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Petitioner: Messrs YOUSUF & CO. and 34 others VS Respondent: The Collector of Customs Model
Court Name: Customs Appellate Tribunal Judge(s): Abdul Jabbar Qureshi Title:Messrs YOUSUF & CO. and 34 others vs The Collector of Customs Model
JUDGMENT
Reported As: 2023 PTD (Trib.) 1019 Result: Appeals allowed Judgment JUDGMENT ABDUL JABBAR QURESHI (MEMBER JUDICIAL-I).---By this judgment, I intend to dispose of (18) Customs Appeals bearing Nos.K-824 to 841/2022, filed by the appellant against Order-in-Appeal bearing .Nos.1237 to 1254 of 2022 dated 28.02.2022 passed by the Collector, Collectorate of Customs (Appeals), Karachi under Section 193-A(3) of the Customs Act, 1969 confirming the consolidated Order-in-Original bearing Nos.01 to 18 of 2021-22 dated 15-07-2021. These appeals have identical issues on law and facts, therefore, being heard, dealt with and disposed of simultaneously through this common order in the light of the judgment of the Honorable High Court of Sindh in Customs Reference No. 157 of 2008, S.M. Naqi son of Syed Muhammad Hussain, Karachi v. Collector of Customs (Adj-1) and others. The Appellants appearing at serials Nos. 1, 3, 5, 7, 8, 10, 12, 14, 16, 18, 20, 22, 24, 26, 28, 30, 32 and 34 are Importers of goods and the Appellants appearing at serials Nos.2, 4, 6, 9, 11, 13, 15, 17, 19, 21, 23, 25, 27, 29, 31, 33 and 35 are their authorized Customs Clearing Agents, Since, the controversies/issues raised and prayers made by all the Appellants are the same, all the appeals were heard together, and I proceed to decide and dispose of all appeals by this common judgment. 2. The cases of all Appellants importers and their Customs Clearing Agents are identical nature, the brief facts of one of the identical case have been taken on record which are that the MCCA & F (East), Karachi vide its contravention report alleged that during post release audit it has been found that M/s Yousuf & Co., Karachi imported consignments of goods "2/s Coated Writing Paper in Sheets (gloss) (Nevia brand)" from China through their authorized Clearing Agent Messrs G.M. International vide GDs as tabulated in the show-cause notice dated 12-04-2021 processed and
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assessed under section 80 of Customs the Act, 1969, subsequently, the post import clearance data of PRAT- (WeBOC) reveals that goods were assessed and released under tariff heading 4810.1910 attracting 20% customs duty reduced to 16% in compliance SRO 1640(1)/2019 dated 31-12-2020 on presentation of certificates of origin issued under China-Pakistan FTA grating 4% tariff concession which were actually classifiable under tariff heading 4810.1990 being not specifically meant for "Writing" and chargeable to 20% customs duty having no tariff concession under China-Pak FTA. The classification declared on scan documents is in conformity with the classification determined by the Assessing Group, the Importer and its Clearing Agents deliberately misdeclared the tariff heading in the GD(s) and have evaded alleged duty/taxes. Accordingly, Messrs Yousuf & Co. Karachi called upon the show-cause invoking provisions of Sections 32(1)&(2), 32A and 79 of the- Customs Act, 1969 read with sections 3, 6 and 7 of the Sales Tax Act, 1990 and section 148 of the Income Tax Ordinance, 2000 for adjudication and recovery of alleged amount of duty/taxes and penal action under sections 156(1), (14), (14A) and (45) of the Customs Act, 1969 etc 3. The cases of all Appellants were adjudicated by the learned Deputy Collector, Collectorate of Customs (Adjudication-II), Karachi who passed a consolidated Order-in-Original Nos.01 to 18 of 2021-22 dated 15-07-2021 in case of M/s Yousuf & Co. Karachi applied the same mutatis mutandis to the cases of other Appellants being identical nature involving common controversies/issues against which the Appellants being aggrieved persons preferred appeals under section 193 of the Act, 1969 which were decided and disposed of by the Collector (Appeals), Karachi under section 193-A(3) of the Act, 1969 through Order-in-Appeal bearing Nos. 1237 to 1254 all of 2022 dated 28- 02-2022. The Appellants being further aggrieved with the aforesaid Orders-in-Appeal have preferred these appeals while praying to decide questions of law involved and raised in these cases on the facts of the cases and an the grounds as stated in their memorandum of appeals. The common questions of law and grounds of an identical appeal are reproduced below:- QUESTIONS OF LAW INVOLVED AND PRAYED TO BE DECIDED IN THIS CASE:-- 1. Whether in the facts and circumstances of the case the provisions of Sections 32(1)&(2) and 32A of the Customs Act, 1969 have been invoked in accordance with the law in the impugned show- cause notice for retrospective application of tariff heading 4810.1990 subsequently determined through an opinion given on 26-03-2021 by the Committee of Board having administrative functions on past consignments of subject goods already cleared being out-of-charged under section 80 of the Act, 1969? 