KARACHI: The Sindh High Court (SHC) has set aside impugned order passed by customs appellant tribunal and restored order of the customs department on a special customs reference application filed by Collector of Customs against M/s Paramount Enterprises on disputed duty and taxes on consignment of Coconut Acid Oil.
Through this reference application the applicant has impugned order dated 04.05.2012, passed by the Customs Appellate Tribunal at Karachi in Customs Appeal No.K-1132/2011.
Learned counsel for the applicant has read out the order and submits that learned tribunal has seriously erred in law and facts inasmuch as this was a case of mis-declaration under Section 32 of the Customs Act, 1969 (“Act”) and findings of the forums below have been set aside by the learned tribunal without dilating upon this aspect of the matter, and instead, the value and assessment of the goods has been dealt with which is erroneous and not relevant to the facts of the case.
He has prayed for SCRA 243 of 2012 Page 2 of 6 setting aside of the impugned order by answering the proposed questions of law in favour of the Applicant.
On the other hand, learned counsel for respondent has argued that this was not a case of mis-declaration as alleged but was of a wrong shipment by the shipper, whereas, the assessment was required to be made in terms of Section 25 of the Customs Act, 1969 which was done by the Tribunal after considering the data of past imports placed before it. He submits that notwithstanding the allegation of mis-declaration, respondent was entitled for assessment of goods in terms of Section 25 of the Act.
After the hearing, dated April 13, 2021, court passed details judgment and observed that “we have heard both the learned Counsel and perused the record. It appears that respondent had imported four (4) containers and declared the same as containing Coconut Acid Oil claiming assessment under HS Code 3823.1990 and after paying duties and taxes through computerized system sought clearance and the Goods Declaration was processed and completed by the concerned Collectorate.
Thereafter, it was intercepted by the Directorate of Intelligence & Investigation and after examination and laboratory tests, it transpired that goods in-question were mis-declared as the actual consignment consisted RBD Coconut Oil classifiable under HSD Code 1513.1900 and as consequence thereof proceedings for recovery of duty and taxes were initiated besides other penal action. The show cause notice was adjudicated by the authority whereby it was held that an amount of Rs.2,535,580/- was to be recovered in lieu of duties and taxes and after confiscation a fine was also imposed amounting to Rs.1,161,808/- along with a penalty of Rs.200,000/-. The said order was challenged in Appeal before the Collector Appeals which was dismissed
it appears that the learned Tribunal has not touched upon the aspect of mis-declaration which clearly stands established from the Show Cause Notice and the reply furnished by the respondent inasmuch as it was contended by the respondent that it was a case of wrong or misdirected shipment.
However, the respondent had failed to justify the same with any supporting document. The said contention was repelled by the Original authority as well as Collector (Appeals) by holding that such plea is not supported by any documentary evidence, and was apparently SCRA 243 of 2012 Page 5 of 6 an afterthought.
Though, we in our limited jurisdiction under a Reference Application in terms s.196 of the Act, cannot look into any further material which was not placed before the forums below; however, as an indulgence, today we have confronted the learned Counsel for respondent to respond to such finding of fact, whereby, this argument of a wrong-shipment has been repelled, and he has not been able to satisfactorily respond to this; however, has made attempt to argue, that notwithstanding such allegation and lack of evidence to contradict the same, the consignment ought to have been assessed in terms of section 25 of the Act.
However, we are least impressed by this argument inasmuch as firstly, the respondent has not been able to satisfactorily come up with any explanation or any supporting documents as to the claim of a wrong-shipment. Secondly, such blatant mis-declaration of description and HS Code and the attempt to avoid the actual payable duties and taxes, disentitles the respondent from any further indulgence and the plea of an assessment strictly in terms of s.25 of the Act. In our view a mere statement of receiving a wrong or misdirected shipment would not suffice. In that case, first onus has to be discharged as to the wrong-shipment; then the wrongly shipped goods are to be re-exported; and lastly, actual / correct shipment has to be imported.
There is nothing on record to satisfy any of such pleas taken by the Respondent. Rather, it is belied by the conduct as duties and taxes were paid as alleged and delivery of wrongly shipped goods was accepted and taken. In that case, we do not see any justification to raise such a plea that assessment ought to have made in accordance with section 25. It was never a case of any dispute regarding assessment; rather a case of misdeclaration within the contemplation of Section 32 of the Act which has completely gone un-rebutted. The learned Tribunal without dilating upon this very crucial aspect of the matter has merely given its findings on the assessment aspect as if it was a case of some wrong assessment under section 25 of the Act.
The original proceedings were never in respect of an assessment order under Section 80 of the Act; rather it was a case wherein proceedings had been initiated in terms of Section 32 of the Act for misdeclaration. And once this has been alleged, first it has to be responded to; or in the alternative conceded to. Until the importer comes forward with an explanation against allegation of mis-declaration with some considerable material and documents, no refuge can be taken for having the said goods assessed as per his wishes in terms of s.25 of the Act. That would always be a secondary step and can only be examined subsequent to discharge of or withdrawal of the allegation of mis-declaration.
One who seeks equity must come with clean hands. In any case once it is held that the respondent was SCRA 243 of 2012 Page 6 of 6 found indulging in the act of mis-declaration with a view to evade payment of duties and taxes he would not be entitled to seek shelter behind any other proposition. One who seeks equity must have equities in his favour .
In the present case we are firmly of the opinion that the equities do not lean in favour of the respondent; hence, indulgence as has been granted through the impugned judgment was unwarranted, requiring our indulgence for setting aside the same In the impugned order nothing has been said about this aspect; hence, we cannot subscribe to the finding of the learned Tribunal in respect of applicability of s.25 of the Act, when the very basis of the show cause notice regarding mis-declaration remains unexplained.
Therefore, insofar as the respondent is concerned no case was ever made out by it for having any such relief which has been granted by the Tribunal in unnecessary and irrelevant terms
Though it was totally unwarranted for the Tribunal to only decide the valuation aspect in isolation and without adverting to the main issue; however, even in that the Tribunal has erred as apparently the material and data which was never a part of the original and appellate proceedings was considered and relied upon in deciding the matter in favor of the Respondent. This again cannot be approved by us as being not in conformity with settled law
In view of hereinabove facts and circumstances of the case question No.1 is not relevant and need not be answered. Insofar as question No.2 and 3 are concerned they are answered in the affirmative; in favor of the Applicant and against the respondent. The impugned order of the Tribunal stands set-aside, and the orders of the forum below are restored. Let copy of this order be sent to the Appellate Tribunal in terms of Section 196(5) of the Customs Act, 1969”.