(a) Customs Act, (IV of 1969)‑‑‑

‑‑‑‑Ss. 16, 32(1) & 156(1) Cls. (9) & (14)‑‑‑Export (Quality Control) Order, 1973. Cl. 3‑‑‑Establishment of Office of Federal Tax Ombudsman Ordinance (XXXV of 2000), S. 2(3)‑‑‑Power to prohibit or restrict importation and exportation of goods‑‑‑Untrue statement, error etc. Misdeclaration‑‑‑Export of blended bleached patient gowns‑‑‑‑Label showed 65% cotton and 35% polyester‑‑‑Physical examination revealed 60% cotton and 40% polyester‑‑‑Penalty of Rs.1,00,000 was imposed‑‑ Appellate Tribunal reduced the same to Rs.10,000‑‑‑Complainant/ exporter contended that he had been awarded export trophy in the previous years and enjoyed unblemished record and his high profile as an exporter had suffered a set back due to nominal and technical flaw‑‑ Placing of label did not substantially or materially affect the quality of goods exported and imposition of penalty was totally unjustified and unwarranted‑‑‑Validity‑‑‑Harshness of penalty was removed by the Appellate Tribunal‑‑‑High profit of business of Complainant/exporter was evident from his repeated winning of Export Trophy for several years, but this alone did not constitute enough justification for mis declaration‑‑‑Complainant/exporter should have been extra cautious, extra careful and extra particular in ensuring that the goods exported conformed to the prescribed standard‑‑‑Responsibility was greater in the case of Exporter of such high reputation and his vast experience should have compelled him to abide by existing practice, procedure and requirements of rules and regulations‑‑‑If such an act of omission and commission was condoned it would act as an incentive to others to indulge in such practices and may not be conducive to healthy growth of export of the country‑‑‑No case of maladministration had been made out against any tax employee‑‑‑Penalty imposed did not call for any interference and complaint was closed by the Federal Tax Ombudsman.

(b) Establishment of Office of Federal Tax Ombudsman Ordinance (XXXV of 2000)‑‑‑

‑‑‑‑S. 2(3)‑‑‑Maladministration‑‑‑Non‑attendance of proceedings before the Federal Tax Ombudsman by the Departmental representative on the due date‑‑‑Neither request for adjournment was made nor the reasons for non‑attendance were provided‑‑‑Such conduct amounted to dereliction of duty on the part of the concerned officer‑‑‑Federal Tax Ombudsman recommended that Revenue Division should take appropriate notice on this irresponsible and unwanted conduct‑‑‑Necessary administrative action, required to be initiated against the defaulting officer.

S. A. Nasser, Dealing Officer.

DECISION/FINDING

The complainant Messrs Mehtabi Towels Ltd., Karachi engaged in manufacture and export of towels and its allied products for the last many years. The facts of the case are that the complainant filed an appeal regarding Export No. 18227, dated 6‑10‑1999 through their Clearing Agent, Messrs N.S. Agency, Karachi for the export of blended bleached patient gowns (65 % cotton and 35 % polyester). The exports were valued, at Rs.31,72,048 and were exported to USA. However, on physical examination the goods were found blended bleached patient gowns (60% cotton and 40% polyester). The Assessing Authority found this to be a misdeclaration amounting to offence under section 32 of the Customs Act, 1969, and punishable under clause 14 of section 156(1) of 1969. In the opinion of the Assessing Authority this had also contravened the provision of clause 3 of Export (Quality Control) Order, 1973, which is also an offence under section 16 of the Customs Act, 1969 and punishable under clause (9) of section 156(1) of Customs Act, 1969. The authorities had allowed export of the consignment. However, the quadruplicate copy of the shipping bill was detained and the Assessing Authority took cognizance under the aforesaid provisions of law. The case was accordingly referred to the Adjudication Collectorate for decision. The learned Collector Adjudication considered the misdeclaration as an offence under section 32(1) of the Customs Act, 1969 and Export (Quality Control) Order 1973 and imposed a penalty of Rs.100,000 on the ground of the misdeclaration. The complainant, however, preferred an appeal before the Customs, Excise and Sales Tax Appellate Tribunal, Karachi Bench, Karachi. The Tribunal observed that the penalty imposed in this case was harsh and the amount of penalty was reduced from Rs.100,000 to Rs.10,000. The complainant's only grievance now is against the penalty of Rs.10,000 retained by the Customs, Excise, Sales Tax, Appellate Tribunal, Karachi Bench, Karachi vide order, dated 8‑5‑2001.

