NOOR BROTHERS, LAHORE VS ADDITIONAL COLLECTOR OF CUSTOMS (ADJUDICATION-I), KARACHI, 2018 PTD-CUSTOMS-APPELLATE-TRIBUNAL-LAHORE 1013 (2016)

Customs Act (IV of 1969)---

----Ss. 32, 79, 80, 156(1)(14) & 194-A---S.R.O. No. 659(I)/2007, dated 30-6-2007---S.R.O. No. 499(I)/2009, dated 13-6-2009---Mis-declaration---Confiscation of goods---Importer declared description of goods and sought clearance under S.79(1) of the Customs Act, 1969 by filing Goods Declaration---Scrutiny in terms of S.80 of the Customs Act, 1979 was conducted and container was examined and examination report as well as the documents scanned by importer had revealed that there was a gross mis-declaration in net weight, PCT Heading of lower duty slabs and inadmissible facility of F.T.A.---Said act of misdeclaration was alleged to have proved that the importer had deliberately concealed the actual quantity and attempt to hoodwink the national exchequer by declaring incorrect, false and forged Goods Declaration---After issuing show-cause notice, matter was adjudicated by Additional Collector of Customs (Adjudicating Authority) and goods imported by the importer were confiscated---Validity---Importer, before clearance of goods had voluntarily requested to confirm description and quantity of imported goods through examination---After importer's honest disclosure, he could not be held guilty of misdeclaration---Importer had acted bonafidely and in accordance with law as he was not aware to the actual PCT heading and the actual quantity/weight of the imported goods imported by him, he applied to the authorities in a bonafidely manner---Show-cause notice issued to the importer, was defective it pertained to the total value of the goods and not the offending value---In absence of mens rea on the part of the importer, no charge of mis-declaration or untrue statement in the terms of S.32(1) and collusion in terms of S.32(2) of the Customs Act, 1969, could be made---Impugned order was declared to be illegal, void ab initio and was set aside---Redemption fine @ 20% imposed in terms of S.R.O. No. 499(I)/2009, dated 13-6-2009 and penalty imposed on the importer were remitted---Collector of Customs, was directed to immediately discharge/release the security furnished by the importer---Appeal was accepted accordingly.

M/s. Novo Nordisk Pharma (Pvt.) v. Additional Collector--If, PACCS, Karachi 2013 PTD 2186; Weave and Knit (Pvt.) Limited v. Additional Collector 2004 PTD 2981; Mubashir Ahmed Magoon, Karachi v. Collector of Customs (Appeals-I) and other 2014 PTD (Trib.) 830; Metro Tyres Limited v. Collector 1994 (74) ELT 964; Ibrahim Textile Mills Limited v. F.O.P. PLD 1989 Lah. 47 and Cargill Pakistan Seeds (Pvt.) Limited v. Tribunal 2004 PTD 26 ref.

Imran Iqbal Khan for Appellant.

Asfandyar A.C. and Ghulam Mustafa, A.O. present for the Respondents.

Date of hearing: 14 March, 2016.

ORDER

TAHIR ZIA, MEMBER (JUDICIAL-II).---By this order, I will dispose of Customs Appeal No.K-651/2014 filed by the appellant against the Order-in-Original No. 214213 dated 20.05.2014, passed by the Additional Collector of Customs (Adjudication), Custom House, Karachi.

2.Brief fact of the case are that M/s. Noor Brothers imported a consignment declaring the description of goods as "glass beads, auto parts, industrial rubber belts, auto V. belts and other miscellaneous items and sought clearance under section 79(1) of the Customs Act, 1969 by filing GD No. KAPW-HC-132398 dated 12-04-2014. In order to check as to whether the Importer has correctly paid the legitimate amount of duties and taxes under reference GD was selected for scrutiny in terms of section 80 of the Customs Act, 1969 and the examination of container bearing No. DFSU 7122805 was conducted. Perusal of the case in the light of examination report as well as the documents scanned by the importer revealed that there is a gross misdeclaration of net weight, PCT headings of lower duty slabs and inadmissible facility of FTA. The declared weight of the consignment was 18,505 kgs and reported net weight was found 25,565 kgs in the examination report. The excess quantity is 7,066 kgs which amounts to 38.19%. The details of examination reports are as under:

1) EMPTY PLASTIC JEWLARY BOX IN ASSORTED SHAPE AND SIZES. WEIGHT: 80 KGS APPROX.

