MR. S. M. KAZIMI, MEMBER (TECHNICAL).--(1). This consolidated judgment disposes of the 17 appeals filed by Messrs. Umer Cloth Merchant against the consolidated Order-in- Appeal Nos. 122 to 138/2003, dated 20.06.2003 (despatched on 02.07.2003), passed by the learned Collector of Customs (Appeals- I), Custom House, Karachi in relation to the Order-in-Original No. 27)/2003, dated 14.05.2003 despatched under C. No. 601/Adj- 1/2003 & ITC/233/2003-V, dated 14.05.2003 and the other I6 cases as cited in paragraph 6 of the impugned order-in-appeal.
2. Briefly, the facts of the case are that Messrs. Muhammad Umer Cloth Merchant (Import Registration No. W-049304, NTN=0980350-5 and Sales Tax Registration No. 06-01-0800-003- 91) imported a consignment of 23,400 Kgs. Of Aluminum Broken Autoparts Scrap with Iron Attachment (P.C.T. Heading 7602.0000) from Japan per S.S. Torge-5, IGM No. 629/03 dated 21.04.2003, index No. 78, and filed, through Clearing agent Messrs. F. J. Corporation Agent (Pvt.) Ltd. (CHAL No. 515), a bill of entry for home-consumption which was machine-numbered 129213 dated 02.05.2003. The bill of entry was processed under the First Appraisement System and physical examination of the consignment revealed presence of several autoparts and serviceable items as mentioned in the examination report on the reverse of the bill of entry. The Deputy Collector (Adjudication-I) accordingly issued a notice C. No. 601/Adj-I/2003=ITC/233/2005- V, dated 09.05.2003 requiring the importer Messrs. Muhammad Umer Cloth Merchant to show cause why penal/confiscation action should not be taken under clauses 9 and 14 of section 156(1) of the Customs Act, 1969, for the aforesaid breach of the provisions of sections I6 and 32 of the said Act. After hearing the clearing agent on behalf of the importer, the learned Deputy Collector decided the case vide his Order-in- Original No. 279/2003, dated 14.08.2003 and confiscated the offending goods under clause 9 of the section 156(1). While he allowed the owner an option to pay fine equal to 30% of the value of the confiscated old & used Hydraulic Jacks (HTV), he confiscated the rest of the old & used autoparts outright (i.e. Without option to the owner to pay fine in lieu of confiscation). He also imposed a penalty of Rs. 5,000/- on the importer under clause 14 of section 156(1) of the Customs Act, 1969.
Similar orders were also passed in the other I6 identical cases as mentioned in paragraph 6 of the impugned order-in- appeal. The importer filed appeals against these 17 adjudication orders which have been decided by the learned Collector (Appeals- I) vide his impugned consolidated Order- in-Appeal Nos. 122 to 138/2003 where he confirmed the 17 orders-in-original and rejected the 17 appeals. Hence these second appeals.
3. The learned counsel for the appellant stated that SRO. 374(I)/2002, dated 15.06.2002 does not allow accord of option to pay fine under section 181 in lieu of confiscation of only such goods as are imported in violation of section 15 of the Customs Act, 1969, or are banned items notified under Appendix-A of the Import Trade Procedure Order, 2000, including job-lot and stock- lot items where the customs duty rate is zero-per cent or vehicles imported in violation of Import Trade Procedure Order, 2000. He argued that the old & used autoparts are not covered by any of the aforesaid provisions but are in fact covered by Appendix-C of the Import Trade Procedure Order, 2000, and, therefore, should not be confiscated outright and, instead should be released against nominal fine in lieu of confiscation. Without prejudice to the above arguments, he stated that the importers should at least be allowed the benefits of SI. No. (b)(vi) of the Table to SRO. 374(I)/2002, dated 15.06.2002 and such goods should be allowed to be released after making these unserviceable under the prescribed processes. He stated that they are prepared to pay the expenses to be incurred on such processes to make these unserviceable. As regards the hydraulic jacks, the learned consultant argued that these hydraulic jacks (PCT Heading 8425.4200) are even not covered by Appendix-C of the Import Policy Order but are a free-list item. He prayed for remission of the fine in lieu of confiscation of these items.
4. The learned D. R. Stated that the Collectorate has no objection to the release of the old & used autoparts in terms of SI. No. (b)(vi) of the table to SRO. 374(I)/2000, dated !5.06.2000 provided that the importer bears the expenses to be incurred in his regard. As regards the hydraulic jacks, he stated that these may have multiple uses and, therefore, has been rightly confiscated and allowed release against fine under SI. No. (b)(iv) of the said notification.
5. Having heard the parties and on perusal of record of the case, we find that the processing of bills of entry under the First Appraisement System is rare and is resorted to at the importers request where he is in doubt about the description, quantity, quality, PCT Heading, condition, value, etc., of the imported goods or. Where the customs desire to do so for the sake of expediency and propriety. In such cases of assessm ent under the First Appraisement System, the allegation of misdeclaration under section 32 withers away as the importer opens his case before customs for determination of requisite details with propriety, accuracy and clarity. Taking into consideration the circumstances of this case, we remit the penalty imposed in this case under clause 14 of section 156(1) of the Customs Act, 1969. As regards the hydraulic jacks, the examination report shows that this is for HTV and, therefore, the argument of multiple uses does not hold good, We accordingly allow release of these 4 hydraulic jacks without any confiscation or fine in lieu thereof. As regards the old & used serviceable autoparts, these are specifically covered by paragraph (b) of SRO.
374(I)/2002, dated 15.06.2002 and SI. No. (b)(vi) of the Table thereof. The provisions of paragraph
(b) of SRO. 374(I)/2002, being later then the provisions of paragraph (a) thereof has to be read as such. The directions in SI. No. (b)(vi) of the Table to SRO. 374(1)72002 is not controlled by the provisions of paragraph (a) of that notification and, as such, is binding upon the Adjudicating Officer (PTCL 2002 CL. 80). The appellant are allowed to seek release of the serviceable auto-parts and components after making these un-serviceable, to the satisfaction of the appropriate officer of customs, by cutting, pressing, piercing, breaking, or otherwise dephasing. All expenses, on the aforesaid processes of making these unserviceable as above, shall be borne by the appellant. If the appellant fails to get the said serviceable old & used autoparts released in the above manner within 30 days of the receipt of this judgment, the order of its outright confiscation, as in the impugned order, shall get automatically restored as duly confirmed by us. The impugned order is modified to the extent stated in this paragraph and the appeal stands disposed of accordingly.
6. This judgment shall also apply to other I6 appeal cases (Appeal cases Nos. Cus. A-424 to 439/2003 (K-2)) relating to the cases mentioned to paragraph 6 of the impugned Order-in-Appeal No. 122 to 138/2003 and the Table thereof.
7. Announced.
8. Inform all concerned.