2020 PLP 2136 (PTD)

SYED ARSHAD ALI, J.

Yasin Khan, the present petitioner, seeks the Constitutional jurisdiction of this Court, praying that-- "It is most respectfully prayed that writ under Article 199 (1)(a)&(c) may be issued of the following effect: i. It may very graciously be declared that the action of the respondents regarding withheld of the release of petitioner's vehicle even after payment of payable duty/taxes on the basis of further assessment made by the respondents in the petitioner's case and further demand of duty/taxes based on second assessment is illegal, unlawful and against the relevant provisions of law, therefore, the respondents may be directed to allow immediately release of the petitioner's vehicle with delay and detention certificate to get relief in demurrage charges. ii. Further writ may be issued against the respondents restraining them from auctioning or any coercive action against the petitioner in respect of the vehicle in question.

2. The brief and essential facts, as per the averments of the petition, leading to the institution of instant writ petition are that the petitioner, pursuant to the Personal Baggage Scheme ("Scheme"), as prescribed in "Appendix-E" of Import Policy Order, 2016 ("Import Policy"), had imported a used Toyota Land Cruiser ("Vehicle"). The petitioner filed Goods Declaration ("GD") on 16-8-2017 at Customs Dry Port, Peshawar. The said vehicle was assessed for the purpose of payment of all duties which the petitioner had paid. However, at the time of release of the Vehicle, the petitioner was asked to further pay an amount of Rs.1,714,457/- on account of enhanced Federal Excise Duty.

3. The respondents were put to notice who have contested the claim of the present petitioner through their written comments. The contention of the respondents is that although, the petitioner had filed his Goods Declaration on 16.08.2017, but he failed to clear the vehicle on paying the said duties within the specified time and accordingly he was issued two notices under section 82 of the Customs Act, 1969 ("Act") to clear his Vehicle upon payment of levy-able duties. Finally the Vehicle was assessed for the purpose of payment of all taxes and duties on 13.08.2018, but the petitioner did not pay the Federal Excise Duty ("FED") on the enhanced rate and, thus, he is liable to pay the said duty in terms of section 30-A(a) read with section 31-A of the Act.

4. Valuable arguments of learned counsel for the parties heard and with their able assistance the record perused.

5. It is evident from the record that the present petitioner has imported the Vehicle under the aforesaid Scheme of Import Policy issued vide SRO No.345(1)/2016 dated 18.04.2016 and has filed GD in terms of Section 79 of the Act on 16.08.2017. This fact has not been denied by the respondents, however, the respondents contend that the petitioner was required to have paid the taxes and duties within 15 days of the filing of Goods Declaration, but he failed to clear his Vehicle within that period by paying the required tax and duties, thus, two notice were issued to the petitioner under section 82 of the Act to clear his Vehicle. The 1st notice was issued on 13-8-2018. whereas the 2nd notice was issued on 27-8-2018. The Vehicle of the petitioner was assessed on 31-10-2018 for the purpose of all duties and taxes including the FED. However, the respondents has later demanded a disputed amount of Rs.1,714,457/- on the basis of notification date 12-10-2018 whereby the FED was enhanced from 10% to 20% on all vehicles above 1800-CC vide Finance Act, 2018.

6. Thus, the controversy between the parties for adjudication of this case, is the date of payment of duties on the import of used vehicle. In order to fully comprehend this issue, it is appropriate to refer to the relevant provisions of the Act; S.25A. Power to determine the customs value.

(1) Notwithstanding the provisions contained in section 25, the Collector of Customs on his own motion, or the Director of Customs Valuation on his own motion or on a reference made to him by any person 88[or an officer of Customs, may determine the customs value of any goods or category of goods imported into or exported out of Pakistan, after following the methods laid down in section 25, whichever is applicable. (2) The Customs value determined under subsection (1) shall be the applicable customs value for assessment of the relevant imported or exported goods. (3) In case of any conflict in the customs value determined under subsection (1), the Director-General of Customs Valuation shall determine the applicable customs value. (4) The customs value determined under subsection (1) or, as the case may be, under subsection (3), shall be applicable until and unless revised or rescinded by the competent authority. S.

