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Petitioner: Messrs TAYABBA AGENCIES and 2 others VS Respondent: ADDITIONAL COLLECTOR OF CUSTOMS-IV and another
Court Name: Customs Appellate Tribunal Judge(s): Ch. Naimat Ullah Title:Messrs TAYABBA AGENCIES and 2 others vs ADDITIONAL COLLECTOR OF
CUSTOMS-IV and another Case No.: Appeals Nos. K-1404 to K-1407 of 2011 Date of Judgment:2013-08-12 Reported As: 2013 PTD (Trib.) 2284 Result: Appeal accepted Judgment ORDER ' CH. NAIMUTULLAH CHAIRMAN/MEMBER (JUDICIAL).- These (4) appeals of the appellants are directed against Orders-in-Appeals Nos. 5946-5949 of 2011 dated 3-11-2011, passed by the respondent No, 2. These appeals have identical issues of law and facts and are, therefore being heard, dealt with and dispose of simultaneously through this common order in the light of judgment Hon'ble High Court of Sindh in Custom Reference No, 157 of 2008 S.M. Naqi son of Syed Muhammad Hussain, Karachi v. Collector of Custom (Adjudicaiton-1) and others, Karachi. 2. Brief facts of the case are that Messrs 'Lunar products/ISAF, Kabul, Afghanistan had imported four consignments of assorted beverages vide IGM No, 6975 dated 3-3-2010 Index No, 202 vide IGM No,1014 dated 23-5-2008, Index No, 261 IGM No, 1590 dated 15-8-2008, Index No, 193 IGM No, 7075 dated 25-3-2010 and Index No, 108 and cleared the same without payment of customs duty and other leviable thereon for onward transit to Afghanistan through the appellant respectively. The goods were handed over to the appellants for transportation to Peshawar and then to Afghanistan. Subsequently, the appellants were asked to submit the requisite cross border certificate CBC in respect of Aforesaid consignment because in terms of clause (X) of the para. 31 of the CGO No, 12 of 2002 dated 15-6-2002 the crossing of border certificates were required to be submitted within fifteen days. The appellants however, failed to submit the requisite CBC's which clearly meant that the goods had not crossed border and, instead , had been consumed inside Pakistan in violation of the provisions of law quoted in the impugned order. Had the misappropriated goods been imported in Pakistan. The Government would have got an amount of Rs,1,312,002.00 as duty/taxes. Thus a mis-preparation of the goods under reference had caused revenue loss of Rs,1,312,002.00 to
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the Exchequer besides violating the import restriction imposed on import of alcoholic beverages. The appellants were charged under the relevant provisions of law and the respondent No, 1 held vide impugned Order-in-Original No, 7 of 2011 dated 30-4-2011 charges against the appellant has been established. The operative para of the same is reproduced as under:-- "I have gone through the case record as well as written and verbal submission of respondent i,e, Messrs Tayabba Agencies. Karachi (CHAL No, 2045) and departmental representative. The goods were imported by Messrs Lunar Product/ISAF , Kabul, Afghanistan and the goods were lifted for transit through NLC. The carrier/clearing agent had failed to transport the cargo for final destination and did not produced the cross border certificate to the effect that the goods have crossed the border for Afghanistan hence violated the provision of Section 129 of the Customs Act, 1969. The offence is therefore established as well as admitted by the carrier they have not delivered the goods at final destination failing which they shall pay the duty and other taxes. Therefore, in terms of power vested in me under clause (64) of section 156(1) of the Customs Act, 1969, the carrier Messrs NLC is directed to pay duty and other taxes amounting to Rs,1,312,002.00. A. Penalty of Rs,25,000.00/(each) on NLC and the clearing agent. The amount of duty and other taxes/penalty are to be paid within a period of 14 days failing which recovery proceeding under section 202 as of the Customs Act, 1969 read with recovery rules as well as action under licensing Rules notified vide S.R.O. No, 450(I) of 2001 shall be initiated." 3. The appellant challenged the vires of the order before the respondent No, 2 through appeals dated 1-6-2011, who rejected the appeal while holding that these are absolutely without merit, the operating Para. 6 of the impugned order read as under:-- ' I have thoroughly examined the entire case record and given very careful consideration to the arguments advanced before me "It is an admitted position that the goods imported through the impugned four (4) consignment had been given into the care of the appellants for onward transportation to Afghanistan and to the appellant had submitted undertaking to the effect that they would ensure safe transportation of the submitted undertakings to the effect that they would ensure safe transportation of the same at their final destination. The evidence on record also establishes that the appellants had neither been appointed by the actual importer (that is, Messrs Lunar Products/ISAF Afghanistan) nor the requisite documents had been directly