This Custom Reference has been filed seeking setting aside of impugned judgme nt dated 15.02.201 1, passed by learned Customs Appellate Tribunal, Lahore and following questions of law inter alia have been proposed for determination by this Court:- i) Whether the importer can be disallowed to claim the refund where this is admitted that the duties/levies were paid by the importer itself? ii) Whether a new plea can be raised by the Department at the third round of litigation before the Appellate Tribunal whereas the new plea has not been raised by the Department before the Collector Appeals as well as Deputy Collector of customs? iii) Whether in the presence of clear admission by the Pakistan Sports Board whereby the Pakistan Sports Board categorically stated through its letter dated 21.12.2010 that the payment of taxes/duties were responsibility of the Applicant hence, no incidence is passed on to the Pakistan Sports Board?
(iv) Whether the Applicant who is importer can be deprived of his valuable lawful rights on the basis of technicalities and wrong interpretation of law? v) Whether in the absence of any eviden ce in rebuttal, the available evidence should have been accepted by the Respondent No.1? vi) Whether the Respondent No.1 while not acting according to judgment of Supreme Court of Pakistan has passed the impugned order contrary to law and the impugned order has also been passed on the basis of non-application of judicial/judicious mind by the Respondent No. 1. vii) Whether the impugned order is arbitrary and unlawful? viii) Whether on the facts and circumstances of the case the impugned order is against admitted facts and applicable law? ix) Whether the impugned order is based on non-appreciation of law?
2. Briefly stated facts of the case are that the Applicant imported a consignment of Kraiburg Shock Pad for Synthetic Hockey Turf' from Netherland and sought clearance thereof under H.S. Code 5703.3010 vide G.D.
No.16105 dated 21.04.2006 filed through Messrs Land Sea Cruisers, Customs Clearing Agent, Lahore. During examination, the goods were found to be the rubber sheets in rolls comprising of rubber . and EPDM. On the basis of physical attributes and constituent material, these goods were treated to be rubber sheets in rolls classified under H.S. Code 4008.2100 attracting CD 10% as against the claimed H.S. Code 5703.3010, which were later on got released by the Applicant without filing any objection as assessed by the appraising group under H.S. Code 4008.2100. Thereafter , on 08.06.2006, the Applicant filed refund claim on the ground that the imported consignment Shock Pads (Rubber Sheets) were classified under PCT heading 5702.3210 instead of 4800.2100 attracting lower rates of duty/tax, which was rejected and the appeal preferred against it stood dismissed by the Collector Appeals which was further challenged through an Appeal before the Customs Tribunal which also met the same fate.
3. Learned counsel for the Applicant contends that the Applicant being a registered importer and successful bidder entered into an agreement with the Pakistan Sports Board (PSB) for supply and installation of Green Field Synthetic Hockey Turf System ("Turf System") at Khushab Hockey Stadium, Khushab. It is a Turf System with separate shock pad like Poligrass, Forbe x and other Green Fields etc; which was imported by the Applicant from Messrs Green Fields B.V. Netherlands due to fact that manufacturing facilities of Messrs Green Fields was located in two different parts of Europe i.e. Netherlands and Germany , former for Turf and latter for Shock Pad. Further contends that first consignment of Synthetic Turf was cleared by the Customs Authorities on 06.03.2006, as per duties and taxes described under HS Code 5702.3210 determining Customs duty @ 5%, Income/withholding tax @ 1% while sales tax was exempted. But when second consignment of Shock Pad was imported by the Applicant then the Customs Authorities refused it to be considered as a part of the previou s consignment and assessed it under PCT 4008.2100 levying Customs duty @ 10%, Sales Tax 15%, Income/Withholding Tax @ 6% and others @ 1.5% and on account of these illegal and unlawful duties and taxes the Applicant was forced to pay an amount of Rs.1235375/- for the Shock Pad, which as stated above, being part of the first consignment should have also been assessed under HS 5702.3210. Adds that due to said overcharge, the Applicant filed. Application claiming refund of rupees one million on 08.06.2006, which was rejected by Deputy Collector Customs (R&R), Dry Port, Lahore/Respondent No.3, vide order dated 02.08.2006, on the ground that it/Applicant had not challenged the impugned assessment order before an appropriate forum. Appeal filed against this order before Collector (Appeals)
Lahore/Respondent No.2 was also dismissed vide order dated 25.01.2007 holding that the Applicant had not filed Appeal against the assessment order; besides that, the department has rightly classified the second consignment and that the Applicant got his consignment released without raising any objection at that time. Further adds that being aggrieved of the said orders passed by Respondents Nos.2 and 3, the Applicant challenged before Customs Appellate Tribunal/Respondent No.1, who, vide impugned order dated 15.02.201 1, rejected the Appeal, relevant portion of which reads as under:- "5. The Shock Pads separately imported have no independent functions and can only work with Synthetic Turf.
