Versus Malik Muhammad Arshad , Dr. Akhtar Hussain, D.R. and Khurram Munir
ABDUS SALAM KHAWAR (CHAIRMAN).--- Brief facts leading to this appeal are that Messrs Al-Qamar Imports (Pvt.) Ltd., Abkari Road, Near Lahore (hereinafter referred to as "appellant") lodged a refund claim for Rs.107,111. Allegedly, this amount was got deposited in excess vide Cash No.166 dated 24-1-2002 without adopting legal course. In addition to the customs duty other taxes were also charged against Bill of Entry No.5736 dated 21-1-2002 bearing Cash No.680 dated 22-1-2002. The case of the department hereinafter referred as the 'respondent' is that the scrutiny of the documents revealed that the claimants imported PS Printing Plates and value declared in the invoice was found to be on the lower side as compared to data of identical goods, imported/cleared from Karachi Customs House in respect of the imports made by others during the corresponding period and imported from the same source. During the pendency of the refund claim a writ petition No.920/2003 was lodged by the appellant in the Honorable High Court, Lahore. It was asserted therein by the appellant that the amount of Rs.107,111 was recovered from him without adverting to the proce dure laid down in section 32(2) or as the case may be under section 32(3) of the Customs Act, 1969: This Writ Petition was disposed of by the Honorable High Court, Lahore vide order dated 11-7-2003 with the direction to the department to dispose of the same in accordance with the law within a period of two months.
2. Vide Order-in-Original No.440 of 2003, the Assistant Collector seized of the matter disposed of the application for refund of the claimed amount that the amount of duties and the taxes were deposited by the claimants before the release of the goods without challenging the re-assessment. It was observed therein that in case the appellant/claimant was aggrieved of the reassessment they should have moved a petition challenging the reassessment. Thus the case of refund was dismissed.
3. Aggrieved of the same, this appeal has been preferred by the appellant.
4. On behalf of the appellant, it is submitted that the appellant imported a consignment of AQP PS Plate for printing, quantity 19030 sheets at unit value, US$ 0.53 per sheet of total import value of US$ 19163.85 from China against proper Letter of Credit dated 10-11-2001 established on the basis of Proforma Invoice dated 7-11-2001, at Lahore Dry Port, Lahore via Karachi. On arrival of goods at Dry Port, the appellant filed Bill of Entry No.05736 dated 21-1-2002 through Messrs Abeer International, Customs House Agents. Thereupon the goods were examined and value was assessed at US$ 2.76/sq.meter. On completion of bill of entry, the appellant was allowed to pay duties and taxes and got his goods cleared. The appellant deposited a sum of Rs.6,90,332 which included customs duty of Rs.35,498, Sales Tax 230,229 ,and Income Tax 105,905 and got the goods released.
5. It was alleged that while the goods were being removed from the port premises, appellant was restrained to do so on the ground that according to information duties and taxes were short levied and further a sum of Rs.107,111 was directed to be deposited. The appellant protested and informed the customs authorities that he had already paid the duties and taxes as assessed under the law and if there was any short levy, the procedure laid down under section 32 of the Customs Act, 1969 be followed. The respondent did not agree and insisted that the appellant would be allowed to remove the goods only on the deposit of additional amount of Rs.107,111 and therefore, the appellant deposited the said amount under protest. On 28-1-2002, the appellant moved an application before the respondent No.1 for the refund of the amount but no action was taken. The respondent did not refund the amount and ultimately a writ was filed before the Honorable High Court, Lahore. Whereafter under the direction of the Honorable High Court, Lahore, the application for refund was disposed of whereby the refund was refused.
6. It has been alleged on behalf of the appellant that the impugned order is illegal and void. It is result of mis-reading, non-reading of record and mis-interpretation of relevant provision of law. It was maintained that the plea of the appellant that the further deposit of excess amount was within the meaning of section 2(bb) of the Customs Act, 1969 was not based on true facts. It was pleaded that once the assessment has been made then without taking proper course and invoking of subsection (3) of section 32 of the Customs Act, 1969 the earlier assessment could not be effected. Before proceedings with the matter no show cause notice was issued to the appellant as laid down under section 32(2), (3) of the Customs Act, 1969. Without issuance of the show cause notice the recovery was illegal. To substantiate these arguments, reliance was placed on 1996 CLC 1365.
7. On the other hand, the D.R. appearing on behalf of the respondent maintained that admittedly the appellant had deposited the customs duty and other taxes but before the goods were made out of charge reassessment was made under section 2(bb) of the Customs Act, 1969 and this reassessment did not require issuance of any show cause notice. It was asserted that the levy of the additional tax was made before the goods had become out of charge.
8. I have heard the learned counsel for the appellant and the D.R. appearing on behalf of the respondent and perused the record with their assistance.
9. The question involved in this matter is that whether the reassessment was made by respondent when the goods had been effected out of charge by the respondent or before that. In this connection, the relevant record of the respondent/department was called for. From the record it was admitted by the D.R. that as per record, the additional duty was recovered after the goods have been made out of charge. In view of this factual position, I feel that a show cause notice required under section 32 of the Customs Act, 1969 was necessary. Without the show cause notice reassessment could not be effected. Once the goods had c become out of charge no reassessment under section 2(bb) of the Customs Act, 1969 could be effected.
10. In view of the above, the impugned order is set aside and the appeal is accepted. The appellant is entitled for refund of the additional customs duty and taxes which were levied without resorting to the relevant provision of the law contained m section 32 of the Customs Act, 1969.
11. Parties be informed.
H.B.T./138/Tax (Trib.) Appeal accepted.