' MRS. IRSHAD QAISER, J.---This appeal filed under section 96 of the Customs Act, 1969 is directed against the order of Customs, Excise and Sales Tax Appellate Tribunal, Peshawar Bench dated 22- 6-2002.
2. Feeling aggrieved appellant Messrs Kaghan Ghee Mills (Pvt.) Limited, Bilour Plaza Saddar Road, Peshawar, through instant appeal prayed for the determination of the following questions of law:--
(i) Whether under the circumstances of the case and in light of the High Court, judgment penalty of Rs,5,00,000 under clauses 57, 58, 59, 60, 62 and 90 of section 156(1) of the Customs Act, 1969 is not ultra vires?
(ii) Whether under the circumstances of the case where at the time of ex-bonding and issuance of Show Cause Notice the C&F price of the RBD Palm Oil was reduced substantially, however, the appellant's goods were assessed on a high C&F price @ US$ 633 per M.Tones whereas International Market the C&F price of RBD Palm Oil was US$ 290 to 340 per M.Tons, the valuation carried out by respondent-I is in violation of section 30 of the Customs Act, 1969, discriminatory, attracts the provisions of Articles 4 and 25 of the Constitution of the Islamic Republic of Pakistan 1973.
(iii) Whether under the circumstances of the case, the appellant alleged liabilities have not been inflated for not taken into consideration the exemption available under S.R.O. 328(1)/95 dated 19-4- 1995 read with S.R.O. 108(1)/95 dated 12-2-1995, to the 7% of the each consignment be exempted from the whole of the Customs duties and Sales Tax leviable thereon.
(iv) Whether impugned order of imposition of penalties is not against the well settled principle of law that the proceedings for imposition of fine and penalties are criminal in nature, under the circumstances of the case, the respondent has succeeded in discharging the onus of proof to the standard as required in criminal cases to sustain the order of imposition of penalty.
3. The brief facts leading to the appeal are that the Superintendent, Custom and Central Excise Gadoon visited the premises of Messrs Kaghan Ghee Mills (Pvt.) Limited, Gadoon and found that the lock applied to the bonded tank was removed along with the chain to which it was affixed from the valve of the bonded tank. Stock taking was got conducted and it transpired that the said. Mill had imported 395.312 tonnes of RBD palm oil and had transported the same from Karachi to their private Bonded Ware house in Gadoon according to Bond bills of Entry No, SE: 346/ 35/90/99 dated 11-3-1999 and No, St. 347/35/90/99 dated 11-3-1999. However only 181.430 tonnes (as against the aforesaid into bond Bill of Entry No, ST. 346) and 199.095 tones (as against the aforesaid into-bond Bill of Entry No, St. 347) were received and in bonded on 28-4-1999 and 12-6-1999, respectively..
Later, the mill cleared 1.50 tonnes on payment of duty and taxes vide ex-bond bills of entry No,1537/24/ KGM/99 dated 20-5-1999 and No, 1576/26/KMG/99 dated 28-5-1999 as against un- bonded quantity of 199.095 tonnes of the aforesaid into bond Bill of Entry No, St.
347. Thus a quantity of 49.095 tonnes (relating to the aforesaid into bond Bill of Entry No, St. 347) and 181.430 tonnes (relating to the aforesaid into bond B.E. No, St. 346) were found short being not in the bonded tanks of the warehouse. On inquiry, the General Manager of Messrs Kaghan Ghee Mills (Pvt.) Limited admitted removal of the said 230.525 (49.095 and 181.43C) tones of the ware house R.B.D. Palm oil from the said warehouse without payment of duty and allied taxes. The Collector of Customs, Peshawar accordingly, issued notice, C. No, Coll/ADJ/24/990/7944 dated 25- 8-1999 requiring Messrs Kaghan Ghee Mills (Pvt.) Limited to show cause why the evaded amount of Rs,4,313,686 (Rs, 2,489,670 as Customs duty, Rs,1,575,521, as Sales Tax, Rs,236,969 as 2% withholding tax and Rs,11,526 as regulatory duty) should not be recovered from them on the 230.525 tonnes of RBD palm oil warehoused which was unlawfully removed from there and also why penal action under clauses 54, 58, 59, 61 and 62 of section 156(1) of the Customs Act, 1969, should not be taken against them for the breach of sections 18, 93, 97, 98, 104, 107, 111, 114 and 117 thereof.
4. During the course of proceeding before Customs Collector accused company had also deposited the duty and taxes leyiable on 200 tonnes of RBD palm oil and while the duty and taxes on the remaining 30.525 tonnes of RBD palm oil was still outstanding. After hearing the parties, the Collector upon adjudication to the case, imposed penalty of Rs,10,00,000. On appeal, the appellate Tribunal reduced the penalty to Rs, 5,00,000 through the impugned order dated 22-6-2002.
