MUHAMMAD ASLAM, TECHNICAL MEMBER.-- (1). This order shall dispose of the following 10 appeals as identical points of law and facts are involved therein: S.No. Name of the appellants Appeal No. Orders appealed against1GM No and date along- with IndexRepresented by:
1. . M/s. Pakistan Services Ltd.K-68/98 O-IN-O No. 55/97 dt. 2.8.97 passed by Collector of Customs, Appraisement, KarachiNo. 1728/95 dt. 6.1 1.95 Index No. 51(1) Mian Nazir Azhar ,
(2) Mr . Sajjad Hassan. & (3) Rana Badar Munir , Advocates.
2. do K-69/98 do No. 1728/95 dt. 6.1 1.95 Index No. 52do
3. do K-65/98 do No. 1728/95 dt. 6 1 1.95 Index No. 53do
4. do K-67/98 do No. 1728/95 dt,. 6.1 1.95do Index No. 54
5. do K-66/98 do No. 1728/95 dt. 6.1 1.95 Index No. 55do
6. do K-62/98 do No. 1754/95 dt. 21.1 1.95 Index No. 3do
7. do K-63/98 do No. 319/96 dt.
2.3.96 Index No. 5do
8. do K-64/98 do No. 570/96 dt.
20.04.96 Index No. 270do
9. M/s. Hashwani Hotels. K-60/98 do No, 319/96 do Dt. 2.3.96 Index No. 4do
10. do K-61/98 do No. 319/96 dt.
2.3.96 Index No.6do
2. Back-ground of the aforesaid appeals is that:--
(A) The appellants who own and operate Marriot and Pearl Continental Five-star Hotels at Karachi, Lahore, Rawalpindi, Islamabad, Peshawar and Bhurban applied to the Government of Pakistan in the year 1995 for the importation of Hotel Machines and Equipment including Fire-Proof/ Fire- Resistant/Fire-Retardant carpets in terms of notification No. SRO 212(I)/91 dated 14.3.1991.
(B) The Board of Investment, Government of Pakistan, considered/examined the request of the appellants and after verification from M/s. Pakistan Carpet Manufacturers and Export Association, M/s. Pak Carpet Industries (Pvt.) Limited, M/s. Gulshan Carpets Industries Limited and M/s. Asian Carpets Palace (Pvt.) Limited that the required quality was not being manufactured in Pakistan, recommended to the Ministry of Tourism that their requirements be quantified and then requisite authorization should be issued to them.
(C) In response to the aforesaid, the Ministry of Tourism verified all the information provided by the Board of Investment and the appellants and then recommended release of the subject Carpets under the provisions of notification No. SRO 212(I)/91 dated 14.3.1991 subject to routine type of conditions which were contained in its Office Memorandum No. 1(27)94-P&S-1 dated 7th April, 1996.
(D) After completion of all related formalities, the appellants filed Bills of Entry with Custom House, Karachi on 6.11.95, 21.11.95, 2.3.96 and 20.4.96 for the release of the subject carpets in terms of the notification referred to above but to their utter surprise, the learned Collector refused to allow them the concession which, they thought, was due to them under SRO No. 212(I)/91 dated 14.3.1991.
(E) As the goods-in-question were incurring heavy demurrage and the authorities concerned were not ready to budge even an inch from their stand that the carpets imported by the appellants were, in fact, of ordinary type which were commonly being manufactured in Pakistan, the appellants approached the Central Board of Revenue to intervene in the matter and rectify the wrong being done to them without any reason.
(F) The Central Board of Revenue vide its orders contained in letter No. 1(71) TAR. II/70-pt-A dated 25.7.1996 bailed them out provisionally by allowing release of their goods against undertaking to be submitted by them to the satisfaction of the learned Collector to the effect that in case the decision was against them, the applicable duty/tax would be paid by them.
(G) All necessary formalities envisaged in this behalf were completed promptly and the learned Collector allowed release of the goods under SRO 212(I)/91 dated 14.3.1991 in line with the directions of the Central Board of Revenue.
