CA Final · Indirect Tax Laws · Warehousing
Bharat Marine Supplies imports 1,000 units of provisions with duty Rs. 50,000 on the whole lot and enters them for warehousing as stores for vessels. It declares that the goods will be supplied as stores to vessels without payment of import duty. The bond for 600 units was cleared by exports as stores; 400 units remain, and Rs. 5,000 interest on a related demand is unpaid. Which statement is correct?
The proper officer may permit warehousing without assessment, because section 85 allows this when the importer declares the goods are to be supplied as stores to vessels or aircraft without payment of duty. The bond cannot yet be cancelled, since goods remain and dues are unpaid.
- AThe proper officer may permit warehousing without assessment to duty under section 85 on such a declarationCorrect
- BSection 85 requires duty assessment before warehousing even for ship stores
- CThe bond must be cancelled now since 600 of 1,000 units are accounted for
- DThe bond can be cancelled once 400 units are cleared, regardless of the interest due
Explanation
Section 85 lets the proper officer permit stores to be warehoused without assessment where the importer declares they are to be supplied to vessels or aircraft without payment of duty. Under section 73, cancellation needs the whole of the goods accounted for and all amounts due paid; here 400 units remain and interest is unpaid, so cancellation is premature.
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