TRIUMPH TRADERS VS The ADDITIONAL COLLECTOR OF CUSTOMS, 2014 PTD-CUSTOMS-APPELLATE-TRIBUNAL-KARACHI 145 (2013)

Sept. 24, 2013 CUSTOMS APPELLATE TRIBUNAL KARACHI 2014 PTD 145

2014 PTD-CUSTOMS-APPELLATE-TRIBUNAL-KARACHI 145

TRIUMPH TRADERS VS The ADDITIONAL COLLECTOR OF CUSTOMS

2014 P T D 145

[Customs Appellate Tribunal, Karachi]

Before Muhammad Nadeem Qureshi, Member Judicial-I

Messrs TRIUMPH TRADERS

Versus

The ADDITIONAL COLLECTOR OF CUSTOMS, and another

Customs Appeal No.K-340 of 2012, decided on 24/09/2013.

(a) Words and Phrases---

----Impregnation---Meaning.

(b) Customs Act (IV of 1969)---

----Ss. 32, 179 & 223---Pakistan Customs Tariff, Chap. 39(21)---Mis-declaration of description of goods---Misleading specification/ classification of goods under PCT heading---Appellant imported artificial leather and filed goods declaration under PCT 5603.9400 of textile fabric, in pursuance of same he determined tax liability on his own and sought clearance thereof---Goods declaration submitted by appellant was selected for scrutiny, in the light of examination report, it was revealed that the appellant had declared the goods as artificial leather with woven backing in rolls which was classifiable under PCT 5903.9000 attracting customs duty 25% ad.val---After serving show-cause notice, fine and penalty were imposed upon appellant---Appellant filed appeal before Collector of Customs (Appeals), who maintained order-in-original---Contention of the appellant was that primary material of artificial leather was Polyurethane and affixed below to that was mesh of textile whether non-woven or woven---Validity---Reference to goods of a given material or substance should be taken to include a reference to goods consisting wholly or partly of such material and the heading which provide the most specific description should be preferred to the heading providing a more general description---Two or more headings each referred to part only of the material or substance contained in mixed or composite goods or to part only of the material or substance contained in mixed or composite goods or to part only of the items in a setup for retail sale, such headings were to be regarded as equally specific in addition to those goods, even if one of them had given a more or complete or precise description of the goods respectively---Major components of artificial leather was Poly Vinyl Chloride and Polyurethane or allied synthetic, the same did not fall within the ambit of either PCT heading 56.03 or 59.03---Impugned goods had to be sold in wholesale and retail as artificial leather and not as textile---Description of artificial leather being the most specific had to be preferred.

(c) Customs Act (IV of 1969)---

----Ss. 32, 179 & 223---General Rules of Interpretation of Schedule, Rr.2(b) & 3(a)---Pakistan Customs Tariff, Chap. 39(21)---PCT heading of artificial leather---Erroneous classification on the basis of past practice---Authority of classification of goods rested with Federal Board of Revenue---Scope---Artificial leather was manufactured/produced from Poly vinyl chloride, Polyurethane or allied polymer which fell under sub-chapter 21 of chapter 39 of Section VII of Pakistan Customs Tariff under PCT 3921.1300---Federal Board of Revenue classified the artificial leather under PCT 3921.1300 in the capacity of final authority for determining the correct classification---Classification made by the Federal Board of Revenue was binding on the hierarchy of Customs---Artificial leather had to be classified for all practical purposes including assessment in future---Classification of artificial leather under PCT heading 56.03 or 59.03 on the garb of non-woven or woven textile backing or on the plea of past practice was to be stopped--Wrong classification was not to be ignored on the pretext of past practice---Goods should be classified under the appropriate PCT heading given in the Customs Tariff.

MessrsP & G International, Lahore v. Assistant Collector of Customs (Appraisement), GR-II), Karachi and 3 others 2010 PTD 870 and Collector ofCustomsv. SheikhShakeelAhmed2011PTD495 rel.

(d) Customs Act (IV of 1969)---

----Ss. 2(kka), 32, & 79(1)---Customs Rules, Rr.433, 437 & 438---Declaration of goods---Charge of mis-declaration---Recovery of short levied customs duty---Scanned copies of additional documents, admissibility---Appellant was charged for mis-declaration---Contention of the appellant was that after filing goods declaration, he was asked to submit further documents to justify his claim---Appellant submitted scanned copies of other relevant documents to justify his claim, the same matched the examination report---Scanned documents were also part of declaration, therefore charge of mis-declaration was not justified---Validity---Principal Appraiser after receipt of examination report on his desktop, required the appellant to justify declaration/ classification---Appellant scanned all supporting documents including printed matter/literature, invoice detail and all other relevant important documents---Unit of measurement and the sizes of the goods matched with the examination report based on the assessing officer---Scanned documents were part of declaration---Charge of mis-declaration of unit of measurement was misplaced---Impugned order-in-original and appellate order of Collector of Customs (Appeals) was set aside---Appeal was allowed.

2011 PTD (Trib.) 22 and 2011 PTD (Trib.) 987 rel.

(e) Customs Act (IV of 1969)---

----Ss. 32 & 80(1)---Customs Rules, Rr.433, 437 & 438---Declaration of goods---Erroneous PCT heading---Charge of mis-declaration---Recovery of short assessed customs duty---Responsibilities and duties of assessing officer---Scope---Appellant importer submitted goods declaration mentioning erroneous PCT heading---Customs authorities after serving show-cause notice for mis-declaration imposed penalty on appellant---Contention of the appellant was that he had been charged for mis-declaration on account of transmitting wrong PCT heading whereas official who had suggested wrong PCT heading had been let free despite standing on the same pedestal and that Official opinion considered valid by Collectorate of Customs without going through respective PCT headings was ridiculous and absurd---Validity---Customs authorities were responsible to check the declaration of importer while completing assessment, which included correctness of the particulars of import including declaration,assessment and in case of Customs Computerized System, payment of customs duty and taxes and other charges thereon---Determination of PCT heading was duty of Customs officials for levy of customs duty and taxes as the importer fill the PCT column for assistance of the assessing officer---PCT heading submitted by importer could be either accepted or rejected by the assessing officer at the time of completion of assessment---Erroneous interpretation of statutory notification could not be deemed to be a false declaration---Appellant could not be charged for mis-declaration on accountoftransmittingerroneousPCTheading---Impugnedorder-in-original and appellate order was set aside---Appeal was allowed.

2003 PTD (Trib.) 293 and State Cement Corporation of Pakistan v. Collector of Customs and another 2002 MLD 180 rel.

(f) Customs Act (IV of 1969)---

----S. 32---Constitution of Pakistan, Arts. 4 & 25---Recovery of short assessed customs duty---Show cause notice---Discrimination---Appellant submitted declaration of artificial leather in units of packing i.e. in rolls---Other importers also declared the artificial leather quantity in rolls but neither contravention report was framed nor any show-cause notice/order-in-original was issued---Consignments of other importers were completed on the basis of weight confirmed in the examination reports---Appellant was given discriminating treatment---Validity---Customs authorities were supposed to adhere to their own precedent in administering taxing statute---Authorities could not give a differential treatment to appellant---Vacating show-cause notice in one case and taking action against another person in similar situation amounted to discrimination---Customs authorities had no power to target incidence of tax in such a way that similarly placed person be dealt not only dissimilarly, but discriminatingly---Facility allowed to someone and denied to other was discrimination---Impugned orders were set aside---Appeal was allowed.

