Information in Shipping Bill.

The exporter must mention/show:

(a) correct exchange rate applicable on the relevant date

(b) FOB value of export irrespective of the nature of export contract, whether CIF/C&F/C&I.

Where the manufacturer-exporter avails the Simplified Procedure of fixation of drawback rate prior to verification of the data, he should mention the name of respective Range and Division in column No. 3 of the covering letter, besides mentioning that drawback claim is filed in pursuance of Govt.’s Simplified Procedure of DBK fixation.

Filing of Shipping Bills in Customs House for Shipment

The exporters should file the shipping bills (in triplicate) or quadruplicate where import licence is to be claimed, well in advance, in the Export Department or the Central Registration Unit, if any, functioning at the Port/Air Port or at ICD, Container Freight Station, Air Cargo Complex, etc. The procedure for filing SB etc. under computerized i.e. Customs EDI system is, however, different as explained in Chapter 7.

Documents

The shipping bills should be accompanied with the following documents (in duplicate).

(i) Invoice i.e. shipment/commercial invoice or any other document giving particulars of the description, quantity and value of the goods to be exported

(ii) Export licence/quota endorsement certificate, if any

(iii) Packing list

(iv) Overseas buyers’ orders/contracts/letters of credit or bank attested invoice, if export order/L/C not available

(v) AR4 form of Central Excise, wherever necessary

(vi) Insurance certificate wherever applicable.

(vii) Copy of brand rate letter (viii) Test report, if already available (ix) Freight and/or insurance amount paid, where export is not on f.o.b. basis

(x) Copy of DEEC book where export made under DEEC-cum-DBK Shipping Bill

(xi) Any other relevant document
and Declarations, as applicable

Attestation

all these documents should be attested by the exporter. These documents will be authenticated by the Customs at the time of scrutiny under the signature and official stamp of the Customs officials.

Drawback Claim No

The shipping bills, thus, filed would be given a running serial No. This number will also be known as drawback claim number.

Scrutiny

On presentation, the shipping bills will be scrutinized and examined in the Export Department from both export and drawback angles. Immediately after scrutiny and completion of the shipping bill by the Assessing Officer, the duplicate and triplicate copies of the shipping bills with suitable examination order would be returned to the exporter for presenting the same to the Docks appraising/examining staff.

Examination Order

The examining officer also known as Assessing Officer, shall give the examination report on duplicate as well as triplicate copy of the shipping bill clearly indicating: -

(i) F.O.B. value of goods

(ii) Net weight of the goods

(iii) Rate of drawback

(iv) Drawback amount

The examination report shall be given in his own hand by the examining officer.

Wherever sample is drawn for analysis, this fact will also be indicated clearly by the examining officer.

There is also a provision to get the export goods examined at the factory instead of at ICD and/or the port of shipment as follows:

Procedure for Examination of Export Cargo by Central Excise Officers.

Where the Commissioners of Customs are satisfied with the need for extending the facility of examination of the export cargo by the Excise Officers, they will notify the goods and the procedure. In such cases, the Commissioner of Central Excise will authorize the Superintendent of Central Excise for detailed examination of the export cargo in the factory of the manufacturer. The examination report will be on the AR4 forms and the cargo will be sealed by the Central Excise Officers. The Customs authorities wherever satisfied with the examination etc. will permit the export of goods without further examination at the Port. However, the Customs authorities reserve the right of reopening and examination of the cargo wherever necessary.

The exporters are required to ensure the compliance of the above provision relating to examination report, to avoid delay in the processing of drawback claims.

Deficiency Memo

If the claim for drawback is incomplete in any material particulars or is without the documents specified above, shall be returned to the claimant with a deficiency memo in the form prescribed by the Commissioner of Customs within 10 days and shall be deemed not to have been filed for the purpose of section 75A of the Customs Act. Hence, no interest is payable where there is a delay in payment on account of deficiency.

Where the exporter resubmits the claim for drawback after complying with the requirements specified in the deficiency memo, the same will be treated as a claim for the purpose of section 75A of the Customs Act.

Let Export Order

The duplicate and triplicate copies of the shipping bills duly scrutinized and completed by the Assessing Officer should be presented to the Docks appraising/examining staff along with the export goods. After scrutiny and examination of the goods in the light of the examination report/order on the shipping bill, the Docks appraising/examining officer will endorse his examination report on both the duplicate and triplicate copies of the shipping bill. He will also endorse the “Let Export Order” on both the copies, if the goods are found in order. Thereafter, the drawback i.e. the triplicate copy of the shipping bill shall be returned to the exporter or his Agent. [The Commissioner of Customs, Bombay, has also agreed to accept bill of lading or mate receipt for endorsement of the triplicate i.e. Export Promotion copy of shipping bill.]

Transference copy of SB in case of consignments sent through ICD (Internal Container Depot), CFS (Container Freight Station) and ACC (Air Cargo Complexes) need not be availed for processing of drawback claims. See further in next pages.

Stage 2 = Post-shipment Stage

After making shipment of goods, the exporter is required to complete certain formalities, which can even be completed before shipment of goods. Hence, the Post-shipment stage is dealt with in two parts A & B.

Part A-Preliminary Requirements

Bank Account Every exporter wishing to claim drawback is required to open a bank account in any bank including even private sector and foreign banks. They should also give their consent to the transfer of the drawback amount sanctioned to them to their bank account. The address of the bank and the exporter’s account No. should be intimated sufficiently in advance to the Drawback Department of the concerned Customs House. In case of export through IGI airport, New Delhi, the account is to be opened in PNB in the New Customs House, IGI Airport, New Delhi.

