CUSTOMS AND CENTRAL EXCISE DRAWBACK – PART II

[Mr. M. GOVINDARAJAN]

Claim of drawback

Claim of drawback may be on the goods exported by post,  on goods exported other than by post and supplementary claim, if any.

Claim on goods exported by post

If the goods are to be exported by post under a claim for drawback the outer packing, carrying the address of the consignee shall also carry in bold letters the words DRAWBACK EXPORT.  The exporter shall deliver to the competent postal authority, along with the parcel or package, a claim of drawback in the Form prescribed.  This form has 5 parts.

In Part I the particulars of goods to be exported by parcel post under claim drawback are to be furnished as detailed below-

• Sl. No;
• Date of parcels;
• Gross weight;
• Marks/No. of Pcs
• Quantity;
• FoBValue;
• Rate of net drawback;
• Weight;
• Amount

The following certificates are to be given in Part I of the claim form-

• Certified that goods were not taken into use after the manufacture;
• Certified that no separate claim for rebate of duty has been made or will be made to the Central Excise Authorities and that the Customs and Central Excise duty has been paid on the raw materials used in the manufacture of the goods.

In Part II gives the examination report of the parcels booked by post.  The Officer who has examined and sealed the consignment is to declare that the parcels have been packed in his presence and sealed by him.  In addition to this the authorized Superintendent of Customs/Central Excise is to certified that the said parcels were examined, packed and sealed under his supervision

Part III of this form will give the information about the forwarding of the parcel to the Superintendent, Foreign post office, New Delhi by the Post Master of the concerned post office   Part IV of the Form gives the inspection report  by the Examiner/Inspector Post Appraising Department, that the parcels exported are inspected and the seal intact.  If the seal is not intact the said parcels will be detained for further action.  Part V of this form contains the certificate given by the Superintendent of foreign post office that the parcels have been exported out of India. 

Date of claim

The date of receipt of the claim by the proper officer of Customs from the Postal Authorities shall be deemed to be the date of filing of drawback claim by the exporter.  An intimation of the same shall be given by the proper officer to the exporter in such form as the Principal Commissioner may prescribe.

If the claim form is not complete in all respects, the exporter shall be informed of the deficiencies within 15 days of its receipt from the postal authorities, in a deficiency memo in the form prescribed by the Principal Commissioner.  Such claim shall be deemed not to have been received by the proper officer.

When the exporter complies with the requirements specified in the deficiency memo within 30 days of its return, he shall be issued an acknowledgement by the proper officer and the date of such acknowledgement shall be deemed to be date of filing the claim.

Claim on goods exported other than by post

Rule 13 provides that in case of exports other than by post, the exporters shall be at the time of the goods-

• state on the shipping bill or bill of export, the description, quantity and such other particulars as are necessary for deciding whether the goods are entitled to drawback, and if so, at what rate or rates and make a declaration on the relevant shipping bill or bill of export that-

• a claim for drawback under these rules is being made;
• in respect of duties paid on containers, packing materials and materials used in the manufacture of the export goods on which drawback is claimed, no separate claim for rebate of duty under Central Excise Rules, 2002 or any other law has been or will be made to the Central Excise authorities

If the Principal Commissioner is satisfied that the exporter, for reasons beyond his control, failed to comply with the provisions of this clause, he may, after considering the representation, if any made by such exporter and for reasons to be recorded, exempt such exporter from the provisions of this Clause

• furnish to the proper officer a copy of shipment invoice or any other document giving particulars of the description, quantity and value of the goods to be exported.

The exporter shall make an additional declaration on the relevant shipping bill or bill of export that-

• there is no change in the manufacturing formula and in the quantum per unit of the imported materials or components, if any, utilized in the manufacture of export goods. And
• the materials or components which have been stated in the application to have been imported, continue to be so imported and are not being obtained from indigenous sources.

Rule 14 prescribes the manner and time for claiming drawback on goods exported other than by post.

• Electronic shipping bill in EDI under the claim of drawback or triplicate copy of the shipping bill for export of goods under a claim of drawback shall be deemed to be a claim for drawback filed on the date on which the proper officer makes an order permitting clearance and loading of goods for exportation;
• The said claim for drawback shall be retained by the proper officer making such order;
• The said claim should be accompanied by the following documents-

• copy of export contract or letter of credit, as the case may be;
• copy of ARE – 1 wherever applicable;
• insurance certificate, wherever necessary; and
• copy of communication regarding rate of drawback where the drawback claim is for a rate determined by the Principal Commissioner of Customs;

• If the claim is incomplete the same shall be returned to the claimant with a deficiency memo within 10 days and shall be deemed not to have been filed;
• On complying with the requirements and on submission of the claim to the proper officer, the same shall be treated as a claim filed;
• The time limit for paying drawback of one month, the time taken in testing of the export goods, nor more than one month, shall be excluded.