Nazir Ahmed Tajdin v. Deputy Collector of Customs, Lahore and 2 others PLD 1977 Lah. 1392; 2002 PTD 976; 2002 SCMR 312; 2009 PTD 1507; 2005 SCMR 72 and 2010 SCMR 431 rel.

(g) Customs Act (IV of 1969)---

----S. 32---Show-cause notice---Short assessed duty, recovery of---Decision of case outside the scope of show-cause notice---Effect---Order of adjudication had been passed on a ground not mentioned in the show-cause notice which was palpably illegal.

Collector of Customs v. Rahm Din 1987 SCMR 1840 and Exide Pakistan (Pvt.) Ltd., v. Deputy Collector of Customs 2004 PTD 1449 rel.

(h) Customs Act (IV of 1969)---

----Ss. 32 & 180---Show-cause notice---Proceedings before customs authorities, nature and scope---Proceedings before Adjudication Officer were in the nature of quasi judicial and issuance of show-cause notice was very important ---Decision to issue show-cause notice was to be taken by the Collector, Adjudication by application of independent mind and not merely signing the draft show-cause notice submitted by investing agency separate from the Adjudication Department---Each category of Customs Officers was required to perform their respective functions/duties under the law---Practice to submit draft show-cause notice by the Director General of Intelligence and Investigation to the Collector Adjudication was deprecated.

Messrs Zeb Traders, Karachi v. Federation of Pakistan 2004 PTD 369 rel.

(i) Customs Act (IV of 1969)---

----S. 32---General Clauses Act, (X of 1897), S.24-A---Short assessed customs duty, recovery of---Non speaking adjudication order---Scope---Contention of the appellant was that adjudicating and appellate officer had not rebutted the grounds advanced in the memo. of appeal/additional arguments and decision/judgments relied upon by the appellant were given with substantial reasons---Impugned orders were non-speaking, therefore liable to be quashed---Validity---Impugned orders had not been passed on objective consideration and the same were treated as illegal, void, arbitrary and a result of misuse of authority vested in public functionary---No room was available for illegal, void and arbitrarily orders in any system of law---Finding of fact given by Authority Court or Tribunal not based on material available on record was illegal, arbitrary---Findings given without discussing and considering the material available on record were perverse---Perverse finding of fact was violative of the established principles of appreciation of evidence on record, therefore the same was not sustainable in law---Every judicial or quasi judicial finding should be based on reasons containing the justification for the finding in the order itself---Adjudication/appellate orders being violation of basic principles of good governance was not only illegal but also not sustainable under law---Appeal was allowed.

2005 YLR 1019; 2007 PTD 2500; 2004 PTD 1973; 2005 YLR 1719; 2003 PTD 777; 2003 PTD (Trib.) 2369; 2002 MLD 357; 1983 CLC 2882; 2005 PTD 2519; 2005 PTD 1189; PLD 1995 SC (Pak) 272; PLD 1970 SC 158; PLD 1970 SC 173; 1984 SCMR 1014 and 2012 PTD (Trib.) 619 rel.

Nadeem Ahmed Mirza for Appellant.

Ghulam Yasin, Appraising Officer, for Respondents.

Date of hearing: 24th September, 2013.

ORDER

MUHAMMAD NADEEM QURESHI (MEMBER JUDICIAL-I).--The appeal, filed by the appellant, is directed against Order-in-Appeal No. 6096 of 2012 dated 31-5-2012 passed by the Collector of Customs AppealmaintainingtheOrder-in-OriginalNo. 92325 of 2012dated25-1-2012 passed by the Additional Collector of Customs , Model Customs Collectorate of PaCCS, Custom House, Karachi.

2.Brief facts of the case as reported are that the appellant electronically filed goods declaration, declared to contain Artificial leather Total quantity 1758 Rolls under PCT 5603.9400 of total invoice value of US$. 2500.0518. They determined his tax liability on his own and sought clearance thereof under section 79(I) of the Customs Act, 1969 (hereinafter the Act). However, in order to check as to whether the appellant had paid correct amount of duties/taxes the aforesaid GD was selected for scrutiny in terms of section 80 of the Act scrutiny of the goods declaration in the light of examination report revealed that the appellant had declared the goods as Artificial Leather with woven backing in rolls (assorted colors/designs) I/O not shown in (N.Wt.25800 Kg) Approx Correctly classifiable under PCT 5903.9000 attracting customs duty 25% ad.val it is further pointed out that the Artificial Leather with Woven Backing origin China are assessable in terms of data at US$ 3.0/Kf. The offending value of misdeclared description/ specification/classification and wrong UOM is Rs.6,703,007.00. Therefore, the appellant had attempted to get the goods released on lower value by declaring misleading description/specifications and classification. In addition to above, it is further noticed that the appellant had declared the unit of measurement as "Rols" to mislead customs besides declaring unit value of the goods as low as US$ 0.097/kg, if taken in kilograms. However, the correct unit of measurement is "Kilograms". Whereas the goods are assessable @ US$ 3.0/kgs on the basis of actual weight determined by examination staff i.e. 25800 Kilograms. The offending value of mis declared UOM amounts to Rs.6,703,007.00. The appellant was accordingly charged under the relevant provisions of law for deliberately mis-declared the description, specification an classification and attempted to defrauding the Government from its legitimate revenue amounting to Rs.1,729,073.00. The appellant controverted the levelled allegation through reply dated Nil and addendum dated 29-1-2012. The respondent No.1 disagreed to the stance of appellant and passed order-in-original 25-1-2012 holding the charges levelled in the show-cause notice as proved. The operative part of the impugned order read as under:--

"I have gone through the record of the case, replies to the show-cause notice and the comments of the department on these replies. Mr. Nadeem Ahmed Mirza consultant in reply to the show-cause notice has contended that the adjudication officer has not applied his independent mind on the allegation levelled in the show-cause notice. This contention of the consultant is a mere assumption and is baseless. The show-cause notice was issued after proper application of mind. The consultant has further suggested a new PCT heading for the classification of the imported consignment. Without going into the merit of suggested PCT Heading if at least confirms that the importer had not declared the correct classification of the time of filing of the goods declaration. The suggested PCT heading by the consultant relates to the plastic sheets etc. and does not cover the product declared as well as product found undeclared during examination. The initial allegations against the importer were mis-declaration of description value and the unit of measurement. The consignment was re-examined for the exact determination of the quantity goods for which wrong description was declared. Upon re-examination 7500 kg of imported consignment was found to be with woven back, which is classified under PCT heading 5903.9000. The remaining consignment was found as per declared description. The rate of duty chargeable on the artificial leather with woven back (PCT heading 5903.9000) is 25 % as against 15% chargeable on the declared description. Both the replies to the show-cause notice submitted on behalf of importer do not comment on this aspect. Hence the charge of mis-declaration of description to the extent of 7500 kgs is established. The Pakistan Customs Tariff has laid down the unit of measurement of the artificial leather classified under chapters 56 and 59 as kg. The representative of the importer during hearing pointed out that they had declared the quantity in rolls as per the past practice for which he showed a long list of previously filed GD's. The learned consultant in reply to the show-cause notice has refereed to previous evidences where rolls were declared as the unit of measurement. This plea of past practice which is against the existing instruction cannot be accepted in view of the reported judgments of the Honourable High Court in the case of Messrs P&G International v. Assistant Collector of Customs, Appraisement, Karachi (2010 PTD 870) and Collector of Customs v. Shaikh Shakil Ahmed (2011 PTD 495) where in it has been held that on unlawful practice cannot over ride the law. In all such cases, where the unit of measurement has not been declared correctly with the intention to defraud the government of its legitimate revenue has taken uniform decision without discrimination. The instant case can not be an exception. The weight of the consignment was also found 5.6% more than the declared weight. This again established the intention of the importer to defraud the government of its legitimate revenue by not declaring the correct unit of measurement. In the light of this discussion I am convinced that the charge of mis-declaration of unit of measurement with the intention to evade the duty and taxes is also established. Accordingly, the consignment is confiscated under clauses 14, 14(A) and 45 of section 156(1) of the Customs Act, 1969 for violation of sections 32(1), 32(2), 32(A) and 79 ibid however, an option is given to the importer under section 181 of the Customs Act, 1969 to redeem 7500 kgs of artificial leather with woven backing (PCT heading 5903.9000) on a fine of 35% of the ascertained value of offending goods as prescribed under S.R.O. 499(I)/2009 dated 13-6-2009 to the tune of Rs.681,992.00 in addition to the duty and taxes leviable on this part of the consignment. The remaining consignment can the redeemed under section 181 of the Customs Act, 1969 on a fine equal to 20% of the ascertained value of offending goods. A penalty of Rs.150,000.00 is also imposed under clauses (14) and (14A) of section 156(I) of Customs Act, 1969 on the importer/NTN holder."

