MANHATTAN INTERNATIONAL (PVT.) LTD., KARACHI VS DIRECTOR GENERAL INTELLIGENCE AND INVESTIGATION CUSTOMS AND EXCISE), KARACHI, 2006 PTD-KARACHI-HIGH-COURT-SINDH 2609 (2006)

Customs Act (IV of 1969)---

----S. 196---Appeal to High Court---Finding of Tribunal on a point not raised by parties--Validity---Such finding could not be treated as finding arising out of the pleas taken by parties---High Court in exercise of its advisory jurisdiction under S.196 of Customs Act, 1969, could not take suo motu notice of a plea, which was neither raised before the Tribunal nor was there any finding of Tribunal thereon---High Court in exercise of its limited jurisdiction could not grant any relief to appellant on such plea as same would amount to transgressing its jurisdiction---Principles.

Mian Shafiq Alam v. The Collector 1998 MLD 2985; .1995 SCMR 387 and Collector, Customs, Central Excise and Sales Tax, v. Haji Ahmedullah and others 2005 PTD 1654 ref.

Sohail Muzaffar and Ms. Fouzia Rasheed for Appellants.

Raja Muhammad Iqbal for Respondents.

Date of hearing: 10th August, 2006.

JUDGMENT

MUHAMMAD MUJEEBULLAH SIDDIQUI, J.---All the above appeals are directed against the order passed by the learned Customs, Excise and Sales Tax Appellate Tribunal, dated 14-5-2003 in Custom Appeals Nos. K-1557, 1558, 1559 and 1560 of 2001.

The relevant facts as contained in the order of learned Tribunal are that on receiving information that the appellant have imported and managed to clear the expensive and highly sophisticated professional recording equipments including high band V.C.Rs, Cameras and other studio equipments under the garb of personal baggage without payment of customs duty and other taxes, the staff of Directorate of Intelligence and Investigation (Customs and Excise), visited the offices of the appellants and required them to produce import documents. The appellants instead of producing documents made a joint representation along with 16 other companies to the Director, Intelligence and Investigation (Customs and Excise) Karachi, contending that they have purchased these equipments from open market/private sellers who did not issue proper receipts. The sellers did not furnish the proper import documents as well.

On 19-2-1995, a meeting was held between the representative of the Directorate of Intelligence and Investigation and members of the Association of Companies. It was decided that they will produce legal documents of the equipment installed in their studios but no such documents were provided by the appellants. On the other hand, the appellants filed Constitution Petition before the High Court of Sindh, which granted stay and ultimately disposed of the petition with the following observation:--

"Petitioners/appellants should have satisfied the respondent (Collector) of having valid possession of goods in question and the respondents thereafter, would dispose of the, matter within one month."

In spite of above direction no valid import documents were produced and the appellants again made a statement in the letter, dated 13-3-2001 that they have purchased these equipments from the open market and the sellers have not given them any receipt. Along with this letter certain irrelevant documents were supplied which did not tally with the goods installed in the appellants studios. Ultimately the Collector issued show-cause notice on 24-5-2001. In the show-cause notice it was observed that by failure on the part of appellants in producing the documents of import, it was established that the goods are smuggled in Pakistan. The actual assessable value of the equipments installed by the appellants were given in the show-cause notice. It was observed that the appellants have deprived the Government of Pakistan of its legitimate revenue and violated the provisions of sections 2(S) and 16, punishable under Clauses (8), (9), (89) and (90) of section 156 of the Customs Act, 1969. The appellants were called upon to show cause as to why penal action should not be taken against them for violation of aforesaid provisions of law.

In reply to the show-cause notice several pleas were taken including the plea that the show-cause notice was issued to the respondent after lapse of 9 years as such it was beyond the period of limitation provided in section 32 of the Customs Act, 1969.

The matter was heard by Collector (Adjudication) Karachi, on 23-6-2001 and the order-in-original was passed on 11-9-2001. During the course of hearing parawise comments were filed by the Departmental Officers. While replying the plea of limitation with reference to section 32 of the Customs Act, 1969, it was contended that the appellants failed to produce any legal valid import documents and that it is their case that they have not imported the goods and therefore, the case falls outside the ambit of section 32 of the Custom Act, 1969, which deals with the import and export of the goods. It was specifically stated that no show-cause notice was issued under section 32 of the Customs Act, 1969 and the show-cause notice was issued under section 180 of the Customs Act, wherein no period of limitation is provided for issuance of show-cause notice.

The learned Collector, ultimately held that the appellants failed to submit any valid legal documents showing the lawful possession and payment of duty and taxes. In absence of any justifiable rebuttal, the offence charged in show-cause notice stood established. She therefore, ordered the appellants to pay the evaded amount of duty and taxes and imposed penalty as well by recourse to clauses (8), (9), (89) and (90) of section 156 of the Customs Act, 1969.

