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Petitioner: Messrs AL-FAZAL INTERNATIONAL VS Respondent: DEPUTY COLLECTOR OF CUSTOMS and 2
Court Name: Customs Appellate Tribunal Judge(s): Tahir Zia Title:Messrs AL-FAZAL INTERNATIONAL vs DEPUTY COLLECTOR OF CUSTOMS and 2
JUDGMENT
Reported As: 2017 PTD (Trib.) 569 Result: Appeal allowed Judgment JUDGMENT ' TAHIR ZIA, MEMBER (JUDICIAL-H).---The subject appeal has been directed against Order-in- Appeal No, 10757/2015 dated 06.11.2015 passed by Collector of Customs, Appeal (hereinafter to be ,referred as respondent No,3) maintaining the Order-in-Original No,SI/MISC/71/2015-Group-I (A/W) dated 07.09.2015 passed by the Deputy Collector of Customs, Adjudication, MCC of Appraisement West, Karachi (hereinafter to be referred as respondent No,2). 2. Briefly facts are that the appellant imported a consignment of 14986 kgs of Bananas from Ahmed pore, Gujrat, India stuffed in 2 x 40 refrigerated container through invoice No, BNA/NAB/119 dated 10.06.2015 and B/L No, NSA/KHI/FCL/2015 4283 dated 15.06.2015, upon receipt of import documents delivered those to his clearing agent who transmitted Goods Declaration with the MCC of Appraisement West and as per pre-condition of availing the regime of We BOC, paid upfront duty and taxes of Rs,783,818.00. Consequent which G.D was numbered as KAPW-HC-206680 dated 24.06.2015. Upon appearance of Goods Declaration on his desktop the nominated Appraiser opted for examination of the goods first, which were found in accordance with the declaration and the examination report so recorded was uploaded in the system. The Appraiser completed the Assessm ent but held the clearance order subject to submission of RO from the Plant Protection Department. Which was agitated upon as no condition existed in Serial No, 5 of Part-I of Appendix- B to Import Policy Order, 2013. Notwithstanding to the said fact and proposition of law, right from PA to Collector insisted upon submission of that, the appellant tried his best to make them understand that their demand is unlawful but of no avail. The Principal Appraiser issued show cause notice dated 24.07.2015, while the same was under consideration of the appellant, the respondent No, 2
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issued show cause notice dated 04.08.2015, which was replied on 08.08.2015. The respondent No, 2 while ignoring the condition laid in Serial No, 5 insisted upon that the submission of RO is mandatory in terms of Serial No, 3 and ordered confiscation of the appellant goods vide dated 07.09.2015 para 8 is relevant, which is reproduced here-in-below:-- 8. The case record has been examined, written and verbal arguments of Consultant have been considered and as a result, the question raised above have been determined/answered as under:- - (i) The bananas are importable from India and these are not included in the negative list i,e, Appendix-G of the Import Policy Order. (ii) As per Sr. No, 3 of Part-I of Appendix-B of Import Policy Order, against all species of plants and parts thereof, whether living or dead, stems, branches, tubers, bulbs, corns stock, bud-wood, layers, slips, suckers, green scum on stagnant pool, leaves, fruits, rhizomes etc, a valid PPRO is required. Hence, the bananas imported in the instant case, cannot be released in the absence of PPRO and in the wake of information communicated vide the Plant Protection Department Ministry of National Food Security and Research communicated vide letter No, C. No, PQS-2015/2016 (Import- Banana) dated 06.07.2015. (iii) The certificate from the country of export .i,e, India that the goods are free from quarantine pest and that the same are in conformity' with the phyto-sanitary regulations of the importing country, is not sufficient to release the goods as it does not fulfill the condition of Sr. No, 3 of Part-I of Appendix-B of Import Policy Order. 3. The varies of the order was challenged before Respondent No,3 by the appellant vide Appeal No, Cus/7517/2015/A-West , who also vide his order dated 06.11.2015 rejected that by observing in para 5 that:-- "5. I have examined the case record and also heard the representative of Plant Protection Department. The goods not listed in appendix -G of Import Policy Order are importable from India subject to conditions and requirement prescribed under Import Policy Order. The Plant Protection Department working as watch dog agency for food and agricultural safety and health have already stated that without a valid permit issued by the said department and in the absence of release order which is issued after proper examination and fumigation, no plant or plant material can be imported. The said department has specifically disallowed the impugned shipment of banana. I, therefore hold that the original order is legitimately passed and there are no grounds to interfere with the same. The appeal - being without merit fails." 