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Order with signature of Judges
1. For orders on office objection and reply of Advocate as at “A”.
2. For orders on CMA No.228/11.
3. For Katcha Peshi.
24.02.2012
Mr. Mazhar Imtiaz Lari, advocate for the applicants.
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Aqeel Ahmed Abbasi, J: We intend to dispose of the above referred four Special Customs Reference Applications arising out of two orders passed by the Customs Appellate Tribunal, Bench-III, Karachi in Appeal No.645/2007 and 646/2007 filed by the importer i.e. M/s.A.C.P. Oil Mills (Pvt) Ltd. as well as two orders passed in Customs Appeal No.662/2007 and 663/2007 filed by the clearing agent i.e. M/s. Cargo Channel through combined order as the facts of the case are identical.
2. The applicants being aggrieved and dis-satisfied with the orders dated 30.05.2011 passed by the Customs Appellate Tribunal, Bench-III, Karachi, whereby the four appeals of the importers and its clearing agents were dismissed, the applicants have filed instant four reference applications separately, whereas following common questions are said to have arisen from such orders.
1. Whether it was mandatory for the learned Tribunal, a Judicial forum, to decide the law point raised by the applicant in the grounds of appeal?
2. Whether the consignment was provisionally assessed after obtaining post-dated cheques and Undertaking if so whether the Show Cause Notice issued under section 32 of the Customs Act, 1969 was pre-mature?
3. Whether the final assessment was to be made on the basis of Test Report of the Custom Lab and hence the description of the consignment inserted in GD was immaterial?
4. Whether the wrong description mentioned in GD was not deliberate and as such does not attract Section 32 of the Customs Act, 1969?
3. Brief facts as recorded by the learned Tribunal in the impugned order are that the applicant with the active connivance of their clearing agent M/s. Cargo Channel (CHAI No.1413), Karachi, are involved in fraudulent clearance of Electrolytic Tin Plate in guise of Tin Free Steel Sheets (Secondary Quality). In pursuance to the said information, preliminary investigation was carried out and enquires made which revealed that the subject consignment had been imported by applicant vide GD IGM No.455/07 dated 21.05.2007 Index No.180 by declaring the PCT heading 7210.5000, which attracted custom duty @ 10% instead of correct applicable PCT classification i.e. 7210.1200, which attracted customs duty @ 25%. By this way, the importers had tried to deprive the government of its legitimate revenue of Rs.1,73,876/-. On further scrutiny of the import documents, it was found that subject imports were made against a letter of credit bearing No.SI,C403/180CPU209 issued by Prime Commercial Bank, Islamabad. However, applicant had not submitted original copy of L/C to the Customs. Instead, the photocopy of an invoice was submitted to Custom, where PCT heading was mentioned as 7210.5000. Subsequently, the original copy of invoice pertaining to the said GDs were recovered from the Clearing Agent, which showed PCT classifications 7210.1200, 7210.5010 and 7209.9000. The intent of applicants were to make a loss to the government exchequer with the active connivance of their clearing agent by mis-declaring the description. This contention was further strengthened when subject consignments were examined and Electrolytic Tin Plate was found corresponding to the description given in original invoice instead of its declaration as Tin Free Steel Sheets in the goods declaration and presented invoice. The applicant and his clearing agent was accordingly charged, under the relevant provisions of law.
4. The applicants responded to the show cause notice issued by the respondents, however, the Deputy Collector, Customs Appraisement (Intelligence) did not agree with the reply submitted by the applicants and passed the order-in-original No.11/2007 dated 25.08.2007.
5. The applicants being aggrieved by such order filed an appeal before the Collector of Custom Sales Tax, and Federal Excise (Appeals), Karachi, who vide its order dated 24.09.2007 concurred with the finding of the Deputy Collector and dismissed the appeal.
6. The applicants feeling aggrieved by such order of the Collector (Appeals) preferred appeals before the learned Tribunal, who vide impugned orders has concurred with the finding referred by the two forums below and dismissed the appeals, which has been impugned through above referred reference applications of the applicants.
7. Learned counsel for the applicant has submitted that the impugned order is based on mis-reading of evidence as the applicants have already explained that mentioning of wrong description in GD was not a deliberate act on the part of the applicants and it was due to inadvertence and negligence whereby incorrect PCT heading was mentioned in goods declaration. It is contended by the learned counsel that the applicants are regular importers of RBD Palm Oil i.e. raw material for the manufacture of Vanaspati Ghee and Cooking Oil and during last two years have made huge imports and no complaint whatsoever nor any case of misdeclaration or evasion of duty and taxes has ever been made by the respondents in this regard. Per learned counsel, the case against the applicants has
been made out on the basis of duplicate invoice issued by shipper and the same does not amount to mis-declaration or fraud on the part of the applicants, whereas the authorities below have wrongfully held the applicants liable for the alleged offence of mis-declaration under Section 32 of the Customs Act.
