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Petitioner: Messrs SRS IMPEX VS Respondent: SUPERINTENDENT DIRECTORATE GENERAL OF INTELLIGENCE and 2 others
Court Name: Customs Appellate Tribunal Judge(s): Muhammad Nadeem Qureshi Title:Messrs SRS IMPEX vs SUPERINTENDENT DIRECTORATE GENERAL OF
INTELLIGENCE and 2 others Case No.: Customs Appeals Nos.H-769 and H-670 of 2014 Date of Judgment:2014-11-10 Reported As: 2015 PTD (Trib.) 1469 Result: Order accordingly Judgment ORDER ' MUHAMMAD NADEEM QURESHI, MEMBER (JUDICIAL-I).--- These cross appeals impugned the Order- in-Original No. 333 of 2014 dated 24-5-2014 and corrigendum dated 20-6-2014 passed /issued by the learned Collector of Customs (Adjudication) Quetta (here-in after 'respondent No. 3') and these appeals are heard and decided through this instant common order. 2. Brief facts as reported by the Superintendent FIU, Directorate of Intelligence and Investigation- FBR , Hyderabad here-in-after referred as respondent No. 1 are that "An information was received from a credible source that Messrs SRS Impex, Karachi (NTN-3950662), Office No. 30, at Floor, Gul Plaza, M.A.Jinnah Road, Karachi is involved in importing and clearing the consignment of miscellaneous item in excess quantity through mis-declaration of description, quantity, weight and value in connivance with other associates-in-crime evading thereby huge amount of government legitimate duty and taxes. It was also disclosed by the source that such consignment would be cleared through Customs Computerized system from MCC, Dry Port, Hyderabad". Resultant an vigilance was mounted and upon clearance of the goods from the Port vide good declaration No. HC-SI-HC-258 dated 7-11-2013, the vehicle carrying the container was intercepted at Zaib Hotel, near Toll Plaza Jamshoroo and detained for examination, which transpired that as against declared 80 items are in excess detail of which is given below the para 13 of the order-in-original. That upon detention the vehicle driver was asked to produce the corresponding documents within 03 days. On 12-11-2013 Syed Muhammad Naqi produced office copy of the good declaration along with relevant invoice, packing list and other documents in the presence of Yawar Abbass from the scrutiny of - the goods declaration it is revealed that the consignment declared to contain Misc.
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Items like EAUD Toilet air freshener, Shaving Gel, Shampoos, conditioners, mini printer, shaving razor, bath soaps, body spray, refrigerator, hair brushes etc. Weighing 22.25000MT was cleared on payment of total duty and taxes amounting to Rs.744,807 online scrutiny of GD further reveals that the consignment was examined 100% by the concerned examination staff as per examination report, the declared description and quantity of the goods was confirmed on the basis of declaration, on the basis of which GD was completed by assessing staff ,of MCC, Dry Port , Hyderabad, where after goods were cleared. The Superintendent has further reported that "the consignment was thereafter examined by the Directorate General of Investigation and Intelligence FBR, Regional Officer, Karachi and Field Intelligence Unit, Hyderabad on 12/13/11-2013 in the presence of Syed Muhammad Naqi, Yawar Abbasss and two Mushirs. The physical re-examination of 1x40" Container No. SUDU-8907110 resulted into recovery of excess quantity along with other foreign origin mis-declared and under assessed miscellaneous goods. It has been further reported that "during the course of preliminary investigation it came on service that Syed Muhammad Naqi is the front man and representative of the owner of the seized goods. He remained present through out entire process of examination with the staff of Directorate General. It is also not worthy that in the subject consignment no clearing agency was utilized and it was a