An importer has imported materials under Concessional rate duty applicable only to manufacturers. Later Importer has found that few of the materials are defective and he wish to re-export it ? Can he do so ?

Yes. He can re-export. Either importer should use goods imported under concessional rate of duty scheme on their own for manufacturing purpose or can re-export it. It may be reasonable that if the goods on importation are re-exported, as such then they should be treated as if were never imported.

Ref Rule 7 of Customs (Import of Goods at Concessional Rate of Duty) Rules, 2017 re produced below;

“ Re-export or clearance of unutilised or defective goods. - (1) The importer who has availed benefit of an exemption notification, prescribing observance of these rules may re-export the unutilised or defective imported goods, within six months from the date of import, with the permission of the jurisdictional Deputy Commissioner of Customs or, as the case may be, Assistant Commissioner of Customs having jurisdiction over the premises where the imported goods shall be put to use for manufacture of goods or for rendering output service”

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SAMSUNG INDIA ELECTRONICS PRIVATE LIMITED VERSUS COMMISSIONER OF CUSTOMS & CENTRAL EXCISE, NOIDA, CESTAT ALLAHABAD decided on 20.12.16 under erstwhile Customs (Import of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 1996. Re export took place between July 2010 and October 2010 but re export permission Rule 7A came to effect from 17.03.2012 only. Though the said new re-export provision was not applicable to the period for which the show cause notice was issued, the principle involved in the said provision should be applicable for all the material periods. Classic case of using latest rules to previous period.

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