The Circular says that importers must file their claims with Centralised Refund Section of the concerned Customs Commissionerate for refund of the 4 per cent duty paid on the imported goods resold. Unsold goods will not be eligible for refund. A single claim against a particular Bill of Entry (B/E) may be filed except when this is necessary at the end of the one-year period.
Further, since the ST/VAT is being paid on periodical or monthly basis, even in case of bills of entry where the entire quantity of goods are sold within a month, all such cases shall be consolidated in a single refund claim and filed with the Customs authorities on a monthly basis. So, there would be a single refund claim in respect of one importer in a month irrespective of the number of B/E processed by the respective Commissionerate.
CBEC has clarified that even if goods are sold on Central Sales Tax (CST) payment, refund would be admissible. A certificate from the statutory auditor/Chartered Accountant, who certifies the importer's annual financial accounts under the Companies Act or any statute, correlating the payment of ST/VAT on the imported goods (in respect of which refund is claimed) with the invoices of sale, would be required along with the original tax / duty payment documents as proof of payment of appropriate ST/CST/VAT.
The Circular says that the principle of unjust enrichment will apply to the refund claims. Importers have to produce a certificate from the statutory auditor/Chartered Accountant who certifies the importer's annual financial accounts under the Companies Act or any statute,explaining how the burden of 4 per cent CVD has not been passed on by the importer and to fulfil the requirement of unjust enrichment.
In addition the importer has to give a self-declaration along with the refund claim to the effect that he has not passed on the incidence of 4 per cent CVD to any other person. It also says that only those cases where 4 per cent CVD was paid on or subsequent to October, 14, 2007,will qualify for refunds, subject to fulfilment of prescribed conditions. A stamp on the invoice (to state that no CENVAT Credit is admissible) should suffice for the purpose of refund and in case of 4 per cent CVD having been paid through DEPB Scrip, the amount eligible for refund should be re-credited on the relevant DEPB Scrip.
The Circular is useful but less than well-thought through. For example, what happens if the relevant DEPB expires before re-credit? It also prescribes documents (CA Certificates) and conditions (unjust enrichment) that the notification does not. So, possibilities for litigations abound.