received by them from the importer instead, the appellants had acted on the advice/directive of one Sohail. Since the importer is not available in Pakistan and it is the clearing agents (the appellants in these cases) at the port of entry of the goods who got the goods cleared without payment of duty/taxes chargeable thereon, the principle responsibility lay under clause (X) of para. 31 of CGO 12/2002 dated 15-6-2002 read with section 209 and other provisions of the Customs Act, 1969 as well as the understanding submitted by them. Keeping in view the role of the appellant in misappropriation of the goods and the extent of duty taxes (that is Rs,436775.00) involved in these cases. I am of the considered view that the penalty of Rs, 25,000.00 imposed on each of the appellant I unduly lenient. I, rule that the arguments advanced by the learned consultant, reproduced at ,para. 3 above are untenable and the case-law quoted by him is not relevant to the facts and circumstances of the instant cases. Consequently, the appeals being absolutely without merit are rejected accordingly" 4. The appellants challenged the above orders by way of the referred in above appeals. The consultant Nadeem Ahmed Mirza appeared on behalf of the appellant who reiterated the arguments incorporated in the memo. Of the appeal and supplied the copies of relied upon citation. ' The respondent No, 2 in order dated 3-11-2011 failed to distinguish or discuss the law including citation, instead made academic discussion of personal nature in regards to fiscal statute, which is not sustainable in comparison to the Law and the judgment of Hon'ble superior Courts of Pakistan. Hence he erred in passing the order and it is not sustainable in law as this is clearly contrary to the
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Law/Rules, being erroneous and not in consonance of law, equity and natural justice and the said fact further stood validated from the following:- (a) That the respondent No, 2 in para 5 of the order has incorporated the comments of the respondent on the memo. Of appeals. No such comments were ever submitted by the respondent No, 1 as those were not supplied to the appellant at the time of hearing. It seems that the respondent No, 2 obtained the said comments at belated stage and those also in accordance with his whims and wishes and dictated version for using those as a tool for rejecting the appeal despite merit allowing on the basis of grounds of memo. Of appeal. The said act of respondent 2 render the comments as not admissible under law as these were obtained at the back of the appellant and at belated stage and order-in-appeal so passed amounts to mala fide and intellectual dishonesty, hence ab inito, null and void. (b) That the clearance of the goods was obtained by the appellant strictly in accordance with the provision of section 129 of the Customs Act, 1969 and upon presenting documents/authorization of Consulate General of Afghanistan and NOC of NLC supplied by the shipper in terms of para 31 of the Customs General Order 12 of 2002 read with procedure laid down for Afghan Transit Goods in Public Notice 16 of 2000 dated 3-9-2000. (c) That invoking of section 129 of the Customs Act, 1969 in the show cause notice is patently erroneous as the said section is a machinery section not charging hence no show cause notice can be issued under the said provision of the Act. Likewise reference to para. 31 of CGO 12/2002 dated 15-6-2002 is without any basis as CGO in none of its sub-para lays down any condition on the appellant for ensuring crossing of the border of the transit goods and neither direct the appellant to submit cross border certificate in confirmation of the said fact. The show cause notice on the face of it suffer from legal infirmity, hence void and ab initio as held by the superior Court of Pakistan in reported judgment 2001 SCMR 838 and 2006 SCMR 1519. (d) That it is the duty of Consulate/Embassy or their representative to re-submit the duplicate copy of Port/Airport of origin within 15 days of the crossing of borders of the goods as enunciated in Clause (x) of para 31 of CGO 12/2002, which is the Consulate General of Afghanistan and National Logistic Cell not the appellant and for that reason he has not submitted any sort of undertaking with the Collectorate of Appraisement and the said fact stood verified from the fact that the same is not available in record and was not provided to the respondent No,2 on 4-10-2011 by the representative of respondent No, 1 and neither the comments incorporated by the respondent No, 2 at para. 5 contain any number or date of the said undertaking. Any action which is based upon no evidence is not permitted by law and Apex Courts laid down the law in this regard in the reported judgment 1991 PTD 551. (e) That in terms of para. 6 of the Public Notice No, 16 of 2000 dated 30-9-2000 it is the duty of the Customs Station at the border to send cross border certificate within 45 day's of the receipt of documents from clearance Collectorate as enumerated in para. 2 of