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----Ss.32, 121, 128, 129, 156(1)(14) & 194-A---Mis-declaration---Consignment was got cleared vide Goods Declaration through clearing agent---Adjudicating Officer had found that weight of consignment was deliberately mis-declared; that goods contained in the container confirmed mis-declaration on account of description and quality of goods and ordered for outright confiscation of the consignment and imposed penalty on clearing agent---Collector (Appeals) vide order-in-appeal directed that the goods be released to the importer on payment of duty/taxes---Validity---Collector (Appeals) had rightly ordered release of goods on payment of duty/taxes for number of reasons that mala fide on the part of the clearing agent was not established from the evidence on record; that confiscation of goods was not in conformity with settled law; that due to the peculiar circumstances of the case, the department could not auction the goods, because such an action was likely to cause a lot of litigation, and in the end the goods being essentially perishable in nature, could expire and auction of the goods, if possible at all, would not fetch the Government any worthwhile revenue; that in the past the department had been releasing the goods imported on payment of duty/taxes on the request of importers and that Collector (Appeals) had rightly held that release of goods on payment of duty/taxes chargeable thereon would be more appropriate and more akin to the settled law---Appellant/Collector of Customs having failed to point out any illegality or infirmity in the impugned order passed by Collector (Appeals), appeal against said order was dismissed by the Tribunal. 1996 SCMR 727; 2004 PTD 2187 and PTCL 1996 CL 54 rel. Muhammad Farooq, Law Officer, for Appellant. Mian Abdul Ghaffar for Respondents. Date of hearing: 10th May, 2012.

--This order shall dispose of the instant appeal filed by the Collector of Customs, Model Customs Collectorate of Appraisement, Karachi against Order-in-Appeal No.5913 of 2011 dated 26-10-2011 passed by the Collector of Customs (Appeals), Karachi against the Order-in-Original No.10 of 2011 dated 30-4-2011 passed by Additional Collector of Customs, Model Customs Collecorate of Appraisement, Customs House, Karachi. 2. Brief facts of the case are that the appellant had imported a consignment of Toiletries (Perfume and Body Spray) from UAE and cleared the same vide Goods Declaration (GD) Machine No. KAPR-AT-11080 dated 6-10-2010 through his clearing agent Messrs Awan and Agha Associates (CHAL No. 2467) Karachi without payment of duty/ taxes leviable thereon for onward transit to Afghanistan. The consignment was taken out from Karachi International Container Terminal (KICT) on 1-11-2010 for transportation to Peshawar and then to Afghanistan. However, the container was illegally off loaded in the private godown of Messrs Younus Arshad and Brothers, on Hawksbay Road with the active connivance of the appellant/clearing agent. It, therefore, stood established that the appellant had violated the provisions of law contained in sections 121, 128, 129 and 192 of the Customs Act, 1969 and other provisions of law quoted in the impugned order. Had the goods, misappropriated in this case, been imported into the country an amount of Rs.18,744,123 in duty/taxes would have been charged thereon. All concerned quoted in the show cause notice dated 7-1-2011. 3. The adjudicating officer held vide the impugned order that the charges against the appellant had been established. The operative part of the same is reproduced as under:--

"The perusal of record available on the case file reveals that on behalf of respondent No.3 Vakalatnama has been filed by Messrs Ismat Law Associates and application dated 31-1-2011 has been filed for grant of adjournment. However, no reply on behalf of respondent No.3 is available on case file. Whereas, similar is the situation with regard to respondent No.4, with regard to submission of reply to the show cause notice. After going through the record available on file, submissions made and reply to the show cause notice it can safely be concluded that the weight of consignment was deliberately mis-declared and that the re-examination of the goods contained in aforesaid container also confirms mis-declaration on account of description and quantity of goods. It is further established that an attempt was made to offload the container at Karachi on the pretext that the vehicle/truck was not capable to carry the container, in fact it was not the situation but was an attempt to consume the goods meant for Afghanistan under ATT facility which was foiled by the staff of MCC(Preventive) otherwise arrangements for consumption of such goods in Pakistan were completed. In my opinion it is a case of gross mis-declaration and misuse of ATT facility which is gross violation of sections 32, 121, 128, 129 and 192 of the Customs, Act 1969 read with Public Notice No.16 of 2000 (A) dated 30-9-2000 punishable under Clauses (14), (64), (86), and (90) of the section 156(I) ibid under the circumstances detailed herein above I am of the considered view that an attempt for unloading the cargo meant for Afghanistan was made with a view to market consume the imported goods in Pakistan. I hereby order for out-right confiscation of the impugned consignment and impose penalty amounting to Rs.One Million (each) upon Clearing Agent Messrs Awan and Agha Associates (CHAL No. 2467), Karachi and National Logistic Cell, Keamari, Karachi. Since the role of Shipping Company in declaring the actual weight of the consignment is dubious, therefore, I also impose penalty of Rs.One million upon respondent No.3 i.e. Messrs Hyundai Merchant Co. Ltd., Karachi." 4. Dis-satisfied with the order of the adjudicating officer, Messrs Nizambaba Limited filed an appeal before the Collector (Appeals), Karachi, who vide his Order-in-Appeal ordered that the goods be released to the appellant on payment of duty/taxes. 5. Being aggrieved and dis-satisfied with the impugned order-in-appeal the Collector of Customs, MCC Appraisement, Karachi filed the instant appeal before this Tribunal on the grounds reproduced as under:--

