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CA Final · Indirect Tax Laws · Refund

Orchid Foods imported a consignment of packaged fruit pulp and paid import duty. It was later found that the pulp did not meet the agreed specifications, and the importer proposes to abandon it to customs and claim refund under section 26A. Consider these facts: (i) the pulp is perishable; (ii) the importer has not claimed drawback; (iii) the goods are identified as those imported; (iv) abandonment would be within 30 days of the section 47 order. Which statement is correct?

Refund is not allowed, because section 26A(3) prohibits refund under sub-section (1) for perishable goods. Even if identity is established, drawback is not claimed and abandonment is timely, the perishable nature of fruit pulp defeats the claim, so the other conditions cannot cure it.

  1. ARefund is not allowed because no refund under section 26A(1) is allowed for perishable goodsCorrect
  2. BRefund is allowed because all conditions including abandonment within 30 days are satisfied
  3. CRefund is allowed only if the importer also claims drawback
  4. DRefund is allowed if the Assistant Commissioner is satisfied about identity, regardless of perishability

Explanation

Section 26A(3) bars refund under sub-section (1) for perishable goods and goods that have exceeded their shelf life or recommended storage-before-use period. So the other satisfied conditions do not help. Option C is wrong because claiming drawback under any other provision disqualifies the refund. Option D ignores the perishability bar.

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