Tribunal strikes down penalties and recovery against aseptic packaging material importer

KARACHI: The Customs Appellate Tribunal has struck down the penalties and recoveries imposed against an importer M/s Alpha Diaries Pvt Ltd declaring the case was void ab-initio, as the entire scheme was not based on legal grounds.

According to the details of the case, Customs I&I Karachi had information that some importers were importing aseptic packaging material on under-assessed values in violation of relevant ruling. Importers were resorting to file into-bond for warehousing of the commodity avoiding application of relevant ruling and managed to get the goods subsequently ex-bonded at the same lower values causing loss to public exchequer.

In order to confirm veracity of information, the relevant clearance data of aseptic packaging material  since issuance of Valuation Ruling No.516/2012 was retrieved and scrutinized. It transpired that previously a Valuation Ruling No.459/2012 was issued by the valuation directorate wherein value of the commodity was determined at $1.44/kg which was subsequently set aside in October, 2012 and a revised Valuation Ruling No.516/2012 was issued wherein Customs value of commodity was determined at $2.60/kg.

Scrutiny of the data revealed that majority of the consignments of aseptic packaging material imported by different importers were assessed and cleared on applicable assessable values as per relevant Valuation Rulings. However, few consignments which were warehoused in public bonds through MCC (Appraisement), Karachi were wrongly assessed at the time of in-bonding at previously applicable value $1.44/kg instead of actual applicable value $2.60/kg. The goods were subsequently ex-bonded at the same value.

It transpired that three others importers along with M/s. Alpha Dairies (Private) Limited, Lahore imported consignments of aseptic packaging material, which were warehoused in public bonds after processing and completion of into-bond GDs at lower value of $1.44/kg instead of applicable value of $2.60/kg.

The Goods Declarations were filed through clearing agent M/s. Ocean World Cargo. Subsequently, tons of aseptic packaging material of China origin were filed through the same clearing agent and got processed at the lower value.

Customs Adjudication established the offense and penalized the importer, clearing agent along with payment of evaded revenue. Collector Appeals upheld the order-in-original.

Dissatisfied, importer approached Customs Appellate Tribunal. After detailed deliberation of the case Member Judicial-I Muhammad Nadeem Qureshi concluded that the re-assessment order is without power/jurisdiction, the entire proceeding right from reassessment order to order-in-original are also without lawful authority and jurisdiction.

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