Re-exportation of imported goods - CBEC's Customs Manual 2023 - Customs

3. Re-exportation of imported goods: 3.1 There are often occasions where imported goods may have to be re-exported such as when the import goods are found defective after Customs clearance or are not found as per specifications or requirements. Various machinery items imported for use in certain projects or otherwise are also often to be re-exported by the original owner. Re-exports can be made by sea, air, baggage or post. 3.2 Section 74 of the Customs Act, 1962 provides for grant of Drawback @98% of the Customs duties paid at the time of importation, if the goods are re-exported by the importer, subject to certain conditions. The re-export is to be made within a maximum period of two years from the date of payment of duty on importation(which period can be extended on sufficient grounds being shown) and goods have to be identified with the earlier import documents and duty payment to the satisfaction of the Assistant/Deputy Commissioner of Customs at the time of export. If such goods are used after importation, Drawback is granted on a proportionate basis but if such goods are re-exported after more than 18 months of import nil Drawback is admissible. Further, no Drawback of the import duty paid is permissible for specific categories of goods such as wearing apparel, tea chests, exposed cinematographic films passed by Film Censor Board, unexposed photographic films, paper and plates and x-ray films. Also, in respect of motor vehicles imported for personal and private use the Drawback is calculated by reducing the import duty paid according to the laid down percentage for use for each quarter or part thereof, but upto maximum of four years. Further Circular 21/2017-Cus dated 30.06.2017 has been issued post introduction of GST in this regard. [Refer Notification No.19/65-Cus, dated 6-2-1965 and Re-export of imported Goods (Drawback of Customs Duties) Rules 2017] 3.3 Section 26A of the Customs Act, 1962 allows refund of import duty if the imported goods are found defective or otherwise not in conformity with the specifications agreed upon between the importer and the supplier of goods. One of the conditions for claiming refund is that the goods should not have been worked, repaired or used after the importation except where such use was indispensable to discover the defects or non- conformity with the specifications. Another condition is that the goods are either exported without claiming Drawback or abandoned to Customs or destroyed or rendered commercially valueless in the presence of the Proper Officer within a period of 30 days from the date on which the Proper Officer makes an order for the clearance of imported goods for home consumption. The period of 30 days can be extended by the jurisdictional Commissioner of Customs on sufficient cause being shown. However, no refund shall be available in respect of perishable goods and goods which have exceeded their shelf life or their recommended storage-before-use period. 3.4 CBIC clarified eligibility of exemption Notification No.104/94-Cus., dated 16.03.1994 (as amended) on import of empty containers that satisfy following conditions a) that are durable, b) capable of being re-used multiple times, c) capable of being identified at the time of re-export viz. a viz. the imported containers, and d) satisfy all the other stipulated conditions in the notification. 3.4.1. Details of procedural requirements are provided in Circular No.51/2020-Customs dated 20.11.2020.