P L D 1997 Peshawar 69 (PLP)

2. The noteworthy facts are that vide Notification No.S.R.O., (1)/92, dated 31‑5‑1992 the Federal Government had extended the period of ex‑bonding up to 30‑6‑1992 and had also remitted 2% penal surcharge in case the goods were removed from the warehouse within the period from 1‑6‑1992 ‑ to 30‑6‑1992. The petitioner filed two ex‑bond Bills of Entry on 30‑6‑1992 and was allowed to clear the raw material on 6‑7‑1992 without payment of penal surcharge. Sometime thereafter an objection about non‑realization of the penal surcharge was raised by an Audit party on which a show‑cause notice was issued to the petitioner on 18‑3‑1993. The requisite reply was submitted by the petitioner. However, vide order dated 5‑4‑1993, which was passed in the absence of the petitioner, the demand was held to be in order by the Assistant Collector, Customs Dry Port, Peshawar Ad as a corollary thereto the petitioner was directed vide letter No. C.No. V‑CUS (10)DP/PDP‑3501/762, dated 11‑4‑1994 to deposit a sum of Rs.3,53,463 within three days failing which the clearance from the Bonded Warehouse would not be allowed. Feeling aggrieved the petitioner has filed this writ petition.

3. The lea‑reed counsel for the petitioner argued at the outset that the petitioner was not at fault because he had filed Bills of Entry on 30‑6‑1992 and would have paid the leviable dues and cleared the goods on that very day if so ordered and allowed but the Customs Authorities had taken the matter in routine and allowed clearance of goods after seven days in view of the second proviso to section 30 of the Customs Act. He further argued that the petitioner had ex bonded goods for home consumption, therefore, under clause (b) of section 30 of the Customs Act he was liable to pay only that duty or surcharge which was in force on the date of presentation of the Bills of Entry, It was also contended that the Assistant Collector, Customs Dry Port, Peshawar in his reply to the audit objection had justified non‑realization of the penal surcharge, therefore, he; was estopped from demanding the same. It was lastly contended that the show cause notice having been issued much after the expiry of the statutory period of six months envisaged by subsection (3) of section 32 of the Customs Act, 1969 was time‑barred and as such was void and of no legal effect.

4. The learned Deputy Attorney‑General on the other hand contended that the writ petition was, not maintainable as the petitioner had not availed the alternate remedy of the filing an appeal against the adjudication made by the Assistant Collector, Customs Dry Port, Peshawar vide his order dated 5‑4‑1993. He also contended that the audit objection was unexceptionable because removal of the goods from the Warehouse on or before 30‑6‑1992 was condition precedent for remittance of the penal surcharge.

5. The contention raised by the learned counsel for the petitioner with regard to estoppel has not impressed us for the simple reason that there can be no estoppel against a statutory provision. However, there is force in the contention that the audit objection is unreasonable and the orders emanating therefrom are not sustainable. The petitioner had admittedly filed the Bills of Entry within the stipulated period, therefore, he was exempt from payment of the penal surcharge and was liable to pay only the duty in force on 30 6 1992 to view of section 30(b) of the Customs Act, 1969 which reads as follows:‑‑‑ "Date of determination of value and rate of import duty.‑‑The value of, and the rate of the duty applicable to any imported goods shall be the value and the rate of duty in force‑‑ (a) ‑‑‑‑‑‑‑‑‑ (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 presented under that section. " In Ibrahim Textile Mills Ltd. v. Federation of Pakistan and others PLD 1989 Lahore 47 it was observed that rate of duty applicable on imported goods, m the case of goods cleared under a Bill of Entry for home consumption or under a Bill of Entry for ex‑bonding, is the rate of duty in force on the date on which such a Bill of Entry is presented and where Customs duty is not paid within seven days from the date on which such a Bill of entry is presented the rate of Customs duty becomes that which is applicable on the date on which the duty is actually paid. It is true that the goods were cleared by the petitioner‑on 6‑7‑1992 but the delay was immaterial because it was caused by the procedure prescribed by the second proviso to section 30 of the Customs Act, 1969 under which the Customs Authority after making assessment according to the leviable dues as on 30‑6‑1992 was obliged to keep the assessment alive for seven days. The said proviso is worded thus:‑‑‑ "Provided further that, in respect of goods for the clearance of which a Bill of Entry for clearance has been presented under section 104, whether before or after the commencement of the Finance Ordinance, 1979, and the duty is not paid within seven days of the bill of entry being presented, the value and rate of duty applicable on the date of which the duty is actually paid."

6. There is also force in the contention that the impugned show‑cause notice is liable to be struck down on the point of limitation. The stipulated period within the import of SRO(I)/92 dated 3‑1‑5‑1992 had expired on 30‑6‑1992 but the goods were removed by the petitioner from the warehouse on 6‑7‑1992 without paying the penal surcharge. The show‑cause notice was, however, issued on 18‑3‑1993. It was a case of short levy of duty of reason of error or misconstruction, therefore, the show‑cause notice ought to have been issued within a period of six months in view of subsection (3) of section 32 of the Customs Act, 1969 which reads as under:‑‑ "Where, by reason of any inadvertence, error or misconstruction; any duty or charge has not been levied or has been short levied or has been erroneously refunded, the person liable to pay any amount on that account shall be served with a notice within six months of the relevant date requiring him to show cause why he should not pay the amount specified in the notice." On the plain language of the above provision there is no difficulty in holding that the provision is mandatory and has to be construed strictly. In this respect two authorities cited by the learned counsel for the petitioner may be referred to with advantage. In Federation of Pakistan and others v. Messrs Ibrahim Textile Mills Ltd. 1992 SCMR 1898, it was held that provision of section 32(3) of the Customs Act, 1969 is not merely directory and in case of short levied duties on account of inadvertence, error or misconstruction the recovery notice is to be served within six months and if that is not done the recovery is not enforceable. The second case is Pakistan International Airlines Corporation v. Central Board of Revenue, Islamabad etc. 1990 CLC Karachi 868 in which the show‑cause notice issued after the expiry of the prescribed period was held to be void.

7. The failure of the petitioner to file an appeal against the ex parte adjudication order passed on 5‑4‑1993 is not fatal because having stemmed from a time‑barred show‑cause notice it was without jurisdiction and as such there was no need to prefer an appeal against it.

8. For the foregoing reasons this writ petition is accepted and the impugned orders are declared as without lawful authority and of no legal effect. No order as to costs. H.B.T./2009/P Petition accepted.