Creation of Centralised Refund Section & Streamlining the procedure thereof-reg. - Customs - 11/2016-17

OFFICE OF THE PRINCIPAL COMMISSIONER OF CUSTOMS (IMPORT) MUMBAI-III, AIR CARGO COMPLEX SAHAR ANDHERI (EAST), MUMBAI-400099 F. No. S/3-Misc-PRO-162/2015-16-ACC(I) Date : 23-06-2016 PUBLIC NOTICE NO. 11/2016-17 Sub: Creation of Centralised Refund Section Streamlining the procedure thereof-reg. Kind attention of all importers, exporters, members of trade and industry Associations, Customs Brokers, Customs Officers and others is drawn to the creation of Centralised Refund Section and streamlining the procedure of filing of the refund claims processing thereof. 2. Trade has represented the problem faced by them in relation to the filing of the refund claims, processing of these refund claims by Refund Section, reassessment or amendment under Section 149 of Customs Act, 1962by the concerned Appraising Groups (wherever necessary) passing of the refund orders and disbursement of cheques/online payments, these difficulties faced by the trade have been examined and accordingly, following decisions have been taken up to simplify the procedure of the above refund claims. 3. The Refund Section is being restructured to receive, process, monitor and sanction the refunds. The restructured Centralised Refund Section (CRC) will have following Sections: i. CRC-I - This section shall receive, monitor, process and sanction the refund claims other than SAD and 1% or 5% EDD (SVB order) ii. CRC-II - This Section shall receive, monitor, process and sanction the refunds of 1% or 5% EDD i.e. (R.D. Refunds), Special Valuation Cell, Monitoring of BG etc. The trade is advised to file their refund claims to the respective CRC Sections. 4. In order to ensure expeditious disposal of Customs Duty refund applications and to enhance transparency in refund disbursement, all refund claim will stand centralized with Refund Section at Import Commissionerate of Customs, Air Cargo Complex w.e.f. 01.07.2016. The claims pending with Groups till 30.06.2016 shall be finalized by the respective Appraising Groups only and in no case, the pending files received before 30.06.2016 shall be transferred to the Refund Section. All refund claims filed after 01.07.2016 shall be dealt as under:- 5. All refunds under Section 27 of the Customs Act, 1962 including consequential refund arising out of orders passed by an Appellate Authority as well as the pre-deposits of amounts deposited during the pendency of appeals and other deposits shall be dealt by the CRC-I. 6. All claims should be filed in the form and manner prescribed under Customs Refund Application (Form) regulations, 1965. All claims should be addressed to DC/AC respective Refund Section and deposited/filed in the respective Refund Section. 7. The work shall be supervised by an AC/DC. All the refund applications made by any person whether by post or courier or personal delivery, shall be received by the Centralised Receipt Section of Refund claims and a simple receipt, for having received the application that is said to be have been filed as Refund application' shall be issued immediately. At this stage, the receipt should make it clear that the application has not been scrutinized for its completeness. All the applications so received will be given a running Serial Number for each financial year and acknowledgement will be given by the Receipt clerk (TA/EO/PO/STA) after verifying that whatever has been stated in the application has in fact been annexed to the application. Thereafter, Refund application details shall be entered in the Master Register and assign them the file number. The running Serial Number given on the application and the Master Register shall be the same and shall bear the dated initials along with rubber stamp indicating the name of the officer, who has received the Refund claim. The same file number shall be endorsed on the refund application. In case of receipt of Refund Application by post, the same procedure shall be followed. 8. After completing the above requirements, the examining officer/PO/AO/Supdt. shall scrutinize the refund application. All those refund claims found to be complete in all respects, after scrutiny shall be processed on first come first serve basis so as to decide whether the whole or any part of the duty and interest paid by the applicant is refundable in its totality with reference to Notifications, Board circulars, Public Notices and otherwise with specific [analysis in respect of all aspects of the refund claim viz. the time limit, the merits and unjust enrichment aspect. Thereafter, the officer shall put up a detailed proposal to Asstt./Deputy Commissioner of Customs, Refund Section for their perusal and orders. 