Samples Drawal and Testing for Drawback

Drawal of Samples

Where there is no compulsory pre-shipment inspection by the Textile Committee of readymade garments, the exporters may request the Customs authorities to draw representative sample of goods for testing in the Customs House Laboratory for the purpose of payment of drawback, if required against a particular sub-serial number in the Drawback Table. For example, this is necessary where it is important to determine dominant fibre and its weight in export product as payment of drawback is payable only on such determination. Hence, the exporters should take care that they request the Customs authorities to draw representative sample of goods under export in case there is no compulsory pre-shipment inspection of the Textile Committee and the consignment is not accompanied with a relevant certificate of the Committee.

Customs Instructions

Even if the exporter does not require a sample to be drawn and tested, the Customs may draw samples or will not draw samples as per the following instructions.

(I) If the exporter amount per Shipping Bill is less than Rs. 10,000/- then no sample would be drawn

(II) In cases where the drawback per Shipping Bill is between Rs. 10,000/- and Rs. 1 lakh, the drawal of the sample would be governed by the general principles as follows: -

(a) Products with brand name and brand rate or drawback

Where the goods are exported under brand name of individual manufacturer and in respect of which rate has been prescribed, sample may be drawn once in a year;

(b) Products with generic names and brand rate of drawback

Where goods are of generic nature but brand rates have been prescribed for an individual exporter, samples may be drawn once in six months;

(c) Specification based items

Where the rates of drawback prescribed are based on: -

(i) certain specifications or technical characteristics

(ii) different grades/count/deniers (of yarn or fabric) of the same material are subjected to different rates of drawback.

(iii) where the rate of drawback varies, depending on the content of a material.

The sample should be drawn from every consignment. However, sample may be drawn once in 6 months if any specific certificate is produced from usually acceptable agencies such as SASMIRA, CLRI, etc.

(III) Where the amount of drawback per shipping bill is Rs. 1 lakh and above, a sample should be drawn in all cases where admissibility of the drawback cannot be decided on the basis of visual examination of the case.

However, in case of 100% cotton knitwear garments, -

(i) no sample need be drawn from each consignment if the Commissioner of Customs is fully satisfies that such knitwear are made out of 100% cotton as clearly so identifiable by visual inspection,

(ii) sample can be drawn at random intervals, say 3 to 6 months, for each exporter and also in case of doubt or where there is special information.

Further whenever the examination of the goods is done in the manufacturers premises, under the supervision of Central Excise authorities and the composition of goods is certified by Central Excise authorities along with AR4, in such cases samples need not normally be drawn for test. The validity of test reports shall also be one year. In respect of an exporter who is a manufacturer-exporter, Export House, Trading House or Star Trading House, the test report shall be valid for a period of two years.

Availment of facility without Test Report

The drawback department processes only those cases which are complete in all respects. Deficient claims are returned along with Deficiency Memo across the counter. In cases where samples have been drawn from the export consignments, drawback claims in respect of such exports are entertained, only when these are accompanied (apart from other documents) by test reports.

It has been brought to the notice of the Customs House that in some cases, the test reports have not been made available to the exporters, even through the goods had been exported long back. Since the test reports have not been produced, their drawback claims have not been accepted in the Drawback Department.

In cases where test report is not 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 general bond or revolving bond with the Customs House with the condition to report the excess amount paid, if any, in case the claim admitted on the basis of declaration and collateral evidences supplied by the exporter, is subsequently found inadmissible on test check of sample 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.