1. The appellant through this appeal has objected against the impugned Order-in-Original No.5 of 2005 dated 23-5-2005 on the following grounds and pray:-- "7. That the order is not maintainable on the ground that even after the issuance of impugned order, the learned respondent vide para 10 states:- "I have gone through case record and considering submissions made by both sides and come to the conclusion that a quantity of 21389.770 M.T. was found short from existing stocks. The management of the unit stated that above mentioned quantity of cement/clinker is lying in the factory as "Damaged Stocks" and not fit for consumption/sale. The Collectorate of Customs Sales Tax and Central Excise Hyderabad is required to re-examine the Damaged Stocks and ascertain whether to the stock can be used for manufacturing of cement or not. If found that the damaged stocks can be used for manufacturing of cement/clinker, Central Excise Duty and Sales Tax is to be charged from them under Rule 10 from plain reading of the above, it is evident that:-
(a) The matter is still in the process of Enquiry/Investigation and the learned respondent is not himself confirmed from assertions of the staff of intelligence, and
(b) The demand of Central Excise Duty and Sales Tax on damaged stocks (to be used as raw material) is not in line with section 3 of Central Excise' Act, 1944. It is only the finished product on which Excise Duty is payable.
2. The impugned order deserves to be set aside ab initio.
(8) That the Customs laboratory Text report confirms the instance of the appellant, as the damaged stocks contains all the basic components/chemicals required for cement and clinker, except that it has lost the properties (binding force) of cement/clinker due to passage of time, absorption of water element present in the atmosphere during 14 months of the closure. The learned respondent lost sight of the Chemicals found, but read only:- "In our opinion they do not constitute a composition of clinker of cement"
3. The test report confirmed the submission of the appellant that the stocks of damaged cement/clinker, out of which samples were drawn, had lost the property of cement due to passage of time.
(9) That the appellant requested time and again that they may be allowed to mix 5% to 10% from the damaged stocks in the manufacture of cement of special grade, but the same was not allowed on one pretext or the other.
(10) That the appellants also advertised in local newspapers for the sale of this stock, but the deal could not take place as no permission for its disposal was granted. They were also not allowed Adjustment or its use in the manufacture of cement/clinker as requested by them time and again.
(11) That the appellants, vide their letter No.ZP/CDS/2003 dated 10-9-2003, once again requested the Assistant Collector that he had not given any decision regarding the adjustment of damaged stock in pursuance of their previous letter and the tests by Customs Testing Laboratory. They may be allowed to mix a certain quantity of damaged stock in their new brand of Zeal Pak No.1, but no head was paid to the requests as made during these last 7 years.
(12) That the allegation of clandestine removal of such a huge quantity (21789.770 MT) in presence of the twenty four hour posted excise staff would appear to be a ridicules. This removal could have taken place either with their connivance or during the absence of the staff from duty. There appear. to be no other way for such removal. The Hawks of the intelligence Staff or the octroi people could not be deceived in any way. The allegation is baseless and presumptive and appears to be the brain child of the Departmental Functionaries.
4. PRAYER That in the light of what have been submitted in the foregoing paras, it is prayed on behalf of the appellants that the Honourable Tribunal may graciously be pleased to set aside the impugned order on hearing. The appellant may also be allowed to urge and raise any other point at the time of hearing."
2. As per the impugned order in original the appeal against the order lies to this Tribunal therefore it is accordingly decided as per the relevant law at that time.
3. Brief facts of the case are that the appellant is a Public Ltd., Company engaged in manufacturing of cement, the factory of which is located in Hyderabad.
5. The appeal in this case was originally decided by the Customs, Excise and Sales Tax Tribunal Karachi vide Central Excise Appeal No.H-142 of 2005 dated 3-4-2008 on a limited issue that the order in original was without jurisdiction. The department preferred appeal before Honourable High Court of Sindh at Karachi. The Honourable High Court vide Special Custom Appeal No.267 of 2008 dated 21-5-2009 remanded the case back to the Tribunal with the following observation:-- "we are therefore of considered opinion that it will be in the interest of justice if the matter is remanded back to the Tribunal to be decided de novo after giving both parties an opportunity of being heard and to present all their arguments legal as well as factual including arguments on the jurisdiction of the officer and then decide the case on merits."