(H) As the test conducted at the Custom House laboratory confirmed earlier apprehension that the subject carpets had not been treated with fire retardant chemical, the appellants were served with a Show-Cause Notice to explain as to why the evaded amounts of duty and taxes be not recovered from them besides initiation of penal action under the relevant provisions of law.
(I) Through a detailed written reply filed on 12.2.1997, the appellants contested all the allegations levelled in the Show-Cause Notice and categorically stated that what they had imported were fire- retardant/fire-resistant carpets and not ordinary-type carpets which were being fabricated locally.
To reinforce their . Stand, they drew attention of the learned Collector to their correspondence with the Board of Investment and the Ministry of Tourism etc. As also the specifications of the manufacturers, M/s. Durkan Patterned Inc. USA, the detailed Technical Test Report of M/s. Professional Testing Laboratory Inc. USA and the report of M/s. Beaulieu United Georgia, USA which all established beyond doubt that the imported carpets were fire-retardant/fire- resistant. They also requested the learned Collector that as the word fire-proof had in-advertently been used by their staff in some documents, the same should not be made the basis to victimize them by linking it with the findings of the Custom House Laboratory. The appellants also explained to the learned Collector that as the Association and a number of prominent local manufacturers, of carpets had all confirmed that the stuff imported by them was not being fabricated locally, it was un-fair on his part to conclude that they had attempted to defraud the national exchequer in this behalf or had, in any way, made an in-correct declaration before the authorities concerned.
(J) As the appellants doubted the authenticity of the test conducted by the Custom House laboratory, they made an earnest request to the learned Collector that representative samples may either be sent to the PCSIR or to any recognized laboratory. In USA so that the issue could be thrashed out once for all to the satisfaction of the parties concerned in the matter.
(K) As the appellants reiterated the aforesaid position at the time of hearing as well, the learned Collector instructed the laboratory incharge to retest the remnants of the samples already drawn in the presence of their Counsel, Mr. Arif Moton on 13.2.1997. On the said date, the learned Counsel discussed the matter with the laboratory Incharge and submitted the following note to the learned Collector:-- "Discussed with Mr. A.M. Abid Chief Chemical Examiner as ordered by Collector (Appg). In view of the report of M/s. Beaulieu (United) USA and finding of Customs Laboratory it is agreed that no chemical process has been used in the manufacture of these fire retardant carpets. As such no chemical test is needed to determine the same. However, since these carpets have such construction that when put to flame they do not bum with the same speed as ordinary carpets locally manufactured. On the contrary, their construction retards the burning process. This can be verified by a physical test. The other material regarding construction duly verified by the reference books will be procured by the undersigned, from the manufacturers and produced by 18th February, 1997 before Collector (Appg)."
(L) In the meanwhile, the learned Collector took up the issue with the Board of Investment and the Ministry of Tourism to ascertain as to whether correct position had been reflected to them by the appellants and also whether any investigation was made by them or test conducted to find out the nature and contents of the stuff imported by the appellants before recommending its release.
(M) The Ministry of Tourism vide its letter dated 7.3.1997 confirmed to the learned Collector that it had recommended release of the imported goods on the basis of the written statement of the importer and the NOC given by the Board of Investment and that no other investigation was made as per the provisions of the relevant SRO.
(N) The Board of Investment vide its letter No. DOI/Misc-III/5(6)/73/90 dated 27.3.1997 confirmed that Pakistan Carpet Manufacturers and Export Associations and some other individual manufacturers had all stated that the required quality of fire-proof carpets could not be manufactured locally. In the last para of the letter, the Board of Investment stated that the investigation conducted from the local manufacturers and the certificates issued by the Carpet Manufacturers and Export Association clearly confirmed that the carpets imported by M/s. Hashwani Hotels Limited were not manufactured locally.
(O) In a letter dated 31.5.1997 addressed to M/s. Pakistan Services Limited Karachi, a copy of which was endorsed to the learned Collector as well, the Board of Investment pointed out that the NOC was issued in the case after investigation from the relevant quarters that already imported fire retardant carpets were not locally manufactured and hence covered by SRO 212(I)/91 dated 14.3.1991. It was also stated that the matter had been re-confirmed from the local manufacturers and the Pakistan Carpets Manufacturers Import and Export Association that fire-retardant carpets were not being manufactured locally.