2. Whether in the facts and circumstances of the case the tariff headings 4810.1910 and 4810.1990 have been correctly interpreted by the Collector of Customs (Appeals) for classification of subject goods under tariff heading 4810.1990 instead of 4810.1910 for levy and demand of duty/taxes in view of the judicial decisions/judgments of this Tribunal dated 27-11-2021 and 13-10-2021 having binding effect being passed in identical cases involving same issues/controversies as relied upon by the Appellants through statement dated 15-02-2022? 3. Whether the impugned Order-in-Appeal has been passed against the law of precedent and in violation of Article 25 of the Constitution, 1973 in terms of judicial decisions/judgments of this Tribunal dated 27-11-2021 and 13-10-2021 relied upon by the Appellants as being covered case? 4. Whether the impugned Order-in-Appeal and Order-in-Original are based on misreading and non-reading of facts, documents including statement dated 15-02-2022 and applicable law? GROUNDS OF APPEAL:- A. That the contravention report pursuant to which the show-cause notice has been issued is arbitrary and illegal which is in defiance of Para-74 of CGO 12/2002 dated 15-06-2002 issued under section 223 of the Customs Act, 1969 having binding effect under which subsequent determination of classification based on administrative interpretation of tariff headings 4810.1910 cannot be applied retrospectively on the subject consignments of goods already cleared by the Customs
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without any objection of classification under section 80 of the Act, 1969. Reliance is made on reported judgments of High Court of Sindh, Karachi passed in case of Muhammad Waheed reported in 2016 PTD 35 as well as 2016 PTD 2910. B. That contravention report and the show-cause notice issued thereon are illegal which are in defiance of common judgments passed by the Honorable Sindh High Court, Karachi cited in 2021 PTD 1430 and 2016 PTD 2910 having binding effect, wherein, it has already been held by the Court that subsequent determination of classification could only be applicable after issuance of public notice having no retrospective effect on consignments already cleared by the Customs without any objection of classification under section 80 of the Act, 1969. C. That the show-cause notice is a foundational document for assumption of jurisdiction under the statutory provisions of Sections 32(1)&(2) and 32A of the Act, 1969, wherein, allegations of forgery, fraud, filing of any forged document knowingly and fraudulently by the Appellants or the allegation that Appellants had succeeded in evading alleged duty and taxes due to the collusion with Appraising Officer(s) are not framed, even the Department itself made admission of fact in the show-cause notice at para 4 that "classification i.e. 4810.1910 declared on scanned documents is in conformity with the classification determined by the assessing Group", hence, the mandatory requirement of statutory provision(s) has been not fulfilled in this case while invoking aforesaid provisions which entailed the entire proceedings being corum non judice and rendered the entire exercise of the Authorities below being ab initio void, illegal and without jurisdiction. Reliance is made on 2011 SCMR 1279 = 2011 PTD 2220; 2010 PTD 1216 and 2013 PTD (Trib.) 600. D. The impugned order and not sustainable in law as per dictum laid down by the apex Courts that "provisions of section 32 not invokable for framing charge of misdeclaration in the matters of interpretation of statutory provision i.e. tariff headings being part of First Schedule to the Customs Act, 1969". Relied upon common judgment of the Honorable Sindh High Court, Karachi cited in 2021 PTD 1430. E. That the impugned order-in-appeal has been discriminatorily passed against the law of precedent by the Collector of Customs (Appeals) who with the male fide intention has neither considered the statement filed during hearing on 15-02-2022 nor followed the judgments/orders of this Tribunal dated 27-11-2021 and 13-10-2021 passed in identical cases/appeals having binding effect, wherein, the question of law No.1 involved and raised in this case has already been adjudicated and decided in favour of the importers. F. That the Authorities below while passing impugned orders mala fidely ignored and made defiance of referred judgments of High Court of Sindh, Karachi passed in two identical cases 2021 PTD 1430 and 2016 PTD 2910 having similar controversy of application of classification of goods subsequently determined after customs clearance of goods, the Honorable Court has already held in its judgments passed in aforesaid cases that "subsequent determination of classification could only be applicable prospectively after issuance of public notice having no retrospective effect as required to be issued under para-2 of CGO 12/2002". Therefore, the impugned orders influenced by the report/opinion of the Classification Committee of Board having adminisrative functions made subsequently on 26-03-2021 is illegal and not in accordance with the law laid down by the High Court. G. That the impugned order has been passed in arbitrary and illegal manner without considering the grounds, contentions and supporting documents submitted through written response/reply and re-joinder by the Appellant. H. That the Adjudicating Officer has passed the impugned order without giving any fact finding and in absence of any adverse material or evidence, wherein, charges enumerated in the show cause notice including criminal charge of misdeclaration of classification have been arbitrarily and illegally established against the Appellants. Therefore, the impugned order is illegal and not