consignment cleared on self basis and preliminary investigation as revealed that even at the Hyderabad, Dry Port the consignment was facilitated to be cleared by Syed Muhammad Naqi." From the facts narrated above,. It is evident that Sadat Ali, Proprietor of Messrs SRS Impex, Karachi Syed Muhammad Naqi and Mr. Yawar Abbass inclusion and connivance with the customs officials and their other associates---in crime by clearing import consignment of miscellaneous item through mis- declaration of description, quantity weight and value evading thereby government's legitimate value to the tune of Rupees (0.878 millions) has committed offence of mis-declaration under sections 16, 32(1) & (2), 32A read with sections 79 and 80 of the Customs Act, 1969 section 2 of Import and Export Control Act; 1950 read with IPO, 2013 and sections 3, 6 and 7A of the Sales Tax Act, 1990 and section 148(1) of the Income Tax Ordinance, 2001. Since, the consignment in question was liable for confiscation hence seized hence container No. SUDU-8907110 was seized under section 168 of the Customs Act, 1969, against proper inventory and mushirnama duly signed by the witnesses and other participant. Notice under section 177 of the Customs Act, 1969, has been sent to the importer Sadaat Khan Meerani Messrs SRS Impex, Karachi through post and a copy of. Notice 171 also pasted on the notice Board of the Int. And Inv-FBR, FIU at MCC, Custom House, Karachi. 3. On the strength of the above allegation, the Collector of Customs Adjudication, Quetta here-in- after referred as respondent No. 3 issued show-cause notice dated 19-12-2013, the Advocate of the appellant in Appeal No. H-769/2014 and respondent in Appeal No. 670/14 replied to the allegations. After providing proper opportunity of hearing the respondent No. 3 passed Order-in-Original dated 24-5-2014 paras. 25 to 27 are relevant , which are reproduced herein-below:-- "25. The respondents have raised question of jurisdiction of seizing agency. Section 168 deals with the seizure of things liable to confiscation. The directorate has been empowered to exercise powers under this section. The seizing agency has invoked sections 32(1) and (2) and 32A of the Customs Act, 1969 and the related penal clauses viz section 156(1), (14) (14A) prescribed confiscation of the goods besides other punative measures. So Directorate has acted well within law on the basics of reasoning made above. The Sales Tax Law, 1990 and Federal Excise Act, 2005 prescribed that these tax/duty will be collected in a manner as if these were customs duty and all provision of Customs Act, will apply. Infact at import stage customs authorities realized tax/duties by invoking these provisions of law. 26. The S.R.O. 486(1)/2007 dated 9-6-2007 (beside mention of specific provisions of law) also empowered the Directorate to invoke all relevant provisions of the said Act and Rules made there under if so warranted.
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27. The charges of misdeclaration levelled in the show-cause notice stand established. I accordingly order for confiscation of seized goods corresponding to Serial Nos. 3, 6, 11, 19, 20, 21, 27 and 28 of the good Declaration under clauses (14) and (14A) B of section 156(1) of the Customs Act, 1969, furthermore excess quantity mentioned against Serial Nos. 12,13, 18 and 32 (para 22) is also confiscated under clause 14 (14A) of section 156(1) of the Customs Act, 1969. However an option to redeem the goods under section 181 of the Customs Act, 1969 is offered against payment of 20% redemption fine in addition to the duty and taxes leviable thereon. A personal penalty of Rs.100,000.00 (Rs. One hundred thousand) is imposed on the importer under the above mentioned provision of law." 4. The respondent No. 3 subsequently on 20-6-2014 issued corrigendum dated 24-5-2014, wherein he substituted the Para 27 of the