PROCEDURE FOR CLAIMING REFUND
A.
REFUND OF EXCESS DUTY PAID
1.
Refund of excess amount of duty paid can be claimed by the importer or
exporter. If any excess interest has been paid by the importer/exporter on the
amount of duty paid in excess, its refund can also be claimed.
2.
Section 27 of the Customs Act, 1962 deals with the refund of duty and
interest. As provided therein, refund of duty and interest can be claimed either by a
person who has paid the duty in pursuance to an order of assessment or a person
who has borne the duty.
3.
Any person claiming refund of any duty or interest has to make an application
induplicate in the form as prescribed in the Customs Refund Application (Form)
Regulations, 1995, to the jurisdictional Deputy/Assistant Commissioner of Customs.
4.
In terms of Section 27 of the Customs Act, 1962 an application for refund is
required to be filed within one year from the date of payment of duty and interest.
Normally, the time limit of one year is computed from the date of payment of duty,
however, in following situations, such time limit is computed differently: (a) In case of
goods which are exempt from payment of duty by an ad-hoc exemption order issued
under Section 25(2) of the Customs Act, 1962 the limitation of one year is to be
computed from the date of issue of such order; (b) Where duty becomes refundable
as a consequence of judgment, decree, order or direction of the appellate authority,
Appellate Tribunal or any court, the limitation of one year is to be computed from the
date of such judgment, decree, order or direction. (c) Where any duty is paid
provisionally under Section 18 of the Customs Act, 1962 the limitation of one year is
to be computed from the date of adjustment of duty after the final assessment
thereof; and (d) The date of payment of any duty and interest in relation to a person,
other than the importer shall be ‘the date of purchase of goods’ by such person.
5.
The limitation of one year for claiming refund does not apply where any duty
and interest has been paid under protest.
6.
The application for refund is required to be filed with documentary or other
evidence including documents relating to assessment, sales invoice and other like
documents to support the claim that the duty and interest was paid in excess,
incidence of duty or interest has not been passed on by him to any other person, and
the refund has not been obtained already.
7.
Where on scrutiny, the application is found to be complete in all respects the
Customs issues an acknowledgement in the prescribed Form. However, in case the
application is found to be incomplete, the Customs will return the same to the
applicant, pointing out the deficiency. The applicant has to then re-submit the
application after making good the deficiency
.
8.
The application of refund found to be complete in all respects by Customs, is
processed to see if the whole or any part of the duty and interest paid by the
applicant is refundable. In case, the whole or any part of the duty and interest is
found to be refundable, an order for refund is passed. However, in view of the
provisions of unjust enrichment enshrined in the Customs Act, the amount found
refundable has to be transferred to the Consumer Welfare Fund except in the
following situations when it is to be paid to the applicant: (a) If the importer has not
passed on the incidence of such duty and interest to any other person; (b) If such
duty and interest was paid in respect of imports made by an individual for his
personal use; (c) If the buyer who has borne the duty and interest, has not passed
on the incidence of such duty and interest to any other person; (d) If amount found
refundable relates to export duty paid on goods which were returned to exporter as
specified in Section 26 of the Customs Act, 1962; (e) If amount relates to Drawback
of duty payable under Sections 74 and 75 of the Customs Act, 1962; and (f) If the
duty or interest was borne by a class of applicants which has been notified for such
purpose in the Official Gazette by the Central Government.
9.
In terms of Section 27(2) of the Customs Act, 1962 the concerned Assistant/
Deputy Commissioner of Customs has to examine the facts of the case and the
material placed before him in order to determine whether the amount claimed by an
applicant is refundable to him or not. Further, the Assistant/Deputy Commissioner of
Customs has to go through the details of audited balance sheet and other related
financial records, certificate of the Chartered Accountant etc., submitted by the
applicant in order to decide whether the applicant had not passed on the incidence of
the duty and interest thereon, if any, to any other person. The Assistant/Deputy
Commissioner of Customs has to pass the speaking Order-in-Original on the refund
application providing specific details including the relevant financial records that are
relied upon to arrive at a conclusion whether the burden of duty or interest, as the
case may be, has been passed on or not.
10.
The Customs has to finalize refund claims immediately after receipt of the
refund application in proper form along with all the documents. In case, any duty to
be refunded to an applicant is not refunded within 3 months from the date of receipt
of application for refund, interest that is currently fixed @ 6% is to be paid to the
applicant. The interest is to be paid for the period from the date immediately after the
expiry of 3 months from the date of receipt of such application till be date of refund of
such duty. For the purpose of payment of interest, the application is deemed to have
been received on the date on which a complete application, as acknowledged by the
proper officer of Customs, has been made.
