Messrs MACPAC FILMS LTD., KARACHI VS FEDERATION OF PAKISTAN
2005 P T D 972
[Karachi High Court]
Before S. Ahmed Sarwana and Muhammad Mujeebullah Siddiqui, JJ
Messrs MACPAC FILMS LTD., KARACHI
versus
FEDERATION OF PAKISTAN through Secretary, Ministry of Finance, Federal Secretariat, Islamabad and 2 others
Constitutional Petition No.963 of 2000, decided on /01/.
30th January, 2001. Customs Act (IV of 1969)---
----Ss. 19 & 33---SRO 484(I)/92, dated 14-6-1992---Constitution of Pakistan (1973), Art. 199---Constitutional petition---Refund claim---Show-cause notice as to non-applicability of S.R.O. 484(I)/92 to goods imported for units established in specified area---Clearance of goods on payment of duty under protest subject to vacation of show-cause notice by Appellate Authority---Refusal of department to refund amount after vacation of show-cause notice by Appellate Authority---Objection of department was that goods required investigation, whether same was of the kind not manufactured in Pakistan---Validity---Such objection not raised earlier was belated, an afterthought and not bona fide---Matter had been decided in favour of importer---Refusal to refund amount was not justified---High Court accepted Constitutional petition by directing department to refund amount within specified time after verification of payment and return indemnity bond and undertaking submitted by importer.
Makhdoom Ali Khan and Miss Danish Zuberi for Petitioner.
Raja M. Iqbal alongwith Khalid Mehmood for Respondents.
ORDER
Petitioner imported two consignments of plant and machinery for their Industrial Unit located in Gadani Industrial Area which were cleared from the Customs vide Bill of Entry, dated 21-1-1995 claiming the benefit of exemption under S.R.O. 484(I)/92, dated 14-6-1992 on providing an indemnity bond and an undertaking which were to be discharged in due course. After clearance of the goods a show-cause notice was issued by respondent No.3 on the ground that the exemption was not available to the petitioner as, their unit is situated in Gadani Industrial Area which is about 22 kilometers away from the municipal limits of Karachi whereas under the S.R.O. only those units are entitled to exemption from payment of duty which are situated beyond 30 kilometers form the Octroi post of KMC. Petitioner filed a reply to the show-cause notice and contested the proceedings. Thereafter they imported further equipments comprising of ancillary parts of the machinery imported earlier and cleared them under S.R.O. 484(I)/92, thedutiesandtaxeswhereofamountingto Rs.15,541,517.00werepaid under protest pursuant to the order of Collector of Customs, dated 3-8-1995 which reads as follows:--
Please allow payment under protest. Importer will be entitled to benefit in this case if the decision is that show-cause notice issued in earlier case is to be vacated.
The show-cause notice was ultimately vacated and consequently the petitioner filed an application for refund of the duties and taxes paid under protest. It is alleged that in spite of lengthy correspondence andstrenuous efforts the department did not refund the amount which the petitioner was entitled to in accordance with law.
Mr. Raja Mohammad Iqbal, learned counsel for department states that the department has lately raised an objection in respect of the consignment of the liquid Chiller which requires investigation whether the Liquid Chiller imported by the petitioner on or about 7-10-1995 comes within the ambit of the SRO i.e. whether the said component is of the kind which is not manufactured in Pakistan. He has not shown any document wherein such an objection was raised by the department earlier. The only objection that was raised on the clearance of the first two consignments was with regard to the applicability ofthe S.R.O. on equipmentsimportedfortheunitestablishedinGadani,whichislocated in Balochistan and the later consignments were allowed to be cleared on paymentofdutyunderprotestsubjecttothevacationofthe show-cause notice by the Appellate Authority as referred to above. The show-cause notice having been ordered to be withdrawn and the matter having been decided in favour of the petitioner, we do not see any reason why the department should not refund the amount. The objection raisedwithregardtotheLiquidChillerisbelated,anafterthoughtand doesnot appear to be bona fide. The objection is accordingly rejected. In view of the above discussion the petition is allowed and the Customs Department is directed to refund within 10 days the sum of Rs.15,541,517.00 after proper verification of payment.
The petitioner has also prayed that respondent No.3 may be directed to discharge and return the indemnity bond and undertaking given by them as the matter has been decided in favour of the petitioner. The respondents are directed to do so expeditiously. In the circumstances there shall be no order as to costs.
S.A.K./M-184/KPetition accepted.