KARACHI: The Customs Appellate Tribunal , Bench I headed by Muhammad Nadeem Qureshi vacated the show cause notices issued to the Philip Morris (Pakistan) Ltd while deciding three identical appeals challenging the show cause notices.
The tribunal earlier heard Ijaz Ahmed advocate, counsel for appellant who maintained that customs Post Clearance Audit (PCA) wrongly assumed the jurisdiction and therefore all subsequent actions/orders are of no legal effect and in fact violation of Section 32 (A). The petitioner submitted that procedure for clearance of the goods for home consumption is embodied in the Section 83. It was further contended that the audit order was miserably time barred.
The counsel for respondent Customs submitted that appellants imported three consignments of Marlboro King Size cigarettes and the same were classifiable under PCT Heading 2402.2000 chargeable to the Federal Excise Duty (FED) at a rate of 65 per cent of the retail price. The customs alleged that appellants have contravened provisions of FED Act 2005 and not paid the FED. An amount of rupees 3,394,762 was short paid besides corresponding short payment of Sales Tax, value addition Sales tax and Withholding tax amounting to rupees 4,318, 249.
The authority decided to issue show cause notices under section 32 (3A) of the Customs Act 1969 , Section 3(1) (b) and Section 12 (4) read with Table I of the First Schedule to the federal Excise Act 2005, section 3 of the sales Tax Act 1990 which was impugned before the special customs tribunal.
The tribunal after hearing the sides noted that respondents failed to file objections to the appeal “instead comments were filed half heartedly and in stereotyped manner emphasizing that the grounds taken in the appeal are incorrect and misleading. The tribunal also noted that Appraiser/respondent failed in assisting the court on questions of law and facts but maintained that the respondents lawfully assumed a jurisdiction.
The tribunal perusing the Income Tax Ordinance 2001, Federal Excise Act 2005 held that “Deputy Director, Post Clearance Audit (Respondent no 2) is not at all appointed/designated as Officer of the Inland Revenue” rendering entire act of the audit in the matter of FED as well as Income Tax is without powers and jurisdiction/Coram non-judice. The tribunal also held that audit could be conduct within three years of the clearance of the goods while in present case it was conducted after 10 years hence “time barred and not enforceable under the law”. The bench relying on a number of case laws and in view of “ratio decidendi” by the Supreme Court of Pakistan allowing the appeals vacated the show cause notices, set aside the order passed by the custom authorities declaring the same as illegal, void ab-initio and in excess of jurisdiction.