4. In this second round the learned A.R. argued before this Tribunal that the entire proceedings starting from the contravention report, the show-cause notice and the order in original are illegal, time barred, without jurisdiction and as such not sustainable in law and on facts of the case. It is argued that very basis of the alleged contravention i.e. Custom laboratory report is incorrect and has been misread and the entire case is based on presumptions and guess work.
6. The learned counsel of the appellant contended that there was a major labour strike at the factory, which got very violent and there was total lockout. The factory remained closed from 4-12-1996 to 8-2-1998 for about 14 months. He has placed before this bench the copy of order of the Tribunal in Sales Tax Appeals Nos. 1097 and 1098 of 1999 dated 2-3-2005 in support of his argument about severity of strike and total lockout. He has submitted that once the factory was opened, after cleaning/housekeeping and testing of stock in house laboratory, the stock taking was done on 21- 2-1998 and the said stock position report was duly signed by the Inspector Customs, Central Excise and Sales Tax and factory staff. The said stock report identified approximately 21000 MT of Clinker/cement stock as damaged due to long exposure to moisture etc due to factory closure. He has contended that in letter dated 5-3-1998 exact quantity of damage clinker/cement was quantified as 21,389,77 MT and their location of damaged stock at factory also identified. The break up being clinker 10,300 MT 11,089,77 MT cement.
7. He has argued that the appellant wrote various letters to the Central Excise authorities pointing out the fact of the above damaged stock and that clinker stock had lost its binding-compressive strength/setting qualities and deteriorated and converted into boulder/rock like lumps. Similarly cement has absorbed moisture from atmosphere and has lost its compressive strength/setting properties.
8. The series of letters written by the appellant and by Excise authorities are listed below, copies of the same were being filed at the time of hearing:-- Letter dated 5-3-1998 Zeal Pak Cement Factory Ltd., Hyd. (ZPCFL) addressed to the Collector, Custom and Central Excise, Hyd. requesting adjustment of damaged stock of clinker (10,300 MT) and Cement (11.08977 MT) Letter dated 21-3-1998 of Zeal Pak Cement Factory Ltd., addressed to Asst Collector, Custom and Central Excise, Hyd. as follow up to visit of Collector to factory on 18-3-1998 as result of our letter of 5-3-1998 along with Test Reports and location of stock: Letter dated 30-5-1998 from Asstt. Collector, Custom and Central Excise, Hyd. addressed to Zeal Pak Cement Factory Ltd., Hyd. regarding taking of samples in respect of damaged clinker (10,300 M.T) and damaged cement (11,089,77 M.T) Letter dated 12-6-1998 Zeal Pak Cement Factory, Hyd. addressed to Assistant Collector, Custom and Central Excise, Hyd. requesting him to send designated officer on any working day in week starting 15-6-1998. Letter dated 1-9-1998 from Asstt. Collector, Custom and Central Excise, Hyd. to Superintendent, Central Excise Hyd. asking him to draw samples from damaged cement stock (11,089,77 M.T) and damaged clinker (10,300 M.T) from Zeal Pak Cement Factory Ltd., Hyd. Letter dated 9-2-2004 Asstt. Collector, Custom and Central Excise, referring to visit of Superintendent, Central Excise, to factory on 15-11-2003 "regarding damaged stock of clinker/cement pertaining to the production of 1996"
9. Copy of abstract Annual Audited account of Zeal Pak Cement Factory Ltd. for 1997-98 where in Note 25.3 disclosure of damaged cement (11,089 M.T) and damaged clinker (10,300 M.T) due to closure of factory due to workers strike from 4-12-1996 to 8-2-1998.
10. It was pointed out by the Learned AR that Central Excise Authorities vide letter dated 15-11-2003 have admitted that damaged stock of Clinker/cement was pertaining to production of 1996. He has submitted that on 25-9-2003, finally three samples of the damaged stock were taken about 5 years after first request was made by the appellant vide letter dated 21-3-1998 and about 6 years after 1996.