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sustainable in the light of law laid down in the judgment of Honorable Supreme Court passed in case of Collector of Customs v. Pakistan State Oil reported in 2011 SCMR 1279 = 2011 PTD 2220 as well as judgment of Sindh High Court passed in case of Muhammad Waheed v. Customs Appellate Tribunal reported in 2016 PTD 35. That while passing impugned orders the Authorities below have deliberately not appreciated that contravention case of misdeclaration of classification has been made after departmental practice of classification, assessm ent and customs clearance of More than 250 consignments of identical goods under HS Code 4810.1910 which was based on lab test reports and departmental interpretation of tariff headings. Whereas, the criminal provisions of Sections 32(1) (2) and 32A of the Customs Act, 1969 along with penal provisions of Sections 156(1)(14), (14A) and (45) invoked in this case are also in violation of para 101(5) of CGO 12/2002 dated 15-06-2002 issued under Section 223 of the Act, 1969 having binding effect on the Respondent. Therefore, the impugned order is arbitrary, illegal and not sustainable in law as the Hon'ble High Court Sindh in the case of Messrs Sadat Khan v. FOP and others reported at 2014 PTD 1615 has already held that "it is settled proposition of law that an interpretation of a notification as well as the classification of the goods does not fall within the definition of mis-declaration". J. That the consignments of goods were imported from china having description "Two Side Coated Writing Paper" covered under SRO 1640W/2019 issued under Pak-China FTA supported with the uncontroverted certificates of origin issued by the. designated Government Authority of China, wherein, the HS Code 4810.19 and national HS Code 4810.1910 in respect of subject goods have been specifically mentioned for classification and the same were declared by the Appellants while filing goods declarations under section 79 of the Act, 1969 which were checked under section 80 of the Act, 1969 by the Customs who issued Assessment Orders after satisfaction that imported goods classifiable under HS Code 4810.1910, hence, there was no any misdeclaration of classification made by the Appellant. K. That while passing impugned orders the Authorities below have not considered the facts apparent on record that no any import document i.e. invoice and certificate of origin contained HS Code 4810.1910 submitted before the Department at the time of. filing of GDs have been controverted instead there is an admission of fact on part of the Customs mentioned in the show- cause notice that "the classification declared on the scanned documents is in conformity with the classification determined by the Assessing Group". Hence, the impugned orders establishing charge of misdeclaration against the Appellants are prima facie illegal and arbitrary. L. That in the impugned orders the Authorities below have not applied their independent judicious mind who mis-interpreted the Rule 3 of the General Rules of Interpretation of Harmonized System under which the subject goods are/were classifiable under HS Code 4810.1910 reference can be drawn from the consignments of identical goods of Japan origin having declared description "Both Side Coated Paper" assessed and cleared by the Customs under HS Code 4810.1910. M. That the Collector of Customs (Appeals) has acted contemptuously and illegally in this case who intentionally has neither mentioned the statement of the counsel of the Appellants filed during the hearing fixed on 15-02-2022 through which both judicial decisions/judgments dated 27-11-2021 and 13-10-2021 passed in identical cases/appeals by this Tribunal were submitted as precedent while contending that this case is fully covered with these judicial decisions/judgments having binding effect against which no supervening order of High Court is operating nor any finding has been given thereon to distinguish the same as precedent under Article 25 of the Constitution, 1973 in its order-in-appeal dated 28-02-22 passed contemptuously against the law of precedent as well as rule-of consistency. N. That the classification of goods is the mixed question of law and facts relating to interpretation of statutory provisions i.e. tariff headings being part of First Schedule to the Customs Act, 1969
