6.  Claim/Payment of Drawback against Export by Sea or Air (other than under Computerised System)

Two Stages

There are two stages to file claim/payment of drawback. These are:

Stage 1 = Shipment stage for goods to be exported by sea, air or surface (land route), but other than by mail, i.e. post. However, for export of goods by air through IGI Airport, New Delhi, the procedure is different as explained in Chapter 7. For export by air through other airports under Customs EDI i.e. Computerised System, more or less similar procedure is followed.

Stage 2 = Post-shipment stage when drawback is paid to the exporter.

Hence, this Chapter deals with this subject in two parts, viz; Stage 1 and Stage 2.

Stage 1 = Shipment Stage

Two Essential Conditions

Two conditions are material for claiming drawback.

These are:

(i) there shall/is export

(ii) the export should be for the goods which are specified in the Shipping Bill/Bill of Export. Hence, it is MOST IMPORTANT that exporters must file a Drawback Shipping Bill/Bill of Export and make a declaration thereon that he claims/intends to claim drawback.

No Separate Claim

With effect from November 1, 1996, there is no longer any need for filing separately a claim for drawback. The Drawback Shipping Bill filed along with specified documents is itself a claim for drawback. The procedure hitherto followed i.e. to file a separate claim after shipment of goods has been dispensed with.

Even in cases where (e.g. IGI Airport, New Delhi) computerization of Shipping Bills has been introduced, no separate claim is to be filed.

Shipping Bill

The triplicate copy of the shipping bill is treated as drawback copy. If the exporter wants to keep a copy for his use, he may keep a photocopy before submitting the drawback copy for claiming drawback.

Also see DEPB-cum-Drawback SB below. The front side of the drawback copy i.e. triplicate copy of the shipping bill will be the same asallthe other copies of the shipping bill.

The drawback copy i.e. triplicate copy of the shipping bill should also bear a pre-receipt from the claimant exporter duly signed on one rupee revenue stamp.

It should also contain description of goods and other identifying particulars in detail.

The exporter must mention:

(a) the correct exchange rate applicable on the relevant date and

(b) the f.o.b. value of the consignment irrespective of the nature whether CIF/C&F/C&I.

(c) The Importer-Exporter Code (IEC) Number

The amount of drawback claim should be split into the Customs and Central Excise portions of the drawback as per the percentage shown in the Drawback Rate Table. The exporters may, therefore, make suitable provisions in the relevant columns on the back of the duplicate and triplicate copies of the shipping bills. It is all the more necessary in cases where drawback of additional or countervailing duty is to be claimed on exports effected under DEEC Scheme.

DEPB-cum-Drawback SB. This SB is to be filed in case of exports under DEPBSchemeof those products which can not avail modvat credit of Additional or Countervailing Duty (CVD) of Customs paid in cash on imported inputs, or excise duty paid on indigenous inputs, since no excise duty is payable on export goods. Such exports will be eligible for payment of brand rate of drawback against additional customs duty/excise duty suffered on inputs, on submission of proof of payment of duty. To enable the exporter to file applications for brand rate, they will be allowed to file DEPB-cum-Drawback SB.

The photocopy of the SB duly attested by a DGFT officer, will be accepted as a drawback copy where the 3rd copy of DEPB Shipping Bill is filed with the licensing authority.

Also file/give declaration-common & specific-as described in next pages.

Export Manifest/Report

The export of goods that are required under the Customs Regulations to be included in the Export Manifest/Report, should have been so included for being eligible for drawback.

Declarations/Statements

Give the appropriate declaration/statements in/alongwith the Drawback Shipping Bill. These declarations may be categorized into (1) Common Declarations, (2) Specific Declarations and (3) GR Form of Exchange Control Declarations. The form of declarations are at Annexure 1 to 19. There are, however, certain exceptions where “NO DECLARATION” is required to be filed. See next pages.

Substantiation of declarations/information in SB. The competent authority sanctioning drawback can ask any exporter to submit such information and documents as are necessary for determining the class or description of material or components used in the production or manufacture of goods or for determining the amount of duty paid on such material or components. May be normally such an information is not sought, but it does not debar the officer to do so when prima facie goods appear to be of natural/human origin, that do not attract duty.

Misdeclaration. Drawback Rule 3 read with Section 74, 75 and 76 of the Customs Act, 1962 and the Notifications issued presenting all industry (A1) rate prescribes a statutory right. There is no provision any where that the statutory right is prohibited or denied or to be denied even if there is a ‘misdeclaration’ observed the Commissioner (Appeals). Further, ‘if there is a misdeclaration at all the right course is to impose penalty.

Discrepancy in Declaration. Drawback Rules prescribe procedure for claiming drawback on exports. It is a procedural rule which prescribes making a declaration, furnishing of documents, giving description, quantity, etc. etc. It is no where prescribed under the Customs Act or the Drawback Rules that if there is some discrepancy in the declaration the drawback shall not be admissible and therefore, it cannot be presumed that drawback, due to the above lapses if at all, is not to be allowed. It is clear that wherever drawback is not to be allowed, law itself makes a specific provision as made under Rule 3, Section 76 of the Customs Act and Notifications prescribing drawback rules. Adjudicating authority can not make its own law and disallow.