2010 PTD (Trib (PLP)

MUHAMMAD ARIF MOTON (MEMBER JUDICIAL).

This rectification application is filed by Additional Collector of Customs, Model Customs Collectorate of PaCCS, Custom House, Karachi under section 194-B(2) of the Customs Act, 1969 against the order dated 6-8-2009 passed by this Tribunal in Customs Appeal No.K-232 of 2008,whereby the appeal was allowed and order-in-original and order-in- appeal passed by Additional Collector of Customs, (Adjudication) Collectorate of Customs of PaCCs/Collector of Customs (Appeal) were set aside.

2. Brief facts of the case are that respondent imported a consignment of stainless steel of second choice T-200 series, weighing 25, 791 Kgs under H.S. Code 7219.1300 at total invoice value of US$. 36,

107. He determined his liability of payment of leviable duty and taxes on the basis of declaration and sought clearance of the goods of the consignment under section 79(1) of the Customs Act, 1969. The applicant's officers in order to check the veracity of the declaration forwarded the GD for examination. The examiner concerned transmitted an opinion that, the goods seems to be "prime quality" as against "secondary". Nevertheless he recommended to the assessing authority to call for mill test certificate and the respective documents for determination of the factual position. The said advice was ignored and a contravention was framed against the respondent for misdeclaration of description and value. On the strength of that, respondent was served with a show-cause notice, which was contested by him vigorously but the adjudicating authority disagreed with him and passed Order-in-Original No.2243/2007 dated 10-12-2007 holding charge of misdeclaration as proved and hence goods were confiscated subject to redemption of the same on payment of fine equal to 50% of the ascertained value in addition to leviable duty and taxes and on payment of imposed penalty of Rs.2,000,000 under clause 11 (c) of section 33 of the Sales Tax Act, 1990. The vires of said order was challenged by the respondent before the Collector of Customs (Appeals) who directed the applicant to draw sample from the consignment and forward the same to PSM for determination of the content of nickel which was the vital factor for determination of the imported stainless steel sheet. The Collector (Appeals-II) despite receipt of report from the PSM verifying the content of nickel ignored that while holding that the report is not credible nor comprehensive enough to clearly determine the quality as the percentage of chromium is not mentioned in the report, despite not requisitioned for and thus termed the report being sufficiently flawed and deficient, hence that cannot be trusted or made basis for decision and on the basis of the said observation, rejected the appeal of the respondent vide Order-in-Appeal No.990/2008 dated 9-4-2009.

3. The respondent thereafter challenged the vires of the Order-in- appeal before the Customs Appellate Tribunal. The Customs Appellate Tribunal allowed the appeal of the respondent while setting aside the Order-in-Original and order-in-appeal by answering the following framed questions:- (i) Whether the impugned goods are of "Prime Quality" in view of data examination and test reports on record? (ii) Whether the phenomenon of determination of quality of goods attract the mischief of sections 32 and 32A of the Customs Act, 1969 particularly when divergent opinions/reports in respect of the same goods are on record? (iii) Whether S.R.O. No.487(I)/2007 envisages imposition of redemption fine on goods when the main bone of contention is the disputed quality particularly where there is no mis declaration of material particulars? (iv) Whether production of evidential data of actual physical contemporaneous imports in terms of section 25 read with para. 78 of Customs General Order 12 of 2002 dated 15-6-2002 further read with Sub-Rule (a) of Rule 107 and Rule 110 of Customs Rules, 2001 further read with judgment of superior courts is mandatory on the part of customs administration for enhancement of transaction value?

