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

Many importers of a certain machine part were, for several years, cleared at a lower duty rate under a prevalent practice, though the goods were actually liable to higher duty. The Central Government is satisfied that the practice was generally prevalent. Which course is available to it under section 28A of the Customs Act, 1962?

The Central Government may issue a notification in the Official Gazette directing that the duty not levied or short-levied because of the generally prevalent practice shall not be required to be paid. Section 28A gives this power when the practice and the liability to duty are established.

  1. ADirect by notification that the duty not levied or short-levied by reason of the practice need not be paidCorrect
  2. BAuthorise the Board by circular to recover the shortfall with interest from all importers
  3. CDirect the Commissioner (Appeals) to waive the duty in each pending case separately
  4. DRequire importers to apply individually to the Tribunal for exemption from the shortfall

Explanation

Section 28A empowers the Central Government, if satisfied about a generally prevalent practice and that goods were liable to duty or higher duty, to direct by notification in the Official Gazette that the duty not levied or short-levied under that practice shall not be required to be paid. The other options describe powers or routes not given by the section.

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