Circular No. 44/2000-Cus

F.NO. 609/37/99-DBK
Government of India
Ministry of Finance
Department of Revenue
Central Board of Excise & Customs

New Delhi, the 15th, May, 2000

Subject: Drawback — payment under EDI system – CIF/C&F price

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        The question of processing of drawback claims under the EDI system at the sea ports when the price is declared on CIF/C&F basis has been under examination of the Board following references received in this behalf from some of the Commissioner of Customs.

  1. In this context, attention is invited to para 13 of Board’s minutes issued vide letter F.No.605/160/99-DBK dated 21.10.99 wherein instructions were circulated regarding the declaration of freight under shipping bills filed for claiming drawback on C&F/CIF basis under EDI system. It was instructed that (in absence of information regarding actual freight) the exporter must be required to declare freight on the basis of the rates declared in the freight schedule published by Shipping lines. As the published freight indicates highest freight leviable, it would obviate the Department having to raise notices for recovery of excess payment of drawback. In the said minutes, it was also mentioned that the possibility of deducting a standard freight @ 16% to arrive at the FOB value would be separately examined by the Board and a final decision taken thereafter.

2. The matter has since been examined by the Board. Government is keen that drawback claims which are now made on the shipping bill itself can be finalised on most immediate basis using EDI. Considering very large number of shipments under drawback claims, it will cause considerable administrative problems if one has to give a provisional drawback claim and later entertain a supplementary drawback claim on the basis of actual freight details being made known on the plea that it was not available at the time of export. It is observed that it is highly improbable that the exporter would not be aware of the freight that is required to be paid by him for the export goods even at the time of presenting the goods for shipment. It has, therefore, been decided that the exporter must declare the actual freight paid or payable by him on the shipping bill, or when the goods are presented for examination. This declaration of freight must reflect the freight charges borne by the exporter irrespective of the amount received by the shipping lines or by the consolidating agents or any other person engaged in the shipment of the goods. In the exceptional cases, when the exporter is not able to ascertain the actual freight payable by him at the time of export, the exporter must file a declaration of the freight payable for the consignment on the basis of the standard published freight schedule. However, the exporter should review each case of shipment after export has taken place and if the freight borne by him is higher than the one declared in the shipping bill, he would immediately on his own pay back to the customs the excess amount of drawback claimed/received or any other export incentives claimed thereon. Any misdeclaration of freight paid or payable which results in loss of revenue by way of excess drawback payment, is liable be processed against under the Customs Act, 1962.

3. Commissioner of Customs also should ensure that a regular test check of 10-15% of the claims cleared on actual/declared standard freight schedule basis (with suitable undertaking) is carried out so as to verify the correctness of the declaration of freight by the exporter and taking appropriate action against exporters who are found to have misdeclared the freight element to claim higher drawback. However, in cases where the freight actually paid is less than the one declared, no supplementary claims shall be entertained.

    Kindly issue appropriate public notice on the aforesaid lines and acknowledge receipt.

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Category : Custom Duty (6632)
Type : Circulars (7511) Notifications/Circulars (30303)

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