JUDGMENT: MR. MUHAMMAD ASLAM, TECHNICAL MEMBER.--(1). This appeal has been filed By M/s. Riaz Electric Company (Pvt) Limited, Multan Road, Lahore against order-in-original No, 10/99 dated 3-2-1999 passed by Collector of Customs (Appraisement), Lahore.
2. Facts leading to this case are that the Customs staff, on a specific information, visited the private bonded warehouse of M/s. Riaz Electric Co. Limited, bond licence No, 49/LH/88 situated at Kharak, Multan Road, Lahore, on 4-9-1998. The record of the imported consignments lying in the said warehouse was scrutinized which revealed that the aforesaid firm imported four consignments of compressors from France vide safe transport bills of entry No, ST-4979 dated 9-4-1997, ST-5218 dated 23-4-1998, ST-00857 dated 31-3-1998 and ST-00944 dated 30-4-1998. Physical examination of the goods imported against the above said bills of entry was conducted in the presence of representative of the said firm which resulted in recovery of the following new as well as condemned compressors.
S. No,Specification of compressorsNew CondemnedTotal quantity available
1. AEZ 1360-A Nil 904 904
2. AEZ 1380-A 608 2216 2824
3. AEZ 1410-D 502 1016 1518
4. AZ 1340-A Nil Nil Nil
5. AZ 1355-D Nil Nil Nil
3. On checking the above mentioned stock of compressors available in the said private bonded warehouse, it transpired that condemned compressors of different specifications had been placed in the pallets of originally imported compressors to hoodwink the Customs. Thus the compressors of the following specifications valuing Rs, 1,25,50,050 were removed from the warehouse without payment of duty and taxes to the tune of Rs, 76,63,358 leviable thereon.
S. No,Specification of CompressorsQuantity
1. AEZ 1360-A 2120 Nos
2. AEZ 1380-A 2920 Nos
3. AEZ 1340-D 0586 Nos
4. AZ 1340 0286 Nos
5. AZ 1355-D 0336 Nos
4. On demand the management of bonded warehouse failed to produce any evidence of clearance of the said goods on payment of duty, which created a reasonable belief that the said goods had illegally been removed by evading duty and taxes leviable thereon in contravention of the provisions of Chapter-X1 of the Customs Act, 1969 read with section 157 and 178 ibid. Therefore, the entire stock of compressors available in the warehouse was seized being liable to confiscation under section 168 of the Customs Act, 1969 for violation of law referred to above, punishable under clause 1, 55, 59, 61 and 62 of section 156(1) ibid. An FIR No, 43/98 dated 4-9-1998 was also lodged against the Directors and management of the above said firm.
5. While pleading their case before the learned Adjudicating Officer, the appellants contended that as they had already deposited the leviable amounts of duty and taxes and delay thereto was not deliberate or wilful but the result of a procedural lapse, there was hardly any occasion or justification to invoke penal provisions of law against them, particularly because they had been punished by way of a fine of Rs, 100,000 by the Special Judge as well.
6. The learned Adjudicating Officer, however, concluded to the contrary and held them guilty of the offences enumerated in the Show-Cause Notice and also observed that they could not be let off scot-free as "they had not only removed the bonded goods without payment of government taxes but to cover up their offence, they placed condemned compressors in their place". He, therefore, imposed on them a penalty of Rs, 25 lacs under the provisions of law contained in section 156(1), 55, 59, 61 and 62 of the Customs Act, 1969 which was ordered to be forthwith in the national treasury.
7.The stand of the appellants before the Tribunal is that:
(i) As Ex-Bond Bills of Entry had been filed with Customs at the Lahore Dryport, it was unfair to assume that they had made a deliberate attempt to hoodwink Customs or deprive the national exchequer of its due share.
(ii)As they made good the payment of the principal amount of duty and taxes there and then and the lapse, if any, was more of a procedural nature, the learned Collector was not justified in inflicting the heavy penalty of Rs, 25 lacs on them.
(iii)There are number of instances where the quasi-judicial authorities and the superior Forums have condoned such lapses and sufficed by merely warning the offending persons/concerns.
(iv)The penalty imposed in not only excessively harsh but even otherwise not maintainable in that under all the provisions referred to in para 8 of the impugned order, it could not exceed Rs, one lac.
8.The learned Departmental Representative repeated the stand already contained in the impugned order. He, however, concedes that the provisions of law quoted in the Show-Cause Notice and the order-in-original do not empower an adjudicating officer to impose penalty beyond the limit of Rs, one lac.
9. Perusal of the overall facts and circumstances of the case leave hardly any doubt that neither the offence entailed therein is of a grievous nature nor otherwise the learned Collector had the authority to saddle the appellants with the heavy penalty of Rs, 25 lacs. As he far exceeded his lawful authority and exhibited high-handedness in the matter, the orders passed by him no longer remain maintainable in the eye of law. That being so, we remit the penalty of Rs, 25 lacs (rupees twenty five lacs only) imposed on the appellants but would like to warn / advise them to ensure that they adhere to the relevant provisions of law procedure in letter and spirit in future and avoid such technical lapses.
10.Orders appealed against are modified to the aforesaid extent.
11. It has been noted that in the instant case, the learned Collector could not exceed the monetary limit of Rs, one lac under clauses 1, 59, 61 and 62 of section 156(I) of the Customs Act, 1969 while imposing penalty while he burdened the appellants with an amount of Rs, 25 lacs in this respect.
This is quite a serious lapse on his part which must be avoided in future for it not only increases un- due litigation but even otherwise brings bad name to the Department and the Government.