COLLECTOR OF CUSTOMS, MCC, PESHAWAR VS COLLECTOR OF CUSTOMS (APPEALS), MCC, PESHAWAR, 2011 PTD-CUSTOMS-APPELLATE-TRIBUNAL-PESHAWAR 2863 (2011)

Customs Act (IV of 1969)---

----S.37---Customs General Order No.12 of 2002 dated 15-6-2002, Chapter XII, Paragraphs 47 & 49---Export Policy Order, 2005, S.8(1)(a)---Ministry of Commerce letter No. 16(1)/2005-E.1, dated 17-8-2007---S.R.O. 415(I)/2001 dated 18-8-2001---S.R.O. 787(1)/2005 dated 6-8-2005---S.R.O. 840(1)/2006 dated 17-8-2006---Drawback on goods used in the manufacture of goods exported---Limitation---Condonation of delay---Repayment claims of customs duty on account of export of cement to Afghanistan---Rebate claims were rejected with the observation that the same were filed after expiry of limitation period i.e. 210 days and failed to come up with cogent reasons of delay in filing these claims and to justify that the delay was beyond their control---Exporter contended that, due to law and order situation of Afghanistan they were unable to produce the Original Afghan Customs Clearance Documents, which were the requirement of the department at that time and the issue was taken up by the Ministry of Commerce, who clarified that the attested copies of the Afghan Customs Clearance Documents will be accepted and they will get the same verified from Afghan Customs and delay in filing of rebate claims was genuine and was required to be condoned by the customs authorities---Delay in filing the rebate claims was condoned by the First Appellate Authority and Collectorate was directed to sanction the rebate claims filed by the exporter as per direction of the Ministry of Commerce---Validity---Department had not taken into consideration Ministry of Commerce's instructions---Claims of rebate filed by the exporter should have been considered in the light of such instructions and action should have been taken subsequently, provided they had failed to produce the verified documents from the respective quarters---Appeal was barred by period of nineteen days and no request for condonation of delay had been filed by the Department---Appellate Tribunal did not intervene in the order of First Appellate Authority and appeal of the Department was rejected being without any merit.

Collector of Customs, Peshawar v. Messrs Bilour Enterprises Customs Reference No.83 of 2010 distinguished.

Aziz-ur-Rehman, D.S. for Appellant.

Danish Ali Qazi and Waheed Ahmad, Account Officer for Respondents.

Date of hearing: 24th May, 2011.

JUDGMENT

SHER NAWAZ, MEMBER (TECHNICAL)---The Collector of Customs, Model Customs Collectorate, Peshawar (hereinafter called as the appellant) has filed this appeal under section 194-A of the Customs Act, 1969, against the Order-in-Appeal No.562 of 2010, dated 3-11-2010 (should have been Order-in-Remand), passed by the Collector of Customs (Appeals), Peshawar.

2. Precisely, the stated facts of the case as recapitulated from the available case record are that Messrs Lucky Cement Company Ltd., had various repayment claims of customs duty on account of export of cement to Afghanistan via land route, Torkham, which under Chapter XII (Paragraph 49) of Customs General Order No.12 of 2002, dated 15-6-2002, falls within the competency of Superintendent (Rebate), MCC, Peshawar. During the course of scrutiny, it was observed that all 1 the cases were filed after expiry of the limitation period i.e., 210 days, but they failed to come up with cogent reasons of delay in filing these claims and to justify that the delay was beyond their control. Accordingly, a show cause notice was issued to Messrs Lucky Cement Company Ltd., and the date of hearing was fixed for 17-12-2008, which was adjourned for 30-12-2008, but they failed to appear for hearing. However, their representative Mr. Mohibullah Afridi had submitted an application for extension of time for submitting reply to the show cause notice, but the Superintendent (Rebate Cell) Model Customs Collectorate, Custom House, Peshawar vide his impugned Order?-in-Original No. 22 of 2008, dated 30-12-2008, rejected the rebate claims without granting condonation in filing the same beyond the I mandatory period of 210 days under Chapter XIII (Paragraph 47 read with Paragraph 49) of Customs General Orders No.12 of 2002, dated 15-6-2002.

3. Being aggrieved by the impugned Order-in-Original, the respondents (then appellants) filed an appeal before the Collector of Customs (Appeals), Peshawar, who vide his Order-in-Appeal No.103 of 2009, dated 27-2-2009, upheld the impugned Order-in-Original.

