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Petitioner: IRSHAD AHMAD and another VS Respondent: FIAZ AHMAD CHAUDHARY, DEPUTY
Court Name: Customs Appellate Tribunal Judge(s): Muhammad Arshad, Shahid Mehmood Bhatti Title:IRSHAD AHMAD and another vs FIAZ AHMAD CHAUDHARY, DEPUTY
JUDGMENT
Reported As: 2012 PTD (Trib.) 47 Result: Appeal accepted Judgment JUDGMENT SHAHID MAHMOOD BHATTI, MEMBER (JUDICIAL).---This order will dispose of Customs Appeal No.327/LB of 2010 filed by the appellants against Order-in-Appeal No.340 of 2010 dated 29-10-2010 passed by the learned Collector of Customs. (Appeals), Lahore. 2. Brief facts of the case as reported by the Deputy Collector of Customs (MB), Customs House, Lahore vide seizure report C.No.01/ AIB/HQ/256/08/427 dated 19-9-2008 are that on 24-6-2008, an information was received through the Chief Collector of Customs that one Haji Irshad Ahmad had stored a huge quantity of foreign origin non-duty paid paper including coated, uncoated paper, self adhesive paper, sell adhesive PVC sheets, PVC rigid film etc. In his godown situated at 48- Rajgarh Road, Lahore and at 12 Sandha Road, Lahore. In pursuance of the above information, the Collector of Customs Lahore constituted a team. On 24-6-2008 warrant under section 162 of the Customs Act, 1969 was obtained from the concerned Judicial Magistrate to search the godown situated at 48-Rajgarh Road, Lahore. On 27-6-2008 another warrant under section 162 ibid was also obtained from the concerned Judicial Magistrate to search the other godown situated at 12 Sandha Road, opposite Shahnaz Banquet Hall, Sandha Lahore. After completion of all the legal formalities the aforesaid two godowns were searched. A huge quantity of aforesaid goods was found lying in the above two godowns. The above said Haji Irshad Ahmad present on the spot was neither in a position to segregate the aforesaid goods for detailed examination/checking/weighment nor was he able to provide any documentary evidence in support of legal import and lawful possession of the aforesaid goods. Therefore, at the request of Haji Irshad Ahmad the aforesaid goods were detained and detention notices dated 24-6-2008 and
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27-6-2008 were issued to Haji Irshad Ahmad for physical examination/weighment etc. Of the goods available in the godowns. After completing the legal formalities as incorporated in the show-cause notice as well as order dated 5-5-2010 adjudication proceedings of the case were finalized and the Collector of Customs Lahore has passed the aforesaid order holding that the impugned goods were confiscated. However, the same were allowed release against payment of 20% redemption fine besides penalty of rupees five lacs each upon the appellants. 3. The aforesaid order was challenged before the learned Collector of Customs (Appeals) who also dismissed the appeal of the appellants. Hence this appeal on the following grounds incorporated in the memo. Of Appeal:--- (a) That the raid and search of the godowns were carried out by the respondent No.2 on the basis of search warrant obtained from Judicial Magistrate by him in terms of section 162 of the Customs Act, 1969, (b) That the entire action on the part of the respondent No.2 of conducting raid, carrying out search of the godowns and seizure of goods was illegal and without jurisdiction because being nongazetted section 162 of the Customs Act, 1969 are vested in him. It was only a gazetted officer of Customs who can search any premises under the said provisions of law. Thus, raid, search and seizure by respondent No.2 and subsequent proceedings on the basis thereof were void, illegal, without jurisdiction of no legal effect. (c) That since the raid, search and seizure were carried out by 'exercising powers under section 162 of the Customs Act, 1969, thus the questions of detention of goods under section 186 read with section 2(kk) of the Customs Act, 1969 does not arise because for action under section 186, no search warrant is required to be obtained. Moreover, the detention can only be made if any fine and penalty had already been imposed or any inquiry or investigation was underway. Moreover, section 186 deal with the goods which are under the control of the department because subsection (1) is to be read in harmony with subsection (2) and not in isolation. (d) That "detention" as defined under section 2(kk) of the Customs Act, 1969 means to prohibit the disposal or use of the goods pending finalization of any proceedings. It is humbly pointed out that since neither any fine or penalty was to be recovered from the appellants nor any proceedings were pending against them and as such there was no 