PARAMOUNT SPINNING MILLS LTD. VS COLLECTOR OF CUSTOMS (APPRAISEMENT) GOVERNMENT OF PAKISTAN APPRAISEMENT COLLECTORATE, LAHORE
2009 P T D 1575
[Karachi High Court]
Before Muhammad Ather Saeed and Salman Ansari, JJ
Messrs PARAMOUNT SPINNING MILLS LTD.
Versus
COLLECTOR OF CUSTOMS (APPRAISEMENT) GOVERNMENT OF PAKISTAN APPRAISEMENT COLLECTORATE, LAHORE
Customs Appeal No.121 of 2000, decided on 30/06/2009.
(a) Customs Act (IV of 1969)---
----Ss. 156(1)(10-A) & 19---S.R.O.484(I)/92, dated 14-5-1992---S.R.O.791(I)/91, dated 15-8-1991---Exemption---Importers, having voluntarily opted the scheme under S.R.O.484(I)/92, dated 14-5-1992, for the import in question and remaining under the said scheme for considerable time, abiding by its conditions favourable to them, obtained condonation of delay under S.R.O.484(I)/92 and at the time of the clearing of the goods had fulfilled the conditions of S.R.O.484(I)/92 and filed the Indemnity Bond required to be filed under the provisions of said S.R.O., had given up their claim under S.R.O.791(I)/91, dated 15-8-1991---S.R.O.791(I)/91, dated 15-8-1991, in circumstances, would not apply to the case of importers---Principles.
(b) Customs Act (IV of 1969)---
----S. 19--S. R.O.484(I)/92, dated 14-5-1992---Exemption---Central Board of Revenue condoned the violation of the conditions of S.R.O.484(I)/92, dated 14-5-1992 issued by the Federal Government, and allowed the importers permission to relocate the machinery from place "S" to place "K"---Validity---Held, no authority had the power to modify any S.R.O. issued by the authority superior to it---If the Central Board of Revenue had permitted to relocate the machinery, Board could not condone the non-following of the conditions mentioned in the S.R.O. or in the Indemnity Bond submitted by the importers for the purpose of exemption and could not allow them the benefit of S.R.O. if they had violated the conditions of the S.R.O.---If the intention of the Board in issuing the letter to importer was to condone the conditions and allow them exemption under the S.R.O., it would be beyond the powers of the Board as Board had no power to allow exemption to machinery, which had been installed at areas other than the areas specified in the subject S.R.O.
(c) Customs Act (IV of 1969)---
----Ss. 202 & 19---S.R.O.484(I)/92, dated 14-5-1992---Exemption---Recovery of dues as arrears of land revenue---Limitation---Conditions of S.R.O.484(I)/92, dated 14-5-1992 and Indemnity Bond and undertaking of the importers had made it clear that the exemption allowed to the importers was contingent upon the machinery being installed in the specified area and the importers had undertaken that the machinery will not be removed to another area, or if it is removed to another area, they will not be entitled to concession and will repay the rebate amount and other penalties, and if they do not pay the same, the amount will be recovered as arrears of land revenue under S.202, Customs Act, 1969---Held, since the exemption which was granted was a contingent exemption, it could be assumed that the importers were liable to pay the duties unless they fulfilled the conditions on which the exemption was contingent and not fulfilling the conditions or violation thereof would render them liable to government dues as payable on the day of the clearance and there was no time limit for collection of such government dues---No show-cause notice or order-in-original was needed to collect these dues and a simple demand notice would have sufficed---Action leading to the recovery of the disputed dues was not barred by the period of limitation.
(d) Customs Act (IV of 1969)---
----S. 32(2)---Notice under S.32(2), Customs Act, 1969---Limitation---Date on which the department learnt of the violation of S.R.O., Indemnity Bond of the Importers and law, issuance of notice under S.32(2), Customs Act, 1969 within the four years from the date of such knowledge by the department was within time.
A Ghaffar Khan for Appellant.
Raja Muhammad Iqbal for Respondent.
Date of hearing: 26th March, 2009.
