KARACHI: A Customs Appellate Tribunal comprising Muhammad Nadeem Qureshi , Member (Judicial-I) and Muhammad Yahya, Member (Technical-I) Karachi allowing an appeal by clearing agent Kaka traders remitted personal fine and also vacated show cause notice issued on alleged charge of filing mis-declaration.
Kaka trader filed the appeal against an order passed by the Collector of Custom (Adjudication-II), Karachi imposing a personal fine of rupees 100,000 on appellant as well as other Custom House clearing agents namely Ahsan International, Qayyum, and Sons under clause 14 of the Section 156 (1) of the Customs Act 1969.
According to the memo of the appeal, Directorate General of Intelligence and Investigations, Karachi was tipped about an attempt to defraud the exchequer by an importer/manufacturer Mars International who imported miscellaneous goods/ready to sell food/spice items as raw material for in house consumption without payment of Value Addition Tax and reduced rate of Income Tax applicable to industrial concerns under Sales tax Procedure Rules 2007. The custom authorities further alleged that importer avoided the payment of levies on plea that they were registered as “Manufacturers” with the Sales Tax Department. The Collector Customs Adjudication deciding the case against the importer ordered recovery or rupees 42,850,278 besides imposing a fine of rupees 5,000,000 under clause 14 and 12-A of the Customs Act 1969.The Adjudicator also held the clearing agents responsible for filing a GD through mis-declaring. Appellant Kaka Traders through Counsel Nadeem Ahmed Mirza filed the clearing agents were fined for rupees 100,000 each against which the instant appeal. The counsel submitted before the tribunal that sole function of the Customs House Agent is to prepare the Goods Declaration on the basis of the import documents showing the description of goofs, quantities value and PCT Heading under section 79 (1) of the Customs Act 1969.
He further contended that a clearing agent is not responsible for the subsequent treatment of the goods imported by their clients and he could not be responsible for any act of the importer whether the imported goods are used for manufacturing or disposed of in the local market.
The counsel for appellant also denied the charge of mis-declaration. The counsel for appellant also submitted that respondents have failed to adduce any evidence that clearing agent connived with the importer for defrauding the government of their legitimate revenue this imposition of penalty is void and without jurisdiction.
The appellant also questioned the issuance of show cause notice on ground that no charge was mentioned in the show cause notice.
The tribunal after detailed hearing allowed the appeal remitting the fine and vacating the show cause notice being illegal and without jurisdiction.