4. Being aggrieved by the above (order dated 6-8-2009) the department i.e. the Additional Collector, Model Customs Collectorate of PaCCs, Karachi has filed this rectification application (inter alia) on the following grounds: (i) Whether the learned Member (Judicial) of Tribunal is on correct lines to observe that in the absence of "Mill Test Certificate" the goods cannot be treated as a "Prime" quality? It. is pertinent to mention here that the availability of Mill Test Certificate is dependent of the importer whether they produce it or not. (ii) Whether only on the basis of slight percentage difference of "Nickel" the goods can be rendered as of Secondary quality? (iii) Whether the Steel Mill's report is making categorical confirmation about secondary quality? Question of law:- (a) Whether the learned Member (Judicial) of the Tribunal's observation in para. 12 of the Order about letter C.No.1(25)S/Val/98 dated 22-7-2000 is correct in the presence of Chapter-IX of the Customs Rule 2001 and amended provisions of sections 79 & 25 of the Customs Act, 1969? (b) Whether that without prejudice to above, whether the member (Judicial) is correct in law and facts to treat the record of determined customs values, maintained in terms of subsection 13(a) of sections 25 & 25A of the Customs Act, 1969 read with Rule 107 of the Customs Rules, 2001 at par with the data base of pre-amended section 25 of the Customs Act, 1969? Lastly he prayed that: (i) Declare that the impugned Tribunal's order dated 6-8-2009, issued on 8-9-2009, in Appeal No. K-232/2008. was not in accordance with the facts of the case, hence liable to be rectified to straighten the facts to apply correct provisions of law. (ii) Declare that the applicant importer has produced a report of Steel Mill which is not confirming the goods as of secondary quality. (iii) Declare that the applicant importer has not made correct and true declaration of all particulars of the imported goods as required in terms of section 79(1) of the Customs Act, 1969 for correct self assessment and subsequent checking and audit in terms of sections 80, 32 & 32A of the Customs Act, 1969.

5. The respondent consultant while using his right to rebut the contents of rectification application submitted as follows:

Preliminary Objection:

(a) The applicant found no fault or apparent mistake in the order of the Tribunal in any respect and due to that reason restraint itself from filing reference with the Hon'ble High Court of Sindh under section 196 of the Customs Act, 1969 or noticed rectification application under subsection (2) of 194-B ibid upon receipt of the order of the Tribunal. Resultant, the order of the Tribunal attained finality. Instead of complying the order of the Tribunal in letter and spirit, he was pressurizing the respondent to get his consignment cleared on the basis of order-in-original/ appeal, which was set aside by the Hon'ble Appellate Tribunal through order dated 6-8-2009 in Customs Appeal No.K-232 of 2008. In the given circumstances the filing of rectification application with the Appellate Tribunal is not more than an afterthought, beside abuse of powers by virtue of the fact that the order of the Tribunal is correct in facts and law and contains no apparent mistake for rectification. (b) That it is not out of place to add here further that for filing Customs Reference under section 196 of the Customs Act, 1969, the time lapsed in the instant order on 7-11-2009. Despite that, compliance to the order of the Tribunal was not made. Resultant, the respondent filed a complaint with the Hon'ble Federal Tax Ombudsman on 14-12-2009 vide No.257/KHI/ CUST(76)/779/2009 for payment of paid port demurrage/ storage, container detention/rental charges, and the expenses made by the appellant in terms of fee of advocate/consultant and for compliance of order of the Tribunal which after registration of the complaint sought comments from the FBR by 1-1-2010 vide letter dated 17-12-2009. The applicant i.e. Additional Collector of MCC of PaCCs, upon receipt of copy of complaint opted to file a rectification application under subsection (2) of section 194-B of the Customs Act, 1969 on 4-1-2010 with the Appellate Tribunal. The said act of the applicant confirms in clear terms mala fides and administrative excess and the filed rectification application is frivolous, besides is being absurd, hence not to be entertained in principle and norms of natural justice. Comments on Questions of Facts and Grounds:

