Messrs INNOVATIVE TRADING COMPANY LTD VS APPELLATE TRIBUNAL
2004 P T D 38
[Lahore High Court]
Before Mansoor Ahmad and Sardar Muhammad Aslam, JJ
Messrs INNOVATIVE TRADING COMPANY LTD.
Versus
APPELLATE TRIBUNAL and 2 others
Custom Appeals Nos.40, 29 and 30 of 2002, decided on /01/.
st
October, 2003. (a) Customs Act (IV of 1969)-----
----S.194-A [as amended by Finance Ordinance (XXI of 2000)] & S.195---Appeal to the Appellate Tribunal---Powers of Board of Revenue or Collector of Customs to pass certain orders---Scope---Right of appeal is one of the substantive rights---Insertion of words "an Officer of Customs" after the expression "any person" in S.194(1) of the Customs Act, 1969 by Finance Ordinance, 2000---Connotation and effect-- Insertion of said words not retrospective in nature---Computation of period of limitation in case of appeal---Principles.
Vide insertion made through the Finance Ordinance, 2000, the expression "an Officer of Customs" was made after the expression "any person". This insertion was made on 19th of June, 2000 and it was made effective from the said date. Prior to this an Officer of the Customs was not competent to file an appeal under section 194-A. The jurisdiction to file an appeal by any Officer of the Customs was thus conferred on 19th of June, 2000 and before that although right to file appeal was available to any person aggrieved but it was not within the competency of any of the Officers of Customs to file such an appeal. In the present case order under section 195 was passed by the Member of Customs, Central Board of Revenue by exercising his revisional jurisdiction on 3/6-5-2000. On the said date when the decision was made and when it was conveyed on 19-5-2000 to the Collector Customs, he was not competent to file any appeal. As such the order passed by the revisional Authority had attained finality. Subsequent amendment in law clothing the Collector with the right to file an appeal on 19th of June, 2000, would not tend to destroy the right of the appellant acquired by it before 19th of June, 2000. It is a settled in the domain of fiscal law that the amendment touching upon and dealing with substantive right could not be given retrospective effect until and unless it is specifically intended to be so by the Legislature. Conferring a right of appeal is one of the substantive rights which was thus provided to the Officers of the Customs on 19th of June, 2000. Conversely, it also abridges the right other other party to claim immunity against any order passed in their favour by revisional forum. Amendment brought under section 194-A by virtue of Finance Ordinance, 2000 was not merely procedural in nature.
Therefore, on examining the various provisions of law the right to file an appeal by any officer of the Customs, was not available before 19th of June, 2000 and the appellant acquired a valuable right through the judgment dated 6-5-2000 and this right could not be taken away by construing the amended provision retrospectively. On 6-5-2000, when the Revisional Authority passed a judgment in favour of the appellant, as it was non-appealable order, therefore, it had-attained the finality and it had become a past and closed transaction. Admittedly, the Finance Act, came after 50 days of, the judgment and conferred right on any Officer of the Customs to file the appeal, which could not be used by the Collector Customs, to challenge the order' dated 6-5-2000 passed by C.B.R. in its revisional jurisdiction. Even sub-clause (3) which deals, with the limitation of 60 days did not confer any right as the question of limitation is dependent on the competency to file appeal. Sub-clause (3) could not be interpreted in a manner so as to give retrospectivity to the amended provision of sub-clause (1). The contention on behalf of the Revenue was that under sub-clause (3) because of the fact that limitation of 60 days was available and computing the 60 days from 6-5-2000 the date of revisional order, the right of appeal was available to the Collector up to 6th of July and the 3rd July was a day within which he had a right to file the appeal, the appeal was competently filed. The contention was not well taken. Computation would be dependant on a kind of order described under sub-clause (1) and the competency to challenge the said order, under, the law. In the absence of any competency, the-procedural provision relating to limitation would not confer any substantive right on the Collector to file an appeal. The appeal filed by the appellant before the Tribunal was not competent as the Collector Customs was not conferred any jurisdiction to file the appeal and the order dated 6th of May, 2000 had attained finality and it was past and closed transaction in the present case.
Haji Abdullah Jan v. State 2003 SCMR 1063 ref.
(b) Interpretation of statutes---
---- Fiscal statute---Amendment touching upon and dealing with substantive rights could not be given retrospective effect until and unless it is specifically intended to be so by the Legislature.
(c) Customs Act (IV of 1969)--------
----Ss. 25 & 30---Determination of Customs value of imported goods-- Criterion---Date for such determination and rate of import duty-- Principles---Classification of goods---Contravention---Onus of proof.
The value of any imported goods shall be taken to be the normal price, that is to say, the price which they would fetch (on the date referred to in section 30), on a sale in open market between a buyer and `a seller independent of each other.
According to section 30, the value and rate of duty leviable on the imported goods are those which shall be in force for the goods meant for home consumption, like the consignment in dispute, on the date when the "Bill of Entry" is presented to the Customs Authority. Section 25 speaks of "normal price" which is described as the price, the goods would fetch on sale in "open market" in a bona fide transaction. The "open market" here means the market in the country of origin and not at the place of importation. Thus, criterion for determination of the value of the goods should have been the prevailing commercial price in the country of export at the time of import and not the price obtaining in the regional, countries. Admittedly, the price list of similar goods of origin was not before the Authorities concerned when the consignment was evaluated. The onus to establish that the importer made a misstatement was entirely on the department who failed to muster any evidence from the country of origin to belie the declared value.
