DEWAN FAROOQUE MOTORS LTD. VS The COLLECTOR (APPEALS), 2014 PTD-CUSTOMS-APPELLATE-TRIBUNAL-KARACHI 1899 (2013)

2014 P T D (Trib.) 1899

[Customs Appellate Tribunal, Karachi]

Before Ghulam Ahmed Member (Technical-II) and Adnan Ahmed Member (Judicial-II)

Messrs DEWAN FAROOQUE MOTORS LTD.

Versus

The COLLECTOR (APPEALS) and 2 others

Customs Appeal No.H-510 of 2008, decided on 09/12/2013.

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

----S.32(3)---Recovery of short levied duty---Failure to issue show cause notice---Demand notice in absence of statutory show cause notice---Effect---Show-cause notice had to be issued for recovery of any short paid amount, due to inadvertence, error or mis-construction---Adjudicating authority after providing opportunity to the person to whom show-cause notice was issued could pass an order---Demand notice could not be issued directly in derogation of the provisions of Customs Act, 1969 and Customs Rules, 2001---Adjudicating authority was not allowed under law to pass any order upon demand notice as the same was without lawful authority and of no legal effect---Demand notice in the absence of statutory show cause notice was without lawful foundation---Impugned order was set aside---Appeal was allowed.

Forte Pakistan (Pvt.) Ltd., Karachi v. The Director General of Intelligence and Investigation (Customs and Excise), Karachi and another 2006 PTD 978 and Assistant Collector of Customs, Dry Port Peshawar v. Messrs Khyber Electric Lamp MFG Co., Ltd., Peshawar 2001 SCMR 838 rel.

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

----S.32---Short assessed duty, recovery of---Show cause notice---Pre-requisite---Prior to proceeding or adjudication, it was pre-requisite to issue statutory show-cause notice, enabling the person to know the charges levelled and the provision of the Act contravened and the attracted penal clauses of the law---Adjudicating authority had no right to ignore the mandated requirement of law---Show cause notice should contain the brief facts of the case, the offences committed and the evidence on the presumption of which the allegations were based, the law that had been violated and the penal clauses that were attracted---Main object of show-cause notice was to enable the person to whom notice was given to fully know what were the charges levelled against him.

2004 PTD (Trib.) 1324 rel.

(c) Maxim---

----"Expressum facit cessar tacitum": If a thing is required by law to be done in certain specific manner that must be done in the same manner as prescribed by law or not at all.

PLD 1964 SC 536; 2003 SCMR 1505 and 2006 SCMR 129 rel.

(d) Natural justice, principles of---

----Violation of principles of natural justice could be equated with violation of provisions of statutory instruments.

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

----S.32---Show-cause notice---"Audi-Alteram Partem", principle of---Scope---Issuance of proper show cause notice to a person is an essential ingredient of the expression "audi alteram partem", which literally means that no man shall be condemned unheard---Right of being issued with a show cause notice and the right of being personally heard are inseparable rights of the defendant and cannot be denied to the person concerned under any circumstances.

Pakistan v. Pubilc PLD 1987 SC 304 rel.

(f) Interpretation of statutes---

----Principle of natural justice must be read in each and every statute, unless and until it was prohibited by the wording of the statute itself.

University of Dhaka v. Zakir Ahmed PLD 1965 SC 90; 1994 SCMR 2232; M.D the Bank of Punjab v. Syed Shahzad Hussain 2006 SCMR 1023; Sir Edward Snelson's case PLD 1961 SC 237; Fazal-ur-Reham's case PLD 1964 SC 410; Pakistan Crome Mines' case 1983 SCMR 1208 and Pakistan's case PLD 1987 SC 304 rel.

(g) Administration of justice---

----Action of executive functionaries are to be restricted to specific sphere permitted by statute.

