COLLECTOR OF CUSTOMS, MODEL CUSTOMS COLLECTORATE OF PaCCS, KARACHI VS KAPRON OVERSEAS SUPPLIES CO. (PVT.) LTD., KARACHI
2010 P T D 465
[Karachi High Court]
Before Gulzar Ahmed and Irfan Saadat Khan, JJ
COLLECTOR OF CUSTOMS, MODEL CUSTOMS COLLECTORATE OF PaCCS, KARACHI
Versus
Messrs KAPRON OVERSEAS SUPPLIES CO. (PVT.) LTD., KARACHI
Special Customs Reference Application No. 101 and C.M.A. No. 1281 of 2009, decided on 22/12/2009.
(a) Jurisdiction---
----Orders passed without jurisdiction would be non-est in eyes of law.
(b) Customs Act (IV of 1969)---
----S.179(1)---Pecuniary jurisdiction of Customs Officers prescribed in S.179(1) of Customs Act, 1969---Scope---Any transgression of such jurisdiction for not being a technical defect would render entire exercise of authority to be ab initio void and illegal---Illustration.
Shamoon Traders v. Customs, Excise, Sales Tax Appellate Tribunal and others 2006 PTD 2177; Mansab Ali v. Amir and 3 others PLD 1971 SC 124; Reckitt Benckiser Pakistan v. Federation of Pakistan 2009 PTD 642 and Zarghoon Zarai Corporation v. Collector of Customs 2006 PTD 534 ref.
(c) Customs Act (IV of 1969)---
----S.196---Reference to High Court---Origin of imported goods---Determination of----Order of Tribunal deciding such point without discussing merits of case---Validity---Such point was a question of fact---No question of law arose from impugned order---Reference application was dismissed in circumstances.
(d) Jurisdiction---
----Exercise of---Mandatory condition stated.
The exercise of jurisdiction by an authority is a mandatory requirement and its non-fulfilment would entail the entire proceedings to be coram non juidice.
Mansab Ali v. Amir PLD 1971 SC 124; 2006 SCMR 783; 2007 SCMR 729; 2007 SCMR 1835; Faqir Abdul Majeed Khan v. District Returning Officer and others 2006 SCMR 1713; Yousuf Ali v. Muhammad Aslam Zia and 2 others PLD 1958 SC 104 and Saeed Farooq v. State and 2 others 1996 MLD 434 rel.
(e) Customs Act (IV of 1969)---
----S.196---Reference to High Court---Finding given by Tribunal regarding jurisdiction of an authority not controverted by Revenue---Effect---Such finding would be treated as question of fact.
Commissioner of Income Tax Zone `A' Lahore v. Mst. Iqbal Begum 2001 PTD 1414 rel.
Zain A. Jatoi for Applicant.
M. Junaid Ghaffar for Respondent.
Ashiq Raza, Dy. A.-G. on Court notice.
ORDER
IRFAN SAADAT KHAN, J.---By this Special Customs Reference application, order dated 1-9-2009 of the Customs, Excise and Sales Tax Appellate Tribunal, Bench-I, Karachi (CESTAT) is assailed in which the following questions of law have been raised:-
(1) Whether the Appellate Tribunal, on the basis of an Order-in-Original passed in excess of pecuniary jurisdiction of the adjudicating authority, can alter the status of the goods from "banned" to "freely importable" thereby causing release of the banned goods as' specified in the Import Policy Order read with 1st Proviso to section 181 of the Customs Act, 1969, and para. 1(d) of S.R.O. 487(I)/2007 dated 9-6-2007?
(2) Whether the Appellate Tribunal erred in connecting, by implication, the issues of "Revenue Collection" with the issue of "Importability" of the goods so imported?
(3) Whether the Appellate Tribunal erred in not treating a "without jurisdiction" adjudication as a mere technicality which does not affect the merits of the show-cause notice issued under sections 36, 32 and 32A of the Customs Act, 1969, and has no bearing on the offence committed by the respondent under clauses (9) and (14) of section 156(1) of the Customs Act, 1969?
(4) Whether the Appellate Tribunal, under section 194-C of the Customs Act, 1969, is empowered to pass an order nullifying the authority of the Collector, as contained under section 195 of the Customs Act, 1969, while being the creation of the same statute?
(5) Whether the findings of the Tribunal are not perverse for non reading and/or misreading the record available before the Tribunal?
