P L D 1959 Supreme Court (Pak (PLP)

MUHAMMAD MUNIR, C. J.‑I concur with Cornelius, J., but would like to make one general observation. A person who engages himself in a controlled activity like foreign trade does so with full knowledge of the heavy penalties, which a breach of the law may involve him in. He can, therefore, have no sympathy if it should appear to the Court that he attempted to defraud the public revenue by deceiving the Customs Authorities. Fraud or deceit being proved, the matter is beyond the jurisdictional pale of the Court. At the same time, however, the Court expects that the authorities charged with the administration' of tariff laws which entrust them with enormous powers would act honestly and reasonably and not vindictively, capriciously, or arbitrarily. The Court would, therefore, interfere where it appears that the Customs Authorities have failed to distinguish between deliberate fraud and bona fide errors or omissions. In the present case, it appears that the Collector applied S. 21 because three out of the eighty pieces found in one bundle exceeded the prescribed length by less than half a yard each and there was some repetition of colour and design in each bundle from which the Collector inferred that the entire stuff was not fents but fabrics. In other words, the finding of the Collector is that the appellant in order to obtain 33% reduction in duty, paid an amount several times the amount of invoice price to the shipper, procured sterling at black‑market rates for such payment and induced the shipper for a consideration to cut full pieces into fents and prepare a false and fictitious invoice. This, it seems to me, was an impossible result to arrive at on the circumstantial evidence before the Collector. CORNELIUS, J.‑This judgment will dispose of the following civil appeals :‑ (1) No. 19 of 1959 by Messrs Eastern Rice Syndicate. (2) Nos. 21, 22 and 23 of 1959 by Messrs Noor Ali& Company. In all these cases the principal respondent is the Central Board of Revenue of the Government of Pakistan. Each appeal calls in question orders made under the Sea Customs Act, 1878 imposing penalties and confiscations upon the appellant under items (8) and (9‑B) of section 167 in respect. of a consignment of imported textiles. In the aggregate, the amount of the penalties is very high. In one case, that of the Eastern Rice Syndicate, the effect of the penalties and confiscations is said to be that the Company in question is driven out of the import trade altogether. An additional handicap suffered on account of the weight of the penalties imposed is that an appeal attempted in each of these cases to the Central Board of Revenue has been dismissed by reason of non‑deposit of the amount of the penalties which has been held by the Central Board of Revenue to be a mandatory requirement of the competency of an appeal. Although leave to appeal to this Court was granted in each case in respect of these decisions of the Central Board of Revenue, it became clear in the course of the hearing of the appeals that the principal defect lay, in proceedings taken by the Customs authorities, and in a misconception regarding the application of the relevant law, affecting the "adjudication" by the Collector of Customs in each case. As it is open to this Court to grant leave to appeal against any decision of a quasi‑judicial body such as a Collector of Customs imposing penalties and confiscations under the Sea Customs Act, we have dealt with these appeals as if they were preferred on the basis of special leave granted to challenge the orders made by the Collector of Customs in each case. We have been impressed in each of these cases by the extreme severity of the relevant law which is on the one hand understood to empower the authorities to multiply penalties up to as much as five times any value they may fix for the goods in question, and on the other hand renders the right of appeal subject to the condition that the whole amount of the penalty shall be deposited. These cases by themselves furnish proof that the grant of an appeal by the law in such cases is probably in respect of most of 6 the important cases coming under the relevant provisions, merely nugatory. It will be convenient first to deal with the three appeals brought by Messrs Noor Ali & Company. In Appeal No. 21, the goods imported consisted of 9,3001bs., of Nylon fents of which the invoice value was shown at 97 Cents per lb. Fents are defined for the purposes of Customs law as bona fide remnants of piece‑goods or other fabrics. A maximum length is fixed for such remnants, according to the kind of fabric and this is in certain cases 2 yards and in other cases 4 yards. The Customs House at Karachi reported that the goods were "bona fide fents of mixed quality" and that "market enquiry conducted ..reveals that the price of such goods is $ 1.55 per lb." The importer protested against the increased valuation, but the Customs House adhered to their figure and the goods were allowed to be released provisionally, under section 87‑A, Sea Customs Act, at that figure, subject to security for any short recovery eventually found. The matter was referred to the