JUDGMENT: MR. JUSTICE TASSADUQ HUSSAIN JILANI.-(l). This judgment shall dispose of Customs Appeals No. 25 & 26 of 1999 as in both these appeals common question of law and facts are involved. Through these appeals the appellant has challenged the order dated 29.01.1999 passed by the Customs, Excise & Sales Tax Appellate Tribunal vide which appellant's appeal against the order dated 01.10.1997 passed by Collector of Customs, Lahore was dismissed.
2. Facts giving rise to the afore-referred appeals briefly stated are that the appellant is a multinational company of foreign origin, it imported Sun Flower Seeds and in the Bills of Entry filed, it claimed concessionary rate of duties in terms of SRO 490(I)/95, dated 14.06.1995. The Custom Authorities cleared the goods on 03.01.1996 (C.A. No. 25/99) & on 25.01.1996 in (C.A. No. 26/99) accordingly at the rate of 10% duty. On 12.07.1997, however, show cause notices were issued to the appellant alleging that the goods in question being classified under the P.C.T. Heading 1206.0 were liable to be charged custom duty at the rate of 25%, that the appellant through false declaration got goods cleared at the rate of 10% that there was evasion of custom duty to the tune of Rs.
14,73,888/- in (C. A. No. 25/99) & Rs. 23,56,303/- in (C.A. No. 26/99). In reply it was contended that there was no misdeclaration and that even if there was an evasion the case fell within section 32(3) of the Customs Act and no notice would be issued for recovery of short levied duties after six months. The Collector however, decided the matter against the appellant which order was affirmed by the Appellate Tribunal. Both the concurrent orders have been impugned in these appeals.
3. Learned counsel for the appellant submitted that there was no misdeclaration whatsoever, that the description of goods was correctly given in the Bill of Entry, that SRO under which appellant claimed concession was specifically mentioned in the Bill of Entry, and the custom authorities concurred with appellant's plea. If the custom authorities subsequently mere of the view that appellant was not entitled to the concession, it could worst as bona fide misconstruction of law and not misdeclaration. The matter according to him did not attract the mischief of subsection (2) of section 32. It could at worst be case under subsection (3) of section 32 of the Customs Act and no notice could have been issued and action taken beyond a period of six months of the relevant date which in the instant case would be the date when the date of assessment i.e. 03.01.1996.
Learned counsel relied on a judgment reported Federation of Pakistan Vs. Ibrahim Textile Ltd. (PTCL 1993 CL. 532 = 1992 SCM R 1898) and Assistant Collector of Customs & others Vs. Khyber Electric Lamps etc.
4. Learned counsel for the Custom Department defended the impugned orders of the courts below which according to him are in accord with the mandate of law, that the goods subject matter of these appeals could not have claimed concessionary duty under SRO 490(I)/95 & that the short levied duties are validly being recovered from the appellant. He further contended that the appellant's case fall within the ambit of section 32(2) as the appellant in the Bill of Entry had made a false declaration that the goods should be cleared under SRO 490(I)/95 and it was not a case of a short levy of duty by "inadvertence, error or misconstruction" within the meaning of section 32(3) referred to above.
5. For a better appreciation the issue raised in these appeals it is necessary to refer to section 32 and subsection (2) & (3), which reads as under:- "2. Where any 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 short or has been erroneously refunded, the person liable to pay any amount on that account shall be served with a notice within five 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 three years of the relevant date requiring him to show cause why he should not pay the amount specified in the notice".
6. The periods of limitation stipulated in sub-section (2) & sub-section (3) were three years (action of sub-section (2) & six months for action under sub-section (3)), prior to the Finance Ordinance, 2000 (XXI of 2000). Thus when the Bills of Entry were filed and assessment made the period of limitation was shorter.
A case of misdeclaration can be made against an importer if the document/Bills of Entry was false or on account of "some Collusion" the duties had been short levied. In the instant case admittedly the goods and P.C.T. Heading of those goods were correctly mentioned and there was no misdeclaration on that count. The appellant claimed to be assessed under SRO 490(I)/95 and the case of the respondent custom department is that the appellant could not get benefit of the said SRO. Thus it was clearly a case of "error or misconstruction" within the meaning of sub-section (3) of section 32 of the Customs Act. There is no allegation of collusion with the custom staff either.
That being so a notice beyond the then period of limitation prescribed could not have been issued to the appellant. This is in line with law laid down by the august Supreme Court in 1992 SGMR 1898 = PTCL 1993 CL. 532, wherein at page 1901 (page CL. 537 of PTCL), it was held as under:- "Due consideration was given as to whether the respondents should not pay the short levied duty and whether the State should suffer in public finance. But the cardinal principle of law is that all are equal before law, whether citizen or State. Secondly if a law prescribes period of time for recovery of money, after its lapse recovery is not enforceable through Courts. Thirdly while construing a financial statute, its terms are strictly top be followed. Keeping in view these principles, for short levied duties on account of "inadvertence, error or misconstruction", section 32(3) of the Customs Act, 1969 provides that for recovery notice shall be served 'within six months'. If that is not done, like a suit for recovery of money after lapse of time prescribed by law of limitation, the recovery becomes unenforceable".
The afore-referred judgment was reiterated in For what has been discussed above both the impugned orders cannot be sustained in iaw. Resultantly, these appeals are allowed and orders dated 01.12.1997 passed by the Collector and dated 12.01.1999 passed by the Tribunal are set aside with no order as to costs.