FINAL EXAMINATION: MAY, 2023

Question 2
(b) ABC Industries of Mumbai imported certain goods from United States of America.
Expenses incurred with respect to import are given below:
Cost of Goods $ 40,000

Transport charges from factory of exporter to the port for shipment $ 800
Freight charges from US to India $ 5,000

Lighterage charges paid by ABC Industries at the port in India ` 12,000

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 Freight incurred from port of entry to Inland container depot ` 40,000
Ship demurrage charges paid at Indian port of importation ` 12,000
ABC Industries incurred designing charges necessary for those goods ` 75,000
which were paid to WOW Designers in New Delhi.

Date of Bill of Entry is 16.02.2023 (Rate of BCD 20%, Notified Exchange Rate by CBIC is
` 70 per US $)
Date of Entry Inward 16.03.2023 (Rate of BCD 10%, Notified Exchange Rate by CBIC is
` 75 per US$)
SWS rate is 10% and rate of IGST is ` 12%. Compute Assessable Value of imported
goods, Basic Customs Duty and IGST. Ignore GST Compensation Cess. (5 Marks)

Question 3
(C) Importer Mr. M is engaged in importing and distributing of sports goods. He imports sports
product from Mr. Q of Malaysia and sells it under brand name "TrueSpeed". To publicize the
product, Mr. M spent on AMP (Advertisement, Marketing and Promotion) of the product.
The department contended that AMP expenses incurred by M were required to be added
in the value of imported goods. Whether the contention of department is correct?
(5 Marks)
Question 4
© The custom authorities of India noticed that there is an increase in the quantity of Solar
PV Products imported into the country. So, on the recommendation of Director General
(Specific Safeguard), the Central Government via Notification in Official Gazette imposed
safeguard duty @25% on the import of Solar PV Products.
ABC Exports an importer in Bhuvneshwar imported Solar PV Products from Vietnam at
landed price (exclusive of duties) of ` 30 lakh. Assume that IGST u/s 3(7) is 12%, BCD is
10% and SWS @10%. Determine the total duties payable under Customs Act. Ignore
agriculture infrastructure and development cess.
Will it change your answer if ABC Exports is a SEZ unit? Explain discussing applicable
provisions. (5 Marks)
Question 5

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 © Mr. Noddy, aged 40 years and a citizen of Australia, is on a solo trip to India for 1 month to
meet his Indian friend residing in Mumbai. He carries with him following articles as part of
baggage:
Particulars Value in `
Used personal effects 80, 000
Other articles carried on in person 1,00,000
65 cartridges of fire arms @ ` 1,000 per cartridge 65,000
150 gms of tobacco @ ` 10 per gram 1,500
Mobile phone 50,000
50 cigars of ` 100 each 5,000
Used personal effects of his infant child for donation 10,000
With reference to the Baggage rules 2016, indicate the taxability and taxable value in
respect of each item in the table under baggage rules or otherwise. Also calculate the
customs duty payable on baggage rounded off to the nearest rupee in accordance with
law. Ignore agriculture infrastructure and development cess. (5 Marks)

Question 6
© Under which provisions of Constitution of India, government is empowered to levy taxes,
custom duty and export duties. You are required to write a note on related provisions and
restrictions under the Constitution of India. (5 Marks)

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 Question 2
(B) Mr. X, a chemical manufacturer, imports a machine from Germany on 12 th January, 2019 for
` 20 lakh. Mr. X is eligible for concessional rate of customs duty on capital goods imported by
him subject to the condition that he follows the Customs (Import of Goods at Concessional Rate
of Duty) Rules, 2017. Machinery was put to use on 1st February, 2019. On 5th April, 2022, Mr. X
wants to clear the machine for home consumption after having used the machine for the
specified purpose for which it was imported. Mr. X requires your help in calculating the customs
duty he will be liable to pay for such clearance as per rule 7 of the Customs (Import of Goods
at Concessional Rate of Duty) Rules, 2017. Concessional rate of basic customs duty is 5%.
Normal rate of basic customs duty is 20%. Calculate the basic customs duty payable by Mr. X on
clearance of such capital goods for home consumption on 5th April, 2022. Ignore interest
calculation. (5 Marks)
Question 3