JUDGMENT
MUHAMMAD ATHER SAEED, J.---This Special Customs Appeal, which has been filed against the order of the learned Special Customs Excise and Sales Tax Appellate Tribunal, dated 23-10-2000 in Customs Appeal No.K-370/2000, was admitted for regular hearing on 4-1-2001 to examine the following questions of law:--
(1) "Whether S.R.O. No.791(I)/91 which granted exemption from customs duty to specified machinery irrespective of the area of installation merged in S.R.O. 484(I)/92 which provided exemption to all machinery installed in specified areas?
(2) Whether the C.B.R. had no authority under S.R.O. 484(I)/92 to permit the installation of machinery in an area other than that for which it was imported?
(3) Whether the show-cause notice was barred by time?
(4) Whether the S.R.O. may be by-passed administrative order of C.B.R.?
2. Brief facts of the case are that the appellant had imported a consignment of Complete Textile Machinery and Mill Work in June-1992 and got the same released by claiming the benefit of S.R.O. 484(I)/1992 and filing an Indemnity Bond as required under the provisions of that S.R.O. by claiming that the machinery has been imported for a project located in the rural area Nankana Warborton Road, District Sheikhupura and will be installed there. However, when it later transpired that the appellant had not got installed his machinery at Sheikhupura as undertaken in the Indemnity Bond but at Kotri, the Collector of Customs the respondent issued a show-cause notice No.S.I./Miscellaneous/ 205/99-AID, dated 14-9-199.9 calling on the appellant to show cause in view of the fact that the machinery was not installed at the specified premises and, therefore, they are not entitled to exemption under S.R.O. 484(I)/92, dated 14-5-1992 therefore why action should not be taken against them under various clauses of Customs Act including clause 10-A of section 156(I) of the Customs Act, 1969 for realization of Customs duty of Rs.49,08,665 and Income Tax at Rs.10,63,544.
3. In reply to the above show-cause notice the appellant through their counsel Messrs Fazle Ghani Khan and Co. advocates vide their letter, dated 5-4-2000 filed a detailed reply in which they contended as under:-
4. In this letter the appellant claimed that due to non-receipt of the financing facilities for the project at Sheikhupura the appellant had no other option but to install the above machinery at their original factory premises at Kotri (Sindh) and according to them they also acquired an installation certificate issued by the Assistant Commissioner of Customs, Hyderabad, somewhere in 1993 and had submitted the same also somewhere in 1993 before the Collector Customs for allowing withdrawal, of the indemnity bond furnished by them. The appellant also claimed that they had applied to the C.B.R., now F.B.R., for condoning the delay in filing the installation certificate which was allowed by the C.B.R./F.B.R. vide its letter C. No.1(2) Mach./95, dated 12-9-1995 and they applied to the C.B.R. somewhere in 1995 for allowing change of location for installation of the said machinery and the C.B.R. vide its letter C.No.1(62)Mach.95, dated 20-3-2000 allowed then such permission. The appellant also claimed that they had not only mentioned in the bill of entry that they were claiming exemption under S.R.O. 484 mentioned above but also under S.R.O. 791(I)/91, dated 15-8-1991 and even if it is held that they will not be entitled to exemption under Notification No.484 mentioned above as they had not fulfilled the condition of getting the machinery installed at Sheikhupura then they will be entitled for exemption under S.R.O. 791 mentioned above as they had imported AIR Filtration Plant, which is one of the machinery, which has been specified under the above S.R.O. The appellant also contended that the show-cause notice was barred by limitation as it has not been mentioned in the show-cause notice whether it is under section 32(2) or 32(3) of the Customs Act and he submitted that even if it is assumed that the notice has been issued under section 32(2) then the maximum period of limitation for issuance of such notice is five years and since goods were cleared in June, 1992 and the notice has been issued in 1999, therefore, it is barred by the period of limitation.
