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Petitioner: Messrs QAZI CNG FILLING STATION, GUJRAT and another VS Respondent: DIRECTORATE GENERAL OF INTELLIGENCE AND INVESTIGATIONS-FBR, KARACH and 2 others
Court Name: Customs Appellate Tribunal Judge(s): Adnan Ahmed Title:Messrs QAZI CNG FILLING STATION, GUJRAT and another vs DIRECTORATE
GENERAL OF INTELLIGENCE AND INVESTIGATIONS-FBR, KARACH and 2 others Case No.: Customs Appeals Nos.K-3138 and 3139 of 2013 Date of Judgment:2014-06-30 Reported As: 2016 PTD (Trib.) 107 Result: Order accordingly Judgment ORDER ADNAN AHMED, MEMBER (JUDICIAL-II).-Through this common order, I intend to dispose off Rectification Applications against the order dated 16.12.2013 in Customs Appeal No. K-3138/2013'& K- 3139/2012 dated 16-12.2013 filed under section 194-B(2) of the Customs Act, 1969 of the Tribunal against Order-in-Appeal Nos.8350 & 8351 dated 2.12.2013 by the both parties, wherein respondent No.3 maintained Order-in-Original No.8/2013 dated 1.8.2013 passed by respondent No.2, based on similar facts. 2. Brief, facts of the case as stated in the impugned order are that the appellant is a CNG Filling Station and operate by the name and Styl of M/s. Qazi CNG Filling Station 2, Khastra No. 442, Near Chanab T Plaza, Gujrat, during the course of his business activities established letter of credit bearing No. ILCSGF0032/7065 dated 08.04.2012 favoring Rama Cylinder (Pvt.) Ltd., Mumbai, India for import of 200 empty high pressure seamless steel cylinder for CNG Storage with valves and bull- nose connectors @ US$. 200/C&F Karachi against proforma Invoice No. QCFS/RCL/001/12-13 (REV-2) to his clearing agent M/s. Shameel Enterprises, Karachi for filing good declaration under the regime of One Customs under Section 79(1) of the Customs Act, 1969 through module of "One Customs". Who accordingly transmitted the same to PRAL which accepted the declaration and allotted GD No.KAPR-HC-125916-11052012. The GD was referred for examination under section 198 of the Customs Act, 1969, the officer who conducted the examination, found the goods as,per declaration, consequent to which assessm ent was completed by the assessing officer under section 80 of the Customs Act, 1969, after payment of leviable duty and taxes the Principal Appraiser allowed the release of the goods under section 83 of the Customs Act, 1969. When the appellant clearing agent
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approached for delivery, he was confronted with the facts that the officer of respondent No. 1 has put an hold on the pretext that imported CNG Cylinder for storage in CNG Station are banned under S.R.O. 84(1)/2012 dated 01.12.2012. On the strength of the said opinion, they framed contravention report and forwarded to respondent No. 2. 3. The respondent No. 2 on the strength of contravention report issued show cause notice dated 06.02.2013 to the appellant, stating interalia that he in collusion with his clearing agent are involved in import of CNG Cylinder of PCT heading 7311.0010 from India despite imposition of banned on imposed thereof vide S.R.O. 84(1)/2012 dated 01.02.2012 and tried to clear that through good declaration No. KAPR-HC-125916 dated 11.05.2012. This act amounts to violation of the respective Section of Import and Export (Control) Act, 1950 Section 32 of the Customs Act, 1969 and notification dated 01.02.2012 , resultant, the appellant his clearing agent and freight forwarder are called upon to show cause as to why penal action should not be taken against them for violation of above mentioned provision of law, which was replied by the appellant which failed to impressed the respondent and he passed order dated 01.08.2013 ordering confiscation of the goods and imposing penalty of Rs.500,000.00 , paras 8 and 9 are relevant and produced here-in-below: "8. Since the stipulated period of 120 days for finalizing the adjudication proceedings as mentioned vide para 179(3) of the Customs Act, 1969 was going to expire 06.06.2013, the competent authority in exercise of the power vested under section 179(3) of the Customs Act, 1969 granted extension of 60 days vide order dated 18.05.2013." "9: I have gone through the record of the case and given due consideration to the submission made by the respondents and the departmental representative. It is established beyond any doubt that the above mentioned consignment of CNG cylinders were actually brought in the country during May, 2012 i.e. 5 months after the van imported by .The Federal Government on the import of CNG cylinder and conversion kits. The joint examination conducted with the Directorate General of Intelligence and Investigation also revealed that the imported goods were actually manufactured in March 2012. Since, the L/C bearing No. II.CSGF0032/07065 dated 18.04.2012 and the bill of lading is issued on 02.05.2012, neither of the two documents is issued prior the cut-off date of 15.123.2011(sic). Therefore, it is established beyond any shadow doubt that the importers deliberately and brazenly imported the impugned consignment despite the moitorium placed by the Federal Government in full connivance of the clearing agent and the freight forwarder, who appears to have put caution to the wind and assisted in the import/ clearance of banned item without exercising due diligence for the aforesaid, reason and provisions of law mentioned in the show cause, I hereby order for outright confiscation of the impugned goods for being imported in violation of the prevalent law. For their role in circumventing the policy of the same and hoodwinking customs, the importer (M/s. Qazi CNG Filling. Station-2, Gujrat), the clearing agent (M/s. Shameel Enterprises CHAL No. 20980 and the freight forwarders M/s. International Cargo Management (Pvt) Ltd, Karachi are also directed to pay a personal penalty of Rs. 500,000.00 each within ten days of the issuance of this notice, failing to which recovery proceeding shall be initiated against all above named respondent under section 202 of the Customs Act, 1969 read with Customs (Recovery)/(Licensing) Rules 2001, which shall also include suspension of the NTN/License of all the three respondent for future transaction till the liability is recovered." 