MOEED'S INDUSTRIES, PESHAWAR VS The DEPUTY DIRECTOR CUSTOMS, LAHORE, 2018 PTD-CUSTOMS-APPELLATE-TRIBUNAL-LAHORE 2508 (2018)

Customs Act (IV of 1969)---

----Ss. 32 & 33---Mis-declaration---Deputy Director (Post Clearance Audit), during scrutiny, observed in valuation that the importer had declared the value at US $ 1.4/Kg, instead of US $ 2.23 Kg and evaded duty/taxes violating the provisions of S.32 of the Customs Act, 1969---Show-cause notice was issued to the importer and Additional Collector-II, vide Order-in-Original decided that as the case was kept pending for want of clarification from Deputy Director Valuation, due to non receipt of desired report, the order was passed in the light of Valuation Ruling relevant to the impugned consignment according to which the value of the imported consignment was US $ 2.23 Kg.---Declaration of lesser value, resulted into short payment of duty/taxes, was recoverable from the importer---Being aggrieved, the importer filed an appeal against said order to the Collector (Appeals)---Nothing had been explained by the Collector of Customs in his Order of Remand in respect of the directions issued by the Order-in-appeal of the Collector of Customs (Appeals) as nothing was dilated upon the letter which was the main issue for resolving the matter---Collector of Customs (Appeals), had decided the case without adverting to the factual as well legal points---Order-in-remand of the Additional Collector (Adjudication), was set aside, in circumstances.

Danish Ali Qazi for Appellant.

Mussa Khan, Superintendent/D.R. for Respondents.

Date of hearing: 26th February, 2018.

JUDGMENT

SYED SARDAR HUSSAIN SHAH, MEMBER (JUDICIAL).---This appeal is directed against the Order-in-Remand No.512 of 2015, dated 29.12.2015 by the Additional Collector of Customs (Adjudication), Islamabad, Camp Office, Jamrud Road, Custom House, Peshawar, wherein order for the recovery of short payment of duty/taxes to the tune of (Rs.4,43,465/- as Custom duty, Rs.3,59,206/- as Sales Tax and Rs.25,833/- as Income Tax) from Messrs Moeed's Industries, Private Limited, 69-C, Industrial Estate, Jamrud, Peshawar was passed (hereinafter called appellant).

2.Briefly stated facts of the case are that, the Deputy Director (Post Clearance Audit Lahore), during scrutiny of import data of "BOPP Film Adhesive Tape Grade", observed that the importer (M/s. Moeed's Industries (Pvt.) Ltd. I.E. Jamrud Road, Peshawar) had declared the value @ US$1.4/Kg instead of US$ 2.23/Kg as per Valuation Ruling No.Misc/07/2007-IIA, dated 13.12.2007 cleared vide G.D.No.PDRY-HC-2408, dated 30.05.2009 and evaded duty/taxes to the tune of Rs.8,28,504/- (Rs.4,43,465/- Custom duty, Rs.3,59,206/- Sales Tax and Rs.25,833/- Income Tax). Management of Messrs Moeed's Industries (Pvt.) Ltd., Peshawar had violated the provisions of subsections (1) (2) and 3A of Section 32 of the Customs Act, 1969, Sections 3(b), 6, 7(2)(ii) and 36(I) of the Sales Tax Act, 1990 and Section 148 of the Income Tax Ordinance, 2001 punishable under clause 14 of subsection (1) of section 156 of the Customs Act, 1969 read with Serial Nos. 5 and 19 of the table of section 33 of the Sales Tax Act, 1990 by evading duty and taxes to the tune of Rs. 8,28,504/- . Thus a contravention case has been framed and submitted for adjudication.