11. According to the learned Counsel on 13-5-2004 a show cause notice (SCN) was issued alleging that exactly the same quantity as appellant had claimed as damaged i.e. 21389.77 MT of cement/clinker was alleged as short based on the report of Custom laboratory on the three samples that were taken and it was contended in the show-cause notice that the custom laboratory found that "composition of samples do not constitute a composition of clinker of cement". The date of custom report is 2-10-2003. In other words show cause notice was issued after about 7 months of Custom report dated 2-10-2003. No date of contravention has been mentioned in the SCN.
12. It is contended by the learned A.R that the appellant challenged the contents of SCN and Custom laboratory report, both on factual plain as well as on legal plain and the legality of proceedings before Collector (Adjudication), who has directed the collectorate of Customs, Sales Tax and Central Excise, Hyderabad through the impugned order in original dated 23-6-2005 to re-examine the damaged stock and ascertain whether this stock can be used for manufacturing of cement or not. However no further testing was carried out by the Excise Authorities. The appellant has therefore filed this appeal against that order.
13. He has argued that the show-cause notice is miserably time barred as the period of production as admitted by the department is 1996. The show-cause notice was issued on 13-5-2004. In the show- cause notice which is vague and no date of contravention or corroborative evidence of alleged removal of such huge quantity of cement/clinker has been given, no sub-Rule of Rule 10 of Central Excise Rules, 1944 has been mentioned. It was argued that period of limitation prescribed under Rule 10(1) of recovery of duty short levied is one year. While the period prescribed under Rule 10(2) is five year.
14. The alleged contravention relates to period of production of the year 1996 as has, been admitted by Central Excise authorities in their letter dated 9-2-2004 and date of SCN is 13-5-2004. In other words, SCN was issued about 7 years after date of alleged contravention. Hence it was argued that' the SCN is clearly time barred and as such illegal and void ab-initio. Reliance in this respect is placed on the decision of Honourable Supreme Court in the case reported as 1992 SCM R 1898 (at page 1901) wherein it has been held that if law prescribes period of time for recovery of money, after it's lapse recovery is not enforceable. Reliance is also placed on the cases, reported as 2005 PTD 1378 in Pattoki Sugar Mills v. Collector, PTCL 2002 CL 12 (pg 18); 2003 PTD 1593 (p 1595, 1596 and 1599) and on the appellants own case decided by Honourable High Court of Sindh in S.P.R.A. No.266 of 2008 dated 3-4-2009 wherein the Honourable High Court has held that the show-cause notice issued beyond the period prescribed under Rules 10(1) and 10(2) of Central Excise Rules is time barred. In that case, notice was issued on 12-6-1996 for the period commencing from August 1991 and ending August 1993 where alleged contravention was alleged. Hence it was argued that the SCN is time barred and the subsequent proceedings void ab-initio.
15. It was further argued that as per subsection (3) of section 33 of Central Excise Act, 1944 (which is pari-materia with proviso to section 36 of Sales Tax Act, 1990) a Collector has been mandated to decide a case within 45 days from the date of issuance of show cause notice.
16. For ready reference the said section 33(3) as it existed at the time is reproduced below: 33(3): "A Collector, an additional collector and a Deputy Collector shall decide the case within forty-five days of the issuance of show-cause notice". (underlining/bold provide for emphasis )
17. In this case show cause notice was issued on 13-5-2004 and Order-in-Original was passed on 23- 6-2005.
18. Hence according to the learned counsel the order-in-original was passed about 13 month (404 days) after issuance of show-cause notice and the order-in-original is clearly time barred and hence illegal and void ab-initio.
19. Reliance is placed on a number of case-laws, where it has been held that time limit placed in a statute for creating a tax liability is mandatory and any orders passed beyond the prescribed time limit creating a tax liability is illegal, void ab initio being time barred.
20. In this respect reliance has been placed on the following case-laws:--
(1) Federation of Pakistan v. Ibrahim Textiel Mills Ltd. 1992 SCMR 1989 (at p.1901)
21. Where law prescribes period of time for recovery of money after lapse of such prescribed period recovery is not enforceable.
