CYNAMID PAKISTAN LTD., KARACHI VS GOVERNMENT OF PAKISTAN through Secretary, Ministry of Finance, Islamabad and another, 2006 PTD-KARACHI-HIGH-COURT-SINDH 2053 (2003)

Customs Act (IV of 1969)---

----Ss. 19, 30 & 31-A---S.R.O. 350(I)/85, dated 16-4-1985---S.R.O. 496(I)/88, dated 26-6-1988---Constitution of Pakistan (1973), Art.199---Constitutional petition---Rebate, claim of---Import of goods under concessionary S.R.O. 350(I)/85---Presentation of Bill of Entry from Bond on 16-6-1988---Non-clearance of Bill of Entry by authority and non-payment of duty till 28-6-1998, when such concession, stood withdrawn by S.R.O. 496(I)/88, dated 26-6-1988---Refusal of authority to accept rebate claim of importer on the ground that date relevant for determining rebate was the date of payment of duty and not the date of import or opening of Letter of Credit or presentation of Bill of Entry from Bond---Validity---Duty of authority was to establish beyond any reasonable doubt that delay in payment of duty was on account of any inadvertence, indolence or lethargy of importer---In absence of such proof, importer could not be denied benefit of such concessionary notification---Rebate claim had been filed on 16-6-1988, thus, importer could not be denied benefit thereof as S.R.O. 350(1)/88, dated 26-6-1988 could not operate retrospectively to deprive importer of his right accrued to him prior to 26-6-1988---Provision of S.31-A of Customs Act, 1969 would not apply to the facts of the present case---High Court accepted constitutional petition, set aside impugned order and allowed importer's claim of rebate.

Aziz A. Shaikh for Petitioner.

Nadeem Azhar Siddiqui, Dy. A.-G. for Respondents.

Date of hearing: 20th May, 2003.

JUDGMENT

SAIYED SAEED ASHHAD, C. J.---In this Constitutional Petition the petitioner has sought the following reliefs:---

(a) To declare that rejection order passed by respondent No.1 is illegal and without lawful authority.

(b) To declare that the respondent No. 2 has acted without lawful authority by not allowing concessions available to petitioner.

(c) To direct respondents Nos. 1 and 2 to refund the Duty and Sales Tax amounting to Rs.2,80,826 illegally retained.

(d) Cost.

(e) Any other relief or reliefs which this Hon'ble Court may deem appropriate and proper in the circumstances of this case.

The brief facts as stated by the petitioner in the memo. of petition are that the Government had granted concession of Customs duty and taxes on certain materials listed in S.R.O. 350(1)/85 dated 16-4-1985 (hereinafter referred to as `the said notification'). The petitioner in order to claim benefit of the said notification imported consignment of PVDC Film 0.250 Micron UPVC laminated with 66 GSM/M2 as per Letter of Credit No. 871812 dated 15-10-1987 for blister packing which was to be used in the manufacture of the drugs manufactured by the petitioner. The petitioner presented Bill of Entry from Bond on 16-6-1988 and respondent No. 2 allowed clearance of goods after registering duty rebate claim on 16-6-1988 in accordance with the provisions of the said notification. On account of delay in the process of clearance by respondent No. 2 customs duty could not be paid till 28-6-1988 when the aforesaid concession stood withdrawn by the Notification dated 26-6-1988. However, respondent No. 2 had already admitted the refund claim of the petitioner under the said notification vide order dated 16-6-1988 on the bill of entry from bond. On 29-6-1988 the petitioner filed a claim for refund of Rs.2,80,826 after fulfilling all the requisite conditions of the said notification. This claim was rejected vide order dated 19-8-1990. The petitioner filed a revision application under section 196 of the Customs Act, 1969 before respondent No.1, who also rejected the same. Having no other remedy to assail the order of respondent No. 1 the petitioner approached this Court by way of the above Constitutional Petition.

We have heard the arguments of Mr. Aziz A. Shaikh, learned Advocate appearing on behalf of the petitioner, Mr. Nadeem Azhar Siddiqui, learned D.A.-G. perused the material on record and relevant provisions of law.

Respondent No. 2 Collector of Customs had rejected the claim of the petitioner on the ground that on the date when the consignment was cleared from the bonded warehouse and duty was paid the concession of the said notification had ceased to be available to the petitioner as the same was withdrawn by Notification No. S.R.O. 496(I)/88 dated 26-6-1988. It was further held that the relevant date for the purpose of determining the rebate in view of the provisions of sections 30 and 31-A of the Customs Act would be the date of payment of duty and not the date of Import General Manifest or the date of opening of Letter of Credit or the date on which the bill of entry from bond was presented/manifested. In revision the Central Board of Revenue upheld the order of the Collector of Customs with the observations that the duty and taxes were paid on 28-6-1988 after the concession made available by the said notification was withdrawn by S.R.O. 496(1)/88 dated 26-6-1988. As the Customs Authorities for coming to the conclusion that the petitioner was not entitled to the concession provided by the said notification had placed reliance on sections 30 and 31-A of the Customs Act, 1969, it will be appropriate to reproduced the two section as under:---