Aggrieved the appellant filed instant appeal against the order of the Appellate Tribunal.
5. Mr. Isaas Ali Qazi, advocate pleaded the case of the appellant while Mr. Tasleem Hussain, advocate defended the impugned order. Learned counsel for the appellant contended that the penalty imposed by the Tribunal is harsh and illegal and not applicable to the facts of the case.
That the irregularity, if any, committed by the appellant, the correct section of customs Act applicable to the case of appellant is section 156(1) clause 62 where the penalty is not exceeding Rs,25000 and that section 156(1) clause 90, as claimed by the Customs department is not applicable where heavy penalty has to be imposed.
6. Learned counsel for the respondent defending the impugned order contended that the appellant had clandestinely removed the material from bonded ware house without payment of duties and taxes,, therefore, provisions of section 90 to section 158(1) of Customs Act were applicable where under penalty equal to 10 times of the value of goods could be imposed, which if calculated would come to much higher amount but the Appellate Tribunal took a lenient view and reduced the penalty to Rs,5,00,000.
7. The substantive controversy that requires to be resolved is as to which of the clauses of 62 and 90 of section 156(1) of Customs Act would be applicable to the facts and circumstances of the case. Thus to appreciate the point in issue properly, relevant clauses of clauses 62 and 90 of section 156(1) of the Act are reproduced for facility of ready reference:-- OFFENCES. PENALTIES. SECTION OF THIS ACT TO WHICH OFFENCE HAS REFERENCE
62. If any person illegally taken any good out of any warehouse without payment of duty, or aids, assists or is otherwise concerned therein.Such person shall be liable to a penalty not exceeding twenty five thousand rupees and upon conviction by a Special Judge, he shall further be liable to imprisonment for a term not exceeding five years, or to fine, or to both.Chapter XI
90. If any person, without lawful excuse, the proof of which shall be on such person, acquires possession of or is in any way concerned in carrying, removing, de-positing, harboring, keeping or concealing or in any manner dealing with any goods, not being goods referred to in clause 89, which have been unlawfully removed from a warehouse or which are chargeable with a duty which has not been paid, or with respect to the importation or exportation of which there is a reasonableSuch goods shall be liable to confiscation; and any person concerned shall also be liable to penalty not exceeding ten times the value of the goods.General suspicion that any prohibition or restriction for the time being in force under or by virtue of this Act has been contravened, or if any person is in relation to any such goods, in any way without lawful excuse, the proof of which shall be on such person, concerned in any fraudulent evasion or attempt at evasion or any duty chargeable thereon, or of any such prohibition or restriction as afore-said or of any provision of this Act applicable to these goods.
8. From the record it reveals that Messrs Kaghan Ghee Mills (Pvt.) Limited have admitted to have illegality removed the RBD palm oil from the Bonded warehouse in a clandestine manner without payment of duties and taxes and in token of such admission they have also deposited principal amount of the duty and taxes so avoid by them. The Collector Customs vide order dated 15-12-1999 imposed the penalty of Rs,10,00,000 under sections 156(1), (10-A), 58, 59 and 62 of the Customs Act, 1969 r/w section 33 of Sales Act, 1990 and Tribunal reduced it to Rs,5,00,000. In the similar circumstances involving the identical issue, this Court in case Messrs Paper International Limited Aman Garh, G.T.Road, Nowshera v. Collector of Customs Peshawar (F.A.O. No, 91 of 2000) accepted the appeal vide order dated 12-12-2011 and has held that appellant was liable to under sections 156(1), 62 of the Customs Act, 1969 where the maximum penalty upto Rs,25000 could be imposed.
This order was assailed by Customs Authority before the august Supreme Court of Pakistan in C.P.
No, 173 of 2002 which was dismissed vide order dated 16-8-2006. For assistance it would be proper to reproduce the relevant para of the judgment which is as under:- "A plain reading of two clauses juxtaposed, would indicate without difficulty to comprehension or interpretation that to the circumstances of the present case, it is clause 62 of the section that applies and not clause 90. It clearly provides that the penalty shall not exceed rupees twenty-five thousand and the person concerned can also be tried by the Special Judge, Customs. If found guilty he shall be liable to imprisonment for a term not exceeding five years or fine or to both."
9. Consequent to above discussion, we hold that the appellant was liable to penalty under sections 156(1), 62 of the Customs Act, 1969 where under maximum penalty upto Rs,25000 could be imposed. Therefore, we allow this appeal, set aside the impugned order and direct the competent forum to do the needful in term of the finding of this Court.