2010 PTD 443

ORDER

MUHAMMAD ARIF MOTON, (MEMBER (JUDICIAL-II).--- This order will dispose of Customs Appeal No.K-9/2009 filed by the Appellants against Order-in-Appeal No.1327/2008 dated 6-11-2008, passed by learned Collector of Customs, Sales Tax and Federal Excise (Appeals), Karachi.

2. Brief facts of the case are that the appellants who are engaged in the export of fish and allied products imported subject consignment of complete plant of refrigerating for storage of Fish Catch being used for export purposes from India at USD 67,610 and filed GD electronically vide CRN No.l-HC-721182-28-708. The consignment was examined by 1969 who reported that "Kirloskar Make Model KC-42, 2 Stage Compressor with Suction & Discharge Stop Valves Flywheel etc" is not importable from India vide Appendix-G of Import Policy Order 2008-09. It was also reported that the rest of items including Evaporator Condenser (2 Units), and Air Cooking Unit (1 Unit) meant for cold storage are clearly listed in the list of Locally Manufactured items vide GGO 11/2007, and as such do not qualify for the claimed exemptions as envisaged under S.R.O. 575(1)2005. It was also stated that the import of under reference goods has also been made from India which is not permissible vide Appendix G of Import Policy Order 2008-09, therefore, the goods are banned as well as not importable. Based on these observations of the examination staff a show-cause notice, dated 19-8-2008 was issued to the appellants for violation of the aforesaid provisions of relevant Rules and Regulations. The appellants replied to the show cause notice and submitted that the appellants had imported a composite unit of refrigeration compressor unit classifiable under HS code 8414.3010 which was freely importable from India but the respondent classified them separately under different HS codes and based on this classification an order-in-original was passed whereby item No.1 i.e. compressor with Suction and Discharge Valve was allowed to be released on payment of Duty and Taxes and remaining three items i.e. evaporative condenser and air cooling unit were confiscated outright without any option to pay fine in lieu of confiscation.

3. That the appellants then preferred Appeal under section 193 of the Customs Act, 1969 before the Collector (Appeals) who was pleased to dismiss the same vide the impugned order and hence this appeal.

4. The case was fixed for hearing on 4-4-2009. Mr. Junaid Ghaffar, Advocate for the appellants argued the case at length and submitted some additional documents of similar imports along with their full Goods Declaration, Bills of Lading, etc. The department representative Mr. Ilyas Ahsan sought time to verify the contents of evidences relied upon by the appellants' counsel. The matter was adjourned to 13-4-2009 on which date Mr. Ghulam Yasin appeared on behalf of the department and sought time as Mr. Ilyas Ahsan was busy. He also stated that the respondents have not been able to verify the evidences relied upon by the appellants' counsel. Since the goods are still detained at port the matter was finally adjourned by consent to 17-4-2009 on which date Mr. Ghulam Yasin, Appraising Officer, appeared and showed his inability to file any documents to rebut the contentions of the appellant's counsel except a print out of computer calling it an electronic invoice.

5. The counsel for the appellants has argued the case mainly on two points, one being that they have been penalized for making a correct and true declaration, and second being, that they have been discriminated as admittedly the consignment of other Importer from the same source and supplier had been released by the respondents prior to the import of appellants and even subsequent to adjudication proceedings against them. He further argued that the said machinery is a composite unit for the purpose of freezing fish for exports and is a composite freezing/refrigerating unit and is correctly classifiable under heading 8414.3010 which is listed at Serial No.1387 of Appendix "G" of the Import P. icy Order 2008-2009 meant for freely importable items from India and hence the questions of its being banned does not arise. He relied upon CRN No. 1-HC-639960-120508 in which the similar item of Evaporative Condenser and air cooking unit' supplied by the same shipper has been released, without charging any duty, Sales Tax and Income Tax by allowing the exemption under S.R.O.575(I)/2005. This consignment was released in May 2008 and August 2008 before and after the import of the appellants and the appellants have been discriminated by denial of exemption of duty and taxes and outright confiscation of their goods. He vehemently argued that such an act is based on mala fide, discrimination, favoritism and is in complete violation of the principles of nature justice and against the settled dictum of Departmental Practices. He relied on case law reported as 1989 SCMR 353, 2004 PTD 2516, 2002 PTD 955 and 2008 PTD 1475.

6. The respondents' representative has supported the impugned order and have filed comments to the appeal and have denied and rebutted the contentions of the appellants, and stating that the consignment of the appellants consisted of compressor, Evaporative Condenser, Floor Mounted air cooking unit and was correctly held to be liable for confiscation by the adjudicating authority as except for compressor, the other items are classifiable under HS Code 8418.6990 which is not in the items freely importable from India and hence are liable for outright confiscation. He further stated that Collector (Appeal) vide Para 6 the order has correctly held that if something has gone wrong in the past that does not means that it should be made a precedent to repeat further wrongs. However, he has not been able to put forward any substantiating documentary evidence to rebut the contention of the appellants' counsel specially documents of the evidential imports relied upon by the appellants' counsel. He pressed for rejection of Appeal on the aforesaid grounds.

