SHAKEEL AHMED ABBASI, MEMBER JUDICIAL-III.----By this Judgment, we intend to dispose of above mentioned Customs Appeals tiled by the Appellants against the Order-in-Appeals Nos.70 to 72/2022 dated 28.01.2022 passed by Collector (Appeals), Karachi and Order-in-Original No. 321/2019 dated 15-10-2019 passed by Additional Collector Customs (Adjudication-I), Karachi. Since these appeals invoke identical issues of law and facts. In view of aforementioned position, the same were clubbed, heard together and arc decided through this common order in the light of judgment of the Hon'ble High Court of Sindh in Customs Reference No.157/2008 (S.M. Naqi son of Syed Muhammad Hussain, Karachi v. Collector of Customs (Adjudication-1) and others, Karachi..
2. It is found that out of Four (04) Appeals involve common legal issues hence the facts of Appeal No.K-571/2022 .are discussed in this Judgment as leading case. Brief, facts of the case are that the appellant imported "CHAOYANG Brand Tires and Tubes with Flaps for Dump Truck Off Road Use" under PCT heading 4011.8000 chargeable to Custom Duty 11% Sales Tax @ 17%, Additional Sales Tax 3% Income Tax 6% and Additional Customs Duty 2%. The respondent Collectorate change the PCT heading 4011 2091 chargeable to Customs Duty 3% and Regulatory Duty 35%,
3. The Appellant challenged the assessment before the Collector (Appeals) (Respondent No.1) under Section 193 of the Customs Act, 1969. However, Respondent No.1 rejected the appeal by upholding the assessm ent through impugned Order-in-Appeal in the following terms: - ........................................ In view of above, undersigned is of the opinion that appeal does not carry any merit and all the objections made against the assessment are unfounded and without any legal basis. The appeal is hence therefore rejected. This order shall apply mutatis mutandis to another appeal bearing No. Cus/3828/2019 (Ms. Main Shafiq Business. INTL) and Appeal No. Cus/3829/2019 (M/s. Shafiq Sons) re-assessm ent order dated 03-12-2019 and 02-12-2019, involving the same facts, circumstances and the points of law.
4. Being aggrieved by and dissatisfied with the impugned Order, the appellant preferred this appeal on the following grounds:- A. That the impugned order is ab-initio illegal, ex-party in nature, and with wrong/absurd interpretation of the case, hence, liable to be set aside forthwith. Facts of the case in the light of literature; catalogue which clearly proving that the imported tyres were meant for On/Ort use but this contention was not considered. The superior courts in their several judgements have held mat no one can be deprived from his basic night of being unheard.
B. That the appellate authority (Respondent Nos.1) and 3 also fail to understand) that the Respondent department is not empower to conduct Post Clearance Audit the jurisdiction rests with the Director General Audit in terms of Notification No.SRO 5000/2000 dated 13.06.2000. As such the assessm ent was passed in all the subject cases exclusively clouded and tans under the strict doubts specifically when on completion of transaction and assessment a under provisions of Section 80 and out of charged under Section 83 of the Customs Act, 1969 by following the Rules 450 and 442 of the Customs Rules, 2001, the re-assessment so made under the said provisions of law is appealable under the provisions of Section 193 of the Customs Act, 1969. In spite of doing so the department caused and created the circumstances in the favour without any lawful support and warrant. The department working under legal framework envisaged under the Customs Act, 1969 and Rules flamed there under as such according to the understanding officers of the customs and affiliates working under statutory laws are not supposed to be considered that they are ignorant from the statutory obligations Action taken by the respondent against appellants is without any warrant of law nul and void and held in the reported judgment Mahor syed walayat Shah v.
Muzaffar Khan and 2 others (PLD 1971 SC 184) Omer & Company v. Controller of Customs (Valuation) (1992 ALD 499 Pak Suzuki Motors Company Ltd. Karachi v. Collector of Sales Tax and Central Excise Collectorate of Sales Tax (2004 PTD 624).
C. That Respondent No.1 failed to consider that the learned re-assessing authority re-assessed the goods without considering the actual facts of the case. The learned re-assessing authority re- assessed the goods merely on the view point of the department that these tyres are meant for buses and truck. In this regard it is particular to mention here that in the Light of Catalogues/Literature it is very much clear that the imported Titres are Off High way use.