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which in this case has already been decided by this Tribunal in its judicial decisions/judgments dated 27-11-2021 and 13-10-2021 passed while discharging judicial functions entrusted under the Customs Act, 1969 being a Court as per dicta laid down by the Hon'ble High Court in its judgments cited in 2000 YLR 2724 and PLD 2020 Sindh 284, hence, the impugned orders and baseless findings given therein are not sustainable and illegal after such judicial decisions/judgments assumed status in rem which have been made on finding of facts after considering the relevant law and rules by this Tribunal being final fact finding Authority in the hierarchy of the Customs Act, 1969. Reliance is made on judgment of Hon'ble Supreme Court of Pakistan cited in 2020 SCMR 649. O. That the findings of facts recorded by this Tribunal generally in its judicial decisions/judgments dated 27-11-2021 and 13-10-2021 have attained finality on the ground that neither question of law has been raised by the Department in its SCRAs 38/2022 and 137/2021 challenging such findings of facts of the Tribunal as being not supported by any evidence or being perverse nor any supervening order is available with the Department suspending such findings and judicial decisions/judgments must required to be followed by the Collector of Customs (Appeals) haying binding effect. Reliance is made on judgment in rem of Supreme Court dated 03-02-2022 passed in 2022 SCMR 1082 = 2022 PTD 1079 [C1R v. M/s. Sargodha Spinning Mills (Pvt.) Ltd.]. P. That as per dicta laid down by the Hon' able Supreme Court of Pakistan in its judgment cited in 2020 SCMR 649 and in terms of mandatory direction of the Board already given in Para 2(ix)(a) of the CGO 12/2002 dated 15-06-2002 the opinion/report of Board's Committee, Public Notice No.01/2021 dated 27-11-2021 and the interpretation of such tariff headings made by any Authority below have become invalid after judicial decisions/judgments dated 27-11-2021 and 13-10-2021 contained judicial interpretation of tariff headings 4810.1910 and 4810.1990 made by this Tribunal while discharging judicial functions entrusted under the Customs Act, 1969 being a Court and final fact finding authority. Q. That while passing impugned orders the Authorities below have intentionally ignored the fact apparent from the 'perusal of case file of a consignment of identical goods having GD No. KAPB- HC-63174 dated 17-10-2020 of M/s. Salman Paper Products (Pvt.) Ltd., Karachi who is the Appellant in the judicial decision/judgment dated 27-11-2021 of this Tribunal that certain observations have been given by the concerned officers of the Respondent Department who were/are of the view that "since the Board has created a separate heading ' i.e. 4810.1910), it is construed that 2/side coated paper' for writing purpose also exists, which could have other uses as well, accordingly, it is proposed that, we may release the goods on the strength of manufacturer certificate that the impugned goods are writing paper and keeping in view past practice of classification". Such observations of the Respondent's own officer prima facie establishing the case of the Appellants regarding interpretation of tariff heading 4810.1910 and classification of subject goods thereon. Moreover, there is no material evidence available on record to establish as to why the Board has created separate tariff heading 4810.1910 for writing paper, evidently this fact was never controverted by the Respondent before Authorities below who have acted arbitrarily while passing impugned orders. Reference made to the para-22 of the judgment of this Tribunal dated 27-11-2021 passed in referred identical case/appeal. R. That while passing impugned orders the Authorities below have not appreciated and considered the fact that tariff heading 48.10 has two kinds of goods one is coated paper and the other is coated paperboard, whereas, the coated paper of a kind if usable for writing is classifiable under tariff heading 4810.1910 and the coated paperboard or any other coated paper not usable for writing are classifiable under residual, tariff heading 4810.1990. S. That the facts and circumstance of this case as well as the issues involved are identical to the cases already adjudicated and decided by this Tribunal vide judicial decisions/judgments dated 27-11-2021 and 13-10-2021 which have binding effect in terms of Article 25 of the Constitution, 1973,