3.A Show-Cause notice was issued to the appellant on 14.02.2011. The learned Additional Collector-II, Model Customs Collectorate, Custom House, Peshawar, vide his Order-in-Original No.133 of 2012, dated 23.05.2012, decided that as the case was kept pending for want of clarification from D.G Valuation, Karachi, therefore due to non receipt of desired report the order was passed in the light of valuation ruling relevant to the impugned consignment according to which the value of the imported consignment is US$ 2.23 per Kg. The respondent unit paid duty/taxes at the value of US$ 1.40 per Kg. Declaration of lesser value resulted into short payment of duty/taxes to the tune of Rs.436805/- (C.D Rs.177910/-, S.Tax Rs.224167/-, A.I.Tax Rs.25833/- and F.E.D Rs.8896/-) which is recoverable from Messrs Moeed's Industries in terms of Section 32(3A) of the Customs Act, 1969, and that has to deposit the aforementioned amount into Government Treasury.

4.Being aggrieved the appellant filed an appeal against the order dated 23.05.2012 to the Collector of (Appeals), Rawalpindi, Camp Office, Customs House, Jamrud Road, Peshawar, and vide his Order dated 21.12.2012, the case was remanded to the original Adjudicating authority for de novo consideration with the direction to provide the appellant an opportunity of defence during learing and consider the clarification from Director General of Valuation, Karachi letter dated 28.05.2012.

5.The Collector of Customs (Adjudication), Islamabad, Camp Office, Custom House, Jamrud Road, Peshawar vide Order-in-Remand No.512 of 2015, dated 29.12.2015 passed an order again stating that the case was kept pending for want of clarification from D.G. Valuation, Karachi, but due to non receipt of desired report the case was decided in the light of valuation ruling relevant to the impugned consignment according to which the value of the imported consignment is US$ 2.23 per Kg. The respondent unit paid duty/taxes at the value of US$ 1.40 per Kg. Declaration of lesser value resulted into short payment of duty/taxes to the tune of Rs.8,28,504/- (C.D Rs.4,43,465/-, S.Tax Rs.3,59,206/-, and A.I.Tax Rs.25,833/-) which is recoverable from Messrs Moeed's Industries in terms of Section 32(3A) of the Customs Act, 1969, and that Messrs Moeed's Industries (Pvt.) Ltd. Industrial Estate, Jamrud Road, Peshawar has to deposit the aforementioned amount into Government Treasury.

6.I have heard Mr. Danish Ali Qazi, learned Advocate for the appellant as well as Mr. Mussa Khan, Superintendent, Customs for the respondents and perused the record of the case with their-able assistance.

7.A letter dated 11.06.2010 was issued by the Deputy Director, Directorate of Customs, Post Clearance Audit, Lahore to the appellant, disclosing that the origin of the goods was deliberately mis-declared. Resultantly due to such an error or misconstruction, leviable Customs duty and taxes amounts to Rs.828,504/- Custom Duty Rs.443,465/-, Sales Tax Rs.359,206/- and Income Tax Rs.25,833/-, which is recoverable under Sections 32(3), 32(3A) of the Customs Act, 1969. Thereafter, Deputy Director, Directorate of Customs, Post Clearance Audit, Lahore issued another letter dated 12.08.2010 addressing to Moeed's Industries and replying to a Review Application of the said Industry, which stated that as per value of Self Adhesive OPP Packing Tape (Jumbo Rolls) under the PCT Code 3919.1000, 3919.9000, 3919, 9010 and 3199090 has been determined by the Directorate General of Customs Valuation, Karachi and the same evidence produced by you is not relevant with the imported goods i.e. Biaxially Oriented Polypropylene (BOPP) Film classified under PCT Code 3920.2010, where value of US$ 2.230/Kg has been determined under Valuation Ruling No.Mis/07/2007-IIA, dated 13.12.2007 and directed the appellants to deposited the short levied duties and taxes amounting to Rs.828,504/-. The appellant submitted GD for the clearance of BOPP Film Adhesive Tape Grade and the above stated two letters of the Directorate of Customs, Post Clearance Audit office is not mentioned the value for the BOPP Film Adhesive Tape Grade. It is an established fact on record that the department has sought clarification from Directorate General of Valuation, Custom House, Karachi and the Deputy Director, Director General of Customs Valuation, Custom House, Karachi in his letter dated 28.05.2012 classified the BOPP Film Adhesive Tape Grade and according to his letter and annexure, the value of the same is 1.04 to 1.05 per Kg during the relevant period.

