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CA Final · Indirect Tax Laws · Importation and Exportation of Goods

Kaveri Traders imported a machine and paid duty of Rs 5,00,000 on 1 June 2024. The machine is easily identifiable but was not exported within two years. On 1 October 2026 the company shows sufficient cause for the delay. Under section 74, what is the position?

The Board may extend the two-year period for such further period as it thinks fit, provided sufficient cause is shown in the particular case. Officers below the Board cannot extend it, and the period is not an absolute bar.

  1. AThe Board may extend the two-year period by such further period as it deems fit, on sufficient cause being shownCorrect
  2. BThe Assistant Commissioner may extend the period by one year
  3. CNo extension is possible once two years lapse
  4. DThe Central Government by notification must extend it for each case

Explanation

The proviso to section 74(1)(b) lets the Board extend the two-year period in a particular case on sufficient cause, for such further period as it deems fit. The Assistant Commissioner identifies goods but has no power to extend the period. Absolute bar is wrong because of the proviso.

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