11.
Where any order of refund is made by the Commissioner (Appeals), Appellate
Tribunal or any Court against an order of the Assistant Commissioner/Deputy
Commissioner of Customs, the order passed by the Commissioner (Appeals),
Appellate Tribunal or by the Court, as the case may be is deemed to be an order for
the purpose of payment of interest on delayed refund.
12.
The interest on delayed refund is payable only in respect of delayed refunds
of Customs duty and no interest is payable in respect of deposits such as deposits
for project imports, security for provisional release of goods etc.
13.
The procedure to ensure expeditious disposal of Customs duty refund
applications and to enhance transparency in refund disbursement is as follows:
(a) Receipt and acknowledgement of all refund applications: All refund
applications made under Section 27 of the Customs Act, 1962 whether by
post or courier or personal delivery, are received by the department and a
simple receipt of having received the ‘refund application’ is issued
immediately. The receipt makes it clear that the application has not been
scrutinized for its completeness. These applications are scrutinized for their
completeness of their receipt, for giving acknowledgement by the Proper
Officer as per the Customs Refund Application (Form) Regulations, 1995.
Hence, if any deficiency is found in the application or any document is
required by the department, the same is informed at this stage of initial
scrutiny itself of the initial receipt. This avoids any chance for raising repeated
queries to the applicant, in a piece-meal manner and bring certainty in dealing
with refund applications.
(b) Processing of refund applications and their disposal: Application
found complete in all respects after scrutiny, are processed on ‘first-come-first
served’ basis. If refund is due, an order for refund is passed in terms of
Section 27(2) of the Customs Act, 1962 or where the claim for refund is found
liable to be rejected, as the case may be, a speaking order is passed giving
complete reasons for the order. Further, the order indicates that the aspect of
unjust enrichment has been examined based on the applicable guidelines.
The order also contains the findings of adjudicating authority on the
documents produced in support of the claim and the basis for determining the
amount as either refundable to the claimant or payable to the Consumer
Welfare Fund or the claim not being admissible.
(c) Payment of Refund amount: Where the refund application is admitted,
whether in part or in full, and claimant is eligible for refund the payment is
made to the applicant by crediting in his bank account trough RTGS on the
basis of pre-receipt already obtained from the claimant.
(d)Audit:Pre-audit of refund claims for amount of Rs. 5 lakhs and moreis
conducted by the Assistant/Deputy Commissioner (Audit), in the
Commissionerate Headquarters Office. Thereafter, the Assistant/Deputy
Commissioner(Refunds) passes an order-in-original in respect of the claim.
Thereafter, the orders- in-original passed in this regard are subjected to
review by the Commissioner concerned.
B
Refund of Additional Customs Duty (Special Additional Duty-SAD) paid
under section 3(5) of Customs Tariff Act, 1975.
(1)
Exemption granted to Additional Customs Duty on imported goods:- By
virtue of Notification No. 102/ 2007 dated 14.09.2007 the Central Government
granted exemption, of the whole of the additional duty of customs leviable thereon
under sub-section (5) of section 3 of the said Customs Tariff Act, 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 ;( Para 7.2 of Board’s Circular No.6/2008 dated
28.04.2008)
(b)
The importer shall pay on sale of the said goods, appropriate sales tax or
value added tax, as the case may be; (Para 2(v) of Board’s Circular
No.16/2008 dated 13.10.2008 clarifies that payment of VAT/ST by cash/other
authorized form/input tax credit should be accepted.)
(c)
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;(Para 7.2 of
Board’s Circular No.6/2008 dated 28.04.2008)
(d)
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(Para 4.1 of
Board’s Circular No.6/2008 dated 28.04.2008 and Notification No.93/2008
dated 01.08.2008, Para 2 (i) of Board’s Circular No.16/2008 dated 13.10.2008
clarified that the time limit shall be from the date of payment of duty and not
from the date of finalization of the provisional assessment).
