Customs refund for re export of imported goods

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

30 October 2012
i have imported some electronic goods in bulk quantity, material got rejected and exported back and applied duty refund under sec 74 of customs act.

customs rejected refund on below reasons

1. identity not estabished with serial numbers. ( not possible as serial number not endorsed/ given in import bill of entry but estabished with part number ,which is common for all items)

2. No speaking order issued by customs allowing drawbackbefore exports as per guidelines of cbec vide circulr no. 46/2011.

Can someone help

RAMESH KUMAR VERMA

RAMESH KUMAR VERMA (Expert)
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01 November 2012 Identity of Goods
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As per condition (1) above, the identity of the goods exported is to be established to the satisfaction of the Asstt. Commissioner of Customs as the goods, which were imported. For this purpose, special shipping bill, i.e., Drawback Shipping Bill is presented that enjoins upon the proper officer to make detailed examination to establish the above identification. Hence, if the exporter files any other SB like Dutiable SB or Free SB than Drawback SB, no drawback is admissible.

Coverage or Scope. Expor1 includes loading of provisions or store or equipment for use on board a vessel or aircraft proceeding to a foreign por1 or airpor1. Hence, Ship Stores supplied to foreign going vessels/aircrafts are eligible for drawback.

The position would be clear when goods as such are re-expor1ed, say where these were received as defective goods or wrong shipments were made by suppliers abroad or after use within the country these are being sent back. However, if the goods are expor1ed as a necessary concomitant to other articles which are manufactured in the country and for which drawback may or may not be admissible, it will be permissible to hold that the test of 'those very goods being expor1ed is satisfied. This is despite the fact that broadly the impor1ed goods (OTS cans in 1his case) may at times be re-exported without any substantial change except merely as packing material.

The only issue to allow drawback on re-expor1 of goods under Section 74 of the Customs Act, is whether identity of the goods is established with reference to the expor1er's claim under Section 74 or not. The identity of the goods need not be established with reference to import document only. Other evidence of collateral in nature, if produced, could also be considered. It would include inspection of the goods/packages comparing the examination report or other connected documents relating to import formalities with examination of goods as reflected in the Shipping Bill against which drawback is claimed.

Where detailed examination/test report at the time of import could not be done, reliance may be placed on other parameters/documents such as letters exchanged between exporters and their agents and also the suppliers to reach a subjective satisfaction that the goods which were being re-exported were the same originally imported.

The basic requirement of Section 74 is that "with respect to such (impor1ed) goods a party is entitled to drawback if those very goods, are re-exported. The position is clear when goods are such re-exported, say where these were received as defective goods or wrong shipment were made by suppliers abroad or after use within the country, these were being sent back. However, if the goods are exported as a necessary concomitant to other articles which are manufactured in the country and for which drawback is being claimed separately, it will be impermissible to hold that "test of those very goods" being exported is satisfied. This is despite the fact that broadly the impor1ed goods (plastic package in this case) made at times be re-exported without any substantial change but merely as packing material. Once packing material is used for making the main article marketable the identity of the packing gets assimilated into the overall description of the goods marketed/exported. This applies a Fortiori when the exporter puts labels on the packing materials. It is, thus, clear that the ingredients of the Section 74 of the Customs Act are not satisfied.

LAW:

The documents to be submitted along with a claim have been broadly prescribed under Rule 5(2) of the Re-export of Imported Goods (Drawback of Customs Duties) Rules, 1995. Accordingly, the application for claim of drawback under section 74 made by the exporter / CHA shall be accompanied by the following documents:

1. Annexure-II

2. Calculation Sheet for the drawback claim

3. Export Promotion (EP) copy of the shipping bill

4. Custom attested Export Invoice

5. Custom attested Export Packing List

6. Export Bill of Lading

7. Mate Receipt

8. BRC or G.R. Waiver, whichever applicable

9. Duplicate (Importer) Copy of Bill of Entry

10. Import Invoice

11. Import Packing List

12. Evidence of payment of duty at the time of import i.e. TR-6 Challan (original)

13. Certificate regarding non-availment / reversal of Cenvat credit against import:

a) From central excise in case the exporter is registered with them, or

b) Self declaration if not registered with central excise.

14. Affidavit of stamp paper of Rs. 100 (notarized)

15. Permission from RBI for re-export of the goods, wherever necessary

16. Indemnity bond on stamp paper of Rs. 100 (notarized), wherever required

17. Any other relevant document .

Documents mentioned at Sl. No. 1 to 14 above are mandatory for all the cases. In genuine cases where reasons for non-availability of original Bill of Entry or the TR-6 challan are explained by the importer, a photocopy of the bill of entry containing the particulars of TR6 Challan duty payment, duly attested by the Import Group concerned, alongwith an indemnity bond shall suffice instead of the documents mentioned at Sl. No.9 and 12. Documents mentioned at Sl. No. 15 to 17 are required only in special cases.

The receiving staff in the drawback section shall initially receive the application and shall give a provisional acknowledgement on the photocopy of the application to the exporter / CHA.

Preliminary scrutiny of the application with respect to its completeness and availability of all the relevant documents shall be done. Applications which are incomplete or without any relevant documents, shall be dealt with as per the provisions of Rule 5(4) of the Re-export of Imported Goods (Drawback of Customs Duties) Rules, 1995 and shall be returned to the applicant along with the Deficiency Memo (DM) as prescribed in Annexure A within fifteen days. It is clarified that all claim papers, including documents submitted by the applicant, alongwith the DM shall be sent to the applicant. Applicants are advised to receive back their incomplete claims through their authorized representative, otherwise the same shall be sent by Speed Post