SAIYED SAEED ASHHAD, J.- This petition for leave to. Appeal has been filed against the judgment of High Court of Sindh dated 15.12.2003, in Special Custom Appeal No. 67 of 2004. By the aforesaid judgment the appeal filed by the respondent assailing the order of petitioner Collector of Customs (Export) was allowed and the order of petitioner No. 1 dated 30.1.2002 imposing penalty of Rs.
60,000/- under Section 32 of the Customs Act, was set aside.
2. The petitioner who is manufacturer of men's and children Pyjamas (hereinafter referred to as the 'Goods') exported 445 cartons of the goods to Belgium and in the Bill of Export declared the contents of the Fabric to the 100% cotton. Upon verification through laboratory test the goods were found to be made of fabric containing 90% cotton and 10% polyester; On this show-cause notice under Section 32 of the Customs Act was issued by petitioner No. 1 and a penalty of Rs. 50,000/- was imposed by petitioner No. 2.
3. We have heard the argument of Mr. Akhlaq Ahmad Siddiqui, learned AOR appearing on behalf of the petitioner and have perused the material on record/relevant provisions of the Customs Act and the case-law referred to by the learned Single Judge of the Sindh High Court in his impugned order.
The High Court set aside the order of imposition of penalty on the ground that when a misdeclaration which did not involve evasion of customs duty and/or tax and did not cause any monetary loss to the exchequer would not attract the provisions of Section 32 of the Customs Act, and only a misdeclaration intended to defraud by avoiding payment of customs duty and .Other taxes and causing monetary loss to the Government' exchequer would attract the provisions of Section 32 rendering the party making such misdeclaration liable to penal action.
4. The learned Judge after taking into consideration the provisions of Section 32 and the case-law cited by the learned counsel, for the respondent made the following observations:- "6. The next argument, however, deserves more serious consideration, It had been argued by learned counsel that no pertly under Section 32 can be imposed unless it was shown that the misdeclaration was made to avoid payment of public revenues in this context learned counsel relied upon the observations of Kamran Industries Vs. The Collector of Customs (Exports), Karachi and 4 others (P.T.C.L. 1996 CL. 1) and the more recent pronouncement in M/s. Al-Hamd Edible Oil Limited and others Vs. Collector of Customs and others (S.B.L.R. 2003 Sindh 477) to the following effect:-- "A bare reading of the section clearly indicates that it relates to a situation where a person makes any statement or files any document which is false in any material particular by reason of which any duty or charge is not levied or is short levied or is refunded, In such event, the Custom Authority is improved to issue to the person concerned a notice to show cause why he should not pay the loss of revenue suffered by the Department and after giving him a hearing beside any other action under law, order payment of the same, if a case is made out. The entire provision revolves around the central point of loss of revenue suffered by the Customs Department on account of the conduct of any person. Mr. Iqbal has not urged that the Department has suffered any loss on account of the conduct of the appellant?. The question of applicability of Section 32 in the present circumstances apparently does not arise."
5. It appears that the contention raised on behalf of petitioners before the Sindh High Court was that Section 32 of the Customs Act did not make any distinction between mis-declaration with the intention to defraud or cause loss or a simple mis-declaration. In other words the argument was that no mens rea on the part of the person making misdeclaration was required to be established and in support of the above proposition reliance was placed on the cases of Pakistan Vs. Hardcastle (PLD 1967 S.C. 01), Sikandar and Brothers Vs. Government of Pakistan (PLD 1986 Kar. 3783) and Finest Corporation Vs. Collector of Customs (RLD1990 Kar. 338).
6. The above contention raised on behalf of the petitioners was not accepted by the Sindh High Court on the ground that an amendment/modification in Section 32(1) of the Customs Act was made through the Federal Laws (Revision and Declaration) Ordinance,. 1981, which amended/modified Section 32(1) of the Customs Act whereby to attract the penal provision of this section the person guilty of mis-declaration or non-declaration ought to ; have made the same with knowledge or belief that such statement was false in any material particular, It was also pointed out that in the afore-cited cases relied upon by the learned counsel for the petitioners the mis-declaration had resulted in evasion of payment of customs duty which was due and payable, therefore, ratio of the judgments in the cited cases would not be applicable as in the case in hand admittedly no evasion of payment of customs duty or no financial loss had been caused to the Government, It will also be advantageous to reproduce the relevant passage from the judgment of Sindh High Court dealing with the provisions of. Section 32(1) of the Customs Act as under:- "11/ It may also be mentioned that apart from the statutory change mentioned above Section 32 does not merely contain punitive provision basically it deals with recovery of duties and charges payable to the exchequer either on account of fraudulent acts of persons liable to pay or through errors of customs officials as is evident from a reading of clauses (2), (3), (3-A) and (4). Moreover clause (1) requires that the untrue statement must be made in connection with any material of customs and should be fall if any material particular. A harmonious reading of the entire section tends to show that it does not cover every untrue declaration having nothing to dp with evasion of customs duty or other charges but such statements must indicate an attempt to defraud public revenues.
12. In view of the admitted position that the fact whether the goods exported consisted of-cotton or cotton blended with polyester did not attract any export duty or very the duty drawback. I am of the view that Section 32 was not attracted."
7. From the above discussion, there can be no room for doubt that the provisions of Section 32(1) of the Customs Act will be attracted only when a mis-declaration or mis-statement is' made with a view to obtain illegal gain by evasion of payment of customs duty and other taxes or by causing loss to Government revenues. The mis-declaration alleged to have been in this case was neither for evasion of payment of customs duty or other taxes/charges nor occasioned any financial loss to the Government.
8. In view of the above facts and reasons this petition for leave to appeal is found to be without any merit and is dismissed. Leave to appeal is refused.