Instant Special Customs Reference Application has been filed against the impugned judgment dated 28.08.2018, passed by the Customs Appellate Tribunal. Bench-I, Karachi in Customs Appeal No.K-1027 of 2017. Initially , eight questions were proposed by the applicant/ department, however , when the matter was taken up for hearing at katcha peshi on 22.05.2019 learned counsel for the applicant submitted that the applicant will press questions Nos.
3, 4 and 7 only which, according to the learned counsel for the applicant are the questions of law arising from the impugned judgment passed by the Customs Appellate Tribunal, Bench-I Karachi, which read as follows
1. Whether the provisions of section 27A of the Customs Act, 1969 can be invoked after filing of the goods declaration?
2. Whether the impugned judgment is in conformity with the provisions of section 27A of the Customs Act, 1969 vis- a-vis section 32 of the Act?
3. Whether non-clearance of goods after filing of goods declaration due to examination/verification process shall render such goods "seized" and shall attract the provisions of section 168 of the Customs Act. 1969?
2. Learned counsel for the applicant after having read out the impugned judgment passed by the Customs Appellate Tribunal as well as Order-in-Original No 72534702082017 dated 07.08 2017 in the instant case has submitted that respondent has mis-declared the description of the goods while filing the goods declaration whereafter a Show-Cause Notice was issued whereby the respondent was confronted with the mis-declaration made by the respondent. However , per learned counsel, during the course of assessment, respondent made a request for allowing mutilation and scrap ping of the imported goods in terms of section 27A of the Customs Act, 1969 which was wrongly accepted by the adjudicating officer, as according to the learned counsel such request could have been entertained only before filing of the goods declaration in terms of section 27-A of the Customs Act, 1969, read with rule 593 of the Custo ms Rules, 2001, notified through Notification SRO 250(1)/201 1 dated 16.03.201 1. It has been prayed by the learned counsel for the applicant that the impugned order passed by the Customs Appellate Tribunal may be set aside and the questions proposed through instant reference may be answered in negative in favour of the applicant and against the respondent.
3. Conversely learned counsel for the respondent has vehemently opposed such contention of learned counsel for the applicant and has also raised an objection as to maintainability of the instant. Reference Application on the ground that the impugned order passed by the Customs Appellate Tribunal in the instant case is based on the concurrent findings on facts, whereas, no question of law arises from the judgment of the Customs Appellate Tribunal in the instant case. Learned counsel for respondent has further argued that no mis-declaration was made by the respondent, who has produced all the documents including the purchase agreement/contract in respect of the subject consignment. Whereas, there is no reference either in the Show-Cause Notice nor there is any finding regarding alleged mis-declaration in the Order-in-Original passed by the adjudicatin g officer in the instant case. Per learned counsel, the goods imported by the respondent are admittedly in scrap form, whereas, there was an objection only in respect of steel rerollable bars which as per allegation in the show-cause notice were found oversized, and not within the permissible limit of Import Policy Order . Therefore, according to learned counsel, the respondent, in all fairness, and in order to avoid any evasion of duty and taxes on the imported consignment made a request in terms of section 27-A of the Customs Act, 1969 for mutilation or scrapping of such oversized goods, which request was rightly accepted by the adjudicating officer in the instant case. It has been further contended by the learned counsel for the respondent that contention of the learned counsel for the applicant that request for allowing mutilation and scrapping the oversized scrap could have only been made before filing of the goods declaration, is misconceived in law, for the reason that there is an amendment in section 27A of the Customs Act, 1969 introduced through Finance Act, 2010 whereby , such condition of making a request in terms of section 27A before filing the goods declaration, has been omitted. Therefore according to learned counsel for the respondent the respondent was legally justified to make such request at a subsequent stage, however , before contravention or adjudication, as the case may be. Learned counsel for respondent further argued that the reference to the provisions of rule 593 of the Customs Rules, 2001, in this regard is misconceived for the reason that the Rules do not override the statutory provisions therefore, it has been prayed that the instant Reference Application being misconceived may be dismissed and the questions proposed may be answered in affirmative against the applicant and in favour of the respondent.
4. We have heard the learned counsel for the parties, perused the record and the impugned judgment passed by the Customs Appellate Tribunal as well as the order passed by the adjudicating officer in the instant case. We have also examined the provisions of section 27A of the Customs Act, 1969 (after amendment through the Finance Act, 2010), which reads as follows:-- "27A. Allowing mutilation or scrapping of goods . At the request of the owner the mutilation or scrapping of goods as are notified by the Board, may be allowed in the manner as prescribe d by the rules and where such goods are so mutilated or scrapped they shall be chargeable to duty at such rates as may be applicable to the goods as if they had been imported in the mutilated form or as scrapped."
5. From perusal of herein above provisions of law, it is clear that no time frame has been given to an importer to make the request for mutilation or scrapping of the imported goods. On the contrary, the time A frame which was earlier provided, appears to have been deliberately omitted to avoid unnecessary disputes and litigation in this regard. In this case, Order-in-Original has been passed against the applicant/department wherein it has been recorded that the goods imported by the respondent are substantially rerollable steel bars which according to Customs Authorities were over-sized whereas, are also in the scrap form and have lost tensile strength.
Learned counsel for the applicant has not been able to dispute the fact or position as stated in the Order-in- Original nor could assist the Court as to how the mens rea could be attributed to the respondent by importing scrap having over-sized rerollable steel bars which have admittedly lost tensile strength and cannot be used as scrap for melting purposes.
6. In view of herein above facts and circumstances of the case, we are of the considered opinion that the finding as recorded by the adjudicating officer with regard to the description of the imported consignment, which have been duly affirmed by the Customs Appellate Tribunal, as a finding of fact, whereas, the provisions of section 27A of the Customs Act, 1969 under the facts and circumstances of the instant case have been correctly interpreted and there seems no factual discrepancy or legal error in the impugned judgment passed by the Customs Appellate Tribunal, Bench-I, Karachi in the instant case therefore, we do not find any substance in the instant reference application, which is accordingly dismissed along with listed applications. Consequently the questions proposed herein above are answered in af firmative in favour of the respondents, and against the applicant/ department.