© KIP Chemical, Ahmedabad, Gujarat supplies goods to ACCP, Bharuch, situated in Dahez SEZ
(Gujarat). Examine with reference to decided case law, whether such supply is chargeable to
export duty under the provisions of Customs Act, 1962. (5 Marks)
Question 4
© Mission Life, an NGO, from Indore, M.P. has imported 800 MT of food products from
Australia for free distribution to needy people in backward area of Sagar, M.P. under a Central
Government scheme.
Exporter from Australia has charged only US$ 20 per MT to cover costs towards freight,
insurance etc. and none towards cost of food products. Customs Department found that at
or about the same time of importation, following imports of said food products of Australian
origin have been made:

S. Quantity imported in MT Unit CIF price in US$

No
1. 40 270
2. 100 220
3. 500 200
4. 900 180
5. 400 190
6. 760 160
Discuss the various principles to determine the transaction value of aforesaid transaction
under the Customs Act, 1962 and determine the CIF price that can be considered for
assessment in this case. (5 Marks)
Question 5
© Kiara of Indian origin, came to India on tour with her baby of 1 year. She brought following goods:
1. Personal effects 50,000
2. Used personal effects of infant 10,000
3. New camera 45,000
4. Mobile phone 12,500
5. Cigarette sticks 70 1,000
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 6. Wine - 2 litres 18,000
7. Travel souvenirs 5,000
8. Laptop 90,000
Indicate the taxability or taxable value in respect of each item in the table and calculate
customs duty payable rounded off to the nearest rupee in accordance with law. There is
no need for any notes to support the conclusions regarding taxability or taxable amount.
(5 Marks)

Question 6
c) What are the exceptions provided under sub-section (2) of section 27 of the Customs Act,
1962 in which refund of duty and interest may be paid to the applicant? (5 Marks
FINAL EXAMINATION: MAY, 2022

Question 2
(a) A non-resident Indian from USA donated food processing machinery to Om Charitable
Trust (OCT). OCT, however, paid commission to local agent in India.
Assistant Commissioner of Customs determined the FOB value of machine at US $ 17,500
including design and development charges. The trust accepted the value determined.
Actual air freight paid was US $ 4,000 and insurance cost was US $ 1,500. Other details
available are given below:
(i) Commission paid to local agent of the exporter is US$ 2,100 (paid in ` 1,57,500).
(ii) Date of Bill of Entry presentation is 25th March, 2022. On this date, rate of BCD is
10%. Rate of exchange notified by CBIC is ` 75 per US $; Reserve Bank Rate is
` 76 per US $.
(iii) Date of arrival of aircraft at customs station is 5th April, 2022.
On this date, rate of BCD is 15%, rate of exchange notified by CBIC is ` 74 per
US $; Reserve Bank Rate is ` 75 per US $.
(iv) Social welfare surcharge is leviable @ 10% and applicable IGST rate is 18%
Compute the assessable value under the Customs Act and also calculate basic customs
duty payable, social welfare surcharge and IGST on import of machine. Assume that no
exemption is available on this transaction and make suitable assumptions, if required.
(5 Marks)
Question 3
(c) "The laptop supplied along with software loaded on hard disk drive has to be classified as
laptop and valuation has to be made as one unit. The classification also has to be
determined accordingly." Examine this statement with reference to classification and
valuation of laptop under Customs Act, 1962 read with relevant rules and relevant judicial
pronouncement, if any. (5 Marks)
Question 4
(c) Joginder & Co. imported goods valued at ` 12,00,000 vide a bill of entry presented before
the proper officer on 15th December 2021, on which date the rate of customs duty was
20%. The proper officer decided that the goods should be subject to chemical test and

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 therefore, the same were provisionally assessed at a value of ` 12,00,000 and
Joginder & Co. paid provisional duty of ` 2,40,000 on the same date after fulfilling the
requirements for provisional assessment.
What are the conditions which are to be complied before payment is made for the purpose
of provisional assessment?
Determine the amount of interest payable, if any, under section 18 of the Customs Act,
1962 assuming that the payment of the final duty is assessed on 31st January 2022 at
` 3,80,000 and the balance duty is paid on the same day. (5 Marks)