5. The Adjudicating Officer before passing the Order-in-Original examined the explanation filed by the appellant's counsel and also heard Ms. Danish Zubair and Mr. Pervez Umar authorized representatives of the appellant who attended the hearing of the case and after rebutting the arguments of the appellant's counsel by his Order-in-Original No.66 of 2000, dated 24-6-2000 held that the appellant, had violated the provisions of S.R.O.484 and directed them to make payment of Customs Duty of Rs.32,72,442 along with markup of 14% and also levied a penalty of Rs.10,00,000 in terms of clause 10-A of section 156(1) of the Customs Act.
6. Being aggrieved by the Order-in-Original the appellant filed an appeal before the Customs Excise and Sales Tax Appellate Tribunal, Karachi Bench Karachi, who vide the impugned order upheld the Order -in-Original to the extent of the levy of the Sales Tax and imposition of the penalty but waived the imposition of markup. Hence, this appeal.
7. We have heard Mr. Abdul Ghaffar Khan learned counsel for the appellant and Mr. Raja Muhammad Iqbal learned counsel for the respondent.
8. The learned counsel for the appellant after reiterating the facts of the case mentioned above submitted that when he had filed the Bill of Entry before the Customs Authorities he had claimed exemption to only under S.R.O.484(0/92, dated 14-5-1992 but also under S.R.O.791(I)/91, dated 15-8-1991 for the exemption of duty. He submitted that although the Adjudicating Officer had rejected his claim because according to him since the all other entries in the bill of entry were typed therefore, the fact that the claim of exemption under S.R.O.791 was handwritten led to the conclusion that it was manipulated. He stated that however, this contention of the Adjudicating Officer was not accepted by the Tribunal, who dismissed it for other reasons. The learned counsel further submitted that he had imported the Air Filtration plant, which was specifically exempted under the provisions of S.R.O.791, and therefore, if an item was exempt not only under one notification but under two notifications which were in force at that time and if an importer does not fulfill the conditions of one S.R.O. he will still be entitled to exemption under the second S.R.O. and therefore, he should not be penalized for non fulfillment of the conditions prescribed by S.R.O. 484 and should be allowed exemption under S.R.O.791.
9. The second argument of the learned counsel was that the show-cause notice is barred by the period of limitation. He submitted that such show-cause notice could only be issued under the provisions of section 32 of the Customs Act either under subsection (2) or sub-section (3) and although it has not been mentioned 'in the show-cause notice as to which specific subsection of section 32 has to be applied but even if it is assumed for the sake of arguments that the show-cause notice was issued under subsection (2) of section 32 then the period of limitation is five years and since goods were cleared in June, 1992 the relevant date for the computation for the period of limitation will be June, 1997 and therefore, the period of limitation for issuing notice under subsection of section 32 had expired in June, 1997, whereas the show-cause notice in the present case has been issued somewhere in 1999 and therefore, is barred by limitation.
10. The third argument advanced by the learned counsel was that once he had applied for and got issued an installation certificate by the Assistant Collector Customs, Hyderabad and once the C.B.R., which is the main authority under which the officers of Customs function, has condoned the late filing of the installation certificate before the Customs authorities and had also allowed him change of location of site for installation of machinery then it can safely be assumed that the C.B.R. has modified the provisions of the S.R.O. 484 as far as the installation of his machinery is concerned and therefore, the conditions of such S.R.O. do not apply to him and he is entitled to exemption under S.R.O.484. The learned counsel, however, submitted that this Court has to decide the following law points, which have been canvassed by him in his above appeal:
(1) Whether the plant and machinery imported by the Appellate was exempt from the whole of Customs duty and Sales Tax in terms of S. R.0.484(1)/92, dated 14-5-1992?
(2) Whether the plant and machinery imported by the appellant was exempt from the whole of Customs duty under S.R.O.791(I)/91?
(3) Whether the plant and machinery imported by the appellant was exempt from Sales Tax under S.R.O.500(I)/88?
(4) Whether the Central Board of Revenue acted beyond, its jurisdiction in condoning the delay in installation of the plant and machinery imported by the appellant?
(5) Whether the condonation of change of location by the Central Board of Revenue amounted to an amendment to the conditions imposed by S.R.O.84(I)/92?
