CMA Final · Indirect Tax Laws and Practice · Refund
Mehta Machines Ltd imported a consignment of machine parts and paid duty. The parts were found not to conform to the agreed specifications. Which condition must the importer satisfy to get a refund of import duty under section 26A of the Customs Act, 1962?
Refund under section 26A needs the importer not to claim drawback under any other provision, and the goods must not have been worked, repaired or used after importation, except where use was indispensable to discover the defects or non-conformity. The goods must also be identified as those imported.
- AThe importer must also claim drawback under another provision of the Act to prove the goods were re-exported
- BThe importer must not claim drawback under any other provision of the Act, and the goods must not have been worked, repaired or used after importation, except where use was indispensable to discover the defectsCorrect
- CThe goods may be freely repaired and used after importation, provided they are later exported
- DThe goods need not be identified, as long as the duty payment is proved
Explanation
Section 26A(1) requires the goods to be defective or non-conforming, identified to the satisfaction of the officer, with no drawback claimed under any other provision, and not worked, repaired or used except where use was indispensable to discover the defect. Claiming drawback too would disqualify the refund.
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