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

Importer Faces Payment Demand for Defective Screws; Options Include Credit Note, Re-export, or Abandonment for Duty Refund An importer of mechanical parts from India faced an issue with rejected screws imported from the Netherlands. The supplier suggested scrapping the screws, but the importer's bank demanded payment to the supplier. Respondents advised settling the outstanding amount by either obtaining a credit note from the supplier or re-exporting the defective goods to claim a duty drawback. They also discussed the possibility of abandoning the goods to customs and claiming a duty refund. The discussion highlighted the legal obligation to settle the payment and provided procedural guidance for handling defective imports.