Messrs WALL MASTER vs COLLECTOR OF CUSTOMS and others

MUHAMMAD MUJEEBULLAH SIDDIQUI, J.---The grievances of the petitioner giving rise to this petition are as follows:--

(1) The custom officials have issued notice for recovery against those securities presented to the respondent under section 81(1) of the Customs Act, 1969, which were not accepted and were cancelled;

(2) The respondents are trying to enforce recovery against the securities entrusted to them under section 81(1) of the Customs Act, 1969, wherein the provisional assessment was made, but no final assessm ent order was passed under section 80, with the result that under the provisions contained in section 81(4) of the Customs Act, 1969 the provisional assessment became final and, therefore, no duty and taxes in excess of determined for the purpose of provisional assessment can be recovered; (3)The respondents have issued notice for recovery against the securities entrusted to them under section 81(1) of the Customs Act, 1969 without passing any final order and the period provided for passing final order was not passed at the time of filing the petition, but during the pendency of the petition, the time specified in subsection (4) of section 81 has expired and no final assessment order has been made. We have heard Mr. Muhammad Afzal Awan, learned counsel for the petitioner, and Mr. Ahmed Khan Bugti, learned counsel for the respondents, assisted by Mr. Fayyaz Ahmed R.I, Appraising Officer, Mr. Muhammad Afzal Awan has produced the copies of bank guarantees with the endorsement, "not accepted by the conipetent authorities" and showing that the guarantees were cancelled. We asked Mr. Ahmed Khan Bugti to show as to how the notice was issued for recovery against a bank guarantee, which was not accepted and was cancelled. Mr. Ahmed Khan Bugti is not able to show as to how the recovery can be enforced against a bank guarantee, which was not accepted and cancelled.

So far the notices for recovery of taxes and duty in excess of the duty and taxes assessed in provisional order are concerned, Mr. Ahmed Khan Bugti contended that the final assessment orders were made and, therefore, the differential is to be recovered for which notices have been issued. We asked Mr. Ahmed Khan Bugti to produce the final assessment orders. He has called the Appraising Officer, who has produced the file, which bears an office note with the direction by Deputy Collector to the effect that, "all such cases be finalized on criteria/indicative value as directed". We have asked the Appraising Officer whether any assessment order has been finalized as directed, to which he has replied in negative. He has submitted that there is no such departmental practice and the final assessments are not made separately, but in the light of the policy decision the taxes and duties are recovered. Mr. Muhammad Afzal Awan has produced ruling No.66, given by Central Board of Revenue contained in the book Customs General Order, 2002 Edition, compiled by Mr. Tariq Najib Choudhry, page 369, which reads as follows:-- "(66). Delay in finalization of final assessment of bill of entry.---The case of finalization of provisional assessm ent has been a subject of detailed discussion between the office of the Wafaqi Mohtasib and the Central Board of Revenue.

It has been decided that the provisional assessment should be finalized within four months to be extended by another two months in specific circumstances which should be recorded in writing. It has further been decided that orders of refund shall be made wherever due at the part of the final assessm ent order which should be speaking one and should contain all the relevant information on the basis of which value of the imported goods has been fixed.

2. In view of this position, the following instructions are for strict compliance by field formation:- (0 All cases of provisional assessm ents shall be finalized within a period of four months. Where assessm ent cannot be finalized within four months, owing to exceptional circumstances beyond the control of Custom Houses or Valuation Department, such period shall be extended by the Collectors of Customs or the Collector of Valuation, as the case may be, by a further period of two months recording reasons in writing. Such extension shall also be intimated to the importers.

(ii) Final assessm ent order shall be speaking one and shall also incorporate all the details and evidence on record on the basis of which value has been fixed or assessment has been finalized.

This is necessary to enable the importer to file appeal with the appellate authority if he is not satisfied with the assessm ent order so made.

(i.e) Where on the basis of final assessment any refund is due to the importer, the final assessment order shall also contain order for refund of the said amount and the importers shall not be required to make fresh requests for the refund.

(iv) Keeping in view the time constraint indicated above, refundable amount shall be paid expeditiously.

3. Collector/Controller of Valuation shall ensure that these instructions are complied with in letter and spirit."

We have confronted Mr. Ahmed Khan Bugti and Mr. Fayyaz Ahmed R.I, the Appraising Officer, with the above ruling and have asked whether this ruling given in consequence of detailed discussion between Wafaqi Mohtasib and the Central Board of Revenue has been complied with, to which they have replied in negative.

For the foregoing reasons the petition is allowed in the terms that all the notices issued for enforcing the recovery against the cancelled bank guarantees as well as for the recovery of amount in excess of assessed taxes and duty, show in the provisional assessment order, are illegal and are hereby struck down. The respondents are restrained from enforcing any recovery from the petitioner in excess of the taxes and duty assessed at the time of making provisional assessment order. The petition is allowed accordingly. .