(6) Whether the show-cause notice, dated 14-9-1999 was time barred?
11. The learned counsel further submitted that although the S.R.O.484 is later in time but it could not be assumed that it had impliedly repealed the S.R.O.500(I)/88 or S.R.O.791(I)/91 and such implication could only have been assumed if the provisions of these two S.R.Os. are inconsistent with the provisions of the S.R.O. 484 and the actual fact is since the provisions are not inconsistence, therefore, the doctrine of right of implied repeal cannot be applied in the case of the appellant. The learned counsel also submitted that although he had claimed exemption in the bill of entry under S.R.O.791 also, but even if it is assumed that such exemption was not claimed, the Courts have held that if the correct S.R.O. or section has not been mentioned in the bill of entry or has wrongly been mentioned then it does not vitiate the claim of exemption by the appellant and the Customs authorities are duty bound to provide him the exemption to which he is entitled.
12. On this point he relied on following judgments:--
(1) Gatron (Industries Limited v. Government of Pakistan and others reported in 1999 SCMR 1072.
(2) Assistant Collector, Dry Port, Peshawar and others v. Messrs Khyber Electric Lamps MFG Co. Ltd., Peshawar reported in 2001 SCMR 838.
13. The learned counsel on the basis of the above arguments prayed that the questions of law, which have been admitted for regular hearing may be answered in his favour and his appeal may be allowed and the impugned order may be vacated.
14. Mr. Raja Muhammad Iqbal learned counsel for the respondent supported the order of the Tribunal and contended that the appellant with mala fide intention to claim exemption under 484 had mentioned in the bill of entry that the machinery in question was going to be installed at Sheikhupura which fell within the exemption provided under S.R.O.484 and on the basis of such statement filed the Indemnity Bond and under-taking and such goods were released without levy of Customs duty and Sales Tax in view of the above documents filed by the appellant. He submitted that the appellant never had any intention for getting this machinery installed at Sheikhupura site because a finding of fact has been given both in the order in original and the impugned order of the Tribunal that there is no evidence that the machinery was ever taken for installation at Sheikhupura and was directly taken to Kotri. He submitted that the appellant without intimation to any authority of the respondents installed the machinery at Kotri and thus violated the provisions of the indemnity bond filed by them and somehow or other obtained an installation certificate from the Assistant Collector Customs Hyderabad. He further submitted that the appellant was not entitled to exemption under S.R.O.791 because the only product imported by the appellant, which may have fallen under the provisions of S.R.O.791, is the Air Filtration System, whereas according to the Bill of Entry the appellant had imported complete Textile Machinery and Mill Work, Overhead Cleaners, Dust and Waste Collectors complete with all standard Accessories and Essential Parts besides Air Filtration and Automation Control. He further submitted that the case was never examined under S.R.O. 791 and once the appellant claimed exemption under 484 and filed indemnity bond and undertaking under the S.R.O. he had to fulfil the condition imposed by this S.R.O. which in the undertaking along with the indemnity bond he had undertaken to fulfil and non-fulfilment of these conditions would lead to the payment of duties and taxes which had been exempted as provided in the S.R.O. itself and as undertaken by the appellant in the indemnity bond and the undertaking filed. He further submitted that it has not been mentioned in the show-cause notice that this show-cause notice has been issued under any subsection of section 32 because the fact of the matter is that this show-cause notice has not been issued under any of these subsections as in accordance with indemnity bond filed by the appellant they had undertaken that if the machinery is removed to another area they will not be entitled to the concession and will repay the amount of rebate and penalty, if any, levied and if the same is not paid it may be recovered as arrears of land revenue under section 202 of the Customs Act, 1969. He submitted that the exemption was a contingent exemption on fulfilling of certain conditions and if these conditions were not fulfilled it would be deemed that no exemption was granted and without even issuance of a show-cause notice demand would be deemed to have been created under section 202 of the Customs Act. He, therefore, submitted that there is no question of the show-cause notice or any action taken in accordance with the show-cause notice being time barred as this' Court has already held that there is no period of limitation for the recovery of government dues which does not become time barred.
