KARACHI: The Collector of Customs, Adjudication-I has issued an Order-in-Original (ONO) No. 520/2013-14 against M/s Shaikh Tube Mills and its clearing agent M/s Javaid Umar Enterprises on mis-declaration of description of alloyed prime hot rolled steel sheets in coils imported vide GD IGM No.5549.
According to the details, the case was instituted by the Model Customs Collectorate (MCC) of Appraisement-West on October 21, 2013 and conducted two hearings on Nov 5, 2013 and Nov 19, 2013 respectively. The Collector of Customs Adjudication-I on March 27, 2014 made the judgment in the presence of Imran Iqbal, Advocate from the respondents’ side and Muhammad Khalid, appraising officer, MCC-Appraisement (West) from the prosecution.
As per details, it was reported by the MCC-Appraisement (West) that M/s Shaikh Tube Mills, imported a consignment declared to contain alloyed prime hot rolled steel sheets in coils weighing 1004.880MT vide GD IGM No.5549 dated 15-5-2013, index No.11 under PCT heading 7225.3000 chargeable to customs duty @5per cent, which further reduced to zero per cent under FTA SRO 659(1)/2007 dated 13-6-2007 and filed a GD for home consumption No. HC-115878 dated 16-5-2013 through their authorized clearing agent M/s Javaid Umar Enterprises (CHAL #18) for clearance thereof.
The GD was processed under 1st Appraisement System for examination of the goods. The shed staff upon examination confirmed the quality of goods as prime, but did not confirm the description of goods, keeping in view that through naked eyes, the confirmation of alloy or non-alloy steel, is quite difficult, moreover, the confirmation is as so necessary due to the facts that non-alloy steel sheets are classifiable under PCT heading 7208.9090, attracting customs duty @ 10per cent. Whereas, alloy steel sheets falls under PCT heading 7225.3000 attracts the customs duty @ 5per cent.
The shed staff, therefore, sent representative samples for laboratory test to confirm exact description and complete chemical composition for confirmation of the aspect regarding alloy or non-alloy of imported goods. Afterwards, the samples were sent to M/s A Q Khan Research Laboratory for requisite test purposes where from the laboratory vide its test report No. MIC13-CUS-872 dated 3-7-2013 confirmed the complete chemical composition of the representative samples. When said percentages were examined in the light of definition of alloy steel given at Chapter Notes 1(f) of Chapter 72 of Pakistan Customs Tariff, the percentages of elements given therein were not found in consonance with the criteria given therein, by virtue of which the goods were found to be of non-alloy steel, which are classifiable under PCT heading 7208.9090 attracting 10per cent customs duty instead of declared PCT heading 7225.3000 attracting 5per cent customs duty.
Subsequently, importer requested for testing of the samples on the plea that M/s A Q Khan Laboratory does not possess facility to test the presence of Boron into the samples. The request of the importer was considered and sample was sent to another laboratory M/s Peoples Steel Mills for confirmation of alloy or non-alloy steel. M/s Peoples Steel Mills vide test report No.28380/MTR-2539 dated 19-9-2013 reported the goods as of non-alloy steel. The findings of M/s Peoples Steel Mills are similar to the test results, earlier, reported by M/s A Q Khan Laboratory. Both the laboratories confirmed the goods as of non-alloy steel, which is classifiable under PCT heading 7208.9090 attracting 10per cent custom duty.
It was further added the documents furnished by the importer M/s Shaikh Tube Mills, through their clearing agent M/s Javaid Umar Enterprises (CHAL No.18) at the time of import were showing the description as hot rolled steel coils of alloy steel of PCT heading 7225.3000, whereas, upon test the same was found to be hot rolled steel sheets of non-alloy steel, attracting classification under PCT heading 7208.9090 chargeable to customs duty @10 per cent, which depicted that the importer deliberately and willfully attempted to clear the goods through their clearing agent as alloy steel with an intent to hoodwink the government’s legitimate revenue to the tune of Rs7,764,732 and found guilty of an offence of mis-declaration in terms of Section 32(1)& (2) of the Customs Act, 1969 punishable under Clause 14 of Section 156(1) of the Customs Act, 1969 read with SRO499(1)/2009 dated 13-6-2009.
In the light of above reported facts, M/s Shaikh Tube Mills and its clearing agent M/s Javaid Umar Enterprises were issued show-cause notice as to why impugned goods should not be confiscated and penal proceedings should not be initiated against them for violation of above mentioned provision of law.
The Collectorate was represented by Muhammad Khalid, appraising officer. He defended the charges leveled in the show-cause notice. He stated that laboratory report confirmed contents of the show-cause notice.
The judgment taken by the Collector of Customs Adjudication-I, Shahanshah Hasnain stated: “I have heard both sides in detail, the goods were examined two times by the department. Both test reports confirmed department’s point of view, in this situation it is clearly established that the department’s view was correct. Goods have been found to be non-alloy. As regards, mis-declaration, in this case the department itself was observing that keeping in view that through naked eyes, the confirmation of alloy or non-alloy steel, was quite difficult.
This difficulty faced and accepted by the department was equally applicable in case of importer/respondent, who could not finally decide as to whether goods were alloy or non-alloy and therefore declared goods as per bill of lading, packing list and invoice etc. In view of the aforesaid position, merit of the case is that the difference in the description of the goods in this case does not appear to be based on deliberate mis-declaration. Therefore, the charges of mis-declaration were not found established. Goods may be released on payment of duty/taxes in term of PCT classification of the goods as determined by the department. The case is disposed off accordingly”.