3.The appellant being aggrieved from the Order-in-Originals passed by the respondent No.1 filed appeal before the Collector of Customs, Appeals. The Learned Collector of Customs (Appeals), who maintained order-in-original being correct in law but reduced the imposed penalty to Rs.50,000.00, the operative paras 7 and 8 of the impugned order read as under:--

"I have carefully considered the written and verbal submission made from both sides in the instant case it is observed that appellant imported a consignment declared to contain ARTIFICIAL LEATHER under PCT 5603.9400, during the examination of impugned goods it revealed that the appellant had declared the goods of Artificial Leather under HS Code 5603.9400 chargeable to custom duty import 15% advice. However on examination the goods had been identified as Artificial Leather with Woven Backing in rolls (Assorted Colors/designs ) I/O Not shown (N.WT: 25800 Kg) Approx" correctly classifiable under PCT 5903.9000 attracting customs duty 25% ad.val. it was further pointed out that appellant declared the lower value of goods by mis-declaring the description, specification, classification and wrong UOM of the imported goods. The learned counsel for the appellant pleaded that the appellant considered his imported artificial leather to be falling under PCT heading 5603.9400 meant for non woven textile fabric whether or not impregnated, whereas principal Appraiser/respondent of customs MCC of PaCCS classified a part of that under PCT heading 5903.9000 under which "Textile fabric impregnated, coated, cover or laminated with plastic under then those of heading 5902". In both the PCT heading the primary material is textile i.e. PCT heading 5603.9400 and 5903.9000 with the exception in later, which is impregnated coated covered or laminated with plastic and these cannot be seen through naked eyes as evident from Word Customs Organization Explanatory Notes. That it is pertinent to add that for transmission of erroneous PCT heading, the appellant had been charged for mis-declaration whereas, official who also suggested on erroneous PCT heading has not been charged for any offence that as regards the charge of unit of measurement i.e. also without any substance by virtue of the fact that the Principal Appraiser offer receipt of examination report on his desktop transmitted a view message dated 28-11-2011 under rule 437 of Customs Rules, 2001 to appellant reading as "please justify declaration/classification and scan all supporting documents including printed matter/literature showing constituents material composition and showing all specification, FTA if applicable invoice, detail container wise packing list, B/L and all other relevant import documents. "Which were scanned and those were containing the unit of measurement and the sizes of the goods and that matched with the examination report.

Under the foregoing facts and circumstances I am of the view that from the record of the case as well as the arguments advanced by the rivals it transpires that the appellant mis-declared the classification, value and UOM of the impugned goods to the extent of 7500 kgs. The impugned item is correctly classifiable under HS 5903.9000 to be measured in kilograms since such items are conveniently measured by weight rather than rolls. Infact the first Schedule to the Customs Act, 1969 i.e. the Pakistan Customs Tariff also envisages the item to be assessed for value in terms of weight only, which thus becomes binding on the appellant as held by the Supreme Court in judgments quoted by the respondents. It must be admitted here that the learned counsel for the appellants has filed an exhaustive memo. of appeal however the counsel in his grounds of appeal has placed reliance on points which I do not find convincing. As a matter of fact, as stated in the order-in-original, he has admitted that the appellants suggested a different PCT heading for the impugned goods rather than the declared by him. This it self shows that the appellants were not sure about the correct classification of the impugned goods. In addition citing of judgments of the Superior Courts are very general in nature and do not relate to the inefficacy of this particular case, specially when the GD was electronically filed using the PaCCS facility which is based on self assessment and all declaration are made by the importer himself. Evidentially, any mistakes/error made by the importer cannot be taken for granted by the concerned customs authorities. However, considering all the aspects of the case, I am inclined to rule that whereas the impugned order-in-original has been correctly passed to the extent of imposition of redemption fine and levy of duty and taxes on the impugned goods however the personal penalty imposed on the importer is harsh and the same is accordingly reduced to Rs.50,000.00only. The impugned Order-in-Original No.92325 of 2012 dated 25-1-2012 is modified to this extent only and the appeal is disposed off accordingly."

4.The appellant has now challenged the above order by way of this appeal. The consultant Nadeem Ahmed Mirza appeared on behalf of the appellant who reiterated the arguments incorporated in the memo. of the appeal and emphasized that:--

(1)The appellant considered his imported artificial leather to be falling under PCT heading 5603.9400 meant for non woven textile fabric whether or not impregnated. Whereas, Principal Appraiser/Respondents of Customs, MCC of PaCCS classified a part of that under PCT heading 5903.9000 under which "Textile Fabric impregnated, coated, cover or laminated with Plastic other than those of heading 5902" falls. In both the PCT heading the primary material is textile i.e. PCT heading 5603.9400 and 5903.9000 with the exception of fact in later, which is impregnated, coated, covered or laminated with plastic and these cannot be seen through naked eyes as evident from World Customs Organization, Explanatory Notes reading as "Textile Fabric in which the impregnation, coating or covering cannot be seen with the naked eyes instead can be seen only by reason of a resulting change of colour usually fall in Chapters 50 to 55, 58 or 60. Examples of such fabrics are those impregnated with substances designed solely to render them crease proof, moth proof un-shrinkable or waterproof (e.g. waterproof gabardines and poplins). Textile fabric partially coated or partially covered with plastics and bearing design resulting from these treatments are also classified in Chapters 50 to 55, 58 or 60."

(2)That in artificial leather the primary material is Polyurethane and affixed below to that is mesh of textile whether non-woven or woven and by virtue of its primary material i.e. polyurethane, it cannot be considered as textile material instead a product of polyurethane as per 2(b) of the General Rules of Interpretation of Harmonized System and it falls under PCT heading 2921.1300. The appellant stance stood validated from the Notification No.283(I)/2011 dated 1-4-2011, 1012(I)/2011 dated 4-11-2011, 1058(I)/2011 dated 23-11-2011 and 1125(I)/2011 dated 13-12-2011 issued by the Revenue Division for zero rating of the goods. Artificial leather in these notification has been classified under PCT heading 3921.1300 and these notification are binding on all and sundries and specifically on the hierarchy of the Customs under section 223 of the Customs Act, 1969.