Valuation Branch, which reported that the value should be settled at $ 1.97 c. per lb., which the Collector eventually accepted, though not without protest. Additionally, the case was put up before him for "adjudication" under sections 167 (8) and 167 (9‑B) of the Sea Customs Act. At this stage it is desirable to state the provisions of these items taken from the very comprehensive penal section 167 of the Sea Customs Act. Item (8) refers to a number of cases in which the penalties, which it provides, namely, confiscation of the goods in question and imposition of penalty not exceeding five times the value of those goods, may be applied. Only one of these cases is relevant here, namely, that in which "goods the importation of which is for the time being restricted under Chapter IV of the Act, have been imported contrary to such restriction". The restrictions applicable to the cases here in question are imposed under section 19 of the Act, which enables the Central Government from time to time by notification to restrict the importation of goods of any specified description across any custom frontier. It was conceded that the importation of all the goods in the present case was subject to the obtaining of permits and licences, etc., under the Import Trade Regulations. It appears that the offence under item (8) which the Customs authorities conceived to have been committed in respect of this consignment, was that the import licence had been obtained by the importer by showing a much smaller value for the imported goods than that which had been ascertained by enquiry after their importation by the empowered authorities. Item (9‑B) in section 167 is much simpler in character. It provides a punishment for any offence committed in relation to any goods under section 39 of the Act, and the punishment is that the goods shall be liable to confiscation, and the person concerned in the offence shall be liable to pay a penalty, which may be as high as three times the value of the goods. Section 39 of the Act as a result of a recent amendment, now provides that if a person in connection with any matter of Customs makes any statement in a document or otherwise, such as is necessary for the purpose of his particular proceeding under the Act, which "is untrue in any material particular'", he shall be guilty of an offence under this section, to be punishable under item (9‑B) of section 167 aforesaid, The essence of this penal provision appears to be that the offender has obtained an advantage at the hands of the Customs authorities or has induced them to take some form of action authorised by the statute, by making a statement which "is untrue in any material particular". There need be no doubt whatsoever that the word "untrue" carries the sense of falsity to the knowledge of the person concerned. Thus, upon a point of mere valuation, if a declaration is made by such a person which on enquiry the Customs authorities find to be too low, that will not be by itself sufficient to prove that the declaration was false to the knowledge of the maker, but it would be necessary also to establish that at the time when he made the declaration he was in possession of facts from which the necessary inference would be that the value declared by him was too low and that the value which he ought to declare was the same as that subsequently ascertained by the Customs authorities through their own processes, which are of course processes not available to the person concerned. The application of item (9‑B) of section 167 appears to have been made on the basis that by deliberately and falsely showing a low invoice value, the importer in each of these cases succeeded in bringing into the country against his allowance of foreign exchange, a much larger quantity of goods than that which he could have brought had he declared the correct value, which in the opinion of the authorities was the value ascertained by themselves. In each of these cases, it would seem that the penalty is to be calculated upon the value placed upon the goods by the Customs authorities, and it becomes immediately apparent how great a power is wielded by the authorities under this provision as interpreted by them. It can be fairly and correctly described as a power to ruin a merchant over a single transaction involving the intervention of the Customs authorities. Therefore, the necessary conclusion must be that\in the application of laws which may culminate in the imposition of these enormous penalties, the authorities in question should act with complete fairness and the utmost circumspection if their actions are not to have effects detrimental to the maintenance and development of trade and to the wider interests of the public and the country. In these cases, the authorities have placed before the Court full copies of all the noting which passed in the Customs House and the Valuation Branch in respect of each case, and we have therefore been in a position to judge for ourselves of the attitude of the respective authorities in regard to the particular matters involved in each case. While on the one hand commending the authorities for their candour in not withholding from the Court knowledge