SYED SARDAR HUSSAIN SHAH MEMBER (JUDICIAL)/ CHAIRMAN. This appeal filed by Messrs Sapna Enterprises, Peshawar (appellants herein ) is against the Order-in-Original No.29/2017, dated 09.02.2017, passed by the Collector of Customs ( Adjudication ), Islamabad.
2. Brief facts of the case are that according to a contravention case the appellan ts imported 11 consignments of monofilaments yarn and classified the goods in H.S. Code 5404.1900 and claimed exemption of Sales Tax under SRO. 1125(I)/201 1, dated 31.12.201 1 and got cleared A the goods on payment of duty and taxes after availing the benefit of the said SRO. Accordingly , during scrutiny of import data of 2014 and 2015 of Customs Dry port, Peshawar in the WeBoc system, it was pointed out by the Chief Collector (North)'s Office, Islamabad that monofilaments yarn does not qualify for exemption from Sales Tax under SRO. 1125(1)/201 1, dated 31.12.201 1, as provided in column-2 of Table-I of the said SRO. Hence, the appellants were charged for violation of Sections 3 and 6 of the Sales Tax Act, Section 148 of the Income Tax Ordinance, 2001, Section 32(3A) of the Customs Act, 1969 and SRO.1 125(1)/201 1, dated 31.12.201 1 and a Contravention Report No.31/2016, dated 27.01.2016 was submitted for adjudication under Section 33 of the Sales Tax Act, 1990, Section 156(1)(14) of the Customs Act, 1969 and Clause (f) of SRO.499(1)/2009, dated 13.06.2009 for violation of the aforesaid provisions of law .
3. Subsequently , after completion of the requisite formalities, the matter was placed before the learned Collector of Customs (Adjudication ), Islamabad, who vide Order-in-Original No.29 of 2017, B dated 09.02.2017, ordered the appellants to pay the short paid amount of Rs.9,225,047/- under Sections 3 and 6 of the Sales Tax Act, 1990 and Section 148 of the Income Tax Ordinance, 2001. He also imposed a penalty of Rs.500,000/- (rupees five hundred thousand ) upon the appellants under Section 156(1)(14) of the Customs Act, 1969 and Section 33 of the Sales Tax Act, 1990. Hence, the present appeal filed by the appellants to this Tribunal.
4. The Appellant has assailed the impugned order mainly on the ground that the appellant had not concealed the attributes of the impugned consignments. Arguments heard. Record perused. We have gone through the merits of the case. The appellants imported the 11 consignments of monofilament/nylon thread, which were examined by the appraisers/ examiners at dry-port and were found according to the declaration falling under PCT heading 5402, but later on the dry-port authorities changed the PCT Heading to 5404 and exemption under SRO.1 125(I)/201 1, dated 31.12.201 1 was allowed. Subsequently the data was checked in the WeBoc system and it was pointed out by the Chief Collector (North), Islamabad that monofilament yarn/thread did not qualify for exemption of sales tax under SRO.1 125(1)/201 1, dated 31.12.201 1. The importers contested the veracity of the observation of the customs authorities regarding the description and classification of the goods that decitex was neither mentioned in the GD nor the same had been ascertained by the customs authorities. It is pertinent to mention the relevant entry of SRO.
1125(1)/201 1 given at Sr .2 of the Table (I) of said SRO reads as follows: S.NoDescription of goods PCT heading No.
02. Textile and articles thereof excluding monofilament, sun shading, nylon fishing net, other fishing net, rope of polyethylene and rope of nylon, tyre cord fabric.Chapter 50 to Chapter 63 and other respective headings excluding 5407.2000, 5608.1100, 5608.1900, 5608.9000.
Likewise to relevant entries of PCT headings 54.02and 54.04 are given:
(a) 54.02 54.02 Synthetic filament yarn (other than sewing thread), not put up retail sale, including synthetic monofilament of less than 67 decitex. High tenacity yarn of nylon or other polyamides 5402.1100 -- Of aramids 5402.1900 -- Other 5402.2000 - High tenacity yarn of polyesters Textured yarn 5402.3100 - Of nylon or other polyamides, measuring per single yarn not more than 50 tex (a) 54.04 54.04 Synthetic monofilament of 67 decitex or more and of which not cross-sectional dimension exceeds 1 mm; strip and the like (for example, artificial straw) of synthetic textile materials of an apparent width not exceeding 5mm. - Monofilament 5404.1100 -- Elastomeric 5404.1200 --Other, of polypropylene 5404.1900 --Other The record shows that the Dry port authorities did not spell out "decitex " in the examination report at the time of assessment with respect to the impugne d GDs. The record also shows absence of any lab report at the time of processing/clearance of the said GDs. However during the course of subsequent scrutiny and investigation, another consignment of the importers were got tested by the customs authorities through PCSIR . Based on the test by PCSIR , it was reported that the decitex in that particular consignment was 8.41, hence the correct classification of the goods was 5402 and had been declared by the importers in these cases: This very position was communicated by the dry-port authorities to the Collectorate of Customs, Peshawar vide letter C.No.Cus(DP)
Inadmissible benefit/54/2016/21 18, dated 08.01.2016. The Departmental Representative (DR) did not deny the veracity of the said letter .
5. It is evident that the case had been made out on mere conjecture. The evidence produced by the department confirms the stance of the appellants. The said stance was further augmented by the report referred to above of the dry-port authorities. In absence of any lab report to the contrary , it is also evident that the impugned goods are not hit by the exclusion under clause (b) of Table-1 of SRO. 1 125(1)/201 1, dated 31.12.201 1.
6. For the foregoing reasons, we accept the instant appeal and set aside the impu gned Order-in-Original No.29 of 2017, dated 09.02.2017, passed by the learned Collector of Customs (Adjudication ), Islamabad. The appeal is disposed of accordingly .