' MIAN MUHAMMAD HANIF TAHIR, MEMBER (JUDICIAL).---This appeal has been filed against Order-in- Appeal No,126 of 2010 dated 12-5-2010 through which the learned Collector of Customs (Appeals) had rejected the appeal and upheld the Order-in-Original No,20 of 2010, dated 23-1-2010.
2. Briefly stated the facts of the case, are that the staff of intelligence and Investigation-F.B.R., Range Office, Multan examined the copies of the GD No,735 of 2005 dated 11-2-2005, No,1007 of 2005 dated 25-4-2005, 1095 of 2005 dated 10-5-2005 and No,1196 of 2005 dated 13-6-2005 and it was observed that the appellant misused the facility granted under S.R.O. 456(1)/2004 dated 12-6- 2004 and short paid an amount of Rs,10,68,107. As a result of adjudication the appellant was directed to pay the evaded amount of tax vide Order-in-Original No,20 of 2010 dated 23-1-2010.
3. Aggrieved by the said order, the appellant filed an appeal before the learned Collector (Appeals) who, vide impugned Order-in-Appeal No,126 of 2010 dated 12-5-2010 rejected the appeal and upheld the order-in-original. Hence, this appeal.
4. The main grounds as urged in the memo. Of appeal by the appellant are:--
(a) That the appellant imported a consignment vide GD No,735 of 2005 dated 11-2-2005 and submitted the documents. The Assessing Officer examined the GD and relevant documents under section 80 of the Customs Act, 1969 and during checking of the same it was noted that the benefit of concession in duty was available to the importer under S.R.O. 456(1)/2004 dated 12-6-2004. The Assessing Officer thus cleared the goods accordingly. After that consignment 3 more consignments were imported vide GD Nos. 1107 of 2005 dated 25-4-2005, 1905 of 2005 dated 10-5- 2005 and 1196 of 2005 dated 13-5-2005 and all the 3 consignments were also released under the said S.R.O.
(b) That the appellant moved an application to the learned Collector Customs for the issuance of capacity certificate on 2-2-2005. The learned Collector issued a final certificate to the appellant in terms of S.R.O. 456(1)/2004 on 27-5-2009. The learned Collector while issuing the certificate gave the effect to it from 8-2-2005.
(c) That on the reference, Engineering Development Board in the continuation of the application of the appellant dated 2-2-2005, pointed out that the items/parts, which the appellant manufactured actually covered under S.R.O. 453(1)/2004 dated 12-6-2004 instead of S.R.O. 456(1)/2004. The Engineering Development Board issued the certificate of input output ratio as contemplates in the S.R.O. 453(1)/2004 for the period up to 30th June, 2006 on 5-9-2005. The Central Board of Revenue issued the said certificate to the Collector Customs with the directions to release of inputs under S.R.O. 453(1)/2004 vide its letter dated 10-9-2005.
(d) The S.R.O. 456(1)/2004 gave the benefit of concession of duty to the manufacturers of different parts and items like wires and ACRS spring wires etc., on the importers of the raw material of wires whereas the same benefit was available to the manufacturers of the parts sub-components and sub-assemblies of motorcycles and cycles under S.R.O. 453(1)/2004 this slight difference in the spirit of S.R.Os made the appellant and the Assessing Officer confused and due to the same benefit as to concession in duty the numbers of S.R.Os. Were mixed up and S.R.O. No,456(I)/2004 was mentioned on the GD while assessing the goods imported by the appellant. It is abundantly clear that there has been no loss to the government exchequer as there is no difference in the rate of duty chargeable on the goods imported under S.R.Os. 456(1)/2004 and 453(1)/2004. It is worth mentioning that had the goods been cleared under S.R.O. 456(1)/2004 there would have been no case of short duty framed against the appellant.