However in this case it has been imported separately and its value is much less than the Turf. Therefore, it is found that the shock Pads are integral part of the Turf, hence is to be classified in the same heading in which the Turf has been classified i.e. 5702.3210. The other argument of the respondent that the appellants should have first got assessment order set aside and then lodged a claim for refund is not tenable as if the appellants have adopted a wrong procedure, the department was liable to give them the correct direction and then should have acted at their own for rectification of any mistake and provide them a proper guideline."
Learned counsel for the Applicant argues that from the above it is clear that the orders passed by Respondents Nos.2 and 3 (against the Applicant) were unlawfully passed to the extent mentioned in the above order passed by learned Customs Appellate Tribunal. Further argues that to support its version, the Applicant during the hearing before the Tribunal referred a case whereby similar item viz Shock Pads had already been classified by the Respondents under PCT Head No. 5702.3210 and demanded the same relief; but, instead of deciding Applicant's case on the basis of referred one, the Respondents at that particular juncture raised a plea that the refund could not be allowed to the Applicant, as the incidence had been passed on to the Punjab Sports Board (PSB) under Section 19-A of the Act. For having removed this objection of the Respondents, the Applicant tendered the letter dated 21.12.2010, issued by the PSB contents of which confirmed that it had not paid any additional duties/taxes levied on consignment of Turf or Shock Pads, as it had already been agreed betw een the Applicant and PSB that all the taxes/duties/charges would be paid by the Applicant under its own arrangements. Even otherwise, it is only an importer who can claim a 'refund'. In this regard learned counsel placed reliance on Messrs Pak Forest Industries (Pvt.) Ltd. v. The Federation of Pakistan and others (2004 PTD 2243 ). Lastly argues that while passing the impugned order , learned Appellate Tribunal did not take into account that refund can only be claimed by an importer; that at a third forum the plea that the Applicant could not claim refund could have not been allowed to raise and if it had allowed then the PSB's letter submitted by the Applicant should have considered or rebutted, which had not been done by the Tribun al. In these circumstances, learned counsel seeks setting aside of the impugned orders and claims refund of excessive amount received illegally from the Applicant due to wrong assessment of second consignment.
4. Conversely , Mr. lzhar-ul-Haq, ASC appearing on behalf of the Respondents states that admittedly the consignment imported by the Applicant stated to be Shock Pad, on examination was found to be the rubber sheets in rolls comprising of rubber and EPDM were rightly classified under H.S. Code 4008.2100 attracting Customs duty @ 10% as against the claimed H.S. Code 5703.3010 (CD @ 5%). The consignment was got released by the Applicant after payment of due taxes and duties without filing any objection on that day. However , as mentioned by learned counsel for the Applicant that the refund was claimed on the ground that as the consignment (Shock Pad) was an integral part of the earlier imported consignment, therefore, similar duty/tax be levied as was previously received by the department. Applicant's this claim was rejected up-till third forum i.e. Customs Appellate Tribunal, as the burden has been passed on to the purchaser which is Pakistan Sports Board (PSB) in this case. As far the law relied upon by learned for the Applicant is concerned, it is not applicable in this case because the Applicant has not proved by bringing on record any evidence that the department has illegally received the customs/duty on the said consignment; neither it has been able to submit any proof regarding that the burden has not been passed on to the end of consumer that is PSB and not the Applicant, therefore, does not entitled to claim refund.
