MS. KAUSAR SULTANA HUSSAIN (MEMBER (JUDICIAL-III)).---This order will dispose of Custom Appeal No.K-409/ 2011 filed by the appellant against the Order-in-Appeals Nos.4960 to 4961 of 2011 dated 2-2-2011, passed by the learned Collector of Customs (Appeals), Karachi.
2. Brief facts of the case as stated in the impugned order are that the appellant electronically filed Goods Declaration for import of goods declared as Textile, Fabric, at total invoice value of US$ 34525.38. He determined his tax liability on his on and sought clearance thereof under section 79(1) of the Customs Act, 1969. However, in order to check as to whether the appellant had paid correct amount of duties/taxes the aforesaid GD was selected for scrutiny in terms of section 80 of the Act.
As a result, it was discovered that the appellant had mis-declared weight and origin of the imported goods; origin mentioned on the goods themselves was England whereas the appellant had declared the goods as China origin; the declared gross weight was 25500 kgs whereas on physical checking the total gross weight had been determined as 28230 kgs showing an excess weight of 2730 kgs or 10.71% of the total consignment. Moreover, customs value of the goods actually found (Gents Suiting Fabric, made in England) was far in excess of the same type of cloth produced in China and, obviously, the importer had therefore, deliberately mis-declared the goods as of China origin to get the same assessed at lower values. The importer was accordingly charged under the relevant provisions of law vide show-cause notice dated 8-10-2010 for mis- declaration of description, origin, weight and value of the goods and to defraud the government from its legitimate revenue of Rs.19,58,769.
3. The Additional Collector, Model Customs Collectorate of PaCCS, Custom House Karachi passed an Order-in-Original No.41076 of 2010 dated 12-10-2010 as under:-- "I have gone through facts of the case and submissions made by both the sides. There are three charges in the show-cause notice. First relating to undervaluation; second relating to misdeclaration of origin and the third relating to mis-dedaration of weight in kgs. As regards the charge of undervaluation, it is noted that the same is not based on a direct evidence of value but on the fact that the origin has been mis-declared. Therefore, no separate charge in respect of value can be made. The charges of mis-declaration of origin has been established as the phrase "Made in England" has been found printed on the fabric as seen in the images on record and also in the examination report itself.
It is evident that origin has been mis-declared to get the assessment done at lower value.
Therefore, the charge of mis- declaration of origin has been established. The third charge relates to mis-declaration of weight.
The charge is based on the weight of 25500 kgs, as in the scanned Bill of Lading whereas in the examination report, total gross weight has been determined as 28230 kgs; resulting in an excess weight of 2730 kgs being 10.71% of the total consignment. It is noted that bill of lading is not a document which is considered as declaration of the importer. The relevant document is Goods Declaration, wherein the respondents have declared the quantity in meters as 115,084.6, whereas the quantity found in Kgs is 28230. The unit prescribed for fabric under Customs General Order 7 of 2006 dated 26-6-2006 is kgs. If the department had assessed the goods considering declared meters as kilograms, the exchequer would have benefited. Had the department considered 115,084.6 meters as 115,084.6 kgs, kilogram being the associated unit of measurement , the duties and taxes would have been assessed on much higher side. Clause (g) of Serial No.1 in Table of S.R.O.
499(1)/2009 dated 13-6-2009 prescribes a redemption fine at 20% in cases of mis-declaration of PTC heading in cases "where due to incorrect unit duties and taxes are evaded". In this case, mentioning of incorrect unit would have led to assessment on higher side. Therefore, no mala fide is established on part of the respondents on this account and aforesaid clause (g) is not attracted and imposition of redemption fine is not warranted. However, the importer has failed to follow the provisions of Customs General Order 7 of 2006 dated 26-6-2006 by not declaring the goods in prescribed unit of kilogram. Therefore, penalty is warranted under clause 1 of section 156(1) of the Customs Act, 1969. In view of above, the charges of misdeclaration and declaration of quantity in incorrect unit of measurement have been established. The respondents have also accepted the charges. Accordingly, the imported goods are confiscated in terms of Clauses 14 and 14A of section 156(1) of the Customs Act, 1969. However, the importer is given an option under section 181 of the Customs Act, 1969 to redeem the goods on payment of fine of Rs.3,021,97I (i.e. 20% of offending value Rs.15,109,856,496) in terms of S.R.O.
499(1)/2009 dated 13-7-2009 along with leviable duties and taxes. A penalty of Rs.750,000 is also imposed on the importer under Clauses 1, 14 and 14A of Section 156(1) of Customs Act, 1969."
