2005 PLP (Trib (PTD)

SULTAN AHMED SIDDIQUI (MEMBER JUDICIAL).

Being aggrieved and dissatisfied with the impugned order in Appeal No.1 of 2002, dated 20-3-2003 passed by the Collector of Customs (Appeals), Karachi against Order-in-Original No.163 of 2002, dated 8-8-2002 passed by Deputy Collector Adjudication-I, Karachi, the appellant has preferred this appeal before this forum.

2. The brief facts of the case according to the Order-in-Original are that Messrs Shaheen Enterprises Peshawar imported a consignment containing Toys and other Misc. items including BOP plastic films, vide IGM No.1323 of 2002, dated 25-7-2002 Index No.115 and filed home consumption bill of entry bearing machine No. HC10 10934, dated 26-7-2002 through clearing agent Messrs Danish International (CHAL No.644), Karachi. The goods were examined under first examination system to confirm all aspect during the course of which BOP Plastic films were found as stocklot quality as against declared standard quality. The rest of items were found as per declaration. The assessed value of stocklot plastic films of UAE origin was Rs.648194 after giving discount in value from the value of standard goods i.e. US $ 1.40/kg for metalised film of sotcklot quality film vide chapter note b(ii) CGO 12 of 2002, dated 15-6-2002 against the declared value of US$ 2985, the total ascertained value of the consignment came out to be Rs.1,217,084 against declared value of Rs.449,

798. In terms of Import Trade and Procedure Order, 2001-2002 stocklot quality is banned vide serial No.(1) Appendix-A. The importers have thus violated the provisions of sections (16) and (32) of the Customs Act, 1969 punishable under clauses (9) and (14) of section 156(1) ibid. Had this misdeclaration of value and description gone undetected the importer would have deprived the Government from its legitimate revenue to the extent of Rs.339524 being customs duty and other taxes besides they might have succeeded in release of the goods which are otherwise not importable.

3. A show-cause notice, dated 6-8-2002 was issued to the appellant calling upon them to explain the position, to which nobody appeared before the Adjudicating Authority as such the matter was decided ex parte vide order, dated 8-8-2002. The appellant preferred an appeal before the Collector (Appeals) which was again partly dismissed vide impugned order, dated 20-6-2002.

4. Feeling aggrieved with the above order the appellant has preferred this appeal on the following grounds:-- (a) Feeling aggrieved by outright confiscation of goods, appellant filed appeal under section 193 of Customs Act, 1969 before respondent No.3 which was partly accepted and goods were directed to be released against 15% redemption fine in terms of para-B(ii) of S.R.O. 374(I)/2002, dated 15-6-2002. While releasing the goods, the respondent No.2 without any legal justification also imposed penalty equal to 15% of the ascertained value on the appellant. (b) The imposition of penalty by respondent No.3 is alleged being violative of earlier S.R.O. 1374(I)/98, dated 17-12-1998 as well as present S.R.O. 374(I)/2002, dated 15-6-2002. Order in appeal so far as imposition of penalty is result of misinterpretation of aforesaid notification issued by Central Board of Revenue Hence, liable to be set aside. (c) That even if the goods were of stock lot quality, outright confiscation thereof by respondent No.2 and imposition of penalty by respondent No.3 were illegal, void and without lawful authority as according to the earlier S.R.O. 1374(I)/98, dated 17-12-1998 and present S.R.O. 374(I)/2002, dated 15-6-2002, stock lot goods are to be released against 15% redemption fine. These notifications are binding on the respondents in term of section 181 of Customs Act, 1969 and S.R.O. 374(I)/2002, dated 15-6-2002 are enclosed. (d) That stock lot and job lot goods are being released by all ports in Pakistan against redemption fine as mentioned in the relevant notifications and no penalty is being imposed. The appellant has discriminated both the respondents Nos.2 and 3, which is not permissible under the law. Even otherwise according to annexed judgment of superior Courts and the instructions issued by the Board under section 181 of Customs Act, 1969 are binding upon the Adjudicating Authority as well as Collector of Appeals.

5. The departmental representative supported the impugned order for the reasons stated therein.

6. Rival submissions examined. Case record seen.

7. In the instant case the appellant imported a consignment containing 11 miscellaneous items including BOP Plastic Films and filed home consumption bill of entry and offered the goods for examination under First Examination System to confirm all aspects at the time of physical examination during the course of which the seizing agency observed that BOP Plastic Films were found as stock lot quality as against declared standard quality. However, the rest of the items were found as per declaration.

8. On the basis of contravention report the matter was adjudicated by the Adjudicating Authority who came to the conclusion that the appellant by importing stock lot quality goods has contravened the provision of sections 16 and 32 of the Customs Act, 1969 and issued order for its outright confiscation. However, the respondent No.3 exercising appellate power vide impugned order allowed release of confiscated goods on payment of redemption fine equal to 15% of the ascertained value besides payment of duties and taxes. However, he further imposed penalty equal to 15% of the ascertained value for violation of sections 16 and 32 of the Customs Act, 1969 by overlooking the fact that out of declared 11 items except item No.6 the other items were in accordance with declaration made by the appellant whereas item No.6 was declared Plastic Films. As the appellant had opted for First Appraisement for confirmation of all aspect through physical examination as such he by this way got himself exonerated from the clutches of law regarding any alleged act of mis-declaration as his declaration was subject to examination of the goods and under the circumstances he cannot be held responsible for an act of mis-declaration in respect of difference of goods in terms of sections 16 and 32 of the Customs Act, 1969. The respondent official after examination came to the conclusion that the BOP Plastic Films are stock lot quality and initiated contravention report on which the show-cause notice was issued to the appellant and thereafter the goods were outrightly confiscated by the Adjudicating Authority, however, on filing of the appeal the same vide impugned order were released against 15% redemption fine in terms of para. B(2) of S.R.O. 374(I)/2002, dated 15-6-2002 however, the respondent imposed penalty equal to 15% of the ascertained value on the appellant which in de facto terms negates the spirit of the earlier S.R.O.1374(I)/98, dated 17-12-1998 as well as the present S.R.O. referred above. The impugned order as such is bad in law and liable to be set aside.

9. In view of this state of affairs, we hold that imposition of 15% penalty by the respondent was not justified under the circumstances mentioned above. Accordingly we allow this appeal and set aside the impugned order to the extent of imposition of 15% penalty. C.M.A./385/Tax (Trib.) Appeal allowed.