(i) That the Tribunal has not imported anything extraneous in the order rather has relied upon the examination reports, labels comments of the applicant, rejoinder comments submitted by the respondent, Public Notice No.1/2002 (Appraisement) issued vide No.SI/MISC/136/200-V dated 9-1-2002 and parameters laid down in the minutes of meeting dated 20-4-2006 by customs and experts of iron and steel for determination of quality and test report of Pakistan Steel Mill bearing No. PS/PL/2203/ Exp-034/08 dated 7-2-2008 relied by the applicants. The public notice and minutes of meeting clearly laid down the criteria for prime quality goods i.e. it should accompany with original mill test certificate. Where mill test certificate is not available the quality of the goods shall deem to be "secondary". That as regards the submission of the applicant that the mill test certificate has to be submitted by respondent, it is totally irrelevant, by virtue of the fact that the clearance through PaCCs is online and no documents have to be filed by an importer. Since, the goods were of secondary quality; no mill test certificate was scanned by the appellant upon receipt of view message under rule 437 of Customs Rules, 2001. Contrary only invoice, packing list and B/L were scanned. Non availability of mill test certificate, answered the query of the examiner, who formed opinion that the goods as prime on the basis of appearance. Nevertheless, he advise the processing officer to call for mill test certificate for determination of the quality of goods in question. His advice was totally ignored by every officer superior to him. It speaks about their malice and high handedness? (ii&iii) The test report issued by the Pakistan Steel Mill answered the query made by the applicant i.e. with regard to the nickel, which was 0.95% as against 3.5%. or above in prime quality of stainless steel T-200 series as per ASTM (Austanic Steel Testing Method) by virtue of the said fact the Pakistan Steel Mill in its report made categorical confirmation that the impugned goods were "secondary quality" due to availability of nickel contents below 3.5%.The Hon'ble Tribunal with regard to test report held in its order in clear and unambiguous terms, in following words: "The Collector (Appeals) despite forwarding the sample through PaCCs for testing to Pakistan Steel Mills for confirmation of nickel contents in the impugned goods disregarded the test report No.PS/PL/2203/Exp-034/08 dated 7-2-2008 in which the test was conducted as per ASTM E-1009 confirming that the goods contain nickel content to the extent of 0.95% rendering the goods as secondary quality by virtue of contents of nickel lesser than 3.5% in stainless steel sheets T-200 Series. The Collector (Appeals) held that the report of Pakistan Steel Mills was neither credible nor comprehensive enough to clearly determine the quality and being vague as it did not mention at all about the percentage of chromium. Irony of the fact is that no inquiry in this regard was made by the customs authorities or Collector (Appeals) from the Pakistan Steel Mills while forwarding the sample for testing. Straying from the proceedings is not appreciable. In case the chromium was not discussed in the test report by the PSM despite not being asked for, also renders the product in question as "Secondary" because T-200 series of "prime" quality stainless should contain minimum 11% chromium in addition to other components. The goods not containing chromium to the extent of 11% has a possibility of being something other than stainless steel." (iv&v) These are questions of law, and had been decided by the Appellate Tribunal in clear terms, while answering the question No. (iv) in the order. Vires of that can only be challenged before High Court of Sindh through a reference under the provision, of section 196 of the Customs Act, 1969 and not through a rectification application under the provision of subsection (2) of section 194-B of the Customs Act, 1969. Besides no arguments were placed by the applicant in this regard in his comments dated 25-5-2009. Hence, cannot be challenged at this belated stage through rectification application, as this tantamount to reopening of the order, which has already attained finality. (vi) That the order of Tribunal is correct in fact and law as evident from the decided issues and does not contain even a minor apparent mistake for which an application for rectification can be filed under the provision of subsection (2) of section 194-B of the Customs Act, 1969. Even otherwise "Tribunal has no jurisdiction to rectify its own order which otherwise has been passed keeping in view the facts of the case and law point". By virtue of the said fact, the application in question amounts to be based on forced and inapt interpretation of the provision of the Act. Reliance is placed on judgments in Customs Appeal No.535/2003 (K-2 & Customs Appeal No.7/2001) and on reported judgments 2007 PTD 967 Commissioner of Income Tax Karachi v. Abdul Ghani: 2009 PTD (Trib) 2189 Collector of Customs and Central Excise Peshawar v. Plasto Beg (Pvt.) Ltd. Hattar and others, 2009 PTD 2139, Commissioner of Income Tax/Wealth Tax Multan v. Khalid, Idrees Bhatti and 2009 PTD 1664 M/s. Pakistan Oil Fields v. Customs Central Excise & Sales Tax Appellate Tribunal. Lastly he prayed that in view of the above submission, it is clarified that the subject rectification application under the provision of subsection (2) of section 194-B of the Customs Act, 1969 is filed by the applicant simply to block the decision of the Hon'ble Federal Tax Ombudsman in the complaint filed by the respondent for compliance of the order of the Tribunal. Beside it also proves the mala fide and abuse of powers and ill-wish of the applicant of obtaining order from the Tribunal as per his choice, despite not warranted in law and norms of natural justice.

