Law: Customs Act, 1969

Section: 83

Customs Act (IV of 1969)--Ss. 83(2) & 224---Establishment of Office of Federal Tax Ombudsman Ordinance (XXXV of 2000), S.2(3)---Clearance for home consumption---Mark-up--Demand of mark-up @ 20% against Bank guarantee---Validity---Twenty percent mark up as agreed between the customs authorities' and the importer was not chargeable under customs law and when an importer failed to pay the customs dues, only the rate prescribed under S.83(2) of the Customs Act, 1969 could lawfully be imposed---Charging of 20% mark-up was contrary to law, arbitrary and unjust and amounted to maladministration-Demand was raised vide notices and payment of the principal amount was made----Since customs dues were not paid within thirty days of the issue of notices, surcharge @ 14% per annum for the intervening period would be payable---Federal Tax Ombudsman recommended that the Central Board of Revenue direct the Collector of Customs to recover the amount of surcharge under subsection (2) of section 83 of the Customs Act, 1969 and release the Bank guarantees after the payment of surcharge. Petition No.843 of 2003 ref. FINDINGS/DECISION JUSTICE (RETD.) MUNIR A. SHEIKH, (FEDERAL TAX OMBUDSMAN).----The complaint has been filed against four demand notices dated 2-9-2005 issued by the Collector of Customs (Appraisement) for payment of mark-up against Bank guarantees filed in lieu of duty and taxes in 2003. It has been alleged that the issue of demand notices is "a decision, process, recommendation, act of omission or commission" which is contrary to law, .and is perverse, arbitrary and unreasonable," which constitute maladministration. 2. It has been stated in the complaint that the High Court in its judgment in Petition No.843 of 2003 decided that the company was liable to customs duty and other taxes. Consequently they receive from the respondent four notices dated 4-2-2005 to pay the principal amount along with mark-up @ 20%. On the basis of these notices they paid the principal amounts on 4-6-2005 and requested for release of the Bank guarantees. They contested that the mark-up was not payable as it was repugnant to law and the Customs Act. 3. It has further been stated that instead…

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