2021 PLP (Trib (PTD)

JAHANZAIB WAHLAH, MEMBER JUDICIAL-III.

Through this order, I intend to dispose off Appeal No.K-1160/2018 directed against Order-in-Original No.1171819 dated 04.08.2018 passed by Collector of Customs, (Adjudication), MCC of Appraisement-West, Karachi.

2. Brief facts of the lis are the appellant during the course of his business activities imported a consignment toiletries against invoice No.C-16-2018 dated 22.06.2018 and B/L No. 2018 and B/L No. HDMUAEKNO252019 dated 21.06.2018. Upon receipt of respective import documents appellant transmitted Goods Declaration (GD) with the MCC of Appraisement-West under the provision of Section 79(1) of the Customs Act, 1969 (Act) and Rule 433 of the Customs Rules, 2001 (Rules) and as per pre-requisite for availing the regime of Customs Computerized System (CCS) paid upfront duty and taxes of Rs.811,767/- on 03.07.2018 vide cash No. C-KAPW-000607 and infrastructure cess/stamp duty levied therein amounting to Rs.11,045/-. Consequent to which GD was numbered as KAPW-HC-714 dated 03.07.2018. The nominated Appraiser instead of completing the assessment order under Section 80 and Rule 438 opted to get the goods examined under the provision of Section 198 and Rule 435 of the Act/Rules and to proceed with after adducing reasoning apprehension transmitted the GD to the Deputy Collector of the Group for assent, which he gave and routed the GD to the Assistant/Deputy Collector of the terminal, who marked that to the examiner of his choice in accordance with devised criteria, upon physical verification the goods were found as per declaration and report so prepared was uploaded in the GD reservoir. The assessing officer upon appearance of the same on his workstation passed the assessment orders under section 80 and Rule 438 of the Act/Rules and transmitted those to the Principal Appraiser (respondent No.1) for approval. Who instead of assenting that, opted to framed contravention report on the pretext that the GD in question should had been transmitted through clearing agent as against self as ordered in Public Notice No.1/2017 dated 05.10.2017 issued by Chief Collector of Customs Appraisement, this lapse was construed as an offence punishable under clause (1)(i) of Section 156(1) of the Act and transmitted that to respondent No.2, who transmitted show-cause notice narrating the same facts without any change of comma and full stop. The appellant advocate replied the same, through which he disputed his opinion and interpretation of the law. The respondent No.2 without controverting the stance of the appellant passed order dated 04.08.2018 based on pre-determined opinion and inapt interpretation of the Act/Rules and the law laid down by the Superior Judicial Foras, ordering cancellation of GD and imposing a fine of Rs.50,000/-. The relevant para of the order is reproduced here-in-under for easement: "I have gone through the record of the case and written and verbal submission made by the trader's representative on his behalf. The traders have no where in his reply contested that he did not violate the legal requirements as stipulated in Public Notice 01/2017 dated 05.10.2017 rather perusal of pare 2 of the written reply reflects that the traders actually admits that a "lapse has occurred on his part and he did not submitted the GD in system through his clearing agent as required under the said Public Notice. Further perusal of the written reply indicates that the traders is of the view that ones he is registered with the Customs department by getting a User ID, there is no exception or restriction on his filing a GD. This is not the legal position as the very Rule 433 of the Customs Rules, 2001 quoted by the trader through its 1st proviso that he did not submitted the GD, requires that GDs for clearance of goods or class of goods as specified by the Board or the Chief Collector are to be filed in the system through a Clearing Agent. Licensed under section 207 of the Customs Act, 1969. The traders have further challenged the legality of Rule 433 vide para 3 of his written reply as being in contradiction of section 79 of the Act. However, a simple reading of this section confirms otherwise section 79(1)(a) clearly states that the importer has to filed 02 declaration of imported goods as the Board may prescribed. In the instant case, the Board vide Rule 433 of the Customs Rules, 2001, has categorically specified the "manners" in which a GD, containing certain specified goods in a certain number, is to be filed through a clearing agent license under section 207 of the Act as such there is clearly no conflict in the rules issued through the SRO and the parent Act. The trader has also argue that he is being discriminated as contravention is made only against him only while other traders involved in same violation are not been checked. Although no documentary proof was submitted by the trader to verify this argument, the relevant Additional Collector of the concerned Collectorate was asked to verify the factual position to meet the end of justice. It was informed that multiple contravention have already been made against different traders on this account and almost all of which have been decided through formal adjudication proceeding and traders have cleared their goods after fulfilling the legal requirement as per order. The concerned officer confirmed that at least in 50 contravention had been made out in this Collectorate alone on this account. In view of this confirmation the arguments of the traders that he is being discriminated against does not hold any legal merit or validity. The traders, vide para 7 of the written reply, while again admitting the "procedure lapse" on his part submit an undertaking by one clearing agent M/s. Khursheed Aziz & Sons to be considered to have filed the instant GD on behalf of the trades i.e. M/s. Pari Corp. perusal of section 208 of the Act clearly states that the permission to file GD on behalf of importer is to be obtained before filing of that documents. The request of the importer vide para 7 of his reply is, therefore, not legally acceptable. In view of the above fact and legal position, I am of the considered opinion that the charge framed vide show-cause notice issued to the traders, Messrs Pari Corporation, stand established. I, therefore, order to cancel the declaration no 714 dated 03.07.2018 filed by Messrs Pari Corporation without involving a clearing agent as required under the Public Notice No. 01/2017 dated 05.10.2017 a personal penalty of Rs.50,000/- is also imposed on the trader under section 156(1) of the Act, for violating the said provision of law.".

