should be used for payment of BCD and CVD only and not for 4% CVD so as to avoid cascading of subsequent re-credit of 4% CVD in the relevant scrips. Further, the Board has observed that in the interest of ensuring expeditious grant of refund of 4% CVD in cash, the importers may be advised to make the initial payment of 4% CVD in cash. (Refer Circular No 27/2010 dt. 13-8-2010)

C. The claimants are also requested to take note of the following regarding processing of applications for refund of 4% AD:

1. Along with the refund application, the claimants shall submit all documents required as per the above checklist. For expediting the processing of claims, it is advisable that at the time of filing application itself, the claimants may submit all the documents to avoid protracted correspondence and delay.

2. For those claims which are found to be complete in all respects, an acknowledgement in prescribed form will be issued. Claims short of any documents/deficiencies will be returned with deficiency memo. The applicants have to re-submit the application at the earliest after making good the deficiencies, for scrutiny. It is to be noted that in case of deficient applications, date of initial receipt (of deficient application) will be the date of filing for the purpose of time limit for filing refund application. (Refer Customs Refund Application (Form) Regulations, 1995)

3. Claimants are requested to file their refund applications well in advance, i.e., at least few days before the last date of filing. Filing refund applications in the last minute shall be strictly avoided so that the section officers get reasonable time to verify the documents before admitting the claim.

4. Persons filing refund claims on behalf of claimant / appearing for Personal Hearing / receiving cheque shall furnish specific authorization letter to that effect from the importer in respect of each

41

claim. The person signing the refund application shall mention his name, designation and office seal, if any on the application.

5. In all Documents, Certificates and the Refund application etc., the additional duty (sought to be refunded) shall be referred to as “4% additional duty levied under section 3 (5) of the Customs Tariff Act, 1975.” The acronym “SAD” (which is commonly used by many to refer to 4% Additional Duty levied under section 3(5) of Customs Tariff Act 1975) may be avoided in all references as the abbreviation “SAD” may refer to anything including the “Special Additional Duty” which leviable under Section 3A of Customs Tariff Act 1975.

6. The Chartered Accountant’s certification should be categorical with regard to verification of claimant’s records, Books of Accounts etc. for ruling out unjust enrichment and also co-relating in detail, sales with VAT/CST payment. The certificate shall contain an explanation / Valid grounds justifying as to how the incidence of 4% Additional Duty has not been passed on to the buyer, as required under para 6.2 of the CBEC Circular No. 6/2008 dt. 28.4.2008.

7. In cases where there is variation in the description mentioned in the bill of entry and that reflected in the sales invoice, claimants shall submit for consideration, necessary supporting documentary evidence such as import invoice, confirmation from the supplier etc. establishing the identity of the goods.

8. It is noticed that (as also observed by Board vide Circular No. 15/2010 dt. 29-6-2010) in certain cases, refund claims have been filed with the department by some unscrupulous importers wherein forged documents were submitted for availing the 4% AD refund (envisaged in the notification No.102/2007-Customs dated 14.09.2007.) It is to be noted that cross-verification of documents will be carried out by the department on random basis and if it is found that documents submitted were forged or falsified, stern action will be initiated against the offenders under the relevant provisions of the Customs Act, 1962 and other laws.

This Public Notice is not to be regarded as an exhaustive listing of all provisions of the Board Circulars. Only those provisions important from the Trade point of view were summarized for information and easy compliance by the importers with a view to ensure systematic and expeditious disposal of 4% AD Refund claims. In case of any doubt/clarification, relevant provisions of Board Circulars shall be referred to which are final with regard to the procedure to be followed.

It is hoped that the claimants will take note of above and comply with the requirements and assist the department in ensuring speedy disposal of refund claims.

