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Petitioner: EMRAN MOMIN TOKHI LTD. VS Respondent: The PRINCIPAL APPRAISERHonorable Justice Muhammad Nadeem QureshiNadeem Ahmed Mirza,Raja Shakeel
2019 P T D (Trib.) 704 [Customs Appellate Tribunal] Before Muhammad Nadeem Qureshi, Member Judicial-I Messrs EMRAN MOMIN TOKHI LTD. through Representative Versus The PRINCIPAL APPRAISER and 2 others Customs Appeal No.K-980 of 2016, decided on 23rd October, 2018.
(a) Customs Act (IV of 1969)--- ----Ss. 129 & 180---Customs Rules, 2001, R. 473---Afghanistan Pakistan Transit Trade Agreement, 2010, Art. 3, Para 2---Transit trade---Processing of Afghan Transit---Trade---Misinformation---Show-cause notice---Procedure---Jurisdiction of customs authorities---Scope---Appellant, importer of Afghanistan, imported miscellaneous goods and transmitted Transit Trade Information---Examination of goods transpired that their weight and quantity was in excess to the information---Deputy Collector of Customs (Adjudication) issued show-cause notice and ordered for confiscation of goods, for submission of insurance guarantee and imposed penalty---Collector of Customs (Appeals) dismissed the appeal against aforesaid order---Validity---If any discrepancy was found in documents or goods corresponding to Transit Trade Information during the course of scrutiny or upon examination, said fact had to be reported to Directorate General of Transit Trade for initiation of legal proceedings, by virtue of the fact that the goods had to be transited without levy of duty and taxes---No consequences flow in the entire procedure for exchequer of Pakistan---Directorate General of Transit Trade could take cognizance of any discrepancy in the documents/goods and it was competent to issue show-cause notice to the clearing agent of the importer of Afghanistan for seeking justification of the discrepancy and if no convincing explanation was given, pass an observation for preparation of complaint for submission with the Ministry of Commerce, Pakistan, for onward submission with the Ministry of Commerce, Afghanistan, for placing before Afghanistan Pakistan Co-ordination Authority in terms of para. 2 of Art. 3 of Afghanistan Pakistan Transit Trade Agreement, 2010---Appellate Tribunal vacated the show-cause notice and set aside the orders passed thereon---Appeal was allowed accordingly.
(b) Administration of justice---
----Public functionaries---Jurisdiction---Superior officer is not empowered to exercise quasi judicial powers of his subordinate in the matter of adjudication.
(c) Customs Act (IV of 1969)---
----Ss. 2(la) & 129---"Goods Declaration and Transit Trade Information"---Distinction---Scope---Documents transmitted to the Directorate General of Transit Trade for transit of the goods through Customs Computerized System is not "goods declaration" as defined in S. 2(la), Customs Act, 1969---Documents transmitted for transit under the provision of S. 129, Customs Act, 1969 cannot be construed as a "goods declaration" under any pretext or even through inapt interpretation.
(d) Customs Act (IV of 1969)---
----Ss. 2(s), 129 & 156(1)(64)---Customs Rules, 2001, Rr. 484Q & 484D---Afghanistan Pakistan Trade Transit Agreement, 2010---Transit trade---Removing of goods from terminal---Pilferage of goods during the course of transit---Non-submission of Cross Border Certificate---Smuggling---Scope---Clause 64 of S. 156(1), Customs Act, 1969 and R. 484Q, Customs Rules, 2001 are applicable only in such situation wherein the importer of Afghanistan or his clearing agent removes the goods from the terminal/port in clandestine manner without completion of formalities of transit trade envisaged in Afghanistan Pakistan Transit Trade Agreement, 2010 or pilfered those during the course of transit or wherein Cross Border Certificate was not submitted along with verification of the Afghanistan Government as per expression of clause (b) of R. 484D(1) of the Customs Rules, 2001---Concerned person shall be charged under S. 2(s) & S. 129, Customs Act, 1969 and shall be awarded punishment for criminal intent under Cl. 64 of S. 156(1), Customs Act, 1969.
(e) Customs Act (IV of 1969)---
----Ss. 32 & 32A---Mis-declaration---Fiscal fraud---Scope---Where there is no revenue loss, provisions of S.32(1)(2) or 32A, Customs Act, 1969 cannot be invoked. [p. 716] G
PLD 1996 Kar. 68; 2003 PTD 52 and 2007 PTD 2215 ref.