All 241 invoices in the present case pertained to the period December, 1995 to August, 1997, therefore, section 25 as it existed prior to 1st January, 2000 was applicable and the value of the imported goods was to be taken as normal value that is to say, the price would fetch a sale in open market, between the buyer and seller independent of each other. In the process of determination of value in the present case, if the Department disagreed with the value declared by the importer, the onus shifted on it to prove that the consignment imported was different than the one described in the invoices. It is surprising that the Department in the first instance accepted the bill of entry and import invoices submitted by the importer; accepted the version of the importer that the auto parts imported were non-genuine parts, charged them to customs duty and other taxes and released those consignments. It was in 1997, that on the receipt of some information a truck of the appellant Company was intercepted which was carrying auto parts for supply to another city. It was a fraction of the huge imports spread over a period of 1-1/2 years even then the Department did not proceed to seek the proper identification and examination of the seized goods as to find out whether those were genuine auto parts or non-genuine auto parts. Instead of adopting a logical course the department presumed the seized parts as the genuine one and using the price list of genuine parts made out a case of contravention against the importer. Presupposition of the department before making out a case of contravention was, that the normal price of the auto parts was that which was given in the price list issued by the original Companies of manufacturers. This presupposition could only be taken if the department would have scrutinized, examined and determined the classification of the goods in the first instance. In the absence of any such exercise, the application of the price list of the genuine parts was not warranted its the circumstances of the case.
The Tribunal also relied on price list of genuine spare parts. Real link in the chain was missing that the Department did not determine the classification of the imported goods. It could not be in respect of the consignment which was already released and consumed but this could be done in respect of the parts seized by intercepting the truck. The invoices which were produced by the importer were already accepted and therein these auto parts were declared to be non-genuine, so there was no tangible evidence available with the department to reach a conclusion that the imported parts which had already been released were genuine in kind and the same were mis declared in the original invoices. The department sought the production of the price list of the genuine auto parts from the company and the same were produced. It was presumed that the goods which were imported during 1-1/2 years were also genuine. The same error was also committed in the decision of the Tribunal which had vitiated its decision as such it was not sustainable.
Messrs Latif Brothers v. Deputy Collector of Customs, Lahore 1982 SCMR 1083 fol.
Punjab Beverages v. Appellate Tribunal (Customs, Excise and Sales Tax) 2002 PTD 2957; Irfan Tayyab v. Collector Customs 2003 PTD 890; Messrs Abdul Aziz Ayoob v. Assistant Collector, Customs PLD 1997 Kar. 378; Kausar Trading v. Government of Pakistan 1986 CLC 612; Saleem & Co. v. Deputy Collector, Customs PLD 2001 Lah. 5; Farooq International v. Chief Controller, Imports and Exports 1985 CLC 1781; Dawood Cotton Mills v. Central Board of Revenue 1985 MLD 1610; Ali Muhammad v. Deputy Collector Customs 1986 MLD 1429; Messrs Sasta Autos v. Government of Pakistan 1991 MLD 1582; Capital Supports, Sialkot v. Government of Pakistan 1989 MLD 999; Indus Auto Mobile Ltd. v. C.B.R. PLD 1988 Kar. 99; Commercial Pipes Ltd. v. Federal Government of. Pakistan PLD 1989 Lah. 89 and Haji Abdullah Jan v. The State 2003 SCMR 1063 ref.
(d) Customs Act (IV of 1969)-----
----S.32---Misdeclaration---Concept---Charging for mis declaration-- Prerequisites.
Charging of misdeclaration on untrue statement, misdeclaration pre-requisites a fact that the person charged for the same made or signed or causes to be made any statement in answering to any question which he knows or have reason to believe that such documents are false. In the present case importer has been filing bills of entry and import invoices before the Customs Authorities. They were accepting these invoices and bills of entry and charging them the customs duties and other taxes on the basis of declaration made therein. All 241 invoices presented by the importer were accepted and the consignment was released on payment of customs duty and other taxes as determined by the Customs Department. It came to the notice of the Customs Department that the declarations made by the importer were not true. They accordingly intercepted one truck carrying imported parts which was bound for delivery of the same to NLC, Gujranwala. The consignment in the truck was seized. Notice under section 26 of the Customs Act, 1969 was issued to the importers for production of documents which were produced. As it was a case of misdeclaration on presentation of a document and misdeclaration was alleged in respect. of a part of a consignment which was allegedly seized by the Customs Department, the onus shifted to the Department and it heavily lay on them first to classify the goods seized as the genuine auto parts and thereafter use price list of the genuine auto parts so as to determine the value of the consignment. It was not possible for the Customs Department to take the entire import ranging from December, 1995 to August, 1997 as the import of genuine parts merely on the basis of consignment intercepted on one truck which was hardly, a little fraction of the entire import. The Department in the first instance would have determined the classification of the goods seized and as the most of the import was made by the importer for supply to NLC a Government Organization, the record could have been verified: to find out the kind and classification of the goods imported. The department did not undertake either of the exercises and merely thought it proper to take the price from the price list of the genuine auto parts. The Department did not act diligently and failed to perform their functions and the contravention case was either not made with serious mind or it was not initiated with the serious object. Departmental representative made a statement before the High Court that all the invoices on the basis of which the goods were released were not available in the Department for producing the same in the Court. The Department did not act with diligence and the serious approach on its part to make a case of contravention, which was lacking. Contravention under section 32 is not merely making of a false statement but it should contain an element of mens rea as it defines an offence and makes it punitive. Failure to bring on record, through scrutiny, examination or any other means, that the imported auto parts were genuine in kind, price list was of no use to the Department and it could not be proved that the value declared in bills of entry and import invoices by the importer were untrue and false. Thus, no case of contravention was proved against the importers and the provisions of section 32 were misapplied in the circumstances of the case.