In response to necessary notice, Mr. Nadeem Ahmed Mirza, appeared on behalf of the complainant Messrs Mehtabi Towels Ltd. and argued the case vehemently against the penalty imposed in the instant case by the learned Customs, Excise and Sales Tax Appellate Tribunal, Karachi Bench, Karachi it has been argued that the learned Tribunal was not justified in maintaining the order of the Collector, Customs, Excise and Sales Tax, dated 15‑11‑2000 OO No. 40 of 2000.

As mentioned above, the amount of penalty was reduced to Rs.10,000 as against Rs.100,000 (Rupees one lakh) imposed by the Collector of Customs.

The learned representative of the complainant has vociferously argued that his client has been awarded Export Trophy in the years 1991‑92, 1994‑95, 1996‑97 and 1997‑98. In other words the performance of his client has been found to be exemplary. It has throughout enjoyed unblemished record. The business profile of the complainant thus merits great consideration. It has earned valuable foreign exchange for the country through exports. This high profile as an exporter has suffered a set back due to nominal and technical flaw found by the Assessing Authority in his export consignments. It has been further argued that the placing of label did not substantially or materially affect quality of goods exported and the buyer did not express any dissatisfaction on the quality of goods. The learned Representative contended that in circumstance of his client and his performance of the past the imposition of penalty is totally unjustified and unwarranted.

Arguments we're heard and records have been examined. It is an established fact that there is an element of misdeclaration in the export consignment of the complainant. The consignment carried the label of 65 % cotton and 35 % polyester of blended bleached patient gowns valued at Rs.31,72,048, The physical examination of the goods. revealed blended bleached patient gowns 60% cotton and 40% polyester. In other words, it was established that the complainant had mis-mentioned above. The Assessing Authority considered this to be an offence under section 32 of Customs Act, 1969 and hence it was punishable under section 14 of section 156(1) of Customs Act, 1969. This also contravened the provisions of clause (3) of Export (Quality Control) Order 1973, which is an offence under section 16 of the Customs Act, 1969 and punishable under clause (9) of section 156(1) of Customs Act, 1969.

Considering the facts and circumstances of the case there is no denying the fact that there was misdeclaration of goods. Since an offence was committed it was punishable under the relevant provisions of law harshness of penalty was considerably removed by reducing the amount from Rs.100,000 to Rs.10,000 by the learned Customs, Excise and Sales Tax Appellate Tribunal. The high profile of business of the complainant is evident from his repeated winning of Export Trophy for several years, but this alone does not constitute enough justification formisdeciaration as mentioned above. On the contrary, the exporter should have been extra cautious, extra careful and extra particular in ensuring that the goods exported conformed to the prescribed standard. In the case of an exporter of such high reputation the responsibility is greater. His vast experience should have compelled him to abide by existing practice, procedure anal requirements of rules and regulations. If such an act of omission and commission .is condoned it would act as an incentive to others to indulge in such practices and may not be conducive to healthy growth of export of the country. No case of maladministration has been made out against any tax employee.

Finding:

The penalty imposed does not call for any interference. With these observations, no further action in the matter is required and the case is closed.. While concluding the above discussion it is observed that on the date of hearing of this case no Departmental Representative attended. Even no formal request was made either for adjournment of the case or explaining the reasons for non‑attendance. This amounts to dereliction of duty on the part of the concerned officer and the Revenue Division should take appropriate notice of his irresponsible and unwanted: conduct. Necessary administrative action, therefore, requires to be initiated against the defaulting officer. This office may be informed of the disciplinary proceedings initiated in this behalf and its findings within 45 days of the receipt of this order.

C.M.A./1027/FTO Order accordingly.