PAKISTAN TELECOMMUNICATIONS CORPORATION VS FEDERATION OF PAKISTAN through Secretary, Finance Central Board of Revenue, 2011 PTD-KARACHI-HIGH-COURT-SINDH 2175 (2011)

Customs Act (IV of 1969)---

----Ss. 29, 79 & 88(5)---Constitution of Pakistan, Art.199---Constitutional petition---Refund claim after five months of clearance of goods---Importer's plea that value of imported goods declared in Bill of Entry on higher side was due to error of supplier, thus, he had inadvertently paid higher duties than what was actually due from him---Refusal of Customs authorities to accept such claim---Validity---Amendment of Bill of Entry was permissible under S. 88(5) of Customs Act, 1969 before completion of warehousing but not after clearance of goods---Importer, in the present case, had not only removed/cleared goods, but had consumed major portion thereof---Whether imported goods were software or not, was a matter of inquiry and finding of fact---Whether incorrect description of goods given in Bill of Entry was due to importer's inadvertence or mistake of supplier, was a question of fact and matter of record---High Court, in exercise of constitutional jurisdiction, could not decide such questions of fact---Refund claim was hit by provision of S. 29 of Customs Act, 1969---Constitutional petition was dismissed in circumstances.

PIDC v. Federation of Pakistan 2003 PTD 2241; Shahtaj Sugar Mills v. Addl. Secretary, Ministry of Finance, Government of Pakistan 2009 SCMR 1421; Ghulam Abbas v. C.B.R. 1994 CLC 1612; Pfizer Lab. v. Federation of Pakistan and others PLD 1998 SC 64; H. Shiekh Nooruddin and Sons Ltd. v. C.B.R. PLD 1989 Kar. 601; Messrs Baba Khan v. Collector of Customs 2000 SCMR 678; 2002 PTD 1122 and Government of Pakistan and others v. Sandoz Pakistan Ltd. 2006 SCMR 1403 rel.

H. Shiekh Nooruddin and Sons Ltd. v. C.B.R. PLD 1989 Kar. 601 rel.

Tanveer Ashraf for Petitioner.

Raja Muhammad Iqbal for Respondents.

Date of hearing: 10th March, 2011.

JUDGMENT

IRFAN SAADAT KHAN, J.---These constitutional petitions have been filed against the order passed by the Additional Secretary to the Government of Pakistan, Ministry of Finance dated 12-2-1995.

2. Briefly stated the facts of the case are that the petitioner is a corporation established under the Pakistan Telecommunication Corporation Ordinance, 1991. The petitioner was asked by the Government of Pakistan to provide 500,000 (Five lac) telephone connections across the country under a crash programme within a period of 18 months. In pursuance of the said programme the petitioner entered into an agreement with Messrs Alcatel CIT, S.A. for the supply of hardware i.e. telecommunication equipment and technical know-how in the form of software. In October, 1992 the petitioner imported equipment from the said supplier and Bills of Entry (B.E) bearing Nos.C-5970 and C-5971 were filed with the Customs Department. These B.E showed the import value at Rs.67,507,153 and Rs.114,862,975 and were based on the invoice value attached to the said B.E of US $ 2,641,744 and US $ 4494910 respectively. It was claimed by the petitioner that due to inadvertence by the Supplier, the value of the technical know-how i.e. the software was included in the said invoices attached to the shipping documents and were valued for US $ 931,488 and US$ 1581919. The goods were cleared by the Customs Department and thereafter on 27-2-1993, the petitioner filed refund applications with the respondent No.3 by claiming refund of Rs.85,69,173 and Rs.14551856 by stating that in the original B.E some error/inadvertence was committed by the supplier and they hence were entitled to the said refunds. A number of reminders were then sent to the respondent No.3 who, vide his order dated 31-5-1994, rejected the refund applications. Being aggrieved with the order, the petitioner filed appeals before the respondent No.2, who also dismissed the same vide order dated 2-10-1994. Revisions, thereafter, were filed before the respondent No.1 who also vide his order dated 12-2-1995, which is impugned in these petitions, dismissed the revisions filed by the petitioner.