15. In this connection he relied on the judgment of this Court in the case of Messrs Adamjee Insurance Company Ltd. v. Collector of Customs, Sales Tax and Central Excise (Adjudication) Karachi-III, Karachi reported in PTCL 2007 CL 414.
16. We have examined the appeal in the light of the arguments of the learned counsel and have carefully perused the impugned order, the Order-in-Original and the other documents on record and also the judgments relied on by the learned counsel.
17. The first question, which has to be answered is whether the appellant was entitled to exemption under both S.R.O.484 and S.R.O.791. The Tribunal on the basis of the judgments relied on by the learned counsel for the appellant before it, had rejected the contention of the Adjudicating Officer that the claim of exemption under S.R.O.791 is manipulated firstly to give maximum benefit of doubt to the appellant and secondly in view of the law laid down by Hon'ble Supreme Court of Pakistan in Gatron (Industries) Limited v. Government of Pakistan quoted supra that the mention of a wrong notification will not deprive the Court of the power and jurisdiction if otherwise the appellant is entitled for the benefit of that notification. They, however, after examination of the subject S.R.O. reached to the conclusion that in the facts and circumstances of the case, S.R.O.791 is not applicable to the case of the appellant. It will be relevant to reproduce the above extract from the order of the Tribunal:--
(a) S.R.O.791(I)/91, dated 15-8-1991. It is a general notification issued under section 19 of the Customs Act, 1969 granting exemption of customs duty for the goods falling under specified headings/sub-headings imported during the period of 1-7-1991 and ending 30th of June, 1993. It would be seen that the S.R.O. is only for customs duty and not for sales tax.
(b) S.R.O.500(I)/88, dated 26-8-1988. This S.R.O. is issued under section 7 of the Sales Tax Act, 1951 since repealed by Sales Tax Act, 1990 and exempts only sales tax and not customs duty. Both these S.R.Os. are for each subject, general in nature and dealing with the import of normal goods.
(c) S.R.O.484(I)/92, dated 14-5-1992. This notification was issued under section 19 of the Customs Act, 1969 and subsection (I) of section 13 of the Sales Tax Act, 1990 exempting customs duty and sales tax for the period 1-12-.1990 to 30-6-1995 for such plant and machinery, for setting up new units and for expansion or balancing, modernization and replacement of existing units. It will be noticed that at the relevant time Sales Tax Act, 1990 was in the field, replacing Sales Tax Act, 1951. It covers both the subjects-and is later in time.
(11) It will be seen that S.R.O.484(I)/92 is a complete Scheme in itself, on the import of plant and machinery with a purpose. In the matter of concession it grants exemption to customs duty as well as sales tax. It lays down complete procedure, the liabilities of importers/investors. It lays down the sites to be installed, the period of its compliance, the undertakings and its preservation for a specified period. Hardly there is any scope for any other notification. It is optional for the importer to import under this scheme or not. But if he does, he is to remain within its boundaries and by implication it ousts the other notifications which are only either for sales tax or customs duty, which are general in nature. In this case S.R.O.500(I)/88 is otherwise irrelevant which was issued under section 7 of the then Sales Tax Act, in the presence of Sales Tax Act; 1990. As regards S.R.O.791(I)/91 the Law makers knew its existence, when in its presence S.R.O.484(I)/92 was issued for the exemption of customs duty and sales tax, and as such by implication it merged into it. Both grand total exemption of the customs duty and the benefit is the same. In fact, at this extraordinary late stage the appellant intends to wriggle out of the condition of the S.R.O.484(I)/92 by claiming benefit of S.R.O.791(I)/91. They voluntarily opted the Scheme under S.R.O.484(I)/92, for the import in question and remained under the Scheme for considerable time, abiding by its conditions favourable to them, obtained condonation of delay under S.R.O.484(I)/92 and now they cannot be allowed to switch over to other S.R.O. which is not relevant. We are, therefore, of the considered view that in the facts and circumstances of the case S.R.O. 791(I)/91 is not applicable to the case of the appellant.