(3)That in principle the learned respondents should had ordered classification of artificial leather in PCT heading 3921.1300 in future including the instant consignment of the appellant. Instead they acted in nullity to the law and carried out classification of artificial leather under erroneous PCT heading, only to the extent of appellant consignment, which is tantamount to defiance of section 223 of the Customs Act, 1969 and the law laid down by the High Court of Sindh in reported judgment 2010 PTD 870 Messrs P&G International, Lahore v. Assistant Collector of Customs (Appraisement), GR-II), Karachi and 3 others and 2011 PTD 495 Collector of Customs v. Sheikh Shakeel Ahmed in which it was held "that wrong classification should not be ignored on the pretext of past practice, instead that should be stopped and goods should be classified under the appropriate PCT heading given in the Customs Tariff". Contrary to the consignment of appellant the respondent No. 1 are clearing the said goods under PCT heading 3921.1300 as evident from copies of GD's bearing No. KPPI-HC18071 dated 13-1-2012, KPPI-HC-20639 dated 2-2-2012, KPPI-HC-22552 dated 17-2-2012, KPPI-HC-29933 dated 16-4-2012 and KPPI-HC-29940 dated16-4-2012. The said act validate the classification made by FBR and the stance of appellant and law laid down by the High Court of Sindh and confirms without any ambiguity partial treatment and discrimination against the appellant.

(4)That it is pertinent to add that for transmission of erroneous PCT heading, the appellant had been charged for mis-declaration whereas official who also suggested an erroneous PCT heading has not been charged for any offence. Instead his opinion is considered valid by the learned respondents without going through the respective PCT headings. This is ridiculous and absurd. While doing so the respondents also ignored the provision of section 80(1) and Rule 438 of Sub-Chapter III of Chapter-XXI of the Customs Rules, 2001, which lays built-in responsibility on the Customs officials to check the declaration of importer while completing assessment, which include "correctness of the particular of import, including declaration, assessment and in case of Customs Computerized System, payment of duty and taxes and other charges thereon" and Rule 438 read as "where any declaration has been filed under Rule 433 or additional documents has been submitted under 437, the Customs shall satisfied itself as to the correctness including its value, classification, claim of exemption, payment of duties and taxes and may re-assess the goods during or after clearance". Hence no charge can be invoked in regards to PCT heading against an importer.

(5)The importer which includes appellant only assist the customs by citing the P.C.T. Heading of the goods. Which may be called a claim for assessment of taxes, which means a request may be accepted or rejected by the competent authority but is not a punishable offence under any of the provision of the Customs Act, 1969. The citation of particular PCT heading in the GD does not amounts to mis-declaration with in the meaning of section 32 of the Customs Act, 1969. It is a well settled principle of law in Customs Jurisprudence through a series of judgment of judicial fora of Indian and Pakistani Jurisprudence starting with the case of Monno Industries Ltd. v. Government of Pakistan reported as Pet. D-199/194 to State Cement Corporation v. Government of Pakistan reported as 2002 MLD 1980. Reference is made to the reported judgment 2003 PTD (Trib.) 293 of the Customs, Excise and Sales Tax Appellate Tribunal, Karachi Bench. Whereas, it has been held that: "We believe that clearing agents while filing a bill of entry is required to fill the PCT column for the easement and assistance of the Assessing Officer. The perusal of section 80 of the Customs Act, 1969, indicates that during the process of assessment it is the duty of the Assessing Officer not only to examine the goods but also to tally the description, its weight and value of the goods thereof, and to consider any extra information available on the bill of entry in order to arrive at a correct assessment of duty and taxes. Simply assuming that a wrong PCT heading amount to mis-declaration would not be a correct approach to interpret section 32, where emphasis is on the word "material particular" which means something going to root cause of the basic declaration. To our mind, a mis-declaration in material particulars terms has not been made by the appellant."

(6)That in Customs Appeal No. K-333/06 Umme Kulsoom Trading Co. v. Collector of Customs Appeals and others. The Division Bench of Customs Tribunal did observe in the following terms: "It is gathered from the record that only charge against the appellant is that he misquoted PCT heading for which he is being charged for mis-declaration within the frame work of Customs Law. It is now well-settled law that to constitute a criminal act an element of mens rea and intentional knowledge is necessary and the offending act must be one in which material particulars have been wrongly given or provided to the Customs authorities. It is evident from the record that in the goods declaration all the entries relating to description, quantity and nature of goods were found true and no charge has been framed against the appellant on that count. In such circumstances, alleging a charge of mis-declaration particularly on the basis of wrong classification heading does not constitute an offence within the framework of section 32 of the Customs Act, 1969 as there is no material falsity in the statement made by the appellant. In these circumstances, we would like to allow the appeal and set aside the impugned order as no case has been made out against him.

(7)That in yet another case the Honourable Late Justice Sabihuddin Ahmed ridicule the irrational approach of the Customs Authorities, in reported judgment 2002 MLD 180 State Cement Corporation of Pakistan v. Collector of Customs and another while observing that "we asked both MessrsRaja Muhammad Iqbal and Javed Farooqi as to whether no responsibility devolved upon the hierarchy of customs officials to levy and assesses duty according to law and they had no answer. We are rather amazed at the line of reasoning put forwarded to the effect that while an assessee is required to interpret the law and relevant notification correctly and could be held guilty of a penal offence for not doing so in terms of section 32 (1) of the Customs Act, 1969 no responsibility of any kind would devolve on customs officials. His lordship also held that it is well settled that an erroneous interpretationofstatutorynotificationcannotbedeemedtobea false declaration in terms of section 32(1) of the Customs Act.".

(8)That as regards the charge of unit of measurement, i.e. also without any substance by virtue of the fact that the Principal Appraiser after receipt of examination report on his desktop transmitted a view message dated 28-11-2011 under Rule 437 of Customs Rules, 2001 to our client reading as "please justify declaration/classification and scan all supporting documents including printed matter/literature showing constituent material composition and showing all specification, FTA if applicable, invoice detail container wise packing list, B/L and all other relevant import documents". Which were scanned (see Exhibit "D" to "I") and those were containing the unit of measurement and the sizes of the goods and that matched with the examination report. Upon receipt of those, the Assessing Officer/Principal Appraiser, completed the assessment or framed contravention under Rule 438 of the Customs Rules, 2001. With the consideration of the scanned documents as part of declaration under section 2(kka) of the Customs Act, 1969 of the appellant in addition to the declaration transmitted to the PaCCS through GD in term of Rule 433 ibid and this proposition of law stood validated from the reported judgment 2011 PTD (Trib.) 22 and 2011 PTD (Trib.) 987. For ease section 2(kka) is reproduced here-in-below:--

[2{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 initialed 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 recorder, 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 ofwhichitformspartortowhichitisattachedbyanymeans;

(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)That while framing the contravention report by the Principal Appraiser and transmitting show-cause notice and order-in-original by the respondent No. 1, they not only committed gross illegality by deviating from the precedence instead are instrumental in giving a partial and discriminating treatment to the appellant despite barred under Articles 4 and 25 of the Constitution of Islamic Republic of Pakistan. Not even the appellant is giving declaration in units of packing i.e. in rolls, rather many of the importers are declaring the artificial leather quantity in rolls but no contravention was ever framed and neither any show-cause notice/order-in-original were issued, instead assessments were completed on the basis of Kgs. confirmed in the examination reports. Reference is placed onCR Nos.I-HC-1940490-060911, 1940837-060911, 1942706-070911, 1942732-070911, 1945631-100911, 1951293-150911, 1952507-160911, 1956898-210911, 1959743-240911, 1983558-271011, 1983560-271011, 1985720-301011, 1995425-151111, 2001859-241111.