4. Still being aggrieved of the impugned Order-in-Appeal, the respondents (then appellants) filed an appeal before this Tribunal, who remanded the case back to the Collector, vide judgment in Customs Appeal No.141/PB/2009, dated 17-3-2010, with the following directions:

"(4) The learned counsel stated that due to law and order situation in Afghanistan they were unable to produce the Original Afghan Customs Clearance Documents, which were the requirement of the department at that time and the issue was taken up by the Ministry of Commerce, who later on clarified that the attested copies of the Afghan Customs Clearance Documents will be accepted and they will got verified the same from Afghan Custom, therefore, the delay in filing of rebate claim was genuine and was required to be condoned by the custom authorities, but they have rejected the request for condonation and on the same basis the refund claim was also been rejected.

(5) The D.R. stated that the claims, which were within time, they were allowed, but where the claims were time barred had been rejected by the competent authority. The case is, therefore, remanded back to the Collector for denovo consideration after setting aside the order-in-appeal as the appellant's reasoning for delay are quite logical and due to law and order situation the delay might have occurred. The case should be decided afresh within 30 days of receipt of this order."

5. Thus, in pursuance of the said judgment of this Tribunal, the respondents (then appellants) reappeared before the Collector of Customs (Appeals), Peshawar, who vide his Order-in-Appeal No.562 of 2010, dated 3-11-2010, (should have been Order-in-Remand) concluded as under:

"..14. In view of the above position, the appellant's plea for delay is quite genuine and logical, therefore, the delay in filing the rebate claims is condoned and Collectorate is directed to sanction the rebate claims filed by the appellant in this case as per direction of the Ministry of Commerce in their letter dated 17th August, 2007."

6. Hence aggrieved of the said order, the present appeal under section 194-A of the Custom's Act, 1969, filed by the Collector of Customs, MCC, Peshawar to this Tribunal on the following grounds:

(a)?? that the appellate authority has extended undue benefit to the appellants (now respondents) by passing the impugned judgment condoning the delay in the submission of rebate claim;

(b)?? that the appellants' (now respondents) plea that the delay in submission the rebate claims had occurred due to law and order situation is not plausible one rather a lame excuse. They same have submitted the rebate claims within the mandatory period of 210 days as under Chapter XIII (Paragraph 47 r/w para 49) of the Customs General Orders 12 of 2002, dated 15-6-2002;

(c)?? that the appellate authority has not based his judgment on any solid grounds. Concluding merely on the role of the unit in contributing to the government exchequer as well as establishing the unit in the remote area of N.-W.F.P. does not absolve the appellants (now respondents) from their responsibility of complying with the laid down procedure/rules regarding rebate claims. There are similar other units which are also contributing a lot to the government exchequer hut where as law point arises they cannot be absolved of the charges of non-compliance of the relevant rules and laid down procedure;

(d)?? that we reserve the right to present further arguments during proceedings of the case.

7. On the date of hearing i.e., 24-5-2011, the departmental representative (DR) contended that the rebate claims were filed beyond the admissible time limit of 210 days without any substantial reasons in their favour, which could justify the delay. He maintained that in similar time barred case the Hon'ble Peshawar High Court, Peshawar has accepted the plea of the Collectorate and furnished a copy of the same and insisted that in the instant cases the rebate claims were filed beyond the stipulated time period, therefore, the adjudicating officer had correctly rejected their claims. The learned Collector (Appeals) without considering the basic facts has accepted their appeal, which is unwarranted. The learned counsel for the respondents however, added that the appeal of the Collectorate is time barred by nine/ten days and there is no application for condonation of delay. Moreover, he referred to Ministry of Commerce Letter No.16(1)/2005-E.1, dated 17-8-2007, wherein according to him the Ministry has categorically conveyed the policy decision regarding the export of goods to Afghanistan and verification of the Afghan Customs Documents by the respective authorities in Afghanistan. He also referred to various correspondence in between MCC, Peshawar and F.B.R., wherein problems faced by the Collectorate have been highlighted. Based on this, the matter was then taken up by the F.B.R. with the Ministry of Commerce on the basis of which Ministry of Commerce issued a policy decision, which has been referred to above. Keeping in view the circumstances narrated above, the learned counsel for the respondents prayed that the rebate claims were very much in order and rightly been upheld by the learned Collector (Appeals).