8. We have head the learned counsel and perused the record. From perusal of the record, it is seen that finding on facts has been recorded by all the forums below, whereafter it has been held that the applicants have deliberately, with an intention to evade duty and taxes, have misdeclared goods and mentioned wrong PCT. It will be advantageous to reproduce the relevant finding of the Deputy Collector, Customs Appraisement (Intelligence) while passing the order-in-original No.11/2007 dated 25.08.2007, wherein it has been held as under:-
“I have gone through the case record as well as the verbal and written submissions of the respondent and departmental representative and find myself unable to agree with the contention of the importer and the clearing agent regarding submission of an invoice due to typing error by the staff of the shipper. It would have been a typing error say for instance, if all three PCT headings found on the original invoice were mentioned and a digit had been inserted wrongly but in this case, the omission of all PCT headings mentioned in the L/C confirms a deliberate, intentional act. Moreover, the imports have been effected against L/C but that was not shown to the Customs Staff in order to avoid any detection. I am therefore of the view that M/s. A.C.P. Oil Mills with the connivance of their clearing agent M/s Cargo Channel have attempted to fraudulently clear Electrolytic Tin Plate in guise of Tin Free Steel Sheets (Secondary Quality) at a lower rate of duty by submitting fake and forged invoice and by also mis-declaring and tempering the PCT heading. I, therefore, in exercise of the powers conferred upon me in terms of clause (14) of Section 156(1), order confiscation of the goods. However, an opinion is given in terms of Section 181 of the Customs Act, 1969 read with SRO 487(1)/2007 dated 09.06.2007 to the importers to redeem the same to the payment of 50% fine on customs value of the imported goods along with leviable duty and other taxes thereon. I, in terms of the above cited provisions of law, also impose a personal penalty of Rs.100,000/- upon the importer and Rs.100,000/- on the clearing agent, who connived with the importer in the said mis-declaration and produced a fake and tempered invoice.”
9. The above order-in-original was assailed by the applicant by filing appeal before the Collector of Customs, Sales Tax, and Federal, Excise (Appeals), Karachi, who was pleased to concur with the finding of the Deputy Collector Customs, who vide its order dated 24.9.2007 held as follows;
“I have examined the case record and given due consideration to the arguments made before me and arrived at the conclusion that learned counsel’s averments revolving around inadvertent mistake while typing declaration does not provide sufficient legal reasoning due to the fact that a important import document such as invoice submitted along with GD presented to the assessing officer on account of wrong handling of shipper but what about these PCT heading found recorded on the original invoice with inserted digit wrongly speaks something otherwise foul play. More over malafide intentions are also floating on the surface of the import document such L/C which has no mention of all PCT headings and the same was not presented to custom staff but it was retrieved by the customs staff belied the assertion of the learned counsel that this inadvertent typographical mistake is not tainted with malafide intention to evade duty & taxes. I therefore agree with the observations of the learned adjudicating officer who has legally & justifiably held that appellant in connivance with the Clearing Agent M/s Cargo Channel, had made aborted attempt to fraudulently clear Electrolytic Tin Plate under the garb of Tin Free Steel Sheet (Secondary quality at lower rate of duty by presenting fake and forged invoice by mis-declaring and tempering with PCT heading), has misdeclared the declaration of filed by them and violated the provisions of section 32 of the Customs Act, 1969. As far as role of clearing agent M/s Cargo Channel is concerned for which he has been penalized on account of his complicity in the fraudulent clearance of goods, there is sufficient direct evidence available on record to prove his collusion with the importer by presenting fake & forged documents to customs staff therefore his involvement in shady transaction is proved thus penalty imposed upon him is justified. Further department is at liberty to proceed against him under Clearing and Forwarding Licensing Rules, 2001.
I therefore find no legal justification in appellants plea to alter or disturb the contents of the order-in-original No.11/2007 dated 25.08.2007 which is passed on the correct law points & confirmed and appeal being devoid of merit & legal substance, is dismissed accordingly.”
10. The above order in appeal was once again assailed by the applicants through an appeal before the learned Customs Appellate Tribunal, who vide its impugned order concurred with the concurrent finding recorded by the two forums below and has held as under:
“I have perused the written arguments submitted by the learned counsel for the appellant as well as by the representative of the department. I have also examined the case record and after perusal of the record, I am of the considered view that the appellant at the very initial stage of the case, while replying show cause notice, admitted the version of the respondent that the said mis-declaration was not deliberate, but was due to typing/computer error by the staff of the shippers while issuing duplicate invoice on request of the appellant. The appellant has failed to justify their act of submitting a forged, fake and tempered invoice to customs, in respect of HS Code, net weight, gross weight and value as mentioned in L/C and in original invoice. The deliberation of doing wrong is very much obvious from the record as all PCT headings, mentioned in GD are different from the PCT heading mentioned in L/C and in original invoice. I am therefore of the considered view that the clearing agent M/s Cargo Channel with the connivance of the appellant intentionally and deliberately submitted wrong information only in order to avoid payment of required duty and taxes and thus attempted to get clear Electrolytic Tin Plate in guise of Tine Free Steel Sheets (Secondary Quality) at a lower rate of duty. I therefore do not find any merit in the case of appellant and confirm the orders passed by the two forums below. The appeal of the appellant is therefore dismissed on merits.”
11. From perusal of hereinabove, it is noted that the learned Tribunal has based its decision upon examination and scrutiny of the documents including L/C, original invoice and goods declaration filed by the applicant. It further appears that there is concurrent finding of facts recorded by the forums below wherein it has been held that the applicants, with the connivance of their clearing agent, have deliberately submitted wrong information particularly in order to avoid payment of required duty and taxes and thus attempted to get cleared Electrolytic Tin Plates in guise of Tine Free Steel Sheets (secondary quality) at a lower rate of duty. No plausible explanation has been offered by the applicants to justify their act whereby a deliberate attempt was made to avoid duty and taxes. All the forums below have examined the facts of the case in detail and thereafter recorded their finding thereon, which appears to be in line with the material available on record and in conformity with law. Learned counsel for the applicants could not point out any perversity or error in the impugned order passed by the learned Tribunal. No substantial question of
law arise from the impugned order which may require any interference by this Court in its reference jurisdiction under Article 196 of the Customs Act. Moreover, the concurrent finding of fact, unless found to be perverse, cannot be disturbed by this Court in these proceedings. Accordingly, we do not find any substance in the above reference applications, which are hereby dismissed in limine alongwith listed application, however, with no order as to costs.
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