DR. ZULFIQAR A. MALIK, MEMBER (TECHNICAL-I).---This appeal has been directed against Order-in- Appeal No. 6124/2012 dated 05.06.2012, passed by the Collector of Customs (Appeals), Karachi.
2. Brief facts of the case as stated in the impugned order are that, the appellants electronically filed Goods Declaration declared to contain Computer UPS under HS Code 8504.4090, at total invoice value US$ 23000/-.
They determined his tax liability on his own 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 me aforesaid GD was selected for scrutiny in terms of section 80 of the Act. Scrutiny of the Goods Declaration in the light of examination report revealed that appellant had declared item as Computer UPS under HS Code 8504.4090 chargeable to Customs Duty 10% ad.val. However, on examination the goods had been identified as "The goods are Line Interactive UPS, Capacity 650VA (390 Watts), Mfg yr-NS, Type...Line interactive, Brand Mercury, Model No. Elite 650 Pro, Origin China, Qty 1100 Units correctly classifiable under PCT 8504.4010 attracting customs duty @ 20% ad.val. in addition to above, it is further noticed that scrutiny of the Goods Declaration in the light of examination report revealed that the appellant had imported a number of undeclared goods/items. It is pertinent to mention that in PaCCS while filing the GD, it is mandatory for the appellant to fill the correct relevant information/data but the appellant deliberately concealed the required information in this automated environment just to avoid to roper valuation and application of correct rate of customs duty and avoid payment of Regulatory duty. The appellant was accordingly charged under the relevant provisions of law for deliberately mis-declared the specification/classification and description of the goods and have attempted to defrauding the Government from its legitimate revenue amounting to Rs.2,210,508/- and the adjudicating officer held that the charges against the appellant had been proved.
3. Aggrieved of the Order-in-Original No.84775/2011 dated 18.10.2011, the appellant filed appeal before Collector of Customs (Appeals), Karachi, who Order-in-Appeal No. 6124/2012 dated 05.06.2012, and modified the Order-in-Original, and remitted redemption fine imposed upon the appellants. Aggrieved of the Order-in- Appeal the Collector of Customs, MCC of PaCCS, Karachi filed the instant appeal before this Tribunal. Hence the instant appeal.
4. The Department filed an appeal before this Appellate Tribunal on 28.08.2012 against the Order-in-Appeal passed by Collector (Appeals) on 05.06.2012. In terms of Section 194(3), an appeal in the Tribunal is required to be filed within 60 days. As such appeal was barred by time. The appellant moved an application under section 151 of C.P.C. read with subsection (5) of Section 194-A of the Customs Act, 1969. After hearing both the parties the Tribunal Vide orders dated 19.09.2013 condoned the delay and admitted the appeal of the Department for regular hearing.
5. The appellant in their memo. of appeal and verbal hearing mainly emphasized that: i. The respondents had concealed the specification of the imported goods. They declared the description 'Computer UPS' whereas the goods on examination were found to be 'Live interactive UPS' Capacity 650 VA (390 Watts) 1100 PCS. Blend Mercury model No. Elite 650 Pro'. It may be mentioned that PCT heading 8504.4010 covers UPS of power rating upto 1.5 KVA where as all other UPS of capacity higher than 1.5 KVA are classifiable u/h 8504.4090 attracting lower rate of duty. The respondents had concealed the specification and attempted to evade proper valuation and release of goods in a heading attracting lower rate of duty meant for UPS of power rating exceeding 1.5 KVA. ii. On physical examination by the Customs Examination Staff the goods were found to be "Line interactive UPS capacity 650 VA (390 Watts), Mfg yr-NS, -`TypeLine Interactive, Brand Mercury Model No. Elite 650 Pro Origin China Qty 1100". In addition undeclared UPS and spare parts i.e. Line Interactive USP, Capacity 1200 VA (720 Watts), Mfg yr-NS, TypeLine Interactive, Brand Mercury, Model No.E lite 1200 pro, Origin China, Qty 100 Units, sealed lead acid battery, 7.5 Ah 15 PCS, printed circuit boards quantity 24 PCS and transformer quantity 25 PCS were also found in the consignment. iii. The value of the Line interactive UPS Capacity 650 VA (390) Watts 1100 Pcs, Line Interactive USP, Capacity 1200 VA (720 Watts) 100 pcs and other un-declared parts was determined at Rs.4,913,132/-. iv. The respondents had deliberately mis-declared physical description / specification, PCT classification and imported undeclared parts and attempted to