(e) Customs Act (IV of 1969)-----
----Ss.194-A & 196---Appeal to, Appellate Tribunal---Tribunal had not rendered any finding on the question raised by the appellant and merely in the last three lines of the judgment stated that "as regards the remaining appeals these are dismissed in toto"---Effect.
M.S. Athar Minallah and Qazi M. Naeem for Appellant.
Raja Khalid Ismail Abbasi for Respondent No-3
Date of hearing: 6th October, 2003.
JUDGMENT
MANSOOR AHMAD, J.---Three customs appeals under section 196 of the Customs Act, 1969 are .preferred from judgment, dated 21-3-2002 passed by Customs, Central Excise and Sales Tax, Appellate Tribunal, Islamabad. Appeal No. 40 of 2002 is filed by Messrs Innovative Trading Company Ltd., an importer. The Appeal No. 29 of 2002 is filed by Messrs Moon Enterprises, a clearing agent. Appeal No.30 of 2002 is filed by Messrs Butt Agencies Customs Clearing Agents. Through this consolidated judgment, we decide all the three appeals.
Appeal No.40 of 2002:
2. Appeal No. 40 alongwith Appeals Nos. 29 and 30 of 2002 were admitted to regular bearing to consider legal questions arises out of the judgment of the Appellate Tribunal and the questions raised by the appellant are enumerated as under:---
"(1) Whether the respondent No. 1 having been constituted under section 194 of the Customs Act, 1969 and conferred appellate jurisdiction under section 194-A thereof, can travel beyond the statute and disregard its provisions which are clearly and unambiguously attracted?
(2)Whether the respondent No. 1 is a forum of limited powers and its powers do not include the powers of judicial review as are available to the Civil Courts in exercise of their plenary jurisdiction and the High Court or Supreme Court in exercise of their Constitutional jurisdiction?
(3)Whether the respondent No. 1 could have entertained the filed by the respondent No.3 after holding that the said was not filed competently and in accordance with the provision of the Customs Act, 1969?
(7)Whether the impugned order restoring the Order-in-Original passed with respect to show-cause notice may be limited to penal consequences without providing an opportunity to the person concerned to show cause as to why the allegation on the basis of which penal consequences flow are unwarranted in-law and illegal?
(9)Whether valuation of goods under section 25 of the Customs Act, 1969 be conducted behind the back of the appellant?
(10)Whether valuation of the goods under section 25 of the Customs Act, 1969 be conducted without providing an opportunity to the appellant to lead its evidence in rebuttal?
(13)Whether the burden to prove an access value of goods other than the declared value in terms of section 25 of the Customs Act, 1969 lies on the Customs Authorities?
(14)Whether in determining the value of goods under section 25 of the Customs Act, 1969, the price at the country of purchase is irrelevant and the certificate of the price prevalent in such country may be ignored without any cogent or contradictory evidence?
(15)Whether in determining the value of goods under section 25 of the Customs Act, 1969, the kind of goods and the value of such goods accepted and adopted, by the Customs Authorities in the past is irrelevant?
(20)Whether the penalty imposed vide the Order-in-Original passed by the learned respondent No.3 under section 32(1)(b) of the Customs Act, 1969, without the said section being charged as having been contravened by the appellant could be sustained under law vide the impugned order?
(21)Whether the Customs Authorities are bound to disclose evidence and precise allegations on the basis of which notice under section 32 of the Customs Act, 1969 is being issued in the show-cause notice?
(22)Whether in order to allege contravention of section 32 of the Customs Act, 1969 it is mandatory that the person concerned should make the false statement/submit false document with the knowledge that the same are false/incorrect?
3. Facts available in the case are that appellant is importer of auto parts. He has been importing auto parts of different vehicles namely Volvo Renault and Mitsubishi from Dubai UAE at AFU, Islamabad Airport. These consignments were cleared by the Customs Department through Messrs Falcon Corporation, Messrs Enterprises and Butt Agencies, clearing agents, during the period December, 1995 to 16th August, 1997. The appellant has been importing these parts for NLC (National Logistic Cell) of Pakistan Armed Forces and KRL (Kahuta Search Laboratories) and other Government Departments. 241 invoices during the period were presented to the Customs Department and they had cleared the goods after the charge and payment of the customs duty and the sales tax etc.