(P) In its latest correspondence dated 21.6.1997 which was in reply to letter dated 4.6.1997 from Custom House, Karachi, the Board of Investment stated that the job of their officers was to scrutinize the specifications provided by an importer and then to counter-check the position from the local manufacturers as was done in the case of the appellants. As to the actual physical checking of the imported stuff before making any recommendation in the instant case, the same obviously was not done because this was the exclusive domain of Customs and the Board of Investment had nothing to do in that connection.
(Q) As the learned Collector was convinced that the appellants had mis-informed all concerned, he asked their Counsel, Mr. Arif Moton, vide his letter dated 22.5.1997 to produce clarification from the Board of Investment that already imported carpets used in the Pearl Continental Lahore and Marriot Karachi were fire retardant and that these were covered under the claimed notification being not manufactured locally.
(R) The learned Counsel filed reply to the aforesaid on 14.7.1997. The crux of his arguments was that no ambiguity or confusion could remain if the reply of the Board of Investment dated 21.6.1997 was not construed in isolation but was read in conjunction with the previous correspondence received from the same Organization and the Ministry of Tourism and the CRF issued by M/s. SGS and the test reports of the foreign laboratories, which certified that the carpets-in- question were fire- retardant/fire-resistant type which were not being manufactured indigenously. He once again requested the learned Collector to send representative samples to PCSIR and HEJ Research Institute of Chemistry, University of Karachi or to any recognised laboratory in USA so that he could arrive at a judicious conclusion in the matter.
(S) The learned Collector did not deem it appropriate to send the samples to any other laboratory for test. He, however, finalized the hearing and arrived at the following conclusions
(i) The test report of the Custom House laboratory had established beyond doubt that the carpets- in-question were not fireproof or fire-retardant because no chemical was used in their manufacture.
(ii) The appellants had persistently made incorrect declaration before the Board of Investment, the Tourism Division and the Customs.
(iii) The Board of Investment and the Tourism Division never conducted any detailed investigation to ascertain as to whether the imported stuff was of ordinary or special type. The laboratory test, however, established beyond doubt that the carpets in-question could very easily be manufactured locally as well.
(iv) The appellants were not at all entitled to the benefit provided under notification No. SRO 212(I)/93 dated 14.3.1993.
(T) The learned Collector, therefore, ordered the appellants to pay back to the Government Treasury the evaded amounts of duty and taxes as mentioned in the Show-Cause Notices and also imposed on them penalty equal to 20% of the value of the carpets.
3. The appellants challenged the aforesaid orders of the learned Collector before Karachi Bench of the Tribunal.
4. As the said Bench was not functional in May, 1998, the Chairman of the Tribunal transferred this case to the Bench at Lahore for disposal vide his order No. 1009/98 dated 25.5.1998. Subsequently, 9 other cases of identical nature too were entrusted to the Lahore Bench on the specific request of the learned counsel for the appellants vide order dated 22.9.1998.
5. When formal proceedings commenced on 5.10.1998, learned counsel, Mian Nazeer Azhar, placed on record the expert opinion of the PCSIR dated 30.7.1998 and of the University of Karachi dated 28.8.1998 to establish that the carpets imported by his clients were, in fact, fire-retardant and not of ordinary type as incorrectly held by the learned Collector in his impugned order. The said test reports are reproduced below for ease of reference :~ " Report of Professor Dr. Ronaq Raza Naqvi, Chairman, Department of Chemistry, University of Karachi.
Sample: Two samples of carpets received from M/s. Pakistan Services Ltd., Karachi vide their letter No. D/MSW/UOK/98 dated August 19, 1998.
TEST REPORT FOR FLAME RESISTANCE/ RETARDATION The two samples were tested according to standard methods for flammability/flame resistance/retardation were found to pass the test.
