Law: Customs Act, 1969

Section: 18,19,27(3),32,156(1),Clauses(1)(104A),1 94-A

Law: Customs Rules, 2001

Section: 351,359

ORDER KHALID MAHMOOD, MEMBER TECHNICAL-I.-This appeal has been directed against the Order-in-Original No. 43 of 2013-2014 dated 30-6-2014 passed by the Collector of Customs (Adjudication-Il), Karachi. 2. Brief facts of the case, as stated in the impugned order are that the Revenue Receipt Audit (CRA) conducted performance audit of the manufacturing bonds for the period from July 2007 to December, 2010 and submitted Audit Report vide letter No.DGRRAISFAT-03/S.S.Mfg. Bonds/Obs/2010-11 dated 30-6-2011 which vide Audit Observation Nos.11 and 12 dated 23-6-2011 contained the following in relation to manufacturing bond license of the appellants:- "Audit observation No. 11 dated 23-6-2011 (i) According to Rule-351 of the Customs Rules, 2001, every licensee is required to obtain/get approved from the Collector of Customs an analysis certificate for goods to be manufactured in manufacturing bond showing the actual quantity of input goods used and wastage occurred in- the manufacture of one unit of finished goods. (ii) During the examination of record of manufacturing bond of M/s. Sheikh Pipe Mills, Karachi (PWL-04/2010) it was observed that the licensee was claiming/availing process wastage @ 10% in case of imported 1-IRC material (I-Jot Rolled Coil). However, no analysis certificate was produced before the Audit. While the FBR in case of M/s. IIL, Karachi had finally approved in July 2006 the wastage in caseof HRC showing the input output ratio and, wastage as under: Product Material Total Recoverable Non- Wastage Recoverable MS Pipe Steel 3.75% 2.85% 0.90% G1 Pipes Steel 4.90% 4% 0.90% Made from HRC (iii) Messrs Sheikh Pipe Mills, Karachi (PWL-04/2010) had, therefore, claimed/availed wastage in case of imported raw materials HRC in excess of the normal admissible percentage during the year 2010. This excess wastage also involves government dues amounting to Rs. 1,400,679. Audit observation No. 12 dated 23-6-2011. (i) As per Rule-359 of the Customs Rules, 2001, notified vide S.R.O. 450(I)/2001 dated 18-6-2001, the licensee of a warehouse shall submit the short landing of goods notice to an appropriate officer of Customs, not below the rank of Assistant Collector,…

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