Messrs ROHI GHEE INDUSTRIES (PVT.) LTD. VS COLLECTOR OF CUSTOMS, 2007 PTD-KARACHI-HIGH-COURT-SINDH 878 (2007)

(a)Customs Act (IV of 1969)---

----Ss. 33, 168 & 181---Confiscation of imported goods---Payment of redemption fine---Claim of refund---Once importers had paid redemption fine with an undertaking not to claim its refund they had impliedly accepted the amount of duties and taxes so levied---Redemption fine was assessed on the duties and taxes leviable and in case the quantum of duties was altered, redemption fine would also fall on ground---Acceptance of redemption fine and its payment without prejudice and undertaking, not to claim its refund, tantamount to accepting the quantum of duties and taxes---Importers, in circumstances could not have re-agitated same controversy before Collector of Customs and rejection of application for refund, apparently appeared to be valid---Very fact that importers had neither annexed with the plaint copies of order whereby their application for refund was rejected nor their counsel pointed out any illegality or mala fide, which would go to prove that the orders passed were valid and for good reasons.

(b) Customs Act (IV of 1969)---

----Ss. 33, 168 & 217---Confiscation of imported goods---Refund of customs duty---Suit for declaration---Competence---Application of importers for refund of customs duties having been rejected, appeals before Customs Excise and Sales Tax Appellate Tribunal having also been 'dismissed, importers/plaintiffs filed suit for declaration in High Court--Maintainability of suit---Once importers opted to avail the remedy as provided under Customs Act, 1969 by way of statutory forums upto the stage of Customs, Excise and Sales Tax Appellate Tribunal and issue was decided against them, they could not be allowed to switch the forum by way of a civil. suit and seek re-adjudication of same controversy on factual plane though the legality of such orders, in certain circumstances could be questioned by invoking constitutional jurisdiction of High Court---Importers/plaintiffs had neither pleaded mala fide or want of jurisdiction nor had brought to light' any illegality--Assumption of jurisdiction and re-adjudication of same disputes, would be a sheer abuse of the process of High Court---Even otherwise in view of bar contained in S.217 of Customs Act, 1969, suits filed by importers were incompetent.

Messrs Binaco Traders v. Federation of Pakistan 2006 PTD 1491; Malik Muhammad Saeed v. Federation of Pakistan and others 2006 PTD 2167; Muhammad Jamil Asghar v. The Improvement Trust Rawalpindi PLD 1965 SC 698; Hamid Hussain v. Government of Pakistan 1974 SCMR 356; Abbasia Cooperative Bank v. Hakim Hafiz Muhammad Ghous PLD 1997 SC 03 and Al-Ahram Builders (Pvt.) Ltd v. Income Tax Appellate Tribunal 1993 SCMR 29 rel.

Mansoor Ahmed Sheikh for Plaintiffs.

Raja Muhammad Iqbal for Defendants.

ORDER

SAJJAD ALI SHAH, J.---In both the captioned suits following common office objections were raised:--

(a) It appears that the suit is barred under section 217(2) of the Customs Act, 1969.

(b) It appears that suit is barred by limitation.

Since both the suits were having identical facts and common office objections therefore were heard together for the purposes of adjudicating the aforesaid objections.

The common facts giving rise to the filing of present suits are that the Plaintiffs in both suits imported certain consignments of palm oil from Indonesia and declared it to be RBD Palm Oil, samples were drawn at the time of discharge and the Custom House Laboratory confirmed the cargo to be RBD palm oil. However, the cargo for some reasons was got retested from HEJ Research Institute of Chemistry University of Karachi as well as PCSIR Laboratory. The cargo in accordance with the report of HEJ Research Institute of Chemistry Laboratory was found either to be "palm stearin" or "mixture of palm Stearin and palm oil", whereas the report of PCSIR Laboratory declared it to be "RBD Palm Oil Stearin". Consequently notice for violation of section 16 of the Customs Act, 1969 read with para. 6 of section (i) of Chapter iii of Import Policy, 1989-2000 read with section 3(i) of Imports and Exports Control Act, 1950 were issued which were duly replied by the Plaintiffs and thereafter the matter was adjudicated upon by defendant No.1 by holding that the cargo was a "mixture of palm Stearin and palm oil", and could be made fit for human consumption. The defendant No.1 therefore, directed confiscation with an option of redemption fine. The Plaintiffs complied with the order of defendant No.1 but clue to the uncalled for intervention by the Army Monitoring Cell the cargo could not be released giving rise to filing of a petition bearing No.414 of 2000 directing the release of the consignments. The Plaintiffs in the meanwhile preferred an appeal before the Customs Excise and Sales Tax Appellate Tribunal against imposition of redemption fine whereas the department preferred an appeal against the option of redemption.