of the exact manner in which these cases were dealt with, we must at the same time and with great regret, express our considered opinion that the proceedings are not characterised by that degree of circumspection in the application of law, which was clearly requisite, and in one case, namely, that of the import by the Eastern Rice Syndicate, the attitude of the authorities was not distinguished by fairness. Continuing with the facts in Appeal No. 21, we find that the matter was "adjudicated" by the Collector on the following basis, namely, that the total declared value at 90 cents per lb., was Rs. 40,613, but the appraised value at $ 1.97 c. was Rs. 88,550, showing a difference of Rs. 47,937 and there was a deficit in relation to the licence granted for the import amounting to Rs. 18,335‑8‑

0. The loss of revenue was estimated at Rs. 26,925, and the recommendation to the Collector was that "severest penalties under sections 167 (8) and 167 (9‑B) may be imposed". Thereupon the Collector made the following simple order: ‑ " Penalty Rs. 50,000 under, the first count and Rs. 30,00() under the second count". A formal order was drawn up on the same day, via., the‑ 10th November 1958, of which the operative provision reads as follows: " Since it has been established that the importers are guilty of contravention of Import Trade Control Regulations and misstatement of value of the goods imported, I, under section 167 (8) Sea Customs Act read with section 3 (3) of the Import and Export (Control) Act and under section 167 (9‑B), Sea Customs Act hereby impose personal penalty of Rs. 50,000 and Rs. 30,000 respectively, on the importers Messrs Noor Ali and Company, Karachi". In addition, a demand was made for payment of deficiency amounting to Rs. 10,265 in duty and sales tax. In Appeal No. 22, the goods imported were rayon velvet fents of the declared value of Rs. 21,

950. The following note extracted from the record sets out very clearly the progress of this case up to the point where it was submitted for "adjudication": " A consignment of velvet and plush fents wag imported and, the value was declared by the importer‑@ 45 Cent and 30 Cent per lb. The value was appraised by the Customs House at 60 Cent and 45 Cent respectively. The difference was about 40% and the case was released under section 87‑A of the Sea Customs Act against‑deposit. The case was then referred to Valuation Branch when the value ‑was fixed [u; 77 Cent and 45 Cent per lb., for velvet and plush fents respectively. Show‑cause notice was issued and the importer's reply is at p.

4. The case is submitted for adjudication under section 167 (8) and under section 167 (9‑B) of Sea Customs Act. It is a case of 87‑A of S. C. Act. Loss of sum is Rs. 7,

058. Goods not covered by licence valued Rs. 12,363/8/0:" In this case, both the Customs House as well as the Valuation Branch expressly made an effort to ascertain the "normal price". This is a technical term for the meaning of which reference has to be made to section 30 a recently introduced section in the Sea Customs Act. Previously, by section 29 now repealed it was required that an importer should in his bill of entry state the "real value, quantity and description" of the imported goods, which would then be subject to scrutiny by the Customs authorities, and section 30 provided that the "real value" should be either the whole‑sale‑cash price less the trade discount for which similar goods are capable of being sold at the time and place of importation, or where such price is not ascertainable the cost at which similar goods can be delivered at such place. The change in the law was brought about on the 20th April 1957 and the present cases relate to import of goods later that year and in the following year, at a time when it appears that the full effect of the changes brought about by the amendments had not been appreciated. By section 30 as amended it was provided that the value of any imported goods should be taken to be the "normal price", that is to say the price which they would fetch at the time the bill of entry is delivered to the Customs Collector at a sale in open market between an honest seller and an honest buyer on condition that all freight, insurance, commission and costs incidental to the sale and delivery of the goods should fall upon the seller, but all duties or taxes leviable in Pakistan should be borne by the buyer and that the price should include any consideration for the use of patent rights or registered designs or foreign trade marks, etc. The alternative basis of computation, viz., cost, was excluded. The "normal price" so ascertained would presumably be the' value for assessment of customs duty and other taxes. As a result of the report reproduced above, the case in due course came before the Collector of Customs, who, as in the former case made an order in a single line reading as under: ‑ " Penalty Rs. 25,000 under A and Rs. 15,000 under B". It should be mentioned that "A" refers to the value of goods imported which were not covered by the licence, while "B" refers to the loss of revenue. In addition, a sum of Rs. 1,194 was found short‑recovered on account of customs duty and