4. Being aggrieved and dissatisfied with the impugned Orders the appellant filed the instant appeal before this Tribunal on the ground C incorporated in the Memo of Appeal. Mr. Nadeem Ahmed Mirza (Consultants) and appeared and argued inline with the grounds of appeal and stated further that the imported banana has been rotten due to delay clearance and the appellant has to suffer a colossal loss in the shape of cost of goods, paid duty and taxes, profit etc, and on the consignment more than Rs,10 million container detention/rental/plugging charges and 8 million terminal demurrage/storage charges have accumulated and for payment of which Messrs Riazeda (Pvt.) Ltd (shipping company) and Karachi International Container Terminal (Pvt.) Ltd (KICT) are pressing him hard, in spite no fault or default on his part and against the fact that the goods after confiscation are deems to be the property of respondents in terms of the expression of Section 182 of the Customs Act, 1969. The grounds of appeal are reproduced herein below for easement and perusal. (i) The respondent No, 1 and his subordinate held the clearance of the appellant consignment since, 27.06.2015. Such hold amount to notional seizure as held by High Court of Sindh in reported judgment 2003 PTD 2821 Syed Muhammad Razi v. Collector of Customs (Appraisement), Karachi and 2 others in the following words:-
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"A careful consideration of section 168(1) and section 2(rr) leads to the conclusion that the word "possession" is not confined to the physical possession and is inclusive of constructive possession as well. We are further of the considered opinion that the seizure of goods cannot be confined to the cases where an order in writing in this behalf is made but is inclusive of notional seizure as well, meaning thereby, that if the customs officials has not passed any specific order in writing about the seizure of goods but has verbally given instructions or by his conduct has made the release for removal of goods under restraint thereby depriving to the owner of the goods of exercising all the incidents of the right had title and interest in the goods, it would also amount to seizure of goods within contemplation of section 168(2) of the Customs Act. (ii) That by virtue of notional seizure the provision contained in Sections 171 and 168(1) of the Customs Act, 1969 comes into operation. Meaning thereby in the case of seizure of goods under section 168 the reason are to be recorded and notice under Section 171 of the Customs Act, 1969 has to be served on the person from whose possession the goods are seized. (iii) In the instant case inspite of notional seizure as far as 27.06.2015 under Section 168(1) inspite of the said fact the no notice under Sections 168(1) and 171 have been served on the appellant to this date. Non serving the notices render the whole proceeding infested from legal infirmity and as such of no legal effect as held by Superior Judicial Fora in umpteenth reported judgment e.g. PTCL 1994 CL 22(sic), 1983 PCr.LJ 620,1983 PCr.LJ 623, 1983 PCr.LJ 786, PTCL 1983 CL 47(sic), 1987 PCr.LJ 1413, 1987 PCr.LJ 1091 and 2004 PCr.LJ 1958. (iv) That it is mandated requirement of law that a show cause notice has to be issued by the competent authority having jurisdiction after going through the fact of the case and applicable provision of the Act and penal clauses so that the person to whom it has been served is able to reply the allegation. In the instant case the show cause notice dated 24.07.2015 was complete in all respect and has been transmitted by the competent authority, that can only be withdrawn in case of any discrepancy in figure by the issuing authority only and by none else. By withdrawing the show cause notice issued by the Principal Appraiser, the respondent No, 3 encroached his jurisdiction. His this act is in derogation of the law laid down by the Superior Judicial For a and render the show cause notice dated 04.08.2015 as void and ab-initio and such coram non judice. (v) That irrespective of the above fatal illegality, second show cause notice is permitted in a situation where the show cause notice issued earlier contains several errors. Upon examination of the show cause notices dated 04.08.2015, it can be gathered that it is based on same facts as narrated in show cause notice dated 24.07.2015 i,e, based on the opinion communicated by the Department of Plant Protection in letters dated 03.07.2015 and 06.07.2015. Beside is nullity to the submission made by the appellant clearing agent during the course of assessment and in the letter dated 02.07.2015 to Collector of. Customs. Since