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CA Final · Indirect Tax Laws · Foreign Trade Policy

Pioneer Gems Ltd was penalised ₹3,00,000 under Section 11 of the FT(D&R) Act, 1992 and has not paid. Separately, goods it attempted to export in contravention of the Policy were confiscated by the Adjudicating Authority under Section 11(8). Which statement is correct?

The Adjudicating Authority may suspend the defaulter's Importer-Exporter Code until the penalty is paid or recovered, and confiscated goods may be released on payment of redemption charges equivalent to their market value. Neither consequence is permanent, and redemption is not a fixed small percentage.

  1. AThe Adjudicating Authority may suspend the IEC until the penalty is paid or recovered, and the confiscated goods may be released on payment of redemption charges equal to their market valueCorrect
  2. BThe IEC is cancelled permanently, and confiscated goods can never be released
  3. CThe IEC can be suspended only by the Central Government, and redemption charges equal 10% of market value
  4. DThe IEC cannot be suspended unless goods are first confiscated, and release requires no payment

Explanation

Section 11(7) lets the Adjudicating Authority suspend the IEC of a person who fails to pay penalty till it is paid or recovered. Section 11(9) allows release of confiscated goods or conveyance on payment of redemption charges equivalent to market value. The other options misstate who suspends, permanence, the redemption amount or conditions.

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