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Appeal C.A. No.189/LB and Cus. 162/LB of 2007, decided on 13th August, 2008.

----Ss.16 & 156(1)9---Import Policy Order (2006-07), Appendix-C, S.No.6---Pakistan Customs Tariff, Chapter-XVI---S.R.O. 574(I)/2005, dated 6-6-2005---Power to prohibit or restrict import and export of goods---Non-importable items---Gears---Appellant contended that gears were classifiable under Heading 85.03 as part of the electric motors of Heading 85.01, which had been released by the customs, and were importable in used condition---Expert opined that gears in question were integral part of the motors and had no other independent mechanical function---Admittedly, gears were in old and used condition and the appellant was ready for their release even against redemption fine---Validity---Admittedly, gears were independently classifiable under Heading No.8483 which was included in the list of goods not importable vide Appendix-C of the Import Policy Order, 2007---Gears were proved to be integral part of accompanying electric motors ,they should have been classified under Heading 85.03 and released along with the motors--Since electric motors had already been released and were out of customs control, it was not possible to prove this aspect at this stage---Giving the benefit of doubt, release of gears in question was allowed by the Appellate Tribunal against redemption fine equal to 30% of their customs value in addition to payment of duty and taxes leviable thereon. Mian Abdul Ghaffar for Appellant. Zahid Pervez, D.S. for Respondent. Date of hearing: 4th August, 2008.

This judgment shall dispose of two appeals cited in the title, one filed by Messrs Tufail Old Motors Store, Jhang Road, Faisalabad (Appellant No.1) and the other filed by Assistant Collector of Customs, Customs Dryport, Faisalabad d-(Appellant No.2); both against customs Order-in-Appeal No.20/2007 dated 3-4-2007 passed by the Collector (Appeals), Faisalabad. 2. Brief facts of the case are that appellant No.1 imported a consignment declared to contain old/used machinery i.e. E/Motor, Gear Motor, Tyre Changer,, Welding Plant etc. from Korea and sought clearance thereof vide goods declaration No. FDRY-HC-422 dated, 29-8-2006 filed at Faisalabad Dryport. On examination of the consignment by Customs, following goods were found in used/second hand condition and as such not importable as per Appendix-C of the Import Policy Order, 2006-07 read with section 16 of the Customs Act, 1969.

3. While rest of the consignment was released on payment of leviable duty and taxes, the goods listed above were seized. The case was adjudicated by the Deputy Collector Customs, Faisalabad vide Order-in-Original No.47/2006 dated 13-3-2007 whereby aforesaid goods were confiscated outrightly under section 156(I)/9 of the Customs Act, 1969 read with S.R.O. 574(I)/2005 dated 6-6-2005. Appellant No.1 preferred appeal against this order before Collector (Appeals), Faisalabad who vide impugned order allowed release of Electric Relay Switches and Circuit Breakers, treating them new but upheld the order of Deputy Collector in respect of rest of the goods. 4. Through the instant appeal, appellant No.1 has contested the findings of Collector (Appeals) to the extent of only one item i.e. Gears which according to it are classifiable under Heading 85.03 as part of the electric motors of heading 85.01, which have been released by the customs, and are importable in used condition. In support of its contention, the appellant has referred to the expert opinion given by Messrs Central Engineering Services (Pvt.) Ltd., Lahore whereby, it has been opined that the gears in question are integral part of the motors and have no other independent mechanical function. It has, however, been admitted that the gears are in old and used condition and that the appellant is ready for their release even against redemption fine. 5. The appellant No.2 has opposed the appeal pleading that according to section note 2(a) of Notes under Chapter-XVI of the Pakistan Customs Tariff, gears can only be classified under heading 8443.4090, which heading appears at S.No.6 of Appendix-C of the Import Policy Order, 2007, and are, as such, not importable. Appellant No.2 has also contested the release of Electric Relay Switches and Circuit Breakers in its appeal against the impugned order on the ground that the expert opinion obtained by the appellant No.1 is faulty which is not acceptable as it was based on naked eye inspection of the goods and did not conform to their actual physical condition. The D.R., when confronted with the appellant No.1"s contention about the gear being part of electric motors, could not give any satisfactory explanation as to what is the independent use/function of the gears and why they should not be classified along with electric motors. He could not convincingly rebut the findings of Collector (Appeals) about electric relay switches and circuit breakers being new and as such importable either. 6. I have given due consideration to the facts on record and submissions made by the parties. Admittedly the gears are independently classifiable under PCT Heading No.8483 which is included in the list of goods not importable vide Appendix-C of the Import Policy Order, 2007. However, if it is proved that the gears are integral part of accompanying electric motors, they should have been classified under heading 85.03 and released along with the motors. Since electric motors have already been released and are out of customs" control, it is not possible to prove this aspect at this stage. Therefore, giving the appellant No.1 benefit of doubt, release of gears in question is allowed against redemption fine equal to 30% of their customs value in addition to payment of duty and taxes leviable thereon. 7. The appeal filed by appellant No.2 is, however, rejected being without merit. 8. Both the appeal are disposed of in the above terms and the impugned order is modified accordingly. C.M.A./123/Tax(Trib.) Order accordingly.

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