MUHAMMAD SARWAR VS FEDERATION OF PAKISTAN through the Secretary, Revenue Division and 2 others, 2005 PTD-KARACHI-HIGH-COURT-SINDH 2554 (2005)

Customs Act (IV of 1969)---

----Ss. 177 & 3---Customs Rules, 2001, R.335--- S.R.O. 388(I)/82, dated 22-4-1982---S.R.O. 431(I)/98, dated 30-4-1998--- Constitution of Pakistan (1973), Art. 199---Constitutional petition---.Powers of Directorate General of Intelligence & Investigation---Scope---Seizure of containers---Directorate General of Intelligence and Investigation had no jurisdiction either to seize or to issue notice under S. 171, Customs Act, 1969, inter alia, for the reason that such authority was not even vested with the Collector of the Port of Transshipment, which could have taken note of the alleged misdeclaration---Customs Intelligence Directorate had no jurisdiction to seize duty paid goods as the same did not fall within the ambit of its powers---In the present case, one of the containers on which duty was paid, was intercepted afterwards by the Directorate General of Intelligence and Investigation and Deputy Director General of Intelligence & Investigation and which was not the subject-matter of. transshipment---High Court, in circumstances, directed that the container in question be released immediately to the importer, subject however, to any action to be taken by the Collectorate of the Port for misdeclaration or evasion of Customs duty, if any, in accordance with law---Notice issued by the Directorate General of Intelligence and Investigation in that behalf was declared to be without lawful authority---Other two containers which were also in the custody of the Deputy Director General of Intelligence and Investigation and were to be transshipped to the Dry Port were ordered to be released and handed over to the Collector of the Port for proceedings according to law---Impugned notices issued by Directorate General and Deputy Director General of Intelligence and Investigation were quashed by the High Court with directions that if need be, both the Directorates shall issue the delay and detention certificates forthwith for the three containers from the date of seizure till its release as the importers could not be compelled to pay any amount of demurrage on account of the wrongful acts of the Directorates.

Messrs Haris Trading International and another v. Director Intelligence and Investigation (Customs and Excise), Karachi and 4 others passed on 16-3-2004 in Constitution Petitions Nos.D-1512 and 1513 of 2003 and Shahzad Ahmed Corporation v. Federation of Pakistan and 2 others passed on 7-9-2004 in Constitution Petition No.D-817 of 2004 fol.

Collector of Customs v. S. M. Yousuf 1973 SCMR 411 and Mazhar Iqbal v. Collector of Customs 2004 PTD 2994 ref.

Khalid Javed Khan or Petitioner.

Syed Tariq Ali, Standing Counsel for Respondents.

Date of hearing: 14^th December, 2004.

ORDER

AMIR HANI MUSLIM, J.---Through this petition the petitioner has prayed for the following reliefs:---

"(A) Declare that the officers of the Respondents Nos. 2 and 3 have no lawful authority or jurisdiction to interfere with the consignments/containers meant for transshipment under the Customs Act, 1969.

(B) Declare that detention/seizure of the Petitioner's Containers No.OOLU8075390 and MLCU9303341 for which Transship ment Permits Nos. KPQI, TP-7419 and KPQI, TP-7420 were issued by the appropriate officer of Collectorate of Customs (Port Qasim), by the Officers of the Respondents Nos.2 and 3 was in violation of the Customs Rules,2001 and arbitrary, illegal, mala fide without jurisdiction or any lawful authority whatsoever.

(C) Declare that all subsequent actions taken by the Respondents on the basis of illegal detention/seizure of Petitioner's containers are also illegal, void and without any lawful authority or consequence whatsoever and liable to be quashed.

(D) Direct the Respondents to immediately release the petitioner's container No.OOLU5666975 for which bill of entry has been presented while allowing transshipment of the remaining two containers bearing No.OOLU8075390 and MLCU9303341 to Sialkot Dry Port, Sialkot.

(E) Direct the Respondents to issue delay detention certificates for the duration when the petitioner's containers remained in illegal custody of the Respondents Nos.2 and 3.

(F) Grant any other relief deemed appropriate in the circumstances of the case.

(G) Grant cost of the petition."

