1989 PLP 4352 (MLD)

SAEEDUZZAMAN SIDDIQUI, J.-- The petitioner was granted Import Licence No.702354 dated 23-9-1979 which was valid for import of Pepsi Cola Bottles. The petitioner, accordingly, imported a consignment of Pepsi Cola Bottles which arrived at Karachi in or about August, 1980. On arrival of goods, the petitioner filed Bill of Entry for bond on 19-8-1980 declaring the unit price of goods as U.S.$.20.90 per gross bottles. The petitioner filed ex-bond entry on 21-3-1981 and paid Customs duty on 3-4-1981. On 28-12-1981 respondent No.l issued a show-cause notice to petitioner alleging that the price declared by them in the Bill of Entry was not correct and on investigation the price of the goods has been determined at U.S. $.24.60 as against the declared value of U.S. $.20.90. Accordingly, the petitioner was directed to pay a sum of Rs.90,291 as deficient duty/sales tax. The petitioner filed a reply to the above show-cause notice on 19-1-1982 in which inter alia, he pleaded that the consignment was imported by the petitioner in August, 1979 while the invoice relied by the Customs Authorities for determining the value of the goods is of much latter date namely, August, 1980. It was also pointed out that the demand notice issued by respondent No.l was timebarred as the same was issued after the expiry of period of four months prescribed in subsection (3) of Section 32 of the Customs Act. Respondent No.1 however, did not find the reply of petitioner satisfactory and by order dated 11-2-1982, determined the amount of short levied Customs duty at Rs.90,291 and directed the petitioner to deposit the same. The order of respondent No.l clearly shows that the action was taken against the petitioner under subsection (3) of Section 32 of Customs Act, 1969. The petitioner preferred an appeal against the order of respondent No.l before respondent No.2 but the appeal was dismissed on the sole ground that the petitioner has failed to comply with the requirement of section 194 of the Customs Act, 1969. The revision against the order of respondent No.2 before respondent No.3 also failed, Mr. Zaheer Ahmad Khan, learned counsel for the petitioner contended before us that neither in the show-cause notice nor in the order of respondent No.l there is any allegation of misdeclaration or fraud on the part of the petitioner in declaring the value of the consignment and as such provisions of subsection (2) to Section 32 of the Customs Act, 1969 were not attracted in the present case. It is accordingly contended that the observation of respondent No.3 in the revisional order that it was through inadvertent mistake that subsection (3) to Section 32 was mentioned in the order of respondent No.l instead of subsection (2) to Section 32, is not sustainable as it is not supported by the documents on record. No counter-affidavit has been filed by the respondents in the case nor any one is present on their behalf. We have carefully gone through the show-cause notice dated 28-12-1981 and the order dated 11-2-1982 passed by respondent No.l and we agree with the learned counsel for the petitioner that action against the petitioner was initiated and finalised in accordance with subsections (3) and (4) of Section 32 of the Customs Act, 1969. It may be mentioned here that under Section 156 (1) (14) of the Customs Act if a person is found guilty of offence under Section 32 of the Act, then he is liable to a penalty not exceeding Rs.25,000 or three times the value of the goods whichever is greater, besides confiscation of such goods. From the show-cause notice as well as from the impugned order dated 11-2-1982 passed by respondent No.1 it is quite clear that there was neither any allegation of misdeclaration or fraud against the petitioner nor any action was proposed to be taken against the petitioner for breach of provision of Section 32 of the Act, as contemplated under Section 156(1)(14) of the Customs Act. The learned counsel for the petitioner also invited our attention to the observation of the Supreme Court in the case of M/s. Eastern Rice Syndicate v. Central Board of Revenue and others PLD 1959 SC (Pak.)364 in which the Hon'ble Supreme Court while interpreting Section 39 of the Sea Customs Act which is similar to Section 32 of the Customs Act 1969 alongwith item 9-B of Section 167 of Sea Customs Act which is equivalent to Section 156(1)(14) of the present Customs Act, 1969, observed that merely upon a point of valuation if a declaration is made by a person which on inquiry the Customs Authorities find to be too low, that by itself will not be sufficient to prove that the declaration was false to the knowledge of the maker. In such circumstances, the Court observed, it would be necessary to establish that at the time the maker of such statement made the declaration he was in possession of fact from which the necessary inference would be that the value declared by him was too low and that the value which he ought to have g declared was the same that subsequently was ascertained by the Customs Authorities through their own processes. The above observations of the Supreme Court fully apply to the present case as there was no allegation against the petitioner in the show-cause notice issued by them regarding any false or incorrect declaration about value of the goods and as such the proceedings initiated against the petitioner clearly fell under subsection (3) of Section 32 of the Act, which is also so stated in the order of respondent No.l. In these circumstances, the observation of respondent No. 3 in the impugned order that reference to subsection (3) to Section 32 of the Customs Act by respondent No.l was due to a mistake does not seem to be correct. As the time prescribed for issuance of notice of demand to a party under Section 32(3) of the Customs Act at the relevant time was only four months (now six months under the amendment C of 1981), the demand notice issued by respondent No.l was clearly time-barred. We accordingly declare the orders of respondents 1, 2 and 3 impugned in this petition as without lawful authority and of no legal effect. The learned counsel for the petitioner states that the amount of difference of Customs duty has already been recovered by the respondent from the petitioner, if it is so, the 1 respondents are directed to refund the same to the petitioner. There will be no order as to costs as the respondents have not contested the proceedings. M.Y.H./N-204/K. Petition allowed.