Law: Customs Act, 1969

Section: 30

CUSTOMS ACT, 1969 (IV OF 1969)-----Section 30----The issuance of the second exemption certificate by the Income-tax Authorities by itself, indicated that the appellant was entitled to the income-tax exemption despite a gap of few days between the expiry of the first exemption certificate and the issuance of second one, because for the uncovered period the Income-tax Authorities were responsible for delaying the issue of second exemption certificate. Hence demand of income tax is not valid.--Brief facts leading up to this appeal are that the appellant had imported plastic moulding compound polypropylene and got cleared vide bills of entry No. 0358 dated 24.6.1999 and No. 0365 dated 28.6.1999, under PCT heading No. 3902.1000 on which custom duty @25%, sales tax @ 15% and income tax @5% was payable. The appellant deposited the custom duty and sales tax on 20.7.1999 but the income tax, on scrutiny of the record, was not found to have been paid by them, a show cause notice, demanding the payment of the said amount, was issued to them. In reply, the appellant claimed exemption from the payment of the aforesaid amount u/s 50(5) of the income Tax Ordinance, 1979, and asserted that the production of exemption certificate, dated 22.7 .1999, issued by the income Tax Authorities, covered the imported consignments. Ordinarily when the exemption certificate is filed along with the bill of entry and other relevant documents and the assessment of the customs duty and taxes of the imported goods is finalized, the Customs Authorities can not insist on the production of fresh exemption certificate to be issued by the income Tax Authorities if the amount of customs duty and taxes are deposited by the importer within a week of the finalization of such assessment and meanwhile the exemption certificate expires by afflux of time. However, if the importer does not deposit the assessed amount of duty and taxes within a week and the duration of exemption certificate issued by the Income Tax Authorities expires meanwhile, then the Customs Authorities can insist on the production of fresh exemption certificate to cover the amount of duty and taxes to be deposited after the lapse of the…

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