Dear sirs
We offered discounts to foreign customers subsequent to export which resulted in short realisation of export proceeds. During audit on being pointed out by dept we paid excess Drawback along with interest. Now dept is asking us to pay penalty.
Query:
Are we liable for penalty , if so, under what section and up to what extent.
Debate Sparks Over Penalties for Excess Drawback Payments in Exports; Customs Act Sections Invoked for Clarification. A discussion on a forum addressed the issue of penalties related to excess drawback payments in export transactions. The original poster was asked to pay a penalty after paying back excess drawback and interest due to offering post-export discounts leading to short realization of export proceeds. One participant suggested that there is no explicit provision for such penalties unless specified by the authorities. Another participant referenced sections of the Customs Act and related rules that could be invoked for recovery and penalties in cases of excess refunds due to errors. The conversation concluded with references to relevant rules for further clarity. (AI Summary)
TaxTMI 
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