JUDGMENT: MIAN QAMARUDDIN AHMED, MEMBER (JUDICIAL).--(1). This is an appeal against Order-in-Original No, 106/1997 dated 31.12.1997 passed by the learned Collector of Customs (Appraisement), Karachi whereby he held that since RBD Palm Kernel Oil is not defined in the tariff and falls under HS code 1513.2900 "Others", hence the appellant is not entitled to concessionary rate of duty/partial exemption provided for Palm Kernel Oil under SRO. 487(1)/95 dated 14.06.1995. According to him the notification provides exemption on Palm Kernel Oil and not RBD Palm Kernel Oil imported by the appellant. Both are different products and the exemption available to Palm Kernel Oil cannot be allowed to Refined, Bleached and Deodorized (RBD) Kernel Oil. In the instant case the description of goods enjoying exemption is clearly mentioned in the notification namely Palm Kernel Oil and the same cannot be applied to any other product simply on the ground that the item falls for classification under the same PCT heading 1513.2900. He also held that the matter was referred to Central Board of Revenue (CBR) who vide letter C. No, 2(85)SR-V/94 dated 20.01.1997 clarified that the exemption was never granted to RBD Palm Kernel Oil which essentially is meant for preparing edible oil. He further held that certificate of the consumption of the imported commodity in the production of the soap by the appellant issued by the CBR also relate to the Palm Kernel Oil and not RBD Palm Kernel Oil. He finally held that the appellant is liable to pay the amount of Rs, 1,727,176.00 as short levied taxes and a penalty of Rs, 170,000.00 was also imposed on the appellant under clause (10-A) and (14) of section 156(1) of the Customs Act, 1969 (hereinafter referred to as the Act). Before passing the order a show cause notice No, SI/MISC/441/97-Oil dated nil was served on the appellant.
2. The learned Counsel for the appellant argued that the appellant is manufacturer of toilet soap and imported the RBD Palm Kernel Oil and so declared in the bill of entry and further mentioned that it is exempt from duty of customs in excess of 15 % ad valorem. It was imported as a raw material for manufacturing of toilet soap as per SRO. 487(1)/94 dated 09.06.1994 as amended by SRO. 487(1)/95 dated 14.06.1995 which SRO was rescinded by 44(1)/96 on 13.06.1996 and the exemption was withdrawn. She further argued that the show cause notice was not within statutory period of six months as provided under section 32(3) and so no demand can be raised against the appellant for any short levy as it was not a case of mis-declaration. On confrontation that the notice was served for violation of section 32(1) and clause (10-A) and (14) of section 156(1) of the Act, the time period thereunder is three years, she submitted that there was no deliberate mis- declaration and at best it can be a case of mis-classification which too at this stage cannot be reopened for the reason that the customs authorities after due deliberation accepted the declaration made on the bill of entry and assessed the duty and taxes in accordance with law and the exemption provided under the SRO. She also relied on judgment in four similar appeals No, K- 67/1997, K- /1/1997, K- 192/1997, K-193/1997 all dated 07.01.1998 of Karachi Bench of this Tribunal whereby the exemption and the classification in accordance with the declaration made on the bill of entry by the appellant was accepted and the notice was declared as time barred. The learned Counsel further argued that in the toilet soap or the soap manufactured by them only the RBD Palm Kernel Oil is used and not Palm Kernel crude oil.
3. We have considered the arguments of the learned Counsel for the appellant as well as the decisions in appeals No, No, K67/1997, K-71/1997, K-192/1997, K-193/1997, all dated 07.1.1998 by Karachi Bench of this Tribunal and also examined the case record and hold that concessionary exemption was available under SRO. 487(I)/94 dated 09.06.1994 as amended by SRO. 487(I)/95 dated 14.06.1995 only to the Palm Kernel Oil and not to the RBD Palm Kernel Oil. Both are admittedly different commodities and products. The RBD Palm Kernel Oil is an edible oil whereas all the commodities/items namely inedible tallow Palm Kernel Oil and Palm fatty acid distillate mentioned at S 1. No, 5 of the exemption notification SRO. 487(I)/95 dated 14.06.1995 relate to inedible commodities and concern laundry soap and the exemption thus in no case was available to edible RBD Palm Kernel Oil.
4. We also hold that it is a case of deliberate misdeclaration as the appellant who is dealing in the import and use of the commodity since long was well aware of the difference of both these products and knowingly declared it to get the exemption/concession and thus evaded the payment of lawful duty and taxes. It is settled principle that the intention of a human being is only gathered from the overt act committed and otherwise it is unpredictable. We also find the certificate issued by CBR in respect of use of the Palm Kernel Oil in the manufacture of soap for the purpose of concessionary SRO. 487(I)/95 dated 14.06.1995 is irrelevant as it relates to Palm Kernel Oil and not RBD Palm Kernel Oil. In view of the above, there is no merit in the appeal, which is hereby dismissed. This order shall also dispose of Appeal No, K-21/98 RE-M/s. Zulfiqar Industries (Pvt) Ltd.
Vs. Collector Customs (Appraisement) Karachi.
5. Appeal dismissed.