OFFICE OF THE COMMISSIONER OF CUSTOMS
(IMPORT),
JAWAHARLAL NEHRU CUSTOM HOUSE,
NHAVA-SHEVA,
TAL : URAN, DIST : RAIGAD, NAVI MUMBAI –
400 707
F.No. S/26-Misc-50/07-08 CRC Date :
PUBLIC NOTICE
NO.39/ 2007
Subject: Payment of Custom Duty Refunds –
m/r.
Attention of importers / exporters, CHAs and general trade is drawn to the subject mentioned above. A clarification arrived by CBEC vide Circular No. 24/2007-Cus. dated 02.07.2007 on delay in payment of custom duty refunds is enclosed herewith for information. Any problems faced in this regard may be brought to the notice of the undersigned immediately.
(SANJEEV BEHARI)
COMMISSIONER OF CUSTOMS (IMPORT)
Encl. : Circular No. 24/2007-Cus.dated 02.07.2007
Circular No. 24/2007-Cus
F. No. 401/229/2006-Cus. III
Government of
Department of Revenue
Central Board of Excise and Customs
North Block,
To,
All
Chief Commissioner of Customs.
Al
Chief commissioner of Central Excise.
Principal
Chief Controller of Accounts, CBEC.
Chief Departmental
Representative, CESTAT.
All
Commissioners of Central Excise.
All
Commissioners of Customs.
Webmaster@icegate.gov.in.
Sir,
Sub
: Delay in payment of customs duty refunds – reg.
I am directed to state that various representations from importers, exporters, trade and industry associations have been received in the Board regarding delay in payment of Customs duty refunds and the hardships faced in obtaining refunds from Customs field formations. Further, in a number of cases it has also come to the notice that the Courts and higher judicial authorities have taken adverse note of the delay caused in refund of duty.
2. Refund of customs duty involves acknowledgement and processing of refund application for sanction or rejection of refund in terms of section 27 of the Customs Act, 1962 and the Customs Refund Application (Form) Regulation, 1985. Further, Board have also issued instructions from time to time clarifying the doubts raised by field formations in dealing with the refund claims. (Board’s circular No. 59/95-Cus dated 5.6.1995). Needless to say that if these procedures are followed properly, normally refund applications should be disposed off within the interest free time limit of three months.
3. However, it is noticed that the aspect of timely refund of Customs duty has not been given due importance by the field formations. Therefore, Board desires that in order to ensure expeditious disposal of Customs duty refund applications and to enhance transparency in refund disbursement as well as bring alertness among the officers, the following procedure should be followed :
4.1 System for receipt and acknowledgement of all Customs duty refund applications : All refund applications made by any person under section 27 of the Customs Act, whether by post or courier or personal delivery, shall be received by the department and a simple receipt, for having received the application that is said to 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. These applications are required to be scrutinized for the completeness within ten working days of their receipt, for giving acknowledgement by the proper officer as per the Customs Refund Application (Form) Regulation, 1985. Hence, if any deficiency is found in the application or any document is required by the department,
the same shall be informed at this stage of initial scrutiny itself within ten working days of the initial receipt. This will avoid any chance for raising repeated queries to the applicant, in a piece-meal manner and bring certainty in dealing with refund applications.
4.2 Processing of refund applications and
their disposal : Application of refund found to be
complete in all respect by Customs, after scrutiny as above, shall be processed
on ‘first come first served’ basis so as to decide whether the whole
or any part of the duty and interest paid by the applicant is refundable. If
refund is due in such case, an order for refund is required to be passed in
terms of sub-section (2) to section 27 or where the claim for refund is found liable
to be rejected, as the case may be, a speaking order shall be passed giving
complete reasons for the order. 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
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.
4.3 Issue of Cheque : Where the refund application has been
admitted, whether in part or in full, and claimant is eligible for refund, the
Deputy / Asstt. Commissioner of Customs may ensure
that payment is made to the party within 3 days of the order passed after due
audit, if any. In all such cases refund of amount shall be paid to the
applicant by a cheque on the authorised
bank with which the sanctioning authority maintains account. After the cheque has been signed, it shall either be delivered to the
claimant or his authorised representative personally
when he next calls for it or sent to him by Registered Post 'Acknowledgement
Due' at Government cost, on the basis of pre-receipt already obtained from the
claimant.