18. Although, we agree with the above opinion of the Tribunal but we would like to take up another ground in support of the contention that S.R.O.791 is not applicable to the case of the appellant. Since we have already agreed with the Tribunal that the appellant is not entitled to exemption as mentioned under S.R.O.791 for claiming exemption from customs duty, if they were so entitled the Courts are bound to provide them such exemption. However, we have observed that at the time of the clearing of the goods the appellant had fulfilled the conditions of S.R.O.484 and filed the Indemnity Bond required to be filed under the provisions of that S.R.O. and, therefore, in our view the appellant had given up its claim under S.R.O.791 and, therefore, the customs authorities had not examined whether the claim of the appellant for exemption under S.R.O.791 fell within the ambit of the said S.R.O. or not. The learned counsel of the respondent has pointed out that Air Filtration System is only one of the machinery imported by the appellant and it has not been pointed out or contested by the appellant that the other machineries imported by them also fall under S.R.O.791. The examination of the bill of entry in the light of the arguments of learned counsel for the respondent reveals that arguments of learned counsel carry some weight. Since the point of exemption under S.R.O.791 requires examination and is not free from doubt and it cannot be examined by this Court in its advisory jurisdiction under section 196 of the Customs Act and, since the validity of S.R.O. has now expired therefore, the claim of exemption cannot be examined now, therefore, we are of the considered opinion that S.R.O.791 will not apply to the case of the appellant.
19. We will now examine whether the condonation by the C.B.R. of the violation of the conditions of S.R.O.484 by the appellant and allowing them permission to relocate the machinery from Sheikhupura to Kotri will entitle them to exemption under S.R.O.484.
20. A perusal of the S.R.O. in question reveals that this S.R.O. has been issued by the Federal Government and it is a settled law that no authority has the power to modify any S.R.O. issued by authority superior to it. Even otherwise we are of the opinion that even if the C.B.R. had allowed them permission to relocate the machinery they could not condone the non following of the conditions mentioned in the above S.R.O. or in the indemnity bond for the purpose of exemption and cannot allow them the benefit of the S.R.O. if they have violated the conditions of such S.R.O.
21. We, therefore, agree with the Tribunal that if the intention of the C.B.R. in issuing the above letter is to condone the conditions and allow them exemption under the above S.R.O. then it is beyond their powers as they have no powers to allow exemption to machinery, which has been installed at areas other than the areas specified in the subject S.R.O.
22. We now take up the third argument of the learned counsel for the appellant that the show-cause notice is barred by limitation. In this connection it will be relevant to reproduce certain conditions of the S.R.O. in question and provisions of the Indemnity Bond furnished by the appellant. Condition No.4 of the said S.R.O. is reproduced as under:--
(4) The plant and machinery released under this notification shall not, within a period of eight years from its importation, be used in any area which is not eligible for the same concession. In case this condition is violated, the amount of customs-duty and sales tax exempted under this notification and penalties that may be imposed in this behalf shall be recovered under section 202 of the Customs Act, 1969 (IV of 1969).
23. In the indemnity bond which has been furnished by the appellant following undertakings have been given:--
(i) to produce a certificate from the Assistant Collector, Customs and Central Excise, within one year from the date of the importation of the plant and machinery, to the effect that the plant and machinery have not been installed at a place in any other areas specified in the Tables given in the said Notification; or
(ii) to produce such other evidence as it may be necessary to establish that the plant or machinery has been installed in accordance with the conditions of the said notification.
The importers further agree and bind themselves that the amount covered by this Bond may be recovered as arrears of customs duty under section 202 of the Customs Act, 1969.
The importers shall stand discharged from any liability under the Bond when the aforesaid certificate has been produced and it is established through other evidence, if necessary, that the importers have fulfilled all the conditions of this Bond.