2. Mr. Zain A. Jatoi, the learned counsel appeared on behalf of the department and submitted that the respondent imported certain goods from UAE which partly were of Indian origin and were rightly confiscated by the Deputy Collector of Customs. He contended that the import of these items are banned under Import and Exports (Control) Act, 1950 and is also violative of sections 16, 32, 32-A and 79(1) of the Customs Act, 1969 ('the Act'): He stressed that CESTAT was not justified in dismissing the appeal filed by the department on the technical ground that Deputy Collector was not authorized to adjudicate upon a case involving revenue of more than Rs.8,00,000 and the competent authority in this regard was the Additional Collector. The learned counsel thereafter submitted that CESTAT was not justified in not considering the merits of the case that the respondent has failed to prove that the goods imported by it via U.A.E. were not of Indian origin but that of Indonesian origin. He further submitted that a certificate issued by Dubai authorities with regard to the origin of the goods should not have been relied upon by the CESTAT and in support thereof relied upon the case of Shamoon Traders v. Customs, Excise,. Sales Tax Appellate Tribunal and others 2006 PTD 2177. The learned counsel thereafter submitted that as the order passed by the CESTAT was not in accordance with law, hence the same may be set aside.
3. Mr. Junaid Ghaffar, learned counsel for the respondent, submitted that the order-in-original was passed by a person who was not legally authorized to pass the same. He invited our attention to sections 179 and 195 of the Act and submitted that the only officer who could have adjudicated upon the matter was Additional Collector and not the Deputy Collector, hence the very proceedings initiated by the Deputy Collector were ab initio void, illegal and corum non judice. In support of his contention he has relied upon the decision in the case of Mansab Ali v. Amir and 3 others PLD 1971 SC 124 and the case of Reckitt Benckiser Pakistan v. Federation of Pakistan 2009 PTD 642.
4. The learned counsel thereafter submitted that the issue regarding the origin of the goods is a question of fact, which could not be raised by the applicant under the provisions of section 196 of the Customs Act. To support his contention he has relied upon the case of Zarghoon Zarai Corporation v. Collector of Customs 2006 PTD 534.
5. Mr. Ashiq Raza, DAG, appeared on Court notice and submitted that the order in original is illegal and corum non judice and supported the order passed by the CESTAT.
6. We have heard all the learned counsel and have also perused the record.
7. Briefly stated the respondent imported consignment from UAE which was claimed to be consisting of man-made fiber of 21625 Kgs of Indonesian origin. The said goods were declared electronically vide electronic invoice dated 29-12-2008. The release of said goods was claimed under the provisions of section 79(1) of the Customs Act. However, during the course of assessment it was found that out of 21625 Kgs. of Fabric 17125 Kgs. was that of Indian origin, the import of which is banned. Thus, as per the department, the respondent has made an attempt to get the banned items cleared. Thereafter, order in original No.4033 of 2009 dated 17-2-2009 was passed by the Deputy Collector whereby the alleged Indian origin fabric was confiscated and the Indonesian origin fabric was allowed to be released and an amount of duty-taxes was assessed at Rs.1,204,658. An appeal thereafter was filed by the respondent before the Collector (Appeals) who vide his order dated 5-5-2009 set aside the order passed by the Deputy Collector by holding that the said authority has no jurisdiction to adjudicate upon the sue in terms of section 179 of the Act as in the said section it has clearly been mentioned that the authority to adjudicate upon the cases involving duty/taxes exceeding Rs.8,00,000 vests with the Additional Collector. The Collector further held that the Collectorate has no defence in this regard and it has been held in a plethora of judgments given by the superior Courts that Orders passed without jurisdiction are non-est inthe eyes of the law.
8. An appeal thereafter was filed by the present appellant before the CESTAT which, after due deliberation, vide its order dated 1-9-2009 found no infirmity and factual impropriety in the order passed by the Collector and without touching the merits of the case dismissed the appeal filed by the appellant by holding that the Deputy Collector was not the competent person to have adjudicated upon the issue, as enshrined in the provisions of section 179 of the Customs Act. The learned CESTAT further held that the case involves a serious legal lacuna regarding the competence and the assumption of jurisdiction by the adjudicating authority. As per the CESTAT the Adjudicating Officer, which was Deputy Collector, has surpassed the monetary limit prescribed by the law regarding the matters which could be adjudicated upon by him.
9. Before dilating upon the issue that whether the Deputy Collector was the competent person to have adjudicated upon the issue or not, it would be pertinent if the relevant provisions of the Customs Act be first thrashed out.