Question 5
(c) (i) Mr. Cliff Paul, a resident and citizen of USA, visits India on a business tour. He made
declaration to the proper officer about his baggage under section 77 of the Customs Act,
1962 for the purpose of clearance. During the scrutiny of the declaration, proper officer found
that some of the articles declared in baggage brought with him were prohibited to be
entered in India and were detained by the officer.
Although Mr. Paul did not insist to clear those articles, value of those articles was
very high and it was a difficult situation for him. You are required to advise any
procedure prescribed under customs law to overcome the situation. Give your advice

(ii) Raghu Limited imported a machine from Japan. The payment includes ` 2,00,000 for
post importation charges for installation and testing at the site of Raghu Limited in
India. These charges are payable as a condition for sale of the imported machine.
The department contends that this amount is includible in the assessable value.
Examine the correctness of the stand taken by the Department. (2 Marks)
Question 6
(c) Distinguish between Advance Authorization and DFIA (Duty Free Import Authorization)
schemes. (5 Marks)

FINAL (NEW) EXAMINATION: DECEMBER, 2021

Question 2
(b) PPR Engineering, a manufacturer of tools and spares of Punjab, imports a CNC machine
from USA. Contracted CIF price for import was US $ 15,500. Due to fluctuation of price of
machine in international market, price of the machine was re-negotiated after placing the
order and finally the machine was agreed to be imported at US$ 14,000 CIF. Actual freight
paid was US $ 3,000 and insurance cost was US $ 1,800. Other information is given below:
a. Cost of inspection carried out by foreign supplier on his own account was US $ 300,
and the same was neither required under the terms of contract nor for making the
goods ready for shipment.
b. Commission payable to local agent of the exporter was US $ 184. (It is not a buying
commission).
c. Date of bill of entry presentation is 25th February, 2021. On this date, rate of BCD is
10%, rate of exchange notified by CBIC for 1 US $ is ` 73, RBI rate is ` 71.
d. Date of arrival of aircraft at customs station is 5th March, 2021. On this date, rate of
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 BCD is 15%, rate of exchange notified by CBIC for 1 US $ is ` 74, RBI rate is `
72.
You are required to compute the assessable value and calculate basic customs duty
payable by PPR Engineering. (5
Marks)

Question 3
(c) Supreme Car Decors imported car music systems and GPS devices from Germany. The
importer submits the following issues for your consideration:
(i) 7 music systems were pilfered before unloading and before the proper officer
hasmade an order for clearance for home consumption.
(ii) 10 GPS devices were pilfered after unloading and before the proper officer has made
an order for clearance for home consumption.
(iii) 30 music systems were damaged after unloading and examination for assessment by
the customs authorities but before actual home clearance.
Supreme Car Decors seeks your expert advice with reason regarding the impact on
customs duty on the said goods.(5 Marks)

Question 4
(c) With reference to the Customs Act, 1962, decide the validity of the following independent
cases with proper legal provisions:
a. Apex Rubber Limited is a 100% EOU located in a Special Economic Zone. It imported
certain items from China for its production process. Customs officer proposed to
impose anti-dumping duty on such imports. The importer contends that no anti-dumping
duty can be imposed on imports by a 100% EOU under any circumstances.
b. Customs Department proposed to impose anti-dumping duty retrospectively in
respect of certain items. Importer's association claimed that anti-dumping duty cannot
be levied with retrospective effect under any circumstances. (5 Mark)
Question 5
(c) Mr. X, an Indian resident, returns to India on 10.04.2021 after visiting France for 3 months.
On his return to India, he brings with him following articles:
a. Used personal effects like clothes etc. valued at ` 1,75,000
b. Music system valued at 1,20,000
c. Jewellery valued at ` 1,30,000 measuring 20 grams brought by Mr. 'X'
d. Laptop worth ` 1,20,000
e. Wine 1 litre worth ` 6,000
f. Mobile phone worth ` 50,000
You are required to determine the taxable value of baggage with reference to the Baggage
Rules, 2016.(5 Marks)
Question 6

