M/s Star Imports Ltd. imported machinery from Germany. While the goods were lying in the customs warehouse awaiting clearance, a fire accident…
CA Final · Indirect Tax Laws · PYQS · January 2026
M/s Star Imports Ltd. imported machinery from Germany. While the goods were lying in the customs warehouse awaiting clearance, a fire accident destroyed the entire consignment. The fire was accidental and not due to importer's negligence. M/s Star Imports Ltd. applied to the proper officer under section 23 of the Customs Act, 1962 for remission of duty. Is application of M/s Star Imports Ltd. tenable? Would your answer be changed if fire occurred after clearance for home consumption? Your answer should include necessary explanation.
Suggested Answer and Working Notes:
Answer (c) Where imported goods have been destroyed, duty on such goods shall be remitted provided such destruction has occurred before clearance for home consumption. Therefore, in the given case, M/s Star Imports Ltd. is eligible for remission. Thus, the application of M/s Star Imports Ltd. is tenable/correct. However, if fire occurred after clearance for home consumption, M/s Star Imports Ltd. would not be eligible for remission.
Topics: Customs: Importation and Exportation of Goods
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