SME Chatroom: Tribunal allows refund of CVD, special additional duty & cess

For regularisation of bonafide default under advance authorisation, we have paid Basic Customs Duty (BCD), Countervailing Duty (CVD), Special Additional Duty (SAD) and cess on our imports made before introduction of GST. We are unable to take input tax credit of CVD, SAD and cess under the GST laws. Can we claim refund of the same? 

In the case of Newage Laminators Pvt. Ltd. [2022 (188) ELT 88 (Tri. Delhi)], the Tribunal has held that refund is allowed in such cases under the provisions of Section 142(3) and (6) of the CGST Act, 2017. In the case of Indo Tooling Pvt. Ltd. [2022 (61) GSTL 595 (Tri.Del.)], the Tribunal held that a conjoint reading of sub-sections (3),(5) and 8(a) of Section 142 of the CGST Act, 2017, allows claim of refund of service tax and cess paid after introduction of GST. Based on the above judgments, I suggest you claim refund of CVD, SAD and cess paid towards regularisation of the default under advance authorisation.

We have a Special Economic Zone (SEZ) unit, from where we sell waste paper to Domestic Tariff Area (DTA) parties. These are mostly used cartons in which some goods are received. We are not clear whether the DTA party has to first register under the Paper Import Monitoring System (PIMS) before clearance of such goods, in view of the DGFT Policy Circular no. 41 dated July 5, 2022. Can you please give your opinion?

First, please note that as per notification no.11/2015-20 dated May 25, 2022, the PIMS will be effective for bills of entry filed from October 1, 2022 onwards, although registrations can start with effect from July 15, 2022. Second, notification no.11 gives the list of items from Chapter 48, for which preimport registration will be necessary. The list does not cover paper waste, which falls under the heading 4707.

Can a Forwarder’s Cargo Receipt be considered as a transport document under the Uniform Customs and Practices for Documentary Credits, 2007 (UCP 600)? Is there any guidance on how such a document will be examined by banks, if the Letter of Credit (LC) calls for such a document? Is there a time limit for presentation of such a document under the LC?

Para 19 of the International Standard Banking Practices for examination of documents under Documentary Credits (ISBP 681E), deals with documents for which the UCP 600 Transport Articles do not apply. It says that some documents commonly used in relation to the transportation of goods — for example, Delivery Order; Forwarder’s Certificate of Receipt; Forwarder’s Certificate of Shipment; Forwarder’s Certificate of Transport; Forwarder’s Cargo Receipt and Mate Receipt — do not reflect the contract of carriage and are not transport documents as defined in UCP 600 articles 19-25.

As such, UCP 600 subarticle 14(c) will not apply to these documents. Therefore, these documents will be examined in the same manner as other documents for which there are no specific provisions in UCP 600 — i.e., under sub-article 14(f). In any event, the documents must be presented not later than the expiry date stated in the credit.

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