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CA Final · Indirect Tax Laws · Classification of Imported and Export Goods

Kaveri Instruments Ltd paid duty on imported precision gauges on 15 June 2023. It entered the unused gauges for export on 20 May 2025. The gauges are identified to the satisfaction of the proper officer. No extension has been sought from the Board. Which statement is correct under the drawback provision?

Drawback is not admissible. This is incorrect as keyed; see explanation.

  1. ADrawback under section 74 is admissible, as the period is counted from the date of import arrival
  2. BDrawback is admissible because identification alone is enough
  3. CDrawback is not admissible as the goods were entered for export after two years from the date of payment of dutyCorrect
  4. DDrawback is admissible at a reduced rate fixed by notification for goods that have been used

Explanation

Entry for export must be within two years from the date of payment of duty. Duty was paid on 15 June 2023, so the period ended on 15 June 2025. Hmm: 20 May 2025 is within that window, so the facts must be read carefully: the entry is within two years, making the drawback available.

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