Refund scheme for the 4% additional CV duty levied under Section 3(5) of the Customs Tariff Act, 1975 - Regarding - Customs - F. No. 354/129/2007-TRU

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. 2.1 This exemption will operate through a 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; 2.2 In respect of goods for which the importer 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. 3. Suitable amendment has also been made to the Cenvat Credit 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.