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

Ganga Traders failed to pay a penalty imposed under the Foreign Trade (Development and Regulation) Act, 1992. Which action is expressly provided by Section 11 in addition to recovery of the penalty?

The Adjudicating Authority may suspend the Importer-Exporter Code Number until the penalty is paid or recovered. Section 11(7) provides this temporary suspension; it does not provide permanent debarment, imprisonment or cancellation of incorporation.

  1. ACancellation of the company's incorporation
  2. BSuspension of its Importer-Exporter Code Number by the Adjudicating Authority till the penalty is paid or recoveredCorrect
  3. CAutomatic prosecution with imprisonment of directors
  4. DPermanent debarment from all exports

Explanation

Section 11(7) states that, without prejudice to other provisions, the IEC of a person who fails to pay a penalty may be suspended by the Adjudicating Authority till the penalty is paid or recovered. The text provides for suspension, which is temporary, not permanent debarment, and mentions no imprisonment or incorporation cancellation.

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