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

----Ss.4, 32(3) & 179---Recovery of short levied duty---Order passed by superior authority instead of the authorized officer---Effect---Contention was that superior authorities could exercise the powers of their subordinate under S. 4 of the Customs Act, 1969---Validity---If superior officers were allowed to exercise the adjudication powers clearly conferred by law upon their subordinates, it would be a total anarchy---Powers of adjudication were specific and empowered by statute---Where there was a conflict between special and general provision of law, the special provision shall prevail---Power of adjudication was special in nature and could not be eclipsed by any other general provision---If it was held that Ss. 4 & 179 of Customs Act, 1969 occupy the same fields, there was likely to be redundancy in respect of powers conferred under S. 179 of Customs Act, 1969---Redundancy was to be avoided in respect of any provision of the statute---Where there was a conflict between two provision of the statutes, the later provision prevail and had to be given precedence---Law favoured actions of the authorities to be confined to their own spheres of jurisdiction conferred by the statute---Action taken by a State functionary beyond the ambit of his jurisdiction was nullity---Impugned order was set aside---Appeal was allowed.

Lt. General (Retd.) Shah Rafi Alam v. Lahore Race Club 2004 CLD 373; East West Steamship v. Queen Land Insurance PLD 1963 SC 663; Sahibzada Sharfuddin v. Town Committee 1984 CLC 1517 and Abida Rashid v. Secretary, Government of Sindh PLD 1995 Kar. 587 rel.

(i) Interpretation of statutes---

----Absurdity of provision---Court can supply construction with a view to avoiding absurdity.

Khalid Qureshi v. UBL 2001 SCMR 103 rel.

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

----S.223---Central Board of Revenue, powers of---Central Board of Revenue can not interfere, when Customs authorities are exercising a judicial or quasi judicial functions---Powers of the Central Board of Revenue is to prescribe guidelines which are not relevant for the exercise of judicial function---Central Board of Revenue does not figure in the hierarchy of the officers provided in the statute for the purpose of assessment and adjudication.

Assistant Director v. B.R. Herman Mohata Ltd. PLD 1992 SC 485; Central Insurance v. CBR 1993 SCMR 1232; Collector of Customs, Peshawar v. Collector of Customs (Appeals) Peshawar 2011 PTD 2114 and Messrs Wawa Garments Industries (Pvt.) Ltd. v. The Additional Collector of Customs, Export, Karachi 2011 PTD (Trib.) 2557 rel.

(k) Administration of justice---

----If a mandatory condition for exercise of jurisdiction by Court, Tribunal or Authority is not fulfilled then the entire proceedings which follows become illegal and suffer from want of jurisdiction/powers---Any order passed in continuation of such proceedings in appeals or revisions equally suffer from illegality and are without jurisdiction.

Major Syed Walayat Shah v. Muzaffar Khan and 2 others PLD 1971 SC 184; Ali Muhammad v. Hussain Buksh and others Omer and Company v. Controller of Customs, (Valuation) PLD 1976 SC 514; Karachi, AAA Steel Mills Ltd. v. Collector of Sales Tax and Central Excise Collectorate of Sales Tax 1992 ALD 449(1); 2004 PTD 624; Khyber Tractor (Pvt.) Ltd., v. Pakistan through Ministry of Finance Revenue and Economic Affairs PLD 2005 SC 842; Land Acquisition Collector, Noshehra and others v. Sarfraz Khan and others PLD 2001 Supreme Court 514; 2010 PTD (Trib.) 1636; 2010 PTD 465; 2010 PTD 465; 2010 PTD (Trib.) 2158; 2011 PTD (Trib.) 1010; 2011 PTD (Trib.) 1680; 2011 PTD (Trib.) 2086; Ali Muhammad v. Chief Settlement Commissioner 2001 SCMR 1822; All Pakistan Newspaper Society and others v. F.O.P. and others PLD 2004 SC 600; PLD 1996 Kar. 68; 2006 PTD 978 and PLD 1971 SC 184 rel.

(l) Administration of justice---

----If the law had prescribed method for doing of a thing in a particular manner such provision of law is to be followed in letter and spirit and achieving or attaining the objectives of performing or doing of a thing in manner other than provided by law would not be permitted---Superstructure built on such foundation, no matter how strong it is, has to fall.