'justification of any detention and the goods would be deemed to have been seized on 24-6-2008 and 27-6-2008 by the respondent No.2. (e) That according to respondent department itself the goods were giving in custody of petitioner No.1 in terms of section 168(1) which further supports the contention of the appellants that the goods were duly seized on 24-6-2008 and 27-6-2008. Moreover, obtaining search warrant, conducting raid and carrying out search of the godowns of the appellants made it crystal clear that the goods were seized on 24-6-2008 and 27-6-2008 and there was no detention at all because the seizure of goods are of two forms i.e. Either the customs authorities may take the goods away and keep them under their custody or where the same is not possible can be kept with the owner after obtaining bond for their safe custody as was done in the case of the appellants and as such the date of seizure of the goods shall be taken for all purposes as 24-6-2008 and 27- 6-2008. (f) That admittedly the goods were seized on 24-6-2008 and 27-6-2008 or at the best on 12-7- 2008 on which date the same were given in custody of the appellants in terms of section 168(1) of the Customs Act, 1969. (g) That as per subsection (2) where any goods are seized under subsection (1) of section 168 and no show-cause notice in respect thereof is given under section 180 within 2 months of the seizure of the goods, the same shall be returned to the person from whose possession they were seized. (h) That the seizure of goods in this case took place on 24-6-2008 and 27-6-2008 or as the case may be 12-7-2008 and no extension in time period under proviso to subsection (2) was granted by
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any competent authority and thus the show-cause notice should have been issued prior to 24-8- 2008 and 27-8-2008 or at the best 12-9-2008 whereas the show-cause notice was issued on 30-9- 2008 which was badly barred by limitation. (i) That admittedly the raid, search and seizure were conducted on 24-6-2008 and 27-6-2008 or at the best on 12-7-2008 and the show-cause notice in terms of section 180 of the Customs Act, 1969 was issued on 30-9-2008 after expiry of the limitation prescribed under subsection (2) of section 168 and as such the goods shall be required to be returned to the appellants because continuing with the seizure of the goods after expiry of limitation prescribed under the law would be void, illegal and of no legal effect.. (j) That as per section 179 of the Customs Act, 1969 the power for adjudication of the cases involving confiscation of goods or imposition of penalty are entrusted to various officers of Customs and appeal against their orders is provided before the Collector of Customs (Appeals). No powers of adjudication of such cases are vested in Collectors. (k) That under subsection (2) of section 179, F.B.R. May by notification in the official gazette fix or vary the jurisdiction and power of any officer of Customs or a class of officers and may also assign or transfer any case to any Collector of Customs irrespective of the territorial jurisdiction while under subsection (4) F.B.R. Is empowered to regulate the system of adjudication including transfer of cases and extension of time limit in exceptional circumstances. (I) That respondent No.6 cannot entrust power of adjudication to respondent No.4 as he being Revisional Authority in terms of section 195 of the Customs Act, 1969 does not figure in section 179 ibid. Moreover, no powers of adjudication can be entrusted nor any ease can be assigned or transferred to him by respondent No.6, Moreover, respondent No.6 cannot exercise powers under subsection (2) except by notification in the official gazette and as such the order dated 29-9-2008 being not a notification and not passed by F.B.R. Is void and illegal. (m) That even if it is presumed for the sake of argument (without conceding) that F.B.R. Can assign or transfer any case from the jurisdiction of the Adjudicating Authority competent to adjudicate the sane under subsection (1) to respondent No.4, it would tantamount depriving the aggrieved person from his legal right of appeal provided under sections 193 and 194-A of the Customs Act, 1969. As per section 193 any person other than an officer of Customs aggrieved by any decision or order passed under sections 73, 80 and 179 may prefer an appeal to the Collector (Appeals). No appeal against the order of Collector is provided under section 193. (n) That similarly any person or an officer of Customs aggrieved by any order passed by the Collector (Appeals) under section 193 or by the Board or the Collector of Customs under section 195 may appeal to the Appellate