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CA Final · Indirect Tax Laws · Foreign Trade Policy

Anand Gems Ltd was penalised ₹6,00,000 under the FT(D&R) Act, 1992 for an import contravention but did not pay. It has consignments lying in the custody of a Deputy Commissioner of Customs. Recovery through deduction from money owing failed. Which statement is correct under Section 11?

The Director General can require the customs officer to recover the penalty by detaining or selling the defaulter's goods under his control, as if payable under the Customs Act, 1962. In addition, the Adjudicating Authority may suspend the IEC until the penalty is paid or recovered.

  1. AThe only remedy is cancellation of the company's GST registration
  2. BThe Director General may require the customs officer to recover the amount by detaining or selling the company's goods under his control, as if payable under the Customs Act, 1962, and the IEC may also be suspended till paymentCorrect
  3. CThe penalty can be recovered only as arrears of land revenue and no other mode is available
  4. DThe IEC can be suspended only after the goods are sold, and not for non-payment of penalty

Explanation

Section 11(5)(c) allows recovery by detaining or selling goods under customs control as if payable under the Customs Act. Section 11(7) allows suspension of the IEC until the penalty is paid or recovered. Land revenue recovery is a fallback under (d) only when earlier modes fail, and these modes are not exclusive, so the land revenue option is wrong.

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