Full Judgment Text & Judicial Ruling

2015 P T D (Trib.) 818

[Customs Appellate Tribunal]

Before Ch. Muhammad Tariq, Chairman, Adnan Ahmed, Member Judicial-II and Khalid Mahmood, Member Technical

Messrs ASLAM NIAZI and others

versus

ADDITIONAL COLLECTOR OF CUSTOMS, MODEL CUSTOMS COLLECTORATE PaCCS and others

Customs Appeals. Nos. K-344 to 350, K-392 to 398, 579 to 609, K-954 to 966, K-1085, 1086, 1088 to 1097, K-1232, K-1242 to 1249, K-1314 to 1327, K-1383 to 1392 of 2011 and K-709 and 710 of 2013, decided on 20th October, 2014.

Customs Act (IV of 1969)---

----Ss. 2(s), 16, 17, 32-A, 79, 80, 156, 178, 194-A & 194-B---Customs Rules, 2001, R. 423(XXIV)---Notification S.R.O. 450(I)/2001, dated 18-6-2001---Clearing consignment of imported goods against fake and fictitious Goods Declaration---Penal action---Directorate General of Intelligence and Investigation-FBR, in its contravention report, had reported that importer, cleared consignment against fake and fictitious Goods Declaration without payment of duty and taxes leviable thereon---Validity---Preliminary investigation transpired that neither Goods Declaration was filed by the importer, nor duty and taxes were paid---Accused importer with active connivance with other associates had indulged themselves into the fraudulent and illegal removal of consignment by abusing the Pakistan Customs Computerized System (PaCCS), had defrauded the State Exchequer in violation of relevant provisions of Customs Act, 1969---Importer and other persons were established to be liable for action for the offence and violation of Ss.16, 18, 32, 32A, 79, 80, 156 & 179 of Customs Act, 1969---Amount of duties and taxes had not been ascertained, as the complete description of imported goods were not available---Penal action under various provisions of the Customs Act, 1969 had been recommended in the contravention report---Findings, conclusion and order in respect of the role played by each accused and his liability had fully been given---Feeling aggrieved from the order-in-original, passed by Adjudicating Authority accused/appellants filed appeal, which was dismissed by Appellate Authority---Appellants, Terminal Operators, not only had violated the Customs Laws and Rules, but were also guilty of gross violation of Pakistan Customs Computerized System (PaCCS)---Objection of appellants side about the deposit of duty demanded or penalty levied under S.195-B of Customs Act, 1969, was not sustainable---No one had denied the illegal removal of containers from port area on the basis of forged Goods Declarations, but, every one tried to shift the burden of guilt on the other---Appellate Authority, in circumstances, had rightly brought in operation, the provisions of S.195-B of Customs Act, 1969---Objection raised by appellants in relation to the show-cause notice, was not sustainable in the eyes of law, because limitation would not run in cases of fiscal fraud---Present case was of a peculiar nature; and after disclosure of offence, the matter was interrogated by the authorities---Number of departments, including foreign shipment companies were contacted for verification purposes---Conduct of appellants/accused persons, also remained, non-co-operative, causing the delay in issuance of show-cause notice which was not fatal---Guilt of accused persons having fully been proved without any shadow of doubt, no interference was called for by the Appellate Tribunal---Appeals being without merits, were dismissed, in circumstances.

Ali Almani, Sardar Muhammad Ishaque and Fahad Zia for Appellants.

Kausar Hussain, A.O., Rana Gulzar S.I.O., Ghulam Yasin, P.A., Mohsin Imam, Khalil M. Dogar and Zafar Iqbal, Superintendent for Respondents.

Date of hearing: 24th September, 2014.

JUDGMENT

CH. MUHAMMAD TARIQ, CHAIRMAN.---All the above appeals are identical in nature. The aggrieved persons in these appeals are transporters and terminal operators. Since all the above appellants are allegedly involved in a series of offences in connivance with each other, similar show-cause notices and impugned orders were passed. Therefore, all the above appeals are hereby decided by this single consolidated judgment.

