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Imported material

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28 January 2012 Sir

We have Imported excisable goods from the foreign supplier, due to some reason the quality does not match with our standard.So we have re-exported the rejected material to the supplier. as we have send the material under ARE-1 as Free of Cost (FOC) includung all duty .My question is weather the re-exported rejected material is duty free or not. As we have charged the duty in the previous case. Now once again we have faced the same problem. As the Excise department did not agree that, the material will be send with out duty. Pls guide & send the procedure upon the case of rejected imported material which is sent back to the foreign supplier.

Regards

Amit Ku.Thakur

30 January 2012 Section 20 of the Act provides for levy of duty on all re-imported goods in the same manner as the goods being imported for the first time. The goods imported however exempted by the virtue of Customs Notification 158/95 dated 14.11.1995 subject to conditions stipulated therein.
Essential Ingredients for claiming benefit of exemption notification 158/95 Cus.datd 14.11.1995

In respect of goods manufactured in India and parts of such goods whether of Indian or foreign manufacture which were earlier exported from India and re-imported into India for the purpose of repair or for re-conditioning, from the levy of duty of customs including additional duty of customs subject to the following conditions-

1. the re-importation takes place within three years from the date of exportation.
2. after the process of repairs or re-conditioning the goods are re-exported within six months of the date of re-importation or such extended period not exceeding a further period of six months as Commissioner of Customs may allow.
3. the identity of goods is established subject to satisfaction of Assistant Commissioner of Customs.
4. the importers have to execute a bond undertaking at the time of importation to –
1. export the goods after repairs or re-conditioning within the stipulated period.
2. pay on demand in the event of his failure to comply with the conditions of notification, the difference between the duty levied at the time of re-import and the duty leviable on such goods at the time of re-importation but for the exemption given above.
5. the Board desires that the value of the bond should be approximately the amount of duty likely to be involved. The value of bank guarantee shall be 25% of this bond.

In respect of goods manufactured in India and re-imported for the purpose of (a) re-processing or (b) refining or (c) re-making etc., subject to the following conditions -

1. Such re-importation takes place within one year from the date of exportation;
2. Goods are re-exported within six months of the date of re-importation or such extended period not exceeding a further period of six months as the Commissioner of Customs may allow;
3. The Assistant Commissioner of Customs is satisfied as regards identity of the goods;
4. The importer executes a bond to the effect that –

1. such processes shall be carried out in a factory under Central Excise control following the procedures laid down under Rule 173 MM of Central Excise Rules, 1944 or in a customs bond u/s 65 of the Customs Act, 1962.
2. he shall maintain a due account of the said re-imported goods and shall produce it duly certified by the Officer of Central Excise or Customs.
3. in case any waste or scrap arises during such process either the same is to be destroyed before the Officer of Central Excise or Customs or to clear it on payment of appropriate amount of customs duty leviable on such waste or scrap.
4. the importer in event of his failure has to pay an amount equal to the difference between the duty leviable on such goods at the time of re-importation but for the exemption contained therein.

(v) the Board desires that the value of the Bond should be approximately the amount of duty likely to be involved. The value of bank guarantee shall be 25 % of this Bond.

1. The loss in quantity during such process is exempted from customs duty and additional customs duty.

4. The above notification even covers situation like the goods re-imported for the purpose of changing the packing of goods earlier exported. It also covers the remaking of tablets of medicines which got damaged during transportation or otherwise. It also covers the cases of re-import of chemicals which are required to be reprocessed.

5. The provisions of this notification would also apply in case of re-import of goods which were earlier exported under any scheme like DEEC, 100% EOU etc., subject to fulfillment of the conditions prescribed in the notification.

fro more information link is:

http://www.cbec.gov.in/customs/cst-0809/cs-gen118-126.pdf



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