(2) Messrs Super Asia Muhammad Din Sons (Pvt.) Ltd., v. Collector of Sales Tax 2008 PTD 60 LHC (at p.64/65)
22. Provision of law prescribed time limit for revenue to create liability is mandatory
(3) Messrs Tanveer Weaving Mills v Deputy Collector Sales Tax and 4 others 2009 PTD 762 (at p.764,765)
23. Proviso to section 36(3) of Sales Tax Act is mandatory and any order passed beyond the time limit is illegal and 'void ab-initio
(4) Hanif Straw Board v. Addl Collector 2008 PTD 578 (at p. 581) order passed beyond prescribed limit is time barred
(5) Messrs Abbasi Enterprises v. Collector of Sales Tax, Peshawar 2008 PTD 2025 Isl.H.C. (at p.2031)
24. Section 36(3) is mandatory and not directory and order passed beyond limit is illegal
(6) 2013 PTD (Trib.) 2252 The learned counsel on facts has argued that the allegation of contravention is baseless and without any corroborative evidence. The factory was under supervised clearance and full time Inspector of Central Excise was posted at the factory. The alleged contravention is of 21389.77 MT, which means 427755 bags of 50kg, which means 2138 Trucks with loading of 200 bags per truck. He has contended that where did the appellant get 427755 empty bags from? Where and how did appellant account for labour to fill, pack cement in bags and load them in trucks and when did all this happen? He has submitted that the SCN is silent and no evidence has been brought on record in this respect by the department. He has argued that the entire case of excise is bogus, mala fide and without any evidence and is purely based on presumptions.
25. He has also referred the report of Custom Laboratory dated 2-10-2003. It was argued that this report is not only odd and contradictory but the results have not been co-related with Pakistan Standard Specification for cement PS 232-1983(R). According to him three samples were taken and on the basis of these sample's the custom report dated 2-10-2003 was prepared, which has been relied upon to establish contravention.
26. The said report is reproduced herein under:- "GOVERNMENT OF PAKISTAN CUSTOMS LABORATORY CUSTOM HOUSE KARACHI No.CE/R/68/03 DATED:2- 10-2003 To, The Deputy Director, Directorate General of Intelligence and Investigation.
27. Customs Excise and Sales Tax, Karachi.
28. SubjectSAMPLE FOR TEST Please refer to your letter No.DCl/CEST.CONT/2003/4040 dated 27/9/03 on the above subject Three samples received marked as A. B and C which on test gave the following results.
29. Two samples marked as "A" and "C" are found to be buff color heterogeneous mixture consisting of powder and lumpy pieces. On test. They are found to consist essentially of Calcium Limestone. Clay (Silicates) in association with from Oxides and Aluminum oxide together with small amount of alkali. They do not possess setting properties neither at room temperature not at elevated temperature. In our opinion they do not constitute a composition of Clinker or cement.
30. The Sample "B" is grey color heterogeneous mixture consisting essentially of Calcium Oxide and Silica,m association with Iron Oxide, Aluminum Oxide and Magnesium Oxide together with small amount of alkali. As such, it may constitute a cement composition. It does not possess setting property at room temperature due to deterioration of the sample.
31. COMPOSITION OF THE SAMPLE Sample marked and their description Composition Sample A Sample B Sample C (Cement) (Siloside) (Clinker)
32. Calcium Oxide 69.28/% 70.00% 70.07% Silica 14.14% 12.88% 13.96% Iron Oxide 8.52% 11.32% 8.96% Aluminum oxide 1.52% 1.65% 1.62% Magnesium oxide - 1.72 --- Moisture 1.65% 1.23% 1.53 Loss on ignition 3.52 1.25% 3.35% Sd"
33. It is argued that it is to be noted that samples were taken on 25-9-2003 i.e. about 5 years after they wrote their first letter to Central Excise authorities pointing out the damaged stock of clinker/Cement and about 6.5 years after the production date 1996. It was submitted that if Cement is left to open atmosphere even for 1-2 months, it turns into lumps and looses its binding strength and setting properties and longer exposure spoils the binding force of cement and it's compressive strength. Here the cement/clinker was exposed to atmosphere for over six years from production date to date of test by Custom Laboratory. It was also argued that for over 21,000 MT of cement/clinker kept within factory as informed to authorities vide letter dated 23-8-1998, only three samples were deliberately taken which shows the mala fide of the department officials.