"179. Power of adjudication.---(1) Subject to subsection (2), in cases involving confiscation of goods or imposition of penalty under this Act or the rules made thereunder, the jurisdiction and powers of the. Officers of Customs in terms of amount of duties and other taxes involved, excluding the conveyance, shall be as follows: --
| (i) | Additional Collector | without limit |
| (ii) | Deputy Collector | Not exceeding [eight] Hundred thousand rupees. |
| (iii) | Assistant Collector | Not exceeding [three hundred] thousand rupees. |
10. A perusal of the above referred section would reveal that each authority working under the hierarchy of the Customs Department has been assigned a job to perform his duty/official responsibility within the parameters as specifically provided under the law. Any transgression to the above responsibility would render the entire exercise of authority to be ab initio void and illegal. In the instant reference application also it is an admitted fact that the assessment was made by the Deputy Collector amounting to Rs.1,204,658 whereas under the provisions of section 179(1) of the Act the authority to adjudicate upon the cases exceeding Rs.8,00,000 vests only with the Additional Collector. It is very surprising to note that how this legal lacuna remained un-redressed at the Collectorate level and no attempt appears to have been made to cure this defect. The decision relied upon by the learned counsel for the appellant is not applicable to the facts of the present case as the CESTAT has not discussed the merits of the case, hence the question regarding the point of origin of the imported items, which is a finding of fact, does not arise out of the order passed by the CESTAT. In reply to a question posed by this Bench that whether any exercise was carried out by the department with regard to the question No.1 raised by the department in the instant reference application and the learned counsel admitted that no such exercise was ever carried out. The learned counsel appearing on behalf of the department has also frankly conceded about the legal lacuna that the assessment in the instant reference application has been made by the Deputy Collector whereas according to section 179 of the Act the same should have been carried out by the Additional Collector, however he has submitted that the same is only a technical defect. We do not subscribe to this view adopted by the learned counsel appearing on behalf of the appellant. It is a trite law that the exercise of jurisdiction by an authority is mandatory requirement and its non-fulfilment would entail the entire proceedings to be coram non judice. Reference in this regard may be made to the following authorities:-
(1) Mansab Ali v. Amir PLD 1971 SC 124, wherein it was held that:--
"It is an elementary principle that if a mandatory condition for the exercise of jurisdiction by -a Court, Tribunal or Authority is not fulfilled, then the entire proceedings, which follow become illegal and suffer from want of jurisdiction."
Same principle has been adopted in 2006 SCMR 783, 2007 SCMR 729 and 2007 SCMR 1835.
(2) Faqir Abdul Majeed Khan v. District Returning Officer and others 2006 SOAR 1713:
"By now it is well settled that any order which suffers from patent illegality or is without jurisdiction, deserves to be knocked down." Re: PLD 1958 SC 104, PLD 1973 SC 326, PLD 2002 SC 630, 2003 SCMR 59, 2004 SCMR 28, 2004 SCMR 1798.
(3) Yousuf Ali v. Muhammad Aslam Zia and 2 others PLD 1958 SC 104:--
"If on the basis of a void order subsequent orders have been passed either by the same authority or by other authorities, the whole series of such orders together with the superstructure of the rights and obligations built upon them, must, unless some statute or principle of law recognizing as legal the changed position of the parties is in operation, fall to the ground because such orders have as little foundation as the void order on which they were founded."
(4) Saeed Farooq v. State and 2 others 1996 MLD 434:--
"Where a particular Court or forum has exclusive jurisdiction to proceed with a case, any attempt by any other forum to take cognizance of the matter or to institute proceedings would render cognizance and proceedings void ab initio and of no legal effect."
11.It would not out of place to mention that any finding given by the Tribunal with regard to the jurisdiction of any authority, when such finding was not controverted by the Revenue has been held to be a question of fact. Reference in this, regard may be made to the decision given in the case of Commissioner of Income Tax Zone `A' Lahore v. Mst. Iqbal Begum 2001 PTD 1414 wherein the Honourable Lahore High Court observed as under:--
"It has been noted that the learned Tribunal in the order recorded on appeal of the assessee on 9-12-1984 found it as a fact that I.T.O. Circle-R had no jurisdiction to make the assessment. In the statement of the case again they have stated that admittedly the I.T.O. Circle-R had no jurisdiction to make assessment. In the presence of such findings of fact which are otherwise not controverted by the Revenue, we are of the view that both the questions remain only of an academic interest. if the Assessing officer had no jurisdiction to frame an assessment and as per the order of the learned Tribunal the Revenue had so admitted, no question of law can be said to have arisen out of its order."
12. Hence, in view of our above findings and in view of the authorities cited supra we do not find any merit in this reference application which is hereby dismissed in limine along with the listed application.
13. In our short order dated 3-12-2009, we have already announced dismissal of this reference application and the above are the detailed reasons for the same.
14. A copy of this order, under the seal of this Court, should be sent to the Registrar Tribunal.
15. Let a copy of this order be also sent to the Chairman Federal Board of Revenue with the direction to take disciplinary action against the delinquent officials upon whose negligence the exchequer has suffered the loss of duty/taxes.
16. We also would like to clarify that our this decision should not be considered and read to be the one whereby we in any manner have given the permission to either import or release of the banned items as we have decided the above reference application only on the legal aspect without touching the merits of the case. In this connection we would like to refer the decision given by the Honourable Supreme Court of Pakistan in the case of Abu Bakar Siddique and others v. Collector of Customs Lahore and another 2004 PTD 2187 wherein the apex Court has specifically observed that the goods which are imported in breach of any prohibition or restriction imposed by the law cannot be allowed to be circulated in the market.
S.A.K./C-34/KOrder accordingly.