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Petitioner: IRSHAD AHMAD VS Respondent: FIAZ AHMAD CHAUDHARY, DEPUTY SUPERINTENDENT CUSTOMS (AIB), LAHOREHonorable Justice Shahid Mahmood BhattiMian Abdul Ghaffar,Ahmad Kamal
2012 P T D (Trib.) 47 [Customs, Appellate Tribunal, Bench-II, Lahore] Before Shahid Mahmood Bhatti, Member (Judicial) and Muhammad Arshad, Member (Technical) IRSHAD AHMAD and another Versus FIAZ AHMAD CHAUDHARY, DEPUTY SUPERINTENDENT CUSTOMS (AIB), LAHORE and 6 others
C.A. No.327/LB of 2010, decided on 5th August, 2011.
(a) Customs Act (IV of 1969)---
----S.179(3)---Adjudication---Limitation---Show-cause notice was issued on 30-9-2008 and the order in original was issued on 5-5-2010---Order in original was time-barred by 112 days---Even if the adjournments sought by the appellants was approximately (30) days and the stay given by the court which was of approximately (260) days were excluded even then the order in original was time-barred by 112 days---Provisions relating to limitation were mandatory in nature for implementation by all subordinate judicial and quasi-judicial forums in view of doctrines of binding precedents and stare decisis. 1993 SCMR 311 distinguished. Super Asia Muhammad Din and Sons (Pvt.) Ltd. v. Collector of Sales Tax Gujranwala and others 2008 PTD 60; Nagina Silk Mills Lyalpur v. The Income Tax Officer and the Appellate Tribunal, Pakistan PLD 1963 SC 322; Pace International Rawalpindi v. Secretary, Revenue Division, Islamabad, the Federal Tax Ombudsman (FTO) 2006 PTD 340; SS Oil Mills Ltd. v. Secretary Revenue Division, Lahore GST 2005 CL 592; TCL 2005 CL 841; 1992 SCMR 1898; 2009 SCMR 1126; 2002 MLD 180; 2003 PTD 1354; 2003 PTD 1797; 2008 PTD 578; 2009 PTD 762; 2009 PTD (Trib.) 107 and (2010) 109 Taxation 221 rel.
(b) Customs Act (IV of 1969)---
----S.187---Burden of proof as to lawful authority, etc.---Affidavit---Initial or persuasive burden of proof---Department failed to controvert affidavits of appellant through submissions of counter affidavits---No counter affidavit having been filed by the Department, depositions made by and on behalf of the appellants in the affidavits were deemed to be true and correct and no controversy in that behalf could be allowed to be generated---Department failed to discharge their legal burden or ultimate burden in terms of S.187 of the Customs Act, 1969. Messrs Kamran Industries v. The Collector of Customs, Exports and 4 others PLD 1996 Kar. 68 and 2003 PTD 2118 rel.
(c) Customs Act (IV of 1969)---
----S.187---Affidavit---Affidavit is a piece of evidence which carries full legal weight as per relevant provisions of Civil Procedure Code, 1908 as well as principles of justice, equity and good conscience---Affidavit was based on information received from any source and such information should be disclosed in the affidavit---Affidavit was sworn on either on Islamic principles or on solemn affirmation. AIR 1992 SC 317 and 1986 CLC 1119 rel.
(d) Customs Act (IV of 1969)---
----S.187---Affidavit---Where no evidence had been produced by the Revenue to show that the depositions made by the taxpayer in the affidavit were incorrect or disproved by documentary evidence the Appellate Tribunal would be justified in relying upon the veracity of the facts sworn by the deponent in the affidavit submitted---If the other party files a counter affidavit he could request the court for permission to cross examine the deponent and lead other evidence to rebut the contents of the affidavit---Non submission of the counter affidavit whether by will or default forfeits the adversary's right to deny the assertions made in the affidavit. 1979 PLJ 71 and 72; 1986 CLC 745; 1986 CLC 1408; 1993 SCMR 662; 1991 MLD 1243; (1974) 94 ITR 1; (1984) 146 ITR 140; (1985) 53 (sic) Taxation 1 (Trib.) and (1978) 114 ITR 19 rel.
(e) Customs Act (IV of 1969)---
----Ss.162, 163 & 168---Power to issue search warrant---Search and seizure of godown---Search and seizure in terms of Ss.162, 163 & 168 of the Customs Act, 1969 were in conformity with the requirements stated therein---Question "as to whether search and seizure effected in terms of Ss.162, 163 & 168 of the Customs Act, 1969 were in conformity with the requirements stated therein" was answered in affirmative by the Tribunal.