34. It was argued that the custom laboratory report makes interesting and odd reading: Para 3 of the report lists out chemical composition of samples A&C as: "Calcium limestone, clay(silicates) in association with ron Oxide and Aluminum Oxide together with small amount of alkalai". Then the report reaches conclusion: "they do not possess setting properties neither at room temperature not at elevated temperature". This is what appellant had been stating that cement/clinker is spoilt and has lost binding/setting power. He has argued that the report from no where reaches a conclusion as has been mentioned in the report that "In our opinion they do not constitute a composition of Clinker or Cement". This conclusion according to the learned AR is contrary to facts/results and has absolutely no basis. According to Pakistan Standard Specification relating to cement is PS 232-1983(R) and the major Chemical composition of good cement is (i) Silica Oxide
(ii) Alumina Oxide (iii) Iron Oxide (iv) Calcium Oxide (v) Alkalai. All these chemical components are present. In fact these chemicals are also present in sample C discussed below which the Custom Laboratory have held "It may constitute a cement composition". The learned counsel has argued that what the cement/clinker samples of appellant had lost is setting properties (binding force) and loss of ignition i.e. setting properties and strength.
35. He has submitted that the next par relating to sample B lists out chemical composition as: "Consisting essentially of Calcium Oxide and Silica in association with Iron Oxide. Aluminum Oxide, and Magnesium Oxide together with small amount of alkalai". He has contended that it is to be noted that these are same chemicals essentially as sample A&C. Then the report concludes: "As such, it may constitute a cement composition". "It does not possess setting property at room temperature due to detoriation of the sample". This is exactly what appellant had been stating that due to exposure to atmosphere the clinker/cement has lost setting/binding power.
36. According to PS 232-1983 (R), the test for chemical composition of cement which is contained in par 5 of PS 232 is called Lime Saturation Factor (LSF).
37. LSF =(Ca O)-O.7(SO) 2.8(SiO) + 1.2 (A10) + 0.65(Fe0)
38. This test was not carried out by the Custom Laboratory and it is not part of the report. The learned AR also referred to book "Composition and Properties of. Concrete" by Troxell, Davis, Kelly to demonstrate that all Chemicals necessary for concrete/clinker were present and custom laboratory report in respect of sample A&C was incorrect.
39. It was argued that the test report is contradictory and if any thing it supports appellant's stance that the clinker cement has lost it's setting/binding power/properties and had become damaged due to long exposure to atmosphere/time.
40. He has argued that the entire contravention report has been based on misreading of custom laboratory report which itself is contradictory and supports the contention of the appellant.
41. He has contended that even in order-in-original dated 23-6-2005 which is in appeal the collector (Adjudication) was not convinced about the finding of custom laboratory report and has therefore held that "The Collectorate of Custom, Sales Tax and Central Excise Hyderabad is required to re- examine the damaged stock and ascertain whether this stock can be used for manufacturing of cement or not. It found that damaged stock can be used for manufacturing of cement/clinker, Central Excise Duty and Sales Tax is to be charged from them under Rule 10 ...". He has submitted that the above directions of Collector (Adjudication) were not followed by Collectorate Central Excise and as further tests were not carried out which clearly demonstrates their bad faith, mala fide and leads to conclusion that the contravention alleged had no legs to stand and was false and bogus.
42. He has contended that the order-in-original and the alleged contravention is not sustainable on facts and circumstances of the case and in law and the same requires to be cancelled and alleged contraventions deleted.