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rule of consistency and law of precedent, therefore, the case of the Appellants being covered case would require similar treatment and disposal particularly to the extent of issue/controversy of classification of subject goods under tariff heading 4810.1910 which has already decided in favor of the importers of identical goods of same brand and origin. T. That the impugned Order-in-Appeal is illegal and against the dicta laid down by the Honorable High Court Peshawar in its judgment cited in 2006 CLC 1555, wherein, it has been categorically held that "When either a law is interpreted, or a principle of taw is expounded, or certain facts are generally declared covered by some law or by some principle of law, justice or equity, these judgments, to the extent of above, become judgment in-rem also, and all the similarly placed persons become entitled to the benefit of the same". As in this case, the issues/controversies involved are have already adjudicated and decided by this Tribunal in judicial decisions/judgments dated 27-11-2021 and 13-10-2021 having binding effect passed in identical cases involving same issues/controversies including classification of subject goods identical in nature relating to interpretation of tariff heading 4810. 1910 and 4810.1990. U. That the contravention case and show-cause notice are being confronted to the extent of Appellant No.2 on the ground that the Customs Agent while doing Customs business in normal course of his business filed goods declarations based upon documents and information provided by the Appellant No.1 who could not be held to be a privy to any illegal arrangement which the Appellant No.1 might have advised or had in his mind, and where it is not established that the Customs Agent was directly or indirectly beneficiary of evasion of taxes through material evidence it could not be hold, that Customs Agent liable for the act of commissions or omissions on part of the Appellant No.1 for which he could not be punished with penalties. In the instant case neither any material evidence has been placed on record establishing the allegation of criminal charge of misdeclaration of classification against the Appellant No.2 nor he is liable to be punish with penalty imposed on him in the impugned order illegally. Reliance is made on judgment of Lahore High Court in case of Ports Ways Customs House Agents v. Collector of Customs reported in 2002 YLR 2651. V. That the findings of facts given by the Authorities below are not supported any cogent evidences or material which are perverse and not sustainable and the same are also erroneous and structured on non-reading and mis-reading of facts, documents and relevant law particularly the statement of the Counsel of the Appellants filed on 15-02-2022, but, intentionally concealed and not considered in the impugned Order-in-appeal. W. That the grounds of the Appellants advanced before the Authorities below in writing and otherwise shall be read and considered as part of this appeal while deciding the case of the Appellants. X. That the appeal is being filed within the period of limitation provided under Section 194-A of the Act, 1969. Y. The prescribed Appeal fee has been deposited. Z. The Appellant craves permission to submit any documents, raise or urge further grounds at the time of hearing of the case. 4. That the Respondent Department supported impugned Orders-in-Appeal and Order-in-Original and filed pars-wise comments through Assistant Collector of Customs (Group-III), Collectorate of Customs Appraisement (East), Karachi which have been taken on record, copies supplied to Counsel of the Appellants to go through the same. The Counsel of the Appellants contended that the main controversy of classification of imported goods relating to the judicial interpretation of tariff headings 4810.1910 and 4810.1990 and allegation of misdeclaration involved in all these cases of identical nature have already been adjudicated and decided ,by the Single and Division Benches of this Tribunal in judgments dated 13-10-2021 and 27-11-2021 passed in identical appeals bearing
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Nos.K-7418/2021 and K-7417/2021 against which no supervening or stay order have been passed by any Court having jurisdiction. The Counsel prayed that the cases of the Appellants being identical in nature are fully covered with the aforesaid judgments already delivered by this Tribunal on the common controversy of classification of identical goods imported by all the Appellants and the allegation of misdeclaration also involved in these cases of the Appellants would be decided and disposed of in similar terms as per rule of consistency as well as rule of equal protection of law in terms of Article 25 of the Constitution of Pakistan, 1973 who made reliance on Lahore High Court's judgment cited in 2001 CLC 385 and 2007 PTD 671. The Counsel of the Appellants further contended that order dated 16-09-2021 passed by the Honorable High Court of Sindh, Karachi in C. P. No D- 5578/2021 [Messrs Bilal Traders v. Federation of Pakistan and others] has been set aside by the Honorable Supreme Court of Pakistan vide order dated 13-04-2022 passed in Civil Petition No.5489/2021. The Counsel while making reliance on order dated 0302-2022 passed by the three members Bench of Honorable Supreme Court of Pakistan in 2022 SCMR 1082 = 2022 PTD 1079 [CIR v. Messrs Sargodha Spinning Mills (Pvt.) Ltd.] finally contended that the Honorable Supreme Court already held that the…
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