6. I have anxiously heard the arguments of both the parties at length and carefully examined the record of the case. The main thrust of the arguments advanced before this Tribunal by the applicant i.e. Additional Collector of Customs of MCC of PaCCs mostly revolves around the sole ground that the goods imported by the respondent were "Prime" and submitted in support raised questions of facts and grounds:

(i) It is a settled principle of law that the Appellate Tribunal is the last forum to straighten the facts and on the basis of wrong assumption of facts no reference application in terms of section 196 of the Customs Act, 1969 can be filed before the Hon'ble High Court. (ii) In this case as per Hon'ble High Court order dated 16-7-2008 read with order dated 2-9-2008 the goods were shifted to the bonded warehouse from the port area, despite this admitted fact the Tribunal has ordered for issuance of the delay and detention certificate, which as per procedure and circumstances of the case can only be issued, for those goods which are lying at the port. This sole fact is proving that the aforesaid order has been issued without reading the record and making the fact straight. (iii) The whole order is based on a Steel Mill's report which is not confirming the goods as of secondary quality rather silent on the quality aspect. The Hon'ble Tribunal without getting confirmation from the Steel Mill or any other expert has unilaterally on whimsical ground treated the goods as of secondary quality on the pretext of difference of nickel. The consultant of the respondent vehemently opposed the arguments of the applicant. He stated that since the judgment of the Customs Appellate Tribunal contains no apparent mistake on the face of the order, the application for rectification should be dismissed in limini, being filed with ulterior designs and mala fide intention, which is proved from the fact that despite receipt of the judgment of the Tribunal, the applicant and his subordinate were not complying the directions given therein. He also informed this forum that the respondent filed a complaint with the office of the Hon'ble Federal Tax Ombudsman on 14-12-2009 vide No.257/KHI/CUST (76)/779/2009 in respect of payment of port demurrage/storage, container detention/rental charges, and the expenses made by the respondent in terms of fee of advocate/ consultant and for compliance of order of the Tribunal. The office of the Ombudsman after registration of the complaint sought comments from the Department by 1-1-2010 vide letter, dated 17-12-2009. The Additional Collector of PaCCs upon receipt of copy of compliant opted to file a rectification application under subsection (2) of section 194-B of the Customs Act, 1969 on 4-1-2010.

8. The application submitted by the applicant under section 194-B(2) of the Customs Act, 1969 for the rectification of an order dated 6-8-2009 passed by this Tribunal, on the face of it, is of no avail to the applicant (i.e. the Additional Collector of Customs) section 194-B of the Customs Act, 1969. The plain reading of section 194-B would reflect in clear words the very intent that any "mistake" in an order passed by the Tribunal could be amended for the purpose of rectification of the error, but this very limited scope of rectification with the particular and specific line of direction just for the rectification of any mistake and error is stretched in a way as if (legal) order/judgment passed by a competent forum could be revisited and shaped up according to the desire of the applicant department under the garb of rectification of a mistake. This is merely a mistaken view taken by applicant due to misconception/misinterpretation of the relevant provisions of sub-section (2) of section 194-B of the Customs Act, 1969.