(10)That as per settled Principle, the "Custom Authorities are supposed to adhere to their own precedent in administering taxing Statute". The said opinion was held by the Lahore High Court Lahore in reported judgment PLD 1977 Lahore 1392 Nazir Ahmed Tajdin v. Deputy Collector of Customs, Lahore and 2 others respondents, while allowing the Petition No.585 of 1977 on 23-7-1977. Whereas, in regards to partial/ discriminatory treatment given to the appellant stood proved from the CR Nos. referred in above. The respondents or any body else can not give a differential treatment to any one including the appellant, despite standing on same pedestal and neither can discriminate as per the expression of Articles 4 and 25 of Constitution of Islamic Republic of Pakistan. Reference is made to the reported judgments of High Court of High Court of Sindh reported as 2002 PTD 976, wherein it was held that "vacating the show-cause notice in one case and taking action against another person in similar situation, is amount to discrimination which is hit by Article 25". In reported judgment 2002 SCMR 312 and 2009 PTD 1507the Hon'ble Superior Courts "there exist no power to target incidence of tax in such a way that similarly placed person be dealt not only dissimilarly, but discriminatingly". Whereas, in reported judgment 2005 SCMR 472 the Hon'ble Supreme Court held that "A facility allowed to some one and denied to other is discrimination". The Apex Court further held in reported judgment 2010 SCMR 431 that:

"doctrine of equality, as contained in Art. 25 of the Constitution, enshrine golden rules of Islam and states that every citizen, no matter how high so ever, must be accorded equal treatment with similarly situated persons---State may classify persons and objects for the purpose of legislation and make laws applicable only to persons or objects within a class---In fact all legislations involve some kind of classification whereby some people acquire rights or suffer disabilities whereas others donot---What however, is prohibited under principle of reasonable classification, is legislation favouring some within a class and unduly burdening others---Basic rule for exercise of such discretion and reasonable classification is that all persons laced in similar circumstances must be treated alike and reasonable classification must be based on reasonable grounds in given set of circumstances but the same in any case must not offend spirit of Art. 25 of the Constitution."

(11)That as regards the valuation of the appellant goods @ US$.3.00, i.e. also without any substance as it is based on the value of textile goods "Textile Fabric impregnated, coated, cover or laminated with Plastic other than those of heading 5902" which has no nexus with appellant product. Even otherwise for levelling allegation in regards to value, the Custom has to supply evidential invoice as per direction contained in para 78 of the CGO 12/2002, which is missing in the instant case, rendering the charge of mis declaration of value unsubstantiated and as such of no legal effect and the appellant goods should had been ordered to be assessed on the basis of valuation ruling if that exist or on the basis of identical/similar goods value available in the data of customs maintained under Rule 110 of the period 107(a) of Customs Rules, 2001 of the PCT heading 3921.1300, with the application of lowest value as expressed in clause (d) of section 25(5) of the Customs Act, 1969, which is much lower than the appellant goods as evident from the data of assessment (not import) is US$. 2/kg, which has to be applied in the case of appellant, notwithstanding the stance of the appellant that his declared value has to be accepted as fair or the lowest value of import as against assessed.

(12)That in the order-in-original passed/transmitted by the learned respondent No.1 in regards to difference in weight said to be excess by 5.6% has no nexus with the show-cause notice as no such charges was spelled out in the show-cause notice. Hence, while giving his opinion/decision on the said issue, he travelled beyond the scope of show-cause notice. Said insertion in order is not permitted under law as decision on the basis of the fact not incorporated in the show-cause notice are termed palpably illegal by the Superior Judicial Fora. Reliance is placed 1987 SCMR 1840, 2004 PTD 1449, 2008 PTD (Trib.) 36, 2007 PTD 2265, 2010 PTD (Trib.) 1759, 2010 PTD (Trib.) 1377 and 2012 PTD (Trib.) 1697,.

(13)That upon scrupulous study of the show-cause notice and orders passed by the respondents, it can be easily determined that they had has not applied their mind independently and judiciously instead transmitted/passed unlawful show-cause notice and orders totally in nullity to the reported judgment of the High Court of Sindh in the case of 2004 PTD 369 of MessrsZeb Traders v. Federation of Pakistan. Their lordship of the High Court held that "the proceeding before Adjudicating Officer, under the Customs Act, 1969 are in the nature of quasi judicial proceedings and issuance of notice under section 180 of the Customs Act, 1969 is very important documents. The decision to issue show-cause notice is to be taken by the Collector, Adjudication, by application of independent mind and not merely signing the draft show-cause notice submitted by the investigation agency separate from the Adjudication Department and each category of officers are required to perform their respective functions/duties under the law. The practice tosubmit draft show-cause notice by the Director General of Intelligence and Investigation to the Collector Adjudication is depreciated."

(14)That the learned respondent No.1 in order-in-original failed to distinguish or discuss the law including citation, instead passed order on his personal whims and wishes and on already formed opinion at the time of transmitting show-cause notice, while ignoring the rest of the proceeding and while doing so he tried to took shelter under the umbrella of reported judgments 2010 PTD 870 MessrsP&G International, Lahore v. Assistant Collector of Customs (Appraisement), GR-II), Karachi and 3 others and 2011 PTD 495 Collector of Customs v. Sheikh Shakeel Ahmed, which are not at all relevant to the deviation from the precedence and the act of discrimination instead are based on the application of PCT headings, attention is invited to ground 3 above and while ignoring fact and law and judgment of Hon'ble Superior Judicial Fora, reference is made to the reported judgment 2011 PTD (Trib.) 1010 of IRAT.

(15)That the respondent No. 2 in para 5 of the order has incorporated the comments of respondent No.1 on the memo. of appeal. No such comments were ever submitted by the respondent No.1 as those were not supplied to the appellant at the time of hearing. It seems that the respondent No. 2 obtained the said comments at belated stage and those also in accordance with his whims and wishes and dictated version for using those as a tool for rejecting the appeal despite merit allowing on the basis of grounds of memo. of appeal. The said act of respondent No. 2 render the comments as not admissible under law as these were obtained at the back of the appellant and at belated stage and Order-in-Appeal so passed amounts to mala fide and intellectual dishonesty, hence ab inito, null and void.

(16)The order passed by the respondent No. 2 shows that it is not a proper order without application of judicial mind and provision of the Act. Instead it is partial, influenced and discriminatory order and did not conform to the mandated requirement of S.24-A of the General Clauses Act, 1897 and this stood validated from the grounds and additional arguments incorporated in paras 3 and 4 of order and the copies of GD's submitted as exhibit "A" to "A4" with the additional arguments on 9-5-2012. The grounds incorporated by the respondent No. 2 were only for the sake of extending the order but no rebuttal on those including on the relied upon decision/judgments of the Superior Judicial Fora was given and not the substantial reasons for discarding those. This shows that the order passed was on judicious consideration instead on personal and biased opinion, rendering it illegal void and arbitrarily and a result of misused of authority vested in him. No room was available for such illegal, void and arbitrarily orders in any system of law. If any authority Court or Tribunal gave a finding of fact which was not based on material available on record was illegal arbitrarily without discussing and considering the material available on record it became perverse and a perverse finding of fact which is violative of the established principle of appreciation of evidence on record was not sustainable in law. The principle that every judicial or quasi-judicial finding should be based on reasons containing the justification for the finding in the order itself is an established principle of dispensation of justice. The Adjudication/Appellate orders are being violation of basic principle of the goods governance and mandatory requirement of section 24A of the General Clauses Act, is not only illegal and void but also not sustainable under law. The said position is also fortified by the judgments of Superior Courts reported as 2005 YLR 1019, 2007 PTD 2500, 2004 PTD 1973, 2005 YLR 1719, 2003 PTD 777, 2003 PTD (Trib.) 2369, 2002 MLD 357, 1983 CLC 2882, 2005 PTD 2519, 2005 PTD 1189 and PLD 1995 SC (Pak) 272, PLD 1970 SC 158, PLD 1970 SC 173, 1984 SCMR 1014 and 2012 PTD (Trib.) 619.

