2014 PLP (Trib (PTD)

GHULAM AHMED, (MEMBER (TECHNICAL-II)).

The appeal, filed by the appellant, is directed against Order-in-Appeal No. 4072 of 2010 dated 7-7-2010 passed by the Collector of Customs (Appeals), Karachi maintaining the Order-in-Original No. 3 of 2010 (Manual) dated 19-1-2010 passed by the Additional Collector of Customs, (Adjudication), Model Customs Collectorate of PaCCS, Custom House, Karachi. 2.(sic) Insert brief facts here.

3. Insert relevant portion of para 12 of the order-in-original to the extent of appellant

4. Insert relevant portion of the order-in-appeal to the extent of appellant. 5. insert grounds of memo. of appeal 6. insert parawise comments of MCC of PaCCS dated 23-12-2010.

7. Rival parties heard and case records perused.

8. The representative of the respondent raised the objection in the parawise comments dated 23-12-2010 and even at the bar that the accompanied affidavit with the appeal is not signed by the appellant, rendering the appeal not maintainable in terms of the provision of section 194-A of the Customs Act, 1969. Therefore, we took the said issue for decision prior to issuing a detailed judgment in the instant appeal.

9. The contention of the respondent representative is devoid from law by virtue of the fact that when an appellant engaged an advocate and executed a power of Attorney/vakalatnama in his favour, he authorized the advocate to prepare the appeal and put his signature thereon and file with the competent Appellate Authority as prescribed in respective section of the Act. The instant appeal and affidavit had been signed by the Advocate on the strength of Vakalatnama available in the case file. Even otherwise dismissing of appeal as not maintainable on the strength of the said technical objection tantamount to denying justice, rendering the embodied section 194-A of the Customs Act, 1969 and Article 10A (fair trial) of the Constitution of Islamic Republic of Pakistan 1973 as redundant. The Superior Judicial Fora observed in many reported judgments that technicalities/lacunas should not be made basis for rejecting the appeal. In reported judgment e.g. in 2011 CLD 408 Soneri Bank Ltd. v. Classic Denim Mill (Pvt.) Ltd., and others their lordship of High Court of Sindh held that "signing, verification and drafting of plaint in a manner were of mere procedure thus relevant provision could not be strictly construed. Rules regarding verification and signature on plaint, being matter relating to procedure were to be liberally construed. Such presentation or singing could not make plaint a nullity. Rules and regulation are only meant to streamline the procedure and administer the court of justice but not to thwart the same. Duty of the court is to do substantial justice prime object behind all formalities is to safeguard the paramount interest of justice mere technicalities, unless offering insurmountable hurdles should not be allowed to defeat the end of justice. Legal precept are devised with a view to impart certainty, consistency and uniformity to administration of justice and to secure the same against arbitrariness". Besides the "any person" in the respective provisions of the Act also means advocate, consultant or authorized representative of the person who files appeal on behalf of the person against whom order has been passed. Thus the Tribunal holds that the appeal is validly filed and maintainable and the objection of respondent in this regard is overruled.

10. Reverting to the merit of the case the Tribunal observed that the respondent No. 1 has invoked a series of section of the Customs Act, 1969 without giving thought to the spirit of those and as to whether those were applicable on the appellant in the light of Rule assigned to him in the show-cause notice. For having a better understanding, verbatim of each invoke sections are reproduced here-in-under:--

16. Power to prohibit or restrict importation and exportation of goods:

The {Federal Government } may, from time to time by notification in the official Gazette prohibited or restrict the bering into a taking out of Pakistan of any goods of specified description by air, sea or land.

18. Good dutiable.

(I) Except as hereinafter provided, customs duties shall be levied at such rates as are prescribed in the First Schedule or under any other law for the time being in force on:- (a) goods imported into Pakistan, (b) goods brought from any foreign country to any customs station and without payment of duty there, transshipped or transported for, or thence carried to, and imported at any other customs station, and (c) Goods brought in bond from one customs station to another. (2) No export duty shall be levied on the goods exported from Pakistan. (3) The Federal Government may, by notification in the official Gazette levy, subject to such conditions, limitations or restrictions as it may deem fit to impose a regulatory duty on all or any of the goods imported or exported, as specified in the First Schedule at a rate not exceeding one hundred percent of the value of such goods as determined under Section 25 [or, as the case may be section 25A] (4) The regulatory duty levied under subsection (3) shall:- (a) be in addition to any duty imposed under subsection (1) or under any other law for the time being in force and; (b) be leviable on and from the duty specified in the notification issued under that subsection notwithstanding the fact that he issue of the official Gazette in which such notification appears is published at any time after that day.] [(5) The Federal Government may, be notification in the official Gazette levy an additional customs duty on such imported goods as are specified in the First Schedule at a rate not exceeding thirty five per cent of value of such goods as determined under section 25 [ or, as the case may be section 25A] {Provided that the cumulative incidence of customs duties leviable under subsections (1), (3) and (5) shall not exceed the rates agreed to by the Government of Pakistan under multilateral trade agreement] (6) The additional customs duty levied under subsection (5) shall be, (a) In addition to any duty imposed under subsection (1) and (3) or under any other law for the time being in force and (b) Leviable on and from the day specified in the notification issued under that subsection notwithstanding the fact that the official Gazette in which such notification appears is published at any time after that day.} Section 32 False statement, error, etc.