(c) List the goods (with specific conditions) which are not entitled to drawback under
section 74 of the Customs Act, 1962. (5 Marks)

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 FINAL (OLD) EXAMINATION: JULY, 2021

Question 2
© An importer imported a machine from Germany. The vessel carried the machine up to
Chennai port and from the Chennai port the machine was transhipped to Kandla port.
Determine the assessable value under Customs Act, 1962. Conversion to Indian rupees has
already been done wherever required.
S.No. Particulars Amount in
rupees
i Basic cost of the machine at the factory in Germany 2,00,000
ii Transport charges of the machine from the factory in Germany 10,000
to the load port for transportation to India
iii Loading and handling charges at the load port in Germany for 2,000
loading the machine on the ship
iv Freight charges payable to the shipping company for transport 10,000
to India
v Insurance charges paid but not ascertainable -
vi Transhipment charges from Chennai to Kandla port 5,000
vii Unloading and handling charges paid at Kandla port 2,000
Provide brief note to support your conclusion wherever required. (5 Marks)
Question 3
(c) Mr. Chandrakant imported a car from Britain (UK). After the car arrived in the port and was
unloaded, he went and saw the car and found that it was damaged and it was possible to
get the car repaired and use it. The examination by Customs for the purpose for
assessment is not over. He has come to you seeking advice as to what are the options
available to him under the Customs Act, 1961? (5 Marks)
Question 4
(c) Determine the customs duty payable under the Customs Tariff Act, 1975 including
the safeguard duty of 25% under section 8B of the said Act with the following information
made available by the importer:

Assessable value of fibre granules imported from three developing ` 25,00,000

countries during July 2020
Share of imports of fibre granules from three developing countries taken 10%
together against total imports of fibre granules to India
Rate of basic customs duty 10%
Rate of integrated tax 12%
Rate of social welfare surcharge 10%
(5 Marks)

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 PAPER – 8: INDIRECT TAX LAWS 9
Question 5
(c) (i) Compute the interest payable to an exporter in the following case of delayed
payment of drawback as per the Customs Act, 1962.
The claim was made on 30th June, 2020 for ` 80,000 and was settled on
15th September 2020. (3 Marks)
(ii) Compute the interest payable by the exporter under the Customs Act, 1962 in the
case of recovery of ` 10,000 paid erroneously on 3rd July, 2020. Demand for recovery
was issued on 5th September, 2020 and the exporter paid back the amount on
3rd November, 2020. (2 Marks)
Question 6
(c) List the important aspects to be borne in mind in claiming drawback under section 75
of the Customs Act, 1962 on imported materials used in the manufacture of export
goods.
(5 Marks)

January 2021
Question 1
Question 2
(b) ABC Trade International Limited has imported one machine from USA. It has given
the following particulars:
(i) Price of the machine 10,000 USD
(ii) Freight paid (air) 2,500 USD
(iii) Design and development charges paid to supplier in USA 500 USD
(iv) Commission payable to local agent of exporter, paid by 14,000
ABC Trade International Limited
(v) Date of bill of entry 24-10-2019
- Rate of Basic Customs Duty (BCD) 10%
- Exchange rate as notified by CBIC: ` 70
per USD
- Inter-bank exchange rate on the date of
bill of entry: ` 72 per USD
(vi) Date of arrival of aircraft 20-10-2019
- Rate of Basic customs duty (BCD) 20%
- Exchange rate as notified by CBIC ` 68
per USD
- Inter-bank exchange rate on the date of
arrival of aircraft: `71 per USD
(vii) IGST rate: 12%
(viii) Insurance charges have been actually paid but details are not available.
Compute the total customs duty and IGST payable by ABC Trade International Limited.
Note: Ignore GST compensation cess and social welfare surcharge. (5 Marks)
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 Question 3 PAPER – 8: INDIRECT TAX LAWS 1
(b) (i) Explain the provisions of Customs Act, 1962 relating to computation of limitation
for submission of refund application. (2 Marks)
(ii) Would the period of limitation for claiming refund applicable to refund of amount paid
on account of duty paid twice under mistake? Briefly discuss with reference to legal
provisions and case law. (3 Marks)