Imran Javaid for Appellant.

Abdul Latif Sher, Inspector for Respondents.

Date of hearing: 28th November, 2013.

ORDER

GHULAM AHMED, MEMBER (TECHNICAL-II).---By this order, we dispose of Customs Appeal No. H-510/2008 filed by the appellant against Order-in-Appeal No. 19/2008 dated 30-10-2008 passed by respondent No. 1.

2.Brief facts of the case are that Messrs Dewan Farooque Motors Limited (hereinafter referred as complainant) are manufacturer of automotive vehicles and entitled to import machinery, equipments and components etc., at a concessionary rate, subject to fulfillment of conditions laid down in S.R.O. 436(I)/2001 dated 18-6-2001 superseded by S.R.O.453(I)/2004 dated 12-6-2004 for the manufacture of vehicles. An audit of complainant was conducted by the Engineering Development Board in terms of S.R.O. 436(I)/2001 dated 18-6-2001 and shortfalls in the achievement of deletion target for the year 2000-2001 were determined. The same was approved by the Indigenization Committee of Engineering Development Board in 7th meeting with the ruling that the shortfall in deletion achievement in the year 2000-2001 shall attract statutory rate of duty chargeable on the relevant CBU vehicles produced during 2000-2001. Messrs Dewan Farooque Motors Limited approached the Federal Board of Revenue, Islamabad with a request to allow them ex-bonding of the goods. The Federal Board of Revenue vide its letter C.No.2(21)SUR-II/99 dated.29-7-2002 allowed them ex-bonding of the goods on under taking vide dated 30-8-2002 that the complainant shall pay the duty and taxes on account of shortfall in achievement of deletion program determined by the EDB in terms of S.R.O. 436(I)/2001 dated 18-6-200(sic) after expiry of six weeks. Accordingly, the department issued demand notices instead of show cause notice. Secondly, the shortfall in achievement of deletion program was conveyed through Federal Board of Revenue to this Collectorate in parts for different periods therefore, the department raised the demands on the directions of Engineering Development Board communicated by Federal Board of Revenue. Finally a revised demand notice for Rs.13,389,283 was issued vide C.No.Misc/IS/10/DP/Hyd/2001/193 dated 6-8-2003, as per Board's letter vide C.No.2(1) Sur-II/90 pt dated 11-6-2002.

3.The appellant replied to the demand notices and controverted the same but of no avail and the respondent No. 2 passed order dated 24-5-2008, paras 18 to 23 are relevant and reproduced here-in-below for ready reference:--

.."In view of the foregoing statutory provisions, it is quite evident that in case of any default in the indigenization target, the components imported in violation of the indigenization program shall attract statutory duty applicable at the time of filing of the goods declaration for the clearance of such components in case of home consumption or at the time of ex-bonding in case the goods were warehoused. Suggestion of Engineering Development Board / Indigenization Committee regarding applicability of rate of duty prevalent in succeeding year of production is not maintainable under the law. It may have had an element of agreement between members of the indigenization committee, but an agreement reached beyond the scope of law when contested and tested at the altar of legal provisions would not have any valid or binding effect. The Engineering Development Board and the Indigenization Committee have only been given delegated powers regarding technical matters of auto sector like approval of indigenization program, input/output ratio and annual requirement and determination of default in achieving indigenization target under S.R.O. 436(I)/2004 or S.R.O. 453(I)/2004. The determination of applicable rate of duty does not fall within its purview. Even otherwise as already indicated any recommendation which is in conflict with the statutory provisions of the law is of no consequence. After revisiting the stand point of Hyderabad Dry Port authorities and the contentions raised by the complainant from time to time, I have reached to the conclusion that the calculation of customs duty and allied taxes of Rs.13.972 million on account of shortfall in deletion program for the year 2000-2001 made by the Dry Port Hyderabad vide C. No.05/Shortfall/ DFML/Sur/DP/Hyd/2005/557 dated 5-10-2007 and communicated to the complainant is in accordance with the relevant provisions of Customs Act, 1969 and hence enforceable."

