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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. What is the position on duty?

Duty is remitted. Where the Assistant or Deputy Commissioner is satisfied that imported goods were destroyed before clearance for home consumption, section 23(1) requires remission of the duty. No relinquishment of title or partial payment is needed for this remission.

  1. AThe proper officer shall remit the duty if destruction is shown to his satisfactionCorrect
  2. BDuty is payable in full because the goods were already imported
  3. CDuty is payable only on half the value of the destroyed goods
  4. DDuty is remitted only if the importer first relinquishes title

Explanation

Section 23(1) provides that where it is shown to the satisfaction of the Assistant or Deputy Commissioner that imported goods have been lost (otherwise than by pilferage) or destroyed before clearance for home consumption, the duty shall be remitted. Relinquishment of title is a separate route under section 23(2) and is not a precondition.

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