5. On the other hand the learned D.R has supported the show-cause notice and the order-in- original. It was argued that action has correctly been taken under Rule 10 of Central Excise Rules for recovery of duty short levied or erroneously refunded and is not time barred. On query from the bench that the production was of 1996 as confirmed in letter dated 9-2-2004 issued by Central Excise and how can proceedings under Rule 10(1) where time limit for issuing notice is of 3 years and under Rule 10(2) where time limit is of 5 years a show cause notice was issued on 13-5-2004 that is after about 7-1/2 year? The Learned DR submitted that Central Excise Rules, 1944 specifies that goods can be stored without payment of duty up to one year, storage of goods beyond that period can only be done with approval of Collector.
43. In respect of passing of order beyond mandatory provision of section 33(3) of Central Excise Act, 1944, it was argued by the Learned D.R that in Federal Excise Act, 2005 (which repealed Central Excise Act, 1944) subsection (4) to section 31 of Federal Excise Act, 2005 was added (section 31 of3 2 23 23 Federal Excise Act, 2005 is pari materia with section 33 of Central Excise Act, 1944) which inter alia stated that where cases were pending adjudication as on 30-6-2006, the time limit for adjudication was extended till 31-12-2006. The learned DR has argued that the case is not time barred as per Article 254 of the Constitution of Pakistan. In respect of discrepancies, fallacies in custom report etc., by the Learned DR no tangible arguments were offered. He has however requested for upholding the impugned orders of the officer below.
6. We have considered the rival arguments and have perused the impugned order-in-original, the available case record, case-laws referred and evidence relied upon by both the parties.
44. We agree with the contention of the learned counsel of the appellant on legal plain, that the alleged contravention related to production of 1996 and this fact has also been acknowledged by the department in their letter dated 9-2-2004. The recovery of duty short levied or erroneously refunded can be made under Central Excise Rules. In the show cause notice no Sub-Rule of Rule 10 of Central Excise Rules has been mentioned, which itself is an illegality. In the show-cause notice and even at the time of hearing no date of contravention was given. The time limit prescribed under Rule 10(1) of Central Excise Rules for issuance of notice was 3 year and under Rule 10(2) of Central Excise Rules the time period prescribed was 5 years at the time of issuance of show cause notice. The show-cause notice was issued on 13-5-2004. Clearly the show-cause notice is time barred. In the case of the appellant Zeal Pak Cement in SCRA No.266 of 2008 vide order dated 17-3- 2009, the Honourable High Court of Sindh has held that notice under Rule 10(1) issued beyond period of limitation prescribed was time barred. In that case notice was issued on 12-6-1996 for period commencing from August 1991 to August 1993. Reliance in this respect can also be placed on reported decision 2005 PTD 1378 (Lah, H.C) (p 1382) in case of Collector v. Pattoki Sugar Mills (Lahore H. C), 2003 PTD 1593 (Lah H.C) (p 1595 to 1599) in the case of Atlas Tyres (Pvt.) Ltd., v. Addl.
45. Collector, 2003 PTD 1257(Lah H.C) (p 1260, 1263) in the case of Zamindar Paper and Board Mills v.
46. Collector etc. The ratio of the above decisions is that sub-Rule of Rule 10 needs to be specified in show cause notices and in absence of the same the SCN would be vague and illegal.
47. Keeping in view the decisions of the honourable High Courts cited above, we are of the view that the show-cause notice issued in this case is illegal as no sub-Rule of Rule 10 of Central Excise Rules has been mentioned. We also hold that the SCN is clearly time barred in terms of Rule 10(1) and Rule 10(2) of Central Excise Rules as period of production was 1996. The show cause notice being void ab-initio and illegal, the order in original is annulled on this issue.
48. It is clear from the above facts of the case that the show-cause notice was issued on 13-5-2004 and as per provisions of section 33(3) of Central Excise Act, 1944, as relevant, on the date of the order the departmental official was mandated to finalize the assessment within 45 days of the issuance of show-cause notice. In this case no extension was granted as is clear from the order- in-original and the records. The order-in-original was passed after about 13 months (404 days), therefore the C order is miserably time barred. The honourable Supreme Court of Pakistan in the case of Messrs Ibrahim Textile Mills Ltd., reported as 1992 SCM R 1898 (at pg 1901) held that where law prescribed period of time for recovery of money, after lapse of such prescribed period, recovery is not enforceable. Reliance in this respect can also be placed on cases of Super Asia Muhammad Din Sons (Pvt.) Ltd. v. Collector of Sales Tax Gujranwala, Tanveer Wearying Mills v.