Writ Petition No.13293 of 2008 dated 24-6-2009 rel.
(f) Customs Act (IV of 1969)---
----S.168(2)---Seizure of things liable to confiscation---Show-cause notice---Limitation---Show-cause notice issued well within the statutory time and was not time-barred----Question as to "whether show-cause notice was issued within the statutory time limit as prescribed in S.168(2) of the Customs Act, 1969" was answered in the affirmative by the Appellate Tribunal. Writ Petition No.13293 of 2008 dated 24-6-2009 rel.
(g) Customs Act (IV of 1969)---
----Ss.2(s), 16, 32 & 156(1), (14), (90)---Smuggling---Charge of smuggling in terms of S.2(s) of the Customs Act, 1969 had not been levelled against the appellant neither in the show-cause notice nor in the order-in-original---Appellants during hearing while discussing legal repercussions of simultaneous incorporation of Cls.(14) and (90) of subsection (1) of S.156 of the Customs Act, 1969 had alleged that show-cause notice contained the charge of smuggling whereas the order-in-original was issued for mis-declaration and import of prohibited/ restricted items in terms of Ss.32 and 16 of the Customs Act, 1969---Incorporation of allegation of act of smuggling had nowhere been stated in the show-cause notice or the order-in-original in question was answered in the negative.
(h) Customs Act (IV of 1969)---
----Ss.156(1)(14)(90), 16 & 32---Punishment for offences---Simultaneous invocation of Cls.(14) and (90) of subsection (1) of S.156 of the Customs Act, 1969---Validity---Clause (14) of subsection (1) of S.156 of the Customs Act, 1969 was a penal clause and deals with punishment of an offence committed under S.32 of the Customs Act, 1969 for untrue statement, error in connection with any matter of customs through various modes stated therein---Clause (90) of subsection (1) of S.156 of the Customs Act, 1969 was a penal clause dealing with carrying, removing, deposing, harboring, keeping or concealing or in any manner dealing with any goods not being goods referred to in Cl.(89) of subsection (1) of S.156 of the Customs Act, 1969 (smuggled goods) by any person without any lawful excuse---No anomaly was committed by the adjudicating officer while stating both the penal clauses in the show-cause notice---Charge of smuggling had been levelled against the appellant---Objection was not based on sound footings substantiated by any evidence on record---Question as to "whether invoking of Cls.(14) and (90) of subsection (1) of S.156 of the Customs Act, 1969 simultaneously constitute an illegality detrimental/fatal to the outcome of the merits of adjudicating order" was answered in the negative.
(i) Customs Act (IV of 1969)---
----S. 179(2)---Power of adjudication---Assigning of jurisdiction by an office order---Validity---Federal Board of Revenue may through a notification in the official Gazette either fix or vary jurisdiction of power of any officer of Customs or class of officers and may also assign or transfer any case to any Collector of Customs irrespective of its territorial jurisdiction in terms of S.179(2) of the Customs Act, 1969---Federal Board of Revenue had assigned jurisdiction to Collector of Customs for adjudication of the subject case in terms of S.179(2) and (4) through an office order signed by a Member (Legal) addressed to Chief Collector---Such order was issued in contradiction to the provisions of S.179(2) of the Customs Act, 1969 which prescribed the issuance of such order through a notification in the official Gazette---Such was a mandatory condition, which had not been fulfilled while issuing the subject order and hit at the very root of the legality of the order and order became coram non judice and unenforceable at law---If law required something to be done in a particular manner that thing was to be done in the manner as prescribed under the law, otherwise it should not be done at all---Department had committed various types of violations of mandatory provisions of law which had vitiated the proceedings and the order could not sustain in the eyes of law---Question as to "whether jurisdiction in terms of provision of S.179 regarding power of adjudication can be assigned to a Collector of Customs without issuance of a notification in the official gazette by the Member Legal Federal Board of Revenue in terms of subsection (2) of S.179 of the Customs Act, 1969" was answered in the negative. Messrs Al-Faiz Industries (Pvt.) Ltd.'s case 2006 SCMR 129 and Khalid Saeed v. Shamim Rizwan and others 2003 SCMR 1505 rel. Mian Abdul Ghaffar for Appellants. Ahmad Kamal, D.R. for Respondents. Zaheer Ahmad, for D.S. Date of hearing: 23rd May, 2011.
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 (AIB), 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 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 non-gazetted 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 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. (l) 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 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 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 through 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. Had the said Article been applied to all case, there would have no need to prescribe time for decision of the…
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