Public Notice. Under no circumstances the respondent cannot attribute the duties of Customs Station at border to the appellant and neither can he be charged for any dereliction of duties of officials of the Customs Station at Border. Hence the charges levelled in the show cause notice and subsequently held in the order in original/appeal are of no legal effect being based on absurd interpretation of the provision of the Act and para 31 of CGO 12/2002 and Public Notice No, 16/ 2002. Rendering the show cause notice as well as order-in-original/appeal, void, null and ab initio. (f) That the show cause notice to the appellant was issued on 7-7-2010 under section 180 of the Act, 1969 and order under the proviso of subsection (3) of section 179 of the Customs Act, 1969 should had been passed by the respondent within 120 days from the date of issuance of show cause notice or within a further extended period of 60 days by the Collector and further by Board under subsection (4) of section 179 of the Customs Act, 1969 for some exceptional circumstances
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and recording of the exceptional circumstance by the Collector/Board after giving a notice to the person against whom the order has to be passed as held by Supreme Court of Pakistan in its reported judgment 1999 SCMR 1881 Khalid Mehmood v. Collector of Customs, Customs House, Lahore. Their lordship of Supreme Court held: "S. 168----If initial period of two months, envisaged in 5.168, Customs Act, 1969 is allowed to go by without any extension having been made, vested right may come to accrue to the affectee and Collector should be obliged to issue a notice and accord necessary hearing before granting my extension---Question whether an extension , if any was actually made, within the initial period of two months from the date of seizure and merely because it purported to have been to so made, within time may not be itself be enough the contrary may be shown but, ordinary within the Customs Jurisdiction alone." "Thus if initial period of two months, envisaged in S.168, Customs Act, 1969 is allowed to go by without any extension having been made, a vested right may come to accrue to the affectee and Collector should be obliged to issue a notice and accord necessary hearing before granting any extension--- correspondingly as always , it would remain a moot question whether an extension, if any, was actually made within the initial period of two months from the date of seizure and merely because it purports to have been so made within time, may not be itself be enough the contrary may be shown but, ordinarily within the Customs Jurisdiction alone." (g) That was mentioned at (iii) of para wise comments on ground of appeal by the respondent No, 1 and incorporated in respondent No, 2 in page 5 of the order that the extension of further 60 days was given by the Collector on 16-10-2010, i,e, invalid and of no legal effect as no notice was given to the appellant as per the law laid down by the Supreme Court of Pakistan, beside that extension was given by the collector in mechanical manner on an omni bus request of respondent No, 1 without any reason or exceptional circumstances and recording of those. Such type of extensions are in negation of the subsection (3) of section 179 of the Act, hence illegal as held by Apex Court/Supreme Court in reported judgments 2004 PTD 369, 2005 PTD 23, 2007 PTD 2002, 2011 PTD 235 and 2011 PTD 1185. (h) That as regards the extension given by the Board for further 90 days on 2-2-2011 vide letter C.No, 2(6)/Cus.Jud/2011 i,e, also illegal by virtue of the fact that the period of 180 days stood lapse on 4-1-2011 and extension cannot be given after the lapse of time. In principal if the extension was to be accorded it should had been prior to 4-1-2011 not after that. In words of Superior Judicial Fora time extension given in such cases is akin to giving a new lease of life into dead entity. It is tantamount to flogging a dead horse if an event or document has become dead on account of non-timely extension of time period prior to expiry of entire stipulated period. It is legally considered dead and new spirit cannot be infused into it by any means or on account of any reason whatsoever. Following extract from the judgment of the Hon'ble Sindh High Court reported as 2007 PTD 117 is relevant to the merit of this case: We are of the considered opinion that once a matter become barred by time then the subsequent enhancement in the period of limitation shall not have the effect of reopening the passed and closed transaction and resuscitating the matters which attained finality and had gone in the annals of history. ' The same principle has been laid down by the Hon'ble Lahore High Court in the case of Messrs Super Asia Muhammad Din Sons (Pvt.,) Ltd. v. Collector of Sales Tax Gujranwala and another reported as 2008 PTD 60:-- (i) "Once limitation had started to run and had come to an end the assessee had acquired a vested right of escapement of assessment by lapse of time." (ii) The claim of the revenue that the prescribed limitation of 45 days from completion of adjudication proceedings as provide through Finance Ordinance, 2000 and enhanced to 90 days
