Law: Customs Act, 1969

Section: 56(1),32,32(3),156(7),156(10A)

Customs Act (IV of 1969)-----Ss. 56(1), 32 & 156(7)(l0A)---S.R.O. No.722(1)189, dated 10-7-1989--- Grant of Bond Manufacturing Licences on 6-1-1991--­Collector on 23-12-1997 issued notice to the company requiring them to show cause as to why customs duties and other taxes leviable on machinery should not be recovered from them and penal action under S.56(1) of the Customs Act, 1969 be initiated---Objection of the company was that demand was time­barred under S.32 of the Act as S.32(3) of the Act was attracted in the cases which required issuance of a show-cause notice within 6 months of the relevant date which in the case was 30-9-1993 when the licence was cancelled by the Collector and no conditions prescribed in S.R.O. 722(1)/69, dated 10-7-1989 were violated during the subsistence of the licence---Collector, however, rejected the objections on the ground that customs duties and other taxes were conditionally exempted under S.R.O. 962(1)/90 read with S.R.O. 722(1)/89 which was subject to the condition that dues would be recovered if the beneficiaries failed to fulfil the conditions prescribed in the said notifications within a period of 7 years--­Validity---Department had absolutely no legal or moral authority to issue show-cause notice after a lapse of more than 4 years of the cancellation of the licence as the moment the Collector cancelled the licences the amounts in question became payable by the licensee--­Silence of the Department for over four years be on account of inadvertence, error or misconstruction deprived the Department of its powers to hound the licensee, who was justified in thinking the matter closed and alluding to the provisions of S.156(1)(10A) of the Customs Act, 1969 was not right--­Principles. Nigina Cotton Mills Limited v. Pakistan through the Secretary, Ministry of Finance, Islamabad and 4 others 1990 CLC 1337; Messrs Central Cotton Mills Ltd. v. Collector of Central Excise & Land Customs and 3 others 1992 CLC 841 and Messrs Qaid Cap House v. Collector of Customs and 2 others 1983 CLC 1736 ref. JUDGMENT NASIM SIKANDAR, J.---The appellant a private limited company was granted an Open Bond Manufacturing Licence on 6-1-1991.…

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