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CMA Final · Indirect Tax Laws and Practice · Export Promotion Schemes under Foreign Trade Policy

Arjun Traders was penalised Rs 6,00,000 under the FT(D&R) Act, 1992 and did not pay it. Which of the following is a recovery step that Section 11 does NOT provide for?

Automatic permanent cancellation of the IEC is not provided. Section 11(7) only lets the Adjudicating Authority suspend the IEC until the penalty is paid or recovered, while recovery by land revenue arrears and detention or sale of goods under customs control are expressly allowed.

  1. ASuspension of its IEC by the Adjudicating Authority until the penalty is paid or recovered
  2. BRecovery as arrears of land revenue through the Collector, if other modes fail
  3. CDetaining or selling goods belonging to it under customs control, as if payable under the Customs Act, 1962
  4. DAutomatic cancellation of its IEC permanently on non-paymentCorrect

Explanation

Section 11(7) allows the IEC to be suspended until the penalty is paid or recovered, not permanently cancelled automatically. The land revenue route is in 11(5)(d)(i) and detention or sale of goods is in 11(5)(c). Hence permanent automatic cancellation is not provided.

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