sales tax, and a demand for this amount was duly sent out. The formal order made in this case indicates with some clearness the basis of the findings of offences under items (8) and (9‑B) of section 167, and may be quoted with advantage: ‑ "(2) The value of the goods as declared by the Importer in the relative bill of Entry on the basis of the invoice is 45 cents and 30 cents per lb., as against the correct price of 77 cents and 45 cents per lb., as determined by the Valuation Branch. The total value of the consignment, on this basis, works out to Rs. 33,792 as against the declared value of Rs. 21,428‑8‑0 and thereby the importers have contravened section 39 of the Sea Customs Act and section 19 of the Sea Customs Act punishable under section 167 (9‑B) of the Sea Customs Act. (3) Further, the licence produced by the importers fell short of the value by Rs. 12,363 against which no valid import licence has been produced and thereby have contravened section 3 of the Imports and Exports (Control) Act, punishable under section 167 (8) of the Sea Customs Act. (4) A show‑cause notice was issued to the importers to explain the mis-declaration of value of the goods and importation in excess of value of the licence. The explanation received is not satisfactory. (5) Since it has been established that the importers are guilty of

1. T. C. Regulations and mis‑statement of value of the goods imported I, under section 167 (8) of the Sea Customs Act read with section 3 (3) of the Imports and Exports (Control) Act and under section 167 (9‑B) of the Sea Customs Act hereby impose a personal penalty of Rs. 25,000 (Rupees twenty five thousand) and Rs. 15,000 (Rupees fifteen thousand) respectively on the Importers Messrs Noor Ali & Co., Karachi." An appeal to the Central Board of Revenue was rejected for failure to deposit the penalty. In Civil Appeal No. 23 the goods imported were not fents but piece goods, namely, rayon suitings supported by an invoice in which the declared value was entered as 46 cents per yard. The first note on the file declares that this "is not the measure of normal price" but "the fair measure of normal price is 60 cents per yard". On what basis this declaration was made is not stated, but the recommendation was made that the case should be referred to the Valuation Branch. That Branch reported that 60 cents per yard was "a fair measure of the normal price", on the basis that it had on its record invoices pertaining to previous imports of similar material at that price. The valuation Branch further stated with reference to the declared price of 46 cents per yard that "unless otherwise explained it would be fraudulent". After some further references, the case was put up for "adjudication" under sections 167 (8) and 167 (9‑B) and upon a recommendation that penalties of Rs. 4,000 under the former items and Rs. 3,000 under the latter item should be imposed and any short recovery of customs duty and sales tax should also be recovered, the Collector briefly said "order accordingly ". A formal order was drawn up which sets out that against the declared value of Rs. 10,941‑8‑0, the "real value" as determined by the Valuation Branch proved to be Rs. 14,423‑1‑0 and consequently the import licence produced by the importers "fell short of the correct value by Rs. 3,481‑9‑0" and to this extent, the import was not covered by a valid licence, thus constituting an offence under section 167 (8). In addition, the mis‑statement of the value of the goods imported constituted an offence punishable under section 167 (9‑B) of the Sea Customs Act. The penalties already mentioned were accordingly imposed. Alt appeal was attempted to the Central Board of Revenue, but was rejected for failure to deposit the penalties. It is now possible to consider in relation to these cases the question whether the law has been correctly applied. It is immediately apparent that the condition of section 39 of the Act that any statement by the person concerned in order that it should come within the mischief of the section, should be untrue and not merely incorrect has not been satisfied in any of these cases. We have already indicated our opinion that the, word "untrue" conveys the sense that the requirement of law is that in order to attract the penalties of item (9‑B) on the basis of a wrong statement made by the person concerned there must be falsity to the knowledge of that person. In none of the cases against Messrs Noor Ali & Company was any effort made to show that the invoice price of the consignments was not the correct commercial price actually charged to the importer by the exporter in the foreign country. In one of the three cases before us, the ground stated by the Valuation Branch for fixing the "normal price" at 60 cents is that it had seen invoices of other imports of similar materials at that price. Plainly, that was wholly inadequate for determining what was the true invoice price charged to the importer by the exporter in the particular case. The complete irrelevancy of the basis adopted by the Customs authorities upon which they were enabled to "adjudicate" so oppressively in these cases appears with very great clearness in Appeal No.

