2003 PLP (Trib (PTD)

4. The learned Departmental Representative and the representative from the Collectorate. opposed the appeal on the ground that all refunds are governed by section 33 of the Act. They invited attention to C.B.R.'s Letter C. No.10(122) CUS.Ref/96, dated 28‑2‑1996 which requires claimants to file application for refund of such amounts within 6 months of the date of the decision/order so passed in his favour. They prayed for dismissal of the appeal.

5. Having heard the parties and on perusal of record of the case, we find that section 33 of the Customs Act, 1969, provides as hereunder:‑‑‑ "

33. Refund to be claimed within six months.‑‑‑(1) No refund of any customs duties or charges claimed to have been paid or over‑paid through inadvertence, error or misconstruction shall be allowed unless such claim is made within six months of the date of payment. (2) In case of provisional payments made under section 81, the said period of six months shall be reckoned from the date of adjustment of duty after its final assessment."

6. It is clear that the aforesaid provisions disallow sanctioning of refunds only in cases where the duties or charges, claimed as refund, were paid through (i) inadvertence; (ii) error; and (iii) misconstruction on the part of the claimant where such claim is filed after expiry of limitation of six months from the date of payment. The provisions of section 33(i) of the Customs Act, 1969, are analogous to the provisions of section 40 of the Sea Customs Act, 1878, which read as hereunder:‑‑‑ "

40. No refund of charges erroneously levied or paid, unless claimed within three months.‑‑‑No customs‑duties or charges which have been paid, and of which repayment, wholly or in part, is claimed in consequence of the same having been paid through inadvertence, error or misconstruction, shall be returned, unless such claim is made within three months from the date of such payment."

7. In the Custom House, Karachi's Compilation of "General Manual of Orders Relating to Customs and Tariff Laws" (published in 1967), the following ruling No.1229‑Cus, 1/37, dated 18‑12‑1937 of the Central Board of Revenue is reproduced at page 78 thereof as follows:‑‑ "Section 40 not in itself an authority for refund. ‑‑‑Section 40 of the Sea Customs Act is not in itself an authority for refunds; it merely lays down the time‑limit for the consideration of a certain class of refunds, vis; those which become payable because there has been error, inadvertence or misconstruction. The actual right to a refund, therefore, is not derived from any provision of the law, but from what may be called the common law position that money should not be retained by Government to which the Government have no just claim. "

8. There being no material difference between the provision 40 of the repealed Sea Customs Act, 1878 and that of section 33(1) of the Customs Act, 1969, the Clarification cited in paragraph 7 above shall still have force despite the C.B.R.'s ruling in its C. No.10(122) Cus. Ref/96, dated 28‑2‑1996 as the former is the correct interpretation of the provisions of law under section 33(1) of the Act when read in the light of the Honourable Supreme Court of Pakistan's judgment, dated 28th November, 1997 in Civil Appeal No.48 of 1993 (PLD 1998 SC 64).

9. Notwithstanding what has been stated above, even otherwise the imposition of 5% redemption find by the Collector on the claimant was ab initio unlawful. "Redemption fine" is understood to be the fine imposed in lieu of confiscation of goods under section 181 of the Act. Collector, as an Adjudicating Authority, is authorized to confiscate the offending goods, to allow option to the owner, under section 181 of the Act, to pay fine (commonly known as "redemption fine") in lieu of confiscation of goods and to impose penalty on offences including importers. In his Order‑in‑Original No. 16 of 1997, the Collector had already imposed fine of Rs. 4 lacs in lieu of confiscation under section 181 and penalty of Rs.1 lac under section 156(1)(9)(i). His order of imposition of the "redemption" fine of 5 % (even without specifying the base to which this 5% related) upon the importer was ab initio extra legal vague and unlawful. "Fine" on person of the importer could only be imposed by a Special Judge (Customs and Taxation) if the importer was tried under clause (14) of section 156(1) or under any other relevant penal provision and was convicted by the said Judge. By ordering waiver of his imposition of redemption fine of 5% on importer in his Order‑in- Remand No. 16/98 dated 15‑4‑1998, the Collector pre‑empted the action, which would have otherwise been taken at the appellate stage. The imposition of the redemption fine being unlawful ab initio the recovery of the amount is also unlawful and ought to be refunded to the appellant cum‑claimant without awaiting any formal refund claim under section 33 of the Customs Act, 1969.

10. For the reasons given in paragraphs 5 to 9 above, we hold that C.B.R.'s Letter C. No.10(122)Cus.Ref/96, dated 28‑2‑1996 is not a correct interpretation of the provisions of section 33(1) of the Customs Act, 1969. We are of the view that the opinion cited in paragraph 7 above still holds good. Since the appellant did not pay the amount of Rs.136,853 through any error, inadvertence or misconstruction on his part, we hold that the refund of the said amount may be allowed, if otherwise due and admissible, without applying the time limitation prescribed under section 33(1) of the Customs Act, 1969. The impugned order dated 9‑9‑2000 is set aside accordingly and the case is remanded to the Assistant Collector of Customs, Dry Port, Peshawar, for decision de novo to allow the refund, if otherwise due and admissible, without reference to the time limitation of section 33(1) of the Act. The appeal stands disposed of accordingly.

11. Inform all concerned.

12. Announced. C.M.A./556/Tax(Trib.) Order accordingly.