(e)
The importer shall, inter-alia, provide copies of the following documents along
with 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;(Para 4.1 of Board’s Circular No.6/2008 dated
28.04.2008 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 claims submitted within the maximum prescribed time of one
year and unsold stocks would not be eligible for refunds, para 4.2 of the said
Circular also clarified that only a single refund claim in respect of one Importer
in a month irrespective of the number of Bills of Entry processed by the
respective Commissionerate and this has been further amended vide Board’s
Circular No.12/2015 dated 09.04.2015 that the Importer’s may file refund
claim of 4% SAD refund in terms of Notification No. 102/2007 at the Customs
Stations where the imports are made, however, the number of such claims at
a Customs station shall be limited to one in a particular month. Para 2(iii) of
Board’s Circular No.16/2008 dated 13.10.2008 stipulates that the legal
requirement of submission of copies of sale invoices would be fulfilled if the
same is provided in electronic form, Para 2 of Board’s Circular No.15/2010
dated 29.06.2010 stipulates that refund of SAD is available only in case the
imported goods are subsequently sold on payment of VAT, without carrying
out any process)
(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.
(2)
Illustrative List of Documents to be filed for 4% SAD refund claims:-
(i)
Refund Application (Part-A, B & C) as per Public Notice No.91/95 dated
06.06.95 and proper proforma with declaration. (Proforma-I)
(ii)
Duplicate Bill of Entry (Importer’s Original Copy) with copies of invoice and
Bills of Lading
(iii)
Document evidencing payment of Special Additional Duty (SAD) - Original
TR-6 challan.
(iv)
Calculation / Worksheet (Annexure-A) (Proforma-II)(Public Notice
No.53/2010)
(v)
Self Declaration (Annexure-B) (Proforma-III)(Public Notice No.43/2008 JNCH
dated 06.06.2008)
(vi)
Original Sales Invoices of the imported goods in respect of which refund of
the said SAD is claimed, along with list containing Invoice No., Date, Amount
of ST/VAT paid on imported goods for which Refund is claimed -(AnnexureC)(Proforma-IV)(Public Notice No.43/2008 JNCH dated 06.06.2008)
(vii)
Original Chartered Accountant Certificate (Annexure-S) (Proforma-V) (Public
Notice No.53/2010).
(vii)
All original challans evidencing payment of Sales Tax /VAT with
detailsofinvoices
(ix).
Copy of Invoices in Electronic form (including in the form of CD) (AnnexureI)(Proforma-VI)(Public Notice NO. 04/2009 JNCH dated 02.02.2009).
(x)
Authorization for payment of refund amount directly to Bank Account
Proforma-VII)(Board’s Circular No.18/2010-Customs dated 08.07.2010.
(x).
All relevant documents to substantiate their claim for Unjust enrichment.(The
Board vide its Circular No: 6/2008 dated 28.04.2008 has clarified that considering
the voluminous transactions and the documents involved 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 fulfil the requirement of unjust enrichment. To fulfil the requirement of
unjust enrichment the Board vide circular No: 6/2008 dated 28.04.2008 and 16/2008
dt.13.10.2008 allowed the Importer to produce a certificate from the statutory
auditor/Chartered Accountant who certifies the annual accounts of the Importer to
the effect that the burden of 4% CVD has not been passed on by the Importer to the
buyer. The Board vide its Circular No: 6/2008 dated28.04.2008 required the Importer
to make a self-declaration along with a refund claim to the effect that the burden of
4% CVD has not been passed on by the Importer to any other person.)
(3)
Processing of SAD Refund Claims at JNCH:
(i) The STA/TA posted to the Centralized Refund Cell (CRC) shall receive the SAD
Refund Claim.
On submission, the STA/TA shall ensure that the said claim is
accompanied by the documents mentioned at Para B (2) above.
(ii) On receipt of the SAD Claim, the STA/TA shall give an acknowledgement. In case of
non-production of any of the documents listed above, the claim shall be returned with
the following advice
“The SAD Claim submitted is incomplete due to non-
submission of the following documents:
(1)
(2)
(3)
Therefore, the same is being returned herewith.”
(iii) The Number of Bills of Entry for which SAD refund claim has been filed shall be
endorsed on the refund claim application and also entered in the receiving register by
the concerned TA/STA.
The TA/STA then shall put up the SAD refund claims
received during the day along with receiving register to the concerned DC/AC for his
dated signature on all the SAD refund applications and on the daily receipt
register.Thereafter, the TA/STA shall distribute the SAD refund claims to the
Examiner/Superintendent/Appraiser as per the work allocation in the unit. The
Examiner/Superintendent/Appraisershall endorse the receipt of these claims in the
register.