The Tribunal after hearing the parties dismissed the appeal filed by the department, whereas the appeal filed by the Plaintiffs were allowed in a manner that the cases were remanded back to the defendant No, l to get the consignments re-tested in the Customs House Laboratory for determining as to whether the goods were fit for human consumption. The Plaintiffs being aggrieved with preferred Special-Customs Appeals before this Court which were allowed by setting aside the order of the Customs Excise and Sales Tax Tribunal. The department being aggrieved preferred a Civil Petition before the Hon'ble Supreme Court against the order or the Appellate Tribunal, which was dismissed by the Hon'ble Supreme Court and the order of defendant No.1 was upheld.

The cargo was lifted by the plaintiffs upon payment of all leviable duties and taxes along with redemption fine and thereafter filed a claim for refund of Customs duties paid on the cargo on the ground that since the defendant No.1 had found cargo to be mixture of palm oil and palm Stearin, therefore the duty should be assessed accordingly. However the application of the Plaintiffs for refund of Customs duties were rejected vide order, dated 13-2-2001, and appeals, before the Customs Excise and Sales Tax Appellate Tribunal also failed and were dismissed vide order, datcdl3-6-2002. The Plaintiffs consequently, filed the present suits, seeking a declaration to the effect that the cargo imported by the Plaintiffs being a mixture of palm oil and palm Stearin and therefore ought to have been classified accordingly. As to cause of action it was stated to have arisen on 10-3-2000 when the defendant No.1 held Plaintiff's cargo to be a mixture of palm oil and palm Stearin and on 13-2-2001, when defendant No.1 failed to reclassify the goods.

Mr. Mansoor Ahmed Shaikh, learned counsel representing plaintiffs in both the suits, has argued that since this Court while exercising its original jurisdiction acts as a Court of ultimate jurisdiction and is competent to decide all disputed questions of facts and the controversy involved in the present suit being a disputed question of fact regarding proper classification of the imported goods and was neither properly appreciated by the Defendant No.1 nor by the Customs, Excise and Sales Tax Appellate Tribunal and the last remedy being an appeal before this Court while exercising jurisdiction of Appellate Tribunal under the Customs Act, 1969 being inefficacious having no power to adjudicate disputes regarding question of facts, therefore the Plaintiffs has rightly filed the present suit and as such the bar contained in section 217(2) of the Customs Act, 1969, under the circumstances, is not attracted. However, the counsel did not address on the question of limitation.

On the other hand, Mr. Raja Muhammad Iqbal, learned counsel for the Defendants, in support of office objection has contended that the controversy regarding classification of imported goods, subject-matter of the present suits, has been finally set at naught by the hierarchy, provided under the Customs Act for determination of such disputes. Learned counsel has further pointed out that since it was established that oil imported by the Plaintiffs as `edible oil' was found to be `inedible' at the stage of importation though it could be processed to make edible, therefore, it was rightly released upon fine up to 100% of the amount of duties and taxes, sought to be evaded with a condition to market the oil after a certificate from the public analyst as to its fitness for human consumption, learned counsel further argued that the very fact that the plaintiffs paid the redemption fine and further extended an undertaking before this Court in Special Courts Appeals Nos. 18 and 19 of 2000 (in the first round of litigation) to the effect that the Plaintiffs would not claim the remission or refund of such fine goes to prove that the Plaintiffs agreed to the classification. It was contended that after having extended an undertaking before this Court for not claiming the refund, Plaintiffs have not only accepted the classification but also undertook not to re-agitate the issue of classification, therefore the suit is incompetent on this ground, as well. It was lastly contended that even otherwise section 217(2) of the Customs Act, 1969 completely bars the jurisdiction of this Court. In support of his contention, Mr. Raja Muhammad Iqbal has placed reliance on the cases of Messrs Binaco Traders v. Federation of Pakistan (2006 PTD 1491), Malik Muhammad Saeed v. Federation of Pakistan and others (2006 PTD 2167) and has prayed for the dismissal of suit by upholding the office objection.

I have heard the learned counsel for the respective parties and have gone through the record as well as the case-law cited before me.