21. There, the invoice price was 97 cents per lb. There is not an iota of evidence to show that this was not the price charged to the importer by the exporter. The eventual price on the basis of which falsity has been imputed was settled by the Valuation Branch at $ 1.97 c. per lb. This was not done without protest from the Customs House, whose own opinion was that the rate should be ,$ 1.55 c. per lb., and when the Valuation Branch's report was received, officials in the Customs House were not wanting to criticise that valuation in each detail. The proceedings afford a pitiful spectacle of authorities entrusted with great powers as tax‑gatherers, entirely ignoring the plain basis provided by the Act upon which they should work, and instead vieing with each other in fixing valuations out of their own minds, each higher than the other, upon which to find the merchant in error, and imposing mounting penalties upon him which cannot but have the effect of crippling his trade at least fur the present, if not also for the future. In this particular cast, the final figure of $ 1.97 c. per lb. is clearly rendered doubtfull by the estimate of $ 1.55 c. reached and maintained by the Customs House, but neither of these valuations is put forward as the true export price paid by the importer. It is therefore impossible to see how the importer can be regarded as having made an untrue statement when presenting his invoice. In Appeal No. 22 as well, the Customs House and the Valua tion Branch were at variance with each other and indeed these two instruments of tax‑collection can rarely be expected to agree among themselves it' they are allowed liberty, as seems to be the case to fix values cut of their own minds in each individual case, uncontrolled by legal provisions. In two of these cases, they attempted too fix the "normal price". That figure is related to market value at the port of entry in Pakistan, and is of no relevancy in determining the true export price paid by the importer in the country of origin. A discrepancy between the "normal price" as fixed by the authorities, in complete honesty, and the declared invoice price must always exist. That is a proposition whose universal truth in all such cases can hardly be questioned. And it is equally unquestionable that no merchant can be rendered subject to penalties merely on account of such a discrepancy. If it is claimed by the authorities that he has made a mis‑statement of price in his invoice, that cannot, in our opinion, be established otherwise than boy furnishing proof of the prevailing commercial price in the country of origin at the time of the import. Without first making an attempt, to furnish such evidence, it is impossible to see how the making of an untrue statement, within the meaning of section 39, and the consequent mischief of item (9‑B) in section 167 can b e imputed to any one. The offence under item (8) in each of these cases has been ascertained in exaectly the same way. A merchant obtains a licence to import goods up to a certain value. He imports goods, which according to then invoice price are within the amount of his import licence. If it be charged against him that by under invoicing, he hats succeeded in bringing more goods into the country than his import licence allowed him to do, surely it is the duty of the authorities when enquiring into this charge to receive evidence as to the correct or prevalent commercial price of the goods in question in the country of origin at the time of tile export. Certainly, the charge cannot be found established upon the basis of a "normal price" attained as required by section 30, which may have no relation whatsoever to the export` price in the country of origin. And much more certainly, the charge cannot be established upon the basis of any higher price, which the various Customs authorities may themselves choose to fix, upon their own conception or idea of what the price should be or might be. Operated in the way in which these provisions have been operated in the present cases, they are mere instrument and agencies of oppression, and it is with great regret that we observe that the appellate authority being cognizant of the very, heavy penalties imposed should have regarded it as a sufficient discharge of its duty to dispose of the appeals on the bare ground of non‑deposit of the full amount of the penalties. We are clearly of the opinion that no offence under either item (8) or item (9‑B) of section 167 has been established in any one of these three cases. The proceedings in each case have been characterised by a high degree of arbitrariness and‑ capriciousness It is clear enough that for the purpose of imposition of customs duty and sales tax, the authorities have power to fix the "normal price" as prescribed by section 30 and they would be fully within their rights once they have made a proper valuation of the "normal price" to charge customs duty and sales tax accordingly, and to recover any amount that may have been