4. The order was challenged before Respondent No.3 who also vide his order dated 02.12.2013 rejected the 'appeal by observing in paras 7 to 9 that:- "7. I have very consciously examined the bona-fide of the case. The moot point in this is that whether CNG Storage Cylinders attracts the mischief of S.R.O. 84(1)/2012 dated 01.02.2012 or otherwise in this regard it cannot be denied that the learne, counsel for the appellants has put up a well structured memo. Appeal. It is also apparent that he has not only challenged the legality of the contravention made in this case but has also stressed that the issuance of show cause notice and
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the Order-in-Original are also without any legal foundation. The learned counsel has also tried to convince this forum that the import CNG Cylinders do not attract the mischief of S.R.O. 84(1)/2012 dated 01.02.2012. He firmly hold the opinion that the said notification was issued by the Ministry of Commerce only to ban the imports of the CNG Storage Cylinders and Kits for used in vehicles and neither there is any mention of banning the CNG Cylinders for used in CNG Stations in the notification. He has given citation of various judgments of the Superior Courts to stress his aforesaid view point particularly a judgment of Hon'ble Sindh High Court given in the favour of a party who had imported CNG Cylinders. 8. On the other-side the respondent's intention are equally clear they have focused on the moot point involved in the case and astutely challenged the respondent view point by stating that the notification S.R.O. 84(1)/2012 dated 01.02.2012 was issued by the Ministry of Commerce (MOC), however, a plain reading of the notification makes it crystal clear that the ban applies to all kinds of CNG Cylinders, including CNG Storage Cylinders in any case the only exemption made by the Ministry is quite evident i.e. Further more the aforesaid ban shall not apply on the CNG fitted public transport vehicles i.e. Buses and vans." The FBR totally endorse the respondent said view and has explicitly stated in its clarification dated 13.08.2013 that "As confirmed by Ministry of Petroleum and natural resources the ban imposed vide S.R.O. 84(1)/2012 dated 01.02.2012 shall also be applied-to CNG Storage cylinders that are meant for installation at CNG Stations:. As regards the judgment of the Hon'ble High Court of Sindh on the issue the department/respondent have stated that:- "The judgment 05-03-2013 of the Hon'ble High Court of Sindh passed in C.P. No. D-4320 filed by Pakistan CNG Station is disputed and has been challenged by the department through filing of C.P.L.A. No. 228-K/2013 which is pending before the Hon'ble Supreme Court of Pakistan for hearing and final decision." "9 Going through the argument raised by the rivals I am of the opinion that the stance adopted by the respondent appears to be more rational since evidently the Government's stance regarding the consumption of CNG by the gas Station is very clear to all concerned as has already been announced that stringent measures would be adopted to limit the use of CNG in the winter months. Thus , logically if the CNG cylinders and its kit for vehicles are banned then why CNG Storage cylinder for used in the CNG Stations should be allowed? Accordingly, in my view the said stance taken by the MO Commerce the FBR and the MO Petroleum natural Resources reflects the aforesaid decision of the Federal Government. Therefore, the Order-in-Original No.8/2013 dated 01.08.2013 is upheld and the appeal is not accepted." "10 This order shall apply mutatis mutandis to another appeal bearing No. Cus/5598/2013/DIT filed by the M/s. Shameel Enterprises involving the same fact, circumstances and points of law. "5. The appellant M/s. Qazi CNG has challenged the orders of the forum below by way of Appeal No. 3138/2013. Mr. Obayd Mirza/ Nadeem Ahmed Mirza (Advocates/Consultants) on behalf of the appellant and reiterated the arguments incorporated in the memo of the appeal and emphasized that:-- (i) The respondent No. 1 has no power under Sections 16, 32, 79, 80, 83 and 195 of the Customs Act, 1969 under notification No. 486(1)/2007 issued by the Board delegating the powers to the officers of DGI&I-FBR. Intercepting consignment after clearance on the pretext of importability by the officials of DGI&I suffer from lack of jurisdiction and power, rendering their act as transgression to the vested powers. In these circumstances the impugned contravention report and show cause notice and all the subsequent proceeding there on deems to be illegal and void. No body is allowed to act beyond his jurisdiction and all the acts or deeds beyond the scope of jurisdiction are null and void in the eyes of law. Reliance is placed on the reported judgments 2002 PTD 2457, PLD 1971 Supreme Court 61, PLD 1973 Supreme Court 236, PLD 1964 SC 536, 2001 SCMR 838 and 2003 SCMR 1505, In PLD 1996 Karachi 68, 2006 PTD 978 and PLD 1971 Supreme Court 184.
