CENVAT Credit on Courier Imports - CENVAT Credit Rules Amended
A certificate issued by an appraiser of Customs in respect of goods imported through a Foreign Post Office, is a document prescribed under Rule 9 sub-rule (1), clause (d) of the CENVAT Credit Rules for taking CENVAT Credit.
Now this is amended to include an authorised courier. The Clause now reads as,
A certificate issued by an appraiser of Customs in respect of goods imported through a Foreign Post Office or, as the case may be, an Authorized Courier, registered with the Principal Commissioner of Customs or the Commissioner of Customs in-charge of the customs airport.
Notification No. , Dated: December 31, 2015
Why this amendment? What is the document for taking credit on inputs imported through Courier?
It's a rather long story.
This has been a question haunting the assessees for long. A typical doubt runs like this:
We are receiving imported inputs through courier agencies and they are clearing our consignment along with other consigments under single bill of entry on their own and deliver to us after collecting the duty amount and their charges. They are issuing a consolidated statement in xerox showing the details of duty paid on behalf of us at the time of delivery, along with a copy of the Bill of Entry. Our question is whether we can claim CENVAT credit based on the said document issued by the Courier.
In several places, Audit has raised objection and Department has dutifully confirmed demands when credit was taken on the courier bills of entry.
The Board had issued a clarification in 2007 (, Dated: August 29, 2007 ) in response to a representation from Express Industry Council of India (EICI) on the difficulties being faced by them in availment of CENVAT Credit on Courier Bill of Entry.
The Board clarified that whenever consignee intends to take CENVAT credit on imported goods, normal Bill of Entry may be filed. This Bill of Entry may be used by the importer for taking CENVAT credit on any imported goods, as per clause (c) of rule (9) of CENVAT Credit Rules, 2004.
Board did not clarify as to what a normal (and what an abnormal) bill of entry is. Anyway the Board Circular came in handy to overzealous officers to deny credit.
The CESTAT in a case decided in March 2015 CCE Vs Interface Microsystems - 2016-TIOL-34-CESTAT-DEL, held,
In this case, the first issue is for denial of Cenvat credit on the strength of consolidated Courier Bills of Entry. As per Rule 9 of Cenvat Credit Rules, 2004, Cenvat credit is available on the strength of bill of entry and in the said rules there is no classification of bills of entry. The classification made by the Revenue is imaginary in the Courier Bill of Entry, an Ordinary Bill of entry or a Special Bill of Entry. It is not in dispute that respondent has taken the Cenvat credit on the strength of Courier Bills of Entry. Therefore, I hold that the Courier Bill of Entry is a specified document as per Rule 9 of Cenvat Credit Rules, 2004 .
Instead of solving the problem that the Board created in 2007, they seem to have contributed substantially to continued litigation. Now the amended rule insists on getting a certificate from an appraiser, which is easier said than done. And the field will revive all the old cases and insist that courier bill of entry is not a valid document and credit taken on that is improper.