the first show cause notice is complete, second show cause is barred by principal analogous to res-judicata and this has been held in clear terms in reported judgment AIR 1961 Ca1.195. (vi) The respondent No, 3 has also no power under section 179 of the Customs Act, 1969 by virtue of no evasion of duty and taxes as these have to be collected upon allow of clearance for home consumption and if it is not allowed, no duty or taxes are payable and in that case, it squarely falls within the ambit of Section 80 of the Customs Act, 1969 and under the said Section power vest with the Principal Appraiser under Notification S.R.O. No,371(I)/2002 dated 15.06.2002 read with Section 2(a) ibid. Meaning thereby that he is the only authority to proceed in the matter instead of respondent No, 3 because it is settled elementary principle of law that action of executive functionaries are to be restricted to specific sphere permitted by the statute. Since, in Serial No, 80 of SRO 371(1)/2002 dated 15.06.2002, the respondent No, 3 figure nowhere, rendering the show cause notice as well as the order-in-original to be passed as ab-initio and void and the super structure built there upon is ought to be crumble down.
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(vii) That if the opinion often adopted by the hierarchy of customs that superior authorities can exercise the powers of their subordinate under section 4 of the Customs Act, 1969 is considered valid for a while then the hierarchy of distribution of jurisdiction explicitly provided by section 179 of the Act and SRO 371(1)/2002 dated 15.06.2002 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 (Recd) 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 interpretation of statute i,e, that the courts can supply construction with a view to avoiding abstirdity (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 and SRO 371(1)/2002 dated 15.06.2002. 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 provisions of the statutes, the later provision prevails and has to be given precedents (reference is invited to the case of Sahibzada Sharfuddin v. Town 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 is referred. Their lordship observed as under:- "it is trite law that power vested in an authority should only be exercised by that authority, in default whereof, the exercise of power and authority becomes without jurisdiction, illegal, void , ab-initio and of no legal effect. The term "without jurisdiction" has been judicially interpreted to include usurpation of power unwarranted by law (The Chief Settlement Commissioner Lahore v. Raja Muhammad Fazil Khan and others PLD 1975 SC 331 a p.339) an act done which the person doing it has no jurisdiction at all to do or which was clearly outside the sphere of his activities (The State v. Zia-ur-Rehman PLD 1973 SC 49); and a judgment or order delivered by a court or a judicial or a quasi judicial authority not competent to deliver it (Muhammad Saleh and others v. M/s. United Grain and Fooder Agencies PLD 1964 SC 97). The Constitution jurisdiction can thus be exercise when it is shown that the order is passed without jurisdiction or in excess of jurisdiction. As observed earlier the respondent No, 1 has no jurisdiction to pass the impugned order. As such we declare the same to be of no legal effect. Accordingly, we allow this petition but leave the parties to bear their own cost". ' That while dealing with the powers of adjudication, it is needless to observe, that our Supreme Court has jealously guarded the same. In Assistant Director v. B.R. Herman Mohata Ltd. PLD 1992 SC 485 a full bench of Supreme Court was pleased to observe that section 223 of the Customs Act, 1969 could not be employed so as to interfere with the judicial or quasi judicial functionaries. It was clearly observed that the power of the CBR as to prescribed guideline were not relevant for the exercise of judicial function. To similar effect is the judgment of Supreme Court reported as Central Insurance v. CBR 1993 SCMR 1232. In this case the CBR issued direction for the reopening of Income tax Assessm ent under section 65 of the Income tax Ordinance 1979. It was held by the Supreme Court that the CBR did not figure in the hierarchy of the officer provided in the statute for the purpose of assessm ent and adjudication. On the basis of this it was held that the directions of the CBR to reopen the assessm ent was without jurisdiction and the adjudication officer was directed to
