' MUHAMMAD ARIF MOTON (MEMBER JUDICIAL).---This order will dispose of Customs Appeal No, K- 630 of 2009 filed by the appellant against Order-in-Appeal No, 2027 of 2009, dated 29-9-2009 passed by the Collector of Customs (Appeals) Karachi.
2. Brief facts of the case are that the appellant electronically filed Good Declaration declared to, contain Waste Scrap of Brass at total invoice value of US$. 57,600. The exporter determined his liability for payment of regulatory duty as zero (0%) and sought electronic clearance under section 131(1) of the Customs Act, 1969, through self-assessment under PCT heading under automated system of PaCCS automated procedure. The goods were allowed entry in port area for loading.
However, the said GD was marked for checking/examination by the automated Export Risk Management System. The checking reveals that the exporter has deliberately made wrong self- assessm ent and made deliberate mis-statement and it has been found that "Waste of alloy of Copper & Zinc" (Brass) is correctly classifiable under PCT 7404.0000 and chargeable to regulatory duty @ 25% under S.R.O. 482(I)/2007 dated 9-6-2007. In the light of above checking made under section 131(1)(c) read with section 80 of the Customs Act, 1969, it is clear that the goods are containing metal scrap mainly containing copper and its kind, thus, the same are correctly classifiable under HS Code 7404.0000 which covers all kinds of copper scrap/waste. By making wrong self-assessm ent under wrong PCT heading the exporter has tried to evade the applicable regulatory duty @ 25 amounting to Rs,982,979.00 which is tantamount to contravention and attract the provision of sections 32, 32A,.131 and Chapter XVIA of the Customs Act, 1969. The exporter has deliberately concealed the actual facts and made wrong self-assessment of the goods with mala fide intention to defraud the Government from its legitimate revenue amounting to Rs,982,979.00.
Subsequent to that the respondent No, 1 (Additional Collector of Customs of Paces) passed order dated 6-12-2008, holding that the appellant mis-declared the description and value. Hence, guilty of offence under section 32 of the Customs Act, 1969, while Observing in Para. 6 that:-- "In the instant case the exporters had filed their GD, with the declaration of physical description as "Waste of Alloy of Copper and Zinc (Brass)" and made self-assessment under PCT heading 7312.9010. The exporter claimed release of their consignment for export electronically under PaCCS, without payment of 25% R.D., which was levied under section 18(3) of the Customs Act, 1969, vide S.R.O. 482(I)/2007 dated 9-6-2007. As per Serial No, 2 of Table-I of the said S.R.O. All sorts of scrap of Copper of Chapter 74 are chargeable to 25% R.D, whereas the clearance sought by the exporter under PCT Heading 7312.9010 is not meant for Waste 86 Scrap and infract the said PCT Heading covers Steel Cord. It is, however, pertinent to mention here that when the exporters approached the Hon'ble High Court vide C.P. No, D-1116 of 2008, that the Waste 86 Scrap of Brass is classifiable under PCT heading 7403.0000. This contention of the exporter is also incorrect because the PCT heading 7403.0000 covers Refined Copper and Cooper Alloys. The Chapter 74 covers "Copper and Articles thereof" and waste/scrap of all goods falling under Chapter 74 is classifiable under PCT Heading 7404.0000. The Brass is also a kind of Copper that is why, it is classifiable under Chapter 74. The exporters contention to classify the goods under PCT Heading 7403.0000 and 7312.9010 is nothing but to hoodwink the Pakistan Customs Computerized System (PaCCS) and to get the goods cleared without payment of 25% R.D., it is clear case of an attempt of evasion of revenue, thus the charge attracting the provisions of sections 32 and 32A of the Customs Act, 1969, stands established. Despite repeated notices no one turned up for hearing and in fact disobeyed honourable High Court order as well probably to make the decision exporter and exploit the same in the next appellate forum. Therefore, a penalty of Rs,500,000.00 (Rupees Five Hundred Thousand Only) is imposed upon the exporters together with enforcement of demand and for payment of leviable R.D of Rs, 9,82,979.00. However as per order dated 8-10-2008 of the honourable High Court the adjudicated amount shall be payable when the remedy available with the First Appellate Authority in terms of section 193 of the Customs Act, 1969, is exhausted by the exporter. Export of this consignment if not done earlier be allowed loading ones regulatory duties and fine is paid and all the codal formalities of export are fulfilled. As such no evidence is provided to the undersigned that the respondent has deposited the leviable regulatory duties, fine and penalties with the Nazar of the honourable High Court. However ones it is confirmed that the deposit is made export be allowed without the payment to the regulatory duties and penalties and deferred till the decision of the 1st appeal."
3. The order was challenged before respondent No, 2 who also vide his order dated 29-9-2009 rejected the appeal by observing that:- "The proceeding in this case could not be finalized within the stipulated time limit due to adjournments granted on the requests ' of the parties. Therefore, the requisite extension in the time limit was obtained from the Federal Board of Revenue in terms of first proviso to subsection (3) of section 193-A of the Customs Act, 1969. I have examined the entire case record and given deep consideration to the arguments made before me. On examining the contents of various PCT headings (i,e, 7404.0000 determined by the department and 7403.0000/7312.9010 claimed by the appellants). I have come to the conclusion that the goods exported by the appellants (waste of alloy of copper and zinc brass) were correctly classifiable under PCT heading 7404.0000 and, as such, chargeable to regulatory duty of 25% of the value thereof by virtue of the entry at Serial No, 2 of Table-1 to notification S.R.O. 482(I)/2007 dated 9-6-2007 which clearly covers "waste and scrap of copper". Clearly, the appellants had attempted to export the goods under an irrelevant PCT heading with the clear intention of evading the regulatory duty. The appellants' plea that it is the duty of the customs department to check PCT classification of the goods is not tenable in view of the changed conditions of import/export and the substantial change in customs law for putting into operation the system of self-assessment operative under PaCCS whereby the importer/exporter is required to self-assess his tax liability and make correct declaration in all respects because it is only very few consignments which are subjected to physical examination through the random selectivity criterion fed into the system. Thus, the precedents quoted by the learned consultant are relevant to the facts of the instant case. The other so-called technical issues raised by the learned consultant are aimed at confusing the principal issue and, therefore, carry no weight. Even otherwise the Hon'ble Supreme Court of Pakistan has held in its judgment reported as 2007 PTD 1804 that once substantial compliance of law has been made by the department, technicalities would be liable to be ignored. The penal action taken in this.Case is also in consonance with the gravity of the offence committed by the appellants. I, therefore, hold that the arguments advanced by the learned consultant do not find any support from the evidence available on record and circumstances of the case. The impugned order is accordingly held to be correct in law and on facts and there is no reason to interfere with the same. The appeal is rejected accordingly.
