2020 PLP (Trib (PTD)

SYED SARDAR HUSSAIN SHAH, CHAIRMAN MEMBER (JUDICIAL).

This case was remanded by the Honourable Peshawar High Court in Customs Reference No.139/2008 dated 13.06.2013 directing the Tribunal to decide the appeal of the Company afresh strictly in accordance with law.

2. Brief facts of the case as per prosecution story are that the appellants exported steel products, classifiable under PCT Heading 7308.9090 to Afghanistan. Subsequently, a show-cause notice was issued to the appellants that they had exported M.S. products, M.S. Angles and channels etc of heading 7216.5000 and not M.S. Angles of PCT heading 7308.9090. The case was referred for adjudication. The Order-in-Original was passed by the learned Additional Collector Customs Peshawar.

3. The ONO was assailed by the Appellant before the Collector of Customs (Appeals), Peshawar. After hearing the case the learned Collector Customs (Appeals), Peshawar vide Order-in-Appeal No.455/2008 dated 26.06.2008, held as under:- " ..I have come to the conclusion that the appellant have not paid Regulatory Duty on export of M.S. Angles classifiable under PCT Heading 7216.5000 which was chargeable @ 25% under SRO 482(I)/2007 dated 09.06.2007 and the appellant misclassified the goods by applying wrong PCT Heading i.e. 7308.9000. The impugned order is found in accordance with law and I find no reason to interfere the same. The appeal being without any merit is rejected and the Order-in-Original No.150 of 2008 dated 03.07.2008 is upheld."

4. Aggrieved by the above impugned order, the appellant has filed the instant appeal.

5. Arguments heard. Record perused. This case was remanded by the Honourable Peshawar High Court in Customs Reference No.139/2008 dated 13.06.2013 directing the Tribunal to decide the appeal of the Company in accordance with law in pursuance to determination of the law-points by the Honourable High Court in the aforesaid reference. The relevant portion of the order of the Honourable Peshawar High Court Peshawar is re-reproduced as under:- "The reasoning so rendered by the worthy Tribunal in affirming the mis-declarations on the part of the Company in the 42 GDs is rather speculative. The mere fact Company cleared and exported goods under PCT 7216 after the issuance of Show-Cause Notice is not a definite or conclusive proof of the alleged mis-declarations committed by the Company. In Fact, this reasoning is nullified by the admitted fact that the Company had cleared and exported goods under HS Code 3708.9090 even prior to the levy of regulatory duty imposed by SRO.482. This fact has been noted and duly recorded by the worthy adjudicating officer in the Order-in-Original dated 30.06.2008, wherein it was noted that:- "As regard misclassification on the part of the importer or the clearing agent, it is on record that PCT heading 7308.9090 has been declared by the respondents even before the issuance of SRO.482(I)/2007 dated 09.06.2007, when goods under reference were not liable to any regulatory duty and the same had not been disputed by the examining/assessing staff at the Customs Station and that the respondents did not change PCT heading of their product after levy of regulatory duty. As such no mala fide or wilful evasion of regulatory duty can be attributed to either the exporter or clearing agent on this account." In view of the above, this Court answers questions of law Nos.2 to 5 in the positive. This Court holds that the worthy Tribunal has decided the case without cogent and reliable evidence to prove the alleged misdeclaration by the Company in its 42 consignments to Afghanistan. As this Court has rendered its opinion on questions of law Nos.2 to 5 setting aside the impugned decision of the worthy Tribunal, it would serve no useful purpose to proceed with regard to the other questions of law raised in the present Reference."

6. Within the frame work of the directions of the Honourable Peshawar High Court, existing evidence has to be evaluated whether or not the department had based its opinion regarding the correct classification of the goods after they had been physically exported to Afghanistan. It is evident that the consignments of the goods falling under PCT Heading 7308.9090 or 7216.5000 it had been exported from Pakistan on various dates i.e. from 11.07.20107 to 28.09.2007 through various GDs. The Respondent objected to the PCT Heading 7308.9090 on 11.11.2007. According to the Prosecution, the issue of PCT classification was pointed out by the Audit after the consignments had already been exported. The descriptions under PCT heading 7308.9090 and PCT Heading 7216.5000 are essential. The difference between the two is that PCT 7216.5000 being the product of lesser finish. After having been finished, the same are to be classified in PCT Heading 7308.9090. The consignments were duly examined by the competent officers and Appraisers of the Customs department and they had not objected to PCT Heading 7308.9090. According to the department, it was internal audit which objected to the PCT Heading 7308.9090 and according to Audit the correct classification is 7216.5000 being product of less finish. Without physical examination, the audit team had no cogent footing to rule that the goods were lesser finished goods (7216.5000) and not 7308.9090.

7. Regarding the bona fide of the appellant the remarks of learned Adjudicating authority were incorporated that the Judgment of the Peshawar High Court that the appellant had been exporting goods of PCT heading 7308.9090 even prior to the issuance of impugned SRO. This being so it is held that the objection of audit team (subsequent to exportation of the goods) without there being samples of the impugned goods, is not tenable. Furthermore the departmental functionaries at the time of export had examined and recorded attributes of the exported goods. No adverse inference was construed against the appellant's declaration that the impugned goods did fall under heading 7308.9090. The objection of the audit is thus untenable.

8. Regarding the show-cause notice, the appellant has contended that the same was issued on 10.11.2007 to the appellant. The Order-in-Original passed on 30.06.2008 was conveyed to the appellant on 03.07.2008. In this regard the ONO was time barred. It is viewed that according to section 179 of the Customs Act, order has to be issued within 120 days of show-cause notice. By not deciding the case within stipulated period of law, the ONO dated 30.06.2008 is rendered invalid and time barred one unless the extension is allowed by the Collector for a period not exceeding sixty days under section 179(3) of the Act. In this instant the respondent department has not produced any document to show that extension was allowed by the Board. When the law demands that a case has to be decided in manner provided by law; it has to be so decided.

9. In view of the above, we set aside the orders of the authorities below (the impugned Order-in-Appeal dated 26.08.2008 and Order-in-Original No.150 of 2008 dated 03.07.2008).

10. The appeal stands disposed of in above terms. SA/54/Tax (Trib.) Appeal accepted.