KARACHI: A two-member bench, comprising Justice Muhammad Junaid Ghaffar and Justice Agha Faisal has dismissed 14 special customs reference applications filed by the Collector of Customs against M/s Victory Pipe Industries (Pvt) Ltd and others challenging impugned order passed by customs appellate tribunal.
On 12 April 2021, court released detailed judgment and observed that “through these reference applications, the applicant has impugned an Order dated 18.07.2017 passed by the customs appellate tribunal in customs appeal Nos. K-1560 to 1573 of 2016, learned counsel for the applicant has read out the order and submits that in view of Order dated 04.05.2015, passed by this Court in C.P No.D-3816 of 2014 and other connected matters, the Applicant’s right to invoke the provisions of Section 19-A of the Customs Act, 1969 (Act) was accepted; hence the Tribunal has erred by holding otherwise.
According to him, until the burden as contemplated under Section 19-A (ibid) is discharged; the respondent cannot claim refund or return of their securities. He has prayed for answering the questions in favour of the Applicant.
We have heard the learned Counsel and perused the record. After such perusal, we are not inclined to even issue pre-admission notices. It appears that pursuant to some dispute regarding classification of goods, the consignments of the respondent were released after securing Bank Guarantees / Pay Orders /Cheques or otherwise which were deposited either with the Nazir of this Court in their respective Petitions; or before the department till such time the controversy is finally decided. The said Petitions were disposed of by a learned Division Bench of this Court vide Order dated 04.05.2015
Tribunal has arrived at a just and fair conclusion as in the peculiar facts and circumstances of this case, the order passed by this Court, cannot be construed in a manner so as to non-suit the respondents.
It was only observed that the department can invoke Section 19-A; however, it can only be done in accordance with law and when the entire facts as available in these cases are examined, it appears that if the contention of the Applicants is accepted then it would amount to add premium to their wrong actions.
The respondents had agitated the unilateral action of the department and sought release of their goods either from the Court or directly before the department by securing the disputed amounts.
Finally, the Petitions were disposed of with certain directions and the respondents were otherwise found entitled for the relief as contained in the three paragraphs of the above order dated 04.05.2015, then merely for the observations, as recorded in the concluding paragraph, they cannot be burdened to discharge any such onus.
It is not a case, which would be squarely fall within the ambit Section 19-A3 of the Act as the same only applies on a person who has paid the customs duty and other levies on any goods under this Act and not secured it pursuant to orders of the Court or even by the department itself. This would only come into force when a person seeks refund of a duty which according to him had been paid erroneously and comes after clearance of the same, and then he could be asked to discharge this burden.
The present facts are not fully covered by this provision. None of the claimed amounts were ever paid to the department. It 2 Dated 4.5.2015 3 [19A. Presumption that incidence of duty has been passed on to the buyer. – Every person who has paid the customs duty and other levies on any goods under this Act shall, unless the contrary is proved by him, be deemed to have passed on the full incidence of such customs duty and other levies to the buyer as a part of the price of such goods. SCRA No.471 to 484 of 2017 Page 7 of 7 was in dispute from day one.
The Hon’ble Supreme Court4 has dealt with an identical situation, wherein, the importer had disputed certain actions of the department and pending proceedings before the Appellate forum had got the consignments released after making the requisite payments. Thereafter, the Collector (Appeals) decided the matter in its favour and when he approached for refund of the amount, the same was refused on the ground that he is not entitled for the same under Section 19-A of the Act
In view of hereinabove facts and circumstances of this case, since the question already stands answered by the Hon’ble Supreme Court against the Applicant as above; hence, all Reference Applications stands dismissed in limine. Let a copy of this order be sent to Appellate Tribunal Customs in terms of sub-section (5) of Section 196 of Customs Act, 1969. Office is directed to place a copy of this order in connected Reference Applications as above”.