2. Brief facts of the case are that the Directorate General of Intelligence and Investigation-FBR, Regional Office, Karachi reported vide its Contravention Report No.Appg-II/34-R/DCl/Misc/2007/1374-R dated 31-3-2010, that Messrs Musafa International, E/161, Kucha Suddan, Sharja Bara Centre, Shah Alam Market, Lahore, fraudulently cleared a consignment of electronic goods imported in 1 x 40 ft container from Port Muhammad Bin Qasim against fake and fictitious Goods Declarations without payment of duty and taxes leviable thereon. In pursuance of the above mentioned information, efforts were made to procure the relevant records pertaining to clearance of containers imported by Messrs Musafa International, Lahore, from the Terminal Operators, Messrs DP World QICT, and Messrs Pakistan Revenue Automation, Ltd. Messrs DP World, QICT, provided the computer generated print of Gate Pass dated 17-3-2007, along with photocopy of Goods Declaration bearing No. C-775 dated 5-3-2007, showing clearance of 1 x 40 ft container No. GLDU-058575-0 said to contain 1836 cartons of electronics goods. The Terminal Operator also provided copy of Delivery Order issued by Messrs Maersk Line in favour of Messrs Musafa International, Lahore wherein Messrs AI-Mehran Traders, Karachi, were authorized to take delivery of aforesaid container. The concerned shipping company Messrs Maersk Line was also approached to procure relevant shipping documents pertaining to aforesaid consignment. The said shipping company provided copy of original Bill of Lading No. 854042993 showing name of consignee as Messrs Musafa International, Lahore and descriptions of goods as 1836 cartons of electronics goods, in one container. The shipping company also provided copy of delivery order in favour of Messrs Al-Mehran Traders, Karachi, on behalf of importers Messrs Musafa International, Lahore.

3. In order to further confirm the veracity of aforesaid information and fraudulent/clandestine removal of containerized cargo arriving from foreign destinations at QICT, Karachi, this Directorate General, vide letter C. No. 34-DCl/Misc/Appg-II/07/8608, dated 20-10-2007, approached the Collector, Collectorate of Customs, Port Muhammad Bin Qasim, Karachi, with the request to supply the copies of Goods Declarations, invoices, bills of lading and Packing Lists, in respect of the consignments pertaining to said container of electronic goods imported by Messrs Musafa International, Lahore, cleared from the Collectorate. Similarly, Manager, National Bank of Pakistan, Custom House Branch, Karachi, was also requested vide letter C.No.34-DCI/Misc/Appg-II/07/8672, dated 29-10-2007, to confirm and verify the genuineness of bank stamps signatures affixed on the face of copies of GDs and payment of duty and taxes in the National Exchequer. In response, the Collector, Collectorate of Port Muhammad Bin Qasim, Karachi, vide letter C.No. SI/Misc/15/2007/PQ-Import, dated 15-11-2007, intimated that the clearance of containerized cargo is dealt with by Model Customs Collectorate, PaCCS, Custom House, Karachi. However, the import statistics of the Collectorate with reference to the particulars of Goods Declaration, viz-a-viz, IGM No. and date mentioned in the