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by Finance Act, 2003 is merely directory cannot be accepted. It is settled law that where inaction on the part of a public functionary within the prescribed time is likely to affect the rights of a citizen the prescription of time is deemed directory. However, where a public functionary is empowered to create liability against a citizen only within the prescribed time, it is mandatory. The acceptance of contention of the revenue in that regard will make a provision of law redundant and nugatory. Redundancy or superfluity of an act of Parliament and a provision of law cannot be readily accepted. All the more so when the prescribed limit is beneficial for the citizen and restricts the executive power to touch the pocket of a tax payer thereby creating threat after its expiry even if there was good case for creation of liability he, will not be dragged in." (i) That since the entire period of 120 days stood expired on 4-1-2011, without any valid extension, the order-in-original become barred by limitation period by 176 days rendering it and subsequent order passed by respondent No, 2 on that as without power/jurisdiction, hence ab initio null and void and not enforceable under the law. The said ratio was further fortified by the Superior Judicial Fora in judgments un-reported/ reported viz., Order in Sales Tax Appeal No, K-255/01 (New No,K- 286/04) and K-309/01, 2006 PTD 340 and PTCL 2005 CL 841, finding/decision in Complaint No, 958- L/2005, 1998 MLD 650, 2004 PTD (Trib.) 2898, 2004 PTD 369, 2005 PTD 23, 2007 PTD 2092, 2008 PTD 609, 2008 PTD 578, 2009 PTD (Trib.) 1263, 2009 PTD 762, 2010 PTD (Trib.) 23, 2010 PTD (Trib.) 81, 2010 PTD (Trib.) 1146, 2010 PTD (Trib.) 1469, 2010 PTD (Trib.) 1631, 2010 PTD (Trib.) 1636 , 2010 PTD (Trib.) 2117. (j) That the appeal with the respondent No, 2 was filed on 1-6-2011 and an order under the proviso of subsection (3) of section 193-A of the Customs Act, 1969 should had been passed by the respondent No, 2 within 120 days from the date of filing of appeal i,e, on or before 29-9-2011 or within a further extended period of 60 days prior to the expiry of initial period, of 120 days with reason to be recorded for extension in writing. No extension was granted by respondent No, 2 prior to expiry of initial period of 120 days instead extension was granted on 3-11-2011 as evident from Para 5 of the order-in-appeal reading as "that the proceeding in' this case could not be finalized within the stipulated time limit due to certain un-avoidable circumstances and administrative reasons, despite of the fact there were no un-avoidable circumstances or administrative reason" and neither any exception because appellant attended all the hearing and sought no adjournment and the respondent No, 1 was functioning in the capacity of Collector (Appeal) from the date of filing appeal to the date of order in appeal. Resultant the extension granted on 3-11-2011 is without any lawful authority as it has been extended after lapse of initial period of 120 days, hence the order-in-appeal is barred by 35 days rendering it void and ab inito as held by the judicial forums in its reported judgments 2011 PTD (Trib.) 79, 2011 PTD (Trib.) 1146, 2011 PTD (Trib.) 987, 2011 PTD (Trib) 1010, Customs Appeal No, K-313/2010 dated 2-8-2011, Customs Appeal No, K-320 of 2010 dated 2-8- 2011, Customs Appeal No, K-313 of 2010 dated 2-8-2011. (k) The order-in-original/appeal are nullity to the provision of subsection (3> of sections 179 and 193-A of the Customs Act, 1969. Hence without power/jurisdiction and coram non-judice. The super structure built on such foundation no matter how strong it is has to fall. Refer to PLD 1996 Karachi 68, which laid down that "where the initial order or notice was void all subsequent preceding, orders or super structure built on it were also void. In reported judgment 2006 PTD 978 it is held that "the entire proceeding initiated by the Adjudicating authority and further super structure thereon including the order passed by the learned Tribunal are without jurisdiction void and inoperative." The Apex Court in PLD 1971 Supreme Court 184 held that "order of a Tribunal found to be without jurisdiction --all successive orders based upon it illegal and liable to be quashed". Resultant the contravention report prepared by Directorate General of Post Clearance Audit and show cause notice issued by your authority are ab inito, illegal and void. (1) The appellant carves his right to add any fresh grounds at the time of hearing beside placing any valid incriminating evidence/ documents
