Exempt SAD on
Basic Plus CVD Exemption Docs, Separate Doc for SAD
Exemption not Necessary – CBEC Clarifies in Mobile Phone Parts Case
[CBEC Circular No. 43 dated
8th November 2013]
Subject: Exemption
from payment of SAD to parts, components and accessories etc. of Mobile
Handsets under Notification No. 21/2012-Cus, dated 17/03/2012.
I am directed to
invite your attention to notification No. 21/2012-Cus, dated 17-03-2012 (S. No.
5 of the Table) providing exemption from payment of SAD to parts, components
and accessories etc for the manufacture of mobile
handsets. The exemption was valid until 31.3.2013 and was subject to actual
user condition, that is to say, the importer was required to follow the
procedure set out in the Customs (Import of Goods at Concessional Rate of Duty
for Manufacture of Excisable Goods) Rules, 1996.
2. It has been reported that after 31.3.2013,
manufacturer/importers are claiming exemption from SAD on the said goods under
the said notification in terms of S. No. 1 of the Table, which provides
exemption from SAD to all goods that are exempt from payment of BCD and CVD. As this S.No. does
not stipulate observance of any actual user condition (unlike S. No. 5 of
notification No. 21/2012-Cus, which provided exemption subject to actual user
condition), a doubt has been raised whether exemption from SAD should be
allowed on the said goods.
3. The matter has been examined. Under
notification No.21/2012-Cus dated 17.3.2012 (S.No. 1
of the Table), “goods which are exempt from the whole of the duty of customs
leviable thereon or in case of which “Free” or
“Nil” rates of duty of customs are specified in column (4) under the First
Schedule to the Customs Tariff Act, 1975 (51 of 1975) and which are also exempt
from the whole of additional duty of customs leviable
thereon under sub-section (1) of section 3 of the said Act, or on which no
amount of the said additional duties of customs is payable for any reason,”
are exempt from SAD. Parts, components and accessories, etc required for the manufacture of mobile handsets are
exempt from BCD and CVD under notification No. 12/2012-Cus, dated 17.3.2012 (S.No. 431 of the Table) subject to the condition that the
importer follows the procedure set out in the Customs (Import of Goods at
Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 1996. As
per these rules, the manufacturer/importer is required to produce before
Customs a certificate from the jurisdictional Central Excise authorities as
laid down under the said Rules. In view of this, particularly considering that
the manufacturer/importer furnishes to the customs authorities the required
certificate for availing of the benefit of exemption from BCD and CVD in
respect of parts, components, accessories etc
imported for the manufacture of mobile handsets, it has been felt that the
benefit of exemption from SAD should not be denied in respect of the same goods
if claimed under S.No.1 of notification No.21/2012-Customs. The
certificate which is valid for claiming exemption from BCD and CVD ought to be
taken cognizance of and the benefit of SAD exemption allowed.
4. Accordingly, it is clarified that exemption
from SAD under notification No. 21/2012-Customs (S.No.
1 of the Table) may be allowed at the port of import on the basis of
registration and the certificate issued by the jurisdictional central excise
authorities w.r.t S.No. 431 of notification No.
12/2012-Customs without any requirement of a separate registration/certificate
issued under the said Rules w.r.t notification No. 21/2012-Customs, dated
17-3-2012.
5. Difficulties, if any, faced in the
implementation of above instructions may be brought to the notice of the
Ministry at an early date.
F.No.354/173/2013-TRU