2002 PLP 3172 (YLR)

4. Learned counsel for the appellant submitted that the goods were sold to the passengers keeping in view the legal requirements and that the show‑cause notice if any could only be issued to the passengers who had purchased the goods and who were liable to pay the custom duty. According to him the show‑cause notice issued to the appellant was absolutely misconceived and no action against the appellant could be taken on the basis of such a misconceived notice. He has referred to section 32 which specifically states that in case of non‑payment or short payment of custom duty, the person liable to pay any amount on that account has to be served with notice. The learned counsel further submitted that since there was no untrue document or statement by the appellant and also because there was no collusion with any person subsection (2) of section 32 is not attracted. Notwithstanding, the appellant's argument that they are not liable to pay the duty on goods sold to passengers, even otherwise issue of notice dated 9‑12‑1997 was beyond the prescribed period of 6 months for a major portion of the demand for the period from 1‑7‑1996 to 17‑9‑1997 in terms of subsection (3) of section 32, as it existed in 1997.

5. In order to, properly appreciate the contention of learned counsel for the appellant, the relevant portion of the then section 32 of the Customs Act, 1969 is re produced as under :‑ "

32. Untrue statement, error, etc.‑‑‑If any person, in connection with any matter of customs:‑‑ (a) makes or signs or causes to be made or signed, or delivers or causes to be delivered to an officer of customs any declaration, notice, certificate or other document whatsoever, or (b) makes any statement in answer to any question put to him by an officer, of customs which he is required by or under this Act to answer. Knowing or having reason to believe that such document or statement is false in this any material particular, he shall be guilty of an offence under section. (2) Where; by reason of any such document or statement as aforesaid or by reason of some collusion, any duty or charge has not been levied or has been short‑levied or has been erroneously refunded, the person liable to pay any amount on that account shall be served with a notice within three years of the relevant date, requiring him to show cause why he should not pay the amount specified in the notice. (3) Where, by reason of any inadvertence, error or misconstruction, any duty or charge has not been levied or has been short levied or has been erroneously refunded, the person liable to pay any amount on that account shall be served with a notice within six months of the relevant date requiring him to show cause why he should not pay the amount specified in the notice. "

6. A bare reading of the above quoted provisions of section 32 clearly show that in case of non‑payment, short payment or erroneous refund of duty or charge, it is the person liable to pay any amount on that account who is to be served with a notice. The person liable to pay any amount on that account who is to be served with a notice. The facts of the case show that various goods were sold to the passengers from the warehouse of the appellant. The sale of goods to passengers from the warehouse of the appellant is covered by provisions of Customs General Order No.3 of 1982 dated 4‑4‑1982. The relevant provision is contained in section 5(ii) of the aforesaid C.G.O. which is as under :‑ "The Duty Free Shops Ltd., will make arrangements for proper display and guidance to the passenger, baggage allowances and the prices of the goods in the shops. The passenger will be free to choose items upto the balance of his free and taxable allowances on the basis of the I.T.P. in Pakistani currency and will order for the items selected for purchase alongwith `A' Form and/or transfer of Residence form before the sales counter. The sales man/sales girl will draw up a serially numbered sales invoice (six copies in, the form prescribed s at Annex `C)'. Thereafter, the sales staff shall detach one, copy for their record and give 5 copies of the invoice to the passenger to be presented before the Customs Officer who will scrutinise the 'A' Form and list of items and indicate the items admissible against the free allowances and calculate customs dues leviable on the remaining items within the taxable allowances admissible to the passenger The Customs Officer shall complete the 'A' Form and shall make necessary entries on the reverse 'of Form `A' and thereafter the so‑assessed invoice shall be returned to the passenger. On the basis of the assessment completed by the Customs Officers, the price (in foreign exchange) and the customs dues (Pak Rupees) will be deposited at the bank counter where the bank shall stamp all copies for receipt of foreign exchange and Pak currency and shall retain two copies of the receipted sales invoice and return the three copies to the store‑keeper of the DFS. The Storekeeper shall present the goods alongwith two copies of the receipted invoice (after retaining one of the three copies) to the customs. The Customs Officer shall verify the goods with the receipt and shall allow out of charge after retaining one copy of the invoice. The last copy of the invoice shall be given to the passenger. The bank shall send a copy of the invoice alongwith daily statement of revenue collection to the IPS incharge duty free shops sales outlet who shall in turn send it immediately to Custom House Revenue Section, audit section and C.R.A. section as per the existing procedure."

7. The examination of the said provision shows that it is primarily the responsibility of the customs staff to assess the customs duty and charges and not that of the appellant. The omission of the Custom Officers could not be a ground for holding the appellant responsible for the lapse of the customs staff. Neither any collusion between the customs staff and the appellant has been established in the impugned order nor evidence of charging any Customs Officer for punishment under clauses (14) or (81) or (82) of section 156(1) of the Customs Act; 1969, has been indicated in the impugned order to show such an allegation of collusion.

8. The appellant admittedly did not purchase any goods. The appellant could never be expected to make payment of customs duty and charges leviable on goods sold to the passengers. They are also not the agents of the passengers under sections 207 and 209 of the Customs Act, 1969. Responsibility to make payment of leviable duty and taxes rested with the passengers making purchases of goods from the appellant. In this background of legal position, the show‑cause notice issued to the appellant requiring it to pay the evaded amount of customs duty etc. amounting to Rs.21,57,294 was without jurisdiction and the impugned order arising out of this show‑cause notice as absolutely a nullity in the eye of law. The same is set aside and the appeal is accepted. C.M.A./279/Tax (Trib.) Appeal accepted.