If any person, in connection with any matter of customs,

(a) makes or signs or causes to be made or signed, or delivers or causes to be delivered to an officer of customs any declaration, notice, certificate or other document whatsoever, or (b) makes any statement in answer to any question put to him by an officer of customs which he is required by or under this Act to answer, Knowing or having reason to believe that such document or statement is false in any material particular, he shall be guilty of an offence under this section. (Emphasis Supplied) 32A.Fiscal Fraud (1) if any person, in connection with any matter related to customs:-- (a) Causes to submit documents including those filed electronically, which are concocted, altered, mutilated, false, forged tempered or counterfeit to a functionary of customs; (b) Declares in the 82 [goods declaration] electronically filed customs declaration, the name and address of any exporter or importer which is physically non-existent at the given address; (c) Declares in the 82[goods declaration] electronically filed customs declaration an untrue information regarding 97 [payment of duties and taxes through self assessment] description quantity, quality origin and value of goods; (d) Alters, mutilates or suppresses any finding of the customs functionary on any documents or in the computerized record; or (e) Attempts, abets or connives in any action mentioned in clauses (a) (b) (c) and (d) above, he shall be guilty of an offence under this section. (2) Where, by any reason as referred to in sub section (1) as aforesaid, any duty or tax charged or fee or fine and penalty levied under any provision of law has not been levied or has been short levied or has been refunded, the person liable to pay any amount on that account shall be served with a notice within a period of 180 days of the date of detection of such custom duty and tax fraud, requiring him to show-cause as to why he should not pay the amount specified in the notice along with any other amount imposed as fine or penalty under the provisions of this Act. "Section 79

Declaration and assessment for home consumption or warehousing.--{(1) The owner of any imported goods shall make entry of such goods for home consumption or warehousing or for any other approved purposes, within fifteen days of the arrival of the goods, by,-- (a) Filing of a true declaration of 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 such goods in such from and manner as the board may prescribe; and. (b) Assessing and paying his liability of duty, taxes and other charges thereon, in case of a registered user of the Customs computerized System. [Provided that if, in case of used goods, before filing of goods declaration, the owner makes a request to an officer of customs not below the rank of an Additional Collector that he is unable, for want of full information, to make a correct and complete declaration of the goods, then such officer subject to such conditions as he may deem fit, may permit the owner to examine the goods and thereafter make entry of such goods by filing an goods declaration after having assessed and paid his liabilities of duties, taxes and other charges. Providing further that no goods declaration shall be filed prior to ten days of the expected time of arrival of the vessel.] (2) If an officer, not below the rank of Additional Collector of Customs, is satisfied that the rate of customs duty is not adversely affected and that there was no intention to defraud, he may, in exceptional circumstances and for reasons to be recorded in writing, permit, substitution of a goods declaration for home consumption for a goods declaration for warehousing or vice versa. (3) An officer of customs, not below the rank of assistant Collector of Customs, may in case of goods requiring immediate release allow release thereof prior to presentation of a goods declaration subject to such condition and restriction as may be prescribed by the Board.] "Section 80--Checking of goods declaration by the Customs

(1) on the receipt of goods declaration under section 79, an officer of customs shall satisfy himself regarding the correctness of the particulars of imports, including declaration assessment, and in case of the customs computerized system payment of duty, taxes and other charges thereon. (2) An officer of customs may examine any goods that he may deem necessary at any time after the import of the goods into the country and may requisition relevant documents as and when and in the manner deemed appropriate, during or after release of the goods by customs, (3) if during the checking of goods declaration, it is found that any statement in such declaration or documents or any information so furnished is not correct in respect of any matter relating to the assessment, the goods shall without prejudice to any other action which may be taken under this Act, be reassessed to duty. (4) in case of the customs computerized system, goods may be examined only on the basis of computerized selectivity criteria. (5) the Collector may, however, either condone the examination or defer the examination of imported goods or class of goods and cause it to be performed at a designated placed as he deems fit and proper either on the request of the importer or otherwise. "Section 83

Clearance for home consumption.