4. On the basis of, some information the Customs Department entertained suspicion that the appellant has grossly misdeclared the values of goods imported. On receipt of an information that some parts which have already been cleared from AFU, Islamabad, by undervaluing the same by misdeclaration, were being transported from Rawalpindi to Gujranwala through a vehicle bearing Registration No. RPT-2070 for onward delivery to NLC, Gujranwala. The Deputy Collector Customs Preventive, Rawalpindi constituted. a raiding party and intercepted the vehicle. The vehicle-was subjected to search and it was brought to the Headquarter office and it was seized alongwith goods vide seizure Case No. 384/97. On the same day, a notice under section 171 of the Customs Act, 1969 was served on the manger of the appellant Company. Another notice under section 26 of the Act was also served and in that record of the Company like Air Way Bills Register, Challan Register and Stock Register were demanded and the same were provided by the appellant-Company to the raiding- party. A show-cause notice, dated 21-10-1998 was issued by the Collector to the appellant an its sister concern company Messrs International Path Finders and three others Clearing Agents. In the show-cause notice it was alleged that the appellant and, its sister concern company Messrs International Path Finders committed gross misdeclaration and violated the provision of sections 16, 32(1)(b) and 25 of the Customs Act, 1969 read with section 3(1) of the Imports and Exports (Control) Act, 1950 punishable under section 156(1)(9)(14) of the Customs Act. The appellant submitted reply to the show-cause notice and after hearing the Collector passed an order in original, dated 26th of January, 2000 and held that the appellant in collusion with the clearing agents evaded the payment of the duty and taxes to the tune of Rs.3,20,86,486 and the appellant was ordered to pay the same.. A personal penalty equal to Rs.3,70,70,967 was also imposed in terms of section 56(1)(14) of the Act and the appellant was directed to pay the same.
The appellant challenged the Order-in-Original under section 195 of the Customs Act by submitting the revision petition before the Central Board of Revenue. The revision of the appellant was accepted by Member Customs Central Board of Revenue vide his judgment, dated 6-5-2000. Vide this judgment the revision petition was allowed and the Order-in-Original passed by the Collector was set aside and it was held that the clearance of the imported parts by the appellant between 1995 and 1997 were in consonance with the practice in vogue in the Customs House, Karachi for the similar and comparable goods and the imports of the appellants were treated as cleared against fair value.
6. Collector of Customs, Rawalpindi on 3rd of July, 2000 filed an appeal against the order, dated 3-6-2000 passed by the learned Member Customs of Central Board of Revenue. Islamabad under section 194-A of the Customs Act, 1969. A Full Bench of CESTA, Tribunal, Islamabad heard the appeal and finally decided vide its judgment, dated 26-2-2002 and the order passed by learned Member Customs, C.B.R., Islamabad under section 195 Was set aside and the Order-in-Original, dated 26-1-2000 passed by the Collector Customs, Rawalpindi was restored subject to modification that the penalty imposed on the appellant was reduced from Rs.3,70,967 to Rs.1,00,00,000 (one crore). Relevant it would be to point out that the Appellate Tribunal ,vide its judgment disposed of four appeals through a consolidated judgment and three other appeals related to the Clearing Agents. The judgment of the Tribunal was not unanimous. The Bench comprising Chairman and two members (one of, them Technical Member) rendered a dissenting judgment but through the majority judgment the appeal of the Collector was allowed.
7. It is argued on behalf of the appellant that the Collector of Customs, Rawalpindi could not file an appeal under section 194-A of the Act before the Appellate Tribunal from the order passed by the learned Member Customs. It is contended that section 194-A of the Act was amended through Finance Act of 2000 which, came into force on 19th of June, 2000, by virtue of this Finance Act the expression after the word "any person" "or an officer of Custom", was inserted in section 194-A of the Act. The learned counsel thus submitted that before 19th .of June, 2000 any officer of the Customs Department had no right to file an appeal before the Tribunal. According to him the revision of the Appellant-Company was decided on 3/6-5-2000 by Member Customs, C.B.R. and on the day or thereafter till 19th of June, 2000 right of appeal to any officer of the Customs was not available. The amendment could not operate retrospectively and by judgment prior to 19th of June, 2000 it had become past and closed transaction and the judgment of the Member Customs had attained finality.
8. Legal questions Nos. 1, 2 and 3 raised by the appellant were argued on the premises and reasoning narrated in the preceding paragraph. Question No.7 was dropped and legal questions Nos. 9,10, 13, 14, 15, 20, 21 and 22 were argued as discussed hereunder.
9. Next it was contended by the learned counsel for the appellant that section 25 of the Customs Act, 1969 lays down the principle regarding the valuation of the goods and value of the any imported goods had to be taken to be the normal price which would fetch as sale price in open market, between buyer and seller, independent of each other. It was submitted that section 25 of the Customs Act as it stands now was substituted through Finance Act, 1999 with effect from 1st January, 2000, and doctrine of transaction value was introduced which is the price actually paid or payable for the goods when sold for export to Pakistan.