49. Deputy Collector Sales Tax and 4 others, Hanif Straw Board v. Addl. Collector, Messrs Abbasi Enterprises v. Collector of Sales Tax Peshawar, and 2013 PTD (Trib.) 2252. In all of the above cases it has been held that order passed beyond prescribed limit is illegal and void ab-initio and the provisions of law prescribing time limit for revenue to create liability is mandatory. The reliance of the learned D.R. on Article 254 of Constitution has no applicability when ordinary laws are being examined. This argument has already been rejected by the Honourable High Court in case reported as 2008 PTD 2025 in para 14. Further Article 254 of the Constitution only relates to "any act or things required by Constitution to be done within a particular time period...". Hence this Article 254 only is applicable to act or thing required to be done by the Constitution of Pakistan and does not apply to ordinary laws. We are not persuaded by the arguments of the learned D.R in respect of subsection (4) to section 31 of Federal Excise Act, 2005. In this case Order in Original was passed on 23-6-2005 and as such this provision is of no help. In this respect we also draw strength from decision of this Tribunal reported as 2011 PTD 454 (Trib.) where, in respect of similar provision i.e. section 42(2) of Sales Tax Act, 1990 the Tribunal held that the "language of subsection (2) is non obstinate in nature which extends the period of limitation tell 31 December 2006 of only these cases which were pending for adjudication on 30th June 2006. It is admitted position that the limitation of 90 days in the instant case had expired on 20th June 2006. We are persuaded to agree with learned counsel for the appellant the adjudicating officer had lost its power to adjudicate, therefore the case was no pending adjudication on 30th June 2006. The order-in- original passed on 30-1-2006 on show cause notice issued on 20th March 2006 is held as time barred" .
50. We are therefore of the view that the order-in-original dated 23-6-2005 is time barred and not sustainable in law. And hence the same is cancelled.
51. As to the report of Custom laboratory, we agree with the submissions made by the learned counsel of the appellant that the test report in respect of sample A&C has same Chemical constituents as sample B which the custom report has held that it may constitute cement. The Chemical constituents are constituents of cement as per Pakistan standards 232 for cement. We find force in the contention of the learned A.R that the Custom lab report did not comply with requirements of Pakistan standard PS 232-1983(R) "Chemical Composition" test i.e. Lime Saturation Factor (LSF).
52. According to the appellant this test was never carried out. As per the appellant the major component of LSF are present in all three samples and clinker/cement had lost binding force/setting due to long exposure to atmosphere. We are of the view that the appellant in good faith had re-started the factory in February 1998 and has informed Central Excise authorities with their letter dated 5-3-1998. We have noted that even Collector adjudication was not convinced about the Custom Laboratory report and has directed to reexamine the damaged stock to ascertain if this stock can he used to manufacture cement. This re-examination was not carried out by the Collectorate. We are therefore of the view that report of Custom Laboratory supports the contention of the appellant that their cement/clinker had lost setting properties and was damaged. This fact is confirmed by Custom Laboratory in respect of all three samples. The entire contravention report is based on misreading of report of custom laboratory report and is mare presumptions. We also find force in the contention of appellant about damage of clinker/cement due to long exposure. No contrary evidence in this respect has been brought on record by the department. No evidence has been brought on record about the date of contravention or how such large quantity of cement/clinker was removed from factory especially when the factory was under fulltime supervised clearance and full time Excise Inspector was posted at the factory? We have noted that the very basis of the contravention report as mentioned in SCN being report of Custom Laboratory is incorrect and contradictory as discussed above and as such on the facts and circumstances of the case, the SCN is illegal and is without any basis or evidence therefore the order-in-original being consequence of that SCN is also illegal and is therefore cancelled.
53. The appeal is allowed. revisions by the competent authorities. Therefore, it is advisable to consult the official sources or legal professionals for the most up-to-date and accurate information.