2. Brief facts as they appear from the pleadings of the parties are that the petitioner. Muhammad Sarwar, claims to be proprietor of Imperial Sources, Lahore and is engaged in the business of import. The Petitioner further claims to have imported a consignment consisting of old/used clothes, clothes (shoe lining), scrap printed directories, cling films, sofa clothes (velveteen), assorted toiletries, etc. through Orient Overseas Container Line in three different Containers bearing Nos.OOLU5666975, OOLU8075390 and MLCU9303341. Three bills of lading of aforesaid three containers were manifested on 8-3-2004 vide IGM No. 145 of 2004 by the carrier which were duly approved by the concerned officer of the Customs. The petitioner claims that on 16-3-2004 he had filed a Bill of Entry at Port Qasim in regard to the container No. OOLU5666975 containing used/old clothes for release of the same upon which customs duty and other charges were assessed, which the petitioner claims to have duly paid.

3. In so far as remaining two containers were concerned, they were to be transshipped to Sialkot Dry Port, Sialkot. On 16-3-2004 the Licensed Bonded Carrier namely Messrs Sialkot Dry Port Trust, Sialkot, presented a request to the concerned officer of Collectorate of Customs (Port Qasim) for a transshipment permit for the aforesaid remaining two Containers which permits were accordingly granted by the appropriate authority.

4. Per the Petitioner while the three containers were inside the premises of Port Qasim, the officers of the Respondent No.2 unlawfully entered the premises of the Port on 16-3-2004 and illegally seized all the three containers belonging to the petitioner besides the documents, including the transshipment permits and bills of entry. The petitioner further pleads that no notice either before or after seizure of the Containers was given to the petitioner. The three Containers were given in custody of the QICT vide detention notice issued by the Respondent No.3.

5. The petitioner approached the respondent No.3 and pointed out that the containers had illegally been seized. The officers of Respondent No.3 on refusal of the petitioner to privately settle the matter, on 26-3-2004 lodged FIR No.Appg-06/DC/2004 under section 2(s), 16, 32(1) and (2), 121 and 178 of the Customs Act, 1969. The petitioner claimed that, in law, the Respondent No.2 had neither jurisdiction nor authority to seize the Containers of the petitioner at Port Qasim and hence the Notice issued by the officers of the Respondent No.2 is sought to be declared as without jurisdiction.

6. In support of the petition, the learned counsel for the petitioner has submitted that jurisdiction of the respondent No.2 has been conferred by Notification No. S.R.O. 388(I)/82, dated 22-4-1982. The said S.R.O. has been issued by the Federal Government in exercise of powers under sections 3 and 4 of the Customs Act, 1969. It has been submitted that the Respondent No.2 can exercise its jurisdiction in respect of the provisions of sections 48, 62, 91, 92, 139, 158, 159, 160, 161, 162, 164, 165, 166, 167, 168(1)(3) and (4),171, 175, 198 and 199. Additionally that provisions of sections 22 and 121 of the Customs Act, viz. regarding search and seizure are excluded under the said SRO. The learned counsel submits that the respondent No.2 cannot assume jurisdiction to discharge their duties as Customs Officer in respect of any other provision under the Customs Act except what has been mentioned in the said S.R.O. For the sake of convenience, the relevant Notification is reproduced hereunder: --

"Appointment of Officers of the Directorate of Intelligence and Investigation (Customs and Excises) to discharge the duties of customs officers.

Notification No. S.R.O. 388(I)/82, dated 22nd April, 1982.---In exercise of powers conferred by sections 3 and 4 of the Customs Act, 1969 (IV of 1969), and in supersession of its Notification No. S.R.O. 413(I)/73, dated the 21^st March, 1973, the Central Board of Revenue is pleased to authorize the officers of the .Directorate of Intelligence and Investigation (Customs and Excises) specified in column (2) of the Table below to exercise the powers and discharge the duties of the officers of customs under the provisions of the said Act specified in column (3) of the said table within the area of their respective jurisdiction.

TABLE

7. It has been contended by the petitioner's counsel that the jurisdiction of the Appraisement Collectorate is conferred upon them pursuant to the Notification No. S.R.O. 431(I)(98) issued on 30-4-1998,which is reproduced hereunder:--

"Appointment of officers of Customs and Specification of their jurisdiction.

Notification No. S.R.O. 431(I)/98, dated 30th April, 1998.---In exercise of powers conferred by section 3 of the Customs Act,1969 (IV of 1969), and in suppression of its Notification No. S.R.O. 95(I)/83, dated 12th February,1983, the Central Board of Revenue is pleased to appoint:--

(1) the officers specified in column (2) of the Schedule below to be the Collectors of Customs for the areas specified in the corresponding column (3) thereof; and

(2) the Additional Collectors, the Deputy Collectors, Assistant Collectors, Principal Appraisers, Appraisers, Superintendents, Deputy Superintendents, Inspectors of Preventive Service and

(3) Preventive Officers, Examiners, Inspectors and Officers of Ministerial Department, in the respective Customs Houses and the Collectorates to be officers of customs for those areas.

