2007 PTD 2273
ZAFAR UL MAJEED, MEMBER (TECHNICAL).--- This appeal has been filed by Messrs Hybrid Technicals (Pvt.) Ltd., (the appellant herein) against Order-in-Appeal No: 117 of 2004 dated 10-4-2003 passed by the Collector, Customs, Sales Tax and Central Excise (Appeals), Lahore.
2. Briefly, the facts giving rise to this appeal are that the appellant imported a consignment of Phosphor Bronze from Japan and sought clearance thereof vide Bill of Entry No.32737 dated 31-5-2002. On examination of the consignment by the customs staff at Lahore Airport, the actual weight of the goods was found to be 21.5 Kg instead of 18 Kg. declared. The appellant were proceeded against on the charge of misdeclaration and the Deputy Collector Customs (Adjudication), Lahore vide Order-in-Original No.237 of 2002, dated 18-7-2002 ordered confiscation of excess quantity of goods weighing 3.5 Kg valuing Rs.22,825 and involving duty and taxes amounting to Rs.10,564. Option was, however, given to the appellant to redeem the goods on payment of fine equivalent to 100% of the duties and taxes attempted to be evaded in addition to the duty and taxes payable thereon. The appellant filed appeal against this order which was rejected by the Collector (Appeals) vide impugned order. Hence this second appeal.
3. Through the instant appeal, the appellant have assailed the impugned order mainly on the following grounds:---
(1) That no show-cause notice was issued to the appellant which is mandatory requirement under section 32(3) of the Customs Act.
(2) That the appellant placed order for import of 18 Kg Phosphor Bronze but the foreign supplier mistakenly sent 21.5 Kgs of goods. The situation was later on rectified by issuing a revised invoice/amendment in L/C and, as such, there was no attempt on the part of appellant to evade duty or taxes.
(3) That the goods were imported under form `S' on concessionary rate of 5 % duty. Customs duty on the excess weight of 3.5 Kg at this rate works out to Rs.924 only but the department incorrectly calculated duty at the statutory rate. The appellant, being manufacturer and supplier of electronic parts to auto industry pays millions of rupees in taxes every year and has .never indulged in such activity.
4. The D.R. however, opposed the appeal pleading that the amendment in invoice and L/C was made on 31-5-2002 i.e. after the detection of excess- quantity and that the show-cause notice was not issued because the appellant's authorized clearing agent quested for summary adjudication. He, however; confirmed that the goods were, imported under form `S' but the amount of duty and taxes involved i.e., Rs.10,564 was calculated at the statutory rate and not at concessionary rate of 5 % because of misdeclaration by the appellant.
5. I have perused the record and given due consideration to the submissions made by both sides. Admittedly, a quantity of 3.5 Kg of goods was found in excess of the quantity declared in the bill of entry which, according to appellant, was because of some mistake on the part of foreign supplier. On being informed, the supplier rectified the mistake by issuing a revised invoice and advice for necessary amendment in the letter of credit. It is also admitted that the appellant are entitle to import goods at concessionary rate of 5 % duty in terms of Form `S' issued by the C.B.R. The amount of duty at this rate works out to only Rs.924 which in my view is too small to induce an industrial importer to indulge in wilful misdeclaration. I, therefore; accept the appellant's contention in this regard and set aside the order of confiscation of goods. The goods may be released on payment of duty and taxes at the rate provided in the relevant concessionary S.R.O. and in accordance with the conditional quantities provided in the Form `S' issued by the C.B.R. in favour of the appellant.
6. The appeal is disposed of in the above terms and. the impugned order is modified accordingly.
C.M.A./99/Tax(Trib.) Appeal accepted.