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(ii) That it is of great importance for the appellant to state that the show cause notice in the instant case has been issued by respondent No. 2 on the basis of absurd opinion formed by the official of respondent No. 1, instead of examining himself t facts of the case and provision of the Act and Rules a Regulation, uninfluenced and independently, which he failed exercise as evident that the show cause notice and order original are without power/jurisdiction and based on in interpretation of the statute, further stood validated from the contents of show cause notice, which is silent in regards to collusion or connivance of the appellant. This lapse resulted in grave injustice to appellant and stood validated from the reported judgment 2004 PTD 369 issued by the High Court of Sindh in the case of Messrs Zeb Traders v. Federation of Pakistan. Their lordship of the High Court held that: "The proceeding before Adjudicating Officer, under the Customs Act, 1969 are in the nature of quasi judicial proceedings and issuance of notice under section 180 of the Customs Act, is very important documents, The decision to issue show cause notice is to be taken by the Collector, Adjudication, by application of independent mind and not merely signing the draft show cause notice submitted by the investigation agency separate from the Adjudication Department and each category of officers are required to perform their respective functions/duties under the law. The practice to submit draft show cause notice by the Director General of Intelligence and Investigation to the Collector Adjudication is depreciated." (iii) That neither the officials of respondent No. 1 are empowered to complete assessment of an imported consignment under Section 80 of the Customs Act, 1969 while laying hands on the matter of assessm ent under the Notification No. 84(1)/2012 dated 01.02.2012 they tried to complete the assessm ent under Section 80 of the Customs Act, 1969 as evident from the contravention report received by respondent No. 2, on the strength of which the impugned show cause notice was issued to the appellant is an act of transgression, rendering the contravention report and the impugned show cause notice abinito and passed order-in-original ab-inito , null and void on this count also as held by the Hon'ble High Court of Sindh in unreported judgment in C.P's. Nos.D- 568/2010 Shakeel Ahmed v. FOP and D-710 to 714/2010 M/s. Jamal Din and others v. FOP and 2 others. That the show cause notice in the case of appellant has been issued by the respondent No.2, Inspite of the fact that the amounts of duty and taxes in the instant case are Rs.939,956.00, attracting jurisdiction of Assistant Collector of Customs Under Section 179(1) of the Customs Act, 1969. Nobody is allowed to usurp the powers of their subordinates as held by Superior Judicial Fora in umpteenth reported judgment. 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 held that "Superior authority cannot exercise the power of his subordinates for adjudication purpose powers of sub-ordinate exercise by superior authority is held as without jurisdiction beside usurpation". (iv) That as per settled dictum, the authority empowered under the statute has to proceed in the matter instead of respondent No.2 because it is settled elementary principle of law that action of executive functionaries are to be restricted to specific sphere permitted by the statute, rendering the show cause notice and Order-in-Original as ab-initio and void. The opinion oftenly adopted by the customs official that section 4 of the Customs Act, 1969 empowered the Senior officer to exercise the power of his subordinate, is not valid instead based on inapt interpretation of the statute, if for the sake of arguments the said opinion as valid, it will render the provision of section 179 of the Act as redundant. Also the consequent result would be a total anarchy where the superior officers would be making all efforts to exercise the adjudication powers clearly conferred by law upon their subordinates. The powers of adjudication are specific and empowered by the statute. It is an elementary principle of law that where there is a conflict between special and general provision of law, the special provision shall prevails (reference is invited to the case of Lt. General (Retd) Shah Rafi Alam v. Lahore Race Club, (2004 CLD 1546). The power of adjudication, as already observed is special in nature. This cannot be eclipsed by any other general provision. Even
