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Petitioner: M/S. Khyber Tea And Foods Company VS Respondent: The Collector Customs,Peshawar
Court Name: Customs, Excise and Sales Tax Appellate Tribunal Judge(s): Gulab Shah Afridi Title:M/S. Khyber Tea And Foods Company vs The Collector Customs,Peshawar
JUDGMENT
Reported As: PTCL 2013 CL. 256 Result: Disposed of accordingly Judgment JUDGMENT: MR. GULAB SHAH AFRIDI, MEMBER (JUDICIAL).-- (1). This appeal filed by M/s. Khyber Tea and Foods Company, Peshawar is against the Order-in-Appeal No. 35/2012 dated 31.01.2012, passed by the learned Collector Customs (Appeals), Peshawar, whereby he while maintaining the Order-in- Original No. 59 of 2011 dated 17.03.2011, dismissed the appeal. 2. Brief facts of the case as reported by the Deputy Superintendent, Intelligence and Investigation - FBR Regional Office, Peshawar are that on 24.11.2009, on prior Information a Mazda Mini Truck bearing Registration No. LES-2924-Lahore, loaded with foreign origin Black Tea was stopped near the Motor- Way Toll Plaza, Peshawar. On demand, the occupants of the vehicle could not produce any proof of legal import/lawful possession of the tea loaded on the Truck for detailed examination, the truck was brought to the office of Customs Intelligence, Peshawar, where thorough search led to the recovery of 118 bags of foreign origin black tea. Meanwhile one Amir Wahab S/O Abdul claimed ownership of the recovered goods/tea by producing photo copies of GDs No. CRN, IHC 944948, 210309 dated 21.03.2009 alongwith Invoice No. l2 dated 23.11.2009. On scrutiny however, it was found that the black tea mentioned in the produced GDs did not tally with the recovered black tea. Hence notice under Section 17 read with Section 26 of the Customs Act, 1969 was served upon the owner of goods to produce attested copies of the GDs, Packing Lists, Invoice etc, alongwith details of the stock register and Sale/Supply Register of the Importer alongwith attested copies of Sales Tax Return etc for the relevant month i.e October/November, 2009. He was also directed to submit details of the Supply Register of M/s. Khyber Tea up to 26.11.2009 in order to establish the chain of transactions from the time of import to final supply. The owner of the goods however failed
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to produce the requisite documents on the stipulated date except a copy of the supply Register of M/s. Khyber Tea. The goods were thus seized under Section 168 of the Customs Act, 1969 for violation of Sections 2(s) & I6 of the Act ibid read with Section 3(1) of the Imports & Exports (Control) Act, 1950. The Mazda Mini Truck bearing registration No. LES-2924/Lahore used for transportation of the aforesaid smuggled tea was also seized under Section 157 of the Customs Act, 1969. 3. Subsequently, after completion of the requisite formalities, the matter was placed before the Additional Collector - II, Customs Peshawar, who vide Order-in-Original No. 59 of 2011 dated 17.03.2011 confiscated the goods. However, released the vehicle against 20% Bank Guarantee. 4. Aggrieved of the Order-in-Original No. 59 of 2011 dated 17.03.2011, the appellant filed appeal before the Collector Customs (Appeals), Peshawar, who vide Order-in-Appeal No. 35 of 2012 dated 31.01.2012 dismissed the appeal. Hence the instant appeal on the following grounds:- i. That, the impugned order in original No. 59/2011 dated 17-03-2011 as well as order in appeal No. 35/2012 dated 31.1.2012 are against the law, facts and evidence available on record. Ii. That, the seized confiscated goods have lawfully been imported, legitimately purchased and bonafidely transported. Iii. That, our above contention that the seized/ confiscated goods were lawfully imported and bonafidely possessed is supported by the findings of the adjudicating authority embodied in the impugned order in original No. 59 of 2011 dated 17.3.2011 as mentioned in sub-para (i) of para 13 thereof which reads as follows; "the respondent's claim of purchase of 10000 kgs black tea against valid sales tax invoice No. 196 dated 10.11.2009 from M/s. SPATCO Karachi is proved/supported by the summary of domestic sales of M/s. SPATCO Karachi for the month of November, 2009 as retrieved from the electronic system of FBR and now available on case file". Iv. That, seized/confiscated goods were legitimately transacted in terms of section 73 of the Sales Tax Act, 1990. v. That, our above contention that the seized/ confiscated goods were legitimately transacted is supported by the