8.In this Case, MCC Customs Dryport, Peshawar issued letter No.C.No.PDRY-HC-2408/2011/743, dated 10.05.2012, wherein the department has sought clarification from the Directorate General of Customs Valuation Custom House, Karachi. The Deputy Director, Directorate General of Customs Valuation Custom House, Karachi vide their letter No. Misc/16/2011/6254, dated 28.05.2012 replied that there is difference in the definition of "application" and "classification" of "BOPP Film Adhesive Tape Grade" and "Self Adhesive OPP/BOPP, Packing Tape (Jumbo Rolls)", and Valuation between the two goods would widely differ. One is to be used as raw material for application in allied industry, while the other is considered as a finished product for straightway usage. Nevertheless, it is clarified that the valuation of BOPP Film Adhesive Tape Grade is generally taken by the assessing officers of all the Collectorates on the basis of Polymer Scan prices of Plastic Raw Material, circulated by the Pakistan Plastic Manufacturers Association.

9.Perusal of the Valuation Chart of Plastic Raw Material of 2009 issued by Pakistan Plastic Manufactures Association attached with letter dated 28.05.2012 of the Directorate General of Customs Valuation, Customs House, Karachi shows the value of the BOPP Adhesive Tape Grade @ 1040 -1050 as per metric ton for the time period 22.05.2009 to 03.06.2009 which comes to US$ 1.04 -1.05 per Kg.

10.From available evidence on the record it transpires that the GD No.PDRY-HC-2408 was filed by the appellant on 30.05.2009 showing BOPP Film Adhesive Tape Grade 12.9948 metric ton of 25 micron and declaring its value US$ 0.84 per Kg. Whereas the department assessed its value at US$ 1.4 per Kg, hence the appellant deposited the enhanced duties and taxes under the protest and cleared the consignment. The value of BOPP Adhesive Tape Grade is evident from the record as US$ 1040-1050 per metric ton.

11.The letter of Directorate General of Customs Valuation, Custom House, Karachi was issued on 28.05.2012, which was received on 31.05.2012 means that this letter was available at the time of passing order dated 21.12.2012. It is astonishing that once again at the time of passing Order-in-Remand dated 29.12.2015, the same letter had not been discussed. Both the orders seems to be stereo type.

12,The learned Collector of Customs (Adjudication), Islamabad, Camp Office, Custom House, Jamrud Road, Peshawar in his order dated 29.02.2015 did not discuss the evidence on record i.e. letter dated 28.05.2012 of the Deputy Collector, Directorate General of Customs Valuation Custom House, Karachi. While the Collector of Customs (Appeals), Rawalpindi, Camp Office, Custom House, Jamrud Road, Peshawar in his order dated 21.12.2012 remanded the case for considering the letter dated 28.05.2012 in respect of determination of customs value of Self Adhesive OPP/BOPP Packing Tape (Jumbo Rolls) under Section 25-A of the Customs Act, 1969.

13.Nothing has been explained by the Collector of Customs in his Order-in-Remand dated 29.12.2015 in respect of the directions issued by the Order-in-Appeal dated 21.12.2012 of the Collector of Customs (Appeals) as nothing was dilated upon the same letter which was main fact for resolving the matter in this case.

14.That the Collector of Customs (Appeals), Rawalpindi, Camp Office, Peshawar vide his Order-in-Appeal No.126, dated 21.12.2012 remanded the case for de novo consideration, as such the Show-Cause notice become pending again on 21.12.2012. However, the matter was decided vide Order-in-Remand No.512/2015, dated 29.12.2015 i.e. 03 years and 08 days after show-cause notice became pending with the Adjudicating Officer, hence the Order-in-Remand dated 29.12.2015 is time barred and the learned Collector of Customs (Appeals) decided the case without adverting to the factual as well legal points.

15.In view of the above discussion, I allowed this appeal, and set aside the Order-in-Remand No.512 of 2015, dated 29.12.2015 of the Additional Collector (Adjudication), Islamabad, Camp Office, Custom House, Jamrud Road, Peshawar. This case is disposed off accordingly.

HBT/29/Tax(Trib.) Appeal allowed.