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CA Final · Indirect Tax Laws · Refund

Lakshmi Pharma imported a batch of chemicals, paid duty, and found them non-conforming with agreed specifications. The chemicals are easily identifiable, unused, and the importer will destroy them in the presence of the proper officer within the permitted time. No drawback is claimed. However, the chemicals have exceeded their recommended storage-before-use period. Which statement is correct under section 26A?

Refund is not allowed. Section 26A(3) excludes perishable goods and goods that have exceeded their shelf life or recommended storage-before-use period. Satisfying the other conditions, including destruction before the proper officer, or obtaining a time extension, does not override this bar.

  1. ARefund is allowed because destruction before the proper officer satisfies clause (d)
  2. BRefund is allowed if the Commissioner extends the thirty-day period
  3. CRefund is not allowed, because goods that have exceeded their shelf life or recommended storage-before-use period are excludedCorrect
  4. DRefund is allowed only if the importer instead relinquishes title and abandons them to customs

Explanation

Section 26A(3) bars refund for perishable goods and goods that have exceeded shelf life or recommended storage-before-use period. This bar applies regardless of the mode of disposal, so destruction or relinquishment does not cure it, and an extension of time under the proviso only affects the thirty-day window.

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