KARACHI: The Customs Appellate Tribunal has struck down the adjudication order which imposed fine and penalties on the textile machinery importer.
The M/s S.S Fabrics (Pvt) Limited filed Goods Declaration (GD) declared to contain Touchler Blow Room 2-Lines (19 pint complete set) all essential standard accessories (one set) and small cherry drawing frame DX500C (11 sets) total invoice value of $122050 and sought clearance.
In order to check as to whether the importer has correctly paid the legitimate amount of duties and taxes the under reference GD was selected for scrutiny, which reveals that importer has declared the goods as above of China origin.
However, on detailed examination the goods have been identified of Germany and Switzerland.
It was established that importer has deliberately declared wrong country of origin in order to mislead customs and concealing actual country of origin, willfully with malafide intention and have attempted to defraud the government from its legitimate revenue amounting to Rs1.324 million as the determined value of the offending goods arrive at Rs16.564 million.
The Customs Adjudication ordered confiscation of the subject goods with an option to redeem the goods on payment of fine of Rs3.312 million i.e. 20 percent of value of the offending goods in addition to duty and taxes chargeable thereon. A penalty of Rs300,000 was also imposed on the importer.
The importer approached the Appellate Tribunal submitting that the used textile machinery was imported directly from China as per LC and B/L, therefore the importer claimed the benefit of SRO 659(I)/2007 China FTA as per certificate of origin China-Pakistan FTA.
The said certificate had been issued by Chinese government duly signed and stamped by Chinese Government official.
As per physical examination report two containers out of six containers were found to be German and Swiss origin. The claim of China FTA is bonafide on part of importer on the strength of FTA certificate, which do not constitute mis-declaration in the eyes of law.
After going through the arguments extended by both the parties and grounds of appeal, Tribunal observed that the subject case revolves around the controversy about the scheme of Free Trade Agreement and claim of exemption on the basis of the certificate of origin issued under the prescribed rules of Free Trade Agreement (combined declaration and certificate) duly signed and verified by the Government of China.
The declaration (GD) was filed on the basis of the import documents, description, quantity, value, net weight and PCT Heading, said declaration has not been objected by the Department. There is no discrepancy found in the said declaration. As per the physical examination report, two containers out of six containers do not show the origin, whereas the four containers were found to have the goods of German and Swiss origin.
The importer submitted the documents which shows and reflects that “Trutzschler” Group has the production units in China, India, USA, Brazil, Switzerland, Turkey, Uzbekistan, Mexico etc, companies and the subject unit in China was established in October 2001, as sole subsidiary of “Trutzschler” in China producing and assembling blow rooms, carding machine and draw frames.
After detailed deliberations, the Tribunal noted that the subject goods imported from China in conformity with the rules of determination of origin of goods and the operational certification procedures for the rules of origin notified by Ministry of Commerce.
The Tribunal set aside the redemption fine and penalty imposed.