9. The meaning of the word `mistake" in its true legal sense and in its common parlance, according to the Black's Law Dictionary (Sixth Edition at page 1001) includes a `mistake of fact' and mistake of law' in its broad based spectrum, the department/applicant is yet to pull the curtain down, to place its contention within it to be on track inline with section 194-B (2) of the Customs Act, 1969 as none of the meaning either in plain words as mistake or technically as mistake of fact or even legally as mistake of law could be stretched favourably by the applicant. Section 194-B(2) ibid, thus would not come to the rescue of the department or applicant nor it would cover the committed lapse and illegality in the process of adjudication and appeal. The applicant has failed to establish the mistake if any committed by the Tribunal in the impugned judgment dated 6-8-2009 in view of full bench judgment of august Supreme Court of Pakistan delivered by their lordship Mr. Justice Saeed uz Zaman Siddiqui, Mr. Justice Mukhtiar Ahmed Junejo and Mr. Justice Khalil-ur-Rehman Ramday in the case of Mian Rafiq Sehgul and others v. Bank of Credit and Commercial International (Overseas Limited) and others bearing Civil Review Petition Nos.44 to 46 of 1996 (PLD 1997 SC 865), wherein it was observed that:

"If a Court has taken a conscious or deliberate decision on a point of law or fact while disposing of a petition or an appeal, review of such judgment or order cannot be obtained on the grounds that the Court took an erroneous view or that another view on consideration is possible (and that way) any such error in the judgment would justify a review which are self evident, found floating on the surface are discoverable without much determinant and have a material bearing on the final result of the case." In yet another case "Spin Bacha" and 9 others v. Mst. Neelam and others (Review Petition No.1400 of 2000 with Civil Miscelleneous No.20 of 2000, dated 5-11-2002) reported as 2003 YLR 1306 (Peshawar) Honourable Chief Justice Mr. Justice Mian Shakirullah Jan and Mr. Justice Qazi Ihsanullah of the Peshawar High Court have observed that:- "Arguments of the petitioner in support of their Review Petition had already been discussed by the Court in judgment under review. No error apparent from the face of the record was pointed out nor any other sufficient reasons were advanced to justify review of the Petition and the same was dismissed in the circumstances." Even otherwise the impugned order was passed on 6-8-2009 and almost 9 months have lapsed confirming the legal status of the said order irrespective of the fact that the review in hand was filed on 4-1-2010 controverting the legalities and propriety of the said order, as in such like cases, review could not be considered the continuation of an appeal in view of PLD 1981 Supreme Court 94, whereby Mr. Justice Karam Illahi Chohan Mr. Justice Muhammad Afzal Zullah and Mr. Justice Nasim Hassan Shah were of the view that:

"Right of review is a substantive right and always creation of a statute on the subject but the assumption that a review is continuation of the appeal, is not correct, with the result that the further corollary drawn therefrom in favour of existence of a right of review on that score will also consequently fall"

10. That against the theory of continuation of trial or proceedings is not conclusive of the existence of a right to make a previous judgment open for scrutiny whether by a higher Court in the form of appeal or the same court in the form of review and when this legal aspect of the matter is juxtaposed with the judicial pronouncement of the Superior Courts then the very rectification application so filed stands nowhere except with a razor thin marginal scope of review, when there is any `mistake' as described by the statute, floating on the face of the record and could be rectified in terms of section 194-B(2) of the Customs Act, 1969, which is not so in the case in hand.

11. Apart from above, it is worth consideration that why the subject rectification was filed by the learned Additional Collector so late i.e. on 4-1-2010, if any apparent mistake was floating on the surface of the order, which could have been observed earlier. The application for rectification is nothing except to circumvent the complaint filed by the respondent with the Hon'ble Federal Tax Ombudsman for compliance of the judgment of Tribunal and with the intention to file a reference before the High Court of Sindh against the order in rectification application, despite of the fact that under section 196 of the Customs Act, 1969, no reference lies with the High Court of Sindh in view of a judgment delivered by their lordships Mr. Chief Justice Iftikhar Muhammad Choudhry, Mr. Justice Abdul Hameed Dogar and Mr. Justice Saiyed Saeed Ashhad in the case of Commissioner of Income Tax Karachi v. Abdul Ghani (2007 PTD 967). It was observed that:- "No error on the face of judgment was identified in initial order of Tribunal, therefore in absence of any error apparent on the record with regards to the judgment, Tribunal ought to have refused to exercise jurisdiction under S.156 of Income Tax Ordinance, 1979. In exercise of such jurisdiction only a mistake apparent on record could be rectified by Income Tax Appellate Tribunal but in fact Tribunal acted as Appellate Forum against its own order, which was not sustainable in law

