Manufacturing of Drugs and Pharmaceuticals Products (herein after called as ‘the goods’) and Import and Export of the goods in any Country are regulated by the Laws of the respective Countries. Similarly, in India too manufacturing of the goods and Import and Export thereof are regulated by the Laws framed by the Central Government of India.
In India the Drugs and Cosmetics Act.1940 and the Drugs and Cosmetics Rules,1945 regulates manufacture, sale domestically and storage and Import and Export of the goods. The Ministry of Health and Family Welfare a Central Government body looks after compliance of the Drugs and Cosmetics Act.,1940 and the Drugs and Cosmetics Rules,1945 through the Central Drugs Standard Control Organization (CDSCO) is the Central Drug Authority for discharging functions assigned to the Central Government under the Drugs and Cosmetics Act.,1940 and the Drugs and Cosmetics Rules,1945.
Indian manufacturers of the goods, export the goods to many countries outside India. Sometimes, it may happen that the goods exported are to be called back due to any reason like:
1. Due to quality problem,
2. Due to packaging and damaged packaging and products problem,
3. Due to short self-life of the products problem,
4. Due to products registration expiry problem in the export country,
5. Due to non-response of the consignee for clearances of the exported cargo in the export country,
6. Due to failure of the consignee to remit the export proceeds.
7. Due to Dispute with the buyer after export of the goods in respect of present export or past export or future export too.
8. Due to change in some government regulations for Import in the buyer’s country which may be become effective after export of the goods.
9. Due to delay or cancellation of the Tender for which the goods were exported.
10. Due to change in the buyer constitutions after affecting export of the goods.
When the goods are called back, Two Government Agencies one is Customs and other is office of the Drugs Controller of India have to play their respective role. The first government agency is the Customs authorities of the Port where the goods are called back will verify that the goods which are called back are the goods which were manufactured in India and exported out of India or not.
The manufacturer (herein after called as ‘the exporter’) who had manufactured and exported the goods needs to submit copy of the shipping bill, export invoice, packing list and any other documents as may be required by the Customs authority and a letter from the Indian manufacturer and the foreign buyer explaining the reason that why the goods exported are called back and any other necessary documents as may be required by the Customs authority of the Port where the goods are called back. The Customs authority will verify the documents of import with the documents of export and also 100% examine physically the goods which are called back and if the Customs authority itself satisfies that the goods which are being called back are the goods which were exported out of India.
The exporter is required to return all the export benefits availed on the export of the goods which are being called back with interest at the applicable rate. The Customs authority, then only, will allow to clear the goods so called back without payment of Basic Customs duty and presently applicable Social Welfare Surcharge @10% on the basic Customs duty. However, IGST at the applicable rate will have to be paid at the time of clearance of the called back goods.
The second government agency is the Drugs Controller of India (herein after called as ‘the DCI’) will play their role. When the goods come at the port of discharge and the manufacturer who had exported the goods and called back the goods files Bill of entry with the Customs Authority at the Port of discharge the Bill of entry will appear on the web site of the DCI due to single window clearance system under ICEGATE of Indian Customs.
The Office of the DCI at the Port of discharge will examine the goods and will take sample of the goods for testing in the Laboratory. Generally, sample are tested at the Government Laboratory only however, the DCI may allow the sample to be tested at any good private laboratory also when there is pendency of samples for being tested at the Government Laboratory and testing of the samples of the called back goods are on urgent basis.
The exporter may submit Letter of Guarantee (LG) in the prescribed format on the non-judicial stamp paper of the appropriate value to release the goods after sampling for the purpose of to save detention and ground rent charges of the shipping line and port. The exporter will be allowed to re-export if the test result comes showing the quality of the goods is good and if the test result shows that the quality of the goods is not good the exporter will not be allowed to re-export the goods, but such goods are required to be destroyed.
Any goods so called back are not allowed to be used in India or diverted to the Indian market.
The concerned DCI’s office may require the exporter to submit the following:
1. an undertaking from the exporter stating that they will re-export the goods so re importer or will destroyed under intimation to the DCI office but will not use in India or divert in the domestic market.
2. the proposal of use of the called back goods.
3. Certificate of Analysis (COA) and Method of Analysis (MOA) of the Goods.
4. Letter from the exporter and the importer of the goods showing reason for being re-import of the exported goods.
5. The LG so submitted will be released by the DCI office upon the receipt of the test good result report.
So, when any Manufacturer of the goods calls back the exported goods will have only two options as under:
1. To re- export the called back exported goods or
2. To destroy the called back exported goods.
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