The
Examiner/Superintendent/Appraisershall select
the
claim for
processing strictly on First-in First-out basis. The SAD refund claim documents have
to
be
properly
scrutinized
for
its
correctness
by
the
concerned
Examiner/Superintendent/Appraiserand its correctness or otherwise should be
endorsed on the note sheet and brief facts. The checks regarding availability of all
documents required for SAD refund claims correctness of details namely date of
filing, date of TR6, date of sale and date of payment of VAT/ST/CST and quantity
imported
and
sold
shall
Examiner/Superintendent/Appraiser.
be
the
responsibility
of
the
In case any discrepancy is noticed, a
Deficiency Memo shall be issued to the Importer. If no reply is received within a
reasonable period of time (not more than 4 weeks), a final reminder shall be
issued/personal hearing shall be granted and the case to be decided on merits
expeditiously.
(iv) The SAD refund claims up Rs.1 lakh are to be attended by the Examiner posted in
CRC Section of all chapters, whereas the claims above 1 lakh are to be processed
by the Superintendent/Appraiser posted in the CRC Section.
(v) The SAD refund claim above Rs.5 lakh are to be processed by the
Superintendent/Appraiser posted at CRC Section for pre-auditing before sanctioning
in accordance with Board’s Circular No.24/2007 dated 02.07.2007. After pre-auditing
the claim, the same shall be sanctioned by DC/AC-CRC.
(vi) In respect of SAD refund claim above Rs.5 lakhs the concerned Superintendents and
Appraising Officerposted at CRC shall put up the note on verification and brief facts
of the case to the DC/AC, CRC. The DC/AC, CRC shall examine the case and give
their recommendation and mark the claim file to DC/AC, IAD of JNCH for preauditing. All the files marked for pre-audit shall be forwarded to IAD by the STA/TA
under proper receipt, twice a day. The IAD shall pre-audit the claim paper after
verifying the correctness of the document submitted with the claim, its validity etc. as
provided in the Notification No.102/2007 and Board Circular No.06/2008, 16/2008 as
amended from time to time and correctness of calculation of First-in First-out basis.
The officers posted in IAD must ensure that the claims are audited on First-in Firstout basis.
Original.
After pre-auditing the DC/AC CRC shall approve the draft Order-inProper record of receipted refund claims for pre-auditing and their
subsequent disposal shall be properly recorded in a register maintained in the IAD
Section.
(vii)
After pre-auditing the DC/AC CRC shall approve the draft Order-in-Original.
The approved draft order-in-original duly signed by the concerned DC/AC shall be
forwarded to Appraising (Main) for allocating Order number. The concerned
Superintendents and Appraising Officerposted at CRC as per competency shall
prepare the Refund Order against the draft O-in-O. Thereafter, the STA shall give the
Refund Order number. Thereafter, the refund file shall be put up to DC/AC CRC for
signing the final order-in-original and refund order and for order of issuance of RO
and Order-In-Original.
The STA will issue both the order-in-original against the
Order-in-Original simultaneously. Thereafter, the TA/STA shall give the refund order
number. The refund file with final copy of Order-in-Original and Refund Order duly
signed by the concerned Superintendent/Appraiser shall be put up to DC/AC CRC for
signature and issuance. After approval and signature of AC/DC on the Order-inOriginal and Refund Order, the STA/TA will issue both the Order-in-Original and
Refund Order on the same day.
(viii)
Finally, the refund claim file along with all original documents particularly the
RTGS detail of the claimant shall be forwarded to Cash Section for disbursal through
NEFT/RTGS. The claim should be duly received in the cash section of JNCH in the
register of SAD Refund Sections. The SAD claims received shall be processed for
disbursal through RTGS on FIFO basis.
(Office Order No.S/26-Misc-01/13-14 CRC IV (28) JNCH of July 2014)
(4)
Sale
of
imported
goods
by
Importer
through
consignment
agent/stockiest:-In case of sale of imported goods by importer through consignment
agent/stockist, refund of 4% CVD would be granted subject to the condition that the
consignment agent/stockist has been authorized 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. (Public Notice NO. 04/2009 JNCH dated 02.02.2009).
(5)
Accredited Clients registered with Customs:- 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 has been done
away with and detailed scrutiny will be done only at the stage of post-audit. The
refund claims will be sanctioned within the maximum time period of 30 days from the
date of submission of refund claim (Board’s Circular No.18/2010-Customs dated
08.07.2010).