Basing his argument on the provision of section 25 of the Act, the learned counsel submitted that in both the events whether it was a case under section 25 of the Act before amendment or after amendment the principle was that value has to be determined on the basis of sale in the open market between buyer and seller independent of each other or in the alternative on the transaction value. Reasoning the arguments, the learned counsel sought support from section 80 of the Act and pointed out that clearly it is provided in said section that on the delivery of bill, the goods or such part thereof as may be necessary may, without undue delay, goods were to be examined or tested, and thereafter the goods shall be assessed to duty, if any, and owner of such goods may then proceed to clear the same. Adding to his arguments, the learned counsel submitted that if any dispute arise about the kinds of goods then the goods are to be identified for obtaining a proper value and in case the declared value by the importer was not acceptable to the Customs. Department, the onus to disprove the value shown in the invoice was that of the Department. The Department in that event was required to identify the goods, its make, nature and kind and thereafter proceed to assess its value under section 25 of the Customs Act. Grievances of the appellant in the instant case were that Customs Department in the first instance have been releasing the goods after receiving customs duties and sales tax on the basis of the declaration made in the bill of entry and invoices. Later in 1997, seized one of the vehicle from Gujranwala carrying the imported auto parts. Although- the parts seized were properly declared but were taken into custody when it .were bound for supply to NLC, Gujranwala. These circumstances warranted an onus on the Department to seek the identification of the goods and thereafter proceed to seek their transaction value or otherwise. Instead of doing this, the Department relied on price-list of the genuine parts. It is submitted that auto parts are of two major kinds: One known as genuine parts and other non-.genuine. Genuine parts are those auto part which are manufactured by the original Companies and non-genuine parts are those which are manufactured by other Companies under a licence or franchise by the Companies. According to the learned counsel, the genuine parts are only used by the manufacturing Companies and for replacement or otherwise, non-genuine parts manufactured by other Companies are sold and purchased throughout the world and import of genuine parts are not normally made for use in repair of the second-hand vehicles. It is submitted that the appellant during all this period imported parts which were lesser in value than the genuine parts. The invoices clearly identify these imported goods; as such the cleared by the Customs Department after charging the customs sales tax on non-genuine parts but latter the Department at the some other competitors intercepted some parts of the goods of the appellant after clearance and alleged misdeclaration against the appellant.
Unfair and mala fide approach of the Department was attributed from the fact, submitted by the learned counsel, that the goods seized were not identified whether these were genuine or non-genuine and without such an examination all the import of the appellant ranging from December, 1995 till August, 1997 was treated to be an import of genuine parts. It was valued on the basis of price list of the genuine goods and the appellant was saddled with huge liability of the customs duty as also of the huge penalty.
10. The learned counsel next contended that for penalizing the appellant provisions of section 32 of the Customs. Act were invoked as is evident from the show-cause notice and the Order-in-Original. One of the pre-requisites in section 32 is the mens rea and a proper proof that the invoices submitted earlier by the appellant, which were accepted by the Customs. Department, were false and incorrect and that the appellant contumaciously; deliberately, misdeclared the things with guilty intention. It is submitted by the learned counsel that total number of invoices were 241 spread over during the period of December, 1995 to August, 1997. There was no mean with the Department to substantiate their allegations because of the imported consignment had already been supplied by the appellant to various Government Departments and Organizations particularly NLC and KLR. The Department intercepted consignment which was bound for NLC Gujranwala and it was a negligible part of the import made by the appellant. In any case, the Department did not embark upon the exercise of identification of the seized parts as genuine or non-genuine. So without having determined the basic fact the application of price of the genuine parts could not be made as the first basic step was omitted by the Department. According to learned counsel it was deliberately done by the Department because the fact was that the imported parts were of the non-genuine kind. This is clearly mentioned in the invoices, order of the learned Member Customs, C.B.R. and .dissenting judgment rendered by the Technical Member of the Tribunal.
11. In support of-his contention the learned counsel for the appellant referred to and placed reliance on a large number of judgments particularly cases of Messrs Latif Brothers v: Deputy Collector of Customs, Lahore (1982 SCMR 1083), Punjab Beverages v. Appellate Tribunal (Customs, Excise and Sales Tax) (2002 PTD 2957), Irfan Tayyab v. Collector Customs, (2003 PTD 890), Messrs Abdul Aziz Ayoob v. Assistant Collector, Customs (PLD 1997 Kar. 378), Kausar ,Trading v. Government Pakistan (1986 CLC 612), Saleem and Co. v. Deputy Collector, Customs (PLD 2001 Lah. 5), Farooq International v. Chief Controller Imports and, Exports (1985 CLC 1781), Dawood Cotton Mills v. Central Board of Revenue (1985 MLD 1610) Ali Muhammad v. Deputy Collector Customs (1986 MLD 1429), Messrs Sasta Autos v. Government of Pakistan (1991 MLD 1582), Capital Sports Sialkot v. Government of Pakistan (1989 MLD 999), Indus Auto Mobile Ltd. v. C.B.R. (PLD 1988 Karachi 99), Commercial Pipes Ltd. v. Federal Government of Pakistan (PLD 1989 Lah. 89) and Haji Abdullah Jan v. The State (2003 SCMR 1063).