SCHEDULE

8. The learned counsel for the petitioner submits that section 158(1) of the Customs Act speaks of "goods liable to confiscation" which section has to be read with section 17 of the Customs Act, which refers to section 16, which provides that the Government from time to time would frame Import policies by which it may impose ban on any item. The learned counsel submits that items contained in the containers were not banned items in terms of section 17 of the Customs Act and, therefore, could not have been confiscated. His submission was that mere inclusion of section 158(1) in the Notification, dated 22-4-1982 would not confer jurisdiction on the Respondent No.2 to confiscate goods unless such goods were notified as contraband in terms of section 16 of the Customs Act. In this regard the learned counsel has relied upon the case of Collector of Customs v. S.M. Yousuf reported in 1973 SCMR 411 at 414.

9. The learned counsel further submitted that the Respondents Nos. 2 and 3 had neither jurisdiction nor authority to seize the consignment. He contended that the notice issued to the petitioner mentions, a case of mis-declaration, which falls outside their jurisdiction as the cognizance in respect of mis-declaration in terms of section 32 of the Customs Act could only be taken by the Collectorate of Appraisement and not by the Respondent No.2. He further submitted that the petitioner has yet to file a bill of entry and, therefore, the question of mis-declaration did not arise in respect of the two consignments, which were under the process of transshipment. According to the learned counsel. the cognizance under section 32 regarding mis-declaration was only available by the Collectorate at the port of discharge and the Collector of Port Qasim, which was the port of transshipment was devoid of the authority.

10. He further submitted that the notice issued by the Respondent No.2 was beyond their jurisdiction in as much as the petitioner was charged under sections 16, 18, 25, 32(1) and (2), 79 and 83 of the Customs Act. All these sections according to the learned counsel fall outside the jurisdiction of the Respondent No.2 in terms of the S.R.O. which confers upon them the jurisdiction of exercise their authority. His further submission was that registration of the FIR on 26-3-2004 by the respondent No.2 and the investigation pursuant to the said FIR and submission of the challan in the trial Court were unauthorized as neither the law nor any rule authorized the Respondents Nos.2 and 3 to take cognizance of the matter against the petitioner, as the alleged act of mis-declaration falls within the jurisdiction of Appraisement Collectorate.

11. He has also relied upon an unreported judgment of this Court given by a Division Bench in the case of Messrs Haris Trading International and another v. Director Intelligence and Investigation (Customs and Excise), Karachi and 4 others passed on 16-3-2004 in Constitution Petitions Nos. D-1512 and 1513 of 2003 and in the case of Shahzad Ahmed Corporation v. Federation of Pakistan and two others passed on 7-9-2004 in Constitution Petition No.D-817 of 2004 and submitted that his case was fully covered by the aforesaid judgment where the learned Judges have held that the jurisdiction of Respondent No.2 was confined to the provisions of Customs Act mentioned in the S.R.O. No. 388(I)/82. He further submits that in the said judgment it has been held in the aforesaid cases that cognizance of mis-declaration could only be taken by the Collector of Customs Appraisement and not by the Respondent No.2. He has also relied upon the case of Mazhar Iqbal v. Collector of Customs (2004 PTD 2994).

12. As against this, Syed Tariq Ali, the learned Standing Counsel has argued that section 161 of the Customs Act as mentioned under the S.R.O. confers jurisdiction upon the Responderit`No.2 to take cognizance of any offence mentioned in the Customs Act. He submits that mis declaration itself is an offence and is covered under section 161 and the Respondent No.2 was competent to take action against the petitioner.

13. Mr. Shafi Muhammad learned counsel for Respondent No.2 has submitted that the action of Respondent No.2 was not outside the jurisdiction of Customs law and since the challan has been submitted pursuant to the FIR registered by the Respondent No.2 on 26-3-2004, therefore, all these issues could be raised before the very Court in which the case was pending trial.

