Messrs ADAM HOLDING LTD. vs A.C., CUSTOMS

Messrs Adam Holding Limited, petitioner, imported 1,057 cartons of Instant Coffee from Germany which arrived at Custom Dry Port, Lahore, on 13th January, 1990. The petitioner filed Bill of Entry on 16th January, 1990, seeking clearance of the goods. The Appraising Officer vide his note dated 31st January, 1990, suggested that 630 cartons out of 1,057 be released provisionally under section 81 of the Customs Act against undertaking after adding 30% loading charges on the declared value and rest of the consignment be released after confirmation of value from Controller Valuation, Karachi.

The above--stated suggestion was agreed to by the petitioner and on 14-2-1990 630 cartons which constituted 60% of the consignment were released after adding 30% loading charges and the remaining 427 cartons were detained till receipt of valuation of the goods from the concerned quarters. The matter of valuation, however, remained in dispute and the final decision was made on 28th July, 1991. According to this decision only 10% loading charges were to be added to the valuation. The petitioner again sought release of goods on 12th August, 1991 on the basis of the Bill of Entry already filed.

2. The Assistant Collector Customs (Bonds) issued a notice dated 29th August, 1991, under section 111 of the Customs Act claiming surcharge on account of alleged failure to clear the goods within the prescribed time. This notice was replied to saying that the consignment could not be released as the question of valuation was raised and referred to the Controller Valuation for decision and that it is only on 28th July, 1991, that the final decision has been rendered whereby only 10% of the loading charges have been ordered to be added to the valuation for the purposes of charging customs duty. Another application to the same effect was submitted on 8th September, 1991, but the request to waive off the surcharge was rejected on 19th October, 1991, which led to the filing of the present Constitution petition.

3. The only question involved in this case is whether the respondents are entitled to claim surcharge on account of wharehousing of the goods beyond the prescribed period. The facts noted above clearly show that 427 cartons were ordered to be detained by the authorities themselves vide note dated 31st January, 1990, as otherwise the provisional assessment made under section 81 of the Act was adhered to and 630 cartons were got released after payment of customs duty with the addition of 30% loading charges. The final assessment was made on 28th July, 1991. The petitioner cannot be blamed for the period that the authorities took in making the final assessm ent. This being the position the surcharge cannot legally be claimed as the petitioner is not at fault as the amount due under the provisional assessment was paid by him. The demand of Rs.72,000 as surcharge is, therefore, declared to be without lawful authority with the result that the said amount deposited under order of this Court shall be refunded to the petitioner together with the amount which is refundable on account of deposit of amount in excess of 10% loading charges with respect to goods got released under the provisional assessment under section 81 of the Customs Act. The petition it accepted in above terms. Parties are however left to bear their own cost.