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

Under the Customs Act, 1962, imported goods stored in a port shed are destroyed in a fire before an order for clearance for home consumption is made. The importer shows this to the satisfaction of the proper officer. What is the position on the duty on such goods?

The duty is remitted. Under section 23(1), when imported goods are destroyed before clearance for home consumption and this is shown to the satisfaction of the Assistant or Deputy Commissioner, that officer shall remit the duty. Loss by pilferage is excluded, but destruction by fire is covered.

  1. AThe duty must be paid because the goods were already imported
  2. BThe duty is remitted by the Assistant or Deputy Commissioner of CustomsCorrect
  3. CThe duty is payable at half the normal rate
  4. DThe duty is remitted only if the goods were lost by pilferage

Explanation

Section 23(1) says that where imported goods are lost (otherwise than by pilferage) or destroyed before clearance for home consumption, and this is shown to the officer's satisfaction, the officer shall remit the duty. Fire destruction before clearance qualifies. Option 4 is wrong because pilferage is specifically excluded from remission.

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