2010 PLP 132 (PTD)

9. The review petition was referred to the Revenue Division for comments and the reply of Hyderabad Customs is as follows: (i) The review application is liable to be dismissed in limine as the complainant has not been able to point out any error or any material fact which was apparent on the record and escaped the notice of the Honourable Federal Tax Ombudsman, while deciding the Complaint No.C-204K of 2008, which is in principle a mandatory requirement for the review of the findings already given. The principle laid down by higher' Courts that "The Court will not review findings of fact which findings were recorded after hearing full arguments and on a consideration of the entire evidence and the reasons given by the High Court, there being no allegation that any material fact which was apparent on the record escaped the notice of the Court. (A. Ali v. I. Ali) PLD 1956 FC.

50. As such there has not been pointed out any mistake or material fact which remained un-noticed by the Honourable Federal Tax Ombudsman, therefore, the review application does not have the merit for any review, hence is liable to be dismissed. (ii) The diesel oil being perishable/hazardous and inflammable goods has been sold in accordance with the provisions of Rule 71 of Chapter V of the Customs Rules, 2001. "

71. Auction perishable/hazardous goods.

Notwithstanding the provisions of these rules, the Deputy Collector or the Assistant Collector (Auction) after obtaining approval of the Collector may sell the perishable/hazardous goods through private offers or open auction at any time on the request of the person under whose possession/control these goods are lying. The approval of sale/bid in such cases shall invariably be obtained from Collector." (iii) There is no facility for the storage of petroleum products in the Customs Warehouse, Hyderabad. Moreover, the Customs Warehouse containing seized and confiscated goods as well as the offices and the residential accommodations of the employees are located in the same premises where the oil loaded tanker was parked. To avoid any unforeseen incidence, the seized diesel oil after obtaining the approval of the Collector of Customs, was sold to the Canteen Stores Department (Ministry of Defence) Rawalpindi, in the light of Central Board of Revenue (now FBR's) directives issued under C.No.4/14/AS-2002. Vol-I dated 27th November, 2004. Hence, there is no deviation from the Customs Rules on the part of department and the sale was in accordance with the law, and no maladministration was committed. (iv) The diesel oil was disposed of to a Government organization in accordance with law and no violation of Customs Act, 1969 or the Customs Rules, 2001, has been made. The repair of the slightly damaged oil tanker involves a negligible amount. In fact, disposal of diesel oil saved this Customs House from the irreparable loss. (v) The complainant did not come forward during the entire proceedings of the case before the Adjudicating Authority to claim the ownership of the seized goods. Therefore, in the given situation, the notice under section 201 of the Customs Act, 1969 was placed on the notice board on 12-9-2007 as per the provisions of section 215(b) ibid. (vi) It has been admitted by the complainant here that the oil tanker was damaged during the riots in the wake of assassination of Mst. Benazir Bhutto as against his previous claim that the department had burnt his oil tanker. The oil tanker was damaged slightly due to an accident, and was quite road worthy and in w running condition which was evidently taken away by the complainant in driven condition which can be confirmed from the complainant's receipt of the oil tanker bearing his signature on delivery order dated 5-1-2008. (vii) Issue of compensation has been raised without any legal footing and proper justification.