evade Revenue amounting to Rs.2210508/- under the self assessment system of WeBOC. vi. During the course of Adjudication, the representative of the importers admitted the above position, accepted classification under heading 8504.4010 and stated that shipper had stuffed the goods other than the agreed specification. The adjudicating officers had rightly confiscated the goods in terms of subsections (14) and (14A) of Section- 56(1) of the Customs Act, 1969 and allowed their (sic)?? vii. That Collector (Appeals) finding that the respondents had filed GD in a wrong heading in-advertently and hence elements of mens-rea is absent is unsubstantiated: neither the description / specification of the goods had been correctly declared nor the correct PCT heading was declared. The order of the Collector (Appeals) to retain a personal penalty signifies that he too was convinced of the offence committed by the appellants. Inspite of this, the Collector (Appeals) remitted the redemption fine which is not only against the provisions of SRO 499(1)/2009 but also discriminatory as in all such violations the goods are only released on payment of redemption line under section 181 of the Customs Act, 1969. vii. The honorable Supreme Court vide orders dated 10.11.2003 passed in the Civil Appeal No. 775-K of 2003 that merit of the case should not be scrapped on sheer technicalities.
8. In view of the foregoing, the appellant requested for setting aside the impugned Order-in-Appeal.
9. The respondents, inter alia, contended: i. They have mistakenly declared PCT heading 8504.4090 whereas they have no intention to evade revenues. ii. The excess goods found are in fact gift items which the supplier has sent without their knowledge. iii. Accordingly, to them Collector (Appeals) has rightly allowed released of the goods without redemption fine as element of mens rea was absent.
10. The matter was heard by Bench-II of this tribunal comprising Member Judicial-II Karachi and Member Technical, Islamabad on 25.08.2014. Both the Hon'ble Members passed conflicting judgement therefore matter was referred to Hon'ble Chairman for appropriate action under subsection (5) of section 194-C of Customs Act, 1969, on 17-10-2014. Accordingly the Chairman entrusted this case to Bench-I. Later on 05.10.2015, the appeal was dismissed on account of non-prosecution. The appeal was restored on 05.04.2016 at the request of the appellants. The case kept pending for various reasons such as Bench being non-functional, repeated adjournments and non-appearance by either party on number of dates. The matter was finally heard on 05.03.2019 and the appeal was dismissed. Detailed order is as follows.
11. The facts of the case have been recorded above. The importer has declared the classification of goods under heading 8504.4090 of first Schedule to Customs Act, 1969, whereas the appellants hold the classification as 8504.4010 and the importer has been charged for evasion of duty/taxes by avoiding proper valuation, correct rate of duty and payment of regulatory duty, total of which comes to Rs.2210508/- and offending goods are valued at Rs.4913132/-. The same charges were upheld by the learned adjudicating authority at original stage.
The matter came up in appeal before learned Collector Appeals. The learned Collector upheld the classification as determined by the present appellants, however, since the impugned goods have multiple use, the learned Collector reached a conclusion that it was an inadvertent error a not a wilful misdeclaration. The importer was absolved of mens-rea; redemption fine was remitted and a reduced penalty was imposed. The appellant department has approached this forum for restoration of fine.
12. Perusal of record and arguments of both sides show that there is no doubt that the declared classification attracted lower rate of duty as compared to ascertained classification, however the importer has been contending since the original stage that it was a bona fide error. The learned adjudicating authority did not examine this contention and went on to pass order in mechanical fashion. The Collector, (Appeals) held that it was an error and not wilful misdeclaration. The appellant department has not added any evidence to substantiate that it was wilful fault and deliberate misdeclaration. The department's desire to levy fine in the absence of incriminating evidence cannot be entertained. We, therefore, concur with the findings of the learned Collector (Appeals). The appellant department has failed to come up with cogent reasons to interfere with the orders of Collector (Appeals). The appeal being devoid of merit is dismissed.
13. Judgement passed and announced accordingly.