(f) Customs Act (IV of 1969)---
----Ss. 168, 79 & 129---S.R.O. No. 499(I)/2009 dated 13.06.2009---Seizure of things liable to confiscation---Declaration and assessment for home consumption---Transit trade---Scope---S.R.O. No.499(I)/2009 dated 13.06.2009 has no application to the transited goods.
(g) Administration of justice---
---Thing should be done as it is required to be done or not at all.
2002 PTD 2457; PLD 1971 SC 61; PLD 1973 SC 236; PLD 1964 SC 536; 2003 SCMR 1505; Director General of Intelligence and Investigation and others v. Messrs Al-Faiz Industries (Pvt.) Ltd. and others 2006 SCMR 129; PLD 1996 Kar. 68; 2006 PTD 978 and PLD 1971 SC 184 fol.
Nadeem Ahmed Mirza for Appellant.
Raja Shakeel for Respondents.
Date of hearing: 13th September, 2018.
JUDGMENT
MUHAMMAD NADEEM QURESHI, MEMBER (JUDICIAL-I).--Through this Judgement, I intend to dispose off the instant appeal bearing No. K-980/2016 filed against Order-in-Appeal No. 130/2016 dated 23.02.2016 passed by the Collector of Customs (Appeals), Karachi (respondent No.3), maintaining the Order-in-Original No. 419671 dated 16.09.2015 passed by Deputy Collector of Customs, Adjudication-II, Karachi (respondent No. 2) in the capacity of Principal Appraiser.
2. Brief facts of the lis are that the appellant is a importing company of Afghanistan and in the said capacity is registered with the Ministry of Commerce and Industry of Afghanistan (MOCA), during the course of his business activities he imported a consignment of 1950 cartons, comprising of 77950 Pieces weighing to 35800 kgs of miscellaneous goods (pad lock, pencil, solar battery, solar fan, plastic roll and bulb) stuffed in 2x40" containers bearing Nos. BSIU-2572091 and KMTU-7261909, valuing to US$ 11390.00 C&F Karachi in transit to Afghanistan against invoice No. EMTL-530/2015 dated 20.03.2015 B/L No. KMTCNEB0463530 dated 26.03.2015 from China. Upon receipt of documents from the shipper, he delivered those to his clearing agent Messrs Arif Associates, Karachi (CHAL No.1976) for transmitting Transit Trade Information (TTI) for transit to Afghanistan under the provision of Section 129 of the Customs Act, 1969 (Act) and Rule 472 of Sub-Chapter VII of Chapter XXI of Customs Rules, 2001 (Rules) inserted in the Rules through S.R.O. 121(I)/2014 dated 24.02.2014, with the Directorate General of Transit Trade (DGTT) which he did on the strength of the documents supplied to him by the appellant. The information so transmitted was accepted and DGTT allotted number ITTK-AT-25366 on 23.04.2015 to the TTI. After receipt of which on his desktop, the Appraiser concerned instead of completing the TTI opted to get the goods examined, which transpired that the weight of the pad lock was found in excess by 15200 kgs (45%) and solar rechargeable batteries excess by 6000 kgs (51.72%) including additional item namely valves 2000 kgs for tubeless tires and 200 kgs of circuit breaker i.e. cumulatively in excess by 23500 kgs, which comes to (55.64%) as against transmitted in TTI, the said fact was reported by the nominated officer to the Principal Appraiser, DGTT (Respondent No. 1) for proceeding under Sub-Rule (6) of Rule 473, who framed contravention report with the allegation that the information of the goods transmitted in TTI is found in excess in weight, inclusive of availability of 2 excess item for which no information was transmitted through TTI, which is tantamount to contravention of the provision of Sections 127, 128, 129, 192 and 209 of the Act and Rules 473 and 484-Q of the Rules, punishable under clauses (63) and (64) of Section 156(1) of the Act and transmitted that to the Additional Director, Law, who after assenting it transmitted to respondent No. 2, who issued show-cause notice dated 23.07.2015 in the capacity of Principal Appraiser, containing the same fact and invoked provision of the Act and Rules without any slightest change of even comma and full stop, which was replied by the consultant vide letter dated 25.07.2015, through which he challenged the power/jurisdiction of respondent No. 2 among others in regards to levelled allegation and the invoked provisions of the Act/Rules. The respondent No. 2 ignored the submission in totality and passed order dated 23.06.2015, through which he held the charges established as levelled in the show-cause notice and ordered confiscation of the goods subject to redemption of those on payment of redemption fine of Rs.1305385.00 being 20% of the value of the goods in addition with the imposed penalty of Rs. 50,000.00 and submission of insurance guarantee for the excess found goods equivalent to leviable duty and taxes on the goods if cleared for home consumption under Section 79(1) of the