24. In the order-in-original the Adjudicating Officer has stated that an undertaking, dated 7-6-1992 has also been filed by the appellant, and this undertaking has been reproduced on page No.8 in the Order-in-Original and same is again being reproduced for the sake of relevancy:--
"In consideration of the Collector of Customs, Customs House, Karachi allowing us a rebate of 100% amounting to Rs.49,086,665 (Rupees Forty nine lacs Eight thousand Six Hundred Sixty five only) for Machinery vide S.R.O. No.484(I)/92, dated 14-5-1992 they undertaken as under:--
(i) that the machinery shall be installed at Nankana, Warburton Road, Sheikhupura.
(ii) that the machinery will not be removed for another area within a period of 10 (ten) years from the date of installation.
(iii) that if the machinery is removed to another area, they are not be entitled to concession, they will repay amount of rebate and any other penalties, etc., they may be imposed by the Collector of Customs, Karachi, in this behalf. If the amount of rebate and penalty is not paid, this be recovered as arrears of land revenue under section 202(2) of the Customs Act, 1969.
(iv) that the machinery is for new installation.
(v) they also undertake that they will have no objection in getting the said machinery inspected once a year at their cost until of the undertaking wherever desired."
25. From a perusal of the conditions of S.R.O. and Indemnity Bond and the undertaking reproduced above it is clear that the exemption allowed to the appellant in contingent upon the machinery being installed in the specified area and the appellant had undertaken that the machinery will not be removed to another area or if it is removed to another area they will not be entitled to concession and will repay the rebate amount and any other penalties and if they do not pay the same, the amount will be recovered as arrears of land revenue under section 202 of the Custom's Act, 1969. At this juncture it will be relevant to reproduce section 202 of the Custom's Act, which reads as under:--
202. Recovery of Government dues.--(1) When, under this Act or under any other law for the time being in force, which provides for any tax, duty or other levy being collected in the same manner as custom-duties are collected, a penalty is adjudged against or notice or demand is served upon, any person calling for the payment of any amount unpaid which may be , payable by way of penalty or by way of duty, tax or other levy or under any bond, guarantee or other instrument executed under this Act or such other law or the rules made thereunder, the appropriate officer--
(a) may deduct or require any other officer of Customs, Central Excise and Sales Tax to deduct such amount from any money owing to such person which may be under the control of the Customs, Central Excise or Sales Tax authorities; or
(b) if it cannot be so recovered, may recover, or may require any other officer of Customs, Central Excise or Sales Tax to recover, such amount by detaining and selling any goods belonging to such person which are under the control of Customs, Central Excise or Sales Tax authorities:
[Provided that notwithstanding anything contained in any other law for the time being in force, if a defaulter sells or transfers ownership of his assets, the defaulted amount of duty and taxes shall be the first charge on the business so transferred.]
(2) If the amount cannot be recovered from such person in the manner provided in subsection (1), the appropriate officer may serve upon the defaulter a notice in the prescribed form requiring him to pay the amount specific in the notice within such time as may be so specified.
(3) If the amount referred to in the notice under subsection (2) is not paid within the time specific therein or within the further time, if any, allowed by the appropriate officer, the appropriate officer may proceed to recover from the defaulter the said amount by one or more the following modes; namely:
(a) attachment sale of any moveable or immovable property of the defaulter; and
(b) may recover, or may require any other officer of Customs, Central Excise or Sales Tax to recover, if it cannot be so re-- covered, such amount by detaining and selling any goods belonging to such person which are under the control of the Customs, Central Excise or Sales Tax authorities; or
(a) may recover such amount by attachment and sale of any moveable and immovable property of the guarantor, person, company, bank or financial institution, where a guarantor or any other person, company, bank or financial institution fails to make payment and such guarantee, bond or instrument [; or]
[(d) arrest of the defaulter and his detention in the prison for a period not exceeding fifteen days:
Provided that this mode shall not be applied unless the period of limitation prescribed for filing appeal has expired, or an appeal is pending.]
[(3A) A warrant of arrest issued against a defaulter in subsections (3)(d) shall not be executed if the arrears due from him are paid or the defaulter furnished security to the satisfaction of appropriate officer.
(3B) Any defaulter who under subsection (3) is being kept under detention shall forthwith be set at liberty on the arrears due from him being paid.]