The specimens of the samples that were tested have been marked as specimen No. 1 and specimen No. 2 on the back and signed by the undersigned to accompany this report.
Report of Dr. Z.A. Khan, Chief Scientific Officer, HRD Mat. Division, PCSIR, National Physical and Standards Laboratory, Islamabad.
Samples: Two samples of carpets received from M/s. Pakistan Services Ltd., Karachi vide their letter dated 27.7.1998.
TEST REPORT FOR FLAME RESISTANCE/RETARDATION The two samples were tested according to ASTM methods for flammability/flame resistance/retardation were found to pass the test.
The specimens of the samples that were tested have been marked as specimen No. 1 and specimen No. 2 on the back and signed by the undersigned to accompany this report."
6. For proper appreciation of the aforesaid additional evidence, the Tribunal made the following observations etc. "It is a ticklish technical problem requiring expert opinion possibly of the highest order. We treat the oral request of the learned Counsel for the appellants for producing this additional evidence as an application and afford an opportunity to the Respondent to rebut the same. Besides all else, it appears expedient to take fresh opinion from PCSIR and also the University of Karachi (Chemistry Department) provided new samples are taken in the presence of representatives of both the parties so that there could be no objection to their authenticity. Those samples shall then be sent in a sealed cover to Dr. Z.A. Khan, Chief Scientific Officer HRD Mat. Division (PCSIR) National Physical and Standards Laboratory, 16, Sector H-9, Islamabad and Prof. Dr. Ronaq Raza Naqvi, Chairman, Department of Chemistry, University of Karachi, University Road, Karachi- Pakistan for taking their opinion. In this exercise, the Department shall be represented by an officer not below the rank of Additional Collector. If requisite samples are not available with the Customs, Karachi, the same may be drawn from the appellants in the presence of both the parties. The officers concerned who conduct chemical examination at the respective Laboratories shall also appear before the Tribunal, if need be.
The test reports should indicate as to what are the ingredients of the Carpets and what criterion has been adopted to come to the conclusion that these are fire retardant. The exercise of drawing the samples and tests thereof must be completed by all concerned on or before 15.10.1998 and the report supplied to the Department, the appellants and the Tribunal well before the next date of hearing i.e. 27.10.1998. All expenses in this connection shall be borne by the appellants and not the Department."
7. Pursuant to the aforesaid directions of the Tribunal, representative samples were drawn and sent to Professor Dr. Ronaq Raza Naqvi and Dr. Z.A. Khan by Custom House, Karachi vide its letter No. SI/Misc/IB/154l/BG/IX, dated 12.10.1998. The contents of the reports/comments received there from were as under: ~ "Report of Prof. Dr. Ronaq Raza Naqvi.
Chairman, Department of Chemistry, University of Karachi.
Subject: TESTING OF CARPETS Kindly refer to your letter No. SI/Misc/IB/1541/BGIX dated 12.10.1998 on the above subject.
All the samples of the carpets are made of acrylic materials. The samples were tested according to ASTM standard method (ASTM Designation D 626-55T, 2nd revision July, 1961) the flammability flame Resistance/Retardation was found to pass the test. For further details of apparatus and procedure, kindly refer to part 5 & 6 of the above mentioned reference.
Comments by Dr. Z.A. Khan, Chief Scientific Officer, HARD Mat. Division, PCSIR National Physical and Standards , Laboratory, Islamabad.
We do not have the facilities to determine the ingredients of carpets. Also presently we do not have the recommended facilities to fully follow the method/procedure of a standard method for flame retardation test of carpets, please."
8. When the case came up for hearing on 27.10.1998, the Tribunal decided to call both the experts from Islamabad and Karachi for cross-examination on 9.11.1998 at Lahore.
9. As 9th November, 1998 was declared a public holiday, the case was re-fixed for hearing on 17.11.1998.
10. On the said date, Professor Dr. Ronaq Raza Naqvi, Chairman, Department of Chemistry, University of Karachi and Dr. Zafar Ahmad Khan, Chief Scientific Officer, HRD Mat. Division, PCSIR, National Physical and Standards Laboratory, Islamabad were present and cross-examined, the averments of which are re-produced below.- AW-1 Statement of Prof. Dr. Ronaq Raza Naqvi, Chairman, Department of Chemistry, University of Karachi, Karachi on S.A.