3. Mr. Tanveer Ashraf, advocate appeared fur the petitioner and submitted that some error/inadvertence on behalf of the Supplier crept in the B.E submitted by the petitioner to the Customs Department and, upon realizing the said mistake, refund applications, thereafter, were filed before the respondent No.3 who, without appreciating the merits of the case and the various provisions of the Customs Act, rejected the same by holding that the same were an afterthought on the part of the petitioner, who after five months of the clearance of the said goods had filed the said refund applications and that the claims at this belated stage cannot be accepted. The learned counsel further submitted that reliance of the Departmental Officials on section 29 of the Customs Act, 1969 (The Act) is misplaced as the value of the goods imported had been inadvertently declared and the petitioner was entitled to refund of the excess amount of duties paid by them. The learned counsel further submitted that by mistake duty had been paid by the petitioner on software which were exempt from the levy of customs duty, hence the petitioner had paid the duty on the items on which' no duty was payable by them and if excess amounts were paid by the petitioner inadvertently they were entitled to have the same refunded. The learned counsel went on to argue that the refunds claim were not based on some personal gains of the petitioner, as the petitioner is a state-owned Corporation. The learned counsel further submitted that in the present cases the provisions of section 33 of the Act and Rule 113 of the Customs Rules are applicable which had all together been ignored by the respondents. In the end, he submitted that the respondents may be directed to refund the amounts paid by the petitioner by way of error and inadvertence. In support of his above contentions, the learned counsel relied on the following reported decisions:--

(1)? PIDC v. Federation of Pakistan (2003 PTD 2241);

(2)? Shahtaj Sugar Mills v. Addl. Secretary, Ministry of Finance, Government of Pakistan (2009 SCMR 1421),

(3)? Ghulam Abbas v. C.B.R. 1994 CLC 1612,

(4)? Pfizer Lab. v. Federation of Pakistan and others PLD 1998 SC 64,

(5)? H. Shiekh Nooruddin and Sons Ltd, v. C.B.R. (PLD 1989 Kar. 601).

4. Mr. Raja Muhammad Iqbal, learned counsel appeared on behalf of the respondent and submitted that these. Constitutional Petitions are not maintainable as the same do not fall under Article 199 of the Constitution. He further submitted that the refunds claimed were an afterthought on the part of the petitioner as after a considerable period of time of the clearance of the said goods and after substantial consumption of the said goods refund applications were filed. He in this regard invited out attention to section 29 of the Act and submitted that in view of this section, the said claims were rightly rejected by the respondents. He further submitted that no objection, whatsoever, was raised at the time of the clearance of the goods and much thereafter the said claims were lodged, which too were uncalled for. In the end he submitted that the orders passed by the Customs Officials do not stiffer from any error or misinterpretation of law and the present petitions being devoid of any merit are liable to be dismissed. In support of his above submissions the learned counsel relied upon (i) H. Shiekh Nooruddin and Sons Ltd. v. C.B.R. (PLD 1989 Kar. 601), (ii) Messrs Baba Khan v. Collector of Customs 2000 SCMR 678 (iii) 2002 PTD 1122, and (iv) Government of Pakistan and others v. Sandoz Pakistan Limited (2006 SCMR 1403).

5. We have heard both the learned counsel for the parties at considerable length and have perused the record and the decisions relied upon them.

6. Perusal of record reveals that the cases of the petitioner were based on declaration made in the B.E filed under section 79 of the Act. Soon after filing of the said B.E assessments were made as per the declaration made by the petitioner and the goods were released and due duty and taxes were charged there on. It is also noted that the said goods were thereon taken away by the petitioner and there is no denial of the fact the major portion of the goods were even consumed in this regard. After a considerable period of time the petitioner applied for the refunds on the premise that due to mistake on the part of the supplier excess payment of custom duties were made and thus they were entitled to refund of the said excess amount of Custom duties paid by them.