(i) That the respondent No.2 with the active connivance of their customs clearing agent managed unloading of the consignment at the Godown of Messrs Younus, Arshad Brothers, hawks bay Road, Karachi with a view to market the imported goods in Pakistan instead of taking the same to Afghanistan.

(ii) That the respondent No.2 with the active connivance of their customs clearing agent made untrue declaration with regard to actual weight of the consignment, hence, committed an offence which falls within the ambit of section 32 of the Customs Act, 1969.

(iii) That unloading of the consignment at a Private Godown at Karachi (Pakistan) imported under Afghan Transit Trade is blunt violation of Public Notice No. 16/2000 (A) read with the provisions of sections 121, 128, 129 and 192 of the Customs Act, 1969 punishable under relevant Clauses of section 156(1) ibid.

(iv) That neither the respondent No.2 nor other respondent of the show cause notice could be able to extend any plausible reason for unloading the consignment in the Private Godown of Messrs Yonnus, Arshad and Brothers, Hawksbay Road, Karachi which in fact is situated beyond the route meant for transportation such consignment for up country and eventual cross bordering through customs check post at Torkhum, Peshawar. In the circumstances, deliberate attempt of unloading the consignment at Karachi is established for its consumption in local market to fetch sizeable profit by defrauding the public exchequer under the garb of Afghan Transit Trade.

(v) That detailed re-examination of the consignment carried out by the staff of Appraisement Intelligence Branch, Customs House Karachi also led to the disclosure of mis-declaration of quantity of packages which were found to be 1442 instead of 1077 packages as declared on the face of Goods Declaration, hence, offence of deliberately mis-declaration on the part of respondent No. 2 with the active connivance of others is established.

(vi) That the packages containing the above mention goods imported by the respondent No. 2 were not carrying the marks and numbers i.e. "in Transit Via Karachi to Afghanistan" which is essentially required for the goods imported by Afghan business entitles. This fact alone couple with the fact of unloading the consignment at Karachi give credence to the assumption that the imported goods were to be consumed/market in Pakistan which tantamount to grass violation of statutory provisions government the Afghan Transit Trade via Pakistan.

(vii) That the learned respondent No. 1 grossly erred in allowing release of goods imported by the respondent No. 2 on payment of customs duty and taxes instead of uploading, the order-in-original by virtue of which goods under reference were outright confiscated.