4. The importer did not agree with the Order-in-Original No.41076 of 2010 ated 12-10-2010 passed by the adjudicating officer filed an appeal before the Collector of Customs (Appeals), Karachi. The learned Collector passed an Order-in-Appeals Nos.4960 to 4961 of 2011 dated 2-2-2011 as under:-- "I have examined the case record and given due consideration to the arguments advanced before me. From the circumstances_of the case such as shipment of the goods from China and issuance, by the authorized Chinese authorities, of the certificate of origin create a strong impression that the goods may actually have been manufactured in China with the words of England origin inscribed thereon, as reportedly happens with many goods manufactured in China. However, due to availability of the words "Made in England" on the goods, I am inclined to go with the adjudicating officer and treat the impugned goods to be England, instead of China, origin. I, however, observe that value of the goods appears to have been revised upwards by nearly thirty percent (30%) due to the general impression that the goods manufactured in China are inferior in quality to the aforesaid extent vis-a-vis the goods manufactured. In West European countries like England. But there is no evidence such as a GD showing import of identical goods (of England origin) the establish that customs, value of the instant goods has been determined strictly in accordance with the provisions of law contained in section 25 of the Act read with the Customs Rules, 2001 (notification S.R.O. 450(1)/2001 dated 18-6-2001). Keeping in, view the peculiar circumstances of the case particularly the fact that in exactly the same situation (vide GD bearing No. 1-HC-745274- 210808) no penal action had been taken against the importer, I am of the considered opinion that the ends of justice would be met if the goods are treated/ assessed as England origin and the penal action taken is waived. I, therefore, order to remit the redemption fine and the penalty imposed on the goods and the appellant respectively. The impugned order is modified to the aforesaid extent only and the appeal is disposed of accordingly.
This order shall also be applicable mutates mutandis to Appeal No.Cus/1621/2010/PaCCS filed by Messrs Aazmir Enterprises against Order-in-Original No.41075 of 2010 dated 12-10-2010 involving identical facts, circumstances, evidence and the provisions of law."
5. Being aggrieved with the Order-in-Appeals Nos.4960 to 4961 of 2011 dated 2-2-2011, passed by the Collector of Customs (Appeals), Karachi, the appellant/department filed an appeal before this Tribunal on the basis of the following grounds:--
(1) That the learned Collector (Appeals) has no jurisdiction to allow release of the goods without payment of fine and penalty after accepting that the goods are of England origin. The provisions of 2nd proviso to section 181 of the Customs Act, 1969, and S.R.O.499(I)/2009 dated 13-6-2009 are very much clear in this regard and for penal action the discretion of the officers of the Adjudication and Appellate authorities has been withdrawn, thus, the Collector's order for remittance of fine and penalty is against the aforesaid provisions of law.
(2) That facts and circumstances of the case and amended provisions of law and procedure, particularly related to mis-declaration of origin of fabric and wrong self-assessment under PaCCS, the "certificate of origin" and "Manufacturer's Certificate" are two documents which settle the issue of origin particularly in the case of fabric. The appellant had accepted the findings of customs staff at the adjudication stage and neither any rebuttal about the origin nor about the excess weight was made. It is also submitted that neither certificate of origin nor manufacturer's certificate was produced for confirmation/verification of the origin. The certificate of origin, produced before the learned Collector (Appeals) is not related to the consignment in question, because the name of the exporter is different and the column of producer/manufacturer was silent, that being so, the learned Collector (Appeals) has also not acceptable the said certificate of origin as a conclusive proof.
(3) That the honourable Supreme Court of Pakistan settled a law in the case of Messrs Shamoon Traders, Quetta v. Customs Excise and, Sales Tax Appellate Tribunal, Karachi reported as 2006 PTD 2177 that the physical examination report is more reliable than the certificate of origin. The goods are clearly confirming with inscription of "Made in England". Further, the certificate of origin produced by the appellant is not relevant to the consignment in question. The learned Collector (Appeals) has totally relied upon his decision on a single isolated GD, copy of which was never supplied to the appellants, and treated as a practice. Though the orders are being issued to investigate the matter of GD/CRN-1-HC-745274-210808, however, even otherwise in the light of law settled by the honourable High Court in the reported judgment in the case of Messrs P&G International, Lahore v. Assistant Collector of Customs, Appraisement, GR-II, Karachi and 3 others (20,10 PTD 870) and the provisions of section 80(3) of the Customs Act, 1969, wherein it has been held that an unlawful practice cannot over ride the law.
(4) That in terms of section 193 of the Customs Act, 1969, the importer's appeal was not maintainable as the appeal was filed after 30 days from the date of assessment. It is an admitted fact that neither there was any application for the condonation of delay nor any order was made by the learned. Collector (Appeals) on pointation of this legal point because there is a settled law that aspect of limitation cannot be ignored or even cannot be condoned unless an importer/person is not come up with strong cogent reasons and explanation for each day of the delayed period. Therefore, even without touching the merits the importers appeal was not maintainable. It is well settled law that if the basic order is incorrect then the entire super structure resting thereon automatically falls away. Reference may, in this regard, be made to Atta-ur- Rahman v. Sardar Umar Farooq and others PLD 2008 SC 663 and Yousuf Ali v. Muhammad Aslam Zia and others PLD 1958 SC 104.