Question 4
(c) Precise Finishing Ltd. imported consignment of graphic design system and one
electronic flat knitting machine. The graphic design system is a computer system
required to design the artwork which shall be knitted by the flat knitting machine.
Graphic design system is not an integral part of electronic flat knitting machine.
In exercise of the powers conferred by sub-section (1) of section 25 of the Customs Act,
an exemption had been granted in respect of electronic flat knitting machine and falling
within Chapter 85 of the First Schedule to the Customs Tariff Act, 1975. The exemption
does not include any specific mention of accessories to the machine. Precise Finishing
Ltd. has claimed exemption of the said notification in respect of Graphic Design System
also as accessory of Flat Knitting Machine.
The Customs Department rejected the importer's claim for exemption on Graphic Design
System. Examine whether the Department's action is sustainable in law. (5 Marks)

Question 5
(b) Elaborate the meaning and historical background of "customs". Also elucidate
the constitutional entries/provisions which provide the power to make laws relating to
customs duty, and who possesses the power to make such laws. (5 Marks)

Question 6
(c) Great Year Ltd. imported a offset printing machine from Germany for ` 5.00 crores
and the bill of entry for home consumption was cleared in October, 2019 on
payment of duty. However, due to certain technical glitches, the said machine
could not be started functioning and the said machine was sent-back to the
supplier for repairs in November, 2019. The manufacturer of machinery in
Germany had made necessary repairs and had sent back the machine again to
Great Year Ltd.
Accordingly, Great Year Ltd. re-imported the machine without any re-manufacturing or
reprocessing in March 2020. Since the machine was having manufacturing defect, the
repairs were carried out by the machine manufacturer without charging any amount for the
repairs. However, the fair cost of repairs carried out including cost of material consumed
during repairs for ` 70 lakh, would have been ` 90 lakh.
Actual insurance and freight charges incurred were ` 7.5 lakh each side from India to
Germany and from Germany to India. Assume the rate of basic customs duty is 10%,
social welfare surcharge is 10% and integrated tax is 18%.
You are required to compute the amount of customs duty payable (if any) on re-importation
of the machine. Make the necessary assumptions, if required. Also, provide the exemption,
if any, with regard to re-importation of goods which had been exported for repairs
abroad. (5 Marks)
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 Question 1 PAPER – 8: INDIRECT TAX LAWS 2

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 PAPER – 8: INDIRECT TAX LAWS 3
FINAL (NEW) EXAMINATION: NOVEMBER, 2019

Question 2
(b) Mr. X has imported a machine from Japan in June, 2018 for ` 50 lakh. However,
the machine was exported back in December, 2018 for repairs. The supplier has
agreed to carry out the repairs as the machine was still in warranty period, which
would normally take 6 months. The fair cost of the repairs will cost ` 10 lakh. In the
meantime, Mr. X has requested the supplier to provide him another machine so
that he can carry out his operations without hindrance. Acceding to the request, the
supplier has provided him with another machine which was imported during February,
2019. The value of the new machine is ` 55 lakh. Freight charges incurred were ` 2
lakh. You are required to compute the assessable value and total duty payable for
the above transaction of replacement.
Customs duty is 10% and IGST is 12%. Social Welfare Surcharge to be taken at 10%.
(5 Marks)
Question 3