9. If the application is found to be incomplete, the Examiner/ACAO shall put up the deficiency memo. The AO shall re-check whether all documents required have been mentioned in the deficiency memo and then he shall sign the memo. The TA shall issue the deficiency memo by Regd A.D. Post. The acknowledged memo/deficiency memo shall bear the same Sr.No. and date of receipt of the Refund claim. All the deficiency memos shall be issued within a week/10 days from the date of the receipt of the refund application. 10. The TA/STA will forward the refund file to the Cash Section for No Payment Certificate (NPC). Cash Section will verify the CBR Cus 44 Register and state whether or not any refund has earlier been granted against particular Cash Number. (Thereupon, NPC (No Payment Certificate) clerk ITA would check and make necessary endorsement in the challan and the duty payment scroll regarding non-payment of refund earlier.) This should be within 3 working days. TA/Refund will keep records of movement of file in refund Register. 11. After the file has been received back by the Refund Section from Cash Section, TA will forward the file to the Examiner/ACAO to process the claim. The Examiner/ACAO will evaluate the merits of the claim including excess duty payment, double duty payment, other issues of re-assessment and amendment under Section 149 of the Customs Act and put up the file to AO with a self-explanatory note. The AO will examine the claim and with his comments will forward the same to DC/AC (Refund) for sanction or otherwise. Before sanctioning the Refund, DC/AC (Refund) shall verify from all the Groups/Tax Recovery Cell that whether any confirmed demand is pending for recovery from 'importer/applicant so that the same can be recovered or adjusted if the refund amount is found admissible for sanction. The file where the refund is proposed to be sanctioned will be forwarded to Comptist who will compute the exact amount of refund and will return the file immediately to the Refund Section, not later than one working day. If the confirmed demand, free from restraint is pending for recovery from the importer, the amount of demand can be adjusted from the total refund payable. 12. The Asstt./Dy. Commissioner shall decide the refund claim on merit either by granting the refund or in case there are infirmities, by rejecting/reducing the claim. The rejection shall not be done without giving a personal hearing. In either case, a reasoned Order-in-Original shall be issued after obtaining a running Order-in-Original number. If the refund amount sanctioned is less than ₹ 50,000/-, no Order-in-Original is required to be issued. However in case of rejection/reduction of claimed amount, Order-in-Original shall be issued in all cases. The speaking order granting refund of the full or a part of the amount claimed or rejected should include findings in respect of all three aspects namely the time limit, merit and unjust enrichment of the refund claim. Even if a claim is liable for rejection on one of the grounds, findings in respect of other two grounds should also be elaborated, to avoid repetitive work at various levels. In all the cases where refund is proposed to be sanctioned wherein duty involved is ₹ 5 lakhs or more, shall be forwarded to Audit Section for the purpose of pre-audit along with the draft Order-in-Original of refund. The Audit Cell, shall examine the refund claim and draft Order-in-Original and put up to the competent Authority for pre-audit. The file would be returned after pre-audit to the refund section within five working days. 13. After the file is returned from Audit, after pre-audit of claim, the refund should be sanctioned or otherwise by a speaking appealable order. The rejection shall not be without giving a Personal Hearing. Whenever, refund is rejected, Order-in-Original of rejection should be issued or dispatched to the claimant. Further, in respect of the provisions of unjust enrichment, the order should indicate that this aspect has been examined based on the guidelines, if any, applicable, the order should also contain the finding of adjudicating authority on the documents produced in support of the claim and basis for determining the amount as either refundable to the Consumer Welfare Fund or the claim not being admissible. 14. Once the refund is sanctioned by the Asstt./Dy. Commissioner and after issuing the Order-in-Original, the TA will prepare the Refund Order (R.O.) and put up to AC/DC for signature and issue to the claimant. Further, the payment of refund amount is directly credited to Importer's Bank Accounts instead of by way of issuing cheques as per Facility Notice No. 05/2014 dated 16.09.2014 issued by Commissioner of Customs (Import), Air Cargo Complex, Mumbai. All the members of the trade and applicants of refund claims may follow the procedure prescribed in the said Facility Notice. 