Act. Amazingly the transmitted order was comprised of 10 pages having no conclusion whatsoever of the respondent No. 2, with the exception of mention of imposed fine and penalty on the first page of the order. Since, the goods were suffering from container detention/rental and terminal demurrage/storage charges, appellant paid that despite unwarranted under law and obtained the delivery subject to assailing the order after obtaining complete copy from respondent No. 2, after lot of pursuance, the respondent No. 2 hand delivered copy of order containing no date or number on 18.11.2015. On the strength of which appellant filed appeal before respondent No. 3 on 01.12.2015. Who on the date of hearings fixed for 15.12.2015, 03.01.2016, 27.01.2016 and 02.02.2016 put a specific question what kind of order is this? As this is not containing opinion and operative para, the appellant invited his attention to the supplied copy of the order by the respondent No. 2, which he accepted and thereafter raised query that the matter before him is not the same as to the appeal against which he passed orders maintaining orders of respondent No. 2 as correct. The consultant and the representative of respondent No. 1 confirmed the said fact. Consequent to which he informed that he is keeping the appeal in abeyance for decision till the time Tribunal passed an order in the appeals filed against his order irrespective of the said understanding, and to the fact that the appeal was in time, the respondent No. 3 passed order dated 23.02.2016 through which he rejected the appeal as barred by time despite not and accepting the said fact as correct, on the basis of formed misconceived opinion. Para 5 is relevant which is reproduced here-in-under:--
"I have examined the case record. The appellant were penalized vide the impugned order for bringing in item which were either not declared or were found in excess the order was passed on 16.09.2015 , wherein, the appeal has been filed on 01.12.2015 and as such the same is not entertainable owing to limitation provided under section 193 of the Customs Act, 1969. The said order was transmitted to the respondents in accordance with 215(c) of the Act. The grounds for condonation of delay are therefore not plausible. There is no reason to infer with the orders the appeal failed."
3. The appellant filed the instant 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 subsection (4) of Section 194A of the Act has been filed within the stipulated period of 30 days by the respondent No. 1, instead comments, which are not in any manner qualify memo. of cross-objection, deemed to be termed as cross appeal filed under subsection (3) by the department as expressed in subsection (4) of Section 194A of the Act. Therefore, these are to be considered merely as opinion, having no binding force, however, are placed on record of the case for perusal and consideration.
4. Rival parties heard and the case record perused:--
(i) Whether appeal filed before respondent No. 3 by the appellant was barred by time and whether he was in his right to reject it on the basis of limitation, without evaluating the fact that the order-in-original was not transmitted/served in totality rather half baked having no observation of respondent No. 2 and operative para, wherein charges were held as established and fine and penalty was imposed?
(ii) Whether respondent No. 2 was empowered to assume the powers of Principal Appraiser DGTT despite posted as Deputy Collector of Customs, (Adjudication-II) in the light of settled principle laid down by the Superior Judicial Fora and as to whether he has jurisdiction to adjudicate the case in derogation of para 3(d) of Notification No. S.R.O. 886(I)/2012 dated 18.07.2012? And whether the show-cause notice in the instant case has been issued by the authority defined in the proviso of Sub-Rule (6) of Rule 473 of Sub-Chapter VII of Customs Rules, 2001?
(iii) Whether Goods Declaration as defined in section 2(la) has to be filed for transit goods as to filed for home consumption under the provision of Section 79(1) of the Act?
(iv) Whether the goods found in excess during the course of examination as against reported in TTI for transit can be detained/confiscated by the respondents under Sections 186 and 179 of the Act to be read with Rule 484-Q ibid and clause (64) of Section 156(1) ibid on the presumption that these shall be smuggled back in Pakistan or pilfered during the course of transit? And whether fine as notified in S.R.O. 499(I)/2009 dated 13.06.2009 could be imposed on transit goods meant for Afghanistan akin to goods imported into Pakistan for home consumption under the provision of Section 79(1) of the Act?
