' MUHAMMAD ZAHOORUL HAQ, J.-This petition calls into question the orders made by the respondents Nos. 1 to 3, respectively, dated 26-7-1978, 29-8-1978 and 5-5-1979.
2. The relevant facts are that the petitioner imported Dying Fabric Machine and declared its value as U.S. $ 24,770. The Customs Authorities issued notice to him to show cause as to why he made a misleading statement and as to why a penalty should not be imposed. The petitioner replied that there could be manually operated machine, there could be some automatic machine of the same type and that his machine was not automatic. The Deputy Collector, Customs, held that the machine was of Mark-1-2-Jet Dying Machine. He also came to the conclusion that identical machine of the same model, weight, specification and capacity by the same manufacturer has been supplied at a unit price of U.S$ 58,024. It was also held that the machine was not manually operated. It was held that it was prima facie case of under valuation as it involved loss of revenue.
Personal penalty of Rs,5,00,000 was imposed and a redemption fine of Rs,4,00,000 was also imposed.
3. The petitioner appealed and stated that machine had been offered at & 30,963 with 20% discount. They further stated that Machine imposed by Messrs Sargodha Textile Mills at $ 58,024 was not shown to be identical with that machine and that Sargodha Machine was imported in April, 1977 while the machine of the petitioner was imported in October, 1977 and that there was a decline in Industrial Activities during the intervening period. The petitioner also appended 2 invoices. They are showing value at $ 49,765 for similar machine imported by Star Textile Mills on 15-10-1976 and one imported by Sitara Textile Mills on 1-7-1976 at $ 42,500 cleared by the Customs.
4. The appeal of the appellant was dismissed by the Collector of Customs, who took into consideration the price of machine imported by Sitara Textile Mills on 1-7-1976 and the one imported by Star Textile Mills on 15-10-1976 for $ 49,765 and the one imported for 58,024 by Sargodha Textile Mills on 28-4-1977. And he came to the conclusion that the price were increasing by afflux of time and that the same machine was imported for $42,500 on 1-7-1976 and it was imported for $ 58,024 on 28-4-1977, by Sargodha Textile Millis. There was thus increase in price.
5. However, considering the fine imposed on the appellant to be harsh the personal penalty was reduced to Rs,1,00,000 and redemption fine was reduced to Rs,10,000.
6. The revision filed by the petitioner before the C.B.R. Was dismissed.
7. The petitioner's counsel has submitted that the evidence produced by him in respect of the same machine having been sold at $ 42,500 and $ 49,765 has not been considered. We, however, find that the import of machine by Sitara Textile Mills at $ 42,500 has been considered by the appellate authority. In order to see the impact of the argument of the petitioner's counsel, we would mention the various prices charged for this machine at different time as follows:- ' On 1-7-1976 $ 42,500 charged from Sitara Textile Mills.
' On 15-10-1976 $ 49,765 charged from Star Textile Mills.
' On 28-4-1977 $ 58,024 charged from Sargodha Textile Mills.
' This shows that there has been a price increase for the same machine from $ 42,500 on 1-7-1976, to $ 58,024 on 28-4-1977. While on the other hand, the petitioner alleges to have imported the same machinery at $ 24,770 on 28-12-1977. It appears to us that varying prices charges by the Exporters from different persons have been taken into consideration by the appellate authority, and it has thereafter come to the conclusion that the price of $24,770 alleged to have been paid by the petitioner for the same machinery was a misdeclaration in the price. It appears to us that the Customs Authorities have taken into consideration the relevant material which was before them and they came to the correct conclusion that there was an escalation o price of the same machinery between 1-7-1976 and 28-4-1977 from $42,500 to 58,024 and, therefore, it was correctly inferred by them that is December, 1977, the petitioner could not have imported the same machinery for $ 28,770. The order of the Customs Authorities appeal to be based on relevant material and, therefore, the finding that the price was not correctly declared by the petitioner was correct.
8. Mr.. Zaheer Ahmed Khan, counsel for the petitioner submitted that even if the price determined by the Customs Authorities for the said machine as $ 58,024 could be justified still there was no justification for imposing a penalty or redemption fine unless the Customs Authorities had led evidence to the effect that the petitioner had reason to believe that the statement made by him in 'respect of the price, was false. He relied upon PLD 1959 SC 364 where the Supreme Court had come to the conclusion that the Customs Authority had failed to establish any proof of prevailing commercial price in the country of origin at the time of the import in respect of rents imported in that case. In that case the price of the rents was declared at 97 cents per pound and once the Customs Authorities had estimated its price as 155 cents per pound and another time had estimated its price as 1.97 cent per pound but no evidence had been procured to establish that in the exporting country that price was being charged. The Supreme Court, therefore, came to the conclusion that there was no justification for imposing of fine in those circumstances. The Supreme Court had also observed that a discrepancy between the normal price as fixed by the authority in complete honesty and declared invoice price must always exist. However, the following quotation from that judgment is very relevant:- "If it is claimed by the authorities that he has made a misstatement of price in his invoice, that cannot, in our opinion, be established otherwise than by furnishing proof of the prevailing commercial price in the country of origin at the time of the import."
It, therefore, appears to us that since in the present case the Customs Authorities have relied upon the material which shows the price of the same machinery had been increasing in the country o origin from $ 42,500 on 1-7-1976 to $ 58,025 on 28-4-1977, therefore, they were justified in coming to the conclusion that in December, 197 when the present machinery was imported, the price of the same could not be crashed down to all 24,770 and, therefore, to that extent the inference that there was misdeclaration in the value is justified as legitimate inference which was in fact, based on record. The imposition of penalty and fine was, therefore, justified.
' The petition is, therefore, dismissed.