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CA Final · Indirect Tax Laws · Levy of and Exemptions from Customs Duty

Kaveri Exports Ltd received an order determining short-levied duty of Rs 10,00,000 by reason of suppression of facts. It did not pay within thirty days. On appeal, the Appellate Tribunal reduced the duty to Rs 6,00,000. What is the penalty under section 114A on the duty as finally determined, ignoring the reduced-penalty benefit?

The penalty is Rs 6,00,000. Section 114A fixes the penalty equal to the duty determined, and where the Appellate Tribunal reduces the duty, the reduced amount is taken into account. The original Rs 10,00,000 is superseded, and no concession applies since payment was not made within thirty days.

  1. ARs 10,00,000
  2. BRs 1,50,000
  3. CRs 4,00,000
  4. DRs 6,00,000Correct

Explanation

The penalty equals the duty determined. Under the third proviso, where the Appellate Tribunal reduces the duty, the reduced duty is taken into account. The penalty is therefore equal to Rs 6,00,000. Rs 10,00,000 is wrong because it uses the original, superseded duty figure.

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