PAK SUZUKI MOTOR COMPANY LIMITED, KARACHI VS COLLECTOR OF CUSTOMS, APPRAISEMENT COLLECTORATE, CUSTOM HOUSE, KARACHI, 2015 PTD-KARACHI-HIGH-COURT-SINDH 2600 (2014)

Customs Act (IV of 1969)---

----S.196(1)---Reference jurisdiction of High Court---Scope---Expressions "point of law" and "question of law"---Factual controversy---Formulating of questions---Principles---Assessee assailed order passed by Customs, Excise and Sales Tax Appellate Tribunal and formulated questions of disputed facts for determination by High Court---Validity---In terms of S. 196 (1) of Customs Act, 1969, only substantial questions of law, arising out of order of the Tribunal could be referred for opinion of High Court through reference application, whereas questions of disputed facts could not be examined by High Court under reference jurisdiction---Expression "point of law" could not be equated with expression "question of law" whereas a question of law for opinion of High Court in real sense must be a disputed or disputable question of law---Questions of law referred for opinion by High Court must be formulated in such a manner that reply to such question referred to High Court could be either in affirmative or negative and it should normally settle a pattern of guidance both for the Revenue as well as the assessee---Factual controversies should not be allowed to be converted into legal issues only by employing legal language in such a manner which was usual to forming of such questions---High Court declined to interfere in the matter as no question of law had arisen from order passed by Customs, Excise and Sales Tax Appellate Tribunal, whereas decision was based on concurrent finding on facts, which did not suffer from any error or perversity---Reference was dismissed in circumstances.

Gold Trade Impex v. Appellate Tribunal of Customs, Excise and Sales Tax, Excise and Sales Tax 2012 PTD 377; Commissioner of Income Tax v. Messrs Immion International, Lahore 2001 PTD 900; Japan Storage Battery Limited v. Commissioner of Income Tax 2003 PTD 2849; Collector of Customs, Port Muhammad Bin Qasim, Karachi v. Kaghan Ghee Mills (Pvt.) Ltd. 2008 SCMR 1538 and Collector of Customs v. Qasim International Container Terminal (Pak) Ltd. 2013 PTD 392 (SHC) ref.

I.H. Zaidi for Appellant.

Ms. Masooda Siraj for Respondents.

Muhammad Farooq Khan, Law Officer Appraisement.

Nayyar Shafiq, Additional Collector Appraisement.

Date of hearing: 28th October, 2014.

ORDER

AQEEL AHMED ABBASI, J.---Through instant Spl. Custom Appeal, the appellant has proposed the following questions; which according to learned counsel for the appellant are questions of law arising from the impugned order passed by the Customs, Excise and Sales Tax Appellate Tribunal Karachi Bench-I, vide order dated

27-1-2004, whereby the appeal filed by the appellant against the Order-in-Original No.46 of 1998 dated 13-6-1998 passed by the learned Collector, Appraisement Collectorate, Custom House, Karachi, has been dismissed:--

(1) Whether when the 'connrod bearing' in their one sets of 5 units sent along with the CKD Unit, as apart hereof, could be constituted as separate sets?

(2) Whether, when there was complete disclosure as to facts of sets as a CKD Unit, subsequent action is not a change of opinion?

(3) Whether, an action as taken, ordered in the order-in-original is the correct Order?

(4) Whether the facts as pleaded have been correctly placed and narrated?

(5) Whether the 'connrod bearing' forms a part of the deletion programs?

(6) Whether on the existing facts as pleaded, the order is incorrect in law and on facts?

2. Learned counsel for the appellant has argued that the Collector, Appraisement Collectorate, Custom House, Karachi as well as the Customs Excise and Sales Tax Appellate Tribunal, Karachi, have erred in law and fact by demanding the additional duty from the appellant in respect of Conn-Rod Bearing and Crankshaft Bearings, which were imported by the appellant in the form of sets as CKD Units which included 6, 8 and 10 pieces in respect of various models of Zuzuki Car, Van and Jeep respectively. Learned counsel for the appellant after having readout the order-in-original and the appellate order passed by the Customs, Excise and Sales Tax Appellate Tribunal, Karachi submitted that bearings imported by the appellant were in excess for the reason that different sizes of such bearing may adjust in the shaft as per specification and the same were included in the complete sets i.e. CKD Kits, which have been wrongly understood by the respondent as excess in quantity imported by the appellant. It has been contended by the learned counsel that the impugned orders passed by the forums below are based on incorrect finding on facts, hence the same are liable to be set aside and the questions proposed may be answered in favour of the appellant.