(4) For the purposes of recovery of duty, or other levy under (subsections (1) and (3)], the appropriate officer shall have the same powers which, under Code of Civil Procedure, 1908 (Act of 1908), a civil Court has for the purpose of the recovery of an amount due under a decree.
(5) The Board may make rules regulating the procedure for recovery of duty, tax or other levy under this section and any other matter connected with or incidental to the operation of this section:
[Provided that if any arrears which may be payable by way of duty, surcharge, fee, service charges, fine or penalty or any other amount which is adjudged or payable under any bond, guarantee or other instrument executed under this Act or the rules made thereunder, cannot be recovered, the Board or any officer not below the rank of Collector authorized by the Board, may for reasons to be recorded, write off the arrears in the manner as may be prescribed by rules.]
[202A. Levy of surcharge.---Notwithstanding anything contained in this Act and without prejudice to any other action that may be taken thereunder, if any person fails to pay the arrears within the prescribed time, he shall, in addition to the arrears, be liable to pay surcharge at the rate of one and a half per cent per month, of the total amount or arrears.
26. We are of the opinion that since the exemption which was granted was a contingent exemption, it can be assumed that the appellant was liable to pay the duties unless he fulfil the conditions on which the exemption was contingent and not fulfilling these conditions or violation thereof will render them liable to pay the government dues on the day of the clearance and there is no time limit for collection of such government dues. We are, therefore of the considered opinion that even the show-cause notice or the Order-in-Original was not needed to collect these dues and a simple demand notice would have sufficed. We, therefore, hold that the action leading to the recovery of the disputed dues was not barred by the period of limitation.
27. Another aspect of the case as to why this argument of the learned counsel for the appellant cannot be sustained is that the counsel for the appellant vide letter referred in the earlier part of the judgment had referred to his letter, dated 2-8-1993 by which appellant had communicated the aforesaid installation certificate to the Assistant Collector (Appraisement) and a letter, dated 25-9-1995 by which they had requested the Secretary Customs and Central Board of Revenue to allow them the change of location of the machinery. The Adjudicating Officer in his Order-in-Original mentioned the letters, dated 18-5-1993 by which the appellant had informed the Assistant Collector (Appraisement) that they were unable to get any financial assistance for setting up a new industrial unit at Sheikhupura and letter dated 2-8-1993 by which the installation certificate acquired from the Assistant Collector, Hyderabad was communicated to the Assistant Collector (Appraisement), were never received in the office of the respondent and that the receipt stamp on the face of letters were manipulated. This contention of the Adjudicating Officer was not rebutted by the appellant either before the Adjudicating Officer or the Tribunal or this Court nor any affidavit in this connection was filed before any of the authorities. As far as the letter written to the C.B.R. for change of location is concerned that is admittedly, dated 3-9-1995, however, the C.B.R. while issuing the permission to relocate the machinery vide their letter, dated 20-3-2000 have mentioned in this letter that his relocation is being allowed in response to representation of the appellant company, dated 24-2-2000 but even if we consider that the alleged date provided by the appellant of their letter is correct and treat it as the date on which the respondent learnt of the relocation of the machinery the impugned notice has been issued within four years from the date of such letter and therefore, is within time even if it is treated as it notice under section 32(2).
28. In the light of the above discussion we are of the opinion that the questions which have been framed by this Court at the time of admission do not resolve the controversy in hand except question No.3 which we will answer in affirmative in favour of the respondent and against the appellant. We would also answer the question No.4 for academic purposes only in negative, whereas question Nos. 1 and 2 have no nexus with the decision of this case and therefore, we need not answer them. To resolve the controversy we will frame a fresh question numbered question No.4(a) as under:--
"Whether on the facts and circumstances of the case the action of the respondent in refusing the exemption under S.R.bs. 484 and 791 to the appellant is in accordance with law?"
and we will answer the above question in affirmative in favour of the respondent and against the appellant as consequence thereof this appeal is dismissed.
M.B.A./P-14/KOrder accordingly