Procedure to sent back the rejected imported material

[Rakesh K Paliwal]

Dear All,

as we are manufacturer of automobiles parts and have registered with central excise, can you please let me know the procedure and documentation to sent back the imported material to suppliers which is rejected due to quality issue.

Thanks

Regards

Rakesh K Paliwal

[PAWAN KUMAR]

Dear Sir,

As per my view, the re-export of defective imported goods can be done under the provisions of section 74 of the customs act, 1962. For the purpose of same, documentation which is prepared for general export i.e. Excise invoice, packing list and ARE-1 Forms is to be prepared. The invoice and ARE-1 forms shall also bear remarks that material being cleared as rejected were earlier imported under cover of the bill of entry No. and date and description/ tariff as per the bill of entry. The clearance is to be done on payment of applicable duty which has been taken as cenvat credit in your cenvat accounts. After that application for duty drawback under section 74 to Customs authorities at the port of importation is to be filed. The 98% of the portion of customs duties paid is admissible as drawback under section 74. Another option is also there, if the assessee wants to re-import the material in question, he can do so on nil customs duty payment subject of non claiming of drawback of customs duties earlier paid.

[YAGAY andSUN]

Dear Rakesh,

In addition to reply submitted by Mr. Pawan, please also refer our inputs which are appended below for your kind information.

According to Section 76 (2) of the Customs Act, 1962, if the imported goods are used before re-export, the drawback will be allowed at a reduced percentage. If the goods were in possession of the importer, they will be treated as used by the importer.

Please check Notification No. 23/2008-Cus dated 01-03-2008 in this regard.

Regards

Team YAGAY and SUN

(Management and Indirect Tax Consultants)

AI Summary

Duty drawback procedure for re exporting rejected imports requires export documentation and duty regularisation before claiming relief. Rejected imported goods should be exported using an excise invoice, packing list and ARE-1 bearing remarks referencing the original bill of entry; export clearance must address duties taken as cenvat credit and an application for duty drawback under section 74 filed with customs. Alternatively, replacement goods may be re imported on nil duty if drawback is not claimed. If goods were used or in the importer's possession prior to re export, drawback is allowable at a reduced rate under section 76(2).