Import duties & taxes in China

Question

My company has shipped 10 containers of brake fluid to a client in Shanghai albeit the barrels have deteriorated and are not in a sufficient condition for sale. We are in the process of arranging a credit for the commercial value of goods, then will repatriate the goods to the UK for a QC inspection with the barrel supplier.
The customer buys on CFR terms and has now stated they want us to credit them for the import duties and taxes for all replacement stocks we ship. They do not believe, or rather they are stating they cannot get any relief from the government in terms of the duties & taxes paid on the “damaged” goods, even though they are not for sale and will return to the UK. Is this correct they will have to pay duties/taxes twice…meaning my company has to reimburse them?

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