ABDUL JABBAR QURESHI (MEMBER JUDIC1AL). By this order, I decide and dispose of Customs Appeals bearing Nos.K-798/2022 and K-807/2022 filed by the Appellants arising from Order-in- Appeal No. 1190/2022 dated 22-02-2022 passed by the Collector, Collectorate of Customs (Appeals), Karachi under Section 193 of the Customs Act, 1969. These appeals have identical issues on law and facts, therefore, being heard, dealt with and disposed of simultaneously through this common order in the light of the judgment of the Honorable High Court of Sindh in Customs Reference No.157 of 2008, S.M. Naqi son of Syed Muhammad Hussain, Karachi v. Collector of Customs (Adj-1) and others.
2. Brief facts as per case record are that the MCCA&F (East), Karachi vide its contravention report dated 21-11-2020 alleged that post import clearance of PRAL (WeBOC) data reveals that the GDs bearing No. KAPE-HC-110119 dated 18-01-2020 and KAPE-HC-118112 dated 30-01-2020 declared to contain "Mechanical Paper" made by recycled pulp in reels imported from Japan and the same was classified by the Importer M/s Barry Industries (Pvt.) Ltd., Karachi under PCT Heading 4802.6100 which classify uncoated paper and paperboard in rolls contained more than 10% by weight of the total fiber content consists of fibers obtained by mechanical or chemi-mechanical process. The goods were got cleared on declared invoice values of US$ 0.58 and 0.625/Kg respectively by way of misdeclaration instead to be assessed Q US$ 0.76/Kg determined under section 25A of the Act, 1969 vide Valuation Ruling No.1428/2019 dated 19-11-2019. The Importer/Clearing Agent by way of deliberate misdeclaration of actual, physical description of goods the provision of subsection (2) of Section 25A of the Customs Act, 1969 was violated while assessment of imported goods under which applicable Valuation Ruling No.1428/2019 dated 19-11-2019 was not applied for the purpose to evade duty and taxes amounting to Rs.951,510/-. Allegedly, it has been proved that M/s Barry Industries (Pvt.) Ltd., Karachi committed an offence of deliberate evasion of revenue as defined under section 32 of the Customs Act, 1969, accordingly, called upon to show-cause under sections 32(1), 32(2), 32(A) and 79(1) of the Customs Act, 1969 read with Section 33 of the Sales Tax Act, 1990 and Section 148 of Income Tax Ordinance, 2001 for recovery and penal action under clauses (14), (14A) and (45) of Section 156(1) of the Customs Act, 1969, clause 11(c) of Section 33 of the Sales Tax Act, 1990 and Section 148 of the Income Tax Ordinance, 2001 read with Rule 101 of the Customs Rules, 2001.
3. The case was adjudicated by the learned Deputy Collector, Collectorate of Customs (Adjudication-II), Karachi and an Order-in-Original No.228 of 2020-21 dated 15-06-2021 was passed under section 179 of the Customs Act, 1969 vacating the show-cause notice issued to the Importer M/s Barry Industries (Pvt.) Ltd., Karachi. The Appellant Messrs Salman Paper Products (Pvt.) Ltd., Karachi importing identical goods being assessed by the Respondent Department under Valuation Rulings No.1428/2019 dated 19-11-2019 and No.1532/2021 dated 27-05-2021 respectively aggrieved by the order dated 15-06-2021 preferred an appeal to the Collector of Customs (Appeals), Karachi under section 193 of the Customs Act, 1969 arising from the Order-in-Original dated 15-06-2021 which Was rejected vide Order-in-Appeal No.1190/2022 dated 22-02-2022. The Appellants M/s Salman Paper Products (Pvt.) Ltd. Karachi and M/s Barry Industries (Pvt.) Ltd., Karachi being importers of impugned goods of identical nature classified under PCT heading 4802.6100 aggrieved with the Order-in-Appeal dated 22-02-2022 have challenged the same by preferring these appeals on grounds as stated in their memorandum of appeals who prayed to set aside the Order in-Appeal.
4. The Respondent Department filed para-wise comments through Assistant Collector of Customs, Collectorate of Customs Appraisement (East), Karachi which have been taken on record, copy supplied to Counsel of the Appellants to go through the same. In the para-wise comments the Respondent Department also aggrieved with the impugned Order-in-Original and Order-in- Appeal which have been opposed by the Respondent Department who prayed to allow the appeal and vacation of impugned orders. The Counsel of the Appellant M/s Salman Paper Products (Pvt.)
