1989 PLP 178 (CLC)

Khawaja Tanveer Ahmed for Respondent. Date of hearing: 14th November, 1988. This revision application is directed against order‑in‑appeal No.676 of 1987 dated 18‑10‑1987, passed by the Collector (Appeals), Customs and Excise, Lahore.

2. Mr. Mohammad Faridul Haq, Advocate, appeared for hearing on 14‑11‑1988 on behalf of Messrs Bisvil Spinners Ltd., Lahore. He submitted that:‑ (a) The impugned order‑in‑appeal had been passed ex parte without providing them an opportunity of hearing. As a result, they ~., could not plead their case at the appeal stage. (b) Section 98 of the Customs Act, 1969 was amended in June, 1982 reducing period of storage from three years to one year but this amendment could not be given effect retrospectively as goods of three bills of entry were. already in bond prior to the introduction of the aforesaid amendment. Hence, goods of these three bills of entry did not come in the purview of this section. In this regard the Advocate referred to Supreme Court of Pakistan's ruling in case of Messrs Radham Shayam Agarwala v. Commissioner of Income Tax reported in P L D 1960(?). (c) In the order‑in‑original, the recovery of the short levied amount had been ordered under section 111 of the Customs Act, 1969 whereas that section did not apply to their case as they had not violated provisions of section 98 ibid. (d) The demand of surcharge raised against the applicants was barred by limitation in terms of section 32(2) of the Customs Act, 1969 (IV of 1969). The case fell within the provisions of section 32(3) and not section 32(2) for the reason that the nor‑levy of surcharge had not occasioned by reason of any misdeclaration, wrong statement or collusion on the part of applicants. Instead the non‑levy of surcharge had occurred by reason of inadvertence error or misconstruction on the part of Customs Department and as such demand‑cum‑show -cause notice should have been issued within six months from the date of payment of taxes and duty. As the demand -cum‑show‑cause notice dated 17‑9‑1985 was issued after expiry of limitation period of six months so it was time‑barred.

2. Record of the case has been examined and submissions made by the Advocate that amendment in section 98 of the Customs Act cannot be given retrospective effect is correct and it is held that amount of surcharging under section 98 for the period prior to the commencement of the aforesaid amendment shall not be charged.

3. It is further observed that the basic issue involved in this case is whether the demand enforced under section 111 for violation of provisions of section 98 of the Customs Act, 1969 (IV of 1969) is governed by the limitation clause as provided under section 32 (2) and 32(3) or not. It is held that all demands pertaining to short levy of any customs duty or charge are governed by limitation as provided in sections 32 (2) and 32(3) of the Customs Act, 1969 (IV' of 1969). However, in this particular case the record available on case file is incomplete and it is not possible to establish as to whether the short levy was the result of inadvertence or collusion. Further the grievance of the applicant that they were not provided an opportunity of hearing at appeal stage also merits consideration.

4. In view of the foregoing the case is remanded for de novo consideration to the Collector (Appeals). for verification of the aforesaid aspects of the case and decision in the matter after providing an opportunity of hearing to the applicant. The demand will remain suspended till the fresh decision by Collector (Appeals). A.A./289/R Case remanded