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CA Final · Indirect Tax Laws · Foreign Trade Policy

Ganga Exports Pvt Ltd failed to pay a penalty imposed under the FT(D&R) Act, 1992. The Adjudicating Authority wants an action that operates on the firm's Importer-Exporter Code (IEC) without prejudice to the usual recovery modes. Which action is permitted by Section 11?

The Adjudicating Authority may suspend the Importer-Exporter Code of a person who fails to pay a penalty imposed under the Act, until the penalty is paid or recovered. This is separate from and without prejudice to the recovery modes listed in the section.

  1. AThe IEC may be cancelled permanently without any further condition
  2. BThe IEC may be suspended by the Adjudicating Authority until the penalty is paid or recoveredCorrect
  3. CThe IEC is automatically transferred to the firm's director
  4. DThe IEC remains unaffected, since recovery is possible only through land revenue proceedings

Explanation

Section 11(7) lets the Adjudicating Authority suspend the IEC of a person who fails to pay a penalty, till the penalty is paid or recovered. It is a suspension, not permanent cancellation, and it is additional to the recovery modes in Section 11(5).

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