KARACHI: The Customs, Federal Excise and Sales Tax Appellate Tribunal, Special Branch Karachi comprising Ghulam Murtaza Bhatti, Chairman/Member (Judicial) and Khawaja Umar Mehdi Member (Technical) deciding an appeal filed by M/s Shan Associates Karachi acknowledged the reason imposition of penalty and fine by the Customs Adjudication I was wrong description of the composition of the fabric in question besides no mens-rea against the appellant was proved.

However the tribunal directed the appellant to pay the leviable duties and taxes as determined by the department on the basis of the laboratory test.

The importer in Goods Declaration (GD) under PCT heading 5210.5900 subject to levy Duty at 12 percent ad val claiming Free Trade Agreement (FTA) concession under SRO 659 (I)/2007 and concession of sales tax under SRO 1125(I)/2011.

The Customs examination declared the GD by importer was not correct as the consignment was other than declared cotton blended shirting fabrics. Whereas the importer claimed the imported goods enjoyed FTA.

The tribunal held that under section 181 of the Customs Act 1969 goods are freely importable and the appellant has made no violation of the provisions of section 15 or of a notification under section 16 ibid. Therefore section 17 ibid is not attracted and thus fine and penalty imposed by the respondent was in violation of the law.

The Tribunal heard advocate representing the appellant. The counsel maintained importer did not violate the said SRO and the consignment/container of imported goods. It further said since the laboratory test of the imported goods has been taken so importer has to pay legitimate duty/taxes in this regard.

The tribunal disposed of the case without imposing any cost and impugned order is therefore modified only to the said extent.