short‑paid as a consequence of action under section 87‑A of the Sea Customs Act or otherwise. But we repeat, because we consider that it is desirable that this should be made perfectly clear, that the, "normal price" is no measure whatsoever upon which the guilt of an importer in respect of the making of untrue statements for purposes of taxation or for purposes of the Import Trade Regulations can at all be determined. These charges can only bed established upon the basis of evidence procured, in the circumstances of the present cases, from the foreign country of export,, by such means as may be within the powers of the authorities. We now proceed to consider Civil Appeal No. 19 brought by the' Eastern Rice Syndicate. This case relates to importation o' Ladies Art Silk Taffeta from the United Kingdom at an invoice price of is 3d per lb. The first question raised in the Customs House was whether these were honaich fonts, and the necessity for scrutim, in this respect arises because the ad valorem duty on such fents is 42%, whereas upon similar piece goods, the duty is as high as 75%, and therefore it is important to be satisfied that the fents do not represent the fabric cut up into pieces just under the prescribed limit of 21 yards in length. Accordingly, 20% of the bales in question were opened and examined in the Customs House. In each bale there were sound pieces as well as defective pieces, and we notice that the lowest percentage of defective pieces was 11 and the highest

43. Repetition of colours and designs is a factor to be noticed since it might furnish an indication of evasion of customs duty by mere cutting‑up of full length pieces. The highest percentage of repetition found was 35 and the lowest was 30, but as to this it is important to note that any two pieces of the same colour or design would be taken into account in snaking a calculation of this factor. We were informed that the full length of a piece o' these fabrics is about 40 yards, and it would require at leas) 16 pieces of exactly the same colour and design, each less than 2 yards in length, and found in the same bundle, to provide a ground for concluding that there had been cutting‑up. This is not to say that cut‑up pieces can have the same commercial value as the same pieces when cut from a full length by a retail vendor, for there must almost certainly be a fall in value. Lastly, uniformity of size is a factor to be noticed for the same purpose and we find that the highest degree of uniformity found way. 20 percent and the lowest was 16 per cent The Examiner made a report as below "In each bundle there are many colours and designs but one particular colour and design has got a repetition to a con siderable extent and if all the pieces of this particular colour and design taken into account may constitute a complete `than'. The percentages of sound pieces are very, high and as such at least 25% of this consignment are non‑fents." Although the Examiner gave details in his report regarding each of the six bales which he opened 'and examined; he did not in respect of any of these bales state that it contained as many as 16 pieces of the same colour and design which if put together might constitute a whole than. We should ourselves have thought that as a part of the practice of the Customs I‑louse in dealing with) this type of case, which must come before them frequently a system of tolerances would have been laid down, thus furnishing a uniform basis upon which the question of bona fide fents could be decided. At the hearing we were not furnished with an information on this point, i.e., what percentage of repetition in respect of individual designs or colours, what degree of uniformity of size, and what proportion of sound pieces could be, accepted as a maximum, anything in excess of which would be treated as furnishing proof that the pieces had been fabricated with the sole object of gaining entry at a reduced rate of customs duty. In the absence of any such system, we cannot see that the conclusion of the Examiner mentioned above, namely, that 25% of the consignment should be treated as non‑fents, can be regarded as being anything but arbitrary and capricious, although this was modest indeed in the light of the final result, for, some ten days later, a higher officer made an order in the following words: ‑ " The whole lot has to be treated as Art Silk Fabrics." An example of more arbitrary and capricious treatment of the subject by an official, in the purported exercise of his power, is difficult to conceive. In the absence of any evidence, and in the face of the fact that the goods were in cut pieces and not in whole lengths this officer in a single line rendered the entire consignment subject to a charge of customs duty as for full lengths by the yard, whereas the goods had been imported by the pound. The rate chargeable was increased enormously by this single stroke. We find on reference to the Custom Tariff that textiles of the nature here in question would