(17)The appellant carves his right to add any fresh grounds at the time of hearing besides placing any valid incriminating evidence/ documents.

5.No cross objection under subsection (4) of section 194-A of the Customs Act, 1969 were submitted by the department, however Mr. Ghulam Yasin, Appraiser, appeared on behalf of the respondent and supported the orders as correct in facts and law and prayed for dismissal of the appeal as of no substance. Rival parties heard and case records perused and the following issues are framed for consideration by this forum:--

(i)Whether under any standard and application of General Rules of Interpretation Artificial Leather can be termed as Textile Fabric falling under PCT heading 5603.9400 and 5903.9000?

(ii)Whether Artificial Leather is correctly classifiable under Sub Chapter 21 of Chapter 39 of Section VII of Pakistan Customs Tariff as held by FBR in Notification No. S.R.O. 283(I)/2011 dated 1-8-2011, 1012(I)/2011 dated 4-11-2011, 1058(I)/2011 dated 23-11-2011 and 1125(I)/2011 dated 31-12-2011 and the Hon'ble High Court of Sindh in judgment reported at 2010 PTD 870 MessrsP&G International, Lahore v. Assistant Collector of Customs (Appraisement), GR-II), Karachi and 3 others and 2011 PTD 495 Collector of Customs v. Sheikh Shakeel Ahmed?

(iii)Whether charge of mis-declaration of unit can be invoked after receipt of scanned additional documents under Rule 437 of Customs Rules, 2001 forming declaration of the appellant in terms of section (2kka) of the Customs Act, 1969?

(iv)Whether for transmitting erroneous PCT heading appellant can be charged for mis-declaration and for the same offence Custom Officials are let free without any charge?

(v)Whether the subject imports of the appellants has been meted out a differential treatment as compared to other contemporaneous imports involving an element of discrimination in terms of Articles 4 and 25 of the Constitution of Pakistan read with number of judgments of the Superior Judicial fora?

(vi)Whether the transaction value declared by the appellant are in conformity with the clause (d) of subsection (5) of section 25 of the Customs Act, 1969?

(vii)Whether a decision can be made outside the scope of show-cause notice?

(viii) Whether the respondent No. 2 issued the show-cause notice after going through the facts of the case and applicable PCT heading of Pakistan Customs Tariff, Provisions of the Act, Rules and Regulation independently and fairly as held in reported judgment 2004 PTD 369 MessrsZeb Traders, v. Federation of Pakistan?

(ix)Whether order of the respondents Nos. 2 and 3 can be termed as speaking order even through a stretch of imagination under the provision of section 24-A of the General Clauses Act, 1897?

7.That as regard issue No.(i), in order to better understanding, it is appropriate to reproduce section XI and PCT heading 56.03 and 59.03 Customs Tariff:

Section XI

Textile and Textile Articles

Section Notes

50.Silk

51.Wool,Fine or coarse animals hair, horsehair yarn and woven fabrics.

52.Cotton

53.Other vegetable textile fibrs, paper yarn and woven fabrics of paper yarn.

54.Man Made filaments, strip and the like of man made textile materials.

55.Man made staple fibres.

56Wadding, felt and non wovens, special yarns, twine, cordage, ropes and cables and articles thereof.

57.Carpets and other textile floor coverings

58.Special woven fabrics, tufted textile fabrics, lace, tapestries, trimmings, embroidery.

59.Impregnated, coated, covered or laminated textile fabrics, textile articles of a kind suitable for industrial use.

60Knitted or crocheted fabrics

61.Articles of apparel and clothing accessories knitted or crocheted.

62.Articles of apparel and clothing accessories not knitted or crocheted.

63.Other made up textile articles, sets worn clothing and worn textile articles rags.

Chapter 56:

Wadding, felt and non Wovens; Special yarn; Twine, cordage, ropes and cables and article thereof.

56.03: Non wovens, whether or not impregnated, coated cover or laminated.

5603.1100 : Weighing not more than 25 g/m2

5603.1200 : Weighing not more than 25 g/m2 but not more than 70 g/m2

5603.1300 : Weighing not more than 70 g/m2 but not more than 150 g/m2

5603.1400 : Weighing more than 150 g/m2

5603.9100 : Weighing not more than 25 g/m2

5603.9200 : Weighing not more than 25 g/m2 but not more than 70 g/m2

5603.9300 : Weighing not more than 70 g/m2 but not more than 150 g/m2

5603.9400 : Weighing not more than 150 g/m2

Chapter 59:

Impregnated, coated, covered or laminated textile fabric; textile articles of a kind suitable for industrial use

59.03: Textile fabrics impregnated, coated covered or laminated with plastics, other than those of heading 59.02

5903.1000: With poly (vinyle Chloride)

5903.2000: With polyurethane

5903.9000: Others

Upon examination of Section XI of Pakistan Customs Tariff, it is abundantly clear that this chapter is only meant for textile and textile articles. Sub-Chapter 56 of it, is for Wadding, felt and non Wovens; Special yarn; Twine, cordage, ropes and cables and article thereof and Sub-Chapter 59 for Impregnated, coated, covered or laminated textile fabric; textile articles of a kind suitable for industrial use. Whereas, PCT heading 56.03 is for Non wovens, whether or not impregnated, coated cover or laminated and 59.03 Textile fabrics impregnated, coated covered or laminated with plastics, other than those of heading 59.02. Meaning thereby that, the product falling under the said PCT heading must be of textile. As regards the artificial leather, the word "leather" negates with clarity that this item is not of textile in any manner instead obtained from poly vinyl chloride, polyurethane or allied polymer and as such has no nexus with Textile. Terming the said item as textile on the basis of affixed mesh of very negligible quantity i.e. 0.1% of non-woven or woven textile underneath on the pretext of backing or impregnation on textile fabric amounts to absurdity. The literal meaning of "impregnation" is to "fill, soak, saturate or imbue", with particular practices or qualities of another substance the mesh of non-woven or woven textile is not impregnated in any manner, instead it has just been affixed as a support. The affixed mesh does not change the characteristics of the primary material (major components) of artificial leather. Classifying artificial leather in PCT heading 56.03 and 59.03 meant for Textile is also in negation of sub-rule (b) of Rule 2 and sub-Rule (a) of Sub-Rule (3) of General Rules of Interpretation of the Schedule, which read as "any reference in a heading to a material or substance shall be taken to include a reference to mixture or combination of that material or substance with other material or substance. "Any reference to goods of a given material or substance shall be taken to include a reference to goods consisting wholly or partly of such material" and "the heading which provide the most specific description shall be preferred to heading providing a more general description. However, when two or more headings each referred to part only of the material or substance contained in mixed or composite goods or to part only of the items in a setup for retail sale, these heading are to be regarded as equally specific in addition to those goods, even if one of them gives a more or complete or pr cised description of the goods respectively."