I affirm my report dated 16.11.1998. It is Exbt. Aw/1.
XXXX Mr. Shafqat Mahood, DR. For the Respondent Deptt.
It is correct that the goods in question were not chemically treated.
Question: Is it correct that these were not treated Textile Fabrics or Carpets ?
Answer: Fabrics could be treated by any method or process and can be called as fire retardant carpet.
Question: If the treating and processing are two different methods, then what was used in making the carpets in question as fire retardant ?
Answer: It contains two portions.
(1) combustion.
(2) definition of retardant.
There are three para-meters- Question: (i) Fuel: (ii) Heat: and (iii) oxygen for the second portion the ability to delay the fire. So there is no need of any chemicals to make it fire retardant.
Can it be said that no chemical was used in making these carpets fire retardant ?
Answer: Yes. I will endorse my previous statement that for fire retardant, chemicals are not necessary ingredients.
Question: Were these carpets made of material which had intrinsic properties of being flame resistant?
Answer: For fire retardant, this question is not correct. Any carpet of any fibre can be fire retardant provided it is processed in such a manner that it can delay the fire.
Question: What Gas did you use in testing the carpets?
Answer: I tested the carpets by two Gases namely:-
(1) Sui Gas.
(2) Oxyactylene.
Retardant means to delay the fire.
Question: What is fire retardant treatment?
Answer: Any process which can delay the fire can be called the fire retardant.
(RO&ACT)
17.11.98 Sd/- Sd/- (Akhtar Hassan) (Muhammad Aslam) Chairman Technical Member AW-2. Statement of Zafar Ahmad Khan, Chief Scientific Officer, HRD Mat. Division (PCSIR) National Physical and Standards Laboratory, Islamabad, on S.A.
I affirm the correctness of my report dated 30.7.98, Exbt. AW/2. I am Ph.D in chemistry from New Castle, UK. I am heading Research Division since 1988.1 tested carpets in question and found them fire retardant. Basically I used the ASTM method in testing these carpets. We cut a small piece from the sample, then we dry it in an oven, then we put this carpet to a flame which is in the middle for about two minutes. Then the source of ignition is removed. If the charred or burnt area of the carpet is less than six inches in diameter, it qualifies the test and the carpet in question is termed as fire retardant. Second time we used Methenamile Tablet for burning the representative piece of the carpet and came to the conclusion that it was fire retardant.
XXX Mr. A.M.M. Abid, Customs Laboratory Incharge, Karachi. I used D 2859-76 ASTM No. For conducting the test. The purpose of ASTM method is to test flammability of the finished textile floor covering materials.
Question: Whether flame retardant materials are mentioned in the scope of ASTM method of testing adopted by you ?
Answer: Yes. It has been so mentioned that this test is applicable to fire retardant materials. Para 7.2 of the document amplifies this position beyond any doubt.
Question by Mr. Shafaqat Mahmood DR for the respondent.
Answer: I suppose it was the first time that a test of this kind was conducted by us, comprising four officers of the Organization in which I work.
Question: If the carpets are backed by a rubber foam, would it remain fire retardant?
Answer: The question is irrelevant.
(RO&AC) Sd/- Sd/- 17.11.98 (Akhtar Hassan) (Muhammad Aslam) Chairman Technical Member
11. When hearing resumed again on 18.11.1998, learned Departmental Representative further elaborated the case of the Custom House as under:-
(i) The cross-examination had established beyond doubt that the Experts of the Karachi University and the PCSIR did not apply internationally recognized standard methods to determine whether or not the carpets-in-question were fire-proof/fire- retardant. This, in itself, proved the stand of the Department that as no chemical had been used to make the carpets-in-question fire-retardant, further test was not required to re-verify this aspect.
(ii) The basic declaration of the appellants that the subject carpets were made of nylon had been proved wrong as the report of the Karachi University confirmed that these were of acrylic origin.
