' NASIM SIKANDAR, J.---In this further appeal under section 196 of the Customs Act, 1969, following three questions of law are claimed to have arisen out of an , order of the Customs, Excise and Sales Tax Appellate Tribunal recorded on the appeal of the present appellant on 14-12-2000: "(1) Is the impugned judgment, being arbitrary and based on presumption, not sustainable in the eyes of law?
(2) Is the application of section 32(2) in the present case a time-barred case, instead of section 32(3) not illegal and against the spirit of law?
(3) Are the impugned proceedings and orders violative of the principles of Natural Justice?
2. The appellant as served with a show-cause notice on 4-12-1999 (followed by a corrigendum, dated 19-2-2000) expressing the intention by the Collector (Apparaisal) Lahore to proceed against them and to charge them with contravention of the provisions of sections 13, 26, 32, 89, 98, 111, 116 and 168 of the Customs Act, 1969. On usual proceedings and after considering the reply made by the appellant, though the Collector dropped some of the charges yet finally directed the appellant to pay a sum of Rs,5,27,281 being penal surcharge imposed for his failure to obtain extension in warehousing period of goods covered by certain bills of entry with the further direction to the appellant to pay a sum of Rs,25,37,589 being the difference in the declared value of the goods and the one determined by him on the basis of C.R.F. Also the appellant was directed to get one bale cleared on payment of duty and taxes which was found in excess of stock as reflected by the Record maintained by the Customs Authorities. Finally a penalty of Rs, 10,000 was imposed for violation of some of the aforesaid provisions of the Customs Act, 1969.
3. On first appeal, the assessee succeeded partly inasmuch as the learned Tribunal set aside the finding of the adjudicating officer on the aforesaid points. However, the objection of the appellant that the notice issued in this case was barred by the limitation was rejected. According to the Tribunal, the delayed clearance of the goods where housed without payment of penal surcharge was on account of the collusion between the Custom Officials and the appellant. In the view of the Tribunal, in these circumstances the provisions of subsection (2) of section 32 of Customs Act, 1969 at the relevant time prescribing limitation of three years were applicable and therefore the show- cause notice was well within time.
4. It is the case of the appellant that the provisions of subsection (3) of section 32 of the Act was attracted in the facts of the case and not the provisions of subsection (2) of section 32 of the Act as determined by the Tribunal. The learned counsel in support of the submissions state that since the show-cause notice did not contain an allegation of collusion between the appellant and the Customs Authorities, the learned Tribunal had no authority to hold that collusion had resulted in the escapement of duties. Also relies upon a judgment of this Court cited as PLD 1989 Lahore 47 Re: Ibrahim Textile Mills Ltd. v. Federation of Pakistan and others which was maintained by the Supreme Court in Re: Federation of Pakistan v. Messrs Ibrahim Textiles Ltd. (1992 SCMR 1898) while hearing a number of appeals involving identical issues.
5. In that case, it was inter alia found by this Court that remedy under section 32 (2) was available to the Customs only if a notice was served on the importer within 6 months of the date of short levy. Earlier this Court recounted the conditions precedent for exercise of powers vesting in the Collector in subsection (2) of section 32 of the Customs Act, 1969. These were (a) whether the petitioner had made or caused to be made or delivered or caused to be delivered any declaration or statement knowing or having reason to believe that such documents or statements were false in any material particulars or (b) whether the petitioner by reason of some collusion had connived at any duty or charge being short levied. That view of this Court was maintained by the Hon'ble Supreme Court of Pakistan by holding that where law prescribed period of time for recovery of money after lapse of certain period, the recovery was not enforceable after that period.
5-A. The learned counsel for the Revenue, on the other hand, supports the order of the Collector and states that the matter having been remanded to him again on the issue of valuation of goods the, petitioner had no cause of grievance nor any of the aforesaid questions had arisen out of the order of the Tribunal.
6. After hearing the learned counsel for the parties, we are of the view that question No,2 does arise out of the order of the Tribunal and that the issue of limitation was wrongly decided against the appellant. It is not denied that the appellant was not confronted with the allegation that the aforesaid short levy or clearance of goods without seeking extension in time had been on account of collusion with the Customs Authorities or fraud played by the appellant. The ratio settled in the aforesaid judgment of this Court certainly helps the appellant. In absence of proper notice that the short levy or escapement of duty had been on account of collusion the provisions of subsection (2) of section 32 could not be pressed into service after the lapse of the prescribed period of 6 months at the relevant time. In 1987 SCMR 1840 Re: The Collector Central Excise and Land Customs and others v. Rahim Din, the Hon'ble Supreme Court of Pakistan disapproved the order of adjudication which was based upon a ground not mentioned in the show-cause notice. According to the Hon'ble Judges the order so recorded was palpably illegal and void.
7. We are also in agreement with the submissions made at the bar for the appellant that the learned Tribunal had no material before it to conclude that there had been a collusion between the appellant and Customs Authorities to hold that the facts attracted the provisions of subsection (2) of section 23. Their presumption may very well be correct that such an escapement could not take place without collusion of the Customs Authorities, the legal positions till, remains that the adjudicating officer never made it a ground for issuance of show-cause notice and therefore, the provisions of subsection (3) of section 32 as contended by the learned counsel for the appellant were relevant as the facts in hand and not the provisions of subsection (2) as held by the Tribunal.
Since the appellant was not confronted with collusion as a ground and since the Tribunal found it otherwise without there being any material in the light of the aforesaid judgment of the Hon'ble Supreme Court of Pakistan in Re: The Collector Central Excise and Land Customs and others v.
Rahim Din (supra) we will hold that the remand order of the Tribunal was improper and that the order in original recorded by the Collector on 24-3-2000 on the basis of the aforesaid show-cause notice was illegal and void.
8. The other two Questions Nos.1 and 3 being only consequential in nature need not be answered.
9. This appeal succeeds in the terms of the finding in the penultimate para.