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apply its own mind. Reliance is placed on the order of the Tribunal in S.T. Appeal No, 176/2007 Messrs Muller and Phipps Pakistan (Pvt.) Ltd. v. The Collector of Sales Tax Enforcement LTU, Karachi and 2011 PTD (Trib.) 2114 Collector of Customs, Peshawar v. Collector of Customs (Appeals) Peshawar and 2011 PTD (Trib.) 2557 Messrs Wawa Garments Industries (Pvt.) Ltd. v. The Additional Collector of Customs, Export, Karachi and Order in Custom Appeal No H-510/2008 Dewan Farooque Motors Ltd. v. Collector of Customs(Appeal). (viii) The opinion of the Director, Directorate of National Food and Security and Research Department. Of Plant Protection, Karachi that the Banana of Indian origin is prohibited under Rule 20 of Pakistan Plant Quarantine Rules, 1967 is nullity to its expression. Which read as:-- 20. Banana: ' Importation of banana suckers and fruits prohibited from South West of India and any other country where the disease have been reported to have occurred to prevent the spread of bunchy Top virus disease and Panama disease due to the fungus. (Fusarium oxysoporum var.) ' The conscientious study of the provision it is abundantly clear that the importation of Banana sucker and fruit are prohibited from South West of India and any other country. The Banana imported by the appellant is not of South West of India origin instead of Gujrat region, which does not falls by any stretch of imagination within the region of South West of India. Resultant, the said Rule is not applicable on the imported banana of appellant , forming opinion contrary to the Rule 20 of Pakistan Plant Quarantine Rule, 1967 is stretching the Rule in accordance with once own whims and wishes is not permitted under law. (ix) The statute has to be read as it has been expressed, nothing can be added or subtracted in any statute to suit ones opinion as that amounts Jo redundancy, which has to be avoided. Even otherwise it is settled rule of interpretation that "in interpreting the taxing statute the customs must look to the words of the statute and interpret in the light of what is clearly expressed. It cannot imply anything which is not expressed, it cannot import provision in the statute so as to support assumed deficiency. There is no room for intendment. There is no equity about a tax. There is no presumption as to tax nothing is to be read in , nothing is to be implied. One only look fairly at the language used nothing else to be done" as held by High Court and Supreme Court of Pakistan in their reported judgment starting from Abbassi Steel Industries Ltd. v. Collector of Customs 1989 CLC 1463 to Messrs Fazal Ellahi v. Additional Collector of Customs, 2011 PTD (Trib.) 79. Even otherwise "if there are two or more interpretation of our provision pertaining to levy of tax on account of anomaly/ambiguity the one favorable to tax payer has to be adopted by the court" as per judgment reported as 1993 SCMR 274, 2005 SCMR 728, 2007 PTD 1656 and 2008 PTD 1227. It is considered opinion of the Superior Judicial For a in a number of judgments "that tax payer should not be made to suffer on account of bad drafting of the statute". Reliance is placed on the judgment of High Court of Sindh reported as 2004 PTD 901, wherein the Hon'ble Judges of the Bench held that "While interpreting the taxing statute the Court must look to the word of statute and interpret it in the light of what is clearly expressed. It cannot imply anything which h; not expressed. It cannot import provision in the statute ,as to support assumed deficiency." "While finding out intention of the legislature language of the law is not be seen and if the intention is cleared from the language used nothing else is to be done." "if the legislature has not sufficiently expressed itself Court has no duty to act for it, for court is concerned with what it lays down and not what it has only in mind, but once it has been articulated enough Court does not more than give effect to the intention that it has succeeded in expressing. The intention may be expressed in faulty language, in very faulty language, in-extremely faulty language, this is of no consequence as long as there, is no doubt as to the intention. A draft sman mistake as long as it relates to form in which the legislative intend is expressed and not to the
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substance of It , is of no effect. Of course ones an element of doubt as to the intention of the legislature enter the field consideration otherwise irrelevant may all become relevant. (x) That infact the disease referred in Rule 20 of Pakistan Plant Quarantine Rule, 1967 namely bunchy top virus and Panama disease stood eradicated since long and for that reason the import of banana from whole of the India is permitted as evident from Appendix-G to the Import Policy Order, 2013 and 2015 issued by Ministry of Commerce and which contains no prohibition. This was done by an authority, which is competent to either ban or restrict import of any good subject to fulfillment of