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

Under section 23 of the Customs Act, 1962, an importer's consignment is destroyed in a warehouse fire after arrival but before an order for clearance for home consumption. In which situation will the duty on the goods be remitted by the Assistant or Deputy Commissioner?

Duty is remitted when imported goods are lost or destroyed before clearance for home consumption and this is shown to the satisfaction of the Assistant or Deputy Commissioner. Loss by pilferage is excluded, and destruction after clearance is not covered.

  1. AThe goods were destroyed before clearance for home consumption, and this is shown to the officer's satisfactionCorrect
  2. BThe goods were lost by pilferage before clearance for home consumption
  3. CThe goods were destroyed after clearance for home consumption was ordered and removed from the port
  4. DThe goods were destroyed, but the officer is not satisfied with the evidence offered

Explanation

Section 23(1) requires that the goods be lost (other than by pilferage) or destroyed before clearance for home consumption, and that this be shown to the officer's satisfaction. Pilferage is expressly excluded. Destruction after clearance is outside the section.

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