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Refund of Central Excise duty of diplomatic missions
Circular No. 621
dated 21st February 2002
I am directed to
say that doubts have been raised by the field formations regarding the procedure
to be followed for refunding central excise duty element in respect of purchases
made by foreign diplomatic missions and consular offices located in India.
2. Board�s
instructions on this are, F.No.45/7/56-CX(M).II dt. 24.7.1957 read with Circular
No.1/MOTOR VEHICLES/70 dt. 19.2.1970. One of the conditions mentioned in these
circulars is that the refund claims from diplomatic missions should be
entertained by the Central Excise Officers only if they are filed within 3
months from the date of purchase of the motor vehicle. Claims filed beyond three
months were not to be admitted without reference to the Ministry of Finance.
After the recent amendment to Sec.11B of the Central Excise Act, 1944, in May
2000, the time limit for filing refund claims has been raised from six months to
one year from the relevant date. It has been pointed out that this discrepancy
between the time limit prescribed in the statute (1 year) and the time limit (3
months) mentioned in Board�s instructions of 1957 and 1970, is creating
confusion in the field.
3. In
the past, refunds on purchases by diplomatic missions were being granted, either
as an ex-gratia payment, or on the basis of ad-hoc exemption orders. Being ex-gratia
payment, the time limit for claiming refund was prescribed through the above
executive instructions and in a number of cases relaxations were also granted.
Subsequently, from 1998, Ministry declined to relax the time limit beyond that
statutorily prescribed (then six months).
4. Subsequently,
when the provisions of section 5A(2) relating to ad-hoc exemptions were amended
in 1999 to limit its coverage to goods for charitable purpose or of strategic or
secret nature only, ad-hoc exemptions to diplomatic missions could no longer be
given under section 5A(2). It was then decided to issue a general exemption
notification to cover such cases. This was done for the first time by notfn
No.44/99-CE dt 29.12.99.
5. The
relevant notification, which presently allows exemption to goods supplied to
diplomatic missions, is notification No.3/2001-CE dt. 1.3.2001 (Sl.No.250). This
notification grants full exemption to all goods (and not merely motor vehicles)
supplied for the official use of foreign diplomatic or consulor missions in
India. The exemption is subject to condition (45) of the notifn, which
inter-alia, requires production of a certificate from the Protocol Division of
the Ministry of External Affairs and an undertaking from the diplomatic mission
that they will produce, within a period of 3 months or such extended period, a
certificate that the goods have been put to the specified use. There is also a
condition that the said goods cannot be disposed of before the expiry of 3 years
from the date of clearance of the goods.
6. It
may be noted that earlier, exemption was available (through executive
instructions and ad-hoc exemption orders) to goods (including cars) meant both
for official as well as personal use of the mission or its staff. The general
exemption notification limits this benefit only to goods meant for the official
use of the mission/consular office.
7. There
seems to be no justification, now, for continuing the old Circulars of 1957 and
1970. Refunds to diplomatic missions would be guided by the normal
rules/provisions relating to refunds. In view thereof the Circulars of 1957 and
of 1970 are hereby withdrawn.
8. Refunds
would therefore be governed entirely by the conditions mentioned in notifn.
No.3/2001 CE dt 1.3.2001 (sl no. 250) and the time limit for making the refund
claim would be one year from the date of purchase of the goods by the diplomatic
mission or consular office, as per the provisions of section 11B(1) of the
Central Excise Act, 1944, read with Explanation (B)(e). No extension beyond 1
year from the date of purchase would be permissible as this time limit is
statutorily prescribed. Cases need not, therefore, be referred to the Ministry
for relaxation or extension of this time limit.
9. Refunds
would be entertained by the Commissionerate within whose territorial
jurisdiction the mission/consular office is located as per Board�s
instructions F.No.156/14/2000- CX 4 dated 11th April, 2001.
10. The
missions are, obviously, free to clear the excisable goods straight from the
factories, without payment of duty, after satisfying the conditions of the above
exemption notification. In that case there would be no case for claiming any
refund.
11. It may be
pointed out that petrol is also one of the items on which refunds are sanctioned
to diplomatic missions. Petrol refunds are governed be a separate set of
instructions and, therefore, the procedure indicated in para 8 above will not
apply to motor spirit/petrol refunds which would continue to be governed by
existing instructions on the same.
12. The
Protocol Division of the MEA is also being separately informed for circulating
these instructions to all the diplomatic/consular missions in India.
13. Hindi
version will follow.
14. Receipt
of these instructions may be acknowledged.
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