This further appeal is directed against an order of the Customs, Excise and Sales Tax Appellate Tribunal, Lahore Bench, dated 9-7-1998.
2. The departmental authorities on 11-6-1997 intercepted a heavy vehicle containing 36 M. Tons of imported steel bars at Khanewal Road, Multan. The respondents were charged with violation of S.R.O. No.279(i)/94, dated 2nd April, 1994 which authorised import of machinery equipment and construction material etc. Without payment of custom duty and sales tax if it was imported for setting up, balancing, modernization, and extension of power generation i.e. Oil, gas, coal wind and wave energy projects etc. The departmental authorities were of the view that the aforesaid imported iron bars were being shifted to an unauthorised project located at Lal Pir while it was to be used only in the authorized project located at Abdul Hakeem District Khanewal. Therefore, the respondents were proceeded against. On the other hand, it was the case of the respondents that the seized quantity of iron bars was loaded only on account of a mistake on the part of the lower staff as both the imported and locally manufacture steel was stocked in the same premises. The department was, however, of the different view and alleged that the respondents had earlier transferred another 162 M.Ton of imported steel bars to unauthorized projects.
3. On usual proceedings, the respondents were charged on five counts. However, finally they were found guilty on two counts only i.e., shifting of 36 M.Ton of steel bars imported for Abdul Hakeem (authorized project) to Lal Pir (unauthorized project). Also they were found to have transferred 162 M.Ton of imported steel bar to other projects. On first charge the seized steel bars were confiscated though allowed to be released on payment of redumption fine of Rs.1,00,000. Also a further penalty of Rs.1,00,000 was imposed. The seized vehicle was directed to be released on payment of Rs.50,000. On the second charge, a penalty of Rs.5,00,000 was imposed while Rs.25,000 was directed to be paid as penalty under section 26 read with section 156(1) clause (2) of the Customs Act, 1965 for non-production of record summoned in the course of inquiry.
4. The learned Tribunal by way of the impugned order accepted the appeal filed by the respondents. Earlier it was found that the prescribed restrictions against machinery and equipment as contemplated in the aforesaid S.R.O. Were not attracted in case of the seized goods which comprised of construction material only. In the view of the Tribunal even the installation certificate or the indemnity bond contemplated in the S. R. O. Did not make any mention of construction material. Finding that machinery and equipment covered by the S.R.O. Was duly defined in the S.R.O. And that construction material was not included in that definition all exercise carried out by the department was found misplaced. Finally it was found that mere duty free import of the construction material did not necessarily mean that it was ipso facto under any restraint.
5. Heard the learned counsel for the petitioner. The respondent has failed to appear despite notice, proceeded ex pane.
6. The learned counsel for the petitioner submits and we will agree with him that the-learned Tribunal took a very narrow and restricted view of the contents of the aforesaid S.R.O. He is also correct in pointing out that the learned Tribunal was not correct in holding that duty free import of construction material did not mean that it was ipso facto under any restraint. When goods, machinery, equipment as well as construction material were imported for use in a specific project then their removal to another project were not covered by the S.R.O. It was certainly a violation of the conditions of the concessionary S.R.O. We have also noted that the learned Tribunal did not take into consideration the fact that at the time of enforcement of the aforesaid S.R.O. Only the word "machinery and equipment" were used. However, subsequently on 28th of May, 1995, the words "construction material" were also added to qualify for the concession in respect of the designated projects.
7. The seized bars were admittedly imported on concessional rates to be used in the kind of the projects authorized and identified by the S.R.O. Their removal to and use in another project was certainly a violation of the conditions of the S.R.O. Therefore, it was rightly so taken by the department. Accordingly, we will agree with the learned counsel for the petitioner that the Tribunal did not appreciate the crucial question that the use of the material imported under concessionary S.R.O. Was per se a violation of the concession and needed to be dealt with under various provisions of the Customs Act, 1969. Therefore, the view adopted by the Tribunal is not sustainable.
8. Accordingly, the department succeeds. The impugned older of the Tribunal, dated 9-7-1998 is set aside. Resultantly that of the Collector, dated 11-11-1997 stands restored.