DFCE Scheme – 4% SAD to be paid in cash only
By circular No. 18/2006-Cus. dated 5.6.2006, Board had clarified that in the case of imports under export promotion schemes like DEPB, Target Plus, Served from India, DFCE and Vishesh Krishi and Gram Udyog Yojana, the exemption from basic customs duty, additional duty (CVD) and special CVD in terms of respective customs notifications shall be available if the element of these duties is debited in the duty scrips/entitlement certificates issued under these schemes.
Now the Board has been informed that in case of imports under DFCE Scheme under notification Nos.53/2003-Cus. dated 1.4.2003 and 54/2003-Cus. dated 1.4.2003. the exemption from the additional duty is restricted to the duty leviable on the imported goods under sub-section (1) of Section 3 of the Customs Tariff Act, 1975 and that there is no exemption available in respect of special CVD of 4% which is leviable on the said goods under sub-section (5) of Section 3 of the said Customs Tariff Act. Therefore, the special CVD cannot be paid through the scrips issued under the said scheme. A view has been expressed that in such cases (imports under these two notifications) the importer needs to pay the special CVD in cash and take refund of the same where eligible through cenvat or drawback, as the case may be.
Board agrees with this view and clarifies that in all such cases (i.e. imports under DFCE under these notifications) the importer shall have to pay the special CVD in cash. Needless to mention, the Cenvat credit or drawback (brand rate), as the case may be, can be claimed in respect of this duty.
CIRCULAR NO. , Dated: July 21, 2006