8. I have gone through the record of the case and considered the written as well as verbal arguments put forward by the appellant-department and the learned counsel for the respondents. From perusal of the record it transpires that cement was exported by Messrs Lucky Cement Company Ltd., via land route to Afghanistan on various dates by filing GDs. Claims for rebate/duty drawback were filed, but after the expiry of stipulated period of 210 days, prescribed under Notifications Nos.S.R.O.415(I)/2001, dated 18-8-2001, 787(I)/2005, dated 6-8-2005 and 840(I)/2006,,dated 17-8-2006. A consolidated show-cause notice was issued to the respondents (then appellants) and the rebate claims were rejected on the ground that these did not qualify for condonation in terms of Serial No.47(iii) of the Customs General Order No.12 of 2002, dated 15-6-2002. Messrs Lucky Cement went in appeal and the case was heard by the learned Collector (Appeals), who rejected the appeal of the respondents (then appellants) due to which they approached this Tribunal and the Hon'ble Member (Technical) vide his judgment in Customs Appeal No.Cus.141/PB/2009, dated 17-3-2010, remanded the case back to the learned Collector (Appeals) for de novo consideration. The learned Collector (Appeals), vide his Order-in-Appeal No.562 of 2010, dated 3-11-2010 (should have been Order-in-Remand) accepted the plea of the respondents (then appellants) and allowed the appeal with the direction to the Collectorate to sanction the rebate claims filed by the respondents (then appellants) as per directions of the Ministry of Commerce vide its Office Memorandum No.16(1)12005-E.1, dated 17-8-2007.

9. From perusal of the record it appears that the show-cause notice only refers to the delay in filing of rebate claims within the stipulated time period of 210 days and does not refer to any other reason due to which the claims for rebate were not maintainable. The rebate claims were rejected because these were too old and because the respondents (then appellants) had failed to produce copy of the ACCD and their seeking of adjournment on the grounds that they have to consult the relevant record. The claims were decided without giving them an opportunity of extension in the hearing and without representing by their nominee, as is evident from the Order-in-Original.

10. The record shows that initially the receipt of rebateable goods in Afghan Customs and its subsequent verification was to be made through Commercial Counselor of Pakistan in Kabul but by virtue of change in section 8(1)(a) of the Export Policy Order, 2005, issued vide S.R.O.573(I)/2005, it was made mandatory that export verification shall be made on the basis of copy of import clearance documents by Afghan Customs authorities across the border. This change in the policy made this situation objectionable to the exporters and the matter was taken up by the Sarhad Chamber of Commerce Industries (now Khyber Pukhtoonkhuwa Chamber of Commerce Industries) with the Collectorate of Customs, Peshawar, who took it up with the F.B.R. and the F.B.R. referred the issue vide its letter C. No. 3(59)/EP/96 (Main), dated 19-7-2007, to the Ministry of Commerce. The Ministry of Commerce vide its Letter No. 16(I)/2005-E.1, dated 17-8-2007, intimated as under:

"SUBJECT: ???? VERIFICATION OF GOODS EXPORTED FROM PAKISTAN TO AFGHANISTAN.

The undersigned is. directed to refer to F.B.R's. OM No.3(59)/EP/96(Main) dated 19-7-2007 on the above subject and to say that the Ministry of Commerce is of the view that verification responsibility should rest with the Government Departments and not with the exporters. F.B.R. is accordingly requested to advise its field Collectorates to prepare exporter-wise list of Afghan Import Clearance Documents and furnish the same along with photo-copies of these documents to Commercial Counselor Kabul for verification from Kabul Custom Headquarters. During the period verification process is on C.B.R. may advise field Collectorates to give option to corporate sector exporters to claim-rebate/refund against their undertakings and to non- corporate sector exporters to claim rebate/refund against post dated cheques. Exporters not availing the above option may be given refunds/rebates after Afghan Import Clearance Departments are verified by Afghan Customs Headquarters, Kabul. Ministry of Commerce is advising the Commercial Counselor Kabul to expedite verification of Afghan Import Clearance Documents as and when received from field-Collectorates of C.B.R. "

11. The Central Board of Revenue (now F.B.R.) vide its letter C.No.3(59)/EP/96, dated 22-8-2007, issued instructions on the basis of Ministry of Commerce aforesaid letter for necessary action to its field formation. The F.B.R. subsequent to the above instructions also issued direction vide its letter of even number dated 10-10-2007, to get copies of the Afghan Customs Clearance Documents (ACCD) submitted by the exporters/claimants verified from the Customs Headquarters at Kabul in the manner as outlined in Ministry of Commerce's letter No.16(1)/2005-E-I, dated 17-8-2007, for further processing of the claims of rebate.

12. All these indicate that the cases of export to Afghanistan against claims of rebate were under correspondence with the F.B.R. and Ministry of Commerce. The Ministry devised a way out under which such claims could be considered by the department pending the receipt of verification from the Afghan Customs Department.