order dated 24-5-2014 with the Para as enumerated herein- below:-- "27. The charges of misdeclaration ( i.e. Value on account of origin) levelled in the show-cause notice stand established. I accordingly order for confiscation of seized goods mentioned at Serial Nos. 3, 7, 8, 31, 54, 55, 56, 58, 61, 69, and 70 of the show-cause notice [corresponding to Serial Nos. 3, 6, 11, 19, 20, 21, 27 and 28 of the Goods Declaration ] under clauses 14 and (14A) of Section 156 (I) of the Customs Act, 1969. Furthermore, excess quantity communicated vide Directorate of Intelligence and Investigation-FBR, Karachi letter C. No. 114/ DCl/Appg.D.Port/FIU-Hyd./2013/259 dated 14-4-2014 and mentioned at para 22 of this order is also confiscated under clauses 14 and (14A) of Section 156(1) of the Customs Act, 1969. However, an option to redeem the confiscated goods under section 181 of the Customs Act, 1969 is offered against payment of 20% redemption fine in addition to duty and taxes leviable thereon a personal penalty of Rs. 100,000.00 (Rs. One hundred thousand) is imposed on the importer under the above mentioned provisions of law regarding remaining item the respondents have successfully demonstrated that the duty and taxes have been paid vide GD mentioned earlier. I, therefore, order unconditional release of these goods to its lawful owners." "2. Other contents of the order shall remain unchanged". 5. The appellant in Appeal No: H-769/2014 and respondent No. 1 in Appeal No. 670/2014 filed appeal for decision on the strength of the grounds taken in the Memo of Appeal and argued during the course of hearing on 18-9-2014 and which read as follows: (i) That prior to commenting upon the legal aspects of the case it is advantageous to state that indeed the respondent No. 1 is appointed and designated as "Officer of Customs" under section 3A of the Customs Act, 1969 and they derived power for functioning from Notification No. S.R.0 486(1)/2007 dated 9-6-2007 said to be within the territory of Pakistan for thwarting the act of smuggling but this doesn't means that they can intercept and detain the goods transported within city or territory of Pakistan and their jurisdiction in principal is restricted to the territory not falling within the ambit of sections 9 and 10 of the Customs Act, 1969 and beyond 5 kilometer of the border of India and Iran in terms of section 177 of the Customs Act, 1969 to be read with Notification S.R.O. No.188(I)/83 dated 12-12-1983. The goods in question does not at all falls with in the ambit of Section 2(s) and section 177 of the Customs Act, 1969, instead are lawfully imported and cleared after completion of all the codal formalities. (ii) The official of respondent No. 1 are even not empowered to ask from the person, who is transporting the goods or the driver copy of Good Declaration or purchase receipt of the transported goods within the city or within territory of Pakistan, unless there exist any provision in the Act or notified through an SRO that the person who intent or transporting the goods or the carrier within the territory of Pakistan has to keep with him Good Declaration or purchase receipt of the goods. In the absence of availability of any section in the Act and the notification, demanding Good Declaration/receipt is nullity to law and hold no ground and the stance of the
