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CMA Final · Indirect Tax Laws and Practice · Export Promotion Schemes under Foreign Trade Policy

Meru Overseas' goods were confiscated by the Adjudicating Authority under Section 11(8) for contravention of the foreign trade policy. The market value of the goods is ₹6,50,000 and the conveyance used has a market value of ₹2,50,000. If both are to be released under Section 11(9), what redemption charges are payable in total, and on what basis?

The redemption charges are ₹9,00,000. Section 11(9) lets confiscated goods or conveyance be released on paying charges equal to their market value, so ₹6,50,000 plus ₹2,50,000 is payable. The five-times limit applies to penalty, not redemption.

  1. A₹9,00,000, equal to the market value of goods and conveyanceCorrect
  2. B₹6,50,000 only, since conveyance is not releasable
  3. C₹45,00,000, being five times the combined value
  4. D₹10,000, the minimum penalty

Explanation

Section 11(9) allows release of confiscated goods or conveyance on payment of redemption charges equivalent to the market value of the goods or conveyance, as the case may be. Goods ₹6,50,000 plus conveyance ₹2,50,000 gives ₹9,00,000. The five-times rule applies to penalties, not redemption charges.

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