Tribunal but no appeal against the order of Collector if passed under section 197 is provided to Appellate Tribunal under section 194-A. (o) That the perusal of section 179 in juxta position with sections 193 and 194-A of the Customs Act, 1969 made it clear that respondent No.4 does not figure in the scheme of adjudication and no powers of adjudication can be delegated to him as it would tantamount depriving the aggrieved person or as the case may be department of his legal right of appeal provided under sections 193 and 194-A of the Customs Act, 1969. It is further pointed out that if the adjudication order is passed by respondent No.4 even no reference would lie in terms of section 196 of the Customs Act, 1969 because it only lies in respect of any question of law arising out of the order of the Appellate Tribunal. Since no appeal is provided before the Appellate Tribunal against the order of Collector if passed under section 179, thus, the question of filing reference in terms of section 196 before High Court would also not arise hence the order dated 29-9-2008 passed by the respondent No.6 is void, illegal without jurisdiction and of no legal effect. (p) That although there was no prevision of filing appeal against the order passed by respondent No.4 under section 179 of the Customs Act, 1969 yet by complying with his direction contained in
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preamble of-the impugned order the appellants filed an appeal before respondent. No.7 agitating the grounds regarding jurisdiction of respondent No.4 as narrated at grounds (m) to (o) above but while passing the impugned order she did not utter a single word in this behalf and rejected the appeal of the appellants in arbitrary and mechanical manner.. Thus the reservations of the appellants as narrated in the aforesaid grounds of appeal are yet to be answered in this case. (q) That according to show-cause notice and other seizure documents appellants allegedly were found in possession of non-duty paid paper of different kinds weighing 1,640,457 Kgs. And as such invoking import related provisions under sections 32 (1) and (3A) is illegal and unjustified. Since clause (90) does not carry any criminal, liability, thus respondents in order to pressurize and harass the appellants also invoked irrelevant provisions in a matter adjudicatable in terms of section 179 whereas import relating misdeclaration is to be adjudicated under section 32 of the Customs Act, 1969. (r) That the allegation against the appellants is that they were allegedly found in possession of non-duty paid paper of various kinds and there was no charge of making, signing or causing to be made or signed or delivering or causes to be delivered to an officer of customs any declaration, notice certificate or other documents or making statement in answer to any question put to them knowing or reasons to believe that the same were false in material particular or there is any duty or charge not levied, short levied or erroneously refunded and, thus invoking section 32(1) and (3A) punishable under clause (14) of section 156(1) is patently void, illegal and mala fide. (s) That clauses (14) and (90) of subsection. (1) of section 156 of the Customs Act, 1969 cannot be invoked together because section 32 relates to the declaration at import stage while clause (90) deals with the non-duty paid goods seized inside the country not appearing in section 2(s) or in the notification issued by the Federal Government under the said provision of law. At the one hand the respondent department has alleged that the aforesaid goods were brought into the country without payment of duty and taxes while on the other hand section 32 has also been applied which is contradictory to each other. (t) That as per section 171 of the Customs Act, 1969 when anything is seized the officer or other person making such seizure as soon as may be is required to inform in writing .The person from whose possession the things are seized of the grounds of such seizure or arrest. (u) That the raid, search and seizure were carried out by respondent No.2 while the notices under section 171 were issued by respondent No. 1. Moreover, the seizure took place on 24-6-2008 and 27- 6-2008 whereas the notices were served upon the appellants on 19-9-2008 by respondent No.1 and as such it would be presumed that no notice in terms of section 171 was ever served upon the appellant which makes the entire action illegal. (v) That the entire quantity of assorted type of paper and printing ink etc. Weighing 2,569,000 Kgs. Found lying in both the godowns was lawfully imported/purchased by the appellants and the allegation that out of the said