The Finance Bill proposes introduction of Section 26A in the Customs Act, 1962, so as to comply with the standards under the International Convention on the Simplification and Harmonisation of Customs Procedure (Revised Kyoto Convention).
It seeks to provide for refund of import duty paid at the time of clearance of imported goods, capable of being easily identified as such, if the goods have been found to be defective or not in conformity with the specifications agreed upon between the importer and the supplier of goods.
The refund will be available if the importer re-exports the goods or relinquishes the title to the goods and abandons them to the Customs or destroys the goods or renders them commercially valueless in the presence of the proper officer within one month of the date of import clearance.
The commissioner may grant further three months period. The refund claim must be filed within six months from the date of ‘let export’ order or date of relinquishment or date of destruction.
The refund will not be available for perishable goods or goods which have exceeded their shelf life or recommended storage-before-use period or goods regarding which an offence appears to have been committed.
The major difference between the proposed Section 26A and existing Section 74 of the Customs Act, 1962, in case of re-exports is that Section 74 envisages re-export even in situations when the goods are not defective.
Secondly, Section 74 gives 98 per cent of the duty drawback if the goods are not used but allows drawback at reduced rates even if the imported goods are used and re-exported. The time available under Section 74 is 18 months.
