Tribunal strikes down penalties and recovery against chemical importer

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

According to the details of the case as reported by MCC Appraisement West, M/s King Chemicals imported a consignment and sought clearance declared to be containing cypermethrin, permethrin and esbiothrin under HS code 2919.9090 and determined his liability of payment of applicable duty and taxes.

The GD was selected for scrutiny, which revealed that the importer wrongly declared HS Code 2919.9090 and claimed concessions under SRO 1125(I)/2011,  whereas the goods are correctly classifiable under PCT 2926.9090; 2916.2000 & 2916.2000 where no exemption/benefit of SRO 1125(I)/2011 are applicable.

MCC Appraisement West established that M/s King Chemicals Corporation deliberately declared incorrect HS code in order to suppress the taxes and attempted to defraud the government from its legitimate revenue amounting to Rs1.299 million.

The Additional Collector of Customs Adjudication charged the imported and ordered confiscation of goods with an option to redeem the goods on payment of fine equivalent to 20 percent of the value of goods. A penaly equal to 5 percent of the value of goods was also imposed.

The importer approached Customs Appellate Tribunal against the order-in-original.

The Member Judicial after giving the anxious thought on the controversy observed that it is also evident from the contents of the Show Cause Notice, which does not speak that importer made declaration/statement knowingly or having reason to believe that they were false in any particular substance.

There is also no element of collusion , made so to avoid the payment of duty and taxes, it is well settled proposition of law that a thing required by law to be done in a certain manner must be done in the same manner as described by law are not to be done at all.

After detailed deliberation, Mohammad Nadeem Qureshi ruled that the orders passed during hierarchy of the customs suffers from grave legal infirmities and decalred illegal ab-initio.

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