3. The appellant filed the appeal on the basis of grounds enumerated therein, the consultant/advocates on the date of hearing argued the case strictly in accordance with those. No cross objection under Section 94A(4) of the Act has been filed within the stipulated period of 30 days or not even todate by the respondent No.1. However, his representative vehemently defended the passed order passed by respondent No.2 and prayed for maintenance of those, irrespective of apparent deficiencies/illegality.

4. Heard and case record perused and so the relied upon citation. This case can be decided on the single point of power/jurisdiction, the respondent No.2 issued show-cause notice under the provision of section 179 of the Act, expression of which is unambiguous, an adjudicating authority under the said section has to assume powers on powers on the basis of involved amount of duty and taxes excluding the conveyance in the case of import and for export twice to the monitory limit as specified in section 179(1) involving mis-declaration under the provision of section 32 ibid. in the present case no involvement of duty and taxes is apparent, nor it is the case of export, evident from its contents containing no amount and the entire allegation revolves around contravention of public notice. When no duty and taxes are involved or case not pertaining to export Respondent No.2 is barred by law to assume power/jurisdiction for the purpose of adjudication section 179 of the Act / In a case where there is exist no involvement of duty and taxes, such case is to be construed as a case of technical violation, to adjudicate such case falls under the powers of Principal Appraiser under the provision of Section 80 and Serial No.30 of SRO 371(I)/2002 dated 15.06.2002. The respondent No.2 issued show-cause notice in the absence of availability of powers under the provision of section 179(1) of the Act. Beside usurpation of power of Principal Appraiser, nobody is allowed to usurp the powers of his subordinates as held by the Hon'ble Supreme Court of Pakistan in reported judgment PLD 1973 Supreme Court 49 The State v. Zia-ur-Rehman and others and 2009 PTD 1083 that "Superior authority cannot exercise the power of his subordinates for adjudication purpose.....powers of authority by either superior or subordinates is held as to be without jurisdiction beside usurpation". Rendering the order-in-original passed by respondent No.2 without power/jurisdiction, hence ab-initio, null and void and coram non judice. It is also settled principle that the exercise of jurisdiction by an authority is mandatory requirement and its non fulfillment would entail the entire proceeding to be coram non judice. Ref: PLD 1963 SC 663, PLD 1971 SC 184, PLD 1976 Supreme Court 514, 1983 SCMR 1232, 1984 CLC 1517, PLD 1995 Kar. 587, PLD 1992 SC 486, 2001 SCMR 103, 2004 CLD 373; PLD 2004 Supreme Court 600, PLD 2005 Supreme Court 842, 2009 PTD (Trib.) 1996, 2009 PTD 1112, 2010 PTD (Trib.) 832, 2010 PTD 465, 2010 PTD (Trib.) 1636, 2011 PTD (Trib.) 2114, 2011 PTD (Trib.) 2557 and PLD 2014 Supreme Court 514.