12. On the other hand, the learned counsel representing the Revenue submitted that the appeal filed by the Collector before the Tribunal was competent. He referred to the provision of section 194-A (3) and pointed out that every appeal before the Tribunal was required to be filed within 60 days from the date of the decision. The order assailed was, passed on 3/6-5-2900, therefore, 60 days were to expire on 6th July and the appeal was filed on 3rd July. His argument is that by virtue of sub-clause (3) right to file an appeal was 60 days and during this period by virtue of Finance Ordinance the right to file an appeal was conferred by law on the Collector who was one of the officers of Customs, therefore, it was properly constituted appeal and was competently filed under the provision of section 194-A. Replying td the next legal question under section 25 it was submitted that the value of the imported goods was worked, out on the basis of the price-list of the Company of the genuine goods. He referred to Customs General Order of 1985 and submitted that in respect of auto parts price of non-genuine parts had to be 80% of the price of genuine parts. According to him, the parts imported by the appellant were genuine in kind, therefore, Customs Department were justified in finding a misdeclaration against the appellant and determining its value on the basis of the price-list of the genuine parts. The judgment of the Tribunal was supported by the learned counsel.
13. We have considered the arguments of learned counsel for the parties. Firstly the question raised by the learned counsel for the appellant relates to the competency of filing of the appeal by the Collector of Customs. We would take up this question first. Section 194-A, of the Customs Act, as amended finally by Ordinance 2000, reads as under;--
"(194-A) (1) Any person or an officer Customs aggrieved by any of the following orders may appeal to the Appellate Tribunal against such orders;--
(a)a final decision or order passed by an officer of Customs as air Adjudicating Authority under section 179;
(ab)an order passed - by the Collector (Appeals) under section 193
(b)***
(c)an order passed under section 193, as it stood immediately before the appointed day;
(d)an order passed by the Board or the Collector of Customs under section 195 (***);
(i)***
(ii)Every appeal under this section shall be filed within sixty days from the date on which the decision or order sought to be appeal against is communicated to the Board or the Collector of Customs, or as the case may be, the other party preferring the appeal.
14. Vide insertion made through the Finance Ordinance 2000, the expression "an Officer of Customs" was made after the expression "any person". This insertion was made on 19th of June, 2000 and it was made effective from the said date. Prior to this an Officer of the Customs was not competent to file an appeal under section 194-A. The jurisdiction to file an appeal by any Officer of the Customs was thus conferred on 19th of June, 2000 and before that although right to file appeal was available to any person aggrieved but it was not within the competency of any or the Officers of Customs to file such an appeal. In the present case order under section 195 was passed by the Member of Customs, Central Board of Revenue in exercising his revisional jurisdiction on 3/6-5-2000. On the said date when the decision was made and when it was conveyed on 19-5-2000 to the Collector Customs, he was not competent to file any appeal. As such the order passed by the revisional Authority had attained finality. Subsequent amendment in law clothing the Collector with the right to file an appeal on 19th of June, 2000, would not tend to destroy the right of the appellant acquired by it before 19th of June, 2000. It is a settled principle in the domain of fiscal law that the amendment touching union and dealing with substantive right could not be given retrospective effect until and unless it is specifically intended to be so by the Legislature. Conferring a right of appeal is one of the substantive rights which was thus provided to the officers of the Customs on 19th of June, 2000. Conversely, it also abridges the right of the other party to claim immunity, against any order passed in their favour by revisional forum. We are not persuaded to agree with the learned counsel of the Revenue that the amendment brought under section 194-A by virtue of Finance Ordinance, 2000 was not merely procedural in nature. In case Haji Abdullah Jan v. The State (2003 SCMR 1063) section 41.7(2A) of the Criminal Procedure Code was examined by the Apex Court. Sub clause (2A) was added under section 417, Cr.P.C. through an Amending Act No.XX of 1994 on 28-10-1994 and it was gazetted on 14-11-1994.
On 31-10-1994, learned Sessions Judge passed a judgment of acquittal and an appeal was preferred by the Deputy Attorney-General of Pakistan on behalf of the Federal Government. In that case, it was held that the appeal was not competently filed. It was further observed that sub clause (2A) was enforced after the judgment of acquittal. Therefore, on examining the various provisions of law we find that the right to file an appeal by any officer of the Customs, was not available before 19th of June 2,000 and the appellant acquired a valuable right through the judgment dated 6-5-2000 and this right could not be taken away by construing the amended provision retrospectively. On 6-5-2000, when the revisional Authority passed a judgment in favour of the appellant, as it was non-appealable order, therefore, it had attained the finality and it had become a past and closed transaction. Admittedly, the Finance Act. 2000 came after 50 days of the above judgment and conferred right on any Officer of the Customs to file the appeal, which could not be used by the Collector Customs, Rawalpindi to challenge the order dated 6-5-2000 passed by C.B.R. in its revisional jurisdiction. Even sub-clause (3) which deals with the limitation of 60 days did not confer any right as the question of limitation is dependent on the competency to file appeal. Sub-clause (3) could not be interpreted in a manner so as to give retrospectivity to the amended provision of sub-clause (1). The argument raised on behalf of the Revenue was that under sub clause (3) because limitation of 60 days was available and computing the 60 days from 6-5-2000 the date of revisional order, the right of appeal was available to the Collector up to 6th of July and the 3rd July was a day within which he had a right to file the appeal, therefore. he argued that the appeal was competently filed. We are, afraid that this argument is not well taken. Computation would be dependant on a kind of order described under sub-clause (1) and the competency to challenge the said order under the law: In the absence of any competency, the procedural provision relating to limitation would not confer any substantive right on the Collector to file an appeal. We therefore, old that the appeal filed by the appellant before the Tribunal was not competent as the Collector Customs was not conferred any jurisdiction to file the appeal and the order dated 6th of May, 2000 had attained finality and it was past and closed transaction in the instant case.