4.4 Audit System : Existing instructions on audit scrutiny of
refunds shall continue. Accordingly, all applications involving a refund of
duty and/or interest of Rs. 5 lakhs
or more shall be subjected to pre-audit as per the existing practice. The applications
of refund of amount below Rs. 50,000/- may be post
audited on the basis of the random selection by Deputy / Asstt.
Commissioner (Audit).
The selection can be made in such a way that 25 per cent of the refund
applications are post audited. The applications of refund for amount between Rs. 50,000/- and Rs. 5 lakhs should be compulsorily post audited. This audit
system has been prescribed with a view to check improper sanction and payment
of refunds. However, this does not dispense with the verification of the refund
vouchers and the re-conciliation of refunds, which shall continue to be done by
the Chief Account Officers. However, it may be ensured that where pre-audit is
involved the action is completed at the earliest so that the disposal of refund
applications is not unduly delayed.
5. CVC Instructions : Your attention is also invited to the
instructions issued by the Central Vigilance Commission (CVC) under section
8(1)(h) of the CVC Act, 2003 to bring about greater transparency and accountability
in the discharge of regulatory, enforcement and other public dealings of the
Government organisations vide their Circular No.
40/11/06 dated 22.11.2006 (refer CVC website http://www.cvc.nic.in/
under 'improving Vigilance administration by leveraging technology). These
instructions, interalia,
require that status of individual applications /
matters should be made available on the organisation's
website and should be updated from time to time so that the applicants remain
duly informed about the status of their applications. It is further stated that
the manual records maintained presently for various purposes may continue.
6.1 System of maintaining online database on
Customs duty refunds : In
pursuance of the instructions of CVC, all Commissioner of Customs shall
establish a mechanism for maintenance of a comprehensive database in their
respective website, indicating the receipt, acknowledgement, action taken for
disposal (either payment or rejection) of refund applications and those pending
at the end of the month. This shall be implemented with in a period of three
months time and a report of the same may be sent to the Board and DG
(Inspection).
The details of refund application
such as name of the claimant, file number, date of application, amount of refund claimed, date of its acknowledgement shall
be indicated in chronological order by the date of its receipt. The
applications may be serially numbered for each year and shall be shown in a
single list indicating their respective status distinctly. The illustrative
status that could be mentioned for easy understanding of any applicant may
include the following : (i) refund application
received but pending for scrutiny and
acknowledgement (ii) (a) refund application acknowledged for its
completeness (ii) (b) refund application found incomplete and returned for
rectification of deficiency (iii) (a) refund application rejected by passing a
speaking order (iii) (b) refund application sanctioned, pending verification by
audit (iv) cheques issued for refunds sanctioned and
paid to applicant / credited to consumer welfare fund. This is not exhaustive
and if any other stage of processing of refund application is involved the same
may be indicated. An abstract at the end of the month about the total number of
refund application received, acknowledgement, disposal and pending may also be
indicated.
This online data base would enable
any person who had applied for refund with Customs, to check the status of his
refund application by reference to the date of his refund application have been
received by Customs. This data will be accessible to the trade and public as
well as by all custom officers to enhance transparency. Further, the status of
individual applications for refund of customs duty shall be updated from time
to time, at least daily, so that the applicants remain duly informed about the
status of their applications.
The
data may be allowed for displayed in the website for three months period from
the date of its final disposal and there after it can be moved to the history
data base.
7.1 Monitoring
Mechanism: …..If any refund application is is pending for long period, the reasons for the same may be
identified by the concerned Chief Commissioner and action initiated for their
disposal by reference to the concerned Commissionerate.
DGI may also access the data base of such refund application and maintain the
data in respect of those refund applications pending long period and action
taken thereon, for reporting to the Board.
8. The above instructions are being issued so that an
administrative arrangement is made on a permanent basis to deal with refund of
customs duty, an important aspect of tax administration which needs to be given
due importance in view of the prompt disposal as per legal provisions and their
revenue implications. Accordingly, the
Commissioner of Customs and Chief Commissioner of Customs concerned may ensure
for proper implementation of these instructions of the Board.
9. 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 the Circular may be brought to the notice of the Board at an early date.
Yours faithfully,
(Aseem Kumar)
Under
Secretary (Customs)