CRESCENT ART FABRICS (PVT.) LTD. VS ASSISTANT COLLECTOR CUSTOMS, 2011 PTD-LAHORE-HIGH-COURT-LAHORE 2851 (2010)

Customs Act (IV of 1969)---

----Ss. 25 & 81---Constitution of Pakistan, Art.199---Constitutional petition---Determination of customs value of goods---Petitioner imported goods and classified the same for the purpose of import under PCT Heading 3009,5000 and paid applicable duty at the rate of Rs.10% ad valorem---Department by issuing Customs General Order, demanded payment of customs duty at the enhanced rate of Rs.25%, which was applicable rate for items under PCT heading 3208.5000---Contention of counsel for the importer was that provisional assessment was made in the year 1990 and according to the provisions of S.81(2) of the Customs Act, 1969, taxes and charges correctly payable on those goods were to be determined within one year of the date of provisional determination; and that department had failed to comply with the said provision of law; and that according to S. 81(4) of the Act, the provisional assessment had become final assessment---Validity---Department having failed to comply with the provisions of S. 81(2) of the Customs Act, 1969, S.81(4) of the said Act had become applicable; and the provisional determination made in the year 1999, was ,to be considered as the final determination---Department was directed to release the relevant bank guarantee to the petitioner within one month, in circumstances.

Mian Abdul Ghaffar for Petitioner.

Ch. Muhammad Zafar Iqbal for Respondents.

ORDER

MUHAMMAD FARRUKH IRFAN KHAN, J.--- Facts giving rise to filing of this Constitutional Petition in brief are that the petitioner is an importer of polyurethane varnish. The said item was classified by the petitioner for the purpose of its imports under PCT Heading 21 3009.5000. As a consequence the petitioner was paying the applicable duty at the rate of Rs.10% ad valorem. On 5-5-1999 C.B.R. issued Customs General Order No.12 of 1999 and started demanding payment of customs duty at the enhanced rate of Rs.25 %, which was the applicable rate for items under PCT heading 3208.5000. Being aggrieved with the classification set out in C.G.O. No.12 of 1999 the petitioner filed Writ Petition No. 10714 of 1999 and Writ Petition No.5930 of 2000 to challenge the classification made by CBR as per C.G.O. No.12 of 1999. During the pendency of the aforesaid writ petitions the CBR issued a corrigendum dated 20-4-2000 whereby the words "volatile organic" were inserted before the word "solvent" appearing in C.G.O. No.12 of 1999. As a result of this corrigendum only such polyurethane resins in solution were to be classified under PCT Heading 3208.9000 where the volatile organic solvent in such solution counted for more than 50% of such solution by weight. On amendment of C.G.O. No.12 of 1999 both the afore said writ petitions were disposed of by this Court vide order dated 18-6-2002 in the following terms:--

"The C.B.R. has reclassified polyurethane resin. According to this reclassification, this petition has borne fruit and is, therefore, disposed of".

2. The respondent/department apparently having felt some ambiguity in the order dated 18-6-2002 moved a miscellaneous application for clarification of this order and this Court vide order dated 9-9-2002 clarified the order, inter alia, in the following terms:

"The fact that the petition has fructified does not preclude the respondent department from making a final order in respect of the imported goods".

In the above said backdrop the petitioner repeatedly requested and reminded the Customs Department to release the Bank guarantee furnished by it but the requests of the petitioner have not been responded to by the department.

3. Learned counsel for the petitioner submits that the provisional assessment was made in the year 1999; that according to the provisions of section 81(2) of the Customs Act, 1969 applicable at that time the amount of duty, taxes and charges correctly payable on those goods were to be determined within one year (currently six months) of the date of provisional determination; that the department has failed to comply with the said provision of law and according to section 81(4) of the Act ibid the provisional assessment has thus become final assessment.

4. Conversely, learned counsel for the respondents submits that the final determination could not be made as the clarification was sought from the C.B.R./WCO. Adds that the delay in final determination was also caused due to the pendency of different writ petitions before this Court.

5. Arguments heard. Record perused.

6. The first argument of the learned counsel for the respondents is devoid of any force especially when this Court vide order dated 9-9-2002 observed that "the fact that the petition has fructified does not preclude the respondent department for making a final order in respect of the imported goods". In this way, the department was at liberty to make final determination of the bills of entry within a period of one year as envisaged in section 81(2) of the Customs Act, 1969 at the latest from the date of order of this Court dated 9-9-2002.

7. The second contention that the final adjudication was not made as the clarification was sought from the C.B.R./WCO is also not tenable as this was an internal matter of the respondent/department and on that basis neither the petitioner could be forced to wait for an unreasonable period of time exceeding more than one year, nor penalized due to the lack of decision on the part of C.B.R. The plain reading of section 81(2) of the Customs Act, 1969 as was applicable at that time shows that the respondent/department was bound to make the final determination within one year from the date of the provisional determination.

8. As the respondent/department has failed to comply with the provisions of the Section ibid, therefore, the section 81(4) of Customs Act, 1969 has become applicable and the provisional determination made by the respondent/department in the year 1999 is to be considered as the final determination.

9. Resultantly this writ petition is allowed and respondent/ department is directed to release the bank guarantee to the petitioner within one month from the date hereof.

Disposed of.

H.B.T./C-14/L???????????????????????????????????????????????????????????????????????????????????? Petition allowed.