A perusal of record reflects that the Plaintiffs imported edible oil and classified the same accordingly, however the goods ultimately were found to be "mixture of palm Stearin and palm oil" not fit for human consumption therefore were confiscated. However, since the defendant No.1 came to the conclusion that the consignment can be processed to make edible items after blending the same with some other edible oil having low melting point, therefore an option of redemption was provided against payment of fine up to 100% of the amount of duties/taxes sought to be awarded. The Plaintiffs were further put to condition to extend an undertaking that the goods manufactured from such oil would be marketed only after the same being certified by public analyst in accordance with its standard health specification. It is further not disputed that the Plaintiffs not only paid the redemption fine but also extended an undertaking before this Court in Special Customs Appeals Nos.18 and 19 of 2000 not to claim the remission or refund of such fine. The Plaintiffs after lifting the consignment applied for refund of customs duties on the ground that since the consignments were found to be a mixture of palm oil and palm Stearin therefore were classifiable accordingly. However their applications for the refund of duties were rejected by the defendant No.1 vide its order, dated 13-2-2001, and an appeal filed before the Customs Excise and Sales Tax Appellate Tribunal on 13-6-2002, met the same fate. Mr. Manzoor Shaikh learned counsel for the Plaintiffs was not in a position to satisfy as to how the Plaintiffs can claim refund of duties when they had voluntarily paid the redemption fine which was assessed on the basis of such duties and had further extended an undertaking not to claim its remission or refund.

It appears that once the Plaintiffs had paid the redemption fine with an undertaking not to claim its refund, they impliedly accepted the amount of duties and taxes so levied for the reason that the redemption fine was assessed on the duties and taxes leviable and in case the quantum of duties is altered redemption fine would also fall on ground. The acceptance of redemption line and its payment without prejudice and undertaking not to claim its refund tantamount to accepting the quantum of duties and taxes, therefore, the Plaintiffs could not have re-agitated he same controversy before the Defendant, No. 1 and the rejection of their application for refund apparently appears to be valid and for good goods. The very fact that the plaintiffs have neither annexed with plaint copies of order whereby their application for refund was rejected nor the learned counsel pointed out any illegality or mala fide which goes to prove that the orders passed were valid and for good reasons.

Coming to the cases, referred to by Mr. Raja Muhammad Iqbal in support of his contention that section 217 of the Customs Act operates as a complete bar to oust the jurisdiction of a Civil Court. In the first case i.e. Messrs Binaco Traders (supra) .a learned Judge of this Court held that:

"The ratio of the above cited case is that when an action an order suffers from mere illegality an aggrieved party could always seek remedies in the hierarchy provided under the Customs Act."

In my view there can hardly be an exception to this rule, however in instant case, the Plaintiffs has already exhausted the remedies before the Statutory forums provided under the Customs Act and notwithstanding the final determination of dispute by the said Statutory Tribunals the Plaintiffs intends to re-agitate the same dispute before this Court, consequently the rule referred to above is not attracted.

In the second case referred to by Mr. Raja M. Iqbal, i.e. Malik Muhammad Saeed (supra) a learned Judge of this Court has held:--

"From the reading of the above subsection (1) of section 217, it also appears that the exercise of powers by the Customs Authorities is conditional and an exercise which is in good faith or intended to be done in good faith are protected. Whereas, no such condition of good faith is attached to the exercise of jurisdiction by Customs Authorities while exercising their functions under subsection (2) it appears that when it is the intention of legislature to protect official acts done in good faith the legislature makes use of the words "good faith" but in subsection (2) of section 217 there is no condition that the act must be done in good faith to claim protection. Non-using of word "good faith" clearly means that all actions mentioned in subsection (2) of section 217 are protected and cannot be challenged before civil Courts."

Suffice it to observe that our Supreme Court in the case of Muhammad Jamil Asghar v. The Improvement Trust Rawalpindi (PLD 1965 SC 698) under similar circumstances while examining the bar of jurisdiction of the civil court had held:-

"It is possible; of course, that a Special Tribunal may be made the Judge of its own jurisdiction, but this would be a very exceptional provision and one which should be made by altogether clear words. However, with respect to mala fides the jurisdiction of the civil Court can, ever, be taken away for a mala fide act is in its very nature an illegal and void act and the civil Court can always, pronounce an act to be mala fide and therefore void."

Similar were the observations of the apex Court in the case of .Hamid Hussain v. Government of Pakistan (1974 SCMR 356):--

"It is a well-established principle that even where the jurisdiction of a civil Court is barred and conferred upon Special Tribunals, civil Courts being Courts of ultimate jurisdiction will have the jurisdiction to examine the acts of such forums to see whether their acts are in according with law or are even mala fide."