7. Heard both the parties and perused the material on record. The contention of the Appellants is mainly focused on the point that the item imported by them is correctly classifiable under HS Code 8414.3010 and not under HS Code 8418.6990 has claimed by the department and since the heading 8414.3010 is included in the list of freely importable items from India as such the same is not liable to outright confiscation as held in the order-in-original and order-in-appeal. The appellant's second submission is that since identical goods from the same supplier and origin imported by the same category of Industry have been released by the department with the benefit of exemption of duty and sales tax as such they ought not to have been discriminated with such a harsh action.

8. After going through the arguments and material on record I tend to agree with the contention of the appellants' counsel as the same has not been rebutted with any definite and substantive evidence by the departmental representative. It is not denied by the departmental representative that identical and similar goods have been released by the Department under HS Code 84814.3010 except that the same were released by the system and the consignment of the appellant has been examined by the Department and therefore, the evidence are not applicable. This contention of the Departmental Representative is not sustainable in the eyes of law as this would amount to unjust exercise of discretion which is deprecated in law and it has been the consistent view of the superior Courts that such practice should be discouraged. The second contention of the Departmental Representative that the declared description on the Goods Declaration relied upon as evidence does not tally with the description of the appellants' declaration and therefore, is of no help is also belied by the fact that the appellants have also filed invoices and Bills of Lading of the evidences relied upon by them on which the detailed description of goods is mentioned and upon inspection it is seen that it is identical to the appellant's declared description and hence the arguments of the departmental representative are not convincing being not supported by any cogent reasons. It has further been observed that after the insertion of amendment in section 2(kka) of the Customs Act, 1969 in 2006, the definition of documents not only includes the Goods Declaration but also includes invoices and Bills of Lading, for convenience the same is reproduced below:

[(kka] "documents" means a goods declaration, application for claim of refund, duty drawback or repayment of duty, import or export general manifest, passenger manifest, bill of lading, airway bill, commercial invoice and packing list or similar other forms or documents used for customs clearance or making a declaration to Customs, whether or not signed or initiated or otherwise authenticated, and also includes,---

(i) any form of writing on material, data or information recorded, transmitted, or stored by means of a tape reorder, computer or any other device, and material subsequently derived from information so recorded, transmitted or stored;

(ii) a label, marking or other form of writing that identifies anything of which it forms part or to which it is attached by any means;

(iii) a book map, plan, graph, or drawing, and

(iv) a photograph, film, negative, tape, or other device in which one or more visual images are embodied so as to be capable (with or without the aid of some other equipment) of being reproduced; and]

9. From the perusal of the above/definition of the Customs Documents it transpires that invoice and Bill of Lading have been defined as Customs Documents and therefore they could not be discarded and since a scrutiny of both these documents and specifically the invoice submitted on the date of hearing 13-4-2009 it is established that identical goods supplied by the same source and origin have been released by the respondents as such they cannot now resile from it. In fact they are estopped by their own conduct and the appellants are also entitled to release of his goods on the same terms and conditions.

10. As regards the issue of Departmental practice and consistency in assessment required to be followed by the department the aforesaid reported judgments of the Honourable Supreme Court and the High Court, viz 1989 SCMR 353, 2004 PTD 2516, 2002 PTD 955 and 2008 PTD 1475 are also relevant to, the facts and circumstances of the subject case. In the judgment reported as 1989 SCMR 353 the Honourable Supreme Court while relying upon the case reported as PLD 1970 SC 453 has pronounced that it is a settled law that where the departmental has followed a particular practice over a period of time whether right or wrong, it will be extremely unfair to make a departure from it. The judgment reported as 2002 PTD 955 the Honourable High Court of Sindh has held that Revenue could not be allowed shifting of versions in respect of the same product with mere change in the law to the taxability of product. In the subject case the same is all the more necessitated since there is no change in law, it has been further held that an assessee should known his status or the character and status of his product vis-a-vis, the chargeability of the tax and the revenue should not be allowed to take inconsistent and changing versions since indiscipline in realm of taxation is always injurious and hazardous to the health of economy, industry and business. This case has been followed by another Division Bench of the Honourable High Court in the reported case 2004 PTD 2516. Finally the judgment of Honourable High Court of Sindh reported as 2008 PTD 1474 and relied upon as the appellants has more or less identical facts as the consignment of the petitioner was not being released on the same premises that it was banned and not importable, whereas consignments of other importers were being released prior to and subsequent to the import of the petitioner's consignments. The Court went on to hold that "in contrary, the petitioner has been able to establish the fact that even before this consignment and thereafter the department is clearing this very vehicle under PTC Heading 8705.9000, whereas in this particular case has been discriminated by the department. Such act has been condemned by the Honourable Supreme Court of Pakistan in 1989 SCMR 252, Messrs Radaka Corporation and others v. Collector of Customs ."

11. After going through the record of the case including the evidences produced and the above case law and particularly the case reported as 2008 PTD 1474 which has identical facts I am of the considered view that the appellants have been discriminated by the Department by whimsical exercise of discretion as the appellants' case is identical to other importers who have, been allowed release of their consignments of identical machinery imported from India under HS Code 8414.3010 and as such the appellants are entitled for the release of their consignment on same terms and conditions as has been applied to in other cases quoted and relied upon by the appellants. The impugned orders are set aside. The Appeal is allowed. The respondent is directed to release the consignment of the appellants as observed.

C.M.A./166/Tax(Trib.) Appeal allowed.