ABDUL SATTAR & CO. through Proprietor VS COLLECTOR OF CUSTOMS, COLLECTORATE OF CUSTOMS SALES TAX AND CENTRAL EXCISE, QUETTA, 2007 PTD-QUETTA-HIGH-COURT-BALOCHISTAN 361 (2006)

Customs Act (IV of 1969)---

----Ss. 9, 44, 45 & 121---Customs Rules, 2001, Ch. XIV---Constitution of Pakistan (1973), Art.199---Constitutional petition---Import of goods---Deposit of Bank guarantee pertaining to taxes on examination of goods on customs station---Earlier, vide public notice, in order to streamline customs clearance work, a procedure was laid down whereby vehicles loaded with imported goods on their arrival at entry post were allowed to proceed to Dry Port after delivering import manifest and on reaching imported goods at NLC/Railway Dry Port, those were allowed to be cleared after payment of assessed tax/duties---Later on vide impugned office order issued in supersession of previous orders/instructions, new procedure was notified by completely changing procedure; wherein Bank guarantee pertaining to the taxes was to be deposited on examination of goods at customs station---Further, earlier escort was being provided free of cost, but after impugned order it had been ordered that same would be provided on payment of charges, whereby importers were over-burdened in violation of lair and Rules---Impugned office order was based on mala fide and discrimination because no such procedure was prevalent in other border towns or border areas---Impugned office order was violative of Chapter 12 of Customs Act, 1969 and Chapter XIV of Customs Rules, 2001 because said Act and Rules did not contemplate 'obtaining Bank guarantee from the importers---Impugned office order made by Collector, being discriminatory and in excess of authority, was declared to have been passed without lawful authority and of no legal effect.

1989 MLD 2322 and 2005 SCMR 37 ref.

H. Shakil Ahmed for Petitioners (in C.P. No.86 of 2006).

Ch. Mumtaz Yousaf, Standing Counsel and Muhammad Azam, Law Officer, Customs (in C.P. 1W.86 of 2006).

Sycd Ayaz Zahoor for Petitioner (in C.P. 126 of 2006).

Ch. Mumtaz Yousaf, Standing Counsel and Muhammad Azam Law Officer, Customs for Respondents (in C.P. 126 of 2006).

Date of hearing: 22nd August, 2006.

JUDGMENT

AKHTAR ZAMAN MALGHANI, J.---By this common judgment we intend to dispose of C.P. No. 86 of 2006 and C.P. No. 126 of 2006 as identical questions of fact and law are involved in both the petitions.

2. Briefly stated, facts of' the case are that the petitioners are importers or clearing agents who import goods from Iran to Dry port Quetta. According to the petitioners vide public Notice No.1 of 2002, dated 25-7-2002 in order to streamline custom clearance work and to facilitate the trade at NLC Dry port/Railway Dry port Quetta a procedure was laid down whereby vehicles loaded with imported goods on their arrival at Tuftan entry point were allowed to proceed to Dry port Quetta alter delivering import manifest and fulfilment of the Customs Act, 1969 and on reaching of imported goods/consignment at A NLC/Railway Dry Port Quetta they were allowed to clear goods after payment of assessed tax/duties but on 1-3-2006 an office order was issued in supersession of previous orders/instructions whereby new procedure was notified by completely changing procedure wherein bank guarantee pertaining to the taxes is to be deposited on examination of goods at Tuftan customs station. It is further grievance of the petitioners that earlier escort was being provided free of cost but now it has been ordered that the same would be provided on payment of charges and thereby overburdening the importers in violation of law and rules.

3. We have heard the learned counsel for the petitioners as well as learned counsel for the respondents. The learned counsel for the petitioners vehemently contended that the impugned office order is based on mala fide and discrimination because no such procedure is prevalent in other border towns or border areas. It was further contended that the impugned office order is violative of Chapter 12 of the Customs Act, 1969 and Chapter XIV of the Customs Rules, 2001 because the Customs Act as well as rules framed thereunder do not contemplate of obtaining B bank guarantee from the importers. He further contended that the procedure laid down in the office order would require 5 to 10 days for completion of process, for which period the goods would be detained at Tulian; thereby causing heavy losses to the importers and in a way discouraging lawful import and encouraging smuggling. In support of his contentions the learned counsel placed reliance on the judgment reported in 1989 MLD 2322.