Since the major components of artificial leather is Poly Vinyl Chloride and Polyurethane or allied synthetic as per sub-rule (b) of Rule (2) of General Rule of Interpretation, it does not fall within the ambit of either 56.03 or 59.03. Likewise the said item is sold in wholesale and retail as artificial leather not as textile, hence, the description of artificial leather being the most specific has to be preferred as per sub-rule (a) of rule (3) of General Rule of Interpretation. This also find support from the Order No. 9A of 1987 dated 28-2-1987 and 1(970)/Rev.Cus/86 dated 1-9-1987 which pertains to classification of wall paper composed of 80% PVC material and 20% paper backing, the customs classified it in PCT heading 48.11 as against declared PCT 39.02 the learned Additional Secretary of Government of Pakistan, Revenue Division ordered classification of wall paper under PCT heading 39.02 by virtue of major component of the goods, which was 80% of PVC . The issue No. (i) is answered in negative.

8.That as regards issue No.(ii), since the artificial leather is manufactured/Produced from Poly vinyl chloride, Polyurethane or allied polymer it falls under Sub-chapter (21) of Chapter 39 of Section VII of Pakistan Custom Tariff and under PCT heading 3921.1300, and this stood validated from the Notification No's. S.R.O. 283(I)/2011dated1-8-2011, 1012(I)/2011 dated 4-11-2011, 1058(I)/2011 dated 23-11-2011 and 1125(I)/2011 dated 31-12-2011, where in the Federal Board of Revenue classified the artificial leather under PCT 3921.1300 in the capacity of final authority for determining the correct classification. The classification made by the FBR as laid to rest the classification of artificial leather and it has to be adhered, being binding on the hierarchy of Custom under section 223 of the Customs Act, 1969. Resultant artificial leather has to be classified for the all practical purpose including assessment in future under Sub-Chapter (21) of Chapter 39 of Section VII of Pakistan Customs Tariff and classifying it under PCT heading 56.03 or 59.03 on the garb of non-woven or woven textile backing or on the plea of past practice should be stopped forthwith as ordered by the Honorable High Court of Sindh in reported judgment 2010 PTD 870 MessrsP&G International, Lahore v. Assistant Collector of Customs (Appraisement), GR-II), Karachi and 3 others and 2011 PTD 495 Collector of Customs v. Sheikh Shakeel Ahmed "that wrong classification should not be ignored on the pretext of past practice, instead that should be stopped and goods should be classified under the appropriate PCT heading given in the Customs Tariff". The Question No. (ii) is answered in affirmative.

9.That as regards issue No. (iii) the charge of mis-declaration of unit of measurement, is without any substance as evident from the fact that the Principal Appraiser after receipt of examination report on his desktop transmitted a view message dated 28-11-2011 under Rule 437 of Customs Rules, 2001 to appellant stating inter alia "please justify declaration/classification and scan all supporting documents including printed matter/literature showing constituent material composition and showing all specification, FTA if applicable, invoice, detail container wise packing list, B/L and all other relevant import documents". Which were scanned,thosewerecontainingtheunitofmeasurementandthe sizesofthegoods,whichmatchedwiththeexaminationreportbased on those the Assessing Officer/Principal Appraiser, completed the assessment/framed contravention report under Rule 438 of the Customs Rules, 2001. With the consideration of scanned documents as declaration of appellant in terms of section 2(kka) of the Customs Act,1969, in additiontothedeclarationtransmittedtothePaCCS through GD interm of Rule 433 ibid . For ease section 2(kka) is reproduced here-in-below:--

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

(2)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;

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

(4)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)]

Since the scanned documents are part of declaration in terms of Rule 2(kka) made under section 79(1) and Rules 433 and 437 of Sub-Chapter of (III) of Chapter XXI of the Customs Rules, 2001. Hence charge of mis-declaration of unit of measurement is misplaced. This proposition of law stood validated from the judgments of this Tribunal reported as 2011 PTD (Trib.) 22 and 2011 PTD (Trib.) 987. The issue No. (iii) is answered in negative.

10.That as regard issue No. (iv), it is noted with concern that for transmitting wrong PCT heading the appellant had been charged for mis-declaration whereas official who also suggested an wrong PCT heading has been let free without any change despite standing on the same pedestal by the respondent Collectorate. On the top of it, the official opinion is considered valid by the learned respondents without going through the respective PCT headings. This is ridiculous and absurd. The respondents while doing so also ignored the provision of section 80(1) and Rule 438 of Sub-Chapter-III of Chapter-XXI of the Customs Rules, 2001, which lays built-in responsibility on the Customs officials to check the declaration of importer while completing assessment, which include "correctness of the particular of import, including declaration, assessment and in case of Customs Computerized System, payment of duty and taxes and other charges thereon" and Rule 438 read as "where any declaration has been filed under Rule 433 or additional documents has been submitted under 437, the Customs shall satisfied itself as to the correctness including its value, classification, claim of exemption, payment of duties and taxes and may re-assess the goods during or after clearance". In the light of clear expression of the Act and Rule determination of the PCT heading rest on the part of Customs Officials for levy of duty and taxes as the importer fill the PCT column for easement and assistance of the assessing officer, it can be either accepted or rejected by the assessing officer at the time of completion of assessment under section 80 and Rule 438 of the Customs Act/Rules as held by this Tribunal in reported judgment 2003 PTD (Trib.) 293. This Tribunal is tempted to also rely in support of its finding on the reported judgment 2002 MLD 180 State Cement Corporation of Pakistan v. Collector of Customs and another, wherein the Hon'ble Late Justice Sabihuddin Ahmed ready to the irrational approach of the customs authorities, by holding that "we asked both MessrsRaja Muhammad Iqbal and Javed Farooqi as to whether no responsibility devolved upon the hierarchy of customs officials to levy and assesses duty according to law and they had no answer. We are rather amazed at the line of reasoning put forwarded to the effect that while an assessee is required to interpret the law and relevant notification correctly and could be held guilty of a penal offence for not doing so in terms of section 32(1) of the Customs Act, 1969 no responsibility of any kind would devolve on customs officials. His lordship also held that it is well settled that an erroneous interpretation of statutory notification cannot be deemed to be a false declaration in terms of section 32(1) of the Customs Act.". Hence no charge can be invoked in regards to PCT heading against an importer. The issue No. (iv) is answered in negative.

11.That as regards issue No.(v), it has been observed that while framing the contravention report by the Principal Appraiser and transmitting show-cause notice and order-in-original by the respondent No.1, they not only committed gross illegality by deviating from the precedence instead are instrumental in giving a partial and discriminating treatment to the appellant despite barred under Articles 4 and 25 of the Constitution of Islamic Republic of Pakistan. Not even the appellant is giving declaration in units of packing i.e. in rolls, rather many of the importers are declaring the artificial leather quantity in rolls but no contravention was ever framed and neither any show-cause notice/order-in-original were issued, instead assessments were completed on the basis of weight confirmed in the examination reports as evident from annexed GD's by the appellant bearing CR Nos.I-HC-1940490-060911, 1940837-060911, 1942706-070911, 1942732-70911, 1945631-100911, 1951293-150911, 1952507-160911,1956898-210911,1959743-240911, 1983558-271011, 1983560-271011,1985720-301011, 1995425-151111, 2001859-241111.