(6)
Return of Original Duplicate copy of Bill of Entry and corresponding
TR-6 Challan to the Importer on sanctioning of 4% SAD refund claim:-At the
time of filing of the claim, importers have to submit a set of photocopies of these
documents i.e. Duplicate bills of entry and corresponding TR 6 challans along with
originals. On receipt of refund claims by hand, the original documents and their
photocopies shall be endorsed with a stamp “Refund claim submitted on ………..
and original document verified ” with date. The processing officer i.e. the Appraising
Officer or Superintendent shall sign beneath the stamp. After this, the originals shall
be handed back to the importer/ authorised representative. As a proof of receipt of
original documents, the photocopies shall be signed by the importer/ authorised
representative after verification of his identity. Such photocopies shall be treated as
relevant documents for the purpose of processing the refund claim, audit and review.
In case of refund claims submitted by post, photocopies of the documents have to be
submitted along with the Originals. The originals shall be returned by post after
making abovementioned endorsements .The endorsed photocopies shall be kept in
file.This endorsement in itself shall be deemed as defacement of the original bill of
entry for the purpose of the Para (ii) of CBEC Circular No. 16/2008 dated 13th
October,2008. The procedure to be followed is detailed in Public Notice No.60/2012
JNCH dated 07.11.2012.
(7)
Disposal of refund claims of 4% SAD in respect of goods assessed on
provisional basis:-As per Boards Circular No.6/2008Cus dtd.28.04.08, the limitation
of time under Sec.27 is not applicable with regard to refund of SAD. The time limit
prescribed for the purpose of SAD refund claims is one year from the date of
payment of the duty, as incorporated vide Notfn.No.93/2008-Cus dtd.01.08.2008 in
the notification no102/2007-Cus dated 14.09.2007. Hence the date of payment of
SAD amount is the relevant date of payment, and not the date of finalization of the
provisional assessment. Therefore, the claimant would be eligible for the refund only
if the claim is filed within one year from the date of actual payment of SAD i.e the
date of payment of duty at the time of clearance of imported goods. In view of the
above facts and circumstances, it is decided to dispose SAD refund claims despite
the fact that the assessment continues to be provisional for one reason or the other,
without awaiting for finalization of assessments. The procedure is detailed in Public
Notice No.44/2009 JNCH dated 16.07.2009.
(8)
LOSS OF DOCUMENTS:In case of loss of documents or the claimant
importers are unable to produce the original documents for various reasons in
genuine cases where reasons for absence of original Bill of Entry or the TR-6 challan
are explained by the importer and the particulars are verified from the EDI System,
the refund claims may be sanctioned by the Astt./Dy. Commissioner, after obtaining
an indemnity bond from the importer in this regard.(Facility Notice No.05/2010
JNCH dated 27.01.2010).
C.
ORGANISATIONAL STRUCTURE OF CENTRAL REFUND SECTIONS.
The work of processing of refund claims is centralised in Nhava Sheva-I
Commissionerate by creating the Central Refund Cell (CRC). The CRC is consisted
of the following sections.
(i)
CRC-1(A), 1(B) & 1(C) (NON-SAD REFUND SECTION)
This section is entrusted with the work of processing the refund claims (all
claims other than SAD refund) pertaining to Duties of Import, Duties of Export, Cess,
Interest, Refund of RF and PP, Revenue Deposits, Security Deposits,
Unaccompanied Baggage duty etc and any consequential refunds based on tribunal
and court directions.
(ii)
CRC-SAD-I (NHAVA SHEVA-III)
This section is entrusted with the work ofprocessing of refund application of
Refund of Additional Customs Duty (Special Additional Duty-SAD) paid under
section 3(5) of Customs Tariff Act, 1975 pertaining to Chapters 01 to 38.
(iii)
CRC-SAD-II (NHAVA SHEVA-I)
This section is entrusted with the work ofprocessing of refund application of
Refund of Additional Customs Duty (Special Additional Duty-SAD) paid under
section 3(5) of Customs Tariff Act, 1975 pertaining to Chapters 39 to 53.
(iv)
CRC-SAD-III (NHAVA SHEVA-I)
This section is entrusted with the work ofprocessing of refund application of Refund
of Additional Customs Duty (Special Additional Duty-SAD) paid under section 3(5) of
Customs Tariff Act, 1975 pertaining to Chapters 54 to 76.
(vi)
CRC-SAD-IV (NHAVA SHEVA-III)
This section is entrusted with the work ofprocessing of refund application of Refund
of Additional Customs Duty (Special Additional Duty-SAD) paid under section 3(5) of
Customs Tariff Act, 1975 pertaining to Chapters 77 to 98.