SALLM SERUJ LTD. AFGHANISTAN, PESHAWAR VS SECRETARY, REVENUE DIVISION, ISLAMABAD, 2012 PTD-FEDERAL-TAX-OMBUDSMAN-PAKISTAN 1940 (2012)

Customs Act (IV of 1969)---

----S.156(1)(64)---Punishment for offences---Personal penalty and redemption fine was remitted by the Appellate Tribunal---Department was approached for release of goods, but of no avail---Department contended that Reference had been filed against judgment of Appellate Tribunal which was pending before the High Court---Validity---Admittedly, Appellate Tribunal remitted personal penalty and redemption fine and Department filed a Reference before the High Court against judgment of Appellate Tribunal but it had not been suspended---Mere filing of appeal in higher forum did not automatically suspend the judgment of lower forum---Non-releasing of seized goods after judgment of Appellate Tribunal being unlawful and arbitrary was tantamount to maladministration under S.2(3) of the Establishment of the Office of Federal Tax Ombudsman Ordinance, 2000---Federal Tax Ombudsman recommended that Federal Board of Revenue direct the Collector of Customs, concerned to ensure implementation of the judgment of the Customs Appellate Tribunal and release the seized goods, as per law, without prejudice to the final outcome of the reference filed in the High Court.

Hafiz Ahsan Ahmad Khokhar, Advisor Dealing Officer.

Danish Ali Qazi for Authorized Representative.

Zubair Shah, DC Customs and Fazal-ur-Rehman, Dy_. Superintendent Departmental Representatives.

FINDINGS/RECOMMENDATIONS

DR. MUHAMMAD SHOAIB SUDDLE, (FEDERAL TAX. OMBUDSMAN).---The complainant, a border agent, contends that the goods in transit (polyester cloth) for Afghanistan were wrongly confiscated, vide Order-in-Original No.4-7/2010 dated 22-12-2010, by Deputy Collector Customs, Peshawar, However, the Collector Customs (Appeals) vide Order-in-Appeal No.140 of 2011 dated 26-5-2011, ordered release of the confiscated goods on payment of redemption fine of Rs.330,000, along with personal penalty of Rs.230,000 under section 156(1)(64) of the Customs Act, 1969 (the Act). The Customs Appellate Tribunal on the complainant's appeal remitted the personal penalty and redemption fine vide order dated 27-12-2011. Thereafter, he ' approached the Department for releasing the seized goods, but to no avail.

2. The complaint was sent for comments to Secretary, Revenue Division, in terms of section 10(4) of the FTO Ordinance 2000. In response, the FBR forwarded parawise comments by Collector of Customs, MCC, Peshawar, vide Letter No.1(523)S(TO-II)/2012 dated 10-5-2012.

3. During the hearing, the AR reiterated the grounds of complaint and submitted that there was no legal justification with the Department for non-compliance of the order of Appellate Tribunal. He also relied upon the Honble Federal Tax Ombudsman's Findings/Recommendations reported as 2011 PTD 1590.

4. The DR submitted that the Department had filed a reference against the judgment of Appellate Tribunal, which was pending before the Hon'ble Peshawar High Court, Peshawar..However, on a query whether the Hon'ble Peshawar High Court had suspended the judgment of Appellate Tribunal, he replied in negative.

5. Pleadings of both the parties have been examined and the relevant record perused. Admittedly, the Appellate Tribunal remitted personal penalty and redemption fine imposed on the goods vide order 1 dated 27-12-2011. Though the Department filed a reference before Hon'ble Peshawar High Court against the judgment of Appellate Tribunal, but it had not been suspended.

6. It is an established legal position that mere filing of appeal in a higher forum does not automatically suspend the judgment of lower forum. The Hon'ble President of Pakistan confirmed this principle vide Order No. ¹⁴/2007-Law(FTO) dated 31-1-2008 in the following words:

"It is trite rule that the appeal by itself does not have the effect of staying the operation of the order appealed against. Thus, the Customs appeal before the High Court does not have the effect of staying the operation of the Additional Collector^'s Order-in-Original No.194 of 2005 dated 16-5-2005. The FTO's recommendation is in accord with law. It has been decided by the President in numerous cases that the Customs must implement the order of the lower forum unless its operation is stayed by the higher. forum. The Customs can delay implementation of such order only during the period prescribed for making the appeal. After the expiration of the limitation for making appeal they should implement the order or obtain stay. This is rule of law. We must respect it."

Findings:

7. In view of the foregoing, non-releasing of the seized goods after the judgment of Customs Appellate Tribunal being unlawful and arbitrary is tantamount to maladministration under section 2(3) of the FTO Ordinance, 2000.

Recommendations:--

8. F.B.R. to--

(i) direct the Collector of Customs, MCC, _,Peshawar, to ensure implementation of the judgment of the Customs Appellate Tribunal and release the seized goods, as per law, without prejudice to the final outcome of the reference filed in the Hon'ble Peshawar High Court; and

(ii) report compliance within 30 days.

CMA/151/FTOOrder accordingly.