findings of the Adjudicating Authority embodied in sub-para (ii) of the above referred order in original which reads as follows; "The respondent also furnished proof of payment (regarding fulfillment of the mandatory condition of section 73 of the Sales Tax Act, 1990) in the shape of MCB reference CYP/GEN dated 8.2.2010 wherein the following transactions have been confirmed; S #Cheque No. & DateAmount of ChequeCheque used in favor of 1 899480 dt: 14.12.2009Rs. 12,00,000/-M/s. SP ATCO Karachi A/C # 10152-6 2 899488 dt: 02.01.2010Rs.10,10,000/- -do- 3 899489 dt: 05.01.2010Rs.13,00,000/- -do- "The prosecution on the other hand never termed this proof to be fake/forged etc". Vi. That, Sales Tax Invoices so produced by the Appellant were never proved by the prosecution as untrue, false or fabricated. Vii. That, our above contention that the sales tax invoices were never found false, fabricated or untrue is supported by the findings of the Adjudicating Authority embodied in sub-para (iii) of the impugned order in original No. 59 of 2011 which reads as follows; "In so far as the issue of initially sales tax invoice No. 176 dated 20.10.2009 is concerned, the same was also found to be genuine because the summary of the supplier for the tax month/period of
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October, 2009 retrieved from the online data available at the electronic filling of FBR confirmed the purchases made by the respondent from M/s. SPATCO Karachi as per the following details; Sales T ax Invoice No. & Date Value 176 dated 20.10.2009 Rs. 2274461.00 140 dated 02/10/2009 Rs. 1 118803.00 TOTAL Rs. 3393264.00 viii. That, on prosecution as well as respondent No. 2 have failed to establish the case against the appellants whereas on the other hand the appellants have sufficiently proved their case that the seized/confiscated goods were lawfully imported and bonafidely possessed. Ix. That, our above contention that our case was substantially proved is supported by the findings of the adjudicating authority as contained in para-14 of the impugned order in original No. 59 of 2011 which reads as follows: "On the fact of it, all the above discussion and references seemingly point to the legality of the seized tea. The contention of the respondent i.e. Purchase of tea from M/s. SPATCO Karachi is supported by sales tax invoice, purchase register, electronic filling system of FBR as well as proof of payment and proof of purchase of Bardana from Haji Didar Gul Bardana Merchant. The prosecution on the other hand, has prima facie failed to effectively negate these documentary evidences provided/indicated by the respondent. The prosecution has seemingly relied entirely and solely on the report of M/s. Munir Goods Transport Company wherein the said Goods Transport Company has denied issuance of bilty No. 2205 dated 10.11.2009, but even in this connection, the respondent brought on record the decision of the jirga regarding the dispute between the respondent and the transport company". x. That, the provisions of section 2(s) of the Customs Act, 1969 are not applicable in this case because; a. The seized goods have been lawfully imported and bonafidely possessed. b. The seized goods are not those goods which were imported in breach of any prohibition or restriction for the time being in force. c. The seized goods are not those on import of which any custom duties or taxes so leviable thereon were evaded. d. The seized goods though notified under a notification No. SRO 566(I)/2005 dated 6.6.2005 as amended from time to time issued under sub-clause (ii) of clause (s) of section of Customs Act, 1969 are not those goods which cannot be imported into the country. e. The seized goods are not those which were brought into the country by any route other than a route under section 9 or 10 or from any place other than a customs station as the goods so recovered/seized do not bear the remarks "in transit to Afghanistan" xi. That, the provisions of section I6 of the Customs Act 1969 are not applicable in this case because; a. The seized/confiscated goods are freely importable. b. There is no prohibition or restriction on the import of seized/confiscated goods. c. The seized/confiscated goods were supported with legal documents. Xii. That, the provisions of section 157 of the Customs Act, 1969 are not applicable in this case because; a. The owner of the vehicle was not traveling with the seized vehicle. When intercepted. b. The prosecution did not bring any evidence on record which prove any criminal link or association with the owner of the seized goods. c. The owner of the vehicle was never issued show cause notice and in absence thereof no penal or punitive action can be taken against the owner of the vehicle nor any redemption fine could be