Payment of drawback

The drawback and interest, if any, shall be paid by the proper officer to the exporter or to the agent specially authorized by the exporter to receive the said amount of drawback and interest.  The officer may combine one or more claims as well as adjustment of any amount and interest already paid and may issue a consolidated order for payment. 

Deemed date of payment

The payment of drawback and interest, if any, shall be deemed to be, in the case of payment-

• by cheque, the date of issue of such cheque; or
• by credit in the exporter’s account maintained with the Customs House, the date of such credit.

Supplementary claim

Rule 16 provides the procedure for supplementary claim. If any exporter finds that the amount of drawback paid to him is less than what he is entitled, he may prefer a supplementary claim in the Form prescribed.    In the said form the following information is to be furnished-

• Exporter
  • Name;
  • Address;
  • Telephone no;
  • Name of clearing agent;
• Goods exported-
  • Description;
  • Quantity;
  • Gross;
  • Net;
  • Marks& No.
  • Destination;
  • Shipping Bill No. & date;
• Vessel
  • Name;
  • Rotation No.
• Drawback already paid-
  • Amount;
  • Custom House Reference No.;
  • Quantity/Value on which allowed;
  • Rate at which allowed;
• Drawback not claimed-
  • Amount;
  • Quantity/value on which allowed;
  • Rate at which claimed.
• Reason for the supplementary claim;
• No of documents claimed
• Declaration by the applicant.

Time limit for supplementary claim

The exporter shall prefer supplementary claim within a period of three months-

• if the rate of drawback is determined or revised from the date of publication of such rate in the Official Gazette;
• if the rate of drawback is determined or revised upward from the date of communicating the said rate to the person concerned;
• in all other cases, from the date of payment or settlement of the original drawback claim by the proper officer.

The Assistant/Deputy Commissioner may extend the aforesaid period by a period of nine months.  The Principal Commissioner may further extend the period by a period of six months.  The Authorities, on an application received and making such enquiry as he thinks fit, grant extension or refuse to grant extension after recording in writing the reasons for such refusal.

Application fee

The application fee equivalent to 1% of the FOB value of exports or ₹ 1,000/- whichever is less, shall be payable for applying for grant of extension by the Assistant/Deputy Commissioner.

The application fee equivalent to 2% of FOB value or ₹ 2,000/- whichever is less, shall be payable for applying for grant of extension by the Principal Commissioner.

Date of claim

The date of filing of the supplementary claim shall be the date of affixing the Dated Receipt Stamp on such claims which are complete in all respects and for which an acknowledgement shall be issued in the form prescribed.  The claims which are not complete in all respects or are not accompanied by the required documents shall be returned to the claimant with a deficiency memo and the same shall be deemed not to have been filed.  If the exporter resubmits the supplementary claim after complying with the requirements the same will be treated as a claim filed.

Repayment of erroneous or excess payment

If the drawback has been paid to an exporter but the sale proceeds in respect of such export goods have not been realized by or on behalf of the exporter in India within the period allowed under FEMA including any extension of such period, such drawback shall be recovered.  This time limit shall not be applicable to the goods exported from DTA to a SEZ.

If the exporter fails to produce evidence for realization of export proceeds within the period allowed under FEMA or any extension of the said period by RBI, the proper officer shall cause notice to be issued to the exporter for production of evidence of realization of export proceeds within a period of 30 days from the date of receipt of such notice.  If the exporter does not produce such evidence within the said period, the proper officer shall pass an order to recover the amount of drawback paid to the claimant.  The exporter shall repay the amount so demanded within 30 days of the receipt of the order. 

If a part of sale proceeds has been realized the amount of drawback to be recovered shall be the amount equal to that portion of the amount of drawback paid which bears the same proportion of the sale proceeds not realized bears to the total amount of the sale proceeds. 

If the exporter fails to repay the amount it shall be recovered from the exporter.  If the sale proceeds are realized by the exporter after the amount of drawback has been recovered from him, the exporter shall produce evidence about such realization within a period of 3 months from the date of realization of sale proceeds, the amount of draw back so recovered shall be repaid, if the claimant provides the sale proceeds have been realized within the period permitted by RBI.

The Principal Commissioner may extend the said period of 3 months by a period of nine months if the sale proceeds have been realized within the period permitted by RBI.  An application fee equivalent to 1% of FOB value of exports or ₹ 1,000/- whichever is less shall be payable for applying for grant of extension. 

If the sale proceeds are not realized but such non realization is compensated by the Export Credit Corporation of India under an insurance cover and RBI writes off the requirement of realization of sale proceeds on merits and the exporter produces a certificate from the concerned Foreign Mission of India about the fact of non recovery of sale proceeds from the buyer, the amount of drawback paid to the export shall not be recovered.