No penal action if no revenue loss; Tribunal strikes down order-in-appeal

KARACHI: The Customs Appellate Tribunal has struck down the ruling of Collector Appeals and restored the redemption fine as well the penalty imposed by Customs Adjudication in a case where an importer deliberately misdeclared the value of goods to defraud the government of its revenue.

According to details, M/s SFM Associates electronically filed Goods Declaration containing Gasoline generating sets at total invoice of $25900.

In order to check as to whether importer had paid correct amount of duties the GD was selected for scrutiny, which revealed that importer had misdeclared the actual value of the goods.

On physical examination, an invoice was found from the container according to which the goods were worth $40700, thus the declared value was 57 percent low against the actual value. The importer was accordingly charged under the relevant provisions of law.

Customs Adjudication observed that the importer has not submitted any logical and acceptable proof in support of his contention. Thus it is quite clear that he has committed offence of under invoicing and has tried to deprive government of its revenue. Since the charges leveled against the importer of concealing, the actual value of the goods and submission of fake documents electronically stand established; the Adjudication ordered confiscation of the goods. But, the importer has the right to get his goods released/redeemed on payment of 35% fine of the value of offending goods amounting to Rs.1218000 and a penalty of Rs 50000 is also imposed.

The importer approached Collector Appeals, who observed that the goods were to be assessed as per Valuation Ruling No. Misc/12/2007-VA instead of the transaction values declared by the importers. Therefore, the transaction values declared or otherwise hardly matter in such at situation particularly when there is no difference between the actual transaction value and the value nominated in the valuation ruling for the same item. In the instant case too the value found on the retrieved invoice was exactly the same as had been nominated in the valuation ruling. Therefore no revenue loss would have been occasioned even if the impugned invoice had not been recovered. Collector Appeals remit the redemption fine and the penalty imposed on goods and importers.

The customs approached Appellate Tribunal. The Tribunal after observing facts and figures observed that the malafide on part of the importer by causing the attempt of willful and deliberate false declaration about the actual transactional value was confirmed on the basis of record and the action initiated against the importer for misdeclatation of value regardless to all extent about difference between the declared value and the actual transactional value, the observations made by the Collector (Appeals) at the time of passing the impugned order are perverse from the evidence and based on misreading of facts. The Tribunal hence set aside the order-in appeal.

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