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otherwise there is another settled principal of interpretation of statute i.e. That the courts can supply construction with a view to avoiding absurdity (reference is invited to the case of Khalid Qureshi v. UBL (2001 SCMR 103). Equally it must be kept in mind that if it is held that sections 4 and 179 occupy the same fields, there is' likely to be redundancy in respect of powers conferred under section 179. The Supreme Court in the case of East West Steamship v. Queen Land Insurance PLD 1963 SC 663 has been pleased to hold that redundancy is to be avoided in respect of any provision of the statute. There is also plethora of case law on the point that where there is a conflict between two provision of the statutes, the later provision prevails and has to be given precedents (reference is invited to the case of Sahibzada Sharfuddin v. Town Committee, 1984 CLC 1517 Apart from this law favour actions of the authorities to b confined to their own spheres of jurisdiction conferred by statute. An action taken by a state functionary beyond the amb, of his jurisdiction is nullity. In this respect the judgment reported as Abida Rashid v. Secretary, Government of Sindh PLD 1995 Kar. 587 is referred. Their lordship observed as under:- "It is trite law that power vested in an authority should only be exercised by that authority, in default whereof, the exercise of power and authority becomes without jurisdiction, illegal, void, ab-initio and of no legal effect. The term "without jurisdiction" has been judicially interpreted to include usurpation of power warranted by law (the Chief Settlement Commissioner Lahore v. Raja Muhammad Fazil Khan and others PLD 1975 @ p.339) an act done which the person doing, it has no jurisdiction at all to do or which was clearly outside the scope of his activities (The State v Zia- urRehman PLD 1973 SC 49) and a judgment or order delivered by a court or a judicial or a quasi judicial authority not competent to deliver it (Muhammad Saleh & others v. M/s. United Grain and Fooder Agencies PLD 1964 HC 97) . The Constitution jurisdiction can thus be exercise when it is shown that the order is passed without jurisdiction or in excess of jurisdiction. As observed earlier the respondent No. 1 has no jurisdiction to pass the impugned order. As such we declare the same to be of no legal effect. Accordingly, we allow this petition but leave the parties to bear their own cost". (vi) That while dealing with the powers of adjudication, it is needless to observe, that our Supreme Court has also jealously guarded the same. In Assistant Director v. B.R. Herman Mohata Ltd. PLD 1992 SC 485 a full Bench of Supreme Court was pleased to observe that section 223 of the Customs Act, 1969 could not be employed so as to interfere with the judicial or quasi judicial functionaries. It was clearly observed that the power of the CBR as to prescribed guideline were not relevant for the exercise of judicial function. To similar effect is the judgment of Supreme Court reported as Central Insurance v. CBR 1993 SCMR 1232. In this case the CBR issued direction for the reopening of Income tax Assessm ent under section 65 of the Income Tax Ordinance, 1979. It was held by the Supreme Court that the CBR did not figure in the hierarchy of the officer provided in the statute for the purpose of assessm ent and adjudication. On the basis of this it was held that the directions of the CBR to reopen the assessm ent was without jurisdiction and the adjudication officer was directed to apply its own mind. Reliance is placed on the order of the Tribunal in S.T. Appeal No. 176/2007 M/s. Muller and Phipps Pakistan (Pvt.) Ltd. V. The Collector of Sales Tax Enforcement LTU, Karachi and 2011 PTD (Trib) 2114 Collector of Customs, Peshawar v. Collector of Customs (Appeals) Peshawar and 2011 PTD (Trib.) 2557 Messrs Wawa Garments Industries (Pvt.) Ltd. v. The Additional Collector of Customs, Export, Karachi. (vii) That it is imperative for the appellant to invite the attention of the Honorable Appellant Tribunal that where order has been made without any powers/jurisdiction, irrespective of the merit of the case, such order are coram non-judice as held by High Court of Sindh in Customs Reference No. 101 and C.M.A No.1281 of 2009 reported as 2010 PTD 465 Collector of Customs, Model Customs Collectorate v. M/s. Kapron Overseas Supplies Co., (Pvt.) Ltd. Filed on the question of law that whether passing of order without jurisdiction is a technical defect and does not render the
