Government of India
Ministry of Finance
Department of Revenue
Tax research Unit
Circular No. 34/2010-Customs
153, North Block, New Delhi -110001
Dated 15th September, 2010.
To
All Chief Commissioners of Customs / Customs (Prev.).
All Chief Commissioners of Customs & Central Excise.
All Commissioners of Customs / Customs (Prev.).
All Commissioners of Customs & Central Excise.
All Commissioners of Central Excise
Sir / Madam,
Subject: Refund of 4% Additional Duty of Customs (4% Special CVD) in pursuance
of Notification
No.102/2007-Customs dated 14.9.2007 – Applicability to
manufacturers in textile sector - reg.
Your kind attention is invited to the Notification No.102/2007-Customs dated
14th September 2007 whereby exemption from Special CVD of 4% leviable under
sub-section (5) of Section 3 of the Customs tariff Act, 1975 has been provided
subject to the fulfillment of certain conditions.
- Representations have been received from trade and industry (especially the
textile sector) through the Department of Commerce to allow the benefit of this
exemption to manufacturer-importers, especially those who have opted out of the
CENVAT Credit Scheme and do not pay excise duty on their final products.
- The matter has been examined. Special CVD is one of the duties specified
under sub-rule (1) of rule 3 of the CENVAT Credit Rules, 2004. Credit of this
duty, when paid on inputs (imported) used in or in or in relation to the
manufacture of excisable goods, is available. This credit can be used for
payment of duty on the final product. Hence a textile manufacturer who opts to
pay excise duty on his final product can avail of CENVAT credit of 4% Special
CVD paid on his inputs. But this benefit obviously cannot be extended to a
manufacturer who opts to avail of full exemption (and hence not pay excise
duty)) on his final product. Further, if the imported inputs on which 4% Special
CVD has been paid are used by such a manufacturer for the manufacture of final
products, the benefit of exemption (by way of refund) under notification no
102/2007-Customs dated 14th September 2007would also not be available. This is
because the condition regarding payment of State VAT on imported inputs cannot
be fulfilled in this situation where inputs are consumed and not sold as such
- A suitable Public Notice and Standing Order may be issued for the guidance of
the trade and staff. Difficulties faced, if any, in implementation of this
Circular may be brought to the notice of the Board at an early date.
Yours faithfully,
(Prashant Kumar)
Under Secretary to the Government of India.
F. No. 354/138/2010-TRU