above referred letter have been checked which revealed that the same were not cleared through the Collectorate meaning thereby that no Goods Declarations were in fact filed for Customs clearance of the aforesaid container. The Operation Manager, National Bank of Pakistan, Custom House Branch, Karachi, vide letter No. CHB/Admn/2007, dated 31-10-2007, intimated that the cash Nos. supplied by the Directorate General including cash No. C-775 dated 5-3-2007, shown on the Goods Declaration of Messrs Musafa International, Lahore, contains forged stamps and signatures on the challans. The Manager Operations, (South), PRAL, vide letter No. PRAL/Khi/Cus/ 10966, dated 14-11-2007, forwarded a report showing information of relevant Import General Manifest which were found in Customs Computer Database. From the scrutiny of said report, it was found that no "Gate Out" event took place against the listed indexes no GDs were filed/processed against the same. It was specifically intimated by PRAL that the gate out programme does not allow any consignment/ container to be delivered without filing/ processing of a Goods Declaration and without completion of all Customs prerequisites such as payment of duties/taxes, etc. Perusal of GD bearing cash No. C-775 dated 5-3-2007 revealed that neither IGM No. date, nor index number has been indicated in column 8 of GD nor Customs Machine number is endorsed thereon, which are essentially required for filing of Goods Declarations. In order to further verify the genuineness of GD bearing cash No. C-775 dated 5-3-2007, statements of Customs officers, namely, Mr. Abdul Rehman Kurd, Principal Appraiser, and Mr. Gul Muhammad Jokhio, Apprising Officer, Collectorate of Customs, Port Muhammad Bin Qasim, Karachi, were also recorded as their stamps and signatures appeared on GD. It was stated/confirmed by the said officers that neither they processed the aforesaid GD nor it bears their signatures. According to their statements, the GD bears their fake and forged signatures and stamps. From the preliminary investigation conducted so far, it transpired that neither any Goods Declaration was filed by Messrs Musafa International, Lahore through Messrs N.J International, CHAL, No. 2392, Karachi nor duty and taxes amounting to Rs.341,842 were paid vide cash No. C-775 dated 5-3-2007, in National Bank of Pakistan, Custom House Branch, Karachi. From the scrutiny of the computer print out supplied by the Manager Operation (South), PRAL, Custom House, Karachi, it transpired that the consignment imported vide IGM No. KPQI 182 of 2007, dated 28-2-2007, index No. 47 VIR No.1355-2202007, imported by Messrs Musafa International, Lahore, was manifested for transshipment to Lahore Dry Port, Lahore, through Pakistan Customs Computerized System (PaCCS), of the Model Custom Collectorate, Custom House, Karachi. Subsequent to the fraudulent removal of said consignment on 17-3-2007 on the basis of fake and fictitious Goods Declaration Cash No.C-775 dated 5-3-2007, the Transshipment Permit No. 1952 dated 18-3-2007, was manifested with the (PaCCS), the Model Customs Collectorate, Custom House, Karachi to avoid detection of fraudulent removal of consignment and consequential penal action.