5. The legislature under section 79(1)(a) of the Act made mandated for the importer, exporter, manufacturer etc., to transmit GD through Custom Computerized System (CCS) with the respective Clearance Collectorate in the form and manner prescribed by the Board by making "a true declaration of the goods giving therein complete and correct particulars of such goods, duly supported by commercial invoice, bill of lading or airway bill, packing list, or any other documents required for clearance of suck goods in such forms and manner as the Board may prescribed and in terms of Clause 2(b) assessing and paying his liability of duty and taxes and other charges thereon, in case of a registered user of a CCS". The transmitting of GD is not subject to the compliance of the Rules as evident from Section 79(1), laying no conditionality. Board in derogation of the statutory powers inserted proviso in Rule 433 of the Rules through SRO 564(I)/2017 reading as "provided that the Board or the Chief Collector may, by an Order, specify the goods or class of good where Goods Declaration shall be filed only through a custom Agent, licensed tinder section 207 of the Act". This insertion is ultra vires to section 79(1) of the Act as well as violates the fundamental rights of an importer guaranteed under Articles 4, 5, 8, 10A, 12, 18, 24 and 25 of Constitution of Islamic Republic of Pakistan. Rules cannot substitute the parent statute nor could amend. Statutory Rules cannot enlarge scope of section under which they are framed (2003 SCMR 370). Rules should always be consistent with the Act and no Rule shall militate and renders the provision of the Act in effective (2001 SCMR 1806); Rules cannot override the specific provision of the statute (PLD 1990 SC 1034); where there is inconsistency in the provision of statute and a rule made there under the provision of the statute would have precedence and would be given effect to over and above the Rule (PLD 2001 Karachi 52); rules - being not an Act of legislation and having been made by executive authorities have to remain within the parameter of statute and the moment the same and some of them travelled beyond the provision of the apparent law, the same are stuck down as ultra vires (PLD 1999 Lahore 109); rules and regulation been creatures of statute have to be framed within limits and condition imposed by parent statute. Any rule/regulation repugnant to the parent statute will be void and illegal (PLD 1985 Karachi 201); where rules were in-conflict with parent Act, the former must yield to the later and the rules to the extent of inconsistency would be void (2000 PTD 399) and "It is now well established principal or statute that rule which are merely subordinate legislation cannot override or prevalent on the parent statute and when ever there is inconsistency b/w the rule and statute the later must prevail (1982 SCMR 522). Hence, proviso inserted in Rule 433 of the Rules through SRO 564(I)/2017 has no legal sanction being in conflict with section 79(1), resultant, it prevails on the proviso of Rule 433 of the Rules being ultra vires and as such and as such of no significance and a GD ought to be filed by an importer, exporter or manufacturer extra on self basis or through clearing agent on the form and manner as prescribed by the Board, nothing more nothing less. I therefore, hold that the opinion formed by respondent No.2 as ab initio and void having no validation of the superior judicial fora.

6. Notwithstanding to the adumbration made here-in-above, rules framed under any statute are in the nature of subordinate legislation and are meant for providing procedure to act upon the provision of the statute and those are to be used as "stepping stones" and not to be applied and operated as "stumbling blocks". They may also not to be employed to harass the taxpayer on the basis of technicalities instead of advancing the purpose for which they are framed as held by Supreme Court of Pakistan in its reported judgment PLD 1989 Supreme Court 222 in the case of Messrs Nishat Mills Ltd. v. Superintendent of Central Excise Circle-II. Even otherwise, the Public Notice through any definition even could not be termed as Rule and as such has no binding force, any action initiated on the basis of the same is without lawful authority/jurisdiction and as such ab-initio void, validated further from the fact that it has been issued without due authorization of the Board as ordered in CGO 09/2004 dated 20.08.2004, which direct to the Collector of Clearance Collectorate that "It has been observed that Collectorates issue Public Notices and Standing Orders for facilitation, clarification, standardization of procedures etc. however, due to divergent practices and order issued by the Collectorates on same issue, uniformity as envisaged under the Revised Kyoto Convention is not being attained at all the customs stations. Therefore, it has been decided that Collectorates will not issue Public Notices and Standing Orders, in future. However, if a need arises, a draft Public Notice or Standing Order will be sent to the Central Board of Revenue for further necessary action." Compliance of orders, instructions and direction of the Board is mandatory under Section 223 ibid and no defiance is permitted to be made as held by the Hon'ble High Court of Sindh in reported judgments 2003 PTD 2821 Syed Muhammad Razi v. Collector of Customs, (Appraisement), Karachi and 02 others that "in the wake of clear instruction contained in Customs General Order No.12/2002, the importer may not be charged for mis-declaration under Section 32 of the Customs Act, 1969, the impugned action on the part of Customs Officials is not sustainable in law and liable to be struck down as illegal and without lawful authority" and in 2016 PTD 35 Muhammad Waheed v. Customs Appellate Tribunal, it was observed that "Direction contained in Customs General Order 12 of 2002 though not binding upon Field Officer of the Department in terms of section 223 of the Customs Act, 1969.....Field Officer were required to follow such direction or guideline before making any contravention report/case against an importer

any act of field officer in violation of such direction would be of no legal consequences." Seeking approval for issuance of Public Notice No.01 of 2017 dated 05.10.2017 is no exception. In the absence of availability of any power either under the provision of the Act and CGO 9/2004 dated 20.08.2004 and that also without approval of the Board, renders the same without lawful authority and as such void and ab initio and so the proceeding initiated against the appellant or any importer on the basis of that also ab initio, null and void.

7. What has been discussed hereinabove, particularly the interpretation of law, legal propositions and observations made thereon and to follow the ratio decidendi observed by the Superior Courts. I declare proviso of Rule 433 ultra vires to section 79(1) of the Act, annual Public Notice No.01/2017 dated 5-10-2017, show-cause notice and set aside order passed by respondent No.2 in totality being illegal, ab initio, null and void. Appeal is allowed accordingly.

8. Order passed and announced with no order as to costs. MH/154/Tax (Trib) Appeal allowed.