be chargeable at 75% ad valorem plus Rs. 3 per lb., and it is to be noted that the prices of fabrics in full length pieces are charged between dealers by the yard. But this was not the only exercise in enhancement of tax practised in the present case, After the examination of the bales in the shed the matter was taken in the Customs House for evalua tion and the first note to this effect is :‑‑ " Invoice value, of 15d. per lb. which appears to be too low, the fair measure of normal price of the goods would be not less than about 20/25d. per lb. This increase by between 33 and 66 per cent., upon no basis what soever, has to be considered in relation to the great quantity of the goods involved by weight, and the further fact that penalties are imposable upon the basis of multiplication by three and some times by five. However, even this increase was not regarded as sufficient. The next note contains a reference to a letter from the Controller of Valuation in which "the, value indicated for such goods is 3s. 6d per lb". This figure is about three times that stated in the invoice, and so far neither at this nor at any later stage was any effort made to establish that 15d. per lb. was not the price paid or that could reasonably in the process of commerce have been paid by the importers‑for these goods. In due course the matter went up to the Valuation Branch and there, in view of the arbitrary charge of classification mentioned above, valuation was made on the basis that the goods, although they were clearly cut pieces, were to be treated as full length fabrics. It was stated that similar goods had been known to have been imported at Is. 6d. per yard and as about 6 yards of the fabric went .to a pound, the "fair measure of the normal price would be" 6s. 4d. per lb. Over and above this, a suggestion was made that the case was obviously "one of fraud in respect of valuation and also in respect of Import Trade Control licence and tariff classification". This led to an "adjudication" by the Collector of Customs, who directed that there should be redeemable confiscation against a fine of Rs. 22,000 and a personal penalty of Rs. 23,000 under item (9‑B) of section 167 coupled with an order for outright confiscation and personal penalty of Rs. 27,500 under item (8) of section

167. In other words, the entire consign ment was confiscated irredeemably and in addition a fine of Rs. 50,500 was imposed. It has been stated before us that as a result of similar orders made in respect of other cases of import by the Eastern Rice Syndicate, goods of the total value of about Rs. 4 lacs imported by them were irredeemably confiscated and they were also subjected to penalties amounting to between rupees 12 lacs and 13 lacs. We have already given reasons, in the course of deciding the appeals brought by Messrs Noor Ali and Company for our view that to find offences under item (8) and item (9‑B) of section 167 upon the basis of "normal prices" fixed in the Customs House with or without the aid of the Valuation Branch is not within, the contemplation of the relevant law. It is falsity in the export price which determines these offences, and not discrepancy between the declared export price and the ascertained "normal price" however honestly the latter price may be calculated. Upon the basis of the "normal price" as properly ascertained, the Customs authorities would certainty be within their right to charge custom duty and sales tax at a higher figure than could be reached invoice price were accepted. It appears that in each of cases before us, the importers have been laving great stress the invoice price throughout as if that conveyed the true measure of their taxability. This appears to have been caused throw‑ii unfamiliarity with the change brought about by the amendment, of section

30. Under the previous section the cost of importation was one of the bases upon which the "real value" was to be ascertained. But we have said enough to indicate that it is clearly impossible to use the "normal price", as ascertained under section 30, as a sufficient measures to determine the accuracy or otherwise of the invoice figures. If those invoice figures are to be falsified they must be falsified by relevant evidence procured from the country of origin. In the case of the Eastern Rice Syndicate, it is necessary also to observe, that the determination of taxability by classification appears to have been done; in a completely arbitrary and unjustifiable manner. This is necessary because the charge for Customs duty and sales tax must depend upon a proper finding being reached on the point of classification. For these reasons, we allow each of these appeals, and hereby quash the adjudication order of the Collector of Customs in each case. The circumstances of these cases leave upon our minds a clear impression that something in the nature of oppression has been practised against the appellants, and we accordingly allow them their costs in each case. A. H. Appeals allowed.