(c) During the year 2018, the customs authorities have noticed that there is an
increased quantity of Product XYZ being imported, into the country. Determine
whether the Central Government should consider levying safeguard duty or anti-
dumping duty with appropriate reasons.
Also enumerate any exemptions/reliefs available from such duty. (5 Marks)
Question 4
(c) Mr. X imported certain goods from a related person Mr. Q of US and transaction
value has been rejected. Rules 4 and 5 of the Import Valuation Rules are found
inapplicable as no similar/ identical goods are imported in India. Mr. X furnishes
cost related data of imports and requests customs authorities to determine value
accordingly as per rule 8. The relevant data are
Cost of materials incurred by Mr. Q $ 2000
Fabrication charges incurred by Mr. Q $ 1000
Other chargeable expenses incurred by Mr. Q $ 400
Other indirect costs incurred by Mr. Q $ 250
Freight from Mr. Q 's factory to US port $ 250
Loading charges at US port $ 100
Normal net profit margin of Mr. Q is 20% of FOB
Air freight from US port to Indian port $ 1,500
Insurance from US port to Indian port $ 50
Exchange rate ` 70 per $
The customs authorities are of the opinion that since value as per rule 7 can be determined
at ` 4,00,000, there is no need to apply rule 8.
Can the request of Mr. X be legally acceptable? If so, compute the assessable value under
the Customs Act, 1962. (5 Marks)
Question 5
(c) Mrs. X, an Indian resident who was on a visit to China, returned after months. She
was carrying with her the following items:
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 PAPER – 8: INDIRECT TAX LAWS 1

(i) Personal effects ` 75,000

(ii) Laptop computer ` 60,000
(iii) Jewellery - 25 grams (purchased in China) ` 75,000
(iv) Music system ` 50,000
Compute the customs duty payable by Mrs. X with reference to the Baggage Rules, 2016.
(5 Marks)
Question 6
(c) M/s PQR has imported used wearing apparel from USA in April 2019. After
receipt, PQR is doubtful that the apparel may not be saleable in India and want to re-
export back to USA, without use, which the supplier has accepted. Will PQR be
eligible to take drawback of duty paid on imports? Also, list out the conditions for
duty drawback. (5 Marks)
FINAL (NEW) EXAMINATION: MAY, 2019

Question 2
(B) Determine the total duties (duty, tax and cess) payable under Customs Act if Mr. Rao
imported rubber from Malaysia at landed price of ₹ 25 lakh. It has been notified by the Central
Government that share of imports of rubber from the developing country against total imports to
India exceeds 5%. Safeguard duty notified on this product is 30%, rate of integrated tax u/s 3(7)
is 12% and rate of basic customs duty is 10%. (5 Marks)
Question 3
(B) Determine the Assessable value under customs law of an imported machine based on the following
information :
(1) Cost of machine
(Contract price = ₹ 1,00,000, Revised price = ₹ 2,00,000, Negotiated &
Agreed price = ₹ 1,50,000)
(2) Freight from the factory of the exporter to the port for shipment = ₹ 20,000
(3) Freight incurred from port of entry to inland container depot = ₹ 60,000
(4) Handling charges paid for loading the machine in the ship = ₹ 5,000
(5) Demurrage charge paid at port = ₹ 30,000
(6) Buying commission paid by importer = ₹ 5,000
(7) Commission paid to local agent appointed by exporter = ₹ 1,000
(8) Vendor inspection charges (not required under contract) = ₹ 8,000
(5 Marks)
Question 4
(c) Mahesh imported certain goods in May 2018 and ‘ínto bond’ bill of entry was
presented on 14th May 2018 and goods were cleared from the port for warehousing.
Assessable value on that date was US $ 1,00,000. The order permitting the
deposit of goods in warehouse for 4 months was issued on 21st May 2018. Mahesh
deposited the goods in warehouse on the same day but did not clear the imported
goods even after the warehousing period got over on 21st September 2018. A
 notice was issued under section 72 of the Custom Act, 1962, demanding duty and
interest. Mahesh cleared
PAPER the
– 8:goods on 14TAX
INDIRECT th October 2018. Customs duty paid on
LAWS 2
removal of the goods is ₹ 7,17,000. You are required to compute interest payable
on such removal, explaining the provisions of the Customs Act, 1962.
(5 Marks)
Question No.5
(c) Z Ltd. a 100% export oriented unit cleared some goods to a unit in domestic traffic
area and some irregularity was committed and therefore a show cause notice
demanding custom duty was issued. Is the show cause notice defective in law?
Express your views with reference to some decided case law, if any. (5 Marks)
Question 6
(c) State export categories/sectors which are ineligible for duty credit scrip entitlement
under Merchandise Exports from India Scheme (MEIS) of Foreign Trade Policy.
(5 Marks)
Nirav Shah used some duty paid inputs for manufacture of the export products. However,
for the rest of the inputs, he wants to apply for advance authorization. Can he do so?
Advise him with reference to the Foreign Trade Policy 2015-2020.
 2
Question No.1
(c) Jolly overseas Ltd. of Hyderabad has imported a machine from U.K (England)
through the sea route by a vessel. The details of the import transaction are as
follows:
Sl. Particulars Amount in U.K. (£)
No.
(i) Cost of the machine at the factory of the exporter 20,000
(ii) Transport charges from the factory of exporter to the port for 600
shipment
(iii) Handling charges paid for loading the machine on the ship at 500
the port of exportation
(iv) License fee relating to the imported goods payable by the 900
importer as a condition of sale
(v) Actual Freight charges from the port of export to the port of -
import are not ascertainable
(vi) Actual insurance charges paid 200
(vii) Landing charges paid at the place of importation are not
-
ascertainable