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imposed on the vehicle. Xiii. That, the adjudication officer while passing the order in original as well as the Collector Appeals while dismissing the appeal of appellant have been failed to appreciate that the seizing officer has illegally seized the black tea. Xiv. That the adjudication officer confiscated the black tea on the ground which is not sustainable in the eye of law the adjudication officer has confiscated the black tea on the ground that the bilty produced by appellant was not verified. The appellant clarify that when the tea in question brought at Peshawar some bags of black tea were damaged therefore the appellant stopped' the payment of fare to the transport company on which the dispute arose between the appellant and transport company which was later on brought before the office bearer of Peshawar Tea Association by the management of Pak Lucky Peshawar Goods Transport Company and the driver of truck No. P-3433 and they have made an application to the Chairman of the said association. The chairman of the said association constituted a jirga for resolving the dispute between the appellant and transport company. The jirga resolved the matter by the way that the jirga deduct Rs. 5000/- from Rs. 23600/- and directed the appellant to pay Rs. 18600/- to the transport ; company at that time the jirga brought its verdict in written form. The appellant brought this fact on record by producing the copy of verdict of Jirga. Thereafter the investigation officer investigated the matter in regard with the fact that whether the consignment of appellant was arrived at Pak Lucky Goods Transport Co. Peshawar because the Munir Goods Transport Co. Karachi in its bilty No. 2205 dated 10-11-2009 mentioned the destination of 147 bags of black tea as Pak Lucky Goods Transport Co. Peshawar, whereby the clerk of Pak Lucky Goods Transport Co. Confirmed in writing this fact that the said bags of black tea were arrived at their Adda. The adjudication officer while passing order in original has totally ignored all the said facts. Now the driver namely Alama zeb of truck No. P-3433 who brought the said black tea in truck No. P-3433 to Pak Lucky Goods Transport Co. Peshawar has admitted the fact of dispute over the fare arose between the appellant and him by an affidavit. Copy of application to Peshawar Tea Association, verdict of jirga, written confirmation of Pak Lucky Goods Transport Co. Peshawar, affidavit and registration book are annexed as annexure (M-l), (M- 2), (M-3), (M-4) & (M-5). Xv. That the adjudication officer has totally ignored the confirmation of purchasing 118 pepper bags and 118 jute bags from Haji Didar Gul Safi Bardana Merchant. However the investigation officer during the course of investigation has contacted the said Bardana Merchant for confirmation of purchasing the aforesaid empty bags whereby the said Bardana Merchant confirmed in written the selling of above mentioned empty bags to appellant. Copy of written confirmation alongwith postal receipt is annexed as annexure (N-l) & (N-2). Xvi. That the appellant has successfully proved that the seized black tea is a legally imported one but the adjudication officer while passing the impugned order in original has totally ignored the documentary evidence produced by the appellant which is against the principle of justice. Xvii. That during the course of adjudication the respondents has verified the documents from the concerned quarters which become genuine but the adjudication officer while passing the order in original totally ignored the verification reports of concerned quarter however the adjudication officer has admitted in his order in original that the documents produced-by the appellant were dully verified by the concerned quarters despite this the adjudication officer deprived the appellant from the fruit of verified documents. Copy of letter for confirmation of Bank Transaction to Manager MCB by Superintendent I & I FBR Regional Office Peshawar, Confirmation Report by the Manager MCB Chowk Yadgar Branch, * Peshawar, Electronically Confirmation Report of Invoice No. 140 and 176 for the month of October, 2009 and Electronically Confirmation Report of Invoice No. 196 for the month of November, 2009 are annexed as annexure (O-l), (0-2), (0-3) & (0-4).