30. Date of determination of rate of import duty.--The rate of duty applicable to any imported goods shall be the rate of duty in force; (a) in the case of goods cleared for home consumption under section 79, on the date on which a goods declaration] is manifested under that section; and (b) in the case of goods cleared from a warehouse under section 104, on the date on which a goods declaration] for clearance of such goods is manifested under that section Provided that, where a goods declaration] has been manifested in advance of the arrival of the conveyance by which the goods have been imported, the relevant date for the purposes of this section shall be the date on which the manifest of the conveyance is delivered at the port of first entry: Provided further that, in respect of goods for the clearance of which a goods declaration] for clearance has been manifested under section 104, and the duty is not paid within seven days of the goods declaration being manifested, the rate of duty applicable shall be the rate of duty on the date on which the duty is actually paid. Provided further that in case of the goods illegally removed from the warehouse, the rate of duty shall be the rate prevalent either on the date of in-bonding or detection of case or date of payment of the duty and taxes, whichever is higher: Provided further that in case of exercising option for redemption of fine in lieu of confiscation of the goods seized during anti-smuggling operations, the rate of duty shall be the rate prevalent either on the date of seizure or date of payment of duty and taxes, whichever is higher. Provided further that the Federal Government may, by notification in the official Gazette, for any goods or class of goods, specify any other date for the determination of rate of duty. Explanation: - For the purpose of this section "manifested" means that when a machine number is allocated to goods declaration] and is registered in Customs record. S. 30A. Date of determination of rate of duty for clearance through the Customs Computerized System.--Subject to the provisions of section 155A, the rate of duty applicable to any imported or exported goods if cleared through the Customs Computerized System, shall be the rate of duty in force on; - (a) the date of payment of duty; (b) in case the goods are not chargeable to duty, the date on which the goods declaration is filed with Customs (c) Omitted. Provided that where a goods declaration has been filed in advance of the arrival of the conveyance by which the goods have been imported, the relevant date for the purposes of this section shall be the date on which the manifest of the conveyance is filed at the customs-station of first entry: Provided further that the Federal Government may, by notification in the official Gazette, specify any other date for the determination of rate of duty in respect of any goods or class of goods. S.

79. Declaration and assessment for home consumption or ware housing.-(1) The owner of any imported goods shall make entry of such goods for home consumption or warehousing or for any other approved purposes, within fifteen days of the arrival of the goods, by; (a) filing a true declaration of goods, giving therein complete and correct particulars of such goods, duly supported by commercial invoice, bill of lading or airway bill, packing list or any other document required for clearance of such goods in such form and manner as the Board may prescribe; and (b) assessing and paying his liability of duty, taxes and other charges thereon, in case of a registered user of the Customs Computerized System: Provided that if, in case of used goods, before filing of goods declaration, the owner makes a request to an officer of customs not below the rank of an Additional Collector that he is unable, for want of full information, to make a correct and complete declaration of the goods, then such officer subject to such conditions as he may deem fit, may permit the owner to examine the goods and thereafter make entry of such goods by filing a goods declaration after having assessed and paid his liabilities of duties, taxes and other charges. Provided further that no goods declaration shall be filed prior to ten days of the expected time of arrival of the vessel. (2) If an officer, not below the rank of Additional Collector of Customs, is satisfied that the rate of customs duty is not adversely affected and that there was no intention to defraud, he may, in exceptional circumstances and for reasons to be recorded in writing, permit, substitution of a goods declaration for home consumption for a goods declaration for warehousing or vice versa. (3) An officer of Customs, not below the rank of Assistant Collector of Customs, may in case of goods requiring immediate release allow release thereof prior to presentation of a goods declaration subject to such conditions and restrictions as may be prescribed by the Board. S.

80. Checking of goods declaration by the Customs. - (1) On the receipt of goods declaration under section 79, an officer of Customs shall satisfy himself regarding the correctness of the particulars of imports, including declaration, assessment, and in case of the Customs Computerized System, payment of duty, taxes and other charges thereon (2) An officer of Customs may examine any goods that he may deem necessary at any time after the import of the goods into the country and may requisition relevant documents, as and when and in the manner deemed appropriate, during or after release of the goods by Customs; (3) If during the checking of goods declaration, it is found that any statement in such declaration or document or any information so furnished is not correct in respect of any matter relating to the assessment, the goods shall, without prejudice to any other action which may be taken under this Act, be reassessed to duty. (4) In case of the Customs Computerized System, goods may be examined only on the basis of computerized selectivity criteria. (5) The Collector may, however, either condone the examination or defer the examination of imported goods or class of goods and cause it to be performed at a designated place as he deems fit and proper either on the request of the importer or otherwise.