quantity, 1,640,467 assorted types of papers etc. Were found non- duty paid, is false and fabricated. It is further pointed out that the documents of import and purchase were not taken into consideration intentionally by respondent No.4 under the influence of respondent No.5 just to make out a false case against the appellants. (w) That the assorted paper etc. Weighing 965,451 Kgs. Were purchased by the appellants against proper tax invoices which were provided to the respondents, which were got verified from the concerned Collector of Sales Tax and Federal Excise but in order to avoid these papers un- necessarily the matter was referred to the Customs Authorities at Karachi which has nothing to do these invoices. (x) That the show-cause notice in this case was issued on 30-9-2008 while the impugned order was passed on 5-5-2008 whereas according to subsection (3) of section 179 of the Customs Act, 1969 the case was required to be decided within 120 days of issuance of the show-cause notice or
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within such period extended by respondent No.4 for which reasons were to be recorded in writing and as such extended period shall in no case exceed 60 days. According to first proviso the period during which the proceedings were adjourned on account of stay order or Alternate Dispute Resolution or time taken throulh adjournment by the appellants not exceeding 30 days shall be excluded for the accumulation of the said period. (y) That in this case the show-cause notice was issued on 30-9-2008 while the appellants filed writ petition on 8-10-2008 which was dismissed by the Hon'ble Lahore High Court, Lahore vide judgment announced in the open court on 24-6-2009 and as such the limitation for decision of this case was as under:-- (a) initial period: 120 days. (b) extended period: 60 days. (c) Adjournments by the appellants:30 days. (d) Total: 210 days (z) That as earlier stated that show-cause notice was issued on 30-9-2008, stay was granted on 8-10-2008 while the petition was decided on 24-6-2009, thus the time available with the respondent No.4 for decision of this case was expired on .20-1-2010 but he decided this case on 5- 5-2010 and as such the impugned order being barred by limitation has no validity in the eyes of law. (aa) That respondent No.4 while dealing with the aforesaid objection of the appellants had referred Article 25A of the Constitution of Islamic Republic of Pakistan which has nothing to do in such matter. The said Article deals with constitutional matters. Hid the said Article been applied to all case, there would have no need to prescribe time for decision of the case under the Customs Act, 1969 Sales Tax Act, 1990 and Federal Excise Act, 2005 and as such the observation given by respondent No.4 is frivolous and baseless. (bb) That the impugned order consists of 17 paragraphs and 13 pages out of which Paragraphs Nos.1 to 14 and page 1 to 13 contained reproduction of show-cause notice, grounds of appeal filed by the appellants and parawise comments of the department while Paragraphs Nos.15 and 16 comprising few lines contained her decision. (cc) That the perusal of the aforesaid decision of respondent No.7 clearly shows that she neither dealt with the objections raised by the appellants with regards to the raid, seizure, show-cause notice limitation, jurisdiction of respondent No.4 and her on and just by mentioning that the appellants have failed to provide record rejected the appeal whereas she was fully aware that the record covering the entire goods was produced by the appellants and held on the record of the case. (dd) That in fact respondent No.7 neither gone through the record of the case nor passed the impugned order. These two paragraphs were written by his clerk as a routine practice in her office and she signed it. It was a great injustice with the appellants that the original order was passed by respondent No.4 who was senior officer in BS-20 and the appellants was directed to file appeal against his order before respondent No.4 newly promoted officer in BS-20. Moreover, respondent No.7 did not deal with any issue and rejected the appeal of the appellants in arbitrary manner as is evident from perusal of Paragraphs Nos.15 and 16 of the impugned order and as such it is not sustainable under the law. (ee) That during the hearing of the case it was observed by respondent No.4 that no provision of law relating to smuggling of seized goods was ever invoked either in the seizure report as the case may be show-cause notice and that only section 32 was mentioned which related to import of the goods. This fact was also recorded in interim order dated 7-11-2009 at para 133(b)(3).
