KARACHI: Customs Appellate Tribunal Member Judicial-III Jahanzaib Wahlah set aside Order-in-Original No 761032 dated 16.10.2017 issued by Collector Adjudication against M/s Pak Arab Engineering Company.
Brief facts of the case are that M/s Pak Arab Engineering Company, Karachi electronically filed GD No. KAPE-HC-36221 dated 22.8.2017 under self assessment scheme of a consignment of “structural beams in material S235 JR with MTC upon 300×12 & flat bar in material S235 JR with MTC 80MMx10MMx6MTR” under HS Code 7222.3000 with the declared quality as 23194 kilograms and 23165 kilograms respectively for payment of applicable duty and taxes of both items @3% customs duty for clearance under Section 79 (I) of the Customs Act, 1969.
The GD was referred to physical examination, the shed staff reported that item no. 1 of the GD “beams” correctly classified under PCT heading 7216.5000 attracting 20% customs duty and 30% regulatory duty. The declared HS Code 7222.3000 is for stainless steel bars and rods whereas the imported goods are not stainless steel as confirmed from the MTC scanned by the importer which indicates chromium contents 0.12%. To categorize the goods as stainless steel chromium contents should be 10.5% of more in the light of Chapter Notes (e) of Chapter 72 of Pakistan Customs Tariff. The importer has not declared the quantity in the GD as per their documents i.e. invoice and packing list and also mis-declared the HS Code in order to avoid proper levy of duty and taxes.
Show cause notice issued and matter was adjudicated. The adjudication authority ordered that the under reference consignment shall be released by recovering indifferent amount of duty and taxes according to the correct valuation of the impugned consignment in terms of PCT and quality as declared in the import documents and determined by the Collectorate accordingly.
Arguments heard, record pursued and collector adjudication issued ONO against the company. After examining all the record, Member Judicial ordered that the learned counsel for the appellant relied upon the judgement of Sindh High Court, Karachi reported as PTCL 1996 CL 1 where it was held as under: Whereas there can be no motive to evade tax, his declaration/statement cannot be false or untrue, therefore no penalty is leviable; where a person submits a declaration in the context of customs clearance, and there can possibly be no fiscal consequences is either undentable or regarding which the accused has demonstrated his knowledge or reason to belief that he thought that no tax was leviable by no figment imagination and the said person had no knowledge or reason to believe that his declaration/statement was false or untrue in any material particular. In this context the contention of Mr. Farogh Naseem that no penalty under section 32 (I) is leviable for any alleged under valuation and mis-description where there can be no motive to evade tax and where such declaration would carry no fiscal consequence is correct’.
Member Judicial referred that the adjudication authority itself held in the concluding lines of order-in-original that no intention of evasion of duty and taxes is found in this case but surprisingly imposed a penalty of Rs200,000/- on the appellant which causes the impugned order self-contradictory and the same is liable to be set aside on this score.
By getting strength from the above cited judgment of Sindh High Court and in view of what has been discussed above this appeal is allowed and the penalty of Rs200,000/- imposed upon the appellant is hereby remitted.
