CA Final · Indirect Tax Laws · Warehousing
Nirmal Exports warehoused 1,000 units of goods under a bond. Of these, 600 units were cleared for home consumption with duty paid and 300 units were exported. The remaining 100 units are still in the warehouse, and all dues on cleared goods are paid. Can the proper officer cancel the bond under section 73?
No. Section 73 allows cancellation only when the whole of the goods covered by the bond have been cleared, exported, transferred or duly accounted for and all dues paid. Since 100 units remain in the warehouse, the bond cannot yet be cancelled.
- AYes, because duty on most goods has been paid
- BYes, because cleared and exported goods exceed 50% of the total
- CNo, because section 73 requires the whole of the goods covered by the bond to be cleared, exported, transferred or duly accounted forCorrect
- DNo, because a bond can be cancelled only after the goods are destroyed
Explanation
Section 73 applies when the whole of the goods covered by the bond have been cleared for home consumption, exported, transferred or otherwise duly accounted for and all amounts due are paid. 100 units remain, so the condition is unmet. No percentage test exists in the text.
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