(1) When the owner of any goods entered for home consumption and assessed under section 80 or 81 has paid the import duty and other charges, if any, in respect of the same the appropriate officer, if he is satisfied that the import of the goods is not prohibited or in breach of any restriction or conditions applying to the import of such goods, may make an order for the clearance of the same: Provided that, at customs stations where the customs computerized system is operational the system may clear the goods through system generated clearance documents. (2) Where the owner fails to pay import duty and other charges within 3[ten] days from the date on which the same has been assessed under sections 80, 80A or 81, he shall be liable to pay surcharge at the rate of [KIBOR] plus three per cent] on import duty and other charges payable on such goods] 121 Transshipment of goods without payment of duty (I) Subject to the provisions of section 15 and the rules, the appropriate officer may, on application by the owner of any goods imported at any customs station and specifically and distinctly manifestly at the time of importation as for transshipment to some other customs station or foreign destination, grant leave to transship the same without payment of duty. If any chargeable on such goods with or without any security or bond for the due arrival and entry of the goods at the customs station of destination. (2) The Board, may subject to rules and such conditions as it may deems fits to impose authorities certain carriers to transport goods under the multimodal, scheme Goods transported under the multimodal scheme shall be specifically and distinctly manifested at the time of importation as for transshipment to some other customs station or foreign destination and shall not:- (a) require distinct permission for transshipment from the customs station of first entry into the country to be transported to the customs station of destination. The principal carrier issuing the multimodal bill of lading or air way bill will be responsible for the sanctity of the cargo during transportation between the customs station of first entry into the country to the customs station of destination, and (b) be subject to the risk management system at the customs station of first entry. (3) The board may, subject to such condition as it may deem first, grant license to any carrier to carry goods under the multimodal scheme]

157. Extent of confiscation.

(1) Confiscation of any goods under this Act includes any package in which they are found and all other contents thereof: (2) Every conveyance of whatever kind used in the removal of any goods liable to confiscation under this Act shall also be liable to confiscation: Provided that, where a conveyance liable to confiscation has been seized by an officer of customs the [appropriate officer] may in such circumstances as may be prescribed by rules order its release pending the adjudication of the case involving in condition if the owner of the conveyance furnishes him with a sufficient guarantee from a scheduled bank for the due production of the conveyance at any time and place it is required by the (appropriate officer to be produced) (3) Confiscation of any vessel under this Act includes her tackle apparel and furniture. 178 Punishment of person accompanying a person possessing goods liable to confiscation:.

If any two or more person in company are found together and they or any of them have goods liable to confiscation under this Act, every such person having knowledge of this fact is guilty of an offence and punishable in accordance with the provisions of this Act as if goods were found on such person. 192 Duty of certain persons to give information.

(1) Any person who come to know of the commission of any offence under this Act, or an attempt or likely attempt to commit any such offence, shall as soon as may be give information thereof in writing to the officer-in-change of the nearest customs house or customs station or if there is no such custom house or customs stations, to the officer in charge of the nearest police station. (2) The office in charge of a police station who receives any information mentioned in subsection (1) shall as soon as possible communicate it to the office in charge of the nearest customs house or custom station. 207 Customs house agents to be licensed.

No person shall act of {on behalf of any principal } for the transaction of any business. Relating to the entrance or departure of any conveyance [or any customs clearance related activity] or the import or export of goods or baggage at any custom station unless such person holds a license granted in this behalf in accordance with the rules [as a customs agent]

11. From perusal of section 16, it is observed that this section is incorporated in the Act for delegating power to FBR for prohibiting or restricting importation and exportation of the goods through a notification, resultant, it is a machinery section and no charge can be invoked under the said section. Similarly section 18 is for levy of, exemption from and payment of, custom duties and the powers for the prescribed Act rest with the Board and have no nexus with importer, clearing agent and any other person by virtue of being machinery section, as such no charge can be invoked under the said section.