Deposit Account

Where the exporter is also an importer, and maintains a deposit account with the Customs House, he may apply for credit of the drawback amount sanctioned to him to his deposit account for being utilized to pay import duty.

General Bond

For claims involving tests either by the Customs House Laboratory or any other laboratory such as SASMIRA, the exporters will be given the facility of maintaining a revolving bond with the Drawback Department will appropriate security/bank guarantee. The form of the bond known as General Bond is at Annexure 20, and would be available in the Drawback Department.

Supplementary Claim and Appeal

According to the revised procedure, no supplementary claim would be entertained since the exporters are expected to present the claim only when it is ripe for disposal. Where the claim is sanctioned for lesser amount than the amount claimed, the exporter could file an appeal with the Appellate Commissioner at the office of Customs and should obtain an Appellate Order. In such cases, Supplementary Claims would not be entertained. But in cases other than those arising on account of less sanction, a Supplementary Claim could be filed. See Chapter 11.

Provisional Claim

No provisional claim will be entertained under the revised Scheme. But where Brand rate had not been fixed before exportation, a Provisional Claim could be filed.

Drawback Ledger and Account No

On receipt of the bank account number and the name of the bank from the exporter, Drawback Section of the Customs House will open a Drawback Ledger and allot an Account No. to the exporter. The Account No. will be intimated to the exporter. This Drawback Ledger Account No. shall be quoted by the exporter on all the documents for the purpose of processing of drawback claims.

Renewal

All those exporters who have obtained their ledger numbers prior to 1.1.88 should get their ledger number revalidated by submitting their applications in form at Anx. 22 as prescribed by the Delhi Customs. The application should be submitted with the documents mentioned in the form. Butallthese documents must be got attested by a Notary Public. Where the names of the partners do not tally with the names of the partners given in the Importer-Exporter Code Number, reasons thereof must be explained in a covering letter.

Part B-Drawback Payment

Processing of the Claim

The 3rd copy of the Shipping Bill received in the Drawback Section/Cell, after ‘let export order, may again be scrutinized and processed with a view to see that it is complete in all respects and accompanied with all documents. If the documents are not complete, the papers indicating the deficiency will be returned to the exporter. See ‘Deficiency Memo’ under Stage-I above.

Settlement of Drawback and Interest

After “let export order” has been given by the Customs Officer at the ICD/CFS/ACC, the goods are stuffed into the containers and sealed with Customs seal. Then, these goods are transported by the Custodian to the gateway port. The Custodian is responsible to pay to the Customs authorities any drawback paid or payable thereon in case goods don’t reach gateway port. In respect of air consignments goods are shipped after due Customs escort. The CBEC has, therefore, clarified that goods in respect of which an order for clearance and loading has been made under Sec. 51 of the Customs Act by the proper officer, at the ICD/CFS/ACC, drawback shall be without awaiting for transference copy of shipping Bill.

Payment of Drawback and Interest

Claims upon being found admissible, shall be sanctioned and credit of the amount given in the ledger account of the exporter maintained in the Drawback Section within a period of two months from the date of filing of claim or compliance of deficiency memo, if any, as applicable. In case of delay, an interest @ 15% per annum shall be paid under Section 27A of the Customs Act and Notif. No. 36/2000-Cus (NT) dt. 12/05/2000.

Under this procedure, the drawback shall be paid through the banks or directly to the exporter or his agent. After every fortnight, on the 1st and 16th of each month, the credit entries shall be totaled and consolidated Account Payee’s cheques dispatched/sent directly to the nominated bank for crediting the exporter’s account, under intimation to the exporter:

The Customs may combine one or more claims for the purpose of payment of drawback and interest if any, as well as adjustment of any amount of drawback and interest already paid and may issue a consolidated order for payment.

Fortnightly/Weekly Payment. The cheques for payment of drawback may be issued on fortnightly or weekly basis, as per the instructions issued from time to time. For example, the Chandigarh Commissionerate has decided to issue cheques on weekly basis.

Bank Branches. The exporters are at liberty to have a bank account with any branch of any bank. The drawback cheques will be sent to such branches by Regd. Post. For export by air through IGI airport, New Delhi the account is to be opened in PNB, New Customs House, IGI airport, New Delhi or ICD Tughlakabad for exports through ICD.

Payment of Erroneous or Excess Payment

Where an amount of drawback and interest, if any, has been paid erroneously or the amount so paid is in excess of what the claimant is entitle to, the claimant shall, on demand by an officer of Customs repay the amount so paid erroneously or in excess, as the case may be, and where the claimant fails to repay the amount it shall be recovered.

Interest. If the repayment is not made within two months of date of demand the exporter shall be liable to pay interest @ 15% per annum on the amount recoverable.

Test Bond

Where the drawback is subject to test report, and the exporter desires to claim drawback before the test report is available, the following procedures is followed at the Delhi Custom House.

(i) Exporters having export turnover during the preceding financial year of Rs. 5 crore or more, shall file general and continuity surety bond in the prescribed form.

(ii) All other exporters i.e. those not having attained a turnover of Rs. 5 crores during the preceding financial year, shall file general and continuity bank guarantees to the tune of 10% of the bond amount along with the test bond.

In Customs House, Mumbai, the procedure is a little different. In cases where test report is not made available to exporter within a period of six months, such claims, which are deficient only in respect of test reports, will be settled by the Drawback Department, on execution of amount paid, if any, in case the claim admitted on the basis of declaration and collateral or otherwise. The general bond may be furnished on a non-judicial stamp paper of Rs. 15 in the proforma at Annexure 20. The duplicate copy of the bond may be given on a plain paper. Exporters are advised to avail of this facility in order to get their duty drawback payment without waiting for receipt of Test Reports.