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CA Final · Indirect Tax Laws · Foreign Trade Policy

Ganga Textiles failed to pay a penalty imposed under the FT(D&R) Act, 1992. The Director General has already tried deducting from money owing and recovering through customs officers by detaining or selling goods, without success. Which course is available under Section 11 for further recovery, and what additional consequence may follow for the firm's IEC?

If earlier modes fail, the Director General can issue a certificate to the Collector of the District, who recovers the penalty as an arrear of land revenue. Additionally, the Adjudicating Authority may suspend the IEC until the penalty is paid or recovered.

  1. AOnly prosecution; the IEC cannot be affected
  2. BA certificate may be sent to the Collector of the District to recover the amount as an arrear of land revenue, and the IEC may be suspended by the Adjudicating Authority till the penalty is paid or recoveredCorrect
  3. CThe penalty is written off after 30 days and the IEC is cancelled permanently
  4. DRecovery is possible only through GST authorities, and the IEC is unaffected

Explanation

Section 11(5)(d) permits a certificate to the Collector for recovery as arrears of land revenue if clauses (a), (b) and (c) fail. Section 11(7) allows suspension of the IEC by the Adjudicating Authority till payment or recovery. Permanent cancellation or write-off is not provided.

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