That as per settled principle, the "Custom Authorities are supposed to adhere to their own precedent in administering taxing Statute". The said opinion was held by the Lahore High Court Lahore in reported judgment PLD 1977 Lahore 1392 Nazir Ahmed Tajdin v. Deputy Collector of Customs, Lahore and2 others respondent, while allowing the Petition No. 585 of 1977 on 23-7-1977. Whereas, partial/ discriminatory treatment given to the appellant despite standing on same pedestal stood proved from the C.R. Nos. referred in above. The respondents or any body else can not give a differential treatment to any one including the appellant, and neither can discriminated as per the expression of Articles 4 and 25 of Constitution of Islamic Republic of Pakistan. Reference is made to the reported judgments of High Court of Sindh reported as 2002 PTD 976, wherein it was held that "vacating the show-cause notice in one case and taking action against another person in similar situation, is amount to discrimination which is hit by Article 25". In reported judgment 2002 SCMR 312 and 2009 PTD 1507 the Hon'ble Superior Courts "there exist no power to target incidence of tax in such a way that similarly placed person be dealt not only dissimilarly, but discriminatingly". Whereas, in reported judgment 2005 SCMR 72 the Hon'ble Supreme Court held that "A facility allowed to some one and denied to other is discrimination". The Apex Court further held in reported judgment 2010 SCMR 431 that:--

The issue No. (v) is answered in affirmative.

12.That as regard issue No.(vi), the declared value of the appellant are also fair in the light of transaction value of identical/similar goods expressed in subsection (5) of section 25 of the Customs Act, 1969 read with Rules 117 and 118 of the Customs Rules, 2001. The copies of the GDs supplied by the appellant /mentioned at Para 11 supra and the data supplied by the respondent substantiate the stance of the appellant , that the lowest declared transaction value of the identical imported goods ranged between US$. 0.75 to 2.05/Kg which had been enhanced to US$ 3/kg without producing evidence of physical import of the 90 days valuation data. Since, there can be more than one transaction value for the identical/similar goods, it is not necessary to enhance the value of the identical goods on record in terms of clause (d) of subsection (5) of section 25 of the Customs Act, 1969 which is also applicable mutatis mutandis to subsection (6) of the section 25 ibid. the relevant extract is as under:--

(d)If, in applying the provisions of this subsection, there are two or more transaction values of identical goods that meet all the requirements of this subsection and clauses (b), (d), (e) and (f) of subsection (13), the customs value of the imported goods shall be the lowest such transaction value, adjusted as necessary in accordance with clauses (b) and (c).

Moreover the respondent has not been able to bring on record any cogent evidence or documents which can prove the declared transaction value of the subject goods tainted or colorable. The lower transaction value for the subject goods in absence of such evidence does not necessitate the enhancement of the value to the level of the highest of transaction value for similar/identical goods on record. As such issue No. (vi) is answered in the affirmative.

13.In regards to issue No. (vii), it revolves around fundamental objection of the appellant No.1 with regards to observation incorporated by the respondent No.1 in the order-in-original regarding difference in weight said to be found excess by 5.6% as against declared. No such allegations were specifically made in the show-cause notice. In the Collector of Customs v. Rahm Din 1987 SCMR 1840 a full Bench of the Hon'ble Supreme Court was pleased to hold that any order of adjudication passed on a ground not mentioned in the Show-Cause Notice shall be palpably illegal on the face. This verdict of the Apex Court has been followed by a Division Bench of the Hon'ble High Court of Sindh (Karachi) in the case of Exide Pakistan (Pvt.) Ltd. v. Deputy Collector of Customs 2004 PTD 1449. The contention of the learned departmental representative pertaining to observation referred in is thus not tenable. As such issue No. (vii) is answered in negative.

14.That as regard to issue No. (viii), the Tribunal observed that the respondent No. 1 has issued/transmitted the show-cause notice in mechanical manner as the same is based on the contravention report forwarded to him , irrespective of the fact that it was mandated upon him to determine himself the actual facts of the case and applicable PCT heading of Pakistan Customs Tariff Provision of the Act, Rules and Regulation independently and fairly not merely on the basis of the opinion forwarded to him by the Principal appraiser of the Group of MCC of PaCCS, as show-cause in the vital documents and it should be a proper legal documents forming the root cause of the case . The show-cause notice in the instant case is defective and nullity to the PCT's of Tariff, Provision of the Act, Rules and Regulation as held by the Tribunal in para supra rendering it ab-initio being nullity to law laid down by the High Court of Sindh in reported judgment 2004 PTD 369 MessrsZeb Traders, Karachi v. Federation of Pakistan that "The proceeding before Adjudicating Officer, under the Customs Act, 1969 are in the nature of quasi judicial proceedings and issuance of notice under section 180 of the Customs Act, is very important documents. The decision to issue show-cause notice is to be taken by the Collector, Adjudication, by application of independent mind and not merely signing the draft show-cause notice submitted by the investigation agency separate from the Adjudication Department and each category of officers are required to perform their respective functions/duties under the law. The practice to submit draft show-cause notice by the Director General of Intelligence and Investigation to the Collector Adjudication is depreciated." The issue No. (viii) answered in negative.

15.That as regards issue No. (ix), the orders passed by the respondents Nos.1 and 2 shows that these are not proper orders with the application of judicial mind and provision of the Act. Instead these are non speaking orders and did not conforms to the mandated requirement of S.24-A of the General Clauses Act, 1897 and this stood validated from the orders of the respondent No.1 which only contains his view points with no rebuttal whatsoever on the ground taken by the appellant in the reply to the show-cause notice neither contain reasoning that how artificial leather can be termed as textile and nothing has been said on the relied upon citations, instead application of the reported judgments of the High Court applied with mutilation instead of their essence .As regards the respondent No. 2, he in his order dated 31-5-2012 at paras 3 and 4 incorporatedgrounds Nos. 1 to 9 of the memo.ofappealinsteadoftotal 14 only for the sake of stretching the order. The order is also silent in regard to additional arguments dated 9-5-2012 and Annexures exhibited with those as A to A4. Astonishingly no rebuttal on the grounds advanced in the memo. of appeal/additional arguments and decision/judgments relied upon by the appellant were given by him, with substantial reasons. Confirming that both orders were not passed on objective consideration. Such type of orders are always treated as illegal, void arbitrary and a result of misuse of authority vested in public functionary. No room was available for such illegal, void and arbitrarily orders in any system of law. If any authority Court or Tribunal gave a finding of fact which was not based on material available on record was illegal arbitrarily without discussing and considering the material available on record it became perverse from evidence and a perverse finding of fact which is violative from the established principle of appreciation of evidence on record was not sustainable in law. The principle that every judicial or quasi-judicial finding should be based on reasons containing the justification for the finding in the order itself is an established principle of dispensation of justice. The Adjudication/ Appellate orders are being violation of basic principle of the goods governance and mandatory requirement of section 24A of the General Clauses Act, is not only illegal and void but also not sustainable under law. The said position is also fortified by the judgments of Superior Courts reported as 2005 YLR 1019, 2007 PTD 2500, 2004 PTD 1973, 2005YLR1719,2003PTD777,2003PTD(Trib.)2369,2002MLD 357, 1983 CLC 2882, 2005 PTD 2519, 2005 PTD 1189, and PLD 1995 SC (Pak) 272, PLD 1970 SC 158, PLD 1970 SC 173 1984 SCMR 1014 and 2012 PTD (Trib.) 619. The issue No. (ix) answered in negative.

16.Towhathasbeenstated,discussedandobservedhereinabove particularly the interpretations of law and legal proposition discussedinreplyofquestionsandobservationsmadethereon,Ihold that order and proceedings of the case made during the hierarchy of the customs are infested with patent illegalities, as such held to be ab initio, null and void and therefore set-aside, the appeal is accordingly allowed.

17.Order passed accordingly with no order as to cost.

JJK/171/Tax(Trib.)Appeal allowed.

TRIUMPH TRADERS VS The ADDITIONAL COLLECTOR OF CUSTOMS, 2014 PTD-CUSTOMS-APPELLATE-TRIBUNAL-KARACHI 145 (2013)

Requisition against illegal voters MTBA

Comdemn Resolution against attack on Azhar Siddique ASC