2013 PLP 463 (PTD)

The appellant has assailed the vires of order dated 5-5-2011 passed by the learned Single Judge in Chamber whereby Writ Petition No.11062 of 2010 filed by respondent No.1 against the appellant and pro forma respondents was accepted.

2. The facts in brief as emerge on perusal of the record are that the appellant imported two consignments of low grade soap noodles as per goods declaration GD-1 form on 9-7-2007 and 11-8-2007. Provisionally, the goods were assessed at the rate of US $ .45 and US $ .25 per KG. On payment of sums of Rs.5,41,175 and Rs.11,50082, the same were cleared subject to final assessment. Subsequently through letters/demand notices dated 13-5-2010 it was conveyed that the sums of Rs.7,87,604 and 11,40,580 were due from him as per final assessments made by the competent authority and the same would be recovered by presenting the cheques issued by him for encashment to the Standard Charted Bank, Lahore. These letters/demand notices were assailed by the respondent No.1 through writ petition contending therein that the assessments made provisionally had attained finality in view of section 81(4) of the Customs Act, 1969 so it was not under obligation to make extra payment.

3. The learned Single Judge in Chamber accepted the writ petition by relying on the law reported as 2005 PTD 2116.

4. The learned counsel for the appellant has contended that the learned Single Judge in Chamber has erred in holding that the provisional assessment was confined to the actual money paid at the time of clearance of the goods because the explanation added under section 81(4) of the Customs Act, 1969 through the Finance Act, II of 2005, clearly provides that the provisional assessment means the amount of duty and taxes paid or secured against bank guarantee or post dated cheques. It is further contended that the judgment relied upon by the learned Single Judge in Chamber (2005 PTD 2116) was pronounced before the disputed provisional assessment and also the promulgation of the Finance Act, 2005 (Act No.VII of 2005) so the learned Single Judge in Chamber fell in error and as such the impugned order is not sustainable and that the time was consumed in obtaining the report of laboratory so the department cannot be held responsible for delay and cannot be deprived of the lawful duty due to it.

5. Controverting these arguments, the learned counsel for the respondent has contended that the final assessment was made after more than 2 years and 9 months of the provisional assessment whereas the law clearly provides a period of one year for finalization of the assessment under subsection (2) of section 81 of the Customs Act, 1969.

6. Under section 81(2) of the Customs Act, 1969 the final assessment of the customs duty and other taxes payable on import of goods is to be made within one year of the provisional assessment or clearance of the goods. However, in exceptional circumstances, a grace period of 90 days is provided for this purpose so the maximum period which can be consumed for finalization of the matter is one year and 90 days. The inordinate delay of more than 2 years and 9 months remains unexplained. No exceptional circumstance has been put forth by the department for this delay. The learned counsel for the appellant half heartedly contended that the time was consumed in obtaining the final report from the laboratory, which revealed that the imported commodities were not actually the lower grade soap noodles rather the same were laundry soap. The date of sending the samples to the laboratory and receipt of reports were not mentioned. Naturally the laboratory could have not consumed a period spreading, more than over 2 years and 9 months. In these circumstances the contention that the delay was result of time consumed in obtaining the final result of analysis/tests is without force. The assessment was made at a specific rate and that had become final in view of section 81(4) of Customs Act, 1969. The rate of customs duty provisionally assessed was US $ 045 per KG and 025 per KG in respect of both consignments cleared on 9-11-2007 and 11-8-2007. This assessment had attained finality and nothing could be charged more than that. In this respect, reliance is placed on 2011 PTD 1185 and 2004 PTD

795. The learned Single Judge in Chamber rightly held that the disputed demand notices are illegal. The department is authorized to receive and respondent No.1 is under obligation to pay the dues in accordance with the provisional assessment only which has attained finality under the law. The impugned order does not suffer from any illegality or infirmity. The ICA is without merits and the same is dismissed. KMZ/C-10/L Appeal dismissed.