7. As envisaged by Section 79 of the Act, the owner of any imported goods is required to make the entry of such goods i.e. filing of Goods Declaration along with other supported documents such as commercial invoice, bill of lading, airway bill, packing list etc within 15 days of the arrival of the goods to the appropriate custom officer. Further, Sections 30 and 30-A of the Act envisages the date of determination of rate of duty and taxes applicable for clearance of the goods.

8. It is settled law that in a taxing statute, as in any other statute, there is no reason to depart from the general rules that the word used in a statute must first be given their ordinary and natural meaning. It is only when such an ordinary meaning does not make sense then resort can be made to discovering other appropriate meanings. Pakistan Textile Mills Owner's Association Karachi and 2 others v. Administrator of Karachi and 2 others PLD 1963 Supreme Court page 137, Collector of Customs (Preventive) and 2 others v. Muhammad Mehfooz (PLD 1991 SC 630), Messrs Islamabad Electric Supply Company Limited v. Deputy Commissioner Inland Revenue, Audit-II, LTU, Islamabad and others (2016 PTD 2685). Under section 30(a) of the Act, it is the rate of duty applicable on the date when the GD is manifested under the said section. The term "manifested" has further been explained in section 30 of the Act as when a machine number is allocated to goods declaration and is registered in Customs record. Whereas section 30-A of the Act envisaged that in cases when the goods are assessed and cleared through a Customs Computerized System, the rate of the duty applicable at the time of payment of duties irrespective of the arrival of the goods to Pakistan are the manifesting the good declaration. Both the sections provide for two different dates of the applicability and payment of the rate of tax and duties on the imported goods. If the goods are cleared through Customs Computerized System then it is the rate of taxes and duties applicable on the date of payment taxes and duties as envisaged by section 30A of the Act, whereas in the case when the goods are cleared in the manner other than the Customs Computerized System then it is the rate of duty and taxes payable on the date when the GD is manifested.

9. Moreover, Chapter XVI-A was inserted in the Act through Finance Act of 2003 whereby a mechanism was provided for application of Customs Computerized System. Section 151-A, which is forming a part of Chapter XIV-A of the Act, authorizes the Federal Government is specify for different areas for bringing the provisions for the application of computerized System. Similarly, Chapter XXI was also introduced in Customs Rules, 2001 ("Rules") wherein a detailed mechanism for application of Computerized System was provided for payment of duties and taxes whereby the said system in any Customs Station is operational. Although, pursuant to section 30-A and Chapter XXI-A, the clearance of Goods through the Computerized System is operational at the Customs Dry Port, Peshawar, however, the Board of Revenue, through Notification No. WeBOC/Rollout/TP/102/2013 dated 06.03.2013, has directed for the clearance of cargos that all the GDs for home consumption at the Dry Part shall be processed through WeBOC System except certain goods which are enumerated in the said notification which includes used vehicles. Thus, admittedly, the used vehicles are cleared under section 30 of the Act as the relevant notifications envisaging for clearance of goods through WeBOC System is not applicable to the clearance/assessment of duties on old/used vehicles.

10. In the context of the present case the GD was manifested on 16.08.2017, whereas, the Federal Excise Duty was enhanced from 10% to 20% through Finance Act, 2018, therefore, the said enhanced rate of duty is not applicable to the case of petitioner. In this regard, the respondent has properly evaluated the taxes and duties against the imported vehicle of the present petitioner on 31.10.2018, wherein Federal Excise Duty at the rate of 10% was assessed against the vehicle of the present petitioner, therefore, the enhanced Federal Excise Duty at the rate of 20% is not applicable to the vehicle of the present petitioner.

11. In view of the above, we hold that the demand of respondent for enhanced rate of Federal Excise Duty is illegal and without lawful authority. The disputed amount (Rs.17,14,457/-) deposited by the petitioner in compliance with order dated 16.01.2019, with the Nazir of this Court, shall be refunded to the present petitioner forthwith, against a proper receipt. MH/332/P Petition allowed.