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CMA Final · Indirect Tax Laws and Practice · Remission of Duties

Hind Traders imported a consignment and, before any order for clearance for home consumption under section 47 was made, decided to relinquish title to the goods. Under section 23(2) of the Customs Act, 1962, in which case can it NOT relinquish its title?

An owner cannot relinquish title where an offence appears to have been committed under the Customs Act or any other law regarding the goods. Otherwise, before a clearance order or warehousing order is made, the owner may relinquish title and avoid the duty.

  1. AThe goods are not yet cleared and no offence appears to have been committed regarding them
  2. BAn offence under the Customs Act appears to have been committed regarding the goodsCorrect
  3. CThe goods are yet to be deposited in a warehouse under section 60
  4. DThe importer has not paid any duty on the goods

Explanation

Section 23(2) allows the owner to relinquish title before a clearance order under section 47 or a warehousing order under section 60, and then he is not liable for the duty. The proviso bars relinquishment where an offence appears to have been committed under the Act or any other law. The other options are situations in which relinquishment is allowed.

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