JUDGMENT: MUHAMMAD ASLAM, TECHNICAL MEMBER.--1. This appeal has been filed by Sunshine Cloth Limited, Lahore against order-in-original No, 62/97 dated 11.8.1997 passed by the learned Collector of Customs, Karachi.
2. Facts leading to this appeal are that:--
(a) The appellants imported textile continuous dyeing machinery classifiable under PCT 8451.4000 vide Bill of Entry filed on 23.6.1993 under the provisions of Section 79(2) of the customs Act, 1969 and claimed exemption from Customs duty and sales tax under notifications No, SRO 791(1)/91 dated 15.8.1991 and SRO 500(1)/88 dated 26.6.1988. The said exemption was allowed by the concerned Appraisement Group but the appellants were asked to deposit 5% Iqra surcharge.
(b)In the meanwhile, another notification No, SRO 560(1)/93 was issued on 4.7.1993 whereby the Government exempted Iqra surcharge on such goods which were importable free of customs duty under notification No, SRO 791(1)/91 dated 15.8.1991 and SRO 848(1)/91 dated 26.8.1991 provided home consumption or ex-bond Bill of Entry for their clearance was filed from 14th to 30th June, 1993.
(c)As the appellants too had filed their Bill of Entry on 23.6.1993, they submitted to the Customs that they also were entitled to the said benefit of exemption from Iqra surcharge. The concerned Group examined their plea and allowed the exemption sought for.
(d)After sometimes, the authorities of Custom House, Karachi received an information that the appellants had, in fact, mis-represented the facts and fraudulently obtained exemption from Iqra surcharge which, otherwise, was not available to them for the crucial date in their case was 8.7.1993 when the manifest was delivered to the Customs and not 23.6.1993 when the Bill of Entry was filed under the provisions of Section 79(2) of the Customs Act, 1969.
(e)Since documents delivered, declaration and statement made were false, the appellants were prima facie found to be guilty of mis-declaration which constituted an offence under section 32 of the Customs Act 1969. The appellants were, therefore, called upon to show cause as to why action under the aforesaid provisions of law be not taken against them and as to why, the short levied amount of Rs, 16,51,834 be not recovered from them.
(f) As the appellants neither submitted written reply nor availed the hearings fixed therefor, the learned Collector concluded ex-parte that the allegations levelled in the Show-Cause Notice had been proved. He, therefore, ordered them to deposit the short-levied amount of Rs, 16,51,834 and also imposed a penalty equal to 20% of the taxes evaded on them. In addition to this, a penalty of Rs, 50,000 was also imposed on the Clearing Agents who were held to have connived in the matter.
3. The appellants have submitted that they rightly claimed the exemption from Iqra Surcharge which was clearly extendable to them in terms of notification No, SRO 560(1)/93 dated 4.7.1993 read with notification Nos, SRO 791(1)/91 dated 15.8.91 and SRO 848(1)/91 dated 26.8.1991 as the Bill of Entry in their case was filed on 23.6.1993 i.e. within the time-frame laid therefor. To say that in their case, the crucial date is to be 8.7.1993 is rather over-stretching the matter and clearly an attempt to deny them the benefit which is legally available to them as they had filed the Bill of Entry on 23.6.1993 and not on the one mentioned above. Another submission made by them is that as the Customs examined their request thoroughly and then extended the benefit, it was unfair to subsequently allege that they had made a mis-declaration. As they had concealed nothing and, at best, it was a case of interpretation, allegation of misdeclaration was totally un-warranted, un- called and maliciously levelled against them.
4. The stand of the learned Departmental Representative is that the appellants definitely manipulated exemption by misstating and suppressing the material particulars. The learned Collector was, therefore, justified in ordering them to make payment of the short-levied amount alongwith the penalty equal to 20% of the evaded taxes.
5. Of the two versions, the one put forth by the appellants is more logical, weighty, well- founded/well-substantiated and definitely in line with the spirit and contents of the governing notification. As the appellants had filed the Bill of Entry on 23.6.1993, they clearly became entitled to exemption from Iqra Surcharge. Even otherwise, as they did not conceal anything from Customs, it was un-fair to allege that they had committed an offence under the provisions of Section 32(2) of the Customs Act, 1969. At best but just for the sake of argument, it could be an offence under section 32(3) ibid which became barred by the time-limitation. On all counts, therefore, the action taken by the learned Collector has been rendered infructuous in the eye of law. As a matter of fact, the Customs appear to have played a dubious/double role in this case which, to say the least, is most unfortunate. The Tribunal has stated categorically in some other judgments as well that the Customs should stop treating the business community as an enemy and be fair and impartial while interpreting different notifications. Their job is not only to secure the legitimate interest of the national exchequer but to do so within the norms and parameters laid down by the superior Courts of the country.
6. In view of the above, as the orders passed by the learned Collector suffer from palpable' legal and factual infirmities, the same are set-aside and the appeal accepted.
These orders shall also apply to the linked appeal of the leafing Agent M/s. Pervaiz Umer Enterprises, Karachi who too is let off as the allegation of connivance levelled against him has become null and void in view of our findings in the main case referred to above. The penalty of Rs, 50,000 (rupees fifty thousand only) imposed on the Clearing Agent, therefore, automatically stands remitted. The Tribunal shall like to place on record that Mr. Pervaiz Umar is one of those countable few Clearing Agents who have rendered valuable services for the growth and sustenance of our economy. It was totally unfair to implicate him in this case as he did not, at any point of time, mis- guide anyone or suppress any information which he was legally supposed to furnish to the Customs. All what happened to him in the case was most unfortunate.