Refund of 4% Additional Duty of Customs (Special CVD) - NotificationNo.102/2007-Customs - Applicability to manufacturers in textile sector - Board Clarifies
BOARD has received representation 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.
Board Clarifies:-
++ 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 does not pay excise duty)) on his final product.
++ 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.
CBEC Circular No. 34/2010-CX., Dated: September 15, 2010