13. From perusal of sub-para (iii) of para 47 of the Customs General Orders No.12 of 2002, it is evident that the officer concerned sanctioning rebate claim is competent to condone the delay in filing of rebate claims provided that the exporter has sufficient justification in his favour that the delay was beyond his control. Apparently, as transpires from the correspondence; referred to in the preceding paras, it appears that the matter was under correspondence and was yet to be resolved and thus, the delay occurred in a way which was beyond the control of the respondents. Keeping this thing in view, the sanctioning authority should have condoned the delay at the time of sanctioning of rebate or according to the procedure devised by the Ministry of Commerce vide its Office Memorandum No.16(1)/2005-E.1, dated 17-8-2007. The contention of the D.R. that the claims of rebate were not admissible being filed beyond the stipulated period of 210 days and that the respondents had no substantial reason in their favour, apparently does not hold the ground. He referred to a judgment of Hon'ble Peshawar High Court, Peshawar in Customs Reference No.83 of 2010, dated 23-12-2010, (titled Collector of Customs, Peshawar v. Messrs Bilour Enterprises), wherein the Hon'ble Peshawar High Court, Peshawar, has rejected the plea of the party in a similar case. Here a reference is made to para-8 of the orders, which states as under:--

"(8) Now we are to see whether the respondents have succeeded in justifying that delay in filing the duty drawback claim was beyond their control. In their reply to the show cause notice, the respondents averred that the export documents that go with the consignment to the Afghan Gumruk Paper were sent late by the concerned party especially ACCD (Afghan Gumruk Papers) without which they were unable to file their duty drawback claims. This stance was repeated throughout, but it somehow or the other, did not find favour in any fora functioning under the learned appellate Tribunal. The respondents thus preferred an appeal before the learned appellate Tribunal, but the stance they took before the learned appellate Tribunal was different altogether. Here they sought refuge in the law and order situation in the area and in kidnapping of the person concerned in the Organization who was carrying the relevant documents. This stance quite obviously was different from the one taken earlier. Nothing in black and white was brought on the record to substantiate it. If it was due to the law and order situation or due to kidnapping of the person concerned, it should have been averred and asserted earlier. The justification so furnished by the respondents appears to be an offshoot of half baked thought which cannot be held to be tenable in the matrix of the case, especially when it is in conflict with the one taken in the fora below. The finding of the Tribunal, in this backdrop, appears to have been based on no evidence, therefore, it cannot be maintained in view of the judgments rendered in the cases of Oriental Investment Co. Ltd. v. Commissioner of Income Tax, Bombay (PLD 1958 Supreme Court (Ind) 151), Shree Meenakshi Mills Ltd., Madurai v. Commissioner of Income Tax, Madras (PLD 1957 Supreme Court (Ind) 188) and Messrs Pakistan International Public School Abbottabad v.. Commissioner Wealth Tax (2006 PTD 545)."

14. From perusal of the said judgment of the Hon'ble Peshawar High Court, Peshawar, it appears that the case under appeal is different than the one to which the learned D.R. has referred to. In Customs Reference No.83 of 2010, dated 23-12-2010, the Hon'ble Peshawar High Court, Peshawar, has rejected the plea of the appellant on the ground that there is difference in opinion of the respondent. First one was that ACCD was not sent within the time and the second was that because of law and order situation in the area and kidnapping of a person concerned in the organization, who was carrying the relevant documents, rebate claims could not be filed in time. In the instant appeal, as is evident from the various correspondence made in between Superintendent Customs (Rebate Cell) Custom House, Peshawar, and the respondents only one point of view has been taken that their importer in Afghanistan was unable to provide the original copy of the ACCD along with the export documents and that on their request Ministry of Commerce, Government of Pakistan has modified the procedure vide its Office Memorandum No.16(1)/2005-E.1, dated 17-8-2007.

15. Keeping in view the position, as is evident from the record and contentions of the learned counsel for the respondents and the D.R. for the appellant-department, it appears that the department has not taken into consideration Ministry of Commerce's instructions issued vide Office Memorandum No.16(1)/2005-E.1, dated 17-8-2007, and as communicated by C.B.R (now F.B.R.) vide it letter C.No.3(59)/EP/96, dated 22-8-2007, and its letter of even number dated 10-10-2007. In fact the claims of rebate filed by the respondents should have been considered in the light of these instructions and action should have been taken subsequently, provided they had failed to produce the verified documents from the respective quarters.

16. In view of the stated facts and because the appeal is barred by period of nine/ten days and no request for condonation has been filed by the appellant-department, I do not see any reason to intervene in the Order-in-Appeal No.562 of 2010, dated 3-11-2010 (should have been Order-in-Remand), and as such the appeal is rejected being without any merit.

17. This judgment consists of eight (08) pages and each page bears my official seal and signature.?????????

18. Announced.

C.M.A./225/Tax(Trib.)???????????????????????????????????????????????????????????? Appeal rejected.