15. Next question raised relates to the section ?5 of the Customs Act, 1969. In Latif Brother's case the Hon'ble Supreme Court authoritatively interpreted the provision of section 25 of the Act and the principle enunciated was consistently followed by all the Courts and hierarchy. In that judgment para 8 is illuminated and it is reproduced herein below:--
"(8) Section 25 of the Act deals with the determination of the value of the imported goods and insofar as relevant for the purposes of this appeal reproduced, below:
"the value of any imported goods shall be taken to be the normal price, that is to say, the price which they would fetch (on the date referred to in section 30), on a sale in open market between a buyer and a seller independent of each other.."
"According to section 30, the value and rate of duty leviable on the imported goods are those which shall be in force for the goods meant for home consumption, like the consignment in dispute, on the late when the Bill of Entry" is presented to the Customs Authority. Section 25 speaks of "normal price" which is described as the price, the goods would fetch on sale in "open market" in a bona fide transaction. The "open market" here means the market in the country of origin and not at the place of importation. Thus, criterion for determination of the value of the goods should have been the prevailing commercial price in Thailand at the time of import and not the price obtaining in Singapore or other Far East Countries. Admittedly; the price list of similar goods of Thailand origin was, not before the Authorities concerned when the appellant's consignment was evaluated. The onus to established that the appellant importer made a misstatement was entirely on the Department who failed to muster any evidence from the country of origin to belie the declared value. No such material has been placed before us even at the time of hearing of the appeal. The position would be different, if the price list from the country of origin was not at all available, despite efforts of the departmental authorities. But, such is not the case here. In the circumstances of the case, it is difficult to hold that the appellant is guilty of making mis-statement within the meaning of section 32 or of violation of section 156(1)-14."
16. All 241 invoices in the present case pertained to the period December, 1995 to August, 1997, therefore, section 25 as it existed prior to 1st January, 2000 was applicable and the value of the imported goods was to be taken as normal value that is to say, the price would fetch a sale in open market, between the buyer and seller independent or each other. In the process of determination of value in the instant case, it the Department disagreed with the value declared by the importer; the onus shifted on it to prove that the consignment imported was different than the one described in the invoices. It is surprising that the Department in the first instance accepted the bill of entry and import invoices submitted by the importer, accepted the version of the, importer that the auto parts imported were non-genuine parts, charged them to customs duty and other taxes and released those consignments. It was in 1997, that on the receipt of some information a truck of the appellant Company was intercepted in Gujranwala which was carrying auto parts for supply to NLC Gujranwala. It was a fraction of the huge imports spread over a period of 1-1/2 years even then the Department did not proceed to seek the proper identification and examination of the seized goods as to find out whether those were genuine auto parts or non genuine auto parts. Instead of adopting a logical course the Department presumed the seized parts as the genuine one and using the price list of genuine parts made out a case of contravention against the appellant. Presupposition of the Department before making out a case of contravention was, that the normal price of he auto parts was that which was given in the price list issued by the original Companies of manufacturers. This presupposition could only be taken if the Department would have scrutinized; examined and determined the classification of the goods in the first instance. In the absence of any such exercise, the application of the price list of the genuine parts was not warranted in the circumstances of the case. In para 15 of the majority judgment of the Tribunal it was observed as under:--
"The respondent-company themselves had supplied to the raid party the records of their imports, including the manufactures price lists, obviously of genuine spare parts in support of the quantity and quality of goods they had been importing and the adjudicating officer was justified to assess the differential of the amount of the Government dues evaded by the respondent company on the basis of these price lists after allowing them maximum usual trade discount at the rate of 15 % under the advice of Collectorate of Customs Valuation Karachi."
17. We observed that the Tribunal also relied on price list or genuine spare parts. Real link in the chain was missing that the Department did not determine the classification of the imported goods. It could not be in respect of the consignment which was already released and consumed but this could be done in respect of the parts seized by intercepting the truck. The invoices which were produced by the importer were already accepted and therein these auto parts were declared to be non-genuine, so there was no tangible evidence available with the Department to reach a conclusion that the imported parts which had already been released were genuine in kind and the same were misdeclared in the original invoices. The Department sought the production of the price list of the genuine auto parts from the company and the same were produced. It was presumed that the `goods which were imported during 1-1/2 years were also genuine. The same error was also committed in the decision of the Tribunal which has vitiated its decision as such it was not sustainable.