(2) PENCIL'S ERASER (RUBBER) BRAND: HP WEIGHT: 810 KGS APPROX.

(3)GLASS BEADS IN ASSORTED SIZES SIZE UP TO 5MM WEIGHT: 760 KGS APPROX.

(4)FOAM GLITTER SHEETS IN ASSORTED COLORS END SIZES. WEIGHT 630 KGS. APPROX.

(5)INDUSTRIAL RUBBER V BELT IN ASSORTED SIZES, ART NO AND BRAND WEIGHT 13,950 KGS APPROX. (B) AUTO PARTS RUBBERY BELT FOR VEHICLES WEIGHT 3.045 KGS APPROX. BRAND OIL FIELDS. 1/0 NOT SHOWN.

(6) AUTO PARTS MECHANICAL SEAL/OIL SEAL IN ASSORTED SIZES FOR VARIOUS MODELS WEIGHT 395 KGS APPROX. BRAND DINGMA 1/0 NOT SHOWN.

(7)BOLT NUT FOR AUTO IN ASSORTED SIZES WEIGHT 375 KGS APPROX.

(8)CONROD BEARINGS (AUTO ARTS) MODELBJ-1028 BRAND DINGMA WEIGHT 430 KGS APPROX BRAND TOP RAINS

(9)AC HYBRID TABILIZERS G SERIES MODEL GS5 AND GS7 INPUT 140 V-26dV AND BRAND DELUX 1/0 NOT SHOWN. QTY 2 PCS EACH CTN TOTAL QTY 518 PCS WEIGHT 2,590 KGS APPROX.

(10)AUTO PARTS CLUTCH CYLINDER FOR UP TO 1300 CC VEHICLES WEIGHT 650 KGS APPROX.

(11)AUTO PARTS, BRAKE YUNDER AND CROSS FOR UP TO 1300 CC VEHICLE WEIGHT 490 KGS APPROX. BRAND HANGDA JIECHI 1/0 NOT SHOWN.

(12)AUTO PARTS TANKI CUP WIGHT 395 KGS APPROX.

(13)AUTO PARTS IRON IN WEIGHT 590 KGS APPROX. I/O AND BRAND NOT FOUND.

(14). AUTO PARTS TANK LOCK WEIGHT 55 GS APPROX.

(15)AUTO PARTS PLASTIC DOOR HANDLE WEIGHT: 225 KGS APPROX.

(16)BOLT WASHER OR AUTO WEIGHT 95 KGS APPROX. MODE OF PACKING CTNS 1/0 NOT FOUND. 100% WEIGHT 26,835 GS VIDE KICT WEIGHTMENT SLIP NO. 409496 DT.13.04.14."

This act of mis-declaration proves that the importer has deliberately concealed the actual quantity and attempted to hoodwink the national exchequer by declaring incorrect, fake and forged Goods Declaration in order to suppress the quantity, value and taxes willfully and with mala fide intention and have attempted to defraud the Government from its legitimate revenue amounting to Rs.2,523,02/-. The value of the offending goods is Rs.4,970,291/- Had this act gone undetected by the customs staff; the public exchequer would have been deprived of its legitimate revenue to the tune of Rs.2,523,0281- The total value of the offending goods is Rs.4,970,291/- whereas the expected evasion in the amount of duty and taxes is Rs.2,523,028/-.

3.After issuing show-cause notice to the appellant, the matter was adjudicated by the respondent (Additional Collector of Customs, Adjudication), who did not agree with reply of the appellant and passed the Order-in-Original No.214213 dated 20.05.2014, against the importer the operative part of the said O-N-O is reproduced as under:-