4. The appellant has now challenged the above order by way of this appeal. The consultant Nadeem Ahmed Mirza appeared on behalf of the appellant who reiterated the arguments incorporated in the memo of the appeal And emphasized that:---
(a) That the appellant is condemned unheard.
(b) The appeal with the respondent was filed on 3-1-2009 and an order under the proviso of subsection (3) of section 193-A of the Customs Act, 1969. It was mandated upon the respondent No, 2 to issue the decision within 90 days from the date of filing of appeal or within a further extended period of 90 days during the initial period of 90 days after serving a notice to the person concerned and thereafter the respondent has to record the reason for extension in writing for the extension of the stipulated period. In the instant case the order-in-appeal was passed on 29-9-2009 i,e, after the expiry of total stipulated period of 180 clays. Rendering the order-in-appeal barred by time by 88 days.
(c) The narration of respondent Nos. 2 at para 5 of the order-in-appeal that proceeding in this case could not be finalized within the stipulated time limit clue to extended hearing and adjournment granted on the request of both parties, therefore the requisite extension in terms of 1st Proviso to subsection (3) of section 193-A of Customs Act, 1969 was obtained from the board is without any substance as no adjournment was applied by the appellant or by the respondent No, 1 in written. Hence, the extension granted if any by the board is unsubstantiated and without any lawful authority and has to be considered as invalid. Nullifying the stance of the respondent No, 2 that time was extended on the request of both the parties for adjournment. In the light of the narrated facts the order-in-appeal is hopelessly time barred and as such is of no legal effect and cannot be enforced. Reliance is placed on the judgments reported vide. 2008 PTD 60 Messrs Super Asia Muhammad Din Sons (Pvt.) Ltd. v. Collector of Sales Tax, Gujranwala and 2008 PTD 578 Messrs Hanif Strawboard Factory v. Additional Collector (Adjudication) Customs, Sales Tax and Central Excise Gujranwala, 2009 PTD 762 Messrs Tanveer Weaving Mills v. Deputy Collector Sales Tax and 4 others and 2009 PTD (Trib.) 1263 Messrs Syed Bhai Lighting Limited, Lahore v. Collector of Sales Tax and Federal Excise, Lahore and 2 others and 2009 PTD 1978 Leo Enterprises v. President of Pakistan and others.
(d) That the order-in-original passed by the respondent No, 1 is full of contradiction e.g. In para 5 he states that show-cause notice was issued on 25-10-2008, whereas, the show-cause notice was posted on the system on 21-10-2008. In the same para he states that order of the High Court was received on 31-10-2008. Consequent to which hearing was fixed for 25-10-2008 (no communication in the shape of notice or letter was forwarded to appellant as per mandatory requirement of law).
Even otherwise, if the order was received on 31-10-2008, the hearing should had been subsequent to that. In the said para the respondent is stating that appellant deposited an amount of Rs, 986,125:00, whereas in the last para of the order he states that no evidence was provided to him regarding deposit of regulatory duty with the Nazir of High Court as against acknowledgement of the certificate issued by the Nazir of High Court on 9-6-2008 at 2:10 PM. The contradictions proves that the respondent is confused and under pressure and the impugned order patently suffered from fairness neutrality and independence of mind.
(e) The respondent No, 2 incorporated in para 4 of the order submission of the representative of respondent No,1 at his own, as no single argument was advanced by the DR and neither any counter comments were submitted. He only stated that the issue was referred to the MCC of Export for attending the hearing. Since, no body appeared from that side adjournment may be granted.
The submission made in para proves prejudice of the respondent No, 2, beside his partiality.
Rendering the order as illegal, contrary to the facts and law beside partial, influenced and put a big question on the integrity and fairness of the respondent No, 2 importer makes a correct declaration on the bill of entry". That the respondent while issuing show-cause notice not only mis-read the expression of sections 32 and 32A of the Customs Act, 1969.
(f) That the respondent Collectorate notionally seized appellant goods on 17-5-2008 and as such brought into operation the provision contained in sections 171 and 168(2) of the Customs Act, 1969.
Resultant, it was mandated upon the respondent to issue show-cause notice under section 180 to the appellant within a period of 2 months from the date of notional seizure. Non-issuance of show cause notice within the stipulated period, create a vested right in favor of appellant for return/shipment of the seized goods. In the instant case the respondent issued show-cause notice on 21-10-2008 i,e, after expiry of stipulated period-of 4 months (initial period of 2 months to be extended by the Collector for further two months after giving notice to the effected person/appellant and subsequently recording the reasons for extending the period). Resultant, the instant show-cause notice is barred by time by 37 days. No action can be taken on a time barred show-cause notice. Reliance is placed on reported judgment of High Courts of Pakistan 1998 MLD 650 Haji Noorul-Haq v. Collector of Customs and others and 2003 PTD 2821 Syed Muhammad Razi v. Collector of Customs (Appraisement) Karachi and 2 others.
(g) That there exist no misdeclaration in any aspects of the goods as the specification was given on the GD as waste and scrap of brass having quantity of 23000 Kgs for US$. 57,500.00. During the examination, it was found as per declaration and the said fact stood verified from the show-cause notice reading as "brass scrap in loose and packed in PP bags comprising of assorted mix broken items, quantity 23000 Kgs and value US$. 57,500.00". In the given circumstance of the case, charge of misdeclaration under section 32 cannot be invoked as by the Board in sub para (b)(i) of para 101 of CGO 12 of 2002 dated 15-6-2002 reading as "where an ide committed a defiance under section 223 ibid. Reliance is being placed on several in field judgments of superior Courts of Pakistan e.g. PLD 1996 Karachi 68 Kamran Industries v. The Collector of Customs Exports and 2003 PTD 2821 Syed , Muhammad Razi v. Collector of Customs (Appraisement) Karachi and 2 others.
