Sales Tax Act (VII of 1990)---

----Sixth Sched., Item No.43---Customs Act (IV of 1969), Ss..179, 195 & 205---Drugs Act (XXXI of 1979)---S.R.O.349(I)/85 dated 15-4-1984-- S.R.O. 373(I)/2000 dated 17-6-2000---S. R. O. 552(I)2000, dated 10-8-2000---Establishment of Office of Federal Tax Ombudsman Ordinance (XXXV of 2000), S.2(3)---Exemption---Concession from customs duty and sales tax ---Complainant/assessee did not mention on the bill of entry that "goods will not be used for any purpose other than the manufacture of pharmaceutical products registered as drugs" which was the condition of the relevant S.R.O.---Claim of refund of excess charged duty and taxes---Validity---After cancellation of S.R.O.349(I)/85 dated 15-4-1984, complainant was not entitled to benefit of S.R.O. 552(I)/2000 dated 10-8-2000---Complainant did not make any declaration as stipulated in Condition No.1 of the said notification at the time of clearance of goods---ADC Health's invoice could not be a substitute of the declaration stipulated in the notification-- -Both Notifications S.R.O.349(I)/85 (defunct) dated 15-4-1984 and S.R.O.552(I)/2000 dated 10-8-2000 having allowed conditional concessions the benefit would accrue under the latter notification if its conditions had been fulfilled---Complainant was neither entitled to the concession/ exemption under S.R.O. 349(I)/85 dated 15-4-1984 because it was not in the field at the time of filing of bill of entry nor it could avail the benefit of S.R.O.552(I)2000 dated 10-8-2000 for failure to fulfill the prescribed conditions of the S.R.O.---No maladministration was observed and the complaint was closed by the Federal Tax Ombudsman.

Gatron Industries Limited v: Government of Pakistan 1999 SCMR 1072 ref.

Shahzad Wazir, Consultant for the Complainant.

Ms. Ambreen Tarar, A.C., Customs and Muhammad Arshad, Superintendent Customs, Dryport, Lahore for Respondents.

DECISION/FINDINGS

This is a complaint of maladministration directed against Lahore Customs for charging the complainant custom duty @ 25 % and sales tax @ 15 % as against the custom duty @ 10 % and nil sales tax to which it was entitled under S.R.O.349(I)/85 dated 15-4-1985 and subsequently under S.R.O.552(I)/2000 dated 10-8-2000.

2. Facts of the case are that the complainant had imported pharmaceutical raw material (CEFACLOR) classified under PCT Heading 2941.9090, cleared it vide Bill of Entry No. 3596 dated 12-8-2000 on payment of custom duty of 25% and sales tax of 15% under protest. It had claimed benefit of S.R.O.349(I)/85 dated 15-4-1985 and later of S.R.O.552(I)/2000 dated 10-8-2000 attracting 10% custom duty and exemption from sales tax. Despite a lapse of more than three years the respondents have ignored its application for refund of duty and taxes charged in excess of what was payable. The respondents may be directed to refund the same.

3. In reply, the respondents have stated that the complainant had not claimed benefit of exemption on the face of bill of entry. It did not follow the procedure prescribed under law and was, therefore, not entitled to exemption in terms of erstwhile notification S.R.O.349(I)/85 dated 15-4-1985 which was in fact replaced by notification S.R.O.552(I)/2000 dated 10-8-2000. Since it had also not adhered to the procedure laid down in notification S.R.O.552(I)/2000 dated 10-8-2000 it was not entitled to the benefit of latter SRO. The case has already been decided vide Order-In-Original No. 1/2002 dated 31-8-2002. The complaint lacking merit may be filed.

4. During the hearing the A.R reiterated the points made in the written complaint emphasizing that they were entitled to the benefit of S.R.O.349(I)/85 dated 15-4-1985. The Customs did not accept the declaration made thereunder. Subsequently, S.R.O. 552(I)/2000 dated 10-8-2000 was issued according to which also the raw material in question was leviable to 10% custom duty and was exempt from sales tax. It could not mention S.R.O. 552(I)/2000 dated 10-8-2000 on the bill of entry because the number of the S.R.O. was still not known, so it paid Rs.886970 duty and taxes under protest. It is entitled to refund of Rs.684056 for which an application dated 21-8-2002 was submitted followed by many reminders. Their case was rejected vide Order-in Original No. 1/2002 dated 31-8-2002 which was not received by the complainant. The Supreme. Court in its judgment reported as 1999 SCMR 1072, Gatron Industries Limited v. Government of Pakistan ruled in that case that although the number of S.R.O. mentioned on the bill of entry was wrong the benefit was available to the petitioner because the bill of entry had shown rate of duty as nil which meant that the exemption claimed was justified. The mentioning of wrong notification did not deprive the complainant of the benefit of concessionary/exempt rates of duty and taxes.