"I have gone through the case record and examined written/ verbal submissions of the respondent and the department. It is observed that the respondent mis-declared net weight, PCT headings of lower duty slabs and claimed inadmissible FIA. The importer declared total weight of the consignment as 18,505 Kg whereas on examination the weight of goods was found to be 25,565 Kg. The quantity of excess weight comes to 7,060 Kg i.e. 38.19% excess. It is evident that the respondent has concealed the actual quantity, weight and correct PCT to evade leviable duty and taxes. Accordingly, charges levelled In the Show-Cause Notice stand established. I, therefore, order confiscation of goods in terms of section 156(1) clause 14, read with section 32(1)(2) of the Customs Act, 1969, however, an option under section 181 of the Customs Act, 1969 is given to the respondent to redeem the Impugned goods on payment of twenty percent (20%) fine Rs.994,058/- (Nine hundred ninety four thousand and fifty eight) in terms of S.R.O. 499(I)/2009 dated 13.06.2009 of the value of offending goods as determined by the department in addition to payment of leviable duty and taxes. A penalty of Rs. 100,000/- (One Hundred thousand) is also imposed on the importer."

4.Being aggrieved and dissatisfied with the Order-in-Original, the appellant filed the instant appeal before this Tribunal on the grounds as under:-

1.That the Respondent No.1 has erred in law not to consider the fact that there is no false statement on Part of the appellants. The Appellants have declared the weight of the consignment on the basis of proforma invoice. However on examination the weight was found to be in excess as declared. The Appellants have duly informed the adjudicating officer that due to holidays and non availability of labour in China the exact weight could not be communicated to the Appellants.

2.That the adjudicating officer has erred in law to calculate the redemption fine at 20% on value of purported offending goods Rs.4,970,291/- instead of evaded amount of duties and taxes on offending value of the goods which comes to Rs. 593,229/- Even otherwise the offending value of the goods comes to Rs.936,146/-. Therefore by no process of reasoning the redemption fine could be imposed on Rs.4,970,291/-. The Appellants have made a statement wherein the evaded duties and taxes have been calculated on offending value which is being enclosed and marked as Annex-G.

3.That the adjudicating officer has failed to implement the decision in identical cases wherein the Honorable High Court and Tribunal has held that the redemption fine should be on the evaded amount of duties and taxes and not on offending value. Reliance is placed on the judgment of the superior courts namely M/s. Novo Nordisk Pharma (Pvt.) Limited v. Additional Collector of PACCS, Karachi, 2013 PTD 2186 (ii) Weave and Knit (Pvt.) Limited v. Additional Collector 2004 PTD 2981 and (iii) Mubashir Ahmed Magoon, Karachi v. Collector of Customs (Appeals-I) and others 2014 PTD (Trib.) 830. The above decision are binding on the Respondents and hence non implementation of the judgments of the superior court tantamount to miscarriage of justice in the eyes of law and hence the impugned order is liable to be set aside on this ground alone.

4.That the adjudicating officer has imposed redemption fine of Rs. 994,058/- i.e. 20% of value of the purported offending goods instead of Rs.118,645/- on evaded customs duties and taxes on offending value along with penalty of Rs.100,000/-. There is a serious calculations mistakes on assessment by the appropriate officer of customs. There is no basis on which the calculation of Rs. 994,058/- has been made in the impugned order.

5.That the adjudication officer has imposed redemption fine and penalty despite the fact there is no mala fide on part of the Appellants. What has been physically declared has been found physical as per declaration of the Appellants. There is no actus reus or mens rea on part of the Appellants. Therefore the imposition of fine and penalty is too harsh in this case which may held to be without jurisdiction, illegal, ultra vires under the law.

6.That the Appellant seeks leave of the Honorable Appellate Tribunal to add, modify, alter and submit further grounds during the proceeding of this appeal.

The appellant's counsel further argued that on the basis of above said grounds and facts, the instant appeal may kindly be accepted and the Order-in-Original No.214213 dated 29.05.2014 passed by the respondent No.1 may be set aside in the interest of justice.

5.The Respondent has submitted parawise comments / counter objections in reply to the memo. of appeal. The corresponding paras are reproduced as under:--

1.That in the light of submissions made above and the contents of Order-in-Original the contents of para (7) of the appeal requires no further comments, hence vehemently denied. It is further submitted that it is un-believable that the managerial staff of the shipper was on leave for one months and the whole operations of the exports were in the control of the labours.