(h) That terming indicating of erroneous HS Code by the respondent as mis declaration is of no legal effect, by virtue of the fact that to check the description/specification of the imported goods rest on the part of examiner concerned examining the goods under section 198 of the Customs Act, 1969. Whereas to check PCT heading, value, rate of duty and taxes paid amount of duty and taxes rest on the part of scrutinizing Appraiser in terms of sections 25 and 80 of the Customs Act, 1969 read with Chapter II of the Appraiser Manual, Volume 1, 1973. Whereas, allow of clearance is being allowed by the Principal Appraiser after receiving of confirmation regarding all the aspect from the scrutinizing Appraiser, and in case of mentioning of in correct PCT Heading, it is manifest duty of the scrutinizing Appraiser to correct the same, if it is indicated or mentioned contrary to the declaration or the examined goods and for the said job the scrutinizing Appraiser is deputed for, otherwise there exist no need of a scrutinizing officer and such is the case with the PACCS, wherein the scrutinizing officer checks each and every aspects in the light of examination report, before recommending out of charge to the Principal Appraiser electronically through his allotted personal secret code, which is not known to anyone except him, as per devised procedure of the PACCS.
(i) That it is not out of place to add here that no contravention case can be made out against any importer or exporter on the basis of merely mentioning of erroneous /incorrect HS Code in the bill of entry/GD as held by August Courts of Pakistan in innumerable reported judgment (i) Monno Industries Ltd., v. Govt., of Pakistan PET. D-199/1984 (ii) Collector v. Central India Board Products 1987
(29) E.L.T. 259 Collector of C.E. v. Chemphar Drugs 1987 (40) E.L.T. 276 (SC) (iv) Central Cotton Mills Ltd., v. Collector 1992 CLC 841 (v) Hindustan Electro Graphites Ltd. v. U.O.I. 1990 (50) ELT 15 M.P. (vi)
Metro Tryres Ltd., v. Collector 1994 (74) ELT 964 (vii) Ballarpur Industries Ltd., v. U.O.I. 1994 (74) ELT 964
(vii) Ballarpur Industries Ltd. v. U.O.I. 1994 (74) ELT 795 (Del) (viii) Northern Plastics Ltd v. Collector 1998 (101) ELT 549 (S.C) (ix) Ibrahim Textile Mills Limited v. F.O.P. PLD 1989 Lahore 47 (x) Central Board of Revenue v. Jalil Sheep Co. 1987 SCMR 630 (xi) Government of Pakistan v. Quetta Textile Mills Civil Appeal (xii) No, 860-K/90 decided by the Supreme Court on 25-2-1992."
(j) That besides above judgments, the appellant is tempted to place reliance on the reported judgment 2003 PTD (Trib.) 293 of the Customs Excise & Sales Tax Appellate Tribunal in similar nature of case. While relying on the dictum laid by the Superior Courts referred in above, held that:- "We believe that clearing agents while filing a bill of entry is required to fill the PCT column for the easement and assistance of the Assessing Officer. The perusal of section 80 of the Customs. Act, 1969, indicates that during the process of assessment it is the duty of the Assessing Officer not only to examine the goods but also to tally the description, its weight and value of the goods thereof, and to consider any extra information available on the bill of entry in order to arrive at a correct assessm ent of duty and taxes. Simply assuming that a wrong PCT heading amount to misdeclaration would not be a correct approach to interpret section 32, where emphasis is on the word "material particular" which means something going to root cause of the basic declaration. To our mind, a misdeclaration in material particulars terms has not been made by the appellant."
' In Customs Appeal No, K-333/06 Umme Kulsoom Trading Co. v.. Collector of Customs Appeals and others. The Division Bench of Customs Tribunal did observe in the following terms: "It is gathered from the record that only charge against the appellant is that he misquoted PCT heading 'for which he is being charged for mis-declaration within the frame work of Customs Law.
It is now well-settled law that to constitute a criminal act an element of mens rea and intentional knowledge is necessary and the offending act must be one in which material particulars have been wrongly given or provided to the Customs authorities. It is evident from the record that in the goods declaration all the entries relating to description, quantity and nature of goods were found true and no charge has been framed against the appellant on that count. In such circumstances, alleging a charge of misdeclaration particularly on the basis of wrong classification heading does not constitute an offence within the framework of section 32 of the Customs Act, 1969 as there is no material falsity in the statement made by the appellant. In these circumstances, we would like to allow the appeal and set aside the impugned order as no case has been made out against him.
(k) That besides the above arguments with regard to legality of the show cause notice and charges pertaining to misdeclaration, in support of his stance that regulatory duty is not payable by him on the export of waste and scrap of brass. Attention is invited to the Pakistan Custom Tariff, which only incorporate description as Copper-Zinc Base Alloy (Brass) at HS Code 7403.2100 and Master Alloy of Copper as 7405.0000, which is inclusive of Copper and Zinc Alloy known as Brass.
Meaning thereby that all products/goods whether new/fresh or old/used or waste and scrap falls under the said HS Code for levy of duty and taxes, with the exception of unit value, which has to be varied as per physical attributes of the product imported or exported.
(1) The Table I of Notification No, S.R.O. 482(1)2007, dated 9-6-2007 is without the entire H.S Code No, 74.03 and 7405.0000, brass waste and scraps attracts these, meaning waste and scrap of brass can be exported without regulatory duty. Nevertheless in case of export of 5 fresh items i,e, bars, rods, ingots, slabs and billets made of 22 specified goods in Table-II are dutiable under the said notification with the exclusion of other items thereof and brass is specified at Serial No,11 of Table-II.
Whereas HS code 7405.0000 is not specified in any table of the notification.
(m) That in case the legislature desired to levy regulatory duty on the product falling under HS code 7403.0000 and 7405.0000, they would have included the said HS codes in Table-I and Table-II of the notification as has done against the 23 items in table-I and 22 items in Table-II. That it is mandated upon the field formation to act in accordance with the spirit of expression given in the Pakistan Customs Tariff and directives contained in the notification. "In interpreting the taxing statute, the customs must looks to the words of the statute and interpreted in the light of what is clearly expressed. It cannot imply anything which is not expressed, it cannot import provision in the statute so as to support assumed deficiency. There is no room for intendment. There is no equity about a tax. There is no presumption as to a tax nothing is to be read in, nothing is to be implied.
