imported goods rejection

[SujitK Mishra]

Dear Sir,

we are importers of mechanical parts, we imported some screws from the Netherlands which got rejected.

Recently our supplier informed us to scrap these screws (shipment weight 3 kg only). Now our bank (ICICI bank has been asking us to pay the supplier. How to handle this please guide.

Sujit K Mishra

ISE BOTECO Tekplast India Pvt Ltd

Chandigarh

9915178662

[email protected]

[KASTURI SETHI]

Sh. Mishra Ji,

The bank is legally right. The amount in question should not remain outstanding. It has to be settled. You have two options :-

1. Persuade the exporter (outside India) to issue credit note.

2. Re-export the defective goods and claim drawback (98% of duty paid).

For re-export of defective imported goods, procedure is laid down in Circular No. 45/2011-Cus., dated 13-10-2011

[Raghunandhaanan rvi]

It is not clear whether the goods have been customs cleared by the importer and duty paid.

Goods if cleared, the following options are available to the importer

• Re-export the defective goods to the seller for a free replacement OR
• Abandon or relinquish the title of the goods to customs
• within 30 days of import clearance or such extended period, the Commissioner of Customs may allow in terms of Section 26A
• And claim a refund of the duty so paid
• Receive free replacement goods
• Approach AD bank to make import remittances based on these documents

[KASTURI SETHI]

Dear Sir,

Thank you very much for detailed reply.

[Shilpi Jain]

You could consider getting a credit note from the foreign supplier

[Raghunandhaanan rvi]

Yes Shilpa ji ..Thank you Shri. Kasthuri Sethi Saab and Shilpa ji mam.

AI Summary

Re-export relief for defective imports permits duty drawback or a credit note to resolve outstanding import payment obligations.
If goods are customs-cleared and duty paid, the importer may obtain a foreign supplier credit note or re-export defective goods and claim duty drawback under the procedure in Circular No. 45/2011-Cus.; alternatively the importer may abandon title to customs or seek re-export/replacement and a refund of duty within thirty days (or extended period) under Section 26A, with documentary support for AD bank remittances to settle the supplier claim.