4. Thus the accused, Messrs Musafa International, Lahore, with the active connivance of accused Jamal Durrani son of Javed Durrani and Naila Jamal, partner of Messrs N.J International, CHAL No.23925, and other associates in crime, have indulged themselves into the heinous crime of fraudulent and illegal removal of containerized goods from QICT, Karachi, by abusing the Pakistan Customs Computerized System (PaCCS) and have therefore, defrauded the state exchequer in violation of the provisions of sections 16, 32(1), (2), 32-A, 79, 80 and 178 of the Customs Act, 1969, punishable under clauses (9), (14), (14-A) (43), (47) of subsection (1) of section 156 ibid. Mr. Jamal Durrani son of Javed Durrani was then under judicial custody at Peshawar in case FIR No.01/08, dated 4-1-2008, lodged against him and others, by the staff of Directorate General of Intelligence and Investigation-FBR, Peshawar, in case of missing transshipment containers destined to up-country Dry Ports. Subsequent to the lodging of FIR, the scope of investigation was broadened and the preliminary statement of accused Jamal Durrani son of Javed Durrani, who was then under judicial custody at Central Prison, Peshawar, in connection with an another FIR lodged against him by the staff of Directorate General of Intelligence and Investigation-FBR, Regional Office, Peshawar, was recorded at Central Prison, Peshawar. During recording of statement, the aforesaid accused person disclosed that he was engaged in the business of working as Customs Clearing and Forwarding Agents for the last sixteen years. Since 1992-93 upto 2005, he remained partner of Messrs Durrani Traders, Customs Clearing and Forwarding Agent, CHAL No. 1469, Karachi, owned by his father. However, in March 2006, he established a new clearing and forwarding agency, namely Messrs N.J. International, Karachi, CHAL No.2392, Karachi, through a partnership deed signed by him and his wife Naila Jamal. Both of them used to give copies of blank Goods Declaration duly signed to one, Naeem Qureshi, and various other persons, for clearance of imported goods against receipt of Rs.1000 per G.D. In the meantime, his wife Naila Jamal established close relationship with Naeem Qureshi. Consequently, his wife separated from him and married Naeem Qureshi. As far as the matter of clearance of 1 container imported by Messrs Musafa International, Lahore and fraudulently cleared from Port Muhammad Bin Qasim, Karachi, against fake and fictitious Goods Declaration through Messrs N.J. International, CHAL No.2392, Karachi without payment of leviable duty and taxes is concerned, he said that has nothing to do with the affairs of the aforesaid clearing and forwarding agency. According to him the fraudulent clearance of aforesaid 1 container have been done by his ex-wife, Naila Jamal, and Naeem Qureshi, who married on 28-2-2007. Moreover, accused Jamal Durrani absconded after getting transit bail from the Honourable Court of Session Judge, Peshawar on 23-6-2008. Subsequent to the filing of interim challan, this Court issued non bailable warrant of arrest against accused Muhammad Naeem son of Muhammad Rustam Qureshi. On receipt of a tip, the said accused person was arrested on 26-4-2008, while he was driving a Honda City Car bearing Reg No. AJZ-238. At the time of interception, the personal search as well as of the said Honda City Car, was carried out in presence of witness, namely, Mr. Abdul Rasheed, Intelligence Officer, which resulted in the recovery of various incriminating documents/evidences including passport, cheque books issued by various banks in the name of accused Muhammad Naeem, and notice sent to Messrs Kashan Traders/importer criminally involved in FIR No. Appg-II/34- F/DCl/Misc/2007, dated 15-4-2008, which prove his direct involvement in the crime. The recovered documents as per inventory duly signed by the accused and the witnesses were seized against mushirnama. The vehicle bearing Registration No. AJZ-238 was handed over to the claimant, namely, Munir Ahmed Hashmi, in compliance of the Court order, dated 14-5-2008. During interrogation of the accused Muhammad Naeem, he disclosed that he was working in the capacity of Manager in Messrs Imex International and Logistics Trading, Karachi, and the head office of the company is situated at Islamabad. The said firm was clearing the containers of US and NATO Forces operating in Afghanistan through the clearing and forwarding agency Messrs N.J. International, CHAL No.2392, Karachi. He opened account No. 6112-349072-050 in Standard Chartered Bank, Korangi Industrial Area, Karachi. During the year 2006, Faisal Shehzad son of Sajjad Haider Awan, one of his childhood friend, approached him and devised a plan to fraudulently clear the containerized import cargo in the name of various