TaxTMI 
TaxTMI 
Processing of Refund Claims of 4% Additional Duty of Customs levied under Section 3(5) of the Customs Tariff Act, 1975 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
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....ading 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 to as 4% AD). Government of India has issued Notifications Nose 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 4% AD. Further, the Central Board of Excise and Customs (CBEC) has issued many circulars (N's 6/2008 dt. 28-4-2008, 16/2008 dt. 13-10-2008, 6/2009 cit. 9-2-2009, 15/2010 dt. 29-6-2010, 18/2010 dt. 8-7-2010, 23/2010 cit. 29-7-2010 & 27/2010 dt. 13-8-2010) on the subject and has clarified various doubts raised by the field formations. The circulars also elaborate on the mandatory procedural requirements to be complied with by the claimants before the sanction of refund of 4% AD. 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 containing necessary particulars in time leading to delay in processing of refund cla....
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....se claims which are found Lo be complete in all respects, an acknowledgement in the prescribed form(with S-24 No.) will be issued. Claims short of any documents/ claims with any deficiencies with regard to requisite particulars will be returned to the claimants with a deficiency memo (D.M). (ii) The applicants have to re-submit the application after making good the deficiencies within 10(ten) days of receipt of the D.M. It is to be noted that in case of deficient applications, date of initial receipt (of deficient application) will be treated as the date of filing for the purpose of reckoning the time limit for filing refund application. However{ the claim will be admitted and will be taken up for final scrutiny only after it is resubmitted after making good the deficiencies. (Refer Customs Refund Application (Form) Regulations, 1995). (C) Representation on behalf of the Claimant by authorized persons: (i) The person signing the refund application shall mention his name, designation and office seal, if any on the application. (ii) However the claimant may represent himself through authorized representative for the purpose of appearance for personal hea....
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....d by DGFT under various schemes viz. DEPB/VKGUY/FPS/FMS etc.: (i) 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, 28-4-2008 & 6/2009 at. 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. (ii) In view of difficulties associated with change in FDI 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 [he 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 ....
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....of this certificate should be very high. It is in this context that the Board also has directed that the refund claims are to be processed expeditiously based on the Chartered Accountant's certificate. The Chartered Accountant giving the certificate shall be either the Statutory Auditor under the Companies Act, 1956 or the VAT Auditor or the Income Tax Act, 1961 (CBEC Circular No. 16/2008 dt. 13.10.2008 refers). The Chartered Accountant giving the certificate shall also mention his registration number as given by the Institute of Chartered Accountants of India. (iv) Hence it is necessary that such certificates issued by the C.As should be categorical with regard to verification of claimant's records, Books of Accounts etc. for ruling out unjust enrichment and for co-relating sales with VAT/CST payment in detail as the standards of scrutiny and certification necessary in such cases is 'beyond all reasonable doubts' and not on selective basis. (v) Since the Department desires to expeditiously process the refund claims, the Chartered Accountant's certificate plays a crucial role and unless it is backed by highest standards of scrutiny by the Chart....
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....ile filing claim for refund of 4%AD: In all documents, certificates and the refund application etc., the additional (sought to be refunded) shall be referred to as "4% additional duty levied under section 3 (5) 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 is leviable under Section 3A of Customs Tariff Act, 1975. 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 have been summarized for information and ease of 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 with regard to the procedure to be followed. It is hoped that the claimants will take note of above and comply . with the requirements for speedy disposal of the refund claims. (S.KANNAN....
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.... 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. (iv) Documents such as Board's Resolution, Appointment letter of the auditor by the claimant, etc., 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 6. A Self-declaration by the claimant to the effect that he has not passed on the incidence of 4% AD to any other person. Also, if the refund claim is for part of the imported goods sold, a self declaration by the claimant that he would not claim refund for the unsold portion of the imported goods subsequently (Suggested format of self-declaration enclosed herewith as Annexure-V) Document 2 7. If the sale is through Consignment Agent / Stockist / Dealer, agreement copy between importer & Consignment Agent / Stocki....
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....om Statutory Auditor / Chartered Accountant certifying the importer's financial records under the Companies Act, 1956 /ST/VAT Act / Income Tax Act, 1961 (i) (ii) (iii) 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. 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 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 (iv) Certifying the details of documents verified towards payment of VAT/CST for relevant states/periods With regard to the imports made by M/s under (No.) Bills of Entry, details of number & dates (as detailed in the correlation sheet enclosed herewith) against which the 4% 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 amounting to Rs. _ being claimed under Notification No....
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....counts 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 RSPIMRP 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). 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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....between Imports, Sales and VAT/CST paid thereon Importer's Name:...... Date of filing claim with customs: DETAILS OF IMPORTS TR 6 Description of Sl. B/E No. Challan No & date No. & imported goods date Qty Imported 4% AD paid (Rs.) 1 (i) Sub-Total for each individual item of BE and total for each BE and Grand total for total nos. of Bills of entry SUB- TOTAL SUB- TOTAL (ii) Sales Invoice No. & Date DETAILS OF SALES & VAT/CST PAYMENT THEREON State from VAT/CST which Name of buyer Qty sold Applicable Rate of VAT/CST paid Refund goods (Rs.) VAT/CST were sold payment Reference No. claimed (Rs.) SUB- TOTAL SUB- SUB- SUB- TOTAL TOTAL TOTAL SUB- TOTAL TOTAL TOTAL TOTAL TOTAL 2 (i) (ii) SUB- TOTAL SUB- TOTAL TOTAL TOTAL TOTAL TOTAL GRAND TOTAL G.TOTAL G.TOTAL G.TOTAL Document 8 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 i....