Law: Customs Act, 1969

Section: 32

Customs Act (IV of 1969)--Ss. 32 & 33---Refund claim---Issuance of show-cause notice under S.32 of Customs Act, 1969 instead of deciding such claim and passing order thereon---Validity---Provisions of S.32 of Customs Act, 1969 speak of duty or charge not levied, short-levied and erroneously refunded---Refund claim, if granted, would fall within term erroneously refunded---Being a simple claim for refund could be rejected after assigning reasons---Issuance of such notice was, erroneous, illegal and without lawfully authority. JUDGMENT ZAHID KURBAN ALAVI, J.---By a short order, dated 1-2-2002 we had allowed this and the connected Constitution petitions bearing C.P. Nos. D-2180/94, 2181 of 1994, 2182 of 1994, 2183 of 1994, 2184 of 1994, 2185 of 1994, 2186 of 1994 and 2187 of 1994 and the following are the reasons. 2. The petitioner is a public limited company and deals with textile and yarn. By a notification, dated 11-7-1990, issued under section 19 of the Customs Act, 1969, the Federal Government was pleased to exempt cotton yarn manufactured on machine, commonly known as "open-end rotors" and wound on cheese from whole of the customs duty chargeable thereon under Second Schedule to the said Act subject to the following conditions:-- (1) the export is made directly from the manufacturing unit under Rule 13 of the Central Excise Rules; and (ii) total quantity of export in case of each manufacturing unit, in a quarter, does not exceed 50% of the quantity manufactured by the said unit in the previous quarter. 3. It is the contention of the petitioner that the notification, dated 11-7-1990 making distinction between the yarn produced in different machines and only on the basis of its method of final wrapping is discriminatory and without lawful authority and of no legal effect and section 19 of the Act, 1969 only empowers the respondents, to grant exemption from customs duty subject to any restriction and limitation on any goods liable to duty. That imposition of penalty is all the more mala fide, arbitrary and illegal as another officer of the Customs, being the Deputy Collector vide his order, dated 2-3-1994, while refusing relief in different but identical…

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