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CA Final · Indirect Tax Laws · Levy of and Exemptions from Customs Duty

The Central Government finds that importers of a certain machine part were generally not paying duty for years because of a prevalent practice, though the goods were actually dutiable. It issues a notification under section 28A directing that the duty not paid need not be recovered. Gupta Ltd. had, however, paid the duty on such goods. What is Gupta Ltd.'s position?

Gupta Ltd. can claim a refund of the duty it paid, but must apply in the section 27 form to the Assistant or Deputy Commissioner before six months from the date of issue of the notification expire.

  1. AIt can claim a refund by applying within six months from the date of issue of the notificationCorrect
  2. BIt has no remedy because the notification only protects those who did not pay
  3. CIt can claim a refund at any time within five years of the notification
  4. DIt is entitled to automatic refund without any application

Explanation

Section 28A(2) treats duty paid that would not have been paid had the notification been in force as refundable under section 27(2). The proviso requires an application in the prescribed form to the Assistant or Deputy Commissioner before six months expire from the notification date. Option B ignores sub-section (2).

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