Sd/-File No. C 11/ 02 /2010 – (Refunds-Air) R PeriasamiDated 7.9.2010 Commissioner of Customs (Air)

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Enclosures:

(Suggested / Indicative formats for CA certification / Self-declaration)

1. Annexure-I 2. Annexure-II 3. Annexure-III 4. Annexure-IV 5. Annexure-V

Annexure- I

Self-declaration where Sale invoices are submitted in Electronic Media

Refund on the Bill/s of Entry No. ____________ dated ___________ / List enclosed

We, M/s __________________________, the importers, declare and certify that the refund of 4% Additional duty (levied under section 3(5) of the Customs Tariff Act, 1975) is being claimed in terms of the Notification No. 102/2007 dated 14-09-2007 and is required to be considered as the conditions stipulated therein are fulfilled in respect of the Bill/s of Entry  No. _________ dated ___________ / List enclosed

(a)               We are registered with VAT/CST authorities of the state of ………………… under TIN No. _______________.

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(b)               For the purpose of fulfillment of the condition at para 2(e)(ii) of the Notification No. 102/2007-Customs dated 14.9.2007, we are herewith submitting copy of invoices in electronic form (CD/DVD/……………). 

We further declare and state that

1.                  The electronic media (CD/DVD/…… enclosed herewith) is containing the details of sale invoices pertaining to the subject claim and is being submitted along with this paper declaration indicating the invoice numbers (listed below) contained in the media.

2.                  The copies of invoices contained in the media are true copies of the original sale invoices / carbon copy / office copy (original) of the said invoices and the originals will be submitted, if so required.  

Place:…………………………    Signature:…………………………………..

Date:………………….     Name:……………………………………….

Designation:………………………………………..

For M/s ____________________

Summary of the invoices contained in the media 

Sl. No.

Sales Invoice No.

Date Amount of sale in Rs.

VAT/CST paid thereon

Remarks

           

Annexure-II

Certificate* from Statutory Auditor / Chartered Accountant certifying the importer’s financial records under the Companies Act, 1956 / ST/VAT Act / Income Tax Act, 1961

(i) Co-relating the payment of VAT/CST on the sale of imported goods (in respect of which refund is being claimed) with the invoices of sale.

(ii) Certifying that the burden of 4% AD has not been passed on by the importer to the buyer or any other person and that the requirement to rule out unjust enrichment is fulfilled

(iii) Explaining how the burden of 4% AD has not been passed on by the importer and how the requirement to rule out unjust enrichment is fulfilled

With regard to the imports made by M/s ____________________ under various Bills of Entry No.’s & Dates (as detailed in the correlation sheet enclosed herewith) against which the 4%

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Additional Duty under section 3(5) of the Customs Tariff Act, 1975 has been paid under various TR6 Challans & Dates (as detailed in the correlation sheet enclosed herewith) and refund being claimed under Notification No. 102/2007 dated 14-09-2007, as amended, we hereby certify as follows:

1.                          It is certified that we, ……………………………………… are the Statutory Auditors / Chartered Accountants who certify the annual financial records of M/s _____________ under the Companies Act, 1956 / ST/VAT Act of the State Government / the Income Tax Act, 1961. (Board Resolution / Claimant Company’s Appointment Letter / ………………… to that effect as proof enclosed herewith)

2.                         The VAT/Sales Tax Authorities for M/s _____________ accept payment of VAT/CST through cash or adjustment of input tax credit as effective discharge of VAT/CST payment on sale of goods.

3.                          For purpose of fulfillment of the condition at Para 2 (d) of the Notification No.

102/2007 dated 14-09-2007 and for considering sanction of refund of 4% AD, as Statutory

Auditor / Chartered Accountant of M/s _______________, we hereby  certify that we have

verified the Bills of Entry & corresponding TR6 challans/e-receipts, invoices of sale and

supporting documents as proof of payment of appropriate VAT/CST on sale of goods vide

said invoices [viz., VAT/CST challans / returns & details of cheques / DD’s / ……………..],

sales registers etc. Based on said verification, we certify that the goods imported under the

Bills of entry (as detailed in the correlation sheet enclosed herewith) have been sold under

various sales invoices (as detailed in the correlation sheet enclosed herewith) and on each

such sale, appropriate VAT/CST had been paid to the concerned VAT/Sales Tax authorities

(as detailed in the correlation sheet enclosed herewith).