6. The learned counsel for the importer/respondent has submitted para-were comments as under:--
(1) That the Collector (Appeals) has full jurisdiction to accept or dismiss any order-in-original on any ground. It is also incorrect that for penal action, the discretion of the officers of adjudication and appellate authorities has been withdrawn. If this contention is correct than there will be no need of any adjudicating officer or Collector (Appeals), only a clerk of Department can issue orders. In the opinion of appellant, the Collector (Appeals) has no powers to pass order for remittance of fine and penalty. The observations of the appellant are not only objectionable but also illegal.
(2) The learned Collector (Appeals), in connection with, certificate of origin has clearly observed in the operative para of the order in appeal that shipment of the goods from China and issuance of certificate of origin by the Chinese authorities create a strong impression that the goods may actually have been manufactured in China with the words of England origin inscribed thereon, as reportedly happens with many goods manufactured in China. However, due to availability of the words "Made in England" on the goods, I am inclined to go with the adjudicating officer and treat the impugned goods to be England, instead of China, origin. I, however, observe that value of the goods appears to have been revised upwards by nearly thirty percent (30.%) due to the general impression that the goods manufactured in China are inferior in quality to the aforesaid extent vis- a-vis the goods manufactured in West European countries like England. But there is no evidence such as a GD showing import of identical goods (of England origin) the establish that customs value of the instant goods has been determined strictly in accordance with the provisions of law contained in section 25 of the Act read with the Customs Rules,,2001 (notification S.R.O. 450(1)/2001 dated 18-6-2001). Keeping in view the peculiar circumstances of the case particularly the fact that in exactly the same situation (vide GD bearing No. 1-HC-745274- 210808) no penal action had been taken against the importer, I am of the considered opinion that the ends of justice would be met if the goods are treated/assessed as England origin and the penal action taken is waived. I, therefore, order to remit the redemption fine and the penalty imposed on the goods and the appellant respectively. The impugned order is modified to the aforesaid extent only and the appeal is disposed of accordingly."
(3) The statement of appellant is undoubtedly irrelevant who denies that "an unlawful practice cannot override the law"? As a matter of fact appellant is trying to fill up the gape of "memo. Of appeal" with irrelevant statements and twisting the facts of the case.
(4) The appellant is mis-leading the members of Honorable Appellant Tribunal through incorrect statement. The appellant has made the following statement:-- "in terms of section 193 of the Customs Act, 1969, the respondent importer's appeal was not maintainable as the appeal was filed after 30 days from the date of assessment. It is an admitted fact that neither there was any application for the condonation of delay nor any order was made by the learned Collector (Appeals) on pointation of this legal point. It is respectfully submitted that there is settled law that aspect of limitation cannot be ignored or even cannot be condoned unless an importer/person is not come up with strong cogent reasons and explanation for each day of the delayed period. Therefore, even without touching the merits the respondent importers appeal was not maintainable, as such the impugned order was , passed without jurisdiction, therefore, liable to be set aside on this account alone. It is well settled law that if the basic order is incorrect and liable to be set aside then the super structure resting thereon automatically falls away .
Reference may, in this regard, be made to Atta-urRahman v. Sardar Umar Farooq and others PLD 2008 SC 663 and Yousuf All v. Muhammad Aslam Zia and others PLD 1958 SC 104."
The above statement is incorrect rather it is false statement. It is pointed out that the GD/CRN I- HC-1543220 was filed on 20-9-2010, show cause notice was issued on 1-10-2010, Order in-Original No.41026 of 2010 was passed on 12-10-2010 which was transmitted to the importer on 13-10-2010 and appeal against the said order-in-original was filed before Collector (Appeals) within seven days on 20-10-2010 whereas the appeal against this order could be filed within 30 days from the date of receipt of order-in-original. The contention of appellant that appeal was time barred is not only incorrect but also misleading and misguiding the Honorable Members of Tribunal. Written evidence will be produced at the time of hearing.
7. I have examined the case record and given due consideration to the oral submissions made by the rival parties. The appellant has contended that respondent No.2 has erred in his decision to remit the fine and penalty as much as holding the impugned goods to be of Chinese origin but to be assessed on the values of identical goods of English or Italian origin. Evidently from record, there is no doubt that goods have been imported from China and certificate of origin to this effect has been produced before the respondent No. 2 during the hearing proceedings which has been relied upon. As per practice in vague in Trade and Industrial manufacturing, goods are manufactured in other countries by international brands through franchise licenses and their value is taken at par with the brand owing countries and are considered to be same. Similarly in this case, the impugned goods have been produced in China but have been subjected to be assessed on values at par with English Textiles product. No where the element of mens rea has been established. The arguments placed before this forum are the reiteration of the same advanced before the respondent No.2 who has considered them and clearly discussed in his judgment. No fresh substantive argument has made in support of appellant claim. In view of above, I find the order of the respondent No.2 correct in law and therefore does not warrant any interference in it. This being so, appeal is disallowed. No order as to cost. .