(viii) That the goods consignment imported under Afghan Transit Trade and unlawfully unloaded at the place which does not fall in route of such consignment to be transported for cross bordering either through Torkhum or Chaman or any customs check post meant for the purpose hence attempt of consuming marketing the goods apparently imported under Afghan Transit Trade are liable to out right confiscation. 5. The case was fixed for hearing on 10-5-2012. Mr. Muhammad Farooq, Law Officer, appeared for the appellants. He contended the case, relied on the ground placed on record in the Memo. of Appeal and prayed that the impugned order-in-appeal may kindly be set aside, upheld the order-in-original and all the respondents directed to realize the amount of penalty imposed upon each. 6. Mian Abdul Ghaffar, Advocate appeared for the respondent and defended the order passed by the Collector (Appeals), Karachi. He further argued that the goods imported under the Afghan Transit Trade Agreement 1965 (hereinafter the ATTA) could not be treated at par with the goods imported under the Act in terms of the judgment of the Honourable Supreme Court of Pakistan as reported as 1996 SCMR 727 and that the Division Bench of the Honourable High Court of Sindh in Constitutional Petition No. D-2410 of 2010 meaning thereby that the order of confiscation of the goods was unlawful ab initio. That the Division Bench of Honourable High Court of Sindh, Karachi in C.P. No.D-2410 of 2010 had categorically held that the provisions of section 32 of the Act, and the relevant penal provisions thereof, could not be applied to the goods imported under the ATTA in any case which also went on to prove that the order of confiscation of the impugned goods was unlawful. That as per practice of the Customs department the goods imported under the ATTA could be disposed of/cleared under the Act on the request of the Afghan importer concerned. That the goods involved in this case (that is toiletries) were perishable, with limited shelf life and the quality of the same was rapidly deteriorating because the same were lying in the open at Customs Bonded Warehouse at Maripur. That the appellant had nothing to do with landing of the container in the private godown which, as reported to him by the clearing agent, had been caused by break down of the vehicle carrying the container meaning thereby that there was no intention on the part of the appellant to cause consumption of the impugned goods inside Pakistan. That the auction of the goods, if possible at all, would not fetch the Government of Pakistan any worthwhile revenue and, in any case, the Honourable Supreme Court of Pakistan had held in the Judgment reported as 2004 PTD 2187 that release of goods, even if liable to outright confiscation, to the importer on payment of duty taxes should be preferred over auction of the same. That in view of peculiar circumstances of the case the appellant/importer was prepared to pay the duty/taxes chargeable on the same under the Pakistan law and that the customs value of the goods had been incorrectly determined because the Valuation Ruling No. 272 dated 28-9-2010 was not relevant in this case, having been set-aside by the Honourable Federal Tax Ombudsman (FTO). The appellant accordingly pleaded that the impugned order may be set aside and the goods be released on payment of duty/taxes on the basis of appraised value of the same. The learned Collector (Appeals) accepted the appeal filed by the respondent/importer and observed as under:--

"I have thoroughly examined the entire case record and have given very careful consideration to the arguments advanced before me. It is an admitted position that weight of the goods declared on the papers such as the GD-AT and Bill of Lading was 13.5 MT whereas at the time of loading of the container on to the vehicle the actual weight of the goods was discovered to be 31MT. Therefore, there is a possibility that the substantial difference in the declared and actual weigh of the goods, as mentioned above, may have caused break down of the vehicle after it left the port premises. However, the evidence on record clearly established that the procedure prescribed under Public Notice No.16 of 2000(A) dated 30-9-2000 regarding replacement of the original vehicle had not been followed inasmuch as the matter was not immediate reported to the Customs authorities concerned and, instead, the container was taken to a private godown. Under the circumstances, the appellant"s innocence cannot be accepted. However, his plea regarding release of the goods on payment of duty/taxes chargeable thereon has weight for a number of reasons; one, mala fide on the part of the appellant are not conclusively established from evidence on record because neither his direct involvement in causing deposit of the container in a private godown in Karachi can be established nor the possibility of break down of the vehicle carrying the container due to excess weight of the goods can be ruled out; two, confiscation of the goods by the adjudicating officer is not in conformity with the judgment of the Honourable Supreme Court of Pakistan reported as PTCL 1996 CL 54 and that of the Division Bench of the Honourable High Court of Sindh in Constitutional Petition No.D-2410 of 2010; three, due to the peculiar circumstances of the case the department may not be able to actually auction the goods because such an action is likely to cause a lot of litigation and, in the end the goods, being essentially perishable in nature, may expire meaning thereby that release of the goods to the appellant on payment of duty/taxes may be a better option for the department; four, auction of the goods, if possible at all, would not fetch the Government of Pakistan any worthwhile revenue and the Honourable Supreme Court of Pakistan has held in the judgment reported as 2004 PTD 2187 that release of goods, even if liable to outright confiscation, to the importer on payment of duty/taxes should be preferred over auction of the same and; five in the past the department has been releasing the goods imported under the ATTA on payment of duty/taxes in Pakistan on the request of importers. For the reasons stated above, I am of the firm opinion that release of the goods on payment of duty/taxes chargeable thereon would be more appreciation and more akin to the case-law referred to above. It is also established from the evidence on record that the Valuation Ruling No.272 dated 28-9-2010 is not relevant for the purpose of assessment of the instant goods. It is accordingly ordered that the goods be released to the appellant on payment of duty/taxes, to be calculated on the appraised value of the goods. The appeal is disposed of in the above terms. 7. All the grounds taken by the appellant have already been discussed in the order-in-Appeal. The appellant has also failed to point out any illegality or infirmity in the impugned order, therefore, appeal being without any merit is dismissed. HBT/142/Tax(Trib.) Appeal dismissed.

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