is there any customs import fee in Germany?

I am not in EU and I purchased something from a German merchant. However, the product is with problem so I will need to ship back to them for replacement. They have quoted me a price "Customs Import Fee" which is about USD 40.

What is this fee? Is it the fee he pays to the Germany Customs as my returned product arrives in Germany? Does it apply only to certain kinds of products or does it
apply to everything coming into Germany? What is the rate of it?

Please let me know. Thank you very much