MUHAMMAD ASLAM, TECHNICAL MEMBER.-- This appeal has been filed by M/s. Pakistan Burmah Shell Limited, Karachi against order-in-appeal No.28 of 1989, dated 20.11.1989 passed by Member Judicial of the Central Board of Revenue, based at Custom House, Karachi.
2. Brief facts of the case are that the respondents had imported 2896541 litres of aviation spirit 100 LL per SS "REHAB" IGM 1659/84, dated 30.8.1994. The assignment was lodged in the bonded tanks vide Bond No. VI/394/84 and IV/395/84, dated 9.9.1984. The appellants filed ex-bond Bill of Entry declaring description as AVGAS 100 LL and claimed assessment under PCT heading 27.10 A 010 leviable to custom duty at the concessionary rate of 0.88 paisa per liter in terms of SRO 676(l)/80, dated 26.6.1980 and got the consignments ex- bonded accordingly. Subsequently, it was detected that aviation spirit as classifiable under PCT heading 27.10 A 020 leviable to correct rate of duty (a)
Rs. 1.08 per liter as against 0.88 paisa per liter paid by the appellants. The short levey was worked out to Rs. 5,79,308. Show Cause Notice was issued on account of mis-declaration committed under the provisions of sub-section (2) of section 32 of Customs Act, 1969 punishable under clause 14 of section 156(1) of Customs Act, 1969. The charges levelled And the appellants were called upon to pay the same. The appellants were also subjected to a personal penalty of Rs. 25,0 under section 156(14) of Customs Act, 1969. These orders were confirmed by the Central Board of Revenue as well, hence this appeal.
3. Learned counsel for the appellants Mr. Nadeem, besides reiterating the written version which is contained in the Memo, of Appeal has, in particular, drawn our attention to the following:-
(a) Order No. 521/Rev. Customs of 1992, dated 18.3.1992 passed by Mr. Abrar Naqvi in his capacity as Additional Secretary to the Federal Government in an identical situation wherein he allowed the revision application holding that the demand was barred by time under the provisions of Section 32(3) of the Customs Act, 1969. This automatically renders his orders passed in the instant situation as infructuous in his capacity as Member of the Central Board of Revenue.
(b) The appellants had no reasons or motive to make any un-true statement or mis-declaration as to the rate of duty. Any duty charged by the Customs was to be an element in the fixation of sale- price by the Government of Pakistan and the appellants were to recover the amount of duty from the buyers of the product. The appellants did not, at any stage, stand to gain anything by paying duty at a lower rate.
(c) The instant case is clearly of inadvertence, error or mis-construction and not of deliberate mis- declaration, un-true statement or collusion etc. and, therefore, the applicable provision of law could be Section 32(3) and not 32(2) of the Customs Act, 1969. Thus the position which emerges is that as the period of four months has elapsed, the demand has become non-enforceable. ln support thereof, the learned Counsel has placed on record a number of judgments of the Superior Courts which deal with the interpretation of the provisions of Section 32 ibid in relation to different situations.
4. The learned counsel has requested for the vacation of demand and the acceptance of the appeal.
5. The learned Departmental Representative has reemphasised the view-point of the Department and pleaded for the confirmation of the orders appealed against, on the ground that the appellants had intentionally chosen to defraud the national exchequer by applying wrong rate of duty.
6. lt is an admitted position that the applicable rate of duty at the given point of time was Rs. 1.08 per liter and not Rs. 0.83 per liter for the aviation spirit. As the appellants had made payment at the rate of Rs. 0.88 per liter, the short-payment did take place, which was to be made good. The point to be resolved is as to whether the Department was justified in effecting recovery by invoking the provisions of Section 32(2) of the Customs Act, 1969 or it had become time-barred in terms of Section 32(3) ibid.
7. As the element of falsity cannot be attributed to the appellants in a conclusive manner and in an identical situation the Federal Government too had concluded accordingly, the orders passed in the matter being incorrect/defective in law and oh facts are set aside and the. As a result thereof, the liabilities of Rs. 6,04,3.08 determined against the appellants have become infructuous.
8. These orders shall also apply as such to another appeal case of the appellants which pertain to Order-in-Original No. S-5/Misc/155(A)/86-Oil, dated 18.9.1989 wherein also the ability of Rs. 6,09,830 has become redundant and non-existent in the eye of law.