CA Final · Indirect Tax Laws · Refund
Anand Pharma imported a lot of medicines with a recommended storage-before-use period that expired 2 months after clearance. In month 3 after clearance, Anand found the goods non-conforming to agreed specifications and, with the officer's satisfaction on identity, proposed to export them within 30 days of clearance order. No drawback is claimed and no offence is alleged. Under section 26A, what is the position on refund of import duty?
Refund is not allowed. Section 26A(3) excludes goods that have exceeded their shelf life or recommended storage-before-use period. Since the period had expired, the exclusion applies even though the goods were non-conforming and identifiable, and the other conditions such as no drawback were satisfied.
- ARefund is allowed because the goods are identifiable and non-conforming
- BRefund is not allowed because goods that have exceeded their recommended storage-before-use period are excludedCorrect
- CRefund is allowed only if the Board extends the 30 day period
- DRefund is allowed only on abandonment to customs, not export
Explanation
Section 26A(3) bars refund for perishable goods and goods that have exceeded their shelf life or recommended storage-before-use period. Here the period expired in month 2, before the defect was found in month 3, so the bar applies even though other conditions such as identity and no drawback are met. Option A ignores this bar. Options C and D misstate the law because export is a valid route and the extension is not relevant. Refund is therefore not allowed.
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