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(ff) That while passing the order by respondent No.4 he did not even utter single word to reconcile the aforesaid discrepancy and confiscated the goods under section 156(1)(90) of the Customs Act, 1969 without altering or amending the charge levelled against the appellant in the show-cause notice. If the case of the department was that the appellants contravened sections 16 and 32 then the case of evasion of misdeclaration could have been made against them. This major irregularity goes to the root of the case. (gg) That during hearing of this case the appellants were directed by respondent No.4 to file affidavit stating therein that the entire goods were lawfully imported/procured by him vide order dated 11-11-2009 recorded at para 138 of the order sheet. (hh) That in compliance with the order dated 11-11-2009 passed by respondent No.4 appellant No.1 sworn an affidavit stating therein that the seized goods were either imported on payment of leviable duty and taxes or locally procured against proper sales tax invoices and the seized goods also included local products as well as damaged stock as is evident from he perusal of order dated 16-11-2009 recorded at para 147 of the order sheet. (ii) That no counter affidavit was ever filed by the detecting agency and according to law an affidavit filed by the appellants stood accepted as correct but respondent No.4 has miserably failed to utter a single word in this behalf. Rather he ignored these facts while passing the order confiscating the goods for the reasons that there was no reply with him in this behalf. This alone is suffice to show that no independent judicial mind was applied either by respondent No.4 or by respondent No.7 and the lawfully imported goods were confiscated and that too by invoking totally irrelevant provisions of law. (ii) Lastly he prayed to set aside the orders and waive the penalty imposed upon the appellants. 4. The Deputy Collector of Customs (AIB) filed para were comments which are as under:-- (i) (a to v) Denied. Preliminary objection and reply of the preceding paras are re-iterated here. (ii) (w) Denied. Appellants supplied untrue and false documents and on verification from the concerned quarters (i.e. Karachi Customs and Sales Taxes through F.B.R. And Forwarding Companies) same were found fabricated and fake. (i.e) (x) to (aa). Denied. As stated above it is further submitted that time limit has been prescribed in section 179(3) of the Customs Act, 1969. A bare perusal of the above provision of law reveals that instruction to decide the case within a specific period of time is administrative and directory in nature. Since the aforesaid instructions are not mandatory in nature therefore same do not effect the proceedings even if concluded after expiry of prescribed time limit. Neither there is anything in section 179(3) of the Customs Act, 1969 nor in any other provisions of the act ibid that specify the consequences of nullification of the order of the adjudicating officer for non compliance of the time limit. Furthermore the concept of time limit is also incorporated in the Article 254 of the Constitution of the Islamic Republic of Pakistan. According to this Article if any act or thing required by the Constitution to be done within the given period is not done within the time limit the doing of the act or thing after expiry of the given time limit shall not become invalid or ineffective by reasons only that it was not done within the prescribed time limited. Therefore noncompliance of the directory provisions as contained in section 179(3) of the Customs Act, 1969 do not nullify the proceedings. It is further added that appellants themselves -requested for reconciliation and verification qua their supplied record. (iv) (bb) to (ii) Denied. The order in appeal passed by the learned Collector of Customs (Appeals) Lahore is detailed and exhaustive and have addressed at the legal issued involved in the subject case. As no law point was raised during the process of appeal and all issues were thoroughly considered and examined at the adjudication forum and the order-in-original passed does not suffer from any legal infirmity and the appeal being devoid of merits was dismissed accordingly by the learned Collector of Customs (Appeals) Lahore as per the powers vested by law in her.
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(v) In view of the above submissions it is evident that the appellant beyond any shadow or doubt have patently failed to establish/ prove lawful possession of stocks to the extent of seized paper of various types weighing 1640.457 M. Tons. The appellants deliberately suppressed the facts from this appellate forum in order to avoid their liabilities on account of illegal paper of various types present in their godowns. It is, therefore prayed that appeal in hand may kindly be dismissed. 5. Heard the arguments of both sides and perused the case record. Following issues have been framed by this Tribunal:-- (i) Whether the order in original is time-barred being issued by the adjudicating officer in terms of section 179(3) of the Customs Act, 1969 beyond the period of 120 days or the extended period of (60) days as permissible under the Customs Act, 1969? (ii) Whether the depositions made by the appellants in their affidavit dated 16th November 2009 placed on record as recorded by the respondent No.4 in his order dated 11-11-2009 at para 138 of the order sheet during the hearing proceedings have been controverted by the respondent through issuance of counter affidavit as directed by the respondent No.4 of his order dated 16-11- 2009 on the note sheet? (i.e) Whether search and seizure effected in terms of sections 162, 163 and 168 of the Customs Act, 1969 were in conformity with the requirements stated therein? (iv) Whether the show-cause notice was issued within the statutory time limit as prescribed in section 168(2) of the Customs Act, 1969? (v) Whether charge of smuggling in terms of section 2(s) has been levelled against the appellants in the show-cause notice dated 30-9-2008 issued to the appellants? (vi) Whether invoking of clauses (14) and (90) of subsection (1) of section 156 of the Customs Act, 1969 simultaneously in this case constitute an illegality detrimental/fatal to the outcome of the merits of adjudicating order? (vii) Whether jurisdiction in terms of provisions of…
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