3. Conversely, learned counsel for the respondent at the very outset submits that questions proposed through instant Spl. Custom Appeal are questions of facts, whereas, no question of law arises from the impugned order passed by the learned Customs, Excise and Sales Tax Appellate Tribunal, Karachi, as according to the learned counsel, the order-in-original and the decision of the learned Tribunal both are based on correct finding of facts. Per learned counsel, the appellant was specifically confronted through show-cause notice by the Collector Appraisement with regard to admitted import of excess quantity of bearings found in CKD Kits, which was not declared and it was found on examination that the appellant has imported excess sets of Conn-Rod Bearing and Crankshaft Bearings for Suzuki Car Van and Jeeps respectively. However, per learned counsel, while contronted the appellant made an attempt to justify the mis-declaration and submitted that the excess quantity is in fact the part of the sets and have been imported by the appellant to ensure that any of the Bearings, which may be adjusted with the size may be supplied for the purposes of installation in the car, van and jeep, whereas, the remaining additional bearings are utilized subsequently in other Cars, Vans and Jeeps. Per learned counsel, since such explanation was not acceptable and was contrary to the facts and approval of quantity to the appellant under deletion programme, therefore, the concerned Collector has rightly ordered for deposit of additional duty on such additional components, which were not declared by the appellant while filing GDs and the time of imports in accordance with law. It is further contended by the learned counsel that the appellant has not been able to point out any error or perversity in the finding of facts as recorded by the forums below therefore, the instant appeal is liable to be dismissed in limine as no question of law arise from the impugned order passed by the Appellate Tribunal in the instant case.

4. We have heard both the learned counsel for the parties, perused the record and impugned orders passed in the instant case with their assistance. From perusal of the record and the correspondence between the parties, it appears that the import of excess components of bearing has duly been acknowledged by the appellant, which is admittedly contrary to the deletion programme, whereby, CKD Kits in sets consisting of Conn-Rod Bearing and Crankshaft Bearings on concessional rates, containing 6 pieces for car 8 pieces for van and 10 pieces for jeep per set was approved. However, on examination by the Customs Authorities it was found that the quantity of the bearings is in excess of what was approved in the deletion programme, whereby concessional rate of duty was allowed to the appellant for the CKD Kits consisting of sets of six, eight and ten pieces for Car, Van and Jeep respectively. A show-cause notice was issued by the Collector of Customs (Appraisement) to this effect, however, while acknowledging the excess quantity of the bearings in each set of CDK Kits, the appellant made an attempt to justify such excess in quantity by stating that the same may be treated as part of the set i.e. CDK Kits. We may observe that if such contention of the applicant is accepted, then the approved quantity of sets as per deletion programme will increase up to 30 pieces/sets in one CKD Kit, which cannot be the intention of the respondent while granting concessional rate of duty to the appellant. Moreover, we have observed that the concurrent finding of fact has been recorded by the two forums below while holding that the appellant is liable to pay the customs duty on the excess quantity of bearings, which was neither declared and was admittedly beyond the approved deletion programme in respect of such imports. Learned counsel for the appellant has not been able to point out any error or perversity in the order based on concurrent finding of facts by the two forums below.