5. As regard to issue No. (i), It has been observed that the opinion formed by the respondent No. 3 is without any substance that, the Order-in-Original was transmitted to the appellant by respondent No. 2 in accordance with the expression of Section 215(c) of the Act, which read as "incase of electronic orders, decisions notices or summons, when these have been sent to the recipient from Customs Computerized System". The order annexed with the appeal as Exhibit "B" although transmitted to the appellant but not complete as evident from para 6 of the order, it is completely silent in regards to the observation of the respondent No. 2 and the operative part. Resultant it cannot be termed as an order qualifying in the legal parlance transmitted to the appellant in terms of Section 155Q and Section 215(c) of the Act. Complete order was neither transmitted nor dispatched through courier to this date, instead after lot of pursuance it was hand delivered by the respondent No. 2 to the consultant of the appellant on 18.11.2015, on the strength of which appeal was filed before respondent No. 3 on 01.12.2015, i.e. within 13 days from the date of receipt of order. Resultant, the appeal before him was filed within time and not time barred as held by respondent No. 2. This alone fact rendered the order-in-appeal and the preceding order without lawful authority and jurisdiction as it is settled law that mere dispatching/transmitting half baked documents/Order-in-original is not enough, unless it is served with observation and concluding para i.e. as passed to the appellant or his consultant/advocate as per judicious norms and provision of Section 215 of the Act, the service was infact made on 18.11.2015, vindicated from the order passed by the respondent No. 3 in Order-in-Appeals Nos. 417 to 462 of 2005 dated 29.02.2005 (Service Fabric Ltd., Lahore v. Assistant Collector of Customs, S.S.C.C Exports) and 188/2007 dated 26.03.2007 (Abdullah Garments (Pvt.) Ltd. v. The Assistant Collector of Customs, (Exports), Karachi. The respondent No. 3 also ignored the settled principle of law by the Superior Judicial fora that no limitations runs against ab-initio void order, despite admitted and apparent position that the order was not transmitted in totality and the show-cause notice and order have been issued/passed by respondent No. 2 in derogation of the provision of Section 179 of the Act and S.R.O. 886(I)/2012 dated 18.07.2012 and amended Sub-Rule (6) of Rule 473 of the Rules. Apparently visible on the face of the show-cause notice/order. These vital available defects render these palpably illegal and a such ab-initio, null and void. No limitation runs against such type of orders, litigant is entitled to challenge the vires of such type of orders immediately upon having the knowledge/receipt of order through any mode or manner, which appellant did. Hence, now it's a legal fiction that no limitation runs against a void and ab-initio order without any exception, akin to the half baked order transmitted by respondent No.2 the appellant and that also in the absence of availability of power/jurisdiction, which is not enforceable under law and as such ab-initio, null and void/coram non judice. The issue No. (i) is answered in negative.
6. As regard to issues No. (ii), it is imperative to reproduce proviso to Sub-Rule (6) of Rule 473 of the Rules, and which is "Provided that where some discrepancy has been found, the AT GD shall be marked to the concerned Principal Appraiser for further necessary action under the law including initiation of legal proceeding." Upon bare reading of the proviso, it is vividly clear that in case of discrepancy found in the submitted documents or goods corresponding to those in any aspect in the transmitted TTI during the course of scrutiny of those or upon examination, said fact has to be reported to respondent No. 1 for initiating legal proceeding, by virtue of he fact that the goods are still lying in the terminal and have to be transited without levy of duty and taxes. No consequences flows in this entire procedure for exchequer of Pakistan. The proceeding for rectification of the discrepancy through amendment or by securing insurance guarantee for the amount of duty and taxes levied on the excess found goods on the value determined by the Officials of DGTT on the strength of data maintained under Rule 110 of Customs Rules, 2001 or Valuation Ruling issued by Director, Directorate General of Valuation under the provision of Section 25A of the Customs Act, 1969, subject to its cancellation/return upon receipt of T-1 report, as per the contemplation of clause (b) of Rule 484-D(1) of Rules, bearing cross reference of TTI filed in Pakistan and the certificate to the effect that the transit goods had crossed border and the said effect had been fed in the system by the Cross Border Verification Officer (CBBO). Initiation of legal proceeding in case of discrepancy against the importer of Afghanistan through his clearing agent rest with respondent No. 1. It is for him, to take cognizance of the discrepancy found in the documents/goods and in case of need he is competent to issue show-cause notice himself to the clearing agent of the importer of Afghanistan for seeking justification for the found discrepancy and if i.e. not convincing, pass an observation, for preparation of complaint for submission with the Ministry of Commerce Pakistan for onward submission with the MOCA for placing before Afghanistan Pakistan Co-ordination Authority in terms of para 2 of Article 3 of Afghanistan Pakistan Transit Trade Agreement, 2010. In the instant case although the respondent No. 1 took the cognizance of the issue, instead of proceeding himself despite being competent under para 3(d) of S.R.O.886(I)/2012 dated 18.07.2012 opted to frame contravention report instead of complaint and forwarded to Additional Director Law, who routed it to the respondent No. 2, who issued the show-cause notice and subsequently passed order in the capacity of Principal Appraiser, to which he is not empowered being a Deputy Collector of the Collectorate of Customs Adjudication-II, who is even otherwise not empowered to adjudicate the cases where there is technical violation of import and export having no revenue loss as expressed in para 3(d) of S.R.O.886(I)/2012 dated 18.07.2012. It is settled principle of law that the Superior Officer is not empowered to exercise quasi judicial powers of his subordinate in the matter of adjudication and this has been held on countless time by the Superior Judicial Fora in reported judgment referred by the appellant in sub-grounds (e) to (g) of ground (3) of memo. of appeal and which are applicable on the instant case with full vigor. Therefore, I hold that the show-cause notice has not been issued by the authority defined in proviso of Sub-Rule (6) of Rule 473 of Rules. Hence, without power/ jurisdiction and as such void and ab-initio. The issues No. (ii) is answered in negative.