(iii) One of the so-called reports from U.S.A, pertained to the year 1992 which confirmed the earlier apprehension of the Department that all such tests had, in fact, been arranged by. The appellants to reap the benefit of duty free import by hoodwinking the authorities concerned.
(iv) The word fire-proof or fire-retardant did not appear on the invoices which were initially submitted to the Customs. These words were inserted later on when it became clear to the appellants that the Customs had come to know, of the fraud perpetrated by them and that there was going to be no escape therefrom. All this showed that the hands of the appellants were not clean right from day one.
12. The learned Departmental Representative prayed that as the Department had proved its case beyond doubt, the orders passed by the learned Collector be confirmed and the appeals rejected.
13. Learned Counsel for the appellants reacted sharply to the aforesaid arguments and, contended that it was unfair and unethical on the part of the learned Departmental Representative to say that the experts such as Professor Dr. Ronaq Raza Naqvi and Dr. Z.A. Khan had not applied standard methods to verify the aspect of fire-retardation etc. If he had any such apprehension, he should have confronted the two gentlemen on 17.11.1998 when they were present and not passed any such remarks in their absence. It was equally unfortunate on the part of the learned Departmental Representative who had stated that the reports/opinions placed on record were, in fact, malafidely arranged by the appellants and not authentic otherwise. As it amounted to a direct insult of the persons/organizations involved in the matter, the Tribunal may summon/re-summon all concerned and then see for itself as to who had tried to circumvent the law of the land. His clients would be delighted if the authorities of Customs could prove that the carpets imported by them were not fire-retardant/fire-resistant as it would enable them to get at-least ten times more money from the supplier by way of compensation through the U.S. Courts. The learned counsel submitted that as the Department had been proved totally wrong in its un-warranted stand, its representative was trying to beat about the bush so as to prolong/delay or side-track the matter.
The learned Counsel prayed that as the orders passed in the matter suffered from palpable legal and factual infirmities, the same be set-aside and the appeals accepted as these were backed by incontrovertible documentary evidence.
14. The questions which crop up for determination in these appeals are:--
(a) What is the essential character of the carpets imported by the appellants? Are these fire retardant/fire-resistant/fire-proof, not manufactured locally or otherwise?
(b) Whether the expressions fire-retardant/fire- resistant/fire-proof are synonymous or mis-nomer of one another ?
(c) Whether or not the provisions of Section 32(1) of the Customs Act, 1969, punishable under clause 14 of Section 156(1) ibid get attracted in these cases?
(d) Which of the evidence, i.e. The one relied upon by the Department or that adduced by the appellants, would take precedence?
(e) whether or not the appellants are entitled to the concession available under SRO 212(I)/91 dated 14.3.1991 ?
(f) What is the validity of the action taken by the Department ? Does it conform to the norms and standards of natural justice, equity and good conscience as postulated by the superior courts of the Country? Can such decisions stand the test of judicial scrutiny?
15. As to the question at para 14(a) above, the stand of the Department is that the carpets-in- question are ordinary type which are commonly being manufactured all over Pakistan. Their reliance in this behalf is on the chemical test which was conducted in the laboratory of Custom House, Karachi on 22.6.1996. On the other hand, the appellants maintain that the subject carpets are of special type and that these definitely are not being fabricated locally. To substantiate their version, they have placed on record certification by the manufacturer, CRF issued by the Pre- shipment Inspection Company of M/s. SGS, then operating in Pakistan in terms of notification No. SRO 1108(I)/94 dated 14.11.1994, Technical Test Report of M/s. Professional testing Laboratory Inc. USA, Report of M/s. Beaulieu United,. Georgia, USA, opinion tendered by Professor Dr. Ronaq Raza' Naqvi, Chairman Department of Chemistry, University of Karachi and Dr. Z:A. Khan, Chief Scientific Officer, HRD Mat. Division, PCSIR, National Physical and Standards Laboratory, Islamabad. The Tribunal is convinced that the stand of the appellants in- this connection is more weighty, logical, well- founded and convincing and that the evidence of the chemical test relied upon by the Department is not maintainable in the eye of law. The Tribunal holds that the subject carpets, in fact, are Fire- Retardant/Fire-Resistant, which have also been termed as Fire-Proof in some documents.
