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Trader registration & import registration query

sagar (Deputy Manager) (77 Points)

04 December 2015

Dear Expert,

Kindly provide us solution for the folllowing query.

1) We have a Traders Registration on which we have sale imported material to our customer instead of Importer registration.We have passed on the CVD & SAD to the Customer on traders registration.

Now Department has denied the credit of Customer stating the reason that we have sale the material on traders registration instead of Importer Registration.

We accept that we have procedural lapse that we need to send the same on imported Registration.But there is no Revenue Loss to the Department.

Kindly provide the solution/Notification or Case Law to deal with the depertment?

Thanks

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Madhukar N Hiregange (Chartered Accountant) (38934 Points)
Replied 07 December 2015

The dealers registration is merely for the purpose of passing on the credit. The requirement of getting separte registration for imported goods was not free of ambiguity.

The reasons why the cusotmer cannot be asked to reverse the credit are:

1. For procedural mistakes of dealers, the manufacturer cannot be hedl responsible and denied credit- Kay Kay Ind - 2013 (SC)

2. There was no failure by the receiver - penalty if any can only be on the dealer.

3. The failure by the dealer was purely procedural - for minor procedural lapses- credit cannotbe denied- settled law under cnevta credit.

4. Whether separate registration reqd by the same dealer- duplication of record- return for no purpose except that the law amended by poor drafting.

You need to make a standrad letter and share with cusotmers who can reply to objections by audit parties or vigilance covering the above aspects.

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