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CA Final · Indirect Tax Laws · Refund

Mehta Foods imported a consignment of packaged fruit pulp and paid duty. On inspection it was found defective and had passed its recommended storage-before-use period, though it is identifiable and unused. Mehta proposes to export it back within thirty days and claims refund under section 26A. What is the position?

Refund is not allowed. Section 26A(3) states that no refund under sub-section (1) shall be allowed for perishable goods or goods that have exceeded their shelf life or recommended storage-before-use period. Identification of goods and timely export cannot cure this exclusion.

  1. ARefund is allowed because the goods are identifiable and are being exported within thirty days
  2. BRefund is allowed only if the Commissioner extends the thirty-day period
  3. CRefund is allowed if Mehta does not claim drawback under any other provision
  4. DRefund is not allowed because goods exceeding their recommended storage-before-use period are excludedCorrect

Explanation

Section 26A(3) bars refund for perishable goods and goods which have exceeded their shelf life or recommended storage-before-use period. Identification, timely export and not claiming drawback are necessary conditions but do not override this bar. Option A ignores the bar.

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