5. Heard. Record perused.
6. Admittedly the consignment/ Shock Pad imported by the Applicant was found to be the rubber sheets in rolls comprising of rubber and EPDM which after making payment of the due duties and taxes was got cleared/released by the Applicant without any objection and claim of refund. Later on, the Applicant filed claim of refund which remained unsuccessful up-till Customs Tribunal and the main reasoning behind which is that the Applicant could not be able to produce any proof that the burden has not been passed on to the end consumer .
7. Answering to, the above stated, first question of law, we would like to go throug h Section 19-A of the Act, which is reproduced below:- "19A. Presumption that incidence of duty has been passed on to the buyer:- Every person who has paid the customs duty and other levies on any goods under this Act shall unless the contrary is proved by him, be deemed to have passed on the full incidence of such customs duty and other levies to the buyer as a part of the price of such goods."
8. Undeniably , the Applicant has itself paid the customs duty/tax qua the consignment, yet has not brought anything contrary to it before the lower forum or this Court and neither has been fulfilled the latter part of the said Section, therefore, it cannot claim refund. To further strengthen our stance, we would like to seek support from a reported judgment of Sindh High Court, Karachi , cited as Pak Suzuki Motor Company Ltd., Karachi v. Secretary Revenue Division, Government of Pakistan and others (2007 PTD 501) wherein it has been held, "The Hon'ble Supreme Court has held that in all indire ct taxes the burden is passed on to the end consumer and if any levy is imposed illegally then the refund can be claimed by the seller/supplier if the burden has not been passed on to the end of consumer and onus of proof is on the seller/supplier ." In this regard, the Applicant submitted a letter issued by the Pakistan Sports Board (PSB) but not fulfilled the requirement of Section 19A ibid.
9. As regards the question of raising of plea at the later stage by the department qua incidence of duty is concerned that the burden had been passed on to the end consumer/PSB, it is elucidated that it was not a plea or objection rather a mandatory requirement of law mentioned in Section 19A of the Customs Act, 1969, which could not/cannot be by-passed, the language of which guides as under:- [19A Presumption that incidence of duty has been passed on to the buyer ... Every person who has paid the customs duty and other levies on any goods under this Act shall, unless the contrary is proved by him, be deemed to have passed on the full incidence of such customs duty and other levies to the buyer as a part of the price of such goods.]. It is further clarified that in all indirect taxes the burden is passed on to the end consumer and if any levy is imposed illegally then the refund can be claimed by the seller/supplier if the burden has not been passed on to the end consumer and onus of proof is on the .seller/supplier . Furthermore, the Federal taxes including Customs, Excise duty and Sales Tax are indirect taxes, the burden of which is always borne by the end consumers (in this case is PSB) and not by the seller/ registered person (the Applicant in this case) or importer/assessee. In this scenario this question fails.
10. Question (c) is totally against the Section ibid.
11. There are no technicalities, as all the three forums below heard the Applicant giving it enough opportunity of hearing and submitting evidence in supp ort of its version. No law has been mentioned by the Applicant while raising this question that which law has wrongly been interpreted by the learned Tribunal and lower courts.
12. Applicant filed Application for refund on 08.06.2006 and impugned judgment was delivered by the Customs Tribunal on 15.02.201 1 and during this span of time the Applicant failed to properly rebut the evidence considered and thereafter decided by the lower courts as well as the learned Customs Tribunal. There is nothing on record to show that any document, evidence tendered by the Applicant was ever refused to receive or bring on record; rather the consignment was received by the Applicant without any objection or rebuttal, which itself is enough to prove the Applicant has nothing to impugn or rebut.
13. In view of the above, this Custom Reference is decided against the Applicant.
14. Office shall send a copy of this order under seal of the Court to the Appellate Tribunal Inland Revenue as per Section 196(5) of the Customs Act, 1969.