30. Date of determination of rate of import duty.---The rate of duty applicable to any imported goods shall be the rate of duty in force:---

(a) in the case of goods cleared for home consumption under section 79, on the date on which a bill of entry is manifested under that section; and

(b) in the case of goods cleared from a warehouse under section 104, on the date on which a bill of entry for clearance of such goods is manifested under that section:

Provided that, where a bill of entry has been manifested in advance of the arrival of the conveyance by which the goods have been imported, the relevant date for the purposes of this section shall be the date on which the manifest or the conveyance is delivered [at the port of first entry]:

Provided further that, in respect of goods for the clearance of which a bill of entry for clearance has been manifested under section 104, and the duty is not paid within seven days of the bill of entry being manifested, the rate of duty applicable shall be the rate of duty on. the date on which the duty is actually paid:

Provided further that the Federal Government may, by notification in the official Gazette, for any goods or class of goods, specify any other date for the determination of rate of duty.

Explanation: For the purpose of this section manifested means that when a machine number is allocated to bill of entry and is registered in Customs record.

"31A. ? Effective rate of duty.----(l) Notwithstanding anything contained in? any other law for the time being in force or any decision of any Court, for the purpose of sections 30 and 31, the rate of duty applicable to any goods shall include any amount of duty imposed under section 18 and the amount of duty that may have become payable in consequence of the withdrawal of the whole or any part of the exemption or concession from duty whether before or after the conclusion of a contract or agreement for the sale of such goods or opening of a letter of credit in respect thereof.

(2) For the purpose of determining the value of any imported or exported goods, the rate of exchange at which any foreign exchange is to be converted into Pakistan currency shall be the rate of exchange in force,---

(a) in the case of goods referred to in clause (a) of section 30, on the date [immediately preceding the date] referred to in that clause;

(b) in the case of goods referred to in clause (b) of the aforesaid section, on the date [immediately preceding the date] referred to in that clause; and

(c) in the case of goods referred to in section 31, on the date referred to in that section".

Form perusal of the above two sections, it is to be observed that the relevant section is section 30 which lays down the date which is to be considered for determining of the Customs duty to any imported goods/consignment. The consignment in question was presented for clearance from a warehouse and would be covered by clause (b) of the Second proviso to section 30 of the Customs Act. Clause (b) provides that the date for determining the rate of duty for goods cleared from a warehouse would be the date on which a Bill of Entry for consumption/ clearance of such goods is presented. Second proviso of section 30 of the Customs Act lays down that in respect of the goods cleared on presentation of a Bill of Entry under section 104, the duty, if not paid within seven (7) days of the manifestation of the Bill of Entry then the rate of duty applicable to such goods will be the rate of duty on the date on which the duty is actually paid. It was the Second proviso on which the Customs Authorities by placing reliance had rejected the claim of the petitioner on the ground that the Customs duty was paid on 28-6-1988 when the concession made available in respect of the payment of Customs duty and taxes by the said notification had ceased to be in existence as it had been withdrawn by Notification No. S.R.O. 496(1)/88 dated 26-6-1988.

The contention of Mr. Aziz A. Shaikh was that the delay in payment of duty was not on account of any negligence or inadvertence on the part of the petitioner but was due to the fact that the respondents had delayed the process of determination of duty and clearance of the goods which did not permit the petitioner to make payment of the Customs duty on or before 26-6-1988. It is also to be observed that the rebate claim had been registered by the Customs Authorities at Sr. No.1638 of Rebate Claim Register on 16-6-1988 under the provisions of the said notification. Mr. Nadeem Azhar Siddiqui was unable to satisfy us that the delay in payment of the Customs duty by the petitioner was on account of any negligence, inadvertence or imprudent act on its part or that the same was not on account of the delay in processing the matter by the respondents as ascertained by the petitioner. In order to deny the A benefit of rebate available under the said notification it was incumbent for the respondents to have established beyond any reasonable doubt that the delay in payment of Customs duty was on account of any inadvertence, indolence or lethargy of the petitioner. In the absence of any such fact the petitioner cannot be denied the benefit of the said notification on the assumption that it had acted inadvertently, imprudently and in a negligent manner to pay the Customs duty and get the goods cleared after the facility/concession provided by the said notification had ceased to be in operation. As the rebate claim of the petitioner had been duly registered/acknowledged by the respondents on 16-6-1988, they could not be denied the benefit thereof as the Notification dated 26-6-1988 could not operate retrospectively to deprive the petitioner of a right which had accrued to it prior to 26-6-1988. It is to be noted that reference to section 31-A by the Customs Authorities for the purpose of rejecting the, claim of the petitioner was absolutely immaterial as the provisions thereof had no application to the facts and circumstances of this case.

For the foregoing reasons and discussions it was found that the orders of the Customs Authorities were not proper and legal and could not be sustained. Accordingly, by a short order dated 20-5-2003, for reasons to be recorded later this Constitutional Petition was allowed, the orders of the Customs Authorities were set aside and petitioner's claim of rebate of Rs.2,80,826 paid by way of Customs duty was allowed directing the respondents to refund the same. These are the reasons for the said short order.

S.A.K./C-15/K??????????????????????????????????????????????????????????????????????????????????? Petition accepted.