One only look fairly at the language used, nothing else to be done" as held by the High Court and Supreme Court of Pakistan in their reported judgments Abbassi Steel Industries Ltd. v. Collector of Customs 1989 CLC 1463; Crescent Pak Industries (Pvt.) Limited v. Government of Pakistan 1990 PTD 29; Messrs English Biscuit Manufacturers Ltd. v. The Assistant Collector, Central Excises and Land.
Customs, Landhi Division, Karachi 1991 PTD 178; Kohinoor Textile v. Federation of Pakistan 2002 PTD 121; Messrs Nadeem Electronics (Pvt.) Ltd. v. Collector of Customs, Central Excise and Sales Tax 1999 PTD 1912; Cape Brandy Syndicate v.
1.R. (1921) 1 KB 76; Canadian Eagle Oil Co. Ltd. v. The King 27. TC 205; Hirjina & Co. (Pakistan) Ltd., Karachi v. Commissioner of Sales Tax 1971 PTD 200; Muhammad Amir Khan v. Controller of Estate Duty, Government of Pakistan PLD 1962 SC 335 and A. Ghafoor v. The State PLD 1965 Quetta 10; Messrs Hashwani Hotels Limited. v. Government of Pakistan and 5 others 2004 PTD 901; Bechu Bai F.E. Dinshaw, Karachi v. Commissioner of Income Tax 1967 PTD 170; S.G. Mercantile Corporation (P.)
Ltd. v. Commissioner Income Tax, Calcutta (1972) 83 ITR 700; Commission of Income Tax Madras v.
The Madras Cricket Club (1934) 11 ITR 209;. Bellygunge Bank Ltd., Calcutta v. Commissioner of Income tax Bengal (1946) 14 ITR 409; The Commercial Properties Ltd. The Commissioner of Income Tax, Bengal.(1928) 3 ITR 23; Additional Commissioner of Income Tax, Bihar v. Lawlys Enterprises (P)
Ltd. (1975) 100 ITR 369; Commissioner of Income Tax, Lucknow v. Chandra Agro (P.) Ltd. (1979) 117 ITR 251; Commissioner of Income Tax, Poona v. Alpana Talkies (1983) 139 ITR 1055 and Messrs Mehran Associates Ltd. v. The Commissioner of Income Tax, Karachi 1993 SCMR 274.
(n) That by virtue of indication of brass under separate HS Code 7403.2100 reading as copper-zinc base alloys (brass) and in 7405.0000 (master alloy of copper) in Pakistan Customs Tariff. The waste and scrap of brass (alloy of copper and zinc) falls within any of the referred in above HS Codes, therefore the goods exported by the appellant cannot be considered/termed as waste and scrap of copper attracting HS Code 7404.0000 by any stretch of imagination for squeezing duty and taxes, which are otherwise not leviable under any Table of S.R.O. 482(I)/2007 dated 9-6-2007.
(o) That the impugned orders of the respondents are also discriminatory and violative of the principle of natural justice/mandatory provision of law due to the reason that in the case of appellant the respondent Collectorate opted to hold the consignment and subsequently framed contravention report for adjudication purpose as against the identical and similar consignments of other exporter and appellant corresponding to CR No,E-G-630120-020508, E-G-635679070508, E- G-639250- 100508 and E-G-675589- 130608, wherein declared waste and scrap of brass, scrap of brass and waste and alloy of Copper and Zinc (Brass) under HS Code 7312.9010 and 7405.0000 were allowed shipment/clearance without any hitch or hindrance and even recourse to any objection or adjudication proceeding
(P) The differential treatment given to the appellant is in violation of Article 25 of the Constitution as well as ruling of the Superior Courts delivered in umpteen numbers of judgments few of which are enumerated here-in-below. Wherein their lordship held with clarity that there is no power to target incident of tax in such a way that similarly placed persons are dealt with discrimination or facility allowed to one and denied to other, amounts to discrimination.
(a) Messrs, Zaman Cement Company (Pvt.) Ltd v. C.B.R. 2002 SCMR P. 312
(b) Pakistan v. Messrs Muhammad Saleem PLD 1995 SC 396
(c) Messrs Gatron Industries Ltd v. Pakistan 1990 SCMR P. 1072
(d) Pakistan Messrs Azhar Brothers Ltd. 1990 SCMR P. 1059
(e) Commissioner v. Makhdoom Syed Hussain Shah 1975 SCMR 352
(f) Collector v. Messrs Novartis Pakistan Ltd., 2002 PTD 976
(g) Messrs M.Y. Electronics 1998 SCMR P.1404
(h) Messrs Elahi Cotton Mills Ltd., v. Pakistan PLD 1997 SC 582
(i) Messrs Sandalbar Enterprises v. C.B.R. PLD 1997 SC 334
(j) Messrs Flying Craft Paper Ltd., v. C.B.R. 1997 SCMR P. 1874
(k) Government of Pakistan v. Village Development Organization 2005 SCMR 492
(q) The appellant carves his right to add any fresh ground at the time of hearing, beside placing any valid incriminating evidence/ document.
5. The department representative Mr. Habib-ur-Rehman, Appraiser appeared on behalf of the respondent and their comments on above cited grounds of appeal inter-alia as under:- "Before making parawise comments it is respectfully submitted that under PaCCS, promulgated vide Chapter XVIA of the Customs Act, 1969, an importer/exporter goods truly and correctly but also to assess and pay his liabilities of duty/taxes through self-assessment and thereafter file his "Goods Declaration (G.D)" electronically in terms of sections 79(1) or 131(1) of the customs Act, 1969, as the case may be. Under PaCCS most of the consignments are allowed release as per importer's/exporter's self-assessm ent without manual check, however under selectivity criteria some of the consignments are ought to be checked to verify whether or not correct amount of revenue/duly drawback has been paid and there is no evasion on part of the importer/exporter.