2.That in the light of submissions made above and the contents of Order-in-Original the contents of para (5) of the appeal requires no further comments, hence, denied. The provisions of S.R.O. 499(I)/2009 and clauses (14) and (14A) of section 156(1) of the Act clearly speaks about value of the "offending goods" and not about "offending value of the goods" the mis-statement about the self-assessment in terms of section 79(1) (b) read with section 32(1)(c) of the Act, mis-declaration of PCT heading, inadmissible claim of FTA exemption and mis-declaration of value has made the whole consignment as "offending goods".

3.That in the light of submissions made above and considering that the facts and circumstances of the case and the law i.e. S.R.O. 499(I)/2009 which is new/changed, thus, the citations of are distinguishable and not applicable, mutatis mutandis, on the appellant's case. Thus, the contents of para (9) of the appeal are incorrect, hence, denied.

4.That in the light of submissions made above and considering the contents of Order-in-Original, the contents of para (10) of the appeal requires no further comments, hence, denied.

5.That in the light of submissions made above and considering the contents of Order-in-Original, the contents of para (11) of the appeal requires no further comments, hence, denied.

6.That the contents of para (12) of the appeal though require no comments, it is however, respectfully submitted that the appellant's counsel may be instructed to supply copy of the "additional ground / arguments" in advance.

The departmental representative further submitted that the Orders passed by the respondent No.1 is legal and within the ambit of prevailing law, which is required to be upheld.

6.The counsel for the appellant in addition to reply to the parawise comments filed by Respondents has also submitted rejoinder/additional grounds, which are reproduced as under:--

(i)Whether sthe Appeal has been signed by an aggrieved person under Section 194-A(1) of the Customs Act, 1969 as alleged in parawise comments filed by Respondent No.2?

(ii)Whether the Respondent No.1 is justified to impose redemption fine of the whole value of the consignment instead of alleged evaded amount of duties and taxes of the value of offending goods?

(iii)Whether the Respondent No.1 is justified to penalize the Appellants on account of alleged misdeclaration of excess weight, PCT Heading and FTA Certificate issued under S.R.O. 659(I)/2007 dated 30.06.2007 which is purely question of law?

(iv)Whether the Respondent No. 1 has justified in alleging that the Appellants have delivered untrue statement or makes or signs or caused to be made or signed or delivered any untrue declaration before the appropriate officer of customs within the mischief of Section 32(1) of the Customs Act, 1969

(v)Whether the Respondent No.1 has justified in alleging that the Appellants have some collusion with customs officers by reasons to believe that the duty has not been charged in the impugned goods?

(vi)Whether incorrect claims as to P.C.T or SRO numbers tantamount to mis-declaration within the meaning of Section 32 of the Customs Act, 1969 as alleged in the show-cause notice and impugned order?

(vii)Whether the Respondent No. 1 could disregard the examination report which confirms that the goods which were actually imported have been arrived at territorial waters of Pakistan?

Issue No.(i)

That it has been alleged in the para-wise comments that the Appeal has not been signed by the aggrieved person i.e. the owner of the Goods. We deny the above allegation and it is respectfully submitted that firstly the Appeal has been duly admitted and/or accepted by this Honorable Tribunal after having all the verification and investigation that the Appeal has been signed by the authorized aggrieved person. However without prejudice to the above it is submitted that the Appeal has been signed by Mr. Liaquat Ali bearing CNIC No.31103-1138867-7, who is the Proprietor of the Appellant's Company as evident vide NTN No.3337375-2 (Annex-A) which proves that the goods have been imported by Mr. Liaqut Ali Proprietor of M/s. Noor Brothers hence the objection raised by the Respondent No.2 is misconceived in all its aspect and liable to be set aside on this ground alone.

Issue No.(ii)

That the Respondent No.1 has erred in law to calculate the redemption fine at 20% on total value of purported offending goods Rs.4,970,291/- instead of evaded amount of duties and taxes on offending value of the goods which comes to Rs.593,229/-. It is respectfully submitted that under the law the Respondent No. 1 was under legal obligation to impose redemption fine on evaded amount of duties and taxes which comes to Rs.593,229/- therefore the fine if imposed at 20% comes to Rs.118,659/-. In this case the Respondent No.1 has imposed redemption fine of Rs.994,058/- i.e. 20% of value of the whole consignment of Rs.4,970,291/-. For the sake of assistance and ready reference the Appellants have made a statement wherein the evaded amount of duties and taxes have been calculated on value of offending goods which was enclosed with memo of Appeal annexed at Annex-G.

