1. Prepaired By:
Jeevesh Mehta| Partner|
(Indirect Tax)
Maven Legal – Advocates & Consultants

2. INTRODUCTION
 Special Additional Duty (SAD) is the duty paid on the
imported goods. The importer could claim for the
refund of the SAD after the subsequent sale of the
imported goods.

3. As per Notification No. 102/2007-
Customs
14th September, 2007
The Central Government exempts the goods falling within
the First Schedule to the Customs Tariff Act, 1975 (51 to
1975), when imported into India for subsequent sale, from
the whole of the additional duty of customs leviable
thereon under sub-section (5) of section 3 of the said
Customs Tariff Act.

4. Conditions To Be Fulfilled To Get
The Exemption
 The importer shall pay on the goods, appropriate Sales Tax
or Value Added Tax.
 The importer shall specifically indicate in the invoice that
in respect of the goods covered therein, no credit of the
additional duty of customs levied under sub-section (5) of
section 3 of the Customs tariff Act, 1975, shall be
admissible.

5. Documents To Be Attached Alongwith
The Refund Claim
 Document evidencing payment of the Special Additional Duty (SAD).
 Invoices of the imported goods in respect of which refund of the said
SAD is claimed.
 Documents evidencing payment of appropriate sales tax or value
added tax, as the case may be, by the importer, on sale of such
imported goods.
 Certificate from a statutory auditor/ CA who certifies the final
accounts in respect of correlation of VAT payment, payment of 4%
SAD amount and unjust enrichment as prescribed in Board’s Circular
No.6/2008-Customs dated 28.4.2008 and 16/2009-Customs dated
13.10.2008.
 Copy of the Consignment Sale Agreement. (in case of sale though
consignment agents/ stockists).
 Self-declaration/ Affidavit (for e.g. in case of submission of invoice in
soft from in lieu of paper documents. In case of fulfillment of the
doctrine of unjust enrichment to the effect that the applicant has not
passed on the incidence of 4% SAD to any other person).
 Any other document considered necessary in support of the claim.

6. Procedure For Applying Refund
Claim
TIME LIMIT
 In the Notification No. 102/2007-Customs dated
14.9.2009, Circular No. 16/2008-Customs, Importers will be
permitted to file 4% CVD claims up to a period of one year
from the date of payment of duty.
 An importer can file only one Refund claim per month
irrespective of the number of Bill of Entries processed by
the Commissionarate. (Circuler no 6/2008- Customs)

7. Declaration For Non- Admission Of
Cenvat Credit
The importer who wishes to avail the refund of 4%
CVD, is also required to make a specific
declaration in the sale invoice that no Cenvat
credit would be admissible, in respect of 4% CVD.
This ensures that there is no double benefit on
account of refund to the importer and Cenvat
Credit to the purchaser.

8. Payment of ST/VAT By Cash Or Input
Tax Credit
It is clarified in the Circular No. 16/2008-Customs
that discharge of ST/VAT liability by the
importer, through cash or other authorized form
of payment to the concerned ST/VAT authority or
input tax credit adjustment, could be accepted by
Customs field formations for the purpose of
fulfillment of the condition in Para 2(d)
considering sanction of refund of 4% CVD.

9. Submission Of ST/VAT Challan
The importer may submit copies of ST/VAT Challan or
copies of ST/VAT payment document in different
forms evidencing payment made to the bank or
ST/VAT Department towards ST/VAT along with a
certificate from the Chartered Accountant. Who
either certifies the importer’s financial records under
the Companies Act, 1956 or any ST/VAT Act of the
state Government or the Income Tax
Act, 1961, confirming the payment against the
aforesaid documents

10. Unjust Enrichment
(circular no.6/2008-Customs, 16/2008-Customs & 18/2010-
Customs)
 It was felt that it would be expedient to allow the
importer to submit a certificate from the statutory
auditor/Chartered Accountant who certifies the
annual accounts of the importer, that the burden
of 4% CVD has not been passed on by the
importer to the buyer and to fulfill the
requirement of unjust enrichment.
 In addition to the aforesaid the importer shall also
make a self-declaration along with the refund
claim to the effect that he has not passed on the
incidence of 4% CVD to any other person

11.  Consignment Agents
It is clarified in the Circular No. 16/2008-Customs that
in case of sale of imported goods by importer through
consignment agent/stockist, refund of 4% CVD shall
be granted by customs field formation, subject to the
condition that Consignment agent/stockist has been
authorizes to sell the imported goods in terms of the
agreement entered into between the importer and
consignment agent/stockist and that each of the sale
invoices issued by the consignment agent/stockist
indicates that the sale is made by him on behalf of the
importer in the capacity of consignment
agent/stockist.

12.  Submission Of Refund Claim For Part Of
Goods In A Consignment
It is clarified in the Circular No.16/2008-Customs
that if certain quantity of goods were lost or short-
landed or damaged resulting in sale of part
quantity and the importer submitting a refund
claim for the quantity that was sold along with the
declaration that for the remaining quantity they
would not claim refund ,then the filing of refund
claim for part quantity shall be accepted by the
customs field formation during the same month
and such cases need not await till the end of the
one year period.

13.  Other Miscellaneous Issues
 It is clarified in the Circular No.6/2008-Customs
that only those cases where 4% CVD was paid on
or subsequent to 14.9.2007, will qualify for refunds
under this scheme subject to fulfillment of
prescribed conditions.
 It is clarified that a stamp on the invoice (to state
that no CENVAT Credit is admissible) should
suffice for the purpose of Para 2(b) of the
Notification No. 102/2007-Customs.

14. Sl. No. Type of refund Section Illustrative list of documents to be filed by applicant along
claim /notification under with Application for refund claim in prescribed form
which filed (Customs Series Form No. 102 as given in Part 5 of Customs
Manual)
3 Refund of 4% Notification No. 1. Document evidencing payment of the Special Additional Duty
SAD 102/2007-Customs (SAD).
dated 14-9-2007
2. Invoices of sale of the imported goods in respect of which
refund of the said SAD is claimed.
3. Documents evidencing payment of appropriate sales tax or
value added tax, as the case may be, by the importer, on sale of
such imported goods.
4. Certificate from a statutory auditor/ CA who certifies the final
accounts in respect of correlation of VAT payment, payment of
4% SAD amount and unjust enrichment as prescribed in Board’s
Circular No. 6/2008-Customs dated 28-4-2008 and 16/2008-
Customs dated 13-10-2008.
5. Copy of the Consignment Sale Agreement, (in case of sale
through consignment agents/stockists).
6. Self-declaration/Affidavit (for e.g. in case of submission of
invoice in soft form in lieu of paper documents, in case of
fulfillment of the doctrine of unjust enrichment to the effect that
the applicant has not passed on the incidence of 4% SAD to any
other person).
7. Any other document considered necessary in support of the
claim.

15. For any further clarifications and doubts you may contact us at Email: jeevesh@mavenlegal.net or Call
us on +919811617186.
Office : E 149, FF Rishi Nagar, Delhi- 110034
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