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Xviii. That the order in original is illegal because the Additional Collector has no jurisdiction to entertain and hear the instant case because the duty and taxes involve in the instant case is Rs. 405207/- as mentioned in the seizure report. According to Section 179(1) clause (ii) of the Customs Act, 1969 the instant case falls with in the jurisdiction of Deputy Collector. In view of admitted position of monitory limit the jurisdiction could only be exercised by the Customs officers according to language of Section 179 of the Customs Act, 1969 and no deviation could be made <5n one or any other pretext. The Additional Collector has passed the Order in Original with out having competency given U/S 179 of the Customs Act, 1969 therefore the Order in Original is illegal, unlawful and with out jurisdiction. The adjudication officer has been failed to mention the reason that why he has not decided the instant case with in the limitation provided by law. Placed reliance on 2010 PTD (Trib) 2086 + (2010 PTD 465) + (PLD-1971.SC-124) + (2009 PTD- 642) xix. That the impugned order in original is against the law because the adjudication officer has decided the instant case after expiry of the limitation provided for the decision of a case. Section 179(3) of the Customs Act, 1969 provides that the cases shall be decided with in 120 days of the issuance of show cause notice are with in such period extended by the Collector for which reasons shall be recorded in writing, but such extended period shall in no case exceed 60 days. The adjudication officer issued show cause notice on 05-1-2010, and then the original limitation for deciding the instant case ended on 05-5-2010. The extended period of 60 days if any extended by the Collector ended on 05-7-2010. But the Adjudication officer passed the impugned order in original on 17-03-2011. The adjudication officer while passing the impugned order in original exceeds the limitation for decision of case provided by the Section 179(3) of the Customs Act, 1969 therefore the impugned order in original is illegal and unlawful. Xx. That without prejudice as supplies are made by the importer and issued a sales tax invoice therefore Customs Act, 1969 is not applicable. Xxi. That the appellant has successfully discharged the burden of proof U/S 187 of the Customs Act, 1969. The adjudication officer while passing the impugned order in original totally ignored this aspect of the case. 5. In rebuttal, the respondent-department filed their parawise comments to the following effect:- i. Not admitted. Both Order in Original No. 59/2011 dated 17.03.2011 and Order in Appeal No. 35/2012 dated 31.01.2012 are legal and lawful having been passed on merit and evidence available on record. ii. Not admitted. This Para is the repetition of Part - A & B, the reply of which has already been given in the preceding Paras in adequate manner. Iii. Not admitted. As far as reference of Para - 13(i)_ of the Order in Original is concerned, reference in this regard is invited to the Para - I6 of the said Order in Original, wherein the stance of the appellant has been turned down by the adjudicating officer stating therein that:- "In so far as this particular case is concerned, it is clear that since the fact of transportation of the tea from Karachi to Peshawar has not been established therefore the only possibility that remain is that any imported tea was disposed off in the local market of Karachi while the documents in respect thereof were being used to cover up smuggled tea in Peshawar. Since Peshawar and its vicinity is a known hub of illegal tea smuggled in from Afghanistan therefore there is this constant temptation and phenomenon of using such documents to disguise smuggled tea as being legitimate tea. It is clear that in the instant case this modus operandi was adopted with the obvious intention to hoodwink the law enforcing agencies. Considering the above position I am inclined to accept the version of seizing agency. The black tea thus being confirmed to be non duty paid and smuggled is therefore, confiscated outrightly". iv. Not admitted. As stated in the preceding paragraphs. v. Not admitted. As stated in Para-3 above read with reply in part A&B.
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Vi. Not admitted. The Quoted tax invoice is irrelevant in the subject matter, because the confiscated tea stated to have been purchased from SPACTO Karachi has never been brought to Peshawar. Thus plea of the appellant is baseless and after thought. Vii. Not admitted. In this regard Para - 3 of Part - C above, is referred. Viii. Not admitted. As stated above in this preceding paragraphs. ix. Not admitted. Although sales tax invoice shows the purchase of tea weighing 10000 Kgs from SPACTO Karachi but on the other side the transportation of aforesaid black tea stated to have taken place from Karachi to Peshawar by bilty No. 2205 dated 10.11.2009, proved fake and bogus after verification from M/s. Munir Goods Transport Company, Karachi. The denial has not been turned down till date by the said transport company. When the transportation of confiscated tea has been disowned by the purported transporter, therefore, it is proved that the confiscated tea was never brought from Karachi to Peshawar. Moreover, the marks and number inscribed on the bags of tea also does not tally with the GD provided by the appellant in support of legal import. Therefore, it has been established that the confiscated tea is not the same which indicates in the GD. Further, the adjudicating authority has turned down the stance of appellant in Para - I6 of Order in Original No. 59/2011, declaring the goods to be the smuggled one on the basis of merit and evidences. x. Not admitted. Section 2(s) of the Customs