D. That the Respondents Nos.1 and 3 -failed to considered that recently PTIDA (Pakistan Tyres Importer and Dealers Association) vide their letter dated 19.12.2018 address to the Chief Collector of Customs, highlighted the same issue of Classification of Tyre After a detailed meeting with the Chief Collector was, decided that for classification of these tyres for construction and mining the following criteria should be followed:- a) Tyre diameter should be 20 inch or above. b) 5 Rib or 4 Line patterns should be excluded.
It is specifically mentioned -here that on the face of this letter worthy Chief Collector Vide its autographic order categorically issue directions to the Collector (East) for circulation of this criterion for compliance. The same is also reproducing for ease of inference "As a result detailed discussion and follow-up meeting on the issue the criteria given hereunder must be followed Please circulate for compliance to the assessment in case of dispute-referee to the association E. That on ment as per catalogue of Road line products specification for tyres having sizes 1100R20 16PR for off Road use are highlighted. This pattern is categorized in mixed road condition for mid and short distance heavy duty vehicles.
F. That as per manufacturer catalogue of some other brands such as Wellplus, Michelin and Bridgestone, specification of Tyres having sizes 1100R20 16PR are highlighted which clearly confirming that these are meant for off road use as construction and minining. The imported tyres having the same specifications which is an ample proof that these are specifically meant for construction and mining use.
O. That on the basis of above factual position the case of the Appellant is a clear case of lawful assessm ent therefore, re-assessm ent is illegal, arbitrary and without lawful authority.
5. The Departmental Representative filed parawise comments on the following lines:- i. That the contents of Para (A) are also false and baseless, hence vehemently denied. The fact is that the impugned order is very much legal, lawful and is a- well speaking order which is liable to be maintained in the eyes of law. ii. That as regards the contents of para. (B) it is submitted that the answering respondent has the powers and jurisdiction to conduct the post release verification for recovery of any short paid/non paid duty and taxes. The Post Clearance Audit conducts only audit and not post clearance verification and as such in light of the above, the stance of the appellant is absolutely not tenable in the eyes of law. The case laws reported by the appellant have no relevancy with the instant cans and as such the same are liable to be ignored totally. iii. That as regards the contents of Para (C) it is submitted that the learned Collector of Customs (Appeals) has considered all aspects of the case on merits and has come to the conclusion that the department has correctly re-assess the goods as the appellant has failed to provide any kind of catalogue, literature etc of whatsoever nature. iv. That the contents of Para (D) are self explanatory and has no relevancy with the instant case. v. That the contents of Paras (E) and (F) are repetition of previous Paras for which reply has already been given, hence this Para require no further comments. vi. That in light of the submissions made above, the contents of Para (G) arc incorrect, hence denied. The re-assessm ent of the goods is absolutely legal and lawful and the same is liable to be maintained/sustained in the eyes of law. vii. That the contents of Para (II) being formal require no comments. That as regards the contents of Para (1) it is submitted that as and when the appellant submits any further grounds the same will, be contested in accordance with the merits of the case.
6. Arguments were heard at length and case record perused. The subject case pertains to the finalization of PCT heading 4011:8000 or 4011:2001 for a specific size 1100-R18-16PR whether pneumatic tyres of 'libber of this size are meant for used in construction mining, -or Industrial handing Vehicles or machinery or used in light trucks.
Department is of the view that this size is meant for light truck falling under POT heading 4011 2091 whereas the Appellant are of the view that these are usable for construction, mining or industrial handling vehicles or machinery. Clearance Collectorate made these case regarding misdeclaration of PCT heading. During the hearing, the learned counsel for the Appellants submitted a copy of the Orders passed by Division Bench of Bench of this Tribunal wherein the learned Bench decided these identical Appeals bearing Nos. K-1370 to 1374/2019 dated 26-09-2022 with the direction to the Clearance Collectorate to decide this issued keeping in view the all legal aspects in the light of relevant catalogues and of Import Policy Order. All the Appeals filed by the clearance Collectorates were accordingly dismissed. During proceedings' this order was shown to the DRs of both the Collectorate for their comments. Both the DRs, however, requested to pass the order as Hon'ble Tribunal deems fit.
7. Keeping in view the above stated facts and legal position. I do not find any mens rea on part of the present Appellants. Accordingly, I hold that orders passed by the lower forum viz Collector (Appeals) and Adjudicating Authority in all four Appeals are infested with legal infirmities hence are set aside. Clearance Collectorates are directed to finalize the assessment in the light of Manufacturers' Catalogues as well as with accordance of Import Policy Order.
8. All the Appeals are allowed and stand disposed of in above 18 terms with no order as to cost.