Customs Appeal No. 430 of 2005, decided on 14th January, 2006. Versus Customs Appeal No. 430 of 2005, decided on 14th January, 2006.

ORDER

MRS. KHALIDA YASIN, MEMBER (JUDICIAL-I).-- -This appeal is directed against the Order-in-Original No. 3 of 2005, dated 9-4-2005 passed by Collector of Customs (Appraisement), Karachi.

2. The brief facts which gave rise to the above said appeal are that the appellant had received a show cause notice, dated 2-3-2005 in which it was alleged that the appellants were holding Customs Private Bonded Warehouse License No.14 of 1980, and they neither applied for renewal of the license since 30-6-1994 nor paid the establishment charges amounting to Rs.1,42,000. The respondent after hearing the case had passed the impugned order and the license was cancelled under section 13(3) of the Customs Act, 1969 and amount of Rs.1,42,000 as establishment charges was ordered to be recovered from the appellant.

3. This appeal is moved on the grounds that the appellant had not applied for the renewal of the license since 30-6-1994 and there is no provision in the Customs Act, 1969 which binds the appellant to obtain renewal or to apply for the renewal. It was stated that establishment charges are not payable as no services of the Custom Authorities were enjoyed by the Appellant and that there is no provision in the Customs Act, 1969 which empowers the respondent to determine the establishment charges at his own will without seeking any approval from the legislature. There is no allegations in the show-cause notice showing the period and basis of computing Rs.1,42,000 as establishment charges. It was prayed to set aside the order in original and hold that the establishment charges are not payable by the appellant.

4. Heard Mr. Muhammad Afzal Awan Advocate for the appellant and Mr. Sanaullah for the respondent and perused the case record.

5. The learned advocate for the appellant had based his arguments on the grounds taken by him in the appeal and urged the Court that the appellant had Private Bonded Warehouse and had been renewing the license from time to time up till June, 1994. Since the goods were not received, therefore, license was not renewed and, therefore, establishment charges are not payable. He re-iterated that when the license had expired they are not bound to pay establishment charges.

The issues before the Court are that;---

(1) Whether it was compulsory for the appellant to renew the license under the Customs Act, 1969?

(2) Whether the appellant are bound to pay establishment charges even if the license had expired?

7. Mr. Sanaullah the departmental representative has been unable to explain and quote any provision of Customs Act, 1969 under which the appellants were bound to renew the license after it had expired and they were liable to pay the establishment charges even if the license had expired.

8. I have gone through the provisions of Customs Act, 1969 and I do not find any mandatory provision by which the appellants were bound to renew the license and to pay establishment charges even if the license had expired, therefore, I answer both these issues as not proved the burden of which lay heavily upon the respondent to prove. The respondent also failed to show that even after expiry of the license the appellants were receiving the goods for their Private Bonded Warehouse.

Since the appellant had not received the goods at their Private Bonded Warehouse and for the reasons that he had no renew the license which had expired, therefore, they are not liable to pay the establishment charges as such I set aside the order-in-original and allow this appeal.

C.M.A./15/Tax (Trib.) ????????????? ??????????????????????????????????????????????? Appeal accepted.