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appellant stood validated form the reported/un-reported judgments K-719/02, H-720/02, H- 686/03, Q-776/04, 2005 PTD (Trib.) 135 and PLD 1991 Supreme Court 630. (iii) The respondent No. 1 has no powers under Sections 16, 32, 79, 80, 83 and 195 of the Customs Act, 1969 through Notification No. 486(1)/2007 dated 9-6-2007 issued by the Board delegating the powers to the officers of DGI&I-FBR. Intercepting consignment after clearance on the pretext of importability by the officials of DGI&I suffer from lack of jurisdiction and power, rendering their act as transgression to the vested powers. In these circumstances the impugned contravention report and show-cause notice and all the subsequent proceeding there on deems to be illegal and void. No body is allowed to act beyond his jurisdiction and all the acts or deeds beyond the scope of jurisdiction are null and void in the eyes of law. Reliance is placed on the reporjed judgments 2002 PTD 2457, PLD 1971 Supreme Court 61, PLD 1973 Supreme Court 236, PLD 1964 SC 536, 2001 SCMR 838 and 2003 SCMR 1505, In PLD 1996 Karachi 68, 2006 PTD 978 and PLD 1971 Supreme Court 184. (iv) That the respondent No.1 are indeed empowered to conduct examination under section 198 of the Customs Act, 1969 under Notification No. 486(1)/2007 dated 9-6-2007 but within the premises of the port /terminal and that also after having approval of the Chief Collector (South) as clarified by the Board vide letter C.No. 2(2) L&P/2014 dated 29-12-2009. Which they failed to obtain in the instant case, resultant, the carried out examination is nullity to law and direction of the Board to be adhered by the field formation in terms of the expression of Section 223 ibid. It is imperative to state that outside the premises of the port/terminal the power vested under section 198 of the Customs Act, 1969 are not operative unless charge of smuggling is levelled against the person (appellant), which is non-existent in the case of appellant as no such charges has been leveled in the show-cause notice. In other cases the provision of the Customs Act, 1969 became un- operative and the case has to be dealt under the respective provision of C. P.C. Or Cr.P.C., rendering the examination of the goods after post clearance outside the premises of the port/terminal being in derogation of Section 198 of the Customs Act, 1969 and as such void and ab initio. Any case made on the strength of such examination report nullity to law and not to be relied upon. (v) The respondent No. 1 is not appointed/designated an "Officer of Inland Revenue" under Section 30A of the Sales Tax Act, 1990 and Section 230 of the Income Tax Ordinance 2001 under which Directorate General Investigation Inland Revenue has been designated as officer of Inland Revenue and they had been delegated powers under different section of the Sales Tax Act, 1990 through Notification No.S.R.0.776(I)/2011 dated 19-8-2011 and Section 207 of the Income Tax Ordinance, 2001. Resultant, respondent No. 1 acted without powers/jurisdiction, rendering their act of detention, seizure and subsequently preparation of contravention report , null, void and ab- initio, hence "coram non-judice". (vi) That similarly respondent No. 3 is also not designated an "Officer of Inland Revenue" under the provision of Section 30 of the Sales Tax Act, 1990 and Sections 207 and 230 of the Income Tax Ordinance, 2001 and as such is not empowered to issue show-cause notice under Section 36, which stood omitted from the Act through Finance Act, 2012 and the appropriate Section is Section 11 and respective Section 162(1) not 148 ibid. The respondent No. 3 usurped the power not vested with him, rendering the show-cause notice and order-in-original without power/jurisdiction, hence void and ab-initio and coram non judice as held in reported judgment Major Syed Walayat Shah v. Muzaffar Khan and 2 others (PLD 1971 SC 184), Omer and Company v. Controller of Customs, (Valuation): (1992 ALD 449 (1) Karachi AAA Steel Mills Ltd v. Collector of Sales Tax and Central Excise Collectorate of Sales Tax (2004 PTD 624), PLD 1976 Supreme Court 514, Ali Muhammad v. Hussain Buksh and others and PLD 2001 Supreme Court 514, Land Acquisition Collector, Nowshera and others v. Sarfraz Khan and others, 2006 PTD 2237, Pak Suzuki Motors Company Ltd, Karachi v. Collector of Customs, Karachi, 2009 PTD (Trib.) 1996 and 2010 PTD (Trib) 832.