Scrutiny of the computerized record by the Adjudication Officer proved that the appellant/ exporter has made an attempt to clear/export the brass scrap without payment of , legitimate revenue through PaCCS automated system. Thus, according to the definition given in subsection (1) of section 32 of the Customs Act, 1969, read with the amended provision of section 79(1) of the Customs Act, 1969, wrong and lower assessment , with a view to evade and pay lesser amount of duties and taxes also constitutes a misstatement in a matter of customs. Therefore, the Adjudication Officer, vide Order-in-Original No, 3700 of 2008, dated 6-12-2008 (Annexed at page 18 of the appeal), the exporter has been asked to pay the R.D amount of Rs,982,979.00 exported goods for violation of sections 32 and 32A of the Customs Act, 1969, however, in terms of section 181 ibid read with S.R.O. 487(I)/2007 dated 9-6-2007 an option was given to the importer/appellant to redeem the consicated goods on payment of fine. A penalty of Rs,50,000 was also imposed on the importer.
' PARAWISE COMMENTS ON FACT OF THE APPEAL:--
(1) That the contents of para. (1) require no comments.
(2) That to substantiate their statement the appellant has failed to provide any copy of valid sales contract/agreement.
(3) That the checking of imported/exported cargo is prerogative of the respondents as per law.
(4) That the appellant has failed to pay legitimate revenue i,e, R.D. Levied vide S.R.O. 482(1)/2007, deliberately through self-assessm ent under section 131 of the Customs Act, 1969, that being so, contravention case was made out against the appellant.
(5) That the respondent had complied the honourable High Court's order.
(6) That in the light of submission made above the contents of para subsequently the said automated message was corrected accordingly.
(7) That the additional duty was paid in the High Court, therefore, subsequently the said automated message was corrected accordingly.
(8) that the contents of para (8) require no comments.
(9) That as per Chapter-XVIA particularly sections 155E and 155Q of the Customs Act, 1969 the orders are transmitted through PaCCS web-site. The contents of para (9) are not. Only a fabricated story but also confirming ignorance of law and procedure on part of the appellant.
(10) That the contents of para (10) relates to respondent No, 2 hence, no comments.
(11) That the contents of para (11) relates to respondents No, 2 hence, no comments.
' PARAWISE COMMENTS ON GROUNDS OF APPEAL:-
(a) That the contents of Grounds (a) are incorrect, hence, denied.
(b) That in the light of para (5) of the Order-in-Appeal and Article 254 of the Constitution of Pakistan, 1973, the contents of Grounds (b) are require no comments hence, denied.
(c) That in the light of submissions made above the contents of Grounds (c) require no further comments. Without prejudice to above, it is however, respectfully submitted that even if there is any technical laches in the order-in-appeal in that case to the order-in-original shall hold the field.
(d) That the contents of Grounds (d) are not concerned with the merits of the case/core issue whether the exporter has made an attempt to evade the R.D imposed vide S.R.O. 482(1)/2007 dated 9-6-2007. In the basis of some typographical errors, if any, the merits of the case 'cannot be changed and Government shall not be deprived from its legitimate revenue.
(e) That in the light of submission made above the contents of Grounds (e) require no further comments.
(t) That first of all it is respectfully submitted that the Goods Declaration was filed on 17-5-2008 and due to wrong self-assessm ent on part of the exporter the goods were re-assessed by the department and after re-assessm ent vide electronic message dated 11-6-2008 (annexed as "K" at page 33 of the appeal) the exporter has been advised to pay the R.D amount of Rs,982,980.00 arid clear the goods, thus there is no question of any seizure on part of the respondent Collectorate in terms of Section 168 of the Customs Act, 1969. After receipt of aforesaid electronic message instead of making payment of Government's revenue and to clear their goods for export the exporter/ appellant indulged in the litigation and filed C.P. No, D-1116 of 2008 in the High Court of Sindh. The honourable High Court of Sindh has disposed of the matter on 8-10-2008 (copy of High Court order is annexed as "M" at page 35 of the appeal), thus, when the issue was sub-judice in the honourable High Court there was no question to proceed further till instructions/decision of the Court. In the instant case to show cause notice was issued on 21-10-2008 i,e, only 13 clays after the honourable High court's order. Thus, neither there was any seizure nor there was any delay on part of the respondent Collectorate. Secondly, it is not a case of smuggling where notice under sections 171 or 168 of the Customs Act, 1969, is mandatory. Thirdly the provisions of sections 168 and 32 of the Customs Act, 1969, are independent of each other. The provisions of section 32 of the Customs Act, 1969, can be invoked within five years even from the release of the goods.
(g) That in the light of submission made in preamble para and considering the automated clearance system or PaCCS mainly based on importer/exporters declaration and self-assessment, thus, any less payment of revenue through self-assessment is tantamount to be a mis-statement within the meaning of sections 32 and 32A of the Customs Act, 1969. Further as stated above a PCT heading is also an essential particular of the imported goods, thus, it is clearly a case of mis- declaration within the meaning of section 79(1) of the Customs Act, 1969.
(h) That considering the amended provisions of sections 79 and 80 of the Customs Act, 1969, it is clear that now the original assessm ent is responsibility/job of the importer/exporter and under section 80 of the Customs Act, 1969, the Customs is only responsible for checking of payment of revenue through self-assessm ent by the importer/exporter. Without prejudice to above, if correct application of PCT Heading is out of importer/ exporter's responsibility, then how they are assessing the goods and paying the revenue at their own. It is out of imagination that assessment can be made without putting a correct PCT heading.
(i) That all the cited case laws are related to an era which is not related to the goods declaration filed under PaCCS, hence, those citations are irrelevant for the clearance of goods through Chapter XVIA of the Customs Act, 1969.
(j) That in the light of submissions made above the contents of Grounds (j) are though require no further comments, however, it is respectfully submitted that the Tribunal's Order-in-Appeal No, K- 333 of 2006 has already been assailed before the honourable High Court of Sindh through Reference Application in terms of Section 196 of the Customs Act, 1969, and the questions of law raised by the department has been admitted by the honourable High Court for regular hearing.
Further without prejudice to above the orders of Tribunal are "order-in-persona" and not "order-in- rem", therefore even otherwise there is no question to allow mala tide wrong self-assessment/less payment of revenue without any punishment in automated clearance environment of PaCCS on the basis of a wrong order.
(k) That the contents of Grounds (k) are incorrect, hence, denied. The PCT Heading 7403.0000 is not for the Copper Scrap rather as stated above it is for the refined Copper and copper alloys. The mixed metal scrap consignments ought to be assessed according to the quantity/percentage of the kind of metal likely to be obtained after shifting from the said scrap consignment. The scrap of copper and zinc are correctly classifiable under PCT heading 7404.0000 and 7902.0000 respectively and both are chargeable to regulatory duty (R.D) in terms of S.R.O. 482(I)/2007.