That in this context reliance is placed on the judgment of the superior courts namely M/s. Novo Nordisk Pharma (Pvt.) Limited v. Additional Collector-II, PACCS, Karachi 2013 PTD 2186 (ii) Weave and Knit (Pvt.) Limited v. Additional Collector 2004 PTD 2981 and (iii) Mubashir Ahmed Magoon, Karachi v. Collector of Customs (Appeals-I) and others 2014 PTD (Trib.) 830. The above decision are binding on the Respondents and hence non implementation of the judgments of the superior court tantamount to miscarriage of justice in the eyes of law and hence the impugned order is liable to be set aside on this ground alone.

Issue No.(iii)

That question whether the Respondent No.1 is justified to penalize the Appellants on account of alleged misdeclaration of excess weight, PCT Heading and FTA Certificate issued under S.R.O. 659(I)/2007 dated 30.06.2007 is purely question of law. It is submitted that in this case the respondents have alleged that the Appellants have misdeclared the net weight, PCT Headings of lower duty slab and claimed inadmissible FTA without any basis or evidence or reasons to believe that the Appellants have deliberately misdeclared the PCT Headings and FTA Certificate. There is no specific allegation as to PCT. Headings that under what PCT headings the Department propose to impose duty and taxes and there is no such reasons or basis on which it has been alleged that the appellants have claimed inadmissible FTA despite the fact that the FTA certificate has been issued by the Government of China vide certificate No.P14470ZC40403245 dated 19.01.2014 (Annex-B) wherein the PCT headings of the goods were duly accorded in the said certificates.

It is submitted that there as difference between a declaration and a claim. In terms of section 79 of the Customs Act, 1969 the importer has to file a bill of entry, for the release of goods on which the appropriate officer has to make an assessment under Section 80 of the Customs Act, 1969. A claim made by an importer is subject to scrutiny by the assessing officer, who has been vested with unfettered powers to complete an assessment. The claim, as stated, is a request subject to the approval by a competent officer and it is the duty of the appropriate officer of customs to make assessment by calculating the liability of duty and taxes on the goods being imported. Reliance is placed on the comments put forwarded by Mr. Javaid Umar in Customs Act, 1969 written by him at page No.631, which is reproduced below:--

Difference between a declaration and a claim: There is a clear distinction in jurisprudence, between a "declaration" or "a statement in answer to any question put" and a "claim". A declaration in the context of the customs laws, essentially means, a positive statement, made by the importer or the exporter, as the factual details of his import or export. The word "declaration" came to judicial scrutiny in this case of Vithoba Syamna v. Union of India report as AIR 1957 Bom. 321. It was held in that case, that the word "declaration" refers to the nature, description and value of the goods, so that the assessing officer can apply appropriate tariff rates for assessment and charging. On the other hand, the word "claim" means a demand for something supposed due to, or, demanded as a right. The mere claiming the benefit of a notification resulting in any erroneous grant of the benefits of the concessionary notification, cannot be considered as a ground for holding, that the declaration in respect of the nature, description and value of the goods is wrong."

Issue No.(iv)

That Respondent No.1 has alleged that the Appellants have delivered untrue statement or makes or signs or caused to be made or signed or delivered any untrue declaration before the appropriate officer of customs within the mischief of section 32(1) of the Customs Act, 1969. The Respondents may kindly be directed to produce such false statements or untrue statements which has been reasoned to believe that the appellants have committed mis-declaration within the meaning of section 32(1) of the Customs Act, 1969. There is no evidence on record that the Appellants have made any untrue statement before the appropriate officer of customs. The burden of prove under Article 117 of the Qanun-e-Shahadat Order, 1984 lies upon the shoulder of Respondents that there is any untrue and false statement within the meaning of section 32(1) of the Customs Act, 1969 given before the appropriate officer of customs.

