JUDGMENT: MR. JUSTICE (R) AKHTAR HASSAN, CHAIRMAN/ MEMBER JUDICIAL.--1. This appeal is filed by'M/s. Sunny Company, 19-Rail Bazar, Faisalabad, against the Order-in-Original No, 06/97 dated 6.8.1997, issued on 7.8.1997 passed by the Collector of Customs and Central Excise, Faisalabad.
2. Facts of the case are that the appellants imported a consignment from UAE consisting of 341 computer monnois sets coloured 14" model 1451-C, SVGA (with cabinet) manufactured in Thailand in 1996. The appellants filed a Bill of Entry No, 01981 dated 7.5.1997 at the Customs Dryport Faisalabad, declaring the value of the goods @ US$ 11 per set, whereas according to the evidence of exactly the same make and model provided by the Custom House, Karachi, the correct value is US$ 199 per set. Similarly the identical monitors were provisionally cleared through Lahore Dryport at the value of US$ 168 per set under the interim relief given by the Lahore High Court, Lahore dated 14.3.1993 in W.P No, 6449/97 filed by M/s. Al-Habib Nylo Corporation Lahore, although in this -case the PSI Company, Cotecna Inspection S.A ascertained the value at US$ 195.86 per set vide CRF dated 15.2.1997. On the basis of the A above misdeclaration of the value by 1780%, the appellants were issued a show cause notice dated 19.6.1997. Thereafter the appellants filed a W.P No, 15075/97 in the Lahore High Court, Lahore. The Honourable High Court disposed of the petition vide order dated 8.7:1997 directing the department to carry out valuation in accordance with the provision of section 25 of the Customs Act, 1969 on the basis of the material available with the department as well as to be produced by the -appellants, if any.
3. For arriving at the normal value in terms of section 25 of the Customs Act, 1969 in the instant case, the appellants requested the Collector to bear in mind that the subject goods were of stock- lot and not prime-quality and that the Customs at Faisalabad had, in the recent past, allowed clearance of computer monitors of 20" at US$ 113 per piece. On this basis, they argued, the fair measure of value should be US$ 63.28 per piece which would entail allowing 20% depreciation and the adoption of workback formula.
4. As to the criterion suggested in the Show-Cause Notice and the allegations of mis-declaration, the appellants categorically stated that the evidential invoice of the Karachi Custom House being of August, 1996 could not be applied to the goods which were invoiced in March, 1996 and that they had done nothing to intentionally circumvent the relevant provisions of law which could/should warrant penal action.
5. The learned Collector discounted the aforesaid pleas and held that:-
(a) The goods were of prime-quality and not of stock- lot category.
(b) As evidential invoices pertaining to the clearance of identical goods from Lahore and Karachi were available, the invoice relating to computer monitors of 20" could not be made the basis for assessm ent through workback formula.
(c) The appellants had made an outrageous mis- declaration of'" quality by terming their prime- quality goods as stock-lot category. The value too had been mis-declared to the extent of 1780%.
6. The learned Collector, therefore, ordered assessment of the subject goods at US$ 195.86 per piece, payment of fine of 10% of the assessable value and a penalty of Rs, 100,000. In addition to this, a penalty of Rs, 10,000 was also imposed on the Clearing Agent for his role in this case of horrible misdeclaration.
7. Before us as well, learned counsel for the appellants has reiterated the same arguments which were made before the Collector and the High Court. His thrust is that the learned Collector has proceeded in the matter in an arbitrary and whimsical fashion and has intentionally tried to ignore the price of US $ 113 per piece at which computer monitors of superior quality were cleared by the very Collecrtorate which is presently heading as Big Boss. The learned counsel says that if value of the stuff imported by his clients is not assessed pragmatically and the discount due for goods of stock-lot quality is not allowed to them, they would be virtually crippled financially. Interesting to note, the national exchequer would also be the least beneficiary as these out-moded goods would get almost nothing in auction.
8. The learned counsel prays for the acceptance of unit value of US$ 63.28 which would safeguard legitimate interest of both the national exchequer and the appellants and also spare the Departmental authorties of the embarrassment to which they have rightly been exposed.
9. The representative of the Respondent says that the Customs at Faisalabad have althrough acted strictly in accordance with law and have not, at any point of time, tried to out-step their jurisdiction or cripple the business interest of the appellants. The role of the appellants, unfortunately, has been just the opposite. Right from begining, they have been adopting one tactic or the other to side-track the issue of gross mis-dclaration of quality and value of the subject goods. Their attempt at every step has been to manage clearance of the subject goods either at the declared price of US$ 11 per or some other price which should l far less than the normal price under the provisions of section 25 of the Customs Act, 1969. The representative requests for the confirmation of the orders appealed against as these were passed in an objective and fair manner.
10.We have heard both., sides and carefully examined the case-record. The fate of this case hinges on the determination of the following points:--
(a) Are the goods-in-question of stock-lot quality or of prime quality?
(b) What should be -the correct measure of valuation in terms of section 25 of the Customs Act, 1969 as far as these goods are concerned? Is the price relevant for this purpose US$ 113 per piece or the one which was determined at Karachi Custom House in respect of the invoice dated 9.8.1996 or at Lahore pertaining to the invoice dated 3.2.1997?
(c)Can a resort be made to the price of similar goods cleared in the past for the purpose of determining value in terms of section 25 of the Customs Act, 1969 when evidential invoice pertaining to identical goods is available and, that too, of the nearest period?
(d) Did the appellants intentionally mis-declare quality and value of the goods or the learned Collector exhibited high-handedness by using such strong words as "Outrageous mis-declaration, horrible mis-declaration.......?
11.The Tribunal is of the considered view that:--
(i) The subject goods are definitely of prime-quality. Learned counsel has not been able to disprove the findings of the Customs at Faisalabad in this respect through any direct or indirect tangible evidence. His mere rhetoric in this connection carries no force in the eye of law unless it is substantiated by some concrete evidence.
(ii) As direct evidence is available, reference to the clearance of similar goods at somewhat lowerprices or suggestion for -arriving at value through workback formula are not relevant. The learned Collector was, therefore, justified in adopting the unit value of US$ 195.86 which does meet the postulates enunciated in section 25 of the Customs Act, 1969.
(iii) There can be no second opinion that the appellants did resort to gross gross mis- declaration of value by suppressing it to the extent of 1780% and that the learned Adjudicating Officer has been extra-ordinarily lenient as he imposed a fine of just 10% and a penalty of only Rs, 100,000 on them. That belies the stand of the learned counsel that the Collector or for that matter anyone downbelow has been unfair or harsh with his clients.
12.The up-shot of the aforesaid is that the orders already passed are correct in law and on facts, the same stand confirmed and the appeal rejected because it is devoid of any merit, substance or legal force.
13.What we have seen from the cases which have come before the Tribunal in the last six months is that the importers invariably choose Faisalabad Dryport for the clearance of consignments which entail gross misdeclaration of quantity quality and value of goods God knows why: No doubt the present Collector (Mr. Shaukat Ali Bhatti) has been quite successful in checkmating the flow of such stuff to his area of jurisdiction, but we feel duty-bound to suggest that there is imperative need to further tighten the screws and nip the evil in the bud through better vigil and administrative improvement. The present case points to another unfortunate phenomenon i,e,, some un-scrunuulous elements are just cruel and merciless in playing with the fate of the national exchequer and bother the least about what will happen to this country if they continue jeopardising the State interest in such an un-bridled manner. We wish and pray that all concerned adopt a more realistic and pragmatic attitude towards the vital requirements of the-economy and make atleast some contribution worthwhile for posterity.