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CMA Final · Indirect Tax Laws and Practice · Remission of Duties

Sundaram Traders imported a consignment and, before any order for clearance for home consumption was made, wished to relinquish title to the goods. Which statement is correct under section 23 of the Customs Act, 1962?

The owner may relinquish title before an order for clearance or warehousing is made and then owes no duty, but not for goods in respect of which an offence appears to have been committed. The right ends once the order is made.

  1. ARelinquishment is allowed at any time before the order for clearance under section 47 or warehousing under section 60, and duty is not payable, unless an offence appears to have been committed regarding the goodsCorrect
  2. BRelinquishment is allowed even after clearance for home consumption if the duty is paid
  3. CRelinquishment is allowed even where an offence appears to have been committed, if a penalty is paid
  4. DRelinquishment frees the owner from duty only if the goods were lost or destroyed

Explanation

Section 23(2) lets the owner relinquish title before the clearance order under section 47 or warehousing order under section 60, and he is then not liable for duty. The proviso bars relinquishment where an offence appears to have been committed. Allowing it after clearance or on payment of penalty is not in the text.

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