(e) That admittedly the concession or duty under the provision of S.R.O. Notification issued under the customs law was available to the appellant and such legal right cannot be denied merely on the basis of technicalities. The obvious answer to question whether legal right of concession of duty conferred upon the importer can be a bridge on the basis of mentioning of wrong preposition of law on the documents is NO. It is the duty of the functionaries, who regulate the taxing system to tell and apply the correct provision of law in the matter regarding levy and non-levy of duties and taxes. It is settled principle of law and practice that a person who hold the position to make any decision is supposed to wear all the laws on his sleeves and the Assessing Officer, has an authority to assess the value and rate of duty and tax leviable on the goods imported by applying the relevant provisions of law applicable in this regard. The Assessing Officer is an Adjudicating Officer as per provisions of section 2(a) of the Customs Act, 1969. So, if there was any mistake on the part of the Assessing Officer and that too was to the extent of mentioning incorrect provisions involving no revenue less, the appellant could not be penalized for the act of the government officer. The Hon'ble High Court has held in a case reported as PLD 2003 (Lah.) 421 that it is the duty of the court to apply correct law, and grant the relief to the aggrieved party if correct provisions of law was not invoked by the party.
(f) That the bare reading of show-cause notice would reveal that there had been nothing on record that shows any statement, document or record submitted by the appellant was wrong or false in any material particular, so section 32 is not attracted in the case. It is also submitted that where there is no revenue ,implication involves there is no application of section 32 as this very section does not cover any wrong mentioning of provisions having nothing to do with evasion of duty and taxes. The appellant has referred to judgment reported as 2004 PTD 2977 in this regard.
(g) That there is no question of smuggling in the case and nothing has been alleged in this regard in the show-cause notice so invoking of section 16 is illegal and without lawful justification. There is no question of violation of any condition of any S.R.O. And thus provision of section 156(1), (10A) is not applicable in the case. Further that there is neither any evasion of duty and taxes at import stage nor any prohibition or restriction was imposed on the import of the goods in question hence the appellant cannot be penalized under section 156(1), (9) of the Customs Act, 1969. It is worth mentioning that there has been no charge of miss-declaration leveled in the show-cause notice so the provision of section f56(1), (14) also does not attract in the case. That the Directorate of Intelligence and Investigation has no powers to examine the documents of the goods already assessed by the appropriate officer of the appraising department of customs as the same will be termed as audit and the Directorate has no power to conduct the audit of the record. Hence the whole exercise carried out by the officer of Directorate is without lawful authority. Reliance is placed on 2005 PTD 23, and 2003 PTD 2821.
(h) That once the consignment is out of charged, it becomes past and closed transaction and such cases cannot be reopened unless the declaration with respect to the physical description of the goods, quantity, weight and classification of goods is found incorrect. Reliance is placed on judgment of Hon'ble Lahore High Court in the case of Messrs A.S. International v. Collector Customs, Lahore 2009 PTD 281 and 2009 PTD 467. That since the assessm ent made by the appraising officer is a final assessm ent so issuing the notice under section 32 is not legal because had there been any DE regularity in the assessm ent the matter should have been examined by the competent authority under section 195 of the Customs Act, 1069. Reliance is placed on 2002 PTD 889.
5. Arguments were heard. The learned counsel for the appellant argued the case on the lines of submission made in the memo. Of appeal.
6. The representative of the department supported the impugned orders. He contended that the wrong mentioning of S.R.O. Falls within the ambit of section 32 of the Customs Act, 1969. He however, could not answer the question whether the goods of the appellant at the time of import .Were covered under any concessionary S.R.O. With respect to customs duty or not.
7. I have heard the learned counsel appearing. On behalf of the appellant as well as the representative of the department and pursued the record carefully. In the first instance I take the issue of the jurisdiction of the Directorate of Intelligence and Investigation F.B.R. For examining the record of an importer after the period of almost four years. A plain reading of S.R.O. 486(1)/2007 dated 9-6-2007 which states the powers and jurisdiction of the officer of the Directorate General Intelligence and Investigation F.B.R. Reveals that the officers of the Directorate can stop the goods, which are smuggled and they can demand the documents thereof at the spot and for the purpose of verification they can hold the goods and take them into their custody. In the comments filed by the department before the learned Collector (Appeals), it is clearly stated that it is in the charter of the Functions of the Directorate General to detain and examine the goods. In the instant case the goods had already been assessed and cleared during the period 2005 and examining the documents of such imports in the year 2009 (after four years) amounts to post clearance audit for which the Directorate has no jurisdiction. The said S.R.O. Clearly restrain the Directorate of Intelligence and Investigation to the extent of prevention of smuggling and performance of preventive operations relating to smuggling and evasion of duty through clandestine removal of dutiable goods, miss-declaration and valuation fraud etc. Whereas in the instant case the staff of the respondent allegedly examined the record of the importer/appellant after the period of four years after the assessm ent had been finalized by the competent authority and the goods had been released. Under the provisions of section 3E of the Customs Act, 1969 read with S.R.O.