(i) Handling charges associatedwith the delivery of the imported ` 15,000

goods at the place of importation
 1 Bill of entry: Dated 21.01.2018 3
Exchange rate on that day:-
(a) Notified by CBEC 1 UK £ = ` 101
(b) prescribed by RBI 1 UK £ = ` 100
2 Entry inward: Dated 26.01.2018
Exchange rate on that day:-
(a) Notified by CBEC 1 UK £ = ` 102
(b) prescribed by RBI 1 UK £ = ` 103
Compute the assessable value of the machine (in rupees) for the purpose of levy of
Customs Duty. (5 Marks)
Question 2
(d) Who can suspend/cancel the warehouse licence and on what grounds? What is
the effect of suspension or cancellation on the warehouse and the goods in the
warehouse? Explain in brief with reference to provisions relating to cancellation of
licence of Warehouse under section 58B of the Customs Act, 1962. (5 Marks)
(e) With regard to the powers of the Customs officers to draw samples under section
144 of the Customs Act, 1962, indicate
I. The purposes for which samples can be drawn;
II. When can the samples be drawn;
IlI. The provisions for disposal of the samples after the purpose is over. (5 Marks)
Question 3
(d) The Settlement Commission settled a case relating to recovery of drawback. The
Customs department contends that the recovery of duty drawback does not involve
levy, assessment and collection of customs duty as envisaged under section 127A
(b) of the Customs Act, 1962. Therefore Settlement Commission does not have
jurisdiction to settle the case.
Discuss with the help of the decided case law, if any, whether the Settlement Commission
have jurisdiction to settle cases relating to the recovery of drawback erroneously paid by
the Revenue? (5 Marks)
Question 4
(d) Payal Company, a unit located in Agri Export Zone has made exports of machineries
worth US $ 30 lakh per annum (on an average) during the last three years and in
the current year. It wants to export certain goods for export promotion on free of cost
basis, which are worth ` 25 lakh. 1 US $ = ` 50. Examine whether Payal
Company can export, export promotion goods on free of cost basis as proposed.
(5 Marks)
Question 5
(d) In an order issued to SC Ltd., the adjudicating authority has confirmed a duty demand of`
50 lakhs and imposed a penalty of equal amount under section 114A of the Customs Act,
1962, plus a penalty of ` 1 lakh under section 117 of the Customs Act, 1962. Their appeal
to Commissioner (Appeals), challenging the duty demand and imposition of penalty after
payment of required pre-deposit was dismissed. Now, they wish to file an appeal before
CESTAT.
Indicate the amount they paid when they filed appeal before the Commissioner (Appeals)
and they are required to pay towards pre deposit for filing the appeal under section 129E
of the Customs Act, 1962 before the Customs, Excise, and Service Tax Appellate Tribunal:
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 (a) if they dispute their liability to pay duty and penalties;
(b) if they accept the duty liability but dispute the imposition of penalties.
4
Briefly explain the legal provisions relating to pre-deposit for appeals before first appellate
authority and CESTAT. (5 Marks)
Question 6
(d) In January, 2018, Rock & Rock India Ltd. imported a consignment from U.S.A (by
sea). The value of consignment was ` 7,50,000 and total duty payable was `
1,50,000.
Company filed bill of entry for home consumption but before inspection and clearance for
home consumption it found that the goods were damaged.
On filing a representation to the Customs Department, proper officer refused the claim for
abatement because goods were already unloaded. The proper officer is in agreement with
the claim that the value of goods has come down to only ` 1,50,000.
Examine the issue with reference to the relevant statutory provisions and calculate the
amount of total duty payable:
Would your answer be different in the above case if the goods get deteriorated after
unloading and examination but before clearance for home consumption, and value comes
down to ` 7,00,000 ? (5 Marks)