Though "Brass" also includes some percentage of Zinc, however, in "Brass", which is admittedly an alloy of copper, the pre-dominant metal is Copper and according to the Pakistan Customs Tariff all kinds of Copper including alloy: of Copper (Brass) are correctly classifiable under PCT Heading 7404.0000. It is, however, respectfully submitted that the petitioner's only aim is to avoid the payment of RD @ 25%, that is why they have made the declaration/self-assessment under a totally irrelevant PCT Heading of 7312.901 in terms of section 13(1)(a) of the Customs Act, 1969. The PCT Heading 7312.9010 is totally irrelevant to the goods (i,e, alloy of copper) exported by them.
(1) That in the light of submission made above the contents of Grounds (L) require no further comments, hence, denied. It is, however, respectfully submitted that the provision of S.R.O.
482(1)/2007 is confirming that the regulatory duty @ 25% adval is leviable on all sorts of metal scrap. Without prejudice to the petitioner/exporter themselves admits that their goods i,e, Brass is consisting of copper and zinc and the aforesaid notification confirms that the R.D is leviable on the scrap of copper and zinc as well. It is respectfully submitted that the "Brass" is an alloy of copper and zinc. Under the Pakistan Customs Tariff the Chapter-74 covers the Copper and articles thereof Brass is renowned alloy of copper and according to the Pakistan Customs Tariff any kind of Copper scrap is classifiable under PCT Heading 7404.0000. It is, however, pertinent to mention here that for clandestine clearance of the consignment for export, without payment of RD, the petitioner filed their goods declaration under totally irrelevant PCT Heading of 7312.9010.
(m) That in the light of submissions made above the contents of Grounds (m) are incorrect, hence, denied.
(n) That in the light of submissions made above the contents of Grounds (n) are incorrect, hence,
(o) That as stated above the clearance of cargo under PaCCS is automated and most of the consignments, particularly export consignments, are allowed release as per declaration and self- assessm ent of the exporters and the PaCCS system is based on post importation scrutiny, hence, the cited four isolated G.Ds. Are under scrutiny and on the basis of those isolated G.D's. Two of them are related to the appellant, the allegation of discrimination cannot not be levelled. Without prejudice to above even otherwise it is a cardinal principle of law two wrongs cannot make one right.
(p) That in the light of submission made above it is clear that it is not a case of discrimination. And infact the respondents acted in compliance of honourable High Court's order, dated 8-10-2008 in C.P. No, D-1116 of 2008 (annexed at page 35 of the appeal), hence, the citations quoted by the appellant are not applicable on aye subject case/appeal.
(q) That the contents of ground (q) require no comments.
6. Rival submissions heard. Case record examined. Following points are framed for consideration by this forum:-
(i) Whether citing of a wrong PCT heading in respect of classification of imported/exported goods constitute an act of misdeclaration within the ambit of mischief of section 32 of the Customs Act, 1969?
(ii) Whether waste and scrap of brass is leviable to regulatory duty a 25% ad valorem in terms of Table I and Table II of S.R.O. 482(1)/2007 dated 9-6-2007.
(iii) Whether the order-in-appeal is barred by time in terms of proviso to subsection (3) of section 193-A of the Customs Act, 1969 being issued after 88 days of the stipulated limitation period of 180 days?
(iv) Whether the subject imports of the appellants has been meted out a differential treatment as compared to other contemporaneous imports involving an elements of discrimination in terms of Articles 4 and 25 of the Constitution of Pakistan read with number of judgments of the superior judicial fora?
7. As regards Issue No,(i) the learned respondents Nos.1 and 2 had failed to consider that the determination of P.C.T Heading is the sole function of the Customs Officers. The importer only assists the customs by citing the P.C.T Heading of the goods. At best citation of P.C.T. Heading may be called a claim for assessm ent of taxes, which means a request, may be accepted or rejected by the competent authority but is not a punishable offence under any of the provisions of the Customs Act or Notification issued there under. The citation of a particular P.C.T Heading in the Bill of Entry does not amount to misdeclaration within the meaning of section 32 of the Customs Act, 1969 is a well settled principle of law in Customs Jurisprudence through a series of Judgments of Superior Judicial Fora of Indian and Pakistani Jurisdictions starting with the case of Monnoo Industries Ltd v. Govt. Of Pakistan reported as PET.D-199/1984 to State Cement Corporation v. Govt.
Of Pakistan reported as C.A. No,43 of 1999. Reference is made to the reported judgment 2003 PTD (Trib.) 293 of the Customs, Excise and Sales Tax Appellate Tribunal Karachi Bench Karachi in similar nature of case.
"We believe that clearing agent while filing a bill of entry is required to fill the PCT Column for the easement and assistance of the Assessing Officer. The perusal of section 80 of the Customs Act, 1969 indicates that during the process of assessment it is the duty of the Assessing Officer not only to examine the goods but also to tally the description, its weight and value of the goods thereof, and to consider any extra information available on the bill of entry in order to arrive at a correct assessm ent of duty and taxes. Simply, assuming that a wrong PCT Heading amounts misdeclaration would not be a correct approach to interpret section 32, where emphasis is on the word "material particulars" which means something going to the root cause of the basic declaration. To our mind, a misdeclaration in material terms has not been made by the Appellant."
' That the allegation under section 32(1) or 32(2) of the Customs Act, 1969 are unwarranted under the circumstances of the case. A correct Goods Declaration was filed by the Appellant with correct description of goods which is undisputed. There was no false statement or any collusion with the officer of the customs. As such the appellant did not misdeclare any material particular which could attract the mischief of section 32 of the Customs Act, 1969 for levelling the allegation of misdeclaration. This is also incorporated in pares 101(b), (1) of Customs General Order 12 of 2002 dated 15-6-2002,
8. That this is a case of classification of goods and no case can be made out under the provisions of section 32 of the Customs Act, 1969 this was held by the honourable Customs, Excise and Sales Tax Appellate Tribunal Karachi in the Judgment of Messrs Falcon Enterprises v. Collector of Customs vide Appeal No,K-723/07:--- "alleging a charge of misdeclaration on the basis of a wrong classification heading does not constitute an offence within the framework of section. 32 of the Customs Act, 1969 as there is no material falsity in the statement made by the Appellant."
