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CA Final · Indirect Tax Laws · Foreign Trade Policy

Rohan Impex failed to pay a penalty imposed under the FT(D&R) Act, 1992. The Director General first tried recovery by deducting from money owing to Rohan under the control of officers, and by customs officers detaining or selling Rohan's goods, but the amount could not be recovered. Which statement is correct as per Section 11?

When deduction and customs recovery fail, the Director General may send a certificate to the Collector of the District, who recovers the amount as an arrear of land revenue. Separately, the Adjudicating Authority may suspend the Importer-Exporter Code until the penalty is paid or recovered.

  1. AOnly the IEC may be suspended; no property can be attached
  2. BThe Director General may send a certificate to the Collector of the District for recovery as an arrear of land revenue, and the IEC may also be suspended by the Adjudicating Authority till paymentCorrect
  3. CThe IEC must be cancelled permanently, and no further recovery is allowed
  4. DRecovery is possible only through proceedings in a civil court

Explanation

Section 11(5)(d) allows, if recovery under clauses (a), (b), (c) fails, a certificate to the Collector for recovery as arrear of land revenue, or detention of property. Section 11(7) separately allows suspension of IEC till the penalty is paid. Permanent cancellation is not provided there, and civil court is not the mode.

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