importers from QICT, Karachi, on the basis of bogus and fabricated Goods Declaration without payment of duty and taxes. Consequently, accused Faisal Shehzad and Naeem Qureshi arranged the phony and dubious firms of Lahore, Karachi, Peshawar and Faisalabad, etc. The modus operandi for illegal removal of the container was also discussed, wherein the bill of lading/invoices were to be supplied to the accused Muhammad Naeem for further fabricating and manipulating processing and clearance of the containerized cargo. In sequel to the settlement of modalities of clandestine removal of containers, Faisal Shehzad sent millions of rupees through his bank Account No.7405- 355985-050 of Union Bank (Standard Chartered Bank), Shadman Branch, Lahore, and through on-line deposit as well in Naeem Qureshi's bank Account No.6112-349072-050 (Messrs Imex International Logistic), Account No.6112-349414-053, (US$ Dollar Account) of Standard Chartered Bank, Korangi Branch, Karachi No.6105-374326-050 of Standard Chartered Bank, 26th Street, DHA, Karachi, Account No.6208-197915-001, Standard Chartered Bank, I.I. Chundrigar Road, Karachi, all in the name of Muhammad Naeem Qureshi, and Account No.6105-252546-050, opened in the name of Messrs N.J. International, Karachi from time to time. During the course of investigation, Notices under section 26 of the Customs Act, 1969, were issued to the Managers, Standard Chartered Bank, Karachi, requiring them to provide information/ particulars of accounts along with bank statements, account opening form and CNIC of introducers of bank accounts in respect of the said accounts. In response, the aforesaid banks supplied the requisite information in respect of Account No.6112-349414-053, 6112-349072-050, 6208-197915-001 and 6105- 374326-050. From the scrutiny of bank statements, it transpired that during the period 1-10-2006 to 17-9-2008, an amount of Rs.106,703,375.10 was credited in Account No. 6112-349072-050. Similarly, during the period 17-5-2007 to 17-9-2007, an amount of Rs.1,42,91,210.00 was credited in Account No.6105-374326-050, and Rs.11,558,267.00 in Account No.6208-197915-001, whereas, US$ 7613 were credited in Account No.6112-349414-053. The involvement of accused Muhammad Naeem in the crime is established from the fact that he established his own importing firm, namely, Messrs Al-Huraim international, Karachi, and also opened Account No.6112-349072-050, in the name and style of Messrs Imex International Logistics Trading, Karachi, whereby the business addresses of both the aforesaid firms have been shown as 1-Marium Palace, Bohri Road, opp. New Custom House, Karachi, which as per record of the licensing authority (Collectorate of Customs, (Appraisement), Custom House, Karachi) is the business address of Messrs N.J. International, CHAL No. 2392, Karachi, whose numerous Goods Declaration were used by accused Muhammad Naeem and others, namely, Babar Hussain, Farhan Ibrahim, Naila Jamal and Jamal Durrani, for the fraudulent clearance of containerized cargo from QICT Karachi. In order to operate the business of illegal removal of containerized cargo from QICT, accused Muhammad Naeem supervised racket from his office situated at Office No.1, Marium Palace, Bohn Road, opposite Custom House, Karachi. He detailed two of his close associates and his employees, accused Babar Hussain son of Adalat Hussain, and Farhan Ibrahim, (co-accused), to whom he used to hand over the copies of bill of ladings/invoices received from Faisal Shehzad from Lahore, for further processing at QICT, Karachi. Upon receipt of the said import documents, accused Babar Hussain and accused Farhan Ibrahim used to hand over import documents to one accused Shakoor Alam son of Ilm Din. The said accused person on the basis of import documents used to deposit security amount arranged by him in the concerned shipping agencies and thereafter received Delivery Orders/NOCs and Gate Passes, which were subsequently handed over to accused Babar Hussain, who prepared fake Goods Declaration of various clearing and forwarding agencies including Messrs N.J International CHAL No.2392, Karachi, through Messrs Awan, Typist and Enterprises, near Custom House, Karachi, owned by one, Nasir Awan, under the instructions of accused Muhammad Naeem. Subsequently, accused Babar Hussain worked in association with accused Farhan Ibrahim, an ex-employee of Messrs Pakistan Revenue Automation Limited (PRAL), who was sacked from PRAL on the charges of embezzlement. During his employment, he remained posted at QICT, Karachi, and after losing his job, he started customs clearance business privately and developed association with accused Muhammad Naeem Qureshi and Babaar Hussain. He prepared Goods Declaration by endorsing fake and bogus examination report and also affixed