10. The FTO Secretariat's views on the points made by Hyderabad Customs are as follows:-- (i) As Honourable FTO had refrained from making any recommendations in complaint No.204-K of 2008 due to the sub juuice status or the matter at that time, therefore, Hyderabad Custom's view that the review petition is liable to be dismissed in limine is untenable. The non-smuggled status of this diesel oil under reference attained finality after the decision of the Appellate Tribunal upholding the decision of Collector (Appeals). Therefore, it would now be appropriate and lawful for FTO to conclude his findings/recommendations on the complaint of maladministration under reference. (ii) the propriety of selling diesel oil at 1/3rd of its normal market price needs to be carefully scrutinized. Besides, auctioning goods without mandatory notice to the, owner under section 201(1) read with 215(a) of the Customs Act, 1969 (IV of 1969) is tantamount to serious maladministration. (iii) The language of the sale notice dated 12-9-2007 creates a misleading perception as if the goods had already been confiscated which was not the case at all at the time of their sale to Canteen Stores Department (CSD). (iv) The view that the owner of goods did not appear before Hyderabad Customs during the entire proceedings of the case under reference is not valid because the owner, Mr. Arshad, had given power of attorney to driver Riaz on 1-12-2007 who had been in constant contact with Hyderabad Customs personally or through his Advocate. It is therefore factually incorrect to say that the owner did not appear before Hyderabad Customs during the entire proceedings of the case under reference. (v) It is also wrong to state that nobody came forward to claim ownership of the diesel oil. As a matter of fact, there was conclusive documentary evidence available with Hyderabad Customs that the diesel oil ' belonged to PSO, which had recovered its full cost from the carriage contractors for non-delivery of oil at the oil depot, Daulatpur. The Carriage Contractors had, in turn, received the full cost of non-delivered diesel oil from Mr. Arshad, the owner of the oil tanker. Therefore, the ownership of diesel oil rested with Mr. Arshad who was duly represented by driver Riaz, who was his attorney, and his Advocate. (vi) The contention of Hyderabad Customs in their comments on the Review Petition that the container was `slightly damaged' is contradictory to their earlier report of rioting filed in the Site Police Station Hyderabad which stated that the oil tanker was `half burnt'. It is obvious that `slight damage' and `half, burnt' are poles apart in their meaning. Therefore, the misstatement involved in contradictory reporting of facts also involves maladministration. (vii) The claim of compensation is lawful as the loss due to unlawful detention of goods and the driver by Hyderabad Customs despite availability of sufficient documentary proof that the goods were not smuggled is established beyond any shadow of doubt. It may not be out of place to mention that section 216 protects only lawful acts of Customs officials; it does not at all protect any blatant illegalities committed by them as in this case. (viii) The FTO is fully empowered under section 9 of the FTO Ordinance, 2000 to entertain the request of the applicant to conclude his findings in Complaint No.204-K of 2008 dated 29-1-2008 and make recommendations about the maladministration involved in this case.

11. In the back drop of the points raised and prayer made in the review petition and the parawise comments received from Hyderabad Customs through the Revenue Division, the Federal Tax Ombudsman heard the parties on 22-7-2009 at FTO's Regional Office, Karachi. Advocate Muhammad Iqbal Riaz appeared as the Authorized Representative of Mr. Arshad, the petitioner in this case. Hyderabad Customs was represented by Assistant Collector Mr. Imdad Ali Jokhio. The Departmental Representative briefly repeated the justifications of their actions explained in parawise comments submitted by Hyderabad Customs. His main reasoning was that since the oil originated from Hub, Baluchistan, it was sufficient in the ordinary course to conclude that it was being smuggled into Sindh. This argument obviously suffered from rationality deficit as how could mere transport of any goods from Baluchistan, prima facie, constitute sufficient evidence of their being smuggled. Besides, the Hyderabad. Customs had ample evidence with them in early May, 2007 that the diesel oil belonged to PSO and was being transported from Bosicor Oil Refinery at Hub Chowki, Baluchistan, to PSO's upcountry oil depot at Daulatpur, Naushero Feroze, Sindh. How could the goods be treated as smuggled in the presence of conclusive evidence available in the form of report of PSO's Daulatpur depot?

12. The 'DR (Customs) was also asked to explain why Hyderabad Customs violated the express provisions of the Customs Act, 1969 (e.g. the sale of diesel oil without giving mandatory notice to the owner of the goods). His-response that due notice of sale was given by affixing it on the Notice Board of Custom House, Hyderabad, was indeed very funny. When asked that affixing notice on the Notice Board was option of the last resort, to be used only if the address of the owner could not be determined, as prescribed under section 201(1) of the Customs Act, 1969 read with section 215(a) ibid, whereas in this case the home address of driver Riaz who was attorney of Mr. Arshad was available on Customs record and thus known to Customs Anti-Smuggling Squad, Hyderabad, the DR could not give any plausible explanation.