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5. The representative of respondent No, 1 maintained that the order of respondent are correct and in support of his stance submitted written cross objection while raising preliminary objection and rebuttle on the grounds of appeal vide dated 21-5-2012 signed by Deputy Collector Afghan Transit Group, MCC of Appraisement, Karachi' reproduced herein-below:-- ' Preliminary objections: ' It is most reverently submitted that the subject appeal is not maintainable as the appellant has failed to deposit the amount of penalty adjudged against him in the impugned Order-in-Original No, 7 of 2011 dated 30-4-2011, as required in terms of section 195-B of the Customs Act, 1969. It is therefore respectfully prayed that this Hon'ble Tribunal may be pleased to reject and dismiss the instant Appeals, as being not maintainable, unless the appellant furnishes valid proof of deposit of the impugned amount under the express provisions of law. ' Grounds: (a) Denied vehemently being conjectural and baseless. The impugned order was passed by the respondent No, 2 after affording due opportunity of hearing to the appellant. The representative of the respondent No, 1 duly submitted their written comments in the matter during the course of hearing which the appellant rebutted. The appellant also availed of his opportunity to cross- examine the prosecution during hearing. He cannot therefore take a plea of "non-hearing" at this belated stage. The position taken by the appellant in this para is therefore untenable. (b) Denied vehemently as already submitted at Sub-Para No, 3 above. (c) Denied vehemently, appellant's objection with regard to section 129 of the Customs Act, 1969 is untenable as this section is the governing law, whereby rules to regulate the flow of Afghan Transit Cargo through Pakistani Territory have been framed. Mention of this section in the impugned show cause notice was therefore in order. Similarly, appellant's plea with respect to para. 31 of CGO 12/2002 dated 15-6-2002 is also frivolous. The relevant extract of para. 31 of CGO 12/2002, whereby the legal responsibilities of the clearing agent (appellants have been enjoying) is as reproduced hereunder , for ease of reference: "(ix)The Customs staff at the port/Airport of Exit shall verify the Shipping/Air Line Seal Customs Bullets Seal and endorse the same on Duplicate and Quadruplicate copy of the trans-shipment permit. They shall retain the quadruplicate copy for their own record and hand over the duplicate copy to the transporter for re-submission by the representative of the consulate/shipping Airline Agent at the Port of Origin. (x) the Consulate /Embassy or their representative shall re-submit the Duplicate copy at the Port/airport of origin within 15 days of Crossing Border by the goods." ' Since the instant appellant is the duly authorized representative of the consignee he cannot absolve himself of his legal obligation to ensure crossing over of the impugned goods into Afghanistan and to produce CBC in this regard to the Port of Departure. (d) Denied as per sub-para (c) above. It is evident that the appellant is fully responsible, as having been nominated on behalf of the consignee and was entrusted for safe transportation of the consignment in question. (e) Denied, as being totally misleading, illogical and against the letter and spirit of law. Without prejudice to the afore-said/ undertaking of the Afghan Consulate General Karachi whereby the legal obligation of the instant appellant (being the Authorized clearing Agent of the consignee), are clearly spelt out, it must be appreciated that even otherwise importer (consignee) are clearly spelt out, it must be appreciated that even otherwise. Importer (consignee)/his authorized clearing agent (appellant) are jointly and severally responsible for safe crossing over of the Afghan Transit Goods into Afghanistan. The clearing agent (Appellant) cannot be said to have discharged his legal duties, under sections 208 and 209 of the Customs Act, 1969 until and under cross border certificate in respect of the relevant AT consignment is received at the Port of department, in line
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with the provisions of the noted CGO. As regards the legal obligation of the customs authorities in this regard, these should not be seen in Isolation. The corollary is that how the Exit Customs Station could be expected to send the Cross Border Certificate to the Port of Origin, on their own, if the goods never actually reached border and were in fact pilfered en-route. The Hon'ble Appellate Tribunal may appreciate that the Afghan Importer, sitting in a foreign land, cannot pilfer the Afghan Transit Goods inside Pakistani territory, all by himself unless such nefarious act is fully supported and facilitated by his local accomplices i,e, the clearing agent and the bonded carrier. (f) Denied being totally misleading the instant order is not hit by limitation. It may be observed that show-cause notice in the impugned matter was issued on 7-7-2010 the statutory time limit of 120 days, in terms of section 179(i) of the Customs Act, 1969 was to expire on 6-11-2010. However, since the matter could not be disposed of within the prescribed time lines, on account…
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