FINAL (NEW) EXAMINATION: MAY, 2018

Question 1

(c) Niketan Industries Ltd., New Delhi has imported certain machine (by sea) from Japan.
From the following particulars furnished by it, work out the assessable value of the machine
and customs duty payable by Niketan Industries Ltd. with appropriate working notes:
S. No. Particulars Amount in
( `)
(i) CIF value of the machine 4,23,379.69
(ii) Freight incurred from port of entry to Inland Container depot 25,000.00
(iii) Unloading and handling charges paid at the place of importation 40,000.00
(iv) Designing charges paid to Consultancy firm in Mumbai 10,000.00

1. Basic Customs Duty leviable 10% advalorem

2. Integrated tax leviable under section 3(7) of the Customs
Tariff Act, 1975 is 18%.
3. Note: Ignore GST Compensation Cess.

Question 2
(d) What is the warehousing period for capital goods and other goods in the case of EOUs,
EHTPs, STPs, and for warehouses where manufacture/ other operations are permitted
under section 65 of Customs Act, 1962 and also in other cases? Can the warehousing
period be extended? (5 Marks)
Question 3
(c) A consignment containing many items was imported by Suraj. On examination of the
goods, it was found that he had made misdeclaration in respect of all the items. You are
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 required to indicate the penalty imposable under section 112 of Customs Act, 1962 in each
case given below. Values are exclusive of customs duties. Basic Customs Duty is 10%,
Education cesses – 3%. No other tax is attracted on these imports. 5
a. Non- prohibited dutiable goods and the value is mis-declared as ` 10,00,000 instead
of ` 11,50,000.
b. In the case at serial number 1, if the importer pays duty and interest within 30 days
from the date of communication of the order.
c. The value of imported goods declared is higher than the value determined by
Customs. Value determined by Customs is ` 15,00,000 but the value declared by
Suraj is ` 20,00,000.
d. The value of prohibited goods was declared as 20,00,000 and the actual value
determined was ` 15,00,000.
e. The imported goods are prohibited goods, which were declared by Suraj to be some
other goods valued ` 15,00,000 and actual value is found to be ` 20,00,000.
(5 Marks)

Question 4

(d) An importer imported a consignment weighing 10,000 tons. The importer filed a bill of entry
for home consumption. The Assistant Commissioner passed an order for clearance of
goods and applicable duty was paid by them. The importer thereafter found, on taking
delivery from the Port Trust Authorities i.e., before the clearance for home consumption,
that only 9,000 tonnes of inputs were available at the docks although he had paid duty for
the entire 10,000 tonnes.
There was no short-landing of cargo. The short- delivery of 10,000 tonnes was also
substantiated by the Port Trust Authorities, who gave a weighment certificate to the
importer.
On filing a representation to the Customs Department, the importer has been directed in
writing to justify as to which provision of the Customs Act, 1962 governs his claim for
remission of duty on the 10,000 tonnes not delivered by the Port Trust.
Examine the issue and tender your opinion as per law, giving reasons. (5 Marks)
Question 6
(d) State the salient features of "Deferred duty payment facility" with reference to Customs
Act, 1962 and rules thereunder. (5 Marks)
OR
(e) An importer filed a bill of entry after 60 days of filing Import General Manifest. The Deputy
Commissioner of Customs imposed a penalty of ` 10,000 for late filing of the bill of entry.
Since, importer wanted to clear the goods urgently, he paid the penalty. Can penalty be
imposed for late filing of the bill of entry? Can bill of entry be filed in advance? Examine
the issue regarding period available for filing bill of entry in the light of relevant statutory
provisions? (5 Marks)

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