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CA Final · Indirect Tax Laws · Importation and Exportation of Goods

Orion Gems Ltd imported identifiable goods and paid duty on 15 July 2022. The goods were entered for export on 20 August 2024, and the company shows sufficient cause for the delay. Which statement is correct under section 74 of the Customs Act, 1962?

The Board may extend the two-year period by such further period as it deems fit if sufficient cause is shown. The claim is not automatically lost. The law gives no fixed extension period and does not give this power to the proper officer.

  1. ADrawback is automatically lost as the two-year period has ended
  2. BThe Board may, on sufficient cause being shown, extend the two-year period by such further period as it deems fitCorrect
  3. CThe proper officer may extend the period by a maximum of six months
  4. DThe Central Government must extend the period by one year

Explanation

Goods must be entered for export within two years of payment of duty (15 July 2022 to 15 July 2024). Here entry was about one month late. The proviso to section 74(1)(b) lets the Board extend the period on sufficient cause by such further period as it deems fit. There is no fixed six-month or one-year extension, and no automatic loss.

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