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(vii) That on conclusion of transaction, under the provision of sections 80 and 83 of the Customs Act, 1969 and 438 and 442 of Customs Rules, 2001, the order so passed under the said provision of the Act become appealable order before Collector of Customs (Appeals) under Section 193 of the Customs Act, 1969 and the respondent No.1 are empowered under, the said Section through Notification No. 486(1)/2007 dated 9-6-2007. If they had any reservation against the passed assessment order, the appropriate course of action was to assail the said order before the Collector of Customs Appeals. Which had not been done within the stipulated period and order so passed by the competent authority defined in Section 2(a) under Section 80 of the Customs Act, 1969 final and that cannot be disturbed by any authority. To the contrary, the respondent No. 1 detained, seized the goods, which is not permitted under law. (viii) That upon filing of the appeal by the respondent No. 1 before the Collector of Customs Appeals under Section 193 of the Customs Act, 1969 emanating the facts of the case and the relevant provision of law. That upon taking up the appeal it is mandated on him to go through the fact and ground of the appeal and thereafter if he think fit .That in the case under adjudication correct duty and taxes has not been either not levied or short paid on the basis of found goods, is empowered to issue a notice under Section 32 of the Customs Act, 1969 to the respondent (appellant) and after receipt of reply to the said notice the Collector of Customs will decide the appeal in the light of the issued show-cause notice and reply. In the instant case no appeal was filed by the respondent No. 1 despite mandated under law, instead assumed the powers under section 195 of the Customs Act, 1969 and reopened a valid passed order under section 80 ibid. Neither respondent No. 1 nor 3 are empowered to reopen an order, hence both acted without power/jurisdiction, hence their action is without any lawful authority and as such ab initio, null and void as held by Superior Judicial Foras in umpteenth reported judgments e.g. 2014 PTD 1256 Messrs Paramount International (Pvt.) Ltd. v. FOP and others. (ix) The expression of Section 179 of the Customs Act, 1969 is very clear in regards to determination of Adjudicating Authority on the basis of "amount of duty and taxes involved excluding the conveyance." Not "amount of evaded duty and taxes". In the instant case of appellant the involved amounts of duty and taxes are Rs.1,615,066.00. Meaning thereby the competent authority to adjudicate the said case under clause (ii) of Section 179(1) is Additional Collector, even otherwise the inapt interpretation adopted by the Customs officials is taken for arguments even then the evaded amount in the instant case is 870799, which falls within the power and jurisdiction of Deputy Collector. To the contrary, respondent No.3 issued the show-cause notices and passed order-in-original while usurping the powers of his subordinates, which is not permitted under law. Rendering both suffers from lack of powers jurisdiction, hence, ab-inito null and void and coram non-judice as held in Order in Sales Tax Appeal No. 444/03, STA 465/07 and judgments reported at Major Syed Walayat Shah v. Muzaffar Khan and 2 others (PLD 1971 SC 184), Omer and Company v. Controller of Customs, (Valuation): PLD 1976 Supreme Court 514, Ali Muhammad v. Hussain Buksh and others (1992 ALD 449 (1), Karachi AAA Steel Mills Ltd v. Collector of Sales Tax and Central Excise Collectorate of Sales Tax, PLD 2001 Supreme Court 514, Land Acquisition Collector, Noshehra and others v. Sarfraz Khan and others, 2004 PTD 624), PLD 2004 Supreme Court 600, All Pakistan News Paper Society and others v. FOP, PLD 2005 Supreme Court 842, Khyber Tractors (Pvt.) Ltd., v. FOP., 2006 PTD 2237, Pak Suzuki Motors Company Ltd, Karachi v. Collector of Customs, Karachi, 2009 PTD (Trib.) 1996 and 2010 PTD (Trib.) 832, 2009 PTD 1112, 2010 PTD 465 and 2010 PTD (Trib.) 1636 (x) It is settled principal of law that action of executive functionaries are to be restricted to specific sphere permitted by the statute, rendering the show-cause notice and Order-in-Original as ab- initio and void. The opinion oftenly adopted by the respondents that the Superior Authority can exercise the power of their sub ordinates in terms of Section 4 of the Customs Act, 1969 is considered valid for a while then the hierarchy of distribution of jurisdiction explicitly provided by