4. For the purpose of examining the clause of unjust enrichment to the importer in respect of subject refund claim, we have verified the importer’s Books of Accounts and other relevant documents & records / cost sheets / price structure / ………… etc. of the goods. Based on such verification, we have satisfied ourselves that the price at which the imported goods have been sold to buyers (including those cases where the goods were subjected to RSP/MRP based assessment at the time of import) vide various invoices does not include the component of the said 4% Additional Duty of Customs levied under Section 3(5) of the Customs Tariff Act, 1975 which was paid at the time of import. As such, we certify that the claimant has not passed on the incidence of the 4% Additional Duty to the buyer or any other person and hence the requirement to rule out unjust enrichment to the importer/claimant is fulfilled in respect of all goods imported and sold as covered by the subject claim (as detailed in the correlation sheet enclosed herewith).

5. For coming to such conclusion that the burden of 4% Additional Duty has not been passed on by the importer to the buyer or any other person and that the requirement to rule out unjust enrichment has been fulfilled, we further give the following explanation / justification / grounds:

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(i) The 4% Additional Duty being claimed as refund has been shown in the Books of Accounts / Balance Sheet / Trial Balance for the period ___________ as ‘Receivables / Recoverables in cash / ……………………’ under the sub-heading “Loans & Advances / ………………………….’ under the head, ‘Current Assets / ……………………...’

(ii) The 4% Additional Duty claimed as refund has not been charged to ‘Expenses /…………………’ in the Profit and Loss Account of the company and therefore the same is not forming part of the cost of the goods and hence the burden of 4% AD is not being passed on to the buyer or any other person.

(iii)………………………………………………………………………....

Place:…………………………    Signature:…………………………………..

Date:………………….     Name:……………………………………….

For M/s ____________________ (CA)

Membership No……………  

* To be filled in with appropriate details and strike out wherever not applicable

Enclosure 1: Co-relation Sheet with details of imports & 4%AD paid, Sales & VAT/CST Paid

Enclosure 2 : Documentary evidence supporting the fact that the CA issuing the certificate is the Statutory Auditor / Chartered Accountant certifying the importer’s financial records under the Companies Act, 1956 / ST/VAT Act / Income Tax Act, 1961

Annexure- III

Certificate   from the Chartered Accountant for not submitting original ST/ VAT Challans and for submitting copies of ST/VAT Challans or copies of ST/VAT payment documents in

different forms evidencing payment of ST/VAT

                      With regard to the imports made vide Bill/s of Entry No.___________dated __________ and TR6 Challan/s No. __________ dated ____________ (List Enclosed) wherein the 4% Additional Duty has been paid and the refund is sought by M/s _______________ under Notification No. 102/2007 dated 14-09-2007, as amended, we certify as follows:

1.                     It is certified that we are the Statutory Auditors / Chartered Accountants who certify the annual financial accounts and the statement of accounts of M/s _____________ under the Companies Act / ST/VAT Act / Income Tax Act. (Board Resolution / Claimant Company’s Appointment Letter / ………………… to that effect as proof enclosed herewith)

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2.                     To fulfill the requirement in terms of Para 2(e) (iii) of the Notification No. 102/2007-Customs dated 14.9.2007, we certify that the Sales Tax Authorities for M/s _____________ accept payment of VAT/CST through cash or adjustment of input tax credit as effective discharge of VAT/CST payment on sale of goods.

3.  To fulfill the requirement in terms of Para 2(e) (iii) of the Notification No. 102/2007-Customs dated 14.9.2007, we further certify that for the relevant periods, the claimant M/s _________________ has effectively discharged the payment of the relevant VAT/CST to the respective State Government/s on the sale of imported goods against which the refund of 4% AD is being claimed. The copies of documents evidencing the payment of VAT/CST (as effective discharge of VAT/CST payment on imported goods), duly certified by us as true copies of their originals are enclosed herewith. / Details of documents verified by us evidencing payment of VAT/CST for relevant states/periods are given in the following abstract.