18. Lastly, dealing with the question relating to section 32, we find that misdeclaration was alleged against the appellant. So, charging of misdeclaration on untrue statement, misdeclaration pre-requisites a fact that the person charged for the same made or signed or causes to be made any statement in answering to any question which he knows or have reason to believe that such documents are false. In the present case importer has been filing bills of entry and imports invoices before the Customs Authorities. They were accepting these invoices and bills of entry and charging them the customs duties and other taxes on the basis of declaration made therein. All 241 invoices presented by the importer were accepted and the consignment was released on payment of customs duty and other taxes as determined by the Customs Department. It came to the notice of the Customs Department that the declarations made by the importer were not true. They accordingly intercepted one truck carrying imported parts which was bound for delivery of the same to NLC Gujranwala. The consignment in the truck was seized. Notice under section 26 of the Act, 1969 was issued to the appellants for production of documents which were produced. As it was a case of misdeclaration on presentation of a document and misdeclaration was alleged in respect of a part of a consignment which was allegedly seized by the Customs Department, the onus shifted to the Department and it heavily lay on them first to classify the goods seized as the genuine auto parts and thereafter use price list of the genuine auto parts so as to determine the value of the consignment. We also find that it was not possible for the Customs Department to take the entire import ranging from December, 1995 to August, 1997 as the import of genuine parts merely on the basis of consignment intercepted on one truck Which was hardly a little fraction of the entire import. The Department in the first instance would have determined the classification of the goods seized and as the most of the import was made by the importer for supply to NLC of Pakistan Armed Forces and Kahuta Search Laboratories again a l Government Organization, the record could have been verified to find out the kind and classification of the goods imported. Unfortunately the Department did not undertake either of-the exercises and merely thought it proper to take the price from the price list of the genuine auto parts. It appears that the Department did not act diligently and failed to perform their functions and the contravention case was either not made with serious mind or it was not initiated with the serious object. We wanted to examine the record ourselves and we directed the Department to produce the invoices and TIPS but after obtaining few dates the Departmental representative made a statement that all the invoices on the basis of which the goods were released are not available, in the Department for producing the same in the Court. The statement of Mr. M.A. Sherazi. Inspector Customs, Legal Division, Customs House, Rawalpindi was and it has fortified our opinion that the Department did not act and the serious approach on its part to make a case of which was lacking. Contravention under section 32 is not merely making of a false statement but it should contain an element of mens rea as it defines an offence and makes it punitive. Failure to bring on record, through scrutiny, examination or any other means, that the imported auto parts were genuine in kind, price list was of no use to the Department and it' could not be proved that the value declared in bills of entry and import invoices by the importer were untrue and false. Thus we are of the view that no case of contravention was proved against the appellant and the provisions of section 32 were misapplied in the circumstances of the case.
19. In view of our findings hereinbefore we, allow Appeal No.40 of 2002 (Messrs Innovative Trading Company, Ltd. v. CEST, Appellate Tribunal, Islamabad) and set aside the judgment, dated 21-3-2002 passed by the Customs; Excise and Sales Tax. Appellate Tribunal and restore the order of Member Custom, Central Board of Revenue, dated 26-11-2002.
Appeals Nos. 29 & 30 of 2002.
20. Learned counsel appearing in the connected Appeals Nos.29 and 30 of 2002 has argued that the appellants therein were merely Clearing Customs Agents and they were issued licence-under section 207 of the Customs Act read with Rules known as Customs Agent Licensing Rules, 1971 issued vide Notification No. S.R.O. 13(I)/71, dated 8th January. 1971 and that they were working as such for about 25 years and they filed the bills of entries on behalf of Messrs Innovative Trading Company for clearance of auto parts in routine which were duly examined by the appropriate officer and imported consignments were released. It was contended on their behalf that their licence could only be invoked under rule 19 of Customs Agent. Licensing Rules, 1971. The learned counsel pointed out that the grounds for revocation/suspension of licence of any of the agent are enumerated in rule 19 and no show-cause notice alleging any violation of rule 19 was served on the appellant On the contrary, show-cause notice which was given to the importer company was also served on the appellant and through the same Order in-Original their licences were revoked. Further submitted that the Order-in-Original was challenged by the importer company by filing a revision petition before the Central Board of Revenue but the appellant herein filed an appeal before the Tribunal. Latter there appeals were disposed of by the Tribunal through consolidated judgment alongwith the appeal of the Collector Customs.
21. Next it was contended that the cancellation of licence while adjudicating the case under section 156 of the Customs Act, 1969 is illegal and without jurisdiction and licence of the petitioner could not be cancelled under the provision of section 196 of the Customs Act. Referring to the show-cause notice it was submitted by the learned counsel that the only allegation against the appellant was submission of the document of the imported consignment and thereafter the Collector while passing Order-in-Original held that the Clearing Agents had male fide (collusion) with the main respondent and filed the incorrect, untrue and false import document before the concerned Customs Authorities while the Tribunal did not decide any question raised by the appellant and merely dismissed three appeals without any reasoning.
22. We have examined the record in the light of the contentions of the appellant and find that the Tribunal has not rendered any finding on the question raised by the appellant and merely in the last three lines of the judgment stated that as regards the remaining appeals these are dismissed in toto. There is no speaking judgment against the appellant by the Tribunal nor any findings were recorded by the Collector against the Clearing Agent while passing the Order-in-Original. We have already found that the judgment of the Tribunal, dated 21-3-2002 was not sustainable in law. Accordingly the Appeals Nos. 29 and 30 of 2002 filed by Messrs Moon Enterprises and Butt Agencies Custom Clearing Agents are allowed and the judgment of the CEST, Appellate Tribunal, dated 21-3-2002 as well as the Order-in-Original dated 26-1-2002 passed by the Collector are set aside and the licences of the Agents are restore if same have not been suspended or revoked in any other case. A copy of this judgment be sent to the. Tribunal (CESTAT), Islamabad who would pass such order as is necessary to dispose of the case conformably to such decision.
M.B.A./I-233/LOrder accordingly.