' That the similar issue of classification was also decided vide. Customs Appeal Nos.K-432 and others which went up to the Apex Court and the orders of the Tribunal passed were maintained in which it was held:-- "The difference of opinion with respect to classification does not fall within the mischief of Section 32 of 'the Customs Act, 1969. The confiscation and imposition of penalty in this count, therefore is ab initio void and illegal."
9. That incorrect quoting of P.C.T is not tantamount to misdeclaration within the ambit of mischief of sections 32(1), 32(2) and 32(A) of the Customs Act, 1969 since a positive assertion of facts is a pre-requisite for bringing charges of misdeclaration against the taxpayer. If the wisdom of the Customs Authorities for invoking section 32 in cases of incorrect citing of P.C.T. Heading is acceded to no responsibility obviously devolve upon the hierarchy of the Customs Officials to levy and assess the duty according, to law. The provisions of section 79 and section 80 of the Customs Act, 1969 in such a state of mind would become redundant and the observation of the honourable late Justice Sabihudduin Ahmed in the case of State Cement Versus Government of Pakistan reported as C.A. No, 43 of 1999 would once again redicule the irrational approach of the Customs Authorities.
The observation verbatim states "We are rather amazed at the line of reasoning put forward to the effect that while an assessee is required to interpret the law and relevant notification correctly and could be held guilty of a penal offence for not doing so in terms of section 32(1) of the Customs Act, no responsibility of any kind would devolve" on the customs officials. In the subject case the citing of incorrect P.C.T Heading attracts no Regulatory Duty as against the alleged Regulatory Duty of 25% under the relevant P.C.T. Had the customs Assessing Officer been vigilant in performance of his duty, there was no apprehension of loss of revenue on this account had the determined PCT heading correct as per arguments of the respondent. While alleging so against the appellant the respondent has forgotten that a number of consignments prior and subsequent to the subject importation with' the same description have been released by the same Customs Authorities. The respondent No,1 while adjudicating the subject case also forget that section 131(1)(c) of the Customs Act, 1969 lays certain duties upon the Customs Officers once the Goods Declaration is presented to them by the importer. In this case the responsibility of the Customs Assessing Officer was all the more enhanced since the Goods Declaration was presented under the First Appraisement System under section 131(1)(a) of the Customs Act, 1969 meaning thereby the exporter had made a declaration subject to full scrutiny and examination of all aspects by the customs staff in terms of section 131(1)(c) ibid. It is very strange that a charge of mis-declaration under section 32 of the Customs Act, 1969 has been invoked against an innocent exporter. It is also a well-settled law that section 32 of the Customs Act, 1969 would only be attracted when misdeclaration was made to cause loss to the Government Exchequer by evasion of Customs Duty.
Thus in the absence of any revenue loss the charge of misdeclaration under section 32 of the Act ibid was not attracted. The honourable Supreme Court of Pakistan in the case of AlHamd Edible Oil (Pvt.) Ltd., and others v. Collector of Customs reported as 2003 PTD 552 while discussing the aforesaid aspect of the case held as under:-- "A bare reading of this section clearly indicates that it relates to a situation "where a person makes any statement or files any documents 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 Customs Authority is empowered to issue to the person concerned a notice to show-cause notice 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 the 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 argued that the department has suffered any loss on account of the conduct of the appellants. The question of applicability of section 32 in the present circumstances apparently does not arise."
' The same principle has been laid down by the honourable High Court of Sindh at Karachi in the case of Kamran Industries v. Collector of Customs Export report as PLD 1996 Karachi 68 and PET. D- 199/1984, 1987 (29) ELT 259, 1987 (40) ELT 276 (SC), 1992 CLC 841, 1990 (50) ELT 15 M.P. 1994 (74) ELT 964, 1994 (74) ELT 795(Del), 1998 (101) ELT 549 (SC), PLD 1989 Lahore 47, 1987 SCMR 630, Civil Appeal
(xii) No,860-K/90 decided by the Supreme Court on 25-2-1992, 2003 PTD (Trib.) 293. In view of the above discussion, Issue No,(i) is answered in the negative.
10. As regards Issue No,(ii), the PCT heading 7403 includes refined copper and copper alloys and brass. It is further sub-divided in two subheadings namely refined copper and copper alloys. The One dash subheading copper alloys includes two dash sub-heading 7403.2100 which includes copper Zinc base alloy (brass). There is one exclusion under two dash sub-heading 7403.2900 pertaining to other copper alloys consisting of master alloy of heading 7405. As such HS Code 7403 includes refined copper and copper alloys which are unwrought or unworked. It nowhere includes copper waste and scrap which pertains to HS code 7404.0000. The relevant S.R.O.482(I)/2007 dated 9th June, 2007 directs a regulatory duty @ 25% ad valorem on export of ferrous and non-ferrous waste and scrap classifiable under HS Codes given in Table-I and on bars, rods, ingots, slabs and billets made thereof whether or not in the form of alloys classifiable under HS Code given in Table-II appended to the aforesaid S.R.O. Table-I at Serial No,2 includes waste and scrap of copper. The waste and scrap of copper is classifiable under PCT heading 7404.0000. It does not have any further sub-heading on the pattern of PCT heading 7403 pertaining to refined copper and copper alloys unwrought. It is the contention of the appellant that drafters of this sub-heading 7404.0000 should have sub-divided it on the pattern of PCT 7403 referred to above in respect of refined copper and copper alloys unwrought. The non-sub-division of the PCT heading 7404 into waste and scrap of alloys of copper with Zinc, Nickel etc. Has resulted in making the Simpleton Harmonized Interpretation of sub-heading 7404.0000 confused for the purposes of levy of regulatory duty on the waste scrap of brass which does not appear in the Pakistan Customs Tariff by name or by two clash sub-heading under the PCT heading 7404.0000.
11. On the other hand, the department argued that since copper includes alloys of copper under the main heading regulatory duty is attracted on waste and scrap of copper which includes brass as well if not by name then by implication. It is obvious that bad drafting of the PCT heading 7404.0000 has given rise to this confusion which has become confounded due to host of reasons including application of General Interpretative Rules (GIR). It is the considered opinion of the superior judicial fora in a number of judgments that taxpayer should not he made to suffer on account of the bad drafting of the statute. The judgment of the Hon'ble High Court of Sindh comes to the rescue of Erie appellant in this case reported as 2004 PTD 901. The relevant extract regarding interpretation of statutes is as under and supports the contention of the appellant:-- "While interpreting the taxing statue the Courts must look to the words of the statute and interpret it in the light of what is clearly expressed. It cannot imply anything which is not expressed. It cannot import provisions in the statute so as to support assumed deficiency.
