Dated 10th February 2013
Duty Drawback can be obtained under section 74 of Customs Act for re-exported goods. If imported goods are rejected, these can be destroyed and refund of customs duty can be obtained under section 26A of Customs Act, without physically re-exporting the goods. Goods like raw material, capital goods, tools, dies, Components etc. can be imported for repairs, reconditioning, testing, calibration etc. without payment of customs duty, if these are re-exported within three years from date of importation as per the provisions of Customs Notification No. 134/94-Cus dated 22-6-1994. Goods can be kept in customs bonded warehouse and then re-exported without payment of customs duty. As per customs notification No. 4-Cus dated 8-1-1962, goods imported but not allowed clearance on ground of non-fulfillment of import trade control regulations can be re-exported without payment of export duty, if goods are allowed to be re-exported on payment of fine or otherwise. If the Indian importer does not release the goods, the foreign exporter continues to be owner of the goods and can apply for re-export or sale to other eligible buyer in India if (a) At the time of importation, the import was legal (b) The foreign exporter was not party to fraud (c) The Indian importer has not paid for the goods or has not made arrangements for payment of goods (like letter of credit) to foreign exporter. CBEC vide circular No. 100/2003-Cus dated 28-11-2003 has clarified that if goods have been imported as a result of bona fide mistake and contrary to the importer’s intentions, goods may be allowed to be re¬exported on payment of nominal penalty or without any penalty. It has been clarified that obtaining NOC from RBI is not necessary. Goods imported under duty credit schemes like SFIES/VKGUY, TPS/DFCE/FMS/HTPEPS/SHIC/ DEPB etc. can be re-exported if found defective or unfit for use, or for any reason, subject to fulfillment of prescribed conditions as per circular No. 45 / 2011-Cus dated 13-10-2011.
In case of re-export of defective or unfit goods, Customs issues re-credit certificate. Customs shall allow use of the re-credit script to the extent of 98% within a period of 6 months. Hence, DGFT is not required to issue fresh scrip as para 220.127.116.11 of HBP Vol 1 as amended w.e.f. 14-1-2011. This facility has been extended to all reward schemes like TPS/DFCE/FMS /FPS / HTPEPS/SHIS /Agri-Infrastructure Incentive scheme under VKGUY. Re-export should be within 6 months and from the same port CBEC circular No. 25 /2009-Cus dated 29-9-2009.
SOURCE: GOVT. OF INDIA, Ministry of Finance