14. We have heard the learned counsel and have perused the record. It would be seen that section 3 of the Customs Act authorizes the Central Board of Revenue to appoint officers of customs whereas section 4 thereof authorizes it to delegate powers and duties to the Customs Officers appointed under section 3. Pursuant to the aforesaid provisions of the Customs Act the Central Board of Revenue has issued S.R.O, dated 22-4-1982, reproduced herein-above, notifying the powers and duties of the Respondent No.2. Under the said S.R.O. the Respondent No.2 is authorized to take cognizance, exercise powers and discharge duties as contained therein. The notification, however, does not include sections 16, 18, 25, 32(1) and (2), 79 and 83 of the Customs Act.

15. The S.R.O. No.431(1) of 1998, issued on 30-4-1998 under section 3, by the Central Board of Revenue, speaks of the officers appointed under the Customs Act, besides their specific jurisdictions. The learned counsel for the petitioner has submitted that Collector of Customs, Port Qasim, was authorized to adjudicate upon all matters relating to import, export and examination of goods in Port Qasim. According to the learned counsel for the petitioner, under the S.R.O. dated 22-4-1982 jurisdiction of respondent No.2 was confined to the provisions of Customs Act, mentioned therein.

16. The further arguments of the learned counsel for the petitioner was that as the two containers were under transshipment to Sialkot Dry Port, in terms of Rule 335(4) of the Customs Rules, 2001 framed under section 219 of the Customs Act, 1969, 100% weighing and 2% random physical examination could be ordered by the Collector of Customs of suspected consignment at the Port of shipment in presence of bonded carrier and in case of mis-declaration of description or weight, action under the provisions or Customs Act could be initiated. The learned counsel submits that under no circumstances goods under transshipment could be detained and or seized by the respondent No.2.

17. The contention of the petitioner's counsel that the respondent No.2 did not have jurisdiction either to seize or to issue notice under the provisions of section 171 of the Customs Act, inter alia, on the ground that such authority is not even vested with the Collector of the Port of Transshipment and it was only the Collector of Port to discharge, which could have taken note of such alleged mis-declaration, is not without force. According to learned counsel for the petitioner Chapter XII of the Customs Act, deals with the transshipment and section 121 of the said A Chapter was the relevant provisions, which have been violated by the respondent No.2. For the sake of convenience, the relevant rule is being reproduced hereunder:---

"Rule 335 of Customs Rules, 2001

335. Clearance of goods from Port.---(1) The authorized representative after completing formalities relating to the port area and on payment of all the dues or charges to the concerned department shall take the transshipment permit to the concerned shed or plot of the container operator for taking delivery of the consignment.

(2) The carrier shall ensure that no goods having marks and numbers or packages etc., different from the once indicated in the Transshipment Permit and Manifest are loaded for transshipment. In case of any discrepancy, the carrier shall report this matter to the concerned Assistant Collector for further orders.

(3) All conveyance carrying transshipment goods shall invariably be weighed at the Port weigh-bridge and the report of the same be provided in carrier manifest and weight slip be attached with the carrier's manifest. In case there is plus variation upto five per cent or five hundred kilograms whichever is less, in the declared weight and the ascertained weight, the transshipment may be allowed subject to the satisfaction of Collector.

(4) Hundred per cent. weighing and two per cent random physical examination to be ordered by Collector of Customs of suspected consignments at the port of transshipment in presence of bonded carrier be allowed and in case of mis-declaration of description or weight, warranted action be initiated.

.

A careful reading of the aforesaid notifications notifying the powers and duties of the respondent No.2 clearly reflect that the legislature never intended to authorize respondent No.2 to exercise their powers under the different provisions of the Customs Act, mentioned in the impugned notice under section 171 issued by them to the petitioner. The provisions Of the Customs Act, mentioned in the impugned notice do not find any place in the referred S.R.O., which confers jurisdiction upon respondent No.2. Mere detection of misdeclaration does not authorize the respondent No.2 either to seize or to register any criminal case against any party but at best they could bring it to the notice of the concerned Collectorate of the port as and when such violation comes to the notice of the respondents. The respondent No.2 has erroneously exercised its jurisdiction to issue notice under section 171 by seizing the containers instead of transmitting such information to the Collector of Port Qasim, who was the competent officer to exercise jurisdiction as provided under the Act. What is most unfortunate is that the respondent No.2 had registered the case and submitted the challan, which again falls outside their jurisdiction as such action should have been taken by the concerned Collectorate. On account of these unwarranted actions of the respondents Nos.2 and 3 the petitioner has been prejudiced. The officials of the respondent No.2 could not encroach upon the powers and duties of the other Collectorate under the garb of section 161. The ultimate result would be that the Government would be at loss, as such unwarranted action would definitely affect the public exchequer. In future, we direct the officers of respondent No.2 to stay their hands from taking cognizance under a provision of the Customs Act and or exercising any power in respect of any provision of Customs Act, which is not notified under the S.R.O. of 1982, however, if they receive any information, they should pass it on to the concerned Collectorate for their action. Apparently, till date the officers of respondent No.2 were exercising all the powers under the Customs Act by encroaching upon the authority of the other Collectorates, which is against the spirit of the law. Every authority, in law, has its own jurisdiction and no one whosoever it may B be, can exceed its limits. We are also not persuaded by the argument of the learned counsel for the petitioner that the action of mis-declaration even by the competent Collectorate was premature as the petitioner did not file a bill of entry, which was required to be filed before the port of discharge and interception at the port of transshipment would not entail any consequence.