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proceeding as ab-inito void . The Hon'ble High Court dismissed the reference while holding that "any transgression of such jurisdiction for not being a technical defect would render entire exercise of authority to be ab-inito, void and illegal", without discussing the merit of the case, which relates to origin of imported goods and the Hon'ble High Court further held that "the exercise of jurisdiction by an authority is a mandatory requirement and its non fulfillment would entail the entire proceeding to be "coram non judice." The said defect render the show cause notice as well as Order-in-Original ab-inito, null and void by virtue of suffer of lack of power/jurisdiction. Hence coram non judice and needs to be strike down. (viii) That the show cause notice in the appellant case was issued on 06.02.2013 by the respondent No. 2 and an order under the proviso of subsection (3) of Section 179 of the Customs Act, 1969 should had been passed by the respondent No. 2 within 120 days i.e. 06.06.2013 from the date of show cause notice or within a further extended period of 60 days by the Collector of Customs, prior to lapse of initial period of 120 days after serving a notice to the person concerned and thereafter recording reasons for the extension based on "exceptional circumstances" as held by Hon'ble Supreme Court of Pakistan in reported judgment 1993 SCMR 1881 Khalid Mahmood v. Collector of Customs. The extension was granted on 18.05.2013 as evident from para 8 of the order-in-original in omni-bus manner, rendering it of no legal effect, beside it was not based on exceptional circumstances and no recording was made and neither any notice was served on the appellant. Rendering the order-in-original dated 01.08.2013 barred by time by 55 days, hence without power/jurisdiction and not enforceable as held in reported judgments 2008 PTD 60 Messrs Super Asia Muhammad Din Sons (Pvt.) Ltd. v. Collector of Sales Tax Gujranwala and 2008 PTD 578 Messrs Hanif Strawboard Factory v. Additional Collector (Adjudication) Customs, Sales Tax and ,Central Excise Gujranwala, 2009 PTD 762 Messrs Tanveer Weaving Mills v. Deputy Collector Sales Tax and 4 others and 2009 PTD (Trib.) 1263, Messrs Syed Bhai Lighting Limited, Lahore v. Collector of Sales Tax and Federal Excise, Lahore and 2 others and 2009 PTD 1978, Leo Enterprises v. President of Pakistan and others, 2010 PTD (Trib.) 1010 Innovative Impex, v. Collector of Customs, Sales Tax and Federal Excise (Appeal), 2011 PTD (Trib) 79 Fazal Ellahi v Additional Collector of Customs, MCC of PaCCS, 2011 PTD (Trib) 987 Unique Wire Industries v. Additional Collector of Customs, MCC of PaCCS, 2011 PTD (Trib.) 1146 Kaka Traders v. Additional Collector of Post Clearance Audit and 2012 PTD (Trib.) 1650 Pak Electron Ltd. v. Collector of Customs, Lahore and others. (ix) That irrespective of the above legal deficiency, it is also erroneous on the part of respondents to term the imported Storage CNG Cylinder as banned under Notification No. S.R.O. 84(1)/2012 dated 01.02.2012 (Exhibit "R"). In fact insertion made by the Ministry of Commerce in para (v) in subparagraph (A) after clause "(vii)" read ad follows: "Import of CNG Cylinders and conversion kits falling under respective PCT heading shall not be importable with immediate effect and under further orders. This banned shall however not applied on CNG Cylinders and conversion kits for whom letter of credit were established prior to 15.12.2011. Furthermore, the aforesaid banned shall not apply on CNG fitted public transport vehicle i.e. Buses and vans. " From careful examination of the said insertion is vividly clear that "the ban was imposed on CNG Cylinder and conversion kits used in motor vehicle only and not on the import of CNG Storage Cylinder used by CNG Stations". In support of his stance, it is appropriate for the appellant to add further for the sake of clarity that no other meaning can be given to the said serial number with the exception of its spirit and nothing can be added or subtracted to suits ones opinion as that amounts to redundancy, which has to be avoided. Even otherwise it is settled rule of interpretation that "in interpreting the taxing statute the customs must look to the words of the statute and interpret in the light of what is clearly expressed. It cannot imply anything which is not expressed, it cannot import provision in the statute so as to support assumed deficiency. There is no room for
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intendment. There is no equity about a tax. There is no presumption as to tax nothing is to be read in, nothing is to be implied. One only look fairly at the language used nothing else to be done" as held by High Court and Supreme Court of Pakistan in their reported judgment starting from Abbassi Steel Industries Ltd. v.…
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