7. It is noted that the petitioner, after clearance of goods never produced the said goods for re-examination in the light of the averments made by them in their refund applications. At this juncture we would like to re produce the provisions of section 29 of the Custom Act, 1969.

29. Restriction on amendment of [goods declaration].---Except as provided in section 88, no amendment of [goods declaration] relating to good .assessed for duty on the declared value, quantity or description thereof shall be allowed after such goods have been removed from the customs-area [or assigned a Customs Reference Number electronically, as the case may be].

8. A bare reading of the section would evince that it restricts the amendment of the B.E after the goods had been cleared by the Customs Authorities. Though amendment in B.E is permissible under section 88(5) of the Act, subject to the condition that before the ware housing of the goods is completed and not subsequently. In the instant petitions it is an admitted fact that ware housing in respect of goods were completed.

9. Interestingly both the learned counsel have relied upon the decision. H. Sheikh and Sons (Pvt.) Ltd. v. C.B.R. (PLD 1989 Karachi 601) wherein the learned Bench while dealing with some what identical circumstances observed as under:--

"(3) Section 33 of the Customs Act, 1969, speaks of refund of any customs duties of Charges claimed to have been paid or over-paid through in advertence, error or misconstruction. A bare reading of this Section would show that refund can be claimed where higher duty, than actual was due, has been charged.

(4) The claim for refund was rejected on the ground that the declared value of US $ 780 M.T. was found to be the normal value at the time of filing of bills of entry. According to section 30, the normal value determined under section 25 of the Customs Act, 1969, in the value applicable at the time of filing of bills of entry. It is also the case of respondents that no valid or tangible documentary evidence was produced by the petitioners to substantiate their contention of normal value of the goods on the date of filing of bills of entry. There is good deal of force in both these contentions.

(5) Section 29 of the Customs Act, 1969, further lays down that except as provided in section 88, no amendment of a bill of entry or bill of export, relating to goods assessed for duty on the declared value, quantity or description thereof shall be allowed after such goods have been removed from the custom area. Again the question that the petitioners succeeded in claiming the excess value from the consigners is irrelevant td the issue as the date of contract remained the same."

10. As per the petitioner's counsel they were entitled to claim the refunds as they had paid higher duties then what was actually due from them. Where as according to the learned Counsel 'representing the department no refund was admissible after the goods had been removed from Customs bonded area. Perusal of the decision quoted supra it is clear that the learned Bench has categorically observed that no amendment of a B.E shall be allowed after such goods had been removed from the customs area. In the instant petitions the petitioner was claiming ' refunds in respect of the consignments which not only had been removed/cleared but which had been consumed in considerable quantity by the petitioner itself, hence the claim of the refunds at this juncture appears to be an after though on their part.

11. It is also noted that whether the imported items or the consignment were software or not was a matter of inquiry and finding of fact, which while exercising jurisdiction under Article 199 of the Constitution could not be done, barring exceptional circumstances. Therefore, we are of the considered opinion, that whether it was petitioners' inadvertence or the mistake of the supplier in giving incorrect description is a question of fact and matter of record which could not be dilated upon under Article 199 of the Constitution.

12. So far as application of section 29 is concerned reading of which clearly establishes that no amendment in B.E. is permissible and allowed once the goods are cleared. Hence the goods were released and cleared by the Customs Authorities on the basis of the declarations by the petitioner in the B.E and no exception could be taken in this regard and the refund applications moved by the petitioner were squarely hit by the provisions of section 29 of the Act. The said refund applications thus in our view were an after thought on part of the petitioner and were not entitled to be entertained. We therefore in view of the observations made supra do not find any merit in these petitions and dismiss the same being devoid of any merit.

S.A.K./P-12/K??????????????????????????????????????????????????????????????????????????????????????????????? Petition dismissed.