5. We may observe that while exercising jurisdiction in terms of section 196 of the Customs Act, 1969 the Courts are required to examine only question of law, which may arise from the order passed by Customs, Excise and Sales Tax Appellate Tribunal, whereas, the question of fact cannot be examined under its reference jurisdiction. Reference in this regard can be made to the case of Gold Trade Impex v. Appellate Tribunal of Customs, Excise and Sales Tax, Excise and Sales Tax reported in 2012 PTD 377, wherein it has been held as under:--

"18. Before giving our opinion on the common questions proposed through instant reference applications, we may observe that in terms of section 196(1) of the Customs Act, 1969 and in view of the judgments of superior Courts on the subject, only substantial questions of law, arising out of the order of the Tribunal, can be referred for opinion of this Court through reference application whereas questions of disputed facts cannot be examined by this Court under reference jurisdiction. "A point of law" could not be equated with expression "question of law", whereas a question of law referred for opinion of this Court in real scene must be a disputed or disputable question of law. We may further observe that the questions of law referred for opinion by this Court must be formulated in such a manner that the reply to such question referred to this court may be either in affirmative or negative and it should normally settle a pattern of guidance both for the Revenue as well as the assessee. Factual, controversies should not be allowed to be converted into legal issues only by employing legal language in such a manner which is usual to the forming of such questions. References in this regard can be made to the case of Commissioner of Income Tax v. Messrs Immion International, Lahore 2001 PTD 900 and Japan Storage Battery Limited v. Commissioner Income Tax 2003 PTD 2849. Further reliance can be made to the cases reported as Collector of Customs, Port Muhammad Bin Qasim, Karachi v. Kaghan Ghee Mills (Pvt.) Ltd. reported in 2008 SCMR 1538 and Collector of Customs v. Qasim International Container Terminal (Pak) Ltd. Reported in 2013 PTD 392 (SHC).

6. It will be advantageous to reproduce the finding of the Customs, Excise and Sales Tax Appellate Tribunal, Karachi, which reads as follows:--

"The allegation against the appellant is that they have imported Connrod Bearing and Crank Shaft Bearing under the concessionary S.R.O. 495(I)/84 dated 14-6-1984 in excess of the sanction to him. As far as the excess is concerned, it is admitted; however, the learned counsel for the appellant attributes that to the fact that his one CKD Kit consists of six sets instead of one. The learned counsel for the appellant has further stated that these bearings are manufactured by vendors or suppliers of Suzuki Motors Corporation. Since these are high precision items these are manufactured in five or six different specifications. Out of these, a special machine selects one set to match the dimension, tolerance and surface finish of corresponding part/machine.

Let us examine the first plea of the appellant that their Kit consists of six sets. We observe that this explanation given after the issuance of show-cause notice, is not substantiated by any other evidence as firstly, the importer has not declared in his bill of entry that each kit consists of six sets. Secondly, the importer never declared this while submitting his application for obtaining the concession under the deletion programme. Thirdly, the Form-S approved by CBR, which authorizes them to import at concessionary rate also does not mention that they can import six sets of bearing for Crank Shaft. The Form-S, on the other hand, authorizes the appellant for the import of one set at concessionary rate of customs duty. Thus the plea that their kit consists of six sets is just a belated attempt to prove their point which is not convincing.

The appellant contends that six sets are required as these are manufactured from vendors at different locations and they are not sure as to which set would match the dimension, tolerance of corresponding part/machine. This argument hardly carries any sense in today's world of advanced technology. The appellant has himself claimed that these are items of high precision and in the same breath says that six sets are required in order to match the corresponding machine. We are not persuaded to accept this argument as it is obvious that specification of the shell bearing and of the corresponding machine are known to the manufacture. When the specifications are known there is no reason to produce five additional sets and undergo unnecessary exercise for matching them. Besides, this would involve a very high percentage of wastage which no manufacturer can afford.? We also observe that no other local assembler is importing five additional set for this purpose. We further observe that this excess quantity which is about five times of the approved quantity has been imported free of cost. No manufacture can afford to do this. Considering the above we find that the impugned order is correct in law and fact and needs no interference. The appeal is dismissed accordingly.

7. Accordingly, we do not find any substance in the instant Special Customs Appeal as no question of law arises from the impugned order passed by the Customs, Excise and Sales Tax Appellate Tribunal in the instant case whereas, the decision is based on concurrent finding on facts, which does not suffer from any error or perversity, hence the same is hereby dismissed in limine along with listed application.

M.H./P-30/SindhAppeal dismissed.