15. The file where refund has been sanctioned will be forwarded to the Cash Section who will keep a note of the refund sanctioned in the CBR Cus 44 Register and give a certificate in the file to this effect. All files received in Cash Section for this purpose must be returned to Refund Section within 2 days. 16. After issuance of Order-in-Original/Refund Order, all the files with refund claim less than 5 lakhs should be sent to post-audit for completing post-audit formalities. In case where refund claim is less than ₹ 50,000/-, the AC/DC (Audit) may select 25% of such cases at random for post audit. The post audit should be done at the level of AC/DC Audit. All refund files should be kept in safe custody in respective Refund section. 17. Where the refund application has been admitted, whether in part or in full, and claimant is eligible for refund, the AC/DC may ensure that payment is made to the party within 3 days of the order passed after due audit, if any. In all such the refund amount is directly credited to Importer's Bank Account as per the Facility Notice No. 05/2014 date 16.09.2014. 18. Finalisation of refund claims, lodged by importers and exporters is a quasi-judicial function and is required to be followed up by issuance of a speaking appellate order. In view of this, DC/AC (Refund) shall issue a speaking order finalizing the refund claims and endorse a copy of the order to DC/AC (Review). DC/AC (Review), on receipt of such order shall after due examination, put up the same to the Commissioner for review and passing orders as deemed fit. 19. In the light of Board's Circular No. 5/2016 dtd. 09.02.2016 regarding Procedure for investigation of related party import cases and other cases by the Special Valuation Branches, Special Valuation Cell (SVC) has been created in the Centralised Refund Section. SVC will function under the CRC-II. 20. SVC will perform following functions: i. After the approval from the Principal Commissioner of Customs (Import), the concerned Group will forward the case details to SVC Cell. SVC Cell will make necessary entry of the case in the register. ii. All the Investigation Reports from SVB, will be received by SVC of Centralised Refund Section. iii. Board vide its Circular No. 5/2016 dated 09.02.2016 has decided that the importer would be free to choose whether the Security Deposit to be provided for the purposes of provisional assessment shall be by way of cash deposit or a Bank Guarantee. The monitoring of such Bank Guarantee like extension, encashment etc will be monitored by the SVC of Refund Section. iv Upon receipt of the investigation report (IR) from the SVB, where finalization is required, where investigative findings are that the declared value is found conforming to Rule 3 of the CVR, 2007, the SVC shall immediately proceed to finalize the same. The finalization of the Bs/E will be done in ICES 1.5. There would be no need to issue a speaking order for finalizing the provisional assessments in such cases. Necessary assistance for finalization may be taken from the importer wherever necessary. v. When investigating findings are that the declared value has been influenced by the circumstances surrounding the sale, the SVC shall issue a show cause notice to the importer within 15 days of the receipt of the IR, and the copy of the same will be forwarded to SVB Cell. vi. In cases where imports have been cleared through multiple customs locations, the jurisdictional commissioner of the SVB shall, after issue of notices by the proper officers in the said locations, make a proposal addressed to the Commissioner (Customs), CBEC recommending appointment of a common adjudicating authority by the Board for the purpose of passing order for finalization of the provisional assessments. The record of the same may be maintained and monitored by SVC. vii. The adjudicating authority shall, after following the principles of natural justice, pass an order quantifying the extent of influence on the declared transaction value. The order shall be endorsed to the Risk Management Division and DG0V. viii. Reassessment of Bs/E shall be done by SVC/CRC-II instead of sending these Bs/E to Assessing Groups for reassessment. All the finalization of Bs/E shall be done in ICES 1.5 in SVC of Refund Section only. 20. Difficulties, if any, faced in the implementation of this Public Notice may be brought to the notice of the undersigned. This issues with the approval of the Principal Commissioner of Customs (Import), ACC. (Dr. S. S. Dhavale) Addl. Commissioner of Customs (Import) Air Cargo Complex, Mumbai