seals/ stamps of Customs and bank, including fake cash numbers and used to approach accused Allah Buksh an employee of Messrs DP World, Terminal operator, QICT, Karachi, who arranged/managed gate passes on the basis of which containers were removed from QICT, Karachi. It is pertinent to mention here that prior to the removal of containers from QICT, accused Nisar Ahmed son of Sher Dad Khan, Yard supervisor of Messrs DP World, Terminal operator, QICT, Karachi, used to facilitate the prompt and speedy removal of containers, including container imported by Messrs Musafa International, Lahore, through public transport. Thus, accused Allah Buksh and Nisar Khan, while employed with Messrs QICT/DP World, Karachi, in order to facilitate the organized crime of fraudulent clearance of container on the basis of fake GDs arranged gate passes, made fake entries in the computer system and managed loading of containers on the vehicles for speedy removal/exit from the QICT. The investigation pertaining to the accused persons, namely Babar Hussain, Farhan Ibrahim, and Nisar Ahmed have further been conducted to ascertain their involvement in illicit financial transaction coupled with criminal involvement in manipulation, fabrication and dubious preparation of GDs and for speedy clearance/fraudulent removal of containerized cargo from QICT. After hectic efforts, few accounts of the aforesaid accused persons have been found. It is evident on record that Account Nos.113-010-0132-9 and 6105-364520-050 maintained in Messrs Askari Commercial Bank Limited, Timbar Market, Karachi, and Standard Chartered Bank, 26th Street Branch, D.H.A., Karachi, respectively, were operated by accused Babar Hussain and shown an amount of Rs.43,218,145 which has been deposited during the period 1-1-2007 to 17-9-2007. Similarly, Account No.6208-335062-001 operated in Standard Chartered Bank, I.I. Chundrigar Road, Karachi, by accused Frahan Ibrahim shows an amount of Rs.19,370,9841- and Account No.0081-000164-01-5 of Bank Al-Habib, Jacson Branch, Keamari, Karachi, jointly operated by accused Nisar Ahmed and his wife, Mst. Irshad, and Account No.1076-0081-001164-0107 of Bank Al-Habib Limited, Jacson Bazar Branch, Keamari, Karachi, operated by Mst. Irshad, wife of accused Nisar Ahmed, shows deposit of Rs.21,935,916. It is of pivotal importance to place on record that through the aforesaid Account No.1076-0081-00016-01-5, maintained in Bank Al-Habib Limited, Kemari, Karachi, was jointly opened by the accused Nisar Ahmed himself. The active connivance of the accused Nisar Ahmed with accused Muhammad Naeem Qureshi has further been firmed up with the transaction of Rs.4,575,000 from the Account No.6112-349072-050 of Standard Chartered Bank, Korangi Branch, Karachi, maintained and operated by accused Muhammad Naeem Qureshi, to the Account No.1076-0081-000164-01-5 of accused Nisar Ahmed in Al- Habib Bank Limited, Keamari, Karachi, through cheque Nos.3002740, dated 4-1-2007, 4859483, dated 6-2-2007, 4859304, dated 19-2-2007, 5909981, dated 8-5-2007 and 5909990, dated 11-5-2007, paid against his services towards clandestine removal/clearance of containerized cargo from QICT. Besides, huge cash amount was also credited in the aforesaid accounts which was paid to the accused Nisar Ahmed by accused Naeem Qureshi. The accused Faisal Shehzad son of Sajad Haider Awan is under judicial custody at Lahore and Shakoor Alam is on bail in case FIRs Nos.06/07 dated 7-2-2007, 08/07 dated 25-7-2007, and 16 of 2007, and 15, 16, 17, 18 and 19/2007, lodged by the staff of Directorate General Intelligence and Investigation-FBR, Lahore and Faisalabad. It is pertinent to place on record that production order issued in the name of Faisal Shehzad and Shakoor Alam by this Honourable Court, dated 16-8-2008, were sent to the Superintendent, Central Jail, Lahore for production of the accused persons at Karachi. It is further to point out that the Jail authorities did not produce any of the above-mentioned accused persons in compliance of this Honourable Court's order as yet. The accused Shakoor Alam absconded after getting bail from Lahore. The accused Faisal Shehzad has been granted bail by this Honourable Court against a surety of Rs.200,000 and PR Bond of like amount, on 26-6-2009. During interrogation of accused Muhammad Naeem son of Rustam Qureshi, it has revealed that in order to fraudulently remove the containerized Cargo, one accused Raziq Dino Jokhio son of Din Muhammad Jokhio, who happens to be a private person and working at the office of Gate SPO, at Exit gate of QICT, had also assisted and connived in the crime. On the pointation of Muhammad Naeem, the said Raziq Dino Jokhio son of Din Muhammad Jokhio was arrested on 3-5-2008, and Notice…

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