' While finding out intention of the Legislature language of the law is not be seen and if the intention is clear from the language used nothing else is to be done.
' If the Legislature has not sufficiently expressed itself Court has no duty to act for it, for Court is concerned with what it lays down and not with what it has only in mind, but once it has been articulate enough Court does not more than give effect to the intention that it has succeeded in expressing. That intention may be expressed in faulty language, in very faulty language, in extremely faulty language. This is of no consequence as long as there is no doubt as to the intention. A draftsman's mistake as long as it relates to the forming which the legislative intent is expressed and not to the substance of it. Is of no effect. Of course once an element of doubt as to the intention of the Legislature enters the field considerations otherwise irrelevant may all become relevant."
Even otherwise if there are two or more interpretations of a provision pertaining to levy of tax on account of anomaly/ambiguity the one favourable to the taxpayer may be adopted by the Courts as per judgments reported as 2005 SCMR 728, 2007 PTD 1656 and 2008 PTD 1227. In view of the ambiguity and discrepancy flowing on the surface of PCT Heading 7404.0000 which has not been further subdivided into two dash sub-heading on the pattern of PCT Heading 7403 thereby indicating alloys of copper and Zinc (i,e, 'brass), benefit in view of the judgments of superior judicial fora needs to be awarded to the appellant regarding payment of regulatory duty on their consignment of brass meant for export. The matter regarding further subdivision of heading 7404.0000 into different alloys of copper needs to be taken up with the competent authority by the administrative Collectorate. As such issue No (ii) is disposed of in these terms.
12. The Issue No,(iii) relating to time bar vehemently contested by the advocate for the appellant.
The record presented before this forum indicates that appeal was filed with Collector (Appeals) on 3-1-2009 the order-in-appeal was issued after expiry of cumulative period of 180 days. To be exact the order-in-appeal was issued after 268 days. A letter was written to Federal Board of Revenue for extension by Collector (Appeals) on 5-9-2009 i,e, after (8) months of the filing of the appeal. The time for deciding the appeal expired on 2-7-2009 and the extension was granted, by the Federal Board of Revenue on 24-9-2009. The record also indicates that no written adjournments were sought by either of the adversaries from the appellate authority and adjournments even if sought would be of no assistance to the revenue's case extension was sought by the Collector (Appeals) after a period of (2) months of expiry of time limit on 2-7-2009. In words of the superior judicial fora time extension given in such cases is akin to giving a new lease of life into a dead entity. It is tantamount to flogging a dead horse. If an event or document has become dead on account of extension of time period it is legally considered dead and new spirit cannot be infused into it by any means or on account of any reason whatsoever. Following extract from the judgments of the Hon'ble Sindh High Court reported as 2007 PTD 117 is relevant to the merits of this case: "Once a matter becomes barred by time then the subsequent enhancement in the period of limitation shall not have the effect of reopening the past and closed transaction......
' The same principle has been laid down by the honourable Lahore High Court in the case of Messrs Super Asia Muhammad Din Sons (Pvt.) Ltd. v. Collector of Sales Tax, Gujranwala and another reported as 2008 PTD 60.
(1) "Once limitation had started to run and had come to an end the assessee had acquired a vested right of escapement of assessment by lapse of time."
(2) The claim of the revenue that the prescribed limitation of 45 days for completion of adjudication proceedings as provided through Finance Ordinance, 2000 and enhanced to 90 days by Finance Act, 2003 is merely directory cannot be accepted. It is settled law that where inaction on the part of a public functionary within the prescribed time is likely to affect the rights of a citizen the prescription of time is deemed directory. However, were a public functionary is empowered to create liability against a citizen only within the prescribed time, it is mandatory. The acceptance of contention of the revenue in that regard will make a provision of, law redundant and nugatory.
Redundancy or superfluity of an Act of Parliament and a provision of law cannot be readily accepted. All the more so when the prescribed limit is beneficial for the citizen and restricts the executive power to touch the pocket of a tax payer thereby creating threat after its expiry even if there was a good case for creation of liability he will not be dragged in."
' In the context of not granting extension within the initial period of time limit, the Hon'ble apex Court in its judgment reported as 1999 SCMR 1881 has observed as under which supports the contention of the appellant beyond any iota of doubt:- "Having said as much, we also do not think that the petitioner's caveats totally devoid of substance.
Thus, if the initial period of two months, envisioned the section 168 (supra), is allowed to go by without any extension having been made, a vested right may come to accrue to the affected and the Collector should be obliged to issue a notice and accord necessary hearing before granting any extension. Correspondingly, as always, it would remain a moot question whether an extension, if any was actually made, within the initial period of two months from the date of seizure and merely because it purports to have been so made, within time, may not in, itself be enough. The contrary may be shown but, ordinarily, within the Customs Jurisdiction alone."
' As such the issue No,(iii) is answered in the affirmative.
13. As regard issue No,(iv) the advocate for the appellant referred to C.R. No, E-G-630120-020508, E- G-635679070508, E-G-639250-100508 and E-G-675589-130608 wherein similar/identical consignments of the contemporary exports were allowed shipment/clearance without any hitch or hindrance and even without recourse to any objection or adjudicating proceedings and also without recovery of regulatory duty. A facility allowed to someone and denied to other is discrimination as held by the Hon'ble apex Court in their judgment reported as 2005 SCMR 492. It militates against the principles enshrined in Article 25 of the Constitution of Pakistan and violates the principle of law settled by the superior Court in a number of judgments reported as 2002 SCMR P. 312, PLD 1995 SC 396, 1990 SCMR P. 1072, 1990 SCMR P. 1059, 1975 SCMR P.352, 2002 PTD 976 1998 SCMR P.1404, PLD 1997 SC 582; PLD 1997 SC 334, 1997 SCMR P. 1874, 2005 SCMR 492. As such Issue No,(iv) is answered in the affirmative.
14. In view of the foregoing findings and observations, I set aside the impugned order and allow this appeal.