Act, 1969, is very much applicable in the subject matter with the reason that the confiscated tea has been brought into the country through un- frequent routes without payment of duty/taxes leviable thereon. The import documents were being used by the appellant which has not relevancy with the confiscated black tea because most of the gunny bags containing foreign origin Black Tea, bears word "Indonesia" (beside other marks and numbers) which was tried to hide by applying ink on it, whereas the origin of goods according to G.D, is Kenya. Further - More tea is also a notified item. Xi. Not admitted. As stated in the preceding paragraphs. Xii. Not admitted. Any means of conveyance used in the removal of any goods liable to confiscation under the Act, is liable to confiscation. However, in lieu of confiscation, the adjudicating officer released the vehicle involved in smuggling of contraband goods against payment of redemption fine of 20% of its Customs value by taking a lenient view in terms of Section 181 of Customs Act, 1969. Xiii. Not admitted. The seizing officer has seized the black" tea after scrutiny of import documents produced by the appellant, the particulars of which did not tally with the confiscated goods. Further more, the transport company has also denied the transportation of tea in question from Karachi to Peshawar and disowned the purported bilty twice which is integral part of the case. Therefore, both the Order in Original and Order in Appeal passed in the instant case are based on evidences available on record. Xiv. Not admitted. The adjudicating officer has passed the Order in Original merely on merit and evidences available on record. When the movement of consignment said to be transported from Karachi through M/s. Munir Goods Transport Company proved fake abinitio and never turned down his denial, then the question of legitimacy does not arise. The stance taken by the appellant that there was a dispute with the Transport Company, is after thought. The story of damage of some bags of tea and repacking in jute bags, is fabricated and have no footing to stand against the truth because when the tea was being transported in the shape of bags and with the same weight then what was the need to change the original bags. What motive was hidden behind this logic. The only possible conclusion there could be drawn from this unnecessary change is that this was deliberately done to evade duty and taxes by giving legal coverage to the foreign origin tea which was in fact a smuggled tea by taking advantage of a GD which was irrelevant to the consignment of confiscated tea.
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Xv. Not admitted. As stated in preceding paragraphs. The plea has no relevancy in view of the proven fake rather of the bilty purported to have been issued by M/s. Munir Goods Transport Company Karachi. Xvi. Not admitted. Sufficient opportunities were provided by the adjudicating officer to prove the legitimacy. The appellant tried their best but could not succeed to prove their case before the learned adjudicating authority. The learned adjudicating officer while passing order in original, narrated the whole scenario in detail vide Para - 15 and 16 of the Order in original in question. Therefore, Order in Original passed in the instant case is in accordance with the law, having been passed on merit and evidences. Xvii. Not admitted. As stated earlier in the preceding paragraphs that the particulars of the GD does not tally with the confiscated tea and transportation of tea in question has been denied by the transport company which is enough evidence to establish that the confiscated consignment is not the same for which payment have been made through banking channel. Xviii & xix. Not admitted. Reply has already been given in the preceding paragraphs. . Xx & xxi. Not admitted. As stated above. 6. The appellant, in reply to the above comments, filed the following rejoinder:-.- PART-A (Facts of the Case) Para I to III That, the comments offered in the paras under reference are irrelevant, escaping and evasive because the "denial" of the Transport Company Karachi to have issued the bilty had subsequently converted into "admission" In para 14 of the impugned Order-in-Original No. 57/2011 passed by the Additional Collector has discussed the issue of disputed bilty and has conceded as under:- "The prosecution has seemingly relied entirely and solely on the report of M/s. Muneer Goods Transport Company wherein the said Goods Transport Company has denied issuance of bilty No. 2205 dated 10.11.2009 but even in this connection, the respondent brought cm record die decision of the jirga regarding the dispute between die respondent and die transport company," (iv) That, since the prosecution has failed to verify the contents of the purchase receipt of empty jute bags issued by Haji Dedar Gul Bardana Merchant Peshawar, its contention that the same is after thought does not have any force as the law of land does not authorize them to stick to a opinion which is not based on documentary evidences. If the prosecution was of the firm opinion that the same was after thought they should have visited the shop Haji Dedar Gul Bardana Merchant Peshawar to ascertain the fact as to whether or not the purchase receipt was actually and factually issued by him. Non-verification of the said purchase receipt by the prosecution strongly supports the contention of the Appellant that the same was properly and genuinely issued by Haji Dedar Gul Bardana Merchant Peshawar and nothing wrong had happened. (v) That, the prosecution has, eventually, accepted the stance of the Appellant that the seized goods were booked through Pak A1 madina Mini Mazda Goods Transport Company Peshawar and were…
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