Custom duty

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madhu sharma (Querist)
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24 December 2012 Sir
if any penal interest is paid on custom duty, input credit for the same is available or not?
and if custom duty is paid on demand by the authority, then the input credit is available or not

RAMESH KUMAR VERMA

RAMESH KUMAR VERMA (Expert)
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29 December 2012 Additional duty of customs equal to the, excise duty leviable on like goods produced or manufactured in India. This is levied under Section 3 of Customs Tariff Act, 1975. This is usually referred to as "countervailing duty" (CVD). However, the correct description of this duty is Additional Duty of Customs. In order to determine the applicable rate, you have to obtain the correct classification of the goods under the Central Excise Tariff Act, 1986. The duties under the Central Excise Tariff are on ad valorem basis. However, specific rates have been prescribed for some items. Importantly, the value for the purpose of computing additional duties of Customs is the total of the assessable value (generally the transaction value - roughly equal to the c.i.f. value) and the basic customs duty.

If you are a manufacturer, importing goods to be used as inputs for manufacture of other goods, you would be generally eligible for obtaining credit (called CENVAT credit) equal to the additional duty of customs paid on the imported goods. This duty amount is eligible for credit under input duty Central Excise Rules, 1944. This credit can be used for paying central excise duties on your manufacture.

for more:

https://www.caclubindia.com/experts/custom-duty-credit-7446.asp#.UN6x9Wc-1tg