On the other hand learned Standing Counsel contended that the petitions were not maintainable as the impugned order was not challenged in the Customs hierarchy in view of the dictum laid down in the judgment reported in 2005 SCMR 37. He further contended that the office order was issued in accordance with procedure notified vide Chapter XIV of Customs Rules, 2001 read with section 121 of the Customs Act, 1969. According to him bank guarantee is not a requirement for the transshipment through notified bonded carrier and only the consignments which are to be transported through private carriers are to be examined and assessed at Customs House Tuftan and would be allowed transshipment on submission of bank guarantee as required under section 121 of the Customs Act, 1969.

4. We have carefully considered the respective contentions put forth by the parties' learned counsel and have also gone through the relevant rules and law. It may be noticed that under section 9 of the Customs -Act, 1969 Central Board of Revenue have been authorized to declare the places which alone shall be Customs Ports or Customs Airport for clearance or the goods or any class of goods imported or to be exported and by exercising said powers vide S.R.O. No. 238(I)/2000, dated 1-5-2000 National Logistic Cell Complex Quetta has been declared as Customs Station allowing the importers to get their goods cleared from the said station and for such purpose in the year, 2000 vide public notice No.1 of 2002 a procedure was prescribed for customs clearance work at NLC Dry port/Railway Dry port, Quetta whereby; on arrival of the vehicles loaded with imported goods at Tuftan incharge of the carrier was required to deliver import manifest under section 44 of the Customs Act, 1969 to the appropriate officer, who would enter the name of master of the vehicle, truck number, bill of lading, number and date, name of consigner and consignee, description of goods, quantity, date and time of arrival of the conveyance in the Manifest register and after fulfilment of provision of sections 44 and 45 of the Customs Act, 1969 the importer or his accredited representative was required to filed written request as per prescribed format for transshipment of goods to the Dry port and on receiving of such application the appropriate officer would C allow transshipment of goods under escort to Dry port, Quetta as per laid down procedure/practice in vogue and as envisaged under section 121 of the Customs Act, 1969 but by office order, dared 1st March, 2006 a complete new procedure was introduced whereby importer or his accredited Agent is required to rile transshipment G.D. at Customs House Tuftan declaring therein complete description, origin, volume and value or the goods as well as submitting invoice, packing list and technical literature of the goods by declaring the mode of transportation along with the name of notified bonded carrier and alter examination of consignment 100% importer or his accredited agent is required to submit bank guarantee covering the amount of duty/ taxes at Dry Port NLC whereafter the vehicle would be allowed onward transportation from Tuftan to Quetta and it is further provided in the said order that after depositing of duties, taxes at Dry Port Quetta the Bank guarantee would be released under intimation to Customs House Tuftan. The learned counsel for the petitioner vehemently contended that such order was discriminatory in nature as said procedure was neither prescribed nor made applicable in other border towns or Port areas which arguments were repudiated by the Customs authorities and according to them the order was issued in accordance with section 121 of the Customs Act, 1969 read with Transshipment Rules, 2001 applicable at other ports/ stations of the country. It may be noticed that under Transshipment Rules, 2001 no where it has been provided that the bank guarantee would be obtained from the importers who want to transport their goods to other customs station situated in up-country in carriers other than bonded carriers. The learned Standing Counsel referred to rule 328(6) of the Rules, 2001 but after perusal of same We are of the view that the same is not applicable to case in hand as under the said sub-rule Collector has been authorized to subscribe the system of revolving insurance guarantee, if not satisfied with the condition prescribed in sub-rule-6 i.e. to deposit bank guarantee or defence saying certificate or a mix of such securities for Rs.5 millions by the bonded carrier. The words "in view of the regular transportation of bonded cargo to up-country Dry port" clearly shows that the same relates to the bonded' carrier. The respondents failed to place on record any office order issued by any, other Collectorate describing the same procedure for import of goods through land into the country demanding bank guarantee equivalent to taxes and duties from the importers at border customs station for permission to transport the imported goods to up-country Dry Ports, thus; the procedure laid down vide office order, dated 1-3-2006 was clearly discriminatory. Furthermore; on the date of issuance of office order i.e. 1-3-2006 Transshipment Rules, 2091 were not applicable to transportation of goods from Tuftan to NLC Dry port Quetta as on that date under clause (c) of Rule 326 "Port" was defined as Karachi Port Trust, Port Bin Qasim and Air Ports whereas under clause (e) transshipment means transfer of transshipment goods without payment of customs duties and taxes at Port (KPT, Port Bin Qasim and Air Ports) to carrier. for carriage to another customs port or station. The learned Standing Counsel placed on record a Notification, dated 24th April, 2006 whereby clause "c" of rule 326 was substituted and "port' was defined to include a customs port and customs station as defined in section 2 of the Act, 1969 but as already observed at the time of issuance or office order the said amendment was not. in existence, therefore the Collector erred in law by issuing the office order under the assumption that he was authorized to issue such order under the Rules, 2001 which powers are otherwise not available to the Collector Customs even after the substitution of definition of "port" to demand Bank guarantee from the importers.