ABSTRACT

State where

VAT/CST paid

Month / Period CST / VAT

VAT/CST Payment

Mode

VAT/CST Payment

Reference No. & Date

Total VAT/CST paid in Rs.

Amount of VAT/CST

paid on sale of goods

pertaining to subject

claim

Place:…………………………    Signature: ……………………………………

Date:…………………    Name:……………………………………

For M/s ____________________ (CA)

Membership No……………  

Enclosure: Certified copies (by CA) of documents evidencing payment of VAT/CST (If applicable)

Annexure-IV

Certificate from a Chartered Accountant who either certifies the importer’s financial records under the Companies Act, 1956 / ST/VAT Act / Income Tax Act in cases where imported goods

are sold through Consignment Agent/Stockist

                        With regard to the imports under Bill/s of Entry No. ___________dated __________ and TR6 Challan/s No. __________ dated ____________ (List enclosed) wherein the 4% Additional Duty has been paid and the refund under Notification No. 102/2007 dated 14-09-2007 as amended, is sought by M/s _______________,

1. It is certified that we are the Statutory Auditors / Chartered Accountants who certify the annual financial accounts and the statement of accounts of M/s _____________ under the

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Companies Act / ST/VAT Act / Income Tax Act. (Board Resolution / Claimant Company’s Appointment Letter / ………………… to that effect as proof enclosed herewith)

2. To fulfill the requirement of the Notification No. 102/2007-Customs dated 14.9.2007,

we certify that

(i)             M/s _______________ has been authorised as Consignment agent/Stockist to sell the imported goods in terms of the agreement entered into between the importer M/s _____________  and consignment agent/stockist M/s ________________; (Agreement copy attested by us enclosed herewith)

(ii)                that each of the sale invoices issued by the consignment agent/stockist indicates that the sale is made by him on behalf of the importer in the capacity of importer’s consignment agent/stockist.

(iii)               appropriate VAT/CST has been paid by Consignment Agent/Stockist, M/s ___________ on behalf of importer M/s _____________ and that the importer, M/s ___________ in turn, has paid/reimbursed the VAT/CST amount to his Consignment Agent/Stockist M/s _______________

(iv) VAT/CST payment made to concerned authorities is correlated with 4% AD paid on imported goods (as per enclosed correlation sheet)

Place:…………………………    Signature:…………………………………..

Date:………………….     Name:……………………………………….

For M/s ____________________ (CA)

Membership No……………  

Enclosures: As above

Annexure – V

Self-declaration for not passing on the incidence of 4% AD to any other person

Refund on the Bill/s of Entry No. ____________ dated ___________ / List enclosed

We, M/s __________________________, the importers, declare and certify that the refund of 4% Additional duty (levied under section 3(5) of the Customs Tariff Act, 1975) is being claimed in terms of the Notification No. 102/2007 dated 14-09-2007 and is required to be considered as the conditions stipulated therein are fulfilled in respect of the Bill/s of Entry  No. _________ dated ___________ / List enclosed

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(a)               We are registered with VAT/CST authorities of the state of ………………… under TIN No. _______________.

(b)               For the purpose of fulfillment of requirement to rule out unjust enrichment in the subject case of refund of 4% AD, we declare and state as follows:

1. We have paid, at the time of import, applicable duties of customs including the 4% Additional Duty of Customs levied under section 3(5) of the Customs Tariff Act, 1975. The imported goods were subsequently sold by us to buyers vide various invoices and applicable VAT/CST was paid on such sales (to the VAT/CST authorities of the State Government/s.)

2. We declare that the price at which the imported goods have been sold to buyers vide various invoices does not include the component of the said 4% Additional Duty of Customs levied under Section 3(5) of the Customs Tariff Act, 1975 which was paid at the time of import. As such, we state and certify that we have not passed on the incidence of 4% Additional Duty of Customs levied under section 3(5) of the Customs Tariff Act, 1975 to the buyer or any other person.

       

Place:…………………………    Signature:…………………………………..

Date:………………….     Name:……………………………………….

Designation:………………………………………..

For M/s ____________________

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