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

The Central Government finds that a general practice prevailed of not levying duty on a certain imported item that was in fact dutiable. It issues a notification under section 28A(1) on 1 March directing that the duty need not be paid. An importer who had paid Rs 2,40,000 duty on the item wants a refund under section 28A(2). What is the correct position?

The importer must apply to the Assistant or Deputy Commissioner in the section 27(1) form before six months expire from the date the notification was issued. The refund is then dealt with under section 27(2), so it is neither automatic nor open-ended.

  1. AThe refund cannot be claimed because the notification only operates for future imports
  2. BThe application must be made before the expiry of six months from the date of issue of the notification, and the refund is dealt with under section 27(2)Correct
  3. CThe application may be made at any time within five years of the notification
  4. DThe duty is automatically refunded without any application

Explanation

Section 28A(2) covers duty paid which would not have been paid had the notification been in force, to be dealt with under section 27(2). The proviso requires an application in the form in section 27(1) before six months expire from the notification date. The other options contradict this.

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