5. The D.R. stated that at the time the complainant had claimed benefit of S.R.O.349(I)/85 dated 15-4-1985 the notification in question was not in the field, superseded as it had been vide S.R.O. 373(I)/2000 dated 17-6-2000. The complainant did not seek benefit of S.R.O. 552(I)/2000 dated 10-8-2000. The assessment was completed on 15-8-2000. The complainant could have filed an application for amendment of the bill of entry under section 205 of the Customs Act, 1969 because it was S.R.O. 552(I)/2000, which was operative then. Even otherwise S.R.O. 522(I)/2000 allowed conditional exemption. The complainant did not fulfill condition No.1 of the aforesaid S.R.O. Even if the complainant had claimed benefit of the aforesaid S.R.O. it was supposed to fulfill condition No. l thereof for benefit of custom duty concession and also of sales tax exemption under serial No.43 of the sixth Schedule of the Sales Tax Act 1990 because that too was subject to fulfillment of similar conditions as were applicable for purposes of the customs duty concession. The complainant's refund was rejected by Order-in-Original after giving the complainant the opportunity of being heard, The cases decided under section 179 of the Customs Act, 1969 are appealable. Since this case was decided in terms of section 33 of the Act, the remedy of appeal was not available but the Collector could re open the case under the provisions of section 195 of the Act in case the complainant proved that the order passed in the case suffered from illegality or impropriety. The copy of Order-in-Original was sent to the complainant by, registered cover in accordance with the provisions of section 215 of the Act. and copy of the registered receipt is being put on record. D.R. also stated that the above cited case i.e. reported as Gatron Industries Limited v. Government of Pakistan 1999 SCMR 1072 is not relevant to this case. In this case the conditions prescribed in both S.R.Os. i.e. 349(1)/85 dated 15-4-1985 (defunct) and 552(I)/2000 dated 10-8-2000 were not-fulfilled.

6. The arguments of the parties to the dispute and the record of the case have been examined and considered. The bill of entry filed by the complainant shows that it had claimed benefit of S.R.O.349(I)/85 dated 15-4-1985 although the aforesaid S.R.O. had been superseded vide S.R.O.273(I)/2000 dated 17-6-2000 well before the filing of Bill of Entry No.03596 dated 12-8-2000 (Cash No.1389 dated 18-8-2000). Clearly S.R.O. 349(1)/85 dated 15-4-1985 has ceased to be since 17-6-2000. However, another notification S.R.O.552(I)/2000 dated 10-8-2000 was issued, which though in the field, was not invoked by the complainant on the Bill of Entry No.03596 dated 12-8-2000. Even so, both notifications S.R.O.349(I)/85 dated 15-4-1985 and S.R.O. 552(I)/2000 dated 10-8-2000 were conditional in nature. Condition No.1 of notification S.R.O. 552(I)/2000 dated 10-8-2000 read "the importer, shall make at the time of clearance from customs, a declaration on the bill of entry that the goods will not be used for any purpose other than the manufacture of pharmaceutical products registered as drugs under the Drugs Act, 1976 (XXXI of 1976). Besides, the importer -cum-manufacturer had also to maintain record of the goods imported and the pharmaceutical product manufactured there from for production before the appropriate officer of customs or the Director General Health. The complainants argument that after cancellation of notification S.R.O.349(I)/85 dated 15-4-1985, it was entitled to benefit of notification S.R.O. 552(1)/2000 dated 10-8-2000 is not convincing. The fact is that the complainant did not make any declaration as I stipulated in condition No.1 of the notification at the time of clearance of goods: The A.R. also admitted this fact during the hearing. The A.R. however, submitted that it had attached ADC Health's Invoice' No.7328/DCA. The so-called invoice cannot be a substitute of the declaration stipulated in the notification S.R.O.549(I)/85 (defunct) and S.R.O. 552(I)/00 dated 10-8-2002 allowed conditional concessions the benefit would have accrued under the latter notification if its conditions had been fulfilled. The complainant was neither entitled to the concession/exemption under S.R.O.349(I)/85 dated 15-4-1985 because it was not in the filed at the time of filing of the bill of entry nor to the benefit of S.R.O. 552(I)/2000 dated 10-8-2000 for failure to fulfil the prescribed conditions of the S.R.O. In view of the foregoing position, no maladministration is observed. The case is closed.

C.M.A./896/FTOComplaint dismissed.