13. From the replies given by the DR, the adamance of Hyderabad Customs to stick to a patently irrational and factually incorrect position becomes all too obvious. One wonders how anti-smuggling powers under the Customs Act, 1969 are being exercised by a team of officers who are not only so ignorant of their legal obligations under the relevant provisions of the law and procedure but also lack the necessary capacity to accept even incontrovertible documentary evidence which subsequently fully convinced the Collector (Appeals) and the Appellate Tribunal, that the diesel oil under reference was a legitimate local product and not a smuggled item. Why should they be gullible enough to unquestioningly believe the verbal information provided by S.H.O. of Baldia Police Station Hyderabad?

14. Indeed, if Anti-smuggling powers are assigned to such a gullible and incompetent team of Customs officers like the Deputy Superintendent (Customs) who made the seizure on the unsubstantiated information of S.H.O. Baldia Police Station Hyderabad, the Assistant Collector, Anti-smuggling, Hyderabad, who authorized the Deputy Superintendent to make the seizure without necessary evidence, the Additional Collector who issued the show-cause notice and decided to confiscate the seized diesel oil as a smuggled commodity ignoring the conclusive evidence supplied by PSO's oil depot at 'Daulatpur, and, finally, the Collector of Customs, Hyderabad, who filed an unjustifiable appeal before the Customs Appellate Tribunal, against a fair, just and self-speaking order made by Collector (Appeals), the outcome cannot be any different from the one we are dealing with in this complaint.

15. The unfortunate incidents involved in this case i.e. arrest of the innocent driver, the seizure of legitimate diesel oil belonging to PSO, sale of diesel oil at throwaway price, burning of the oil tanker and available wastage of official time, energy and resources could all have been easily averted if the driver's statement of facts had been given due consideration by Hyderabad Customs, if the test report of diesel oil showing conformity to Pakistan standards had been correctly comprehended and if the conclusive evidence provided by PSO's Daulatpur depot as early as 8th May, 2007 i.e. within a fortnight from the handing over of the case by Hyderabad Police to Hyderabad Customs, had been given due consideration. Indeed, the Hyderabad Customs miserably failed to discharge their obligations under the law for which the complainant suffered hugely and inexcusably.

16. In view of the above findings, the following recommendations are made: (i) The sale proceeds of Rs.340,100 on account of sale of diesel oil be paid to the complainant within 15 days of the receipt of this order; (ii) Mr. Abdul Jabbar Solangi, the then Deputy Superintendent Customs, Mr. Mamoon. Moazam, the then Assistant Collector Customs Anti-smuggling, Mr. Zahid Hussain Bhayo, the then Additional Collector Customs and Mr. Jalaluddin Shah, the then Collector Customs responsible for extreme maladministration in this case be directed to show-cause, within 15 days, as to why:-- (a) compensation in terms of section 22 of the Establishment of the Office of Federal Tax Ombudsman Ordinance, 2000, for the claimed balance amount of Rs.540,400, along with repair charges of Rs.500,000 and a compensation of Rs.500,000 for loss of business for illegal detention of the oil tanker may not be E awarded to the complainant; (b) Rs.100,000 may not be awarded as compensation for loss of earnings to driver Zahid; and (c) disciplinary proceedings under the Removal from Service (Special Powers) Ordinance, 2000 may not be recommended against them. (iii) They may also state whether they wish to be heard in person. (iv) Compliance be reported within 30 days after implementation of these recommendations.

17. The case of S.H.O. Police, Sikandar Ali Bhatti and A.S.-I. Waris Hangoro of Baldia Police Station, Hyderabad, is being separately referred to Provincial Police Officer, Sindh for taking appropriate disciplinary action. H.B.T./136/F.T.O. Order accordingly.