Messrs PORTS WAYS CUSTOM HOUSE AGENT and another vs COLLECTOR OF CUSTOMS and another

ORDER

NASEEM SIKANDAR, J.---In this first appeal Oder section 196 of the Customs Act, 1969 an order of the Customs Central Excise and ales Tax Appellate Tribunal dated 21-6-2001 is assailed.

2. The appellant No,2 imported certain parts of diesel engines and a Bill of Entry was filed through appellant No,1 M/s Ports Ways Custom House Agent, Lahore. The goods were accordingly cleared.Subsequently, however, the Directorate of Inspection and Internal Audit Lahore made a contravention report against them that they paid less duties at the total sum of Rs,82,379 by declaring lower value of the consignment. The learned Adjudicating Officer on usual proceedings found that the appellant/importer was not cooperating inasmuch as they were attempting to cash on an insignificant typographical error while mentioning the bill of entry number. Also it was noted that after having raised the aforesaid frivolous objection they absconded from proceedings.

Therefore, he proceeded to hold liable the importer as well as customs agent under clauses (1), (14)

(77) and (90) of section 156 (1) of the Customs Act, 1969. Besides levy of customs, sales tax and withholding tax at Rs,82,379 a penalty of Rs,10,000 was imposed on the importer/appellant No,2 and their agent/appellant No,1 at Rs,5,000.

3. Learned Tribunal after agreeing that the mentioning of wrong number of bill of entry was insignificant, proceeded to find that the record in the form of invoices produced by the learned D.R. in support of the determination of the value of the consignment imported by the appellant No,2 was not contested by the learned counsel for the respondents. Therefore, they maintained the order in original dated 29-2-2000 recorded by Collector of Customs, Lahore.

4. After hearing learned counsel for the parties we are of the view that no case for interference for the appellants as far the levy of customs, sales tax and withholding tax is made out. Since the invoices produced by the department during the course of arguments before the tribunal in support of their determined value were not contested, we will refuse to interfere. The attempt on the part of the learned counsel for the appellants to seek a remand, therefore, cannot succeed. The findings recorded by the Adjudicating Authority that the appellants were not cooperating also appears correct. Therefore, as said earlier we are of the view that no question of law in that regard can possibly be said to have arisen out of the order of the Tribunal.

5. However, as far the imposition of penalties on both the importer as well as their agent is concerned, we will readily agree that no material worth the name was brought on record to justify the imposition of penalties. It needs to be noted that there was only a difference of around 6% between the value declared by the importer and the one determined by the department. In such situation no penalty could possibly be imposed on the importer unless mens rea was found to have been there. A declaration which is slightly lower than the price determined by the department will not by itself make the importer liable for penalty unless it was brought home that the declared lower value was a calculated chance taken by the importer.

6. The imposition of penalty on the Clearing Agent/appellant No,1 was all the more unjustified. To hold the clearing agent liable for the act of commissions and omissions on the part of the importer will require a clear findings based upon legally acceptable evidence of his being an active and conscious party to the manipulation.In normal course of his business a Clearing Agent files a bill based upon the documents and information provided by the importer. He cannot be presumed to be a privy to any illegal arrangement, which the importer may have coined or had intended in his mind. For that purpose some evidence of his direct involvement will have to be brought on record.

Particularly when it is not shown that the Clearing Agent was directly or indirectly a beneficiary of evasion of taxes.

7. In the present case no attempt whatsoever was ever made to bring home guilt to the clearing agent.

8. Therefore, we will hold that imposition of penalties both on the importer as well as the Clearing Agent was unjustified. These penalties shall be deleted and this appeal shall stand accepted to that extent.