Issue No.(v)

That similarly the Respondent No. 1 has alleged that the Appellants have some collusion with customs officers by reasons to believe that the duty has not been charged in the impugned goods. Again there is no evidence on record or there is no such statement of appropriate officer of customs on the reasons to believe that the Appellants have collusion within the meaning of section 32(2) of the Customs Act, 1969. A statement may kindly be taken from Respondent No.2 as to whom and at what time and date the transaction of collusion was made. The burden of prove under Article 117 of the Qanun-e-Shahadat Order, 1984 lies upon the shoulder of Respondents that there is collusion in this respect of the Appellants on which duty has not been levied or charged within the meaning of section 32(2) of the Customs Act, 1969 given before the appropriate officer of customs.

Issue No.(vi)

That it is well settled law that incorrect claims as to P.C.T or S.R.O. numbers are not mis-declaration, if made without reason to believe, that they are false in material. This celebrated principle of law in customs jurisprudence has now been well settled in large numbers of cases, some of which are cited below:-

(i)Monno Industries Limited v. G.O.P. C.P. No.D-199/1984

(ii)Collector of Customs v. Central India Board Product 1987 (29) ELT 259

(iii)Collector of C.E. v. Chemphar Drugs 1989 (40) ELT 276 (S.C.)

(iv)Central Cotton Mills Limited v. Collector (sic)

(v)Metro Tyres Limited v. Collector 1994 (74) ELT 964.

(vi)Ibrahim Textile Mills Limited v. F.O.P. PLD 1989 Lah. 47.

(vii)Central Board of Revenue v. Jalil Sheep Co. 1987 SCMR 630.

(viii) F.O.P v. Quetta Textile Mills C.A. No. 860-K/90 SC

(ix)Crescent Steel v. Collector of Customs Appeal No.48/2000 (Tax)

(x)State Cement Corporation v. G.O. P.C.A No.43 of 1999.

(xi)Cargill Pakistan Seeds (Pvt.) Limited v. Tribunal 2004 PTD 26.

(xii)Pakistan State Oil Co. Ltd. v. C.E.S.T.A.T. 2005 PTD 78.

Issue No.(vii)

That it is submitted that Respondent No.1 has disregarded the examination report which confirms that the goods which were actually imported have been arrived at territorial waters of Pakistan. The copy of examination report which has been issued by the appropriate examining officer of customs is enclosed herewith and marked as Annex-C. Thus it is crystal clear that there is no misdeclaration on part of the Appellants on the ground that what has been physically declared has been found physical as per declaration of the Appellants. There is no actus reus or mens rea on part of the Appellants. Therefore the imposition of fine and penalty is too harsh in this case which may held to be without jurisdiction illegal, ultra vires under the Constitution of Islamic Republic of Pakistan.

For the above foregoing reasons and grounds, it is prayed that this Honorable Tribunal may kindly accept the appeal and hold that the impugned Order-in-Original No.214213 dated 20.05.2014 is liable to be set aside and remit the whole of the fine and penalty imposed therein.

That the Appellants further reiterate and adopt the arguments, grounds and prayers taken in the memo. of Appeal. Prayer is made in the interest of justice.

7.I have heard both the parties. In this case firstly it should be determined as to whether there is any misdeclaration or untrue statement given by the Appellants before the appropriate officer of customs. By carefully examine the aspects of the case as per learned Counsel for the Appellants that before clearance of the goods, the Appellants have voluntarily requested First Examination Appraisement System in column description mentioned in item. Detail under impugned GD to the clearance collectorate as to examine the description and quantity of the good which read as "please confirm description and quantity through examination please". On the other hand the Department has proceeded against the Appellants by charging misdeclaration in terms of section 32(1) and (2) of the Customs Act, 1969, without going into actual facts, that the Appellants himself have voluntarily requested for examination as to actual description and quantity of goods. Secondly as per learned Counsel for the Appellants, out of 16 items mentioned in Goods Declaration, Items Nos. 1, 2, 3, 4 and 5 were imported under Free. Trade agreement in terms of S.R.O. 659(I)/2007 dated 30.06.2007 and duly accompanied by a FTA Certificate vide No.P14470ZC40403245 dated 19.01.2014. He argued that the benefit of FTA under S.R.O. 659(I)/2007 was duly accepted by the department and there is no such dispute of the claim of the benefit of said S.R.O. 659 hence the charge of misdeclaration is not attributable by any stretch of imagination. On the above circumstances, I am fully agreed with the Counsel's argument that the appellants' have acted bonafidely and in accordance with law as since he was not aware to the actual PCT headings and the actual quantity/weight of the impugned goods imported by him and hence applied to the Respondents in a bonafidely manner. The Counsel in his rejoinder has also argued that there is difference in "Declaration" and a "Claim"; which he relied upon the opinion drawn by Mr. Javaid Umar at page 631 in his written book "The Customs Act, 1969" wherein various judgments have been cited, which has also been perused by us. The Appellants have filed G.D (Goods Declaration) in terms of section 79 of the Customs Act, 1969 and requested to confirm their description and quantity. The appropriate officer was under obligation that on request of the importer/appellants he should have correctly assessed the goods in terms of description and quantity inter alia includes weight of the impugned goods under section 80 of the Customs Act, 1969, without proceeding to the contravention in this case. The appropriate officer has accepted the claim of benefit of S.R.O. 659(I)/2007 dated 30.06.2007 and the PCT headings declared by the Appellants under items Nos.1 to 5 in G.D have been duly accepted/assessed in terms of section 80 of the Customs Act, 1969 hence there is no question arises regarding misdeclaration in view of the above assessment.

