MUHAMMAD SADQUAIN vs COLLECTOR OF CUSTOMS (APPRAISEMENT), KARACHI

' MUHAMMAD MUJEEBULLAH SIDDIQUI, J.---This Appeal under section 196 of the Customs Act, 1969 is directed against the order, dated 21-5-1999 passed by the Customs, Excise and Sales Tax Appellate Tribunal Karachi Bench in Appeal No, K-205/97, whereby the penalty imposed on the appellant by the Collector (Appraisement) has been upheld by reducing the quantum to Rs,10,000.

2. The question for consideration is whether the appellant as a Clearing Agent made any misdeclaration under section 32 of the Custom's Act, 1969, or committed any other offence warranting imposition of penalty.

3. The relevant facts are that appellant Muhammad Sadquain is Proprietor of Clearing and Forwarding Firm under the name and style of "Muslim Brothers". In the normal course of his business, the appellant as an agent of an importing firm Messrs M.S. Associates received the documents for clearance of consignment imported from Singapore, which stately contained Ferro Manganese, vide IGM No,1873/96, Index No,110. The documents contained CRF No,SGSIN- 012059/PKOI, dated 21-12-1996 issued by SGS Cotecna Liaison Office Karachi, a Pre-shipment Inspection Company hired by the Federal Government.

4. The consignment was stuffed in a container which was examined by the SGS Company and after satisfaction that the contents of declaration on the shipping documents were correct on the basis of documents supplied by the importer and Pre-Inspection Report issued by SOS, the appellant filed bill of entry.

5. The Appraisement Collectorate Staff relying upon the CRF issued by SGS passed the bill of entry.

The duties and taxes assessed were deposited on 28-12-1996. Subsequently, the Custom Authorities received information that the container so cleared contained some undeclared goods.

On receiving this information, the custom officials opened the container in presence of officers of SGS, the appellant as well as importer, and examined the same. It was found that the container contained auto parts for Suzuki vehicles, which were neither authorised nor declared. The importers were traced and show-cause notice was issued to the importer as well as clearing agent, the appellant. It was contended that appellant was in connivance with the importer in making misdeclaration. The contention was denied by the appellant. It was stated that the pre-shipment inspection Report was issued by SGS and the appellant being clearing agent filed bill of entry on the basis of import documents supplied to him as, well as CRF issued by SGS and he was not in connivance with importer or anybody else in respect of the misdeclaration made. The Collector in his Order-in-Original, dated 7-8-1997 while considering the question pertaining to the role of appellant, the customs clearing agent, observed as follows:- "(10) As regard the involvement of clearing agent the position is that he had filed bills of entry on the basis of the documents given by the importers and CRFs issued by Messrs SGS. The clearing agent has however cooperated during the investigation of the case and helped in recovery of evaded amount of taxes in spite of the fact that his name was included in F.I.R. He has however, not denied that he was instrumental in sale of import authorization by Messrs M.S. Associates. A penalty of Rs, fifty thousand only is therefore imposed on clearing agent under clauses (8), (9) and

(14) of section 156 (1) of the Customs Act, 1969."

6. The appellant being dissatisfied with the finding that, "he has however not denied that he was instrumental in the sale of import authorization by Messrs M.S. Associates" preferred appeal before the Customs, Excise and Sales Tax Appellate Tribunal Karachi Bench. The learned Tribunal after narrating the facts disposed of the appeal by a very short finding contained in para. 8 of their order which reads as follows:-- "(81) Mr. Sadquain appellant in person, Mr. Abdul Qayyum, A.O., for the respondent appeared for hearing on 21-5-1999. Arguments of rival parties heard. The involvement of Clearing Agent is established as it was the Clearing Agent who filed the Bill of Entry and he has admitted that he was instrumental in the sale of import authorization by Messrs M.S. Associates. However, keeping in view the over all circumstances of the case the appeal is partly allowed by reducing the fine to Rs,10,000 (Rupees Ten Thousand). The impugned order is modified to this extent only."

7. Being still dissatisfied, the appellant has preferred this appeal before us.

8. We have heard the learned Advocates for the parties.

9. Mr. Sohail Muzaffar, learned counsel for the appellant has submitted that the innocence of the appellant is indicated from the finding of Collector to the effect that the appellant Co-operated during the investigation of the case and helped in recovery of evaded amount of taxes in spite of the fact that his name was included in F.I.R. Mr. Sohail Muzaffar has further submitted that the observations of the learned Collector that the appellant has not denied that he was instrumental in the sale of import authorisation is unwarranted and against the written explanation of the appellant which has been incorporated in his order. He has taken us through the reply" of show- cause notice wherein the appellant has repeatedly denied his involvement/connivance in the sale of import authorization by Messrs M.S. Associates. He has contended that likewise the order of the Tribunal suffers from same defect. The penalty has been maintained while reducing the same on the basis of purported admission made by the appellant, which was never made which is apparent from perusal of the record.

10. On the other hand Mr. Raja M. Iqbal has supported the impugned finding of the Tribunal, and has contended that the appellant was fully involved and was instrument in the sale of import authorization. Mr. Raja M. Iqbal has further supported the finding of the Tribunal that the appellant admitted his involvement in the sale of import authorization. However, when called upon to show the admission of appellant Mr. Raja M. Iqbal was not able to do spite of his vehement argument on the point that the admission was there.

11. We have given our careful consideration to the material on record and we find that the learned Tribunal has made observation about the admission of appellant without any such admission and in the wake of specific denial on this point by the appellant.

12. For the above reason, the finding of the Tribunal is not sustainable in the fact and law, which is hereby set aside. It is held that the Tribunal was not justified in maintaining the penalty imposed on the appellant by the respondent and the finding suffers from illegality. The imposition of penalty is hereby struck down and the appeal is allowed accordingly.