Ltd., Karachi who is also Respondent No.3 in Customs Appeal No.K-807/2022 reiterated the grounds of appeal and contended that all parties including Respondent Department are aggrieved with the impugned Order-in-Appeal confirming the Order-in-Original which have not been defended by anyone. The Counsel further contended that description of impugned goods being "uncoated offset paper for writing, printing and photocopy" is not disputed having contained more than 10% by weight of total fiber content consists of fiber obtained by a mechanical or chemi-mechanical process, hence, classifiable in fifth single dash (-) heading of 48.02. The Counsel also contended that the customs values of these goods were pre-determined under section 25A of the Customs Act, 1969 vide Valuation Ruling No.1428/2019 dated 19-11-2019 which were applicable customs values for assessm ent of these goods under section 79 and 80 of the Customs Act, 1969 in compliance of subsection (2) of Section 25A of the. Customs Act, 1969 having overriding effect on Section 25 of the Customs Act, 1969. The Counsel also contended that the Importer M/s Barry Industries (Pvt.) Ltd. itself classified the impugned goods under PCT heading 4802.6100 by treating the same as uncoated offset paper for writing, printing and photocopy having contained more than 10% by weight of total fiber content consists of fibers obtained by a mechanical or chemi- mechanical process, but, deliberately misdeclaration of description of goods was made purposely to make an excuse of violation of subsection (2) of Section 25A of the Customs Act, 1969 under which assessm ent of impugned goods were to be made on customs values of impugned goods pre-determined under subsection (1) of Section 25A of the Customs Act, 1909. The Counsel contended that impugned Order-in-Original and Order-in-Appeal are discriminatory, illegal and not sustainable and prayed to be set aside. The other Appellant M/s Barry Industries (Pvt.) Ltd. being Importer of impugned goods in its appeal also aggrieved with the impugned Order-in- Appeal confirming the Order-in-Original and prayed to set aside the same in its prayer. On the other hand, the Departmental Representative while reiterating the para-wise comments has supported the contentions and arguments of the Counsel of the Appellant M/s Salman Paper Products (Pvt.) Ltd. who prayed to allow the appeal(s) and vacation of impugned Order-in-Appeal and Order-in-Original.
5. I have heard the arguments and contentions of all parties and examined and perused the facts of the case and record, grounds of appeals and parawise comments of the Respondent Department and considered the case laws/judgments relied upon by the Counsel of the Appellant(s). It has been observed that both Appellants and the Respondent Department are aggrieved with the impugned Order-in-Appeal passed under section 193-A(3) of the Customs Act, 1969 confirming the Order-in-Original. It is found that Order-in-Original confirmed by the Collector (Appeals), Karachi in the impugned Order-in-Appeal has neither been defended nor supported by the Respondent Department in its parawise comments and arguments, wherein, the findings of both the Authorities below given in the hierarchy of the Department have been opposed and the instant appeals prayed to be allowed and vacation of impugned orders has also been prayed.
6. The case record shows that PCT heading 4802.6100 classify such goods, which contain more than 10% by weight of total fiber content consists of fibers obtained by a mechanical or chemi- mechanical process. The goods having aforesaid contents called "Uncoated Offset Paper" which is manufactured from wood pulp obtained from trees and to eliminate lignin from pulp fibers it undergone chemical process. The Importer M/s Barry Industries (Pvt.) Ltd. and other parties doesn't disputed classification of imported goods under PCT heading 4802.6100 as per its contents the customs values of which were determined under section 25-A(1) of the Customs Act, 1969 vide Valuation Ruling No.1428/2019 dated 19-11-2019 during the relevant period. Under the provision of Section 25-A(2) of the Customs Act, 1969 the customs values determined under section 25-A(1) of the Customs Act, 1969 shall be the applicable customs values for assessment of such imported goods. I have observed that no valid reason has been given in the impugned orders to justify the violation of section 25-A(2) of the Customs Act, 1969 in presence of undisputed fact that impugned goods called "Uncoated Offset Paper for writing, printing and photocopy" is classifiable in PCT heading 4802.6100 on fulfilment of condition of containing more than 10% by weight of total fiber content consists of fibers obtained by a mechanical or chemi-mechanical process. The Customs tariff classify goods according to their contents and specifications etc, but in this case it has been observed that while passing impugned orders such important facts and elements have been not considered under which the case of the Department of violation of section 25-A(2) of the Customs Act, 1969 and evasion of alleged duty and taxes Rs 951,510/- while making declarations and assessm ents has been found established.
7. It is also observed that the Respondent Department has neither confronted the facts of the Case of the Appellant M/s Salman Paper Products (Pvt.) Ltd. disclosed at paras Nos.2 and 5 nor controverted the grounds of appeal bearing No. A instead the impugned Order-in-Appeal and Order-in-Original have been opposed and not defended by the Department in its comments and arguments. The locus standi of the above named appellant found established in this case. The judgment relied upon by the Counsel in support of his arguments cited in 2021 MLD 1712 [Nasir Ali v.
Government of Punjab and 3 others) considered to be applicable, wherein, the Honorable Lahore High Court has held that "persons claiming ownership of similar merchandise had a right (locus standi) to contest as to whether such merchandise fall within the definition of such law or not and as such whether the merchandise were liable to be registered under the said law or otherwise".
8. In view of the above fact findings and by following the dictum laid down in the cited judgments I conclude that impugned Order-in-Appeal No. 1190/2022 dated 22.02.2022 and Order-in-Original No.228/2020-21 dated 15-06-2021 are discriminatory, illegal and C arbitrary which are set aside by allowing instant appeals.
9. Order passed accordingly.