DECISION /FINDINGS ' The complaint alleging maladministration is directed against Order-in-Original, dated 5-11-2001 passed by the Deputy Collector Customs, Sales Tax and Central Excise (Adjudication), Multan.
2. Brief facts as explained by the complainant are that his advertising agency was approved by Radio Pakistan Authority in 1998-99 vide their approval letter, dated 4-8-1999. He was not advised by the aforesaid Authority to deposit license fee. Although during the relevant period he did deposit central excise duty leviable at the rate of 12.5% yet he has been -asked vide the impugned order to deposit Rs,30,000 (Rs,20,000 as license fee and Rs,10,000 as penalty) leviable under the Central Excises Act, 1944. For redress of his grievance he had approached the Federal Ombudsman who advised him to approach the Honorable FTO. The DC (Adjudication) has passed an improper and illegal order in that the complainant has been condemned unheard and its business has already been wound up. The impugned order demanding license fee and imposing penalty for each of the relevant financial years may be quashed as being illegal.
3. In their reply, the respondents have stated that the complainant failed to obtain central excise licence and pay the licence fee as per Rules 174 and 176 of the Central Excise Rules, 1944. The adjudicating authority legally decided the case ordering recovery o-f licence fee of Rs,20,000 for 1998-99 and _1999-2000. Similarly the penalty was legally imposed. Recovery notice was issued after expiry of appeal period for recovery of Rs,20,000 (licence fee) and Rs,10,000 (penalty).
Ignorance of law is no excuse. The complainant was not condemned unheard. The relevant notices and Order-in-Original were dispatched to the complainant at the given address but it deliberately avoided appearance before the adjudicating officer. The complainant was legally obliged to obtain excise licence on payment of prescribed licence fee. It could have filed an appeal before the Appellate Ti ibunal under section 35B of the Central Excises Act, 1944. The complaint lacks merit and may be rejected.
4. During the hearing the complainant reiterated the arguments advanced in the written complaint adding that it was not made aware that payment of excise licence fee was prerequisite for obtaining a licence to operate the agency. Neither any show-cause notice nor any of the hearing notices were received by the complainant. The respondents have unduly remanded the licence fee and have imposed a harsh penalty without affording any hearing and without any considering the circumstances of the ease. It confirmed that appeal has not been filed before the Appellate Tribunal
5. The representative of the respondents stated that the show-cause notice and hearing notices were sent to the complainant by post. The licence fee was applicable under Rule 176 of the Central Excise Rules, 1944 because 'advertising' comes within the purview of 'excisable service'. When asked whether the status of the complainant was that of a `firm' or 'individual', the complainant stated that it was a sole-proprietorship and not a firm. The respondents were asked that if the complainant's advertising agency was a sole-proprietorship and not a firm as claimed by the complainant how they could charge licence fee of Rs,10,000 per annum from the complainant as the licence fee rate of Rs,10,000 per annum was applicable to firms and not to individuals. While admitting that the rate for individuals was Rs,5000 per annum the respondents stated that they were not made aware of this by the complainant. Asked to produce evidence of service of show- cause notice, and hearing notices on the complainant the respondents could not provide any evidence and requested for time to produce it. The case was accordingly adjourned for a few days and was reheard. While the complainant was present himself, the respondents were represented by Mr. Muhammad Adnan Akram, D.C. (Adjudication) and Engineer Habib Ahmad. A.C. (Excise). The D.C. (Adjudication) stated that the show-cause notice, dated 4-8-2001 as well as the hearing notices was dispatched to the complainant at the given address through U.M.S. He put the UMS receipts on record. Asked why these were not sent under registered post, he stated that these were dispatched under UMS and were not received back undelivered.
6. The arguments of the parties to the dispute and the record of the case have been examined and considered. Record shows that although the complainant denies the receipts of notices, they were sent to the complainant under UMS. It is true that licence fee was leviable on advertising services (excisable services). The prescribed licence fee rate for firms was, as admitted by the respondents during the hearing, Rs,10,000 per annum and Rs,5,000 per annum for individuals. The complainant has produced and put on record a certificate from the Radio Pakistan Authority that the firm was a sole-proprietary one. If the complainant's claim is verified to be correct then the licence fee demanded vide the impugned order is admittedly in excess of what would have been actually payable as prescribed under Rule 176 of the Central Excise Rules, 1944. Therefore, the impugned order would need to be reviewed for determination of the correct liability of the complainant on account of licence fee for two years, especially when the complainant has produced, as aforesaid, a certificate from the Radio Pakistan Authority certifying that the advertising agency was a sole- proprietary firm. The complainant has also protested against the imposition of harsh penalty. This contention also needs to be considered and decided on merit.
7. Based on the above discussion, it is recommended that:--
(i) The C.B.R. Or the Collector reopen the Order-in-Original, dated 5-11-2001 and direct the appropriate deciding authority to pass a fresh order to determine, subject to verification of certificate of sole-proprietorship produced by the complainant, the actual liability of the complainant on the basis of the applicable rate of licence fee and also consider the complainant's contention regarding harshness of penalty imposed in the case after giving the opportunity of defence/hearing.
(ii) Compliance report be submitted within 30 days of the receipt of this order.