Likewise, in the case of Abbasia Cooperative Bank v. Hakim Hafiz Muhammad Ghous (PLD 1997 SC 3) the 'apex Court while considering the competence of civil Court to assume jurisdiction in cases where a Statute bars the jurisdiction of a civil Court held:--

"It is well-settled principle of interpretation that the provision contained in a statute ousting the jurisdiction of Courts of general jurisdiction is to be construed very strictly and unless the case falls within the letter and spirit of the barring provision, it should not be given effect to. It is also well-settled law that where the jurisdiction of the civil Court to examine the validity of an action or an order of executive authority or a special Tribunal is challenged on the ground of ouster of jurisdiction of the civil Court, it must be shown (a) that the Authority or the Tribunal was validly constituted under the Act; (b) that the order passed or the action taken by the Authority or Tribunal was not mala fide; (c) that the order passed or action taken was such which could be passed or taken under the law which conferred exclusive jurisdiction on the authority or tribunal; and (d) that in passing the order or taking the action, the principles of natural justice were not violated. Unless all the conditions mentioned above are satisfied, the order or action of the Authority of the Tribunal would not be immune from being challenged before a civil Court. As a necessary corollary, it follows that where the Authority or the Tribunal acts in violation of the provisions of the statutes which conferred jurisdiction on it or the action or order is in excess or lack of jurisdiction or mala fide or passed in violation of the principles of nature justice, such an order could be challenged before the civil Court in spite of a provision in the statute barring the jurisdiction of civil Court--------"

In another case titled as Messrs Chemitex Industries (Pvt.) Limited v. Collector of Customs (Export) whereby the apex Court decided 20 petitions bearing Nos,281 to 300-K of 2002 through a common judgment by holding:--

"the orders passed by the Customs Authorities could, only, be challenged in the constitutional jurisdiction of the High Court or in civil Court when the action or orders of the said Authorities suffer from any taint, mala fide or are palpably without jurisdiction, in absence of the same exercise of jurisdiction either by the civil Court or High Court would be in violation of Statutory provisions."

Even in the case of Malik Muhammad Sated (supra), the learned Judge concluded by holding:--

"In this case, since the action taken by the Customs Authorities is within four corners of the Customs Act, the same cannot be termed as mala fide and is saved under section 217 of the Customs Act and is not open to challenge before a civil Court and the same cannot be set aside or modified by this Court."

Though where a Statute provides a self-contained machinery in the form of Statutory Tribunals for the determination of question arising under the said Statute, the frequent indulgence to the contrary is bound to produce essence of distrust in the Statutory Tribunal and for this very reason the jurisdiction of the civil Court though being the Court of ultimate jurisdiction is sparingly exercised only to see as to whether the acts of such Statutory Tribunals are in accordance with law or are illegal, mala fide and or suffer from want of jurisdiction and therefore the bar contained in the Special Statute like one under section 217 of the Customs Act, 1969 can, by no stretch of imagination, be termed as complete ouster. However in the instant case as already observed that the plaintiffs have miserably failed to point out or plead any illegality, mala fide or want of jurisdiction, in order to make out a case for assumption of jurisdiction notwithstanding the bar as contained in section 2.17 of the Customs Act 1969, the suits are found to be incompetent.

The other important question which requires consideration is as to whether the plaintiffs after having availed the remedy by challenging the classification before the forums provided under the Customs Act, 1969 could re-agitate the same controversy before this Court by switching over the forum on the sole ground that this Court while exercising its original jurisdiction acts as Court of ultimate jurisdiction and notwithstanding the bar as contained in section 217(2) of the Customs Act, 1969 can re-adjudicate the same dispute.

In my opinion, once the Plaintiffs opted to avail the remedy as provided under the Customs Act, 1969 by way of Statutory forums upto the stage of Customs, Excise and .Sales Tax Appellate Tribunal and the issue was decided against them, they cannot be allowed to switch the forum by way of present suit and seek re-adjudication of same controversy on factual plane though the legality of such orders, in certain circumstances, may be questioned by invoking constitutional jurisdiction of this Court. It is equally important to note that the Plaintiffs have neither pleaded mala fide or waist of jurisdiction nor have brought to light any illegality and therefore the assumption of jurisdiction and re-adjudication of same dispute would be a sheer abuse of the process of this Court. In the case of Al-Ahram Builders (Pvt.) Limited v. Income Tax Appellate Tribunal (1993 SCMR 29) more or less similar proposition came before the apex Court which was resolved by holding:---

"In the present case, the appellant had opted to avail of the hierarchy of forums provided for under the Ordinance upto the stage of filing of appeal before the Tribunal and, therefore, it would have been proper on the part of the appellant to have invoked section 136 of the Ordinance for making a reference to the High Court instead of filing a constitutional petition. In our view, once a party opts to invoke the remedies provided for under the relevant statute, he cannot at his sweet will switch over to constitutional jurisdiction of the High Court in the mid of the proceedings in the absence of any compelling and justifiable reason."

For what has been discussed above and non-availability of justifiable reason to assume the jurisdiction notwithstanding the bar contained in section 217 of the Customs Act, 1969, the office objection at serial No.1 is upheld and the suits, therefore, are held to be not maintainable and are hereby dismissed with costs.

In view of my findings on Office Objection No.1, Office Objection No.2 need not be addressed.

H.B.T./R-5/KSuit dismissed.