5. Adverting to the next contention of learned Standing Counsel that under section 121 of the Customs Act, 1961 the Collector was authorized to direct for obtaining bank guarantee, it may be seen that the said section pertains to transshipment of goods without payment of duty and under said section the appropriate officer may subject to provisions of section 15 and the rules on application by the owner of any goods imported at any customs station and specially and distinctly manifested at the time of importation as for transshipment to some other customs station or foreign destination, grant leave to transship the same without payment of duty, if any chargeable on such goods with or without any security or bond for the due arrival and entry of the goods at the customs station of destination. The word "transshipment" has not been defined in the Customs Act, 1969 whereas according to `Dictionary "transshipment" means transfer of goods for further transportation from one ship or conveyance to another. Similarly according to the Black's Law Dictionary "transshipment" means "act of taking cargo out of one ship and loading it on another", as such; section 121 of the Customs Act, 1969 is not applicable in the cases where goods have been loaded in a vehicle in Iran destined to Dry Port Quetta and no element of transfer of goods from one' carrier to another was involved at Tuftan Customs station. Furthermore; under the said section appropriate officer has been authorized to grant permission for transshipment with or without any security or bond. The main purpose of obtaining, such security or bond is to ensure due arrival and entry of the goods at the customs station of destination, therefore, bank guarantee equivalent to amount of taxes and duties, that too, to be submitted at Dry port Quetta would not fall, within section 121 nor any general order in this regard could be made by the Collector as under S.R.O. 371(I) of 2002, dated 15-6-2002 Superintendent/Principal Appraiser has been notified as appropriate officer within the meaning of section 121 which discretion has to be exercised by him in accordance with facts and circumstances of each individual case as he can also grant permission for transshipment without obtaining security/bond and no general order in this regard could be made; otherwise the words "without security/bond" used in section 121 would become surplus which would never have been intention of the legislature.

6. Adverting to the objection of learned Standing Counsel with regard to maintainability of petition without availing alternate remedy, it may be noted that no appeal is provided against the office order as section 193 of the Customs Act, 1969 deals with appeal against ally decision or order passed under section 179 whereas section 194-A provides appeal against order of adjudicating authority, order passed by the Collector (Appeals), order passed under section 193 and an order passed by the Board or Collector under section 195 of the Act, 1969.

In view of what has been discussed above, in our considered view, the office order, dated 1-3-2006 made by Collector Quetta is discriminatory and in excess of authority, as such; we are inclined to declare the said order to have been passed without lawful authority and of no legal effect.

Petition is disposed of accordingly.

H.B.T./38/Q???????????????????????????????????????????????????????????????????????????????????????? Petition allowed.