18. With profound respect to the learned counsel for the petitioner, we are not persuaded by this argument. Mere non-filing of the bill of entry before the port of discharge by the petitioner in the present case when the consignment has been intercepted and the description of the consignment was found different from the documents of the export and IGM which the petitioner has filed at the port of transshipment, would not give license to the petitioner to take advantage of his wrongful acts. In such cases, the contents of the IGM could be equated to the contents of Bill of Entry for the purposes of determining any mis-declaration. We are satisfied that the Collector, Port Qasim was duty bound to take cognizance of the mis-declaration at the port of transshipment once such discrepancy in the contents of IGM with the contents of the consignment has surfaced and has been brought to his notice.

19. We are also in respectful agreement with conclusion reached by the Honourable Judges in the unreported judgments of Division Benches in the cases of Messrs Haris Trading International and another v. Director Intelligence and Investigation (Customs and Excise), Karachi and 4 others passed on 16-3-2004 in Constitution Petitions Nos.D-1512 and 1513 of .2003 and Shahzad Ahmed Corporation v. Federation of Pakistan and 2 others passed on 7-9-2004 in Constitution Petition No.D-817 of 2004. Such conclusions were that in the circumstances of the case the respondents viz. Customs Intelligence Directorate had no jurisdiction to seize duty paid goods as this did not fall within the ambit of their powers as per the notification in question. In the result the goods were directed to be handed back to the petitioners while observing that the matter may be referred to the concerned Collectorate for necessary action regarding evasion of duty etc.

20. In the present proceedings one of the Containers on which duty was paid, was intercepted afterwards by the respondents Nos.2 and 3 and which was not the subject-matter of transshipment. This shall be released immediately to the petitioner, subject, however, to any action to be taken by the Port Qasim Collectorate for mis-declaration or evasion of Customs duty, if any, in accordance with law. The impugned notice issued by the respondent No.2 is declared to be without lawful authority.

21. The other two Containers, which are also in custody of the respondent No.2 and were to be transshipped to Sialkot shall be released and handed over to the Collector, Port Qasim, for proceedings according to law. However, the impugned notices issued by the respondents Nos.2 and 3 to the petitioner are hereby quashed for the aforesaid reasons. If need be the respondents Nos.2 and 3 shall issue the delay and detention certificates forthwith for all the three Containers from the date of seizure till its release as the petitioner cannot be compelled to pay any amount of demurrage on account of the wrongful acts of the respondents Nos.2 and 3.

22. Since the F.I.R. has been lodged by the officer of the respondent No.2 and challan has been submitted by them such irregularity can be cured by directing the concerned Collectorate to step into the shoes of the respondent No.2 in such proceedings by taking charge of the said prosecution from the respondent No.2 forthwith but we do not intend to declare that the registration of the case against the petitioner by the respondent No.2 was illegal but it is merely an irregularity which can be cured by transferring the investigation to the concerned Collectorate which we order accordingly. As the trial culminating from F.I.R. No. Appg. 06/DC1/2004 dated 26-3-2004, is yet to conclude before the Court of competent jurisdiction and under the provision of Cr.P.C. the process of investigation does not come to an end till the judgment in criminal case is announced, therefore, even if the respondent No.2 has submitted the challan, the transfer of investigation/prosecution to the concerned Collectorate for taking further steps in the matter can be ordered to cure defects in the given circumstances.

The petition is disposed of in the above terms along with the listed applications.

M.B.A./M-269/KOrder accordingly.