High Court failed to apply correct law and dismissed the appeal without providing any legal justification

High Court also failed to appreciate that assessee by filing application under S. 156 of Income Tax Ordinance 1979 tried to circumvent law by avoiding to the appeal/reference before High Court against earlier order/ judgment

High Court also lost sight of the fact that Tribunal under the law could not sit on its own judgments/order unless error apparent or floating on the surface of record could be pointed out

High Court while holding that no prejudice would be caused and in view of earlier judgment of Courts/Tribunals, assessees were entitled to benefit and committed grave and serious error/mistake, which could not be sustained

Income Tax Appellate Tribunal exceeded its jurisdiction by rectifying its judgment being from any error in terms of S.156 of Income Tax ordinance 1979--If at all assessee were aggrieved they could have approached relevant forum, in accordance with law

Judgments passed by High Court and Income Tax Appellate Tribunal were set aside

Appeal was allowed.

12. In yet another case 'Pakistan Oil field v. Customs and Central Excise Mr. Justice Imtiaz Rasheed Siddiqui and Mr. Justice Syed Asghar Haider of Lahore High Court have observed that:

"If any one opts for a recourse to section 35C(2) of the Act and seeks amendment of the final order of the Tribunal passed under this section then in fact he accepts the main theme of the order/judgment but only seeks an amendment thereof. In such an eventuality, he is precluded to file an appeal subsequently under section 36C of the Act, even otherwise section 36C of the Act does not provide for an appeal against an order passed under section 35C(2) thereof, since such an order does not finally dispose of the appeal but only relates to a requested amendment."

13. Apart from the merits of the case discussed supra the subject rectification application has been filed by the Additional Collector of Customs which is against the provisions of subsection (2) of section 194-B of the Customs Act, 1969 which reads as under:- 194-B Order of Appellate Tribunal.

[The Appellate Tribunal may after giving the parties to the appeal an opportunity of being heard, pass such. orders thereon as it thinks fit confirming, modifying or annulling the decision or order appealed against. The Appellate Tribunal may record additional evidence and decide the case but shall not remand the case for recording the additional evidence: Provided that the appeal should be decided within sixty days of filing the appeal or within such extended period as the Tribunal may, for reasons to be recorded in writing fix: (2) The Appellate Tribunal may, at any time within [one] year from the date of order, with a view to rectifying any mistake apparent from the record, amend any order passed by it under sub-section (1) and shall make such amendments if the mistake is brought to its notice by the Collector of Customs or the other party to the appeal. The aforesaid provisions of subsection (2) of section 194-B of the Customs Act, 1969 in unequivocal and unambiguous terms clearly state that the mistake needs to be brought to the Tribunal's notice by Collector of Customs or to other party to the appeal. The Collector of Customs is the competent authority who can file the rectification applications in terms of this subsection and is different for appeals filed to the Appellate Tribunal in terms of subsection (2) of section 194-A ibid where the competent officer should not be below the rank of Assistant Collector or Assistant Director so authorized in writing by Board or Collector or Director as the case may be. On this ground alone the rectification application of the applicant Additional Collector not filed by the Collector is not maintainable.

14. The ultimate conclusion which could be arrived at is that the applicant i.e. Additional Collector of PaCCs has not been able to establish the vehemently contested version of "mistake" either in actual, factual or legal sense; rather the attempt ended as wild goose chase tantamount to an exercise in futility. Thus I am of the considered opinion that the Tribunal's Judgment dated 6-8-2009 calls for no rectification as envisaged in section 194-B (2) of the Customs Act, 1969. As such the instant Rectification Application being devoid of material substance stands dismissed. C.M.A./103/Tax (Trib.) Application dismissed.