The appellants feeling aggrieved preferred appeals before the Tribunal, inter alia contending that provisions of section 32 of the Customs Act, 1969 were invoked in the show-cause notices without realizing that section 32 of the Customs Act, 1969 applies to the imports only and in the instance case the appellants were not importers and they had not signed any declaration in respect of any import and have not filed any Bill of Entry. It was further submitted that the equipments installed by them were not established to be smuggled goods and therefore, the provisions contained in Clause (89) of section 156(1) were not attracted.

The learned members of the Tribunal considered the issue whether show-cause notice was barred by time and held that the show-cause notice was within time. It was further held that the equipments installed by the appellant were smuggled one and consequently, the appeals were dismissed.

The appellants feeling aggrieved preferred the above appeals proposing the following common questions of law:

"(1) Whether the Appellate Tribunal failed to consider the legal grounds urged before it and did not reply the same resulting in miscarriage of justice?

(2) Whether the show-cause notice issued to. the appellant was within time?

(3) Whether the Honourable Appellate Tribunal failed to determine that any offence under section 32(2) is made out against the appellant?

(4) Whether in absence of the allegation that the goods so found in the use of the appellant were smuggled, the provisions of section 156(1) (89) could be invoked?

(5) Whether the Impugned order passed by the Appellate Tribunal is violative of the judgment passed by the Honourable High Court of Lahore as reported in 1988 MLD 2985 Mian Shafiq Alam v. the Collector?

(6) Whether the Honourable Appellate Tribunal misinterpreted the law laid clown by the Honourable Supreme Court as reported in 1995 SCMR 387?"

The appeals were admitted to regular hearing to consider the following question of law:

"Whether in the facts and circumstances of the case, the learned Tribunal erred in holding that the show-cause notice was within time"?

We have heard learned Advocates for the parties and we are constrained to observe that the main arguments of both the learned Advocates are directed on the point of limitation with reference to section 32(2) and section 180 of the Customs Act, 1969, which are totally mis-directed. An appeal under section 196 of the Customs Act, 1969, is confined to the questions of law decided by the Tribunal. A perusal of the Tribunal's order shows that the learned members of the Tribunal failed to consider that no notice under section 32 of the Customs Act, 1969, was issued and therefore, the sketchy discussion on the point of limitation is totally unwarranted. As already observed this point was never raised before the Tribunal in the written arguments on behalf of the appellants, copies whereof have been filed along with the present application. It was contended in the written arguments that the provisions of section 32 are not attracted at all. Same was the plea on behalf of Department and therefore, their plea was that the notice was issued under section 180 which pertains to the confiscation of goods and imposition of penalty. The result is that the finding of the Tribunal on the point of limitation is totally uncalled for which was beyond the pleas raised by the parties. Such finding can not be treated as finding arising out of the pleas taken by the parties and it is not germane to the issue involved. As no notice under section 32 was issued therefore, the arguments addressed in this behalf require no consideration. We are of the opinion that the appellants ought to have taken plea before the Tribunal that in the absence of section 32 no amount of duty and taxes could be recovered as the direction was beyond the scope of authority vested under Clauses (8), (9), (89) and (90) of section 156(1) of the Customs Act, 1969. Such plea was not taken before the Tribunal and scope of appeal under section 196 of Customs Act, is very limited which is confined to the point of law arising out of the order of Tribunal. While exercising advisory jurisdiction under section 196 of the Customs Act, we cannot take suo-motu notice of an issue which was not raised before the Tribunal and on which point there is no finding of the Tribunal. So far, the levy of penalty is concerned it has not been assailed by the learned counsel for the appellants and therefore, no finding is required by us on this point.

As already observed appellants could take plea that in the absence of show-cause notice under section 32 of the Customs Act, 1969, no amount of evaded duty and taxes could be recovered and in pursuance of the notice under section 180 in respect of the punishments provided under Clauses (8), (9), (89) and (90) of the Customs Act, the confiscation of goods and levy of penalty could be directed, but no such plea was taken before the Tribunal and the scope of advisory jurisdiction of this Court under section 196 of the Customs Act, having limited, we are of the opinion that we cannot grant any relief to the appellants as it would amount to transgress the jurisdiction vested in the High Court. The Hon'ble Supreme Court has held in the case of Collector, Customs, Central Excise and Sales Tax, v. Haji Ahmedullah and others 2005 PTD 1654, that the High Court in its Appellate Jurisdiction could not transgress certain limits by giving relief, which could not have been granted under the relevant provisions of Customs Act, 1969. Respectfully following the dictum laid down by the Hon'ble Supreme Court, it is held that in the facts and circumstances of the present case, no relief can be allowed to the appellants in exercise of the limited jurisdiction vested in this Court and consequently all the appeals stand dismissed.

S.A.K./M-112/KAppeals dismissed.