7. As regard to issue No. (iii), the documents transmitted to the DGTT for transit of the goods to Afghanistan through CCS is not Goods Declaration as defined in Section 2(la) of the Act reading as "means a goods declaration filed under Sections 79, 104, 121, 131, 139, 144 or 147 and includes a goods declaration electronically filed" i.e. for home consumption, clearance of bonded goods for home consumption, transshipment of goods without payment of duty, clearance of exportation, declaration by passenger or a crew of baggage, label or declaration in respect of goods imported or exported by post, and entry of coastal goods and online for any other purpose either for import/ export to/from Pakistan e.g. Manufacturing Bond, Export Processing Zone etc., Resultant, in the absence of availability of Section 129 of the Act in the definition of Goods Declaration given in Section 2(la), the documents transmitted for transit under the provision of Section 129 of the Act cannot be construed as a Goods Declaration under any pretext or even through inapt interpretation. The documents transmitted for transit is in fact TTI, evident from the number given on that reading as ITTK- AT (Information Transit Trade Karachi- Afghan Transit). Hence, I hold that the documents transmitted for transit to Afghanistan is not Goods Declaration as defined in Section 2(la) of the Act. The issue No. (iii) is answered in negative.
8. As regard to issue No. (vii), prior to deliberation on the issue, it is beneficial to reproduce clause (64) of Section 156(1) and Rule 484Q of Sub-Chapter VII of Chapter XXI of Custom Rules, 2001 for better understanding of the essence and spirit of these and so the applicability.
(64)
If any person contravenes any rule or condition relateable to section 128 or 129
[Such person including the custodian and inland carrier shall be liable to a penalty up to twice the value of the goods and upon conviction by a Special Judge be further liable to imprisonment for a term not exceeding five years, and the goods in respect of which such offence has been committed shall also be liable to confiscation.]
128 and 129
484Q. Penalty under the Act - Whosoever commits any contravention of the provisions of this Sub-Chapter shall be liable to be proceeded against under Serial No. 64 and the entries relating thereto, in the table of subsection (1) of Section 156 of the Act.
9. From meticulous study of the above, it is observed that these are applicable in such like situation, wherein the importer of the Afghanistan or his clearing agent remove the goods from the terminal/port in clandestine manner without completion of codal formalities of transit trade envisaged in Afghan Pakistan Transit Trade Agreement, 2010 and Rules or pilfered those during the course of transit or wherein, cross border certificate is not submitted along with verification of the Afghanistan Government as per the expression of clause (b) of Rule 484-D(1) of the Rule. In these circumstances the concerned person shall be charged under Section 2(s) and Section 129 of the Customs Act, 1969 and have to award punishment for the criminal intent under clause (64) of Section 156(1) of the Act. The case in hand is not of the one deliberated upon, instead is a case where excess goods found during the course of examination as against shown in the TTI and which are lying in the terminal. It is immaterial that the goods so found are in excess as those has also to be allowed to be transited without payment of duty and taxes, upon submission of insurance guarantee of the amount of the leviable duty and taxes on the goods imported for home consumption by a Pakistani importer under the provision of section 79(1) ibid on the value determined by the Officials of DGTT on the basis of value available in data reservoir of the Clearance Collectorate under Rule 110 of the Rules or with the application of Valuation Ruling issued by Director, Directorate General of Valuation under section 25A of the Act. Application of Rule 484Q in such like cases is out of context due to the fact that no contravention of the provision of Section 129 of the Act has been made by the appellant. Beside…
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