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section 179 of the Act shall be rendered redundant. Also the consequent result would be a total anarchy where the superior officers would be making all efforts to exercise the adjudication powers clearly conferred by law upon their subordinates. The powers of adjudication are specific and empowered by the statute. It is an elementary principle of law that where there is a conflict between special and general provision of law, the special provision shall prevails (reference is invited to the case of Lt. General (Retd.) Shah Rafi Alam v. Lahore Race Club, 2004 CLD 373. The power of adjudication, as already observed is special in nature. This cannot be eclipsed by any other general provision. Even otherwise there is another settled principal of interpretaion of statute i.e. That the courts can supply construction with a view to avoiding absurdity (reference is invited to the case of Khalid Qureshi v. UBL 2001 SCMR 103). Equally it must be kept in mind that if it is held that sections 4 and 179 occupy the same fields, there is likely to be redundancy in respect of powers conferred under section 179. The Supreme Court in the case of East West Steamship v. Queen Land Insurance PLD 1963 SC 663 has been pleased to hold that redundancy is to be avoided in respect of any provision of the statute. There is also plethora of case-law on the point that where there is a conflict between two provision of the statutes, the later provision prevails and has to be given precedents (reference is invited to the case of Sahibzada Sharfuddin v. 7'own Committee, 1984 CLC 1517. Apart from this law favour actions of the authorities to be confined to their own spheres of jurisdiction conferred by the statute. An action taken by a state functionary beyond the ambit of his jurisdiction is nullity. In this respect the judgment reported as Abida Rashid v. Secretary, Government of Sindh PLD 1995 Kar. 587. (xi) That the consignment in question had undergone the procedure of clearance as evident from the fact that the appropriate officer in the capacity of adjudicating authority defined in Section 2(a) of the Customs Act, 1969 in exercise of the powers vested upon him under Section 80 and Rule 438 of Sub-Chapter III of Chapter XXI of Customs Rules, 2001 and Notification No. 371(1)/2002 dated 15-6-2002 passed that for levy of duty and taxes, which were paid by the appellant, consequent to which the authority defined in Section 83 of the Customs Act,1969 passed Clearance Order. The respondent No. 1 detained the goods and later on seized and framed a contravention report for adjudication under section 179 of the Customs Act, 1969 by the respondent No. 3 by issuing show-cause notice and subsequently passed order-in-original i.e. Piling of fresh order on the existing order, while reopening of the order of assessment in exercise of the power under the provision of Section 195, specifically vested with the Board or Collector. Neither the respondent No. 1 nor respondent No. 3 is empowered to reopen an order under Section 195 of the Customs Act, 1969 by the official of Executive Collectorate both usurped the powers not vested with them rendering the preparation of contravention report, show-cause notice and the impugned order in original without power/jurisdiction, hence void and ab-initio and as such coram non-judice and this stood validated from the reported judgment Messrs Smith Kline French v. Pakistan reported as 2004 PTD 3020 and 2014 PTD 1256 Messrs Paramount International (Pvt.) Ltd., v. FOP and another. (xii) That in terms of proviso of subsection (3) of section 179 of the Customs Act, 1969 the adjudication proceeding has to be completed within 120 days of the issuance of show-cause notice or within such period extended by the Collector for which reason shall be recorded in writing but such extended period shall in no case exceed 60 days provided that any period during which the proceeding are adjourned on the account of stay or alternative dispute resolution proceeding or the time taken through adjournment by the petitioner not exceeding 30 days shall be excluded for the computation of the aforesaid period meaning thereby, the total period can be extended from 120 days to 180 days or 210 days.
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(xiii) In the instant case the show-cause notice was issued on 19-12-2013 and the order should had been passed by the respondent within 120 days i.e. By 18-4-2014, whereas order has been passed on 24-5-2014 to be read with corrigendum dated 20-6-2014 without any extension and the said fact stood validated from the operative part of the order, rendering it barred by time by 61 days. Rendering it without power/ jurisdiction, hence ab-inito void as held in reported judgments 2008 PTD 60 Messrs Super Asia Muhammad Din Sons (Pvt.) Ltd. v. Collector of Sales Tax Gujranwala and others 2008 PTD 578, Messrs Hanif Strawboard Factory v. Additional Collector (Adjudication) Customs, Sales Tax and Central Excise Gujranwala, 2009 PTD 762, Messrs Tanveer Weaving Mills v. ,Deputy Collector Sales Tax and 4 others 2009 PTD (Trib.) 1263, Messrs…
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