486(1)/2007 the Directorate has no jurisdiction to examine the documents of the goods imported as back as four years. Reliance in this regard is placed on the judgment of the Hon'ble Sindh High Court in the case of "Shahzad Ahmad Corporation v. Federation of Pakistan" reported as 2005 PTD 23 and "Syed Muhammad Razi v. Collector of Customs" reported as 2003 PTD 2821.
8. The plea of the learned DR regarding wrong mentioning of S.R.O. On the GD by the appellant for availing the concession in customs duty is covered within the meaning of miss-declaration as contemplated under, section 32 of the Customs Act, 1969 is not convincing one as the same concession was admittedly available to the appellant at the time of import under S.R.O.
456(1)/2004, whereas mentioned the S.R.O. As 453(1)/2004 and the GD was examined and assessed by the Customs staff at the Dryport. The Assessing Officer is an adjudicating authority within the meaning of section 2(a) of the Act ibid and thus it was the duty of the Assessing Officer to apply the correct law for granting the relief. Reliance is placed on the judgment of the Hon'ble High Court in a case Sheikh Niamat Ali v. Sheikh Muhammad Imran" reported as PLD 2003 Lahore 421 wherein it has been held "that it is the duty of the court to apply the correct law and grant relief to the aggrieved party, even if correct provision of law was not invoked by the party ". The perusal of show-cause notice reveals that there has been no allegation on the appellant with regard to miss-declaration of the description of the goods, quantity of the goods, classification of the goods and the value of the goods on the GD and nothing has been mentioned regarding the false statement made by the appellant, which are the necessary and mandatory ingredients of the show-cause notice under section 32 of the Customs Act, 1969. Reliance in this regard is placed on 2009 PTD 281 and 2009 PTD 467. Both S.R.Os. i,e, 453(1)/2004 and 456(1)/2004 give concession in customs duty to the manufacturers of different goods and items of the 1st Schedule of the Customs Act, 1969 that is to say that the said S.R.Os. Give exemption to the manufacturers of certain goods on the import of raw material from so much of customs duty leviable under 1st Schedule to the Customs Act, 1969 as in excess of the rates specified in the said S.R.Os. It is an admitted fact that the appellant has manufacturing facility and the learned Collector issued the certificate to the appellant relating to the GDs in question and it was mentioned on the certificate that the appellant firm is a manufacturer of Clutch, Gear, Accelerator Wires, Wheel Spoke, Wheel Spoke Nipple etc., therefore, there was no violation of the rules and conditions mentioned in the S.R.O. The perusal of both S.R.Os. i,e, 453(1)/2004 and 456(1)/2004, would reveal that the same concession of customs duty was available to some items like raw material, components and sub components etc. To the manufacturers of different parts and the appellant is admittedly a manufacturer of clutch wire, gear wires etc. And the .Same concession was available to the appellant, so there appears no revenue loss to the government exchequer and such like mistake does not at all attract the penal action under section 36 because this sort of mistake has nothing to do with miss-declaration as to quantity description and specification of an item hence the notice issued under section 32 is illegal on the face of it. Reliance in this regard is placed on judgment of the Hon'ble Sindh High Court in case of A.R. Hosiery Works wherein it has been held that "section 32 does not cover every untrue declaration having nothing to do with evasion of customs duty or other charges but such statement must indicate an attempt to defraud public revenues.
9. In view of what has been discussed above, the appeal is accepted and the impugned orders-in- original as well as order-in-appeal are set aside.