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CA Final · Indirect Tax Laws · Foreign Trade Policy

Himalaya Gems Ltd was penalised ₹12,00,000 under the FT(D&R) Act, 1992 and has not paid it. The Director General has already tried deduction from money owing to the company, and recovery through customs officers by detaining goods, without success. Which course is correct under Section 11?

When deduction and customs-based recovery fail, the Director General can send a certificate to the Collector of the District for recovery as an arrear of land revenue, or detain property. Additionally, the Adjudicating Authority may suspend the IEC until the penalty is paid or recovered, under Section 11.

  1. AThe Director General may send a certificate to the Collector of the District, who recovers the amount as an arrear of land revenue, and the IEC may be suspended till the penalty is paidCorrect
  2. BRecovery is barred, because only the first three modes can be used
  3. CThe IEC must be cancelled permanently, with no further recovery
  4. DOnly a civil suit by the DGFT can be filed

Explanation

Section 11(5)(d) applies when recovery fails under clauses (a), (b) and (c). The Director General may send a certificate to the Collector, who recovers the sum as an arrear of land revenue, or detain property under (d)(ii). Under Section 11(7) the IEC may also be suspended till the penalty is paid or recovered. Permanent cancellation is not provided there.

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