16. Regarding the second question at para 14(b), the correspondence of the appellants with the Board of Investment, the Tourism Division and the Custom House, Karachi and likewise the exchange of communication amongst these three Organizations coupled with the contents and spirit of the Show- Cause Notice and the Order-in-Original, leave hardly any doubt, ambiguity or confusion that the three terms i.e. Fire-proof, fire- retardant and fire-resistant have all been used for one and the same purpose. These expressions, therefore, are nothing but synonymous. This very aspect was duly explained by the learned Counsel of the appellants at the original stage vide para 2 of his reply dated 12.2.1997 to the Show-Cause Notice.
17. So far as the question at para 14(c) is concerned, the discussion made above makes it clear that the appellants' cases are not hit by the provisions of Section 32(1) of the Customs Act, 1969. They did hot, at any stage, conceal or mis-declare/mis- state anything or suppress any material particulars before the Board of Investment, the Tourism Division or the Customs Department etc. As a matter of fact, in their correspondence dated 7,9.1995 exchanged with the Board of Investment, Prime Minister's Secretariat, Islamabad, they specifically stated that they intended to import hotel machineries and equipments and kitchen equipments as were not produced in Pakistan and, if produced, were for domestic use and did not meet the required international standards for heavy use in a five-star hotel. This, in itself, shows that their hands were clean in all respects right from beginning and that they did not resort to any mis-declaration while importing the carpets or claiming concession in terms of SRO 212(I)/91 dated 14.2.1991.
18. In view of the discussion contained in paras 15 and 16,1 the questions illustrated in sub-paras (d) and (e) of para 14 automatically stand answered in favour of the appellants. It is pertinent to note that the learned Collector decided the cases of the appellants, vide Order-in-Original No. 55/97 dated 2.8.1997 on the basis of the chemical test report No. Imp/9914 dated 22.6.1996. This step, no doubt, was against the spirit and contents of para one of the Show-Cause Notice No. SI/Misc/IB/7605/95-IX dated 17.12.1996 where in it is clearly laid down that the provisional release was subject to a chemical test which obviously meant that it was yet to be carried out. The note of the learned Counsel of the appellants dated 13.2.1996 which is contained in para 5 of the impugned order cannot assume the status of a chemical test by any stretch of imagination. Therefore, in a situation like this, the evidence relied upon by the learned Collector became redundant in the eye of law as all related formalities had already attained finality in view of Central Board of Revenue's release instruction dated 25.7.1996.
19. The question at para 14(f) above is most pertinent in the context of these appeals. The learned Collector failed to adhere to the basic norms and standards of natural justice in as much as that at no occasion he deemed it appropriate to get the samples retested from independent laboratories within or outside Pakistan or to associate experts of this line of business before release of the consignments nor his organization retained representative samples in accordance with law.
Contrary to that, he entered into an altogether un-necessary correspondence with the Board of Investment and the Tourism Division, which had hardly any nexus with the issue involved. If he was so certain and definite that the imported stuff was the one which is manufactured indigenously as well, the appropriate course open to him was to get the samples tested from independent sources as well and to associate experts from the local organizations such as the Chamber of Commerce and Industry, Karachi and the Association of Carpet Manufacturers and Exporters before release of the consignments. Even otherwise, as the stake of the government too was quite high and the appellants were repeatedly requesting for the re-testing of samples, it was incumbent upon him to have adopted a pragmatic course instead of disposing the matter in an arbitrary and whimsical fashion. The Tribunal is, therefore, constrained to observe that the cases made out by the Department cannot, in any way, stand the test of judicial scrutiny.
20. Up-shot of the aforesaid discussion is that the orders passed by the learned Adjudicating officer being devoid of any merit, substance or legal force are not maintainable. The same are, therefore, set-aside and the appeals accepted in all ten cases.