conditions given in Column 3 of the Appendixes. The respondent No, 1 has to allow the clearance after realizing of leviable duty under first Schedule to the Customs Act, 1969 and in consultation with the Appendixes of the Import Policy Order. It is neither mandated upon the Director, Directorate of National Food and Security and Research Department of Plant Protection, Karachi to issue any direction nor on the respondents Nos. 1 and 3 to comply the said direction as held by Hon'ble High Court of Sindh in reported judgment 2015 PTD 1607 M. Yasin and Co. v. FOP. "The Federal Government in exercise of powers under section 3 of the Import and Exports (Control) Act, 1950 (Act XXXIX of 1950) may by an order published in the official Gazette, prohibit, restrict or otherwise control the import or export of the goods of any specified description and regulates the same through license system and subsection (3) of Section 3 of ibid Act, provide that section 16 of the Customs Act, 1969 shall be given effect in respect of the goods, the import and export of which has been prohibited" or restricted. The Federal Government has the sole authority to regulate import and export of the goods and impose condition for grant of import and export license , issue orders for carrying out the purpose of Import and Export (Control) Act, 1950 and make laws for the import and export of the goods across the borders. Where the function of CBR is to give effect to the Customs Act, 1969, Sales Tax Act, 1990 and the Central Excise Act, 1944 in the light of Policy of the Federal Government as contemplated by the Import and Export (Control) Act, 1950. There is clear distinction between the powers of the Federal Government under Import and Export (Control) Act, 1950 and the powers of the CBR under Customs Act, 1969, Sales Tax Act, 1990 and Central Excise Act, 1944. The framing of policy relating to the Import and Export of goods with or without any restriction is the executive function of the Federal Government and the Central Board of Revenue, subservient to the Policy of the Federal Government may frame Rules under the above referred statute subject to the provision of Section 16 of the Customs Act, under which it is prerogative of the Federal Government to prohibit or restrict the bringing into or taking out of Pakistan any goods by any route including the goods enumerated in 3rd Schedule to the Customs Act, 1969. Under Section 9 of the Customs Act, 1969 the FBR can declare the places as Custom. Port, Custom Airport and Land Customs Station or Clearance of the goods to be imported but is not empowered under the said section or any other provision of the law to restrict or prohibit export or import of the goods through Rules. " (xi) That likewise, neither the Ministry of National Food Security and Research nor its allied Associates Departments e.g. The Department of Plant Protection are empowered to lay restriction on the import and export of any goods. Even otherwise, Rule 20 of the Pakistan Plant Quarantine Rules, 1967, is in fact obsolete beside in conflict with the Import Policy Order, 2013-2015, resultant, the Import Policy Order, 2013-2015 prevails upon Rule 20 of the Pakistan Plant Quarantine Rule, 1967. While following the said dictum, the Collect orate used to allow clearance of the Bananas of Indian origin till March 2015 upon scanning of only phytosanitary certificate instead of RO issued by the Plant and Protection Department. (xii) That no RO is required for clearance of banana of Indian origin under Serial No, 3 of Part-I of Appendix-B to Import Policy Order 2013-2015, except upon production of aflotoxin report that the consignment is free from any pest/disease from the Plant and Protection Department of Ministry of National Food Security and Research for the Fresh and Dry fruit falling under PCT given in column 1
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of Sr. No, 5 to the Import Policy Order 2013 and 2015, which is specific for fresh and dry fruit. The. PCT 0803.9000 is nonexistent in column 1 of Serial No, 5, resultant, the condition laid down in column 3 is not applicable on the import of banana of Indian origin. (xiii)That as regard the opinion of respondents that in any case RO from Plant Protection, Department under Serial number. 3 of Part-1, of Appendix-B to the Import Policy Order 2013-2015, is required by virtue of availability of the word "fruit" in the said serial number is without any substance instead misconceived, if the intention of the legislature was so as interpreted by the officials of the respondent No, 1 and Plant Protection Department Karachi and the Respondents Nos. 1 and 3. Serial No, 5 meant for "fresh and dry fruit" would not had been purposely framed and…
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