8. The learned Counsel in his rejoinder has also argued that there are number of judgments of superior courts wherein it has been held that incorrect PCT classifications of goods are purely questions of law and hence the charge of misdeclaration is not at all attracted in this case. He has also brought into notice that the Respondent No.2 has charged collusion in terms of Section 32(2) of the Customs Act, 1969 but failed to produce any documentary evidence or basis (sic) of to produce the relevant appropriate officer of customs who allegedly to have been collusion with the Appellants to defraud the government revenue in clearance of impugned goods.

9. The second issue brought to my notice that the value of offending goods mentioned in the show cause is incorrect and pertains to the total value of the goods and not offending value. The show-cause notice is itself defective on the (sic) that the amount of offending value as mentioned in the show-cause notice as well as impugned order is Rs.5,212,790 whereas the actual offending value the contravened goods is Rs.593,229/- which is sheer violation of principles of natural justice and equity under the Customs Act, 1969 read with Constitution of Islamic Republic or Pakistan, 1973. In terms of interim order dated 01.10.2014 passed by this Tribunal in this Appeal, the Respondent (sic) collectorate have secured redemption fine and penalty on incorrect value of offending goods which prima facie is the total value of the good instead of actual value of offending goods. Although the Respondents have not made out their case as to how and what basis on evidence on record the redemption fine of Rs.994,058/- being 20% in terms of S.R.O. 499(I)/2009 dated 13.06.2009 and penalty of Rs.l00,000/- could be imposed on the Appellants. In my opinion the show-came notice is itself defective and the redemption fine and penalty imposed on total value of goods instead of actual value of offending goods are illegal, unjustifiable and be void.

10.On the other hand it has been mentioned by the appellants in items detail that "please confirm description and quantity through examination please" thus after appellants honest disclosure, he can not be held guilty by any stretch of imagination in the circumstances action of customs authority in imposing penalty and fine was totally arbitrary and unjustified as there was no will (sic) default/misdeclaration but there was bona fide declaration by the imported invoking of section 32 of the Customs Act, 1969 was too far fetched (sic) imposition. of penalty is not mandatory only for the reason that it has been prescribed in the statute. The authorities should give due regard to the facts and circumstance of each case before invoking of section 32 Ibid.

11.In view of the above reasons, I hold that in absence of mensrea on the part of appellant, no charge of misdeclaration or untrue statement in terms of section 32(1) and collusion in terms of section 32(2) of the Customs Act, 1969 in made out on the Appellants in this case. The impugned order is declared to be illegal, void, ab inito, and set aside. The redemption fine @ 20% imposed in terms of S.R.O. 499(I)/2009 of Rs.994,058/- and penalty of R.l00,000, in the impugned order are hereby remitted. The Respondent No.2 are directed to immediately discharge/release the security furnished by the appellants in the shape of post dated cheque of Rs.1,094,058/- on account of redemption fine and penalty. The Appeal is accepted with no order to cost.

12.Order passed and announced accordingly.

HBT/92/Tax(Trib.) Appeal accepted.