12. It is evident from the expression of sections 32 and 32A of the Customs Act, 1969 can be invoked on an importer or exporter or clearing agent or any other person who submit a declaration with the customs under section 79 of the Customs Act, 1969. The appellant least fall in the category of the person defined as he has not submitted any declaration or statement or any documents, which is false in material particular or concocted, altered, mutilated, false, forged, tampered or counterfeit. To the contrary submitted security with the shipping company against the container, subject to refund of that after delivering empty containers to the Terminal of the Shipping Company after de-stuffing and for providing that service he charged 1% of the security amount. The said instrument is not a document, declaration statement etc required for obtaining clearance of the imported goods. Resultant, neither section 32 or 32A is applicable in the case of the appellant. Wheras under section 79 of the Customs Act, 1969 an importer or clearing agent has to file/transmit goods declaration with the customs not by another person like appellant who is none of those. Under section 80 the officer of the Customs passed assessment order on the basis of declaration or in accordance with this own opinion in regards to description, PCT and value for levy of duty and taxes and under section 83 of the Customs Act, 1969 the appropriate officer of the customs after satisfying that the duty has been paid as per assessment completed by the competent authority under section 80 or 81 of the Customs Act, 1969 and that the import of the goods is not prohibited or in breech of any restriction or condition applying to the import of such goods, passed clearance order for obtaining delivery from the Port under the regime of "One Custom" or transmitting view message to the Terminal, Shipping Company and Gate Staff for obtaining delivery of the goods. These sections lays no duty on the appellant instead on the custom officials, resultant invoking contravention of the said section on the appellant is highly questionable by virtue of the fact that he figures no where in the expression of these Sections.

13. The section 121 of the Act meant for transshipment of the goods without payment of duty and Board has to frame Rules for that. The Rule so made has to be adhered by the importer/clearing agent and Customs not by the appellant as he has not obtained transshipment of the impugned goods, invoking the said provision of the Act is completely absurd. And on perusal of section 157 it has been observed that it speaks about confiscation of goods including packages or conveyance. No confiscation of any sort has been made in the subject case, resultant, invoking of the said section in the show-cause notice is insane. The section 192 lays duty on a person to give information to upon knowing of the commission of any offence or an attempt or likely attempt to commit any such offence to the officer-in-charge of the nearest customs-house or customs station or if there is no custom house or customs-station, to the officer-in-charge of the nearest police station in writing. How can a commission agent who deposited security of the container allegedly cleared by the customs can have the knowledge that the said container has been removed illegally from the port, when it is next to impossible beside in the absence of tangible evidence that he had the information or had been given information through SMS or he including the general public was informed through publication in National Daily's Newspaper or through ticker on News Channels. None of the said procedure was adopted as admitted by the representative of the respondent then how the said provision of the Act was invoked on him. That as regard to section 207 of the Customs Act, 1969 it is for Licensing of Customs-House Agent for transacting of any business relating to clearance of the goods, this section is not at all applicable on the appellant as he is not a clearing agent.

14. In addition to the above irregularities committed by the respondent who passed order on the basis of biased and determined opinion and the said fact stood validated from the order of the respondent No. 1 wherein he held that charges against him are not established in view of the Board's report vide U.O.No. 10(18)L&P/2002 dated 17-10-2009 sent to the President Secretariat (Public) that the act of depositing security with the shipping company is insignificance, therefore the Directorate General of Intelligence and Investigation considering to assign the appellant role of witness in Final Challan instead of accused in the F.I.R. as the evidence on the basis of which the appellant was implicated in the case are no evidence under the Law of Evidence being in sufficient and this stood validated from the Bail Order of The Lahore High Court, Lahore of the appellant in Miscellaneous Bail No. 8429/B of 2008 dated 26-9-2008 that " the petitioner was only a commission agent and nothing more than that. The true import of his role and vicarious liabilities shall be assessed after collecting some material evidence at the time of trial. Even otherwise the disclosure made by the petitioner during Police custody on the basis of which he has been involved in this case is inadmissible in evidence". The respondent No. 1 imposed penalty of Rs.50,000.00 on the said insignificance of his role and non evidence. This confirms that he failed to distinguish or discuss the law including, instead made discussion of personal nature in regards to fiscal statute, which is not sustainable in comparison to the Law and the judgments of Hon'ble Superior Courts of Pakistan. Hence he erred in passing the order and it is not sustainable in law as this is clearly contrary to the Law/Rules, being erroneous and not in consonance of law, equity and natural justice instead based on mala fide and intellectual dishonesty.

15. To what has been stated/discussed herein above particularly the interpretation of law and legal position referred in the light of prescribed law and observations made thereon, we hold that, the appellant had been implicated unnecessarily in the case despite not warranted under the invoked Provision of the Custom Act, 1969 by The Directorate of Intelligence and Investigation - FBR and penalized through impugned orders passed during the hierarchy of Customs, being suffering from grave legal infirmities are declared to be illegal and are hereby set-aside to the extent of present appellant only and allow the appeal as prayed with no order as to cost.

16. Order passed accordingly. JJK/166/Tax(Trib.) Order accordingly.