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

Ravi Traders was penalised under the FT(D&R) Act, 1992 and has not paid. Which of the following consequences is provided by the Act for non-payment of a penalty?

The Adjudicating Authority may suspend the Importer-Exporter Code Number of a person who fails to pay a penalty, until the penalty is paid or recovered. The suspension is discretionary and temporary, not an automatic permanent cancellation.

  1. AThe Importer-Exporter Code Number may be suspended by the Adjudicating Authority until the penalty is paid or recoveredCorrect
  2. BThe IEC is automatically cancelled permanently
  3. CThe company is automatically barred from all domestic sales
  4. DThe penalty is waived after thirty days

Explanation

Section 11(7) says the IEC of a person who fails to pay a penalty may be suspended by the Adjudicating Authority until the penalty is paid or recovered. The power is discretionary and the suspension is temporary, so permanent automatic cancellation is wrong.

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