4.The appellant assailed the said order before respondent No. 1 under the provision of section 193 of the Customs Act, 1969, who after hearing both the parties disposed off the appeal with the direction to file appeal before the Appellate Tribunal on the basis of opinion formed in para 7 of the order which is reproduced here-in-below:--

"I have examined record of the case and considered the written and verbal arguments put forth by the appellant's counsel as well as departmental representative and arrived at the conclusion that since the impugned order is passed by the Collector of Customs, Model Customs Collectorate Hyderabad, hence the appellant is directed to file the appeal before the Honourable Appellate Tribunal, Karachi, as appeal against all orders passed by the Collector lies before Honourable Appellate Tribunal, Karachi. In light of above, the appeal is disposed of accordingly."

5.The appellant has now challenged the above order by way of this appeal, Mr. Imran Javaid Consultant, appeared on behalf of the appellant who reiterated the arguments incorporated in the memo of appeal and he emphasis that:-

(i)That the appellant is pleased to enclose a calculation sheet which shows that the liability to pay customs duty is exactly at Rs.10,051,410 and not Rs.1,39,72,000. Hence the remaining amount of Rs.3,920,590 is liable to be refunded by the respondent.

(ii)That without prejudice to above it is submitted that since no show cause notice was issued as required under the Customs Act 1969, all the demand notices and proceedings are seriously hit by limitation and the amount illegally recovered at Rs.1,39,72,000 which was paid under protest by the appellants is liable to be refunded.

(iii)That the respondents have seriously erred in law by not implementing the EDB/FBR decision in letter and spirit. It is submitted that EDB report about the liability of customs duty mentioned in letter dated 16-2-2002, the customs duty etc is to be legally computed for the full financial year 2000-2001, whereas the respondent has computed the liability of duty from 1-10-2000 to 30-6-2001. It is the case of the appellant that the liability of customs duty may be applied for the whole financial year July 2000 to June 2001.

6.The respondent No. 3 submitted comments on the memo. of appeal dated 21-4-2009 and Mr. Abdul Latif Sher, Inspector, argued in accordance with the same which read as:--

Para-13 Denied. It is most respectfully submitted that the appellant bas not attached the calculation sheet to show the basis of calculation of duty and taxes Rs.10.051 million for the shortfall of deletion program for the year 2000-2001. The departmental demand of Rs.13.972 million vide letter C.No.05/ Shortfall/DFML/Sur/DP/Hyd/2005/557 dated 5-10-2007 along with calculation sheet (Annex-E) is based on the provisions contained in section 30 of the Customs Act, 1969.

Para-14 It is submitted that a speaking Order covering all legal aspects of the case has been passed by the Collector of Customs, Model Customs Collectorate, Hyderabad vide Order dated 24-5-2008 in compliance with the directives of Hon' able Federal Tax Ombudsman in Complaint No.C-1068-K/2007 dated 3-1-2008 filed by the present appellant.

Para-15 The calculation of duty and taxes amounting to Rs.13.972 million is in accordance with the provisions of section 30 of the Customs Act, 1969. Therefore any recommendation of the EDB which is in conflict with the statutory provisions of the law is of no consequence. In this Connection, the Federal Board of Revenue Islamabad vide letter C.No.2(7)I.I & Tarif-III/04 dated 11-12-2006 (Annex-F) has issued clarification in the matter.

PRAYER

In view of the above submissions, it is respectfully prayed that this Honourable Appellate Tribunal may be pleased to reject the appeal filed by Messrs Dewan Farooque Motors Limited being devoid of merit and the Order passed by the Collector, MCC, Hyderabad issued under C.No.05/Shortfall/DFML/Sur/DP-Hyd/2005/4125 dated 24-5-2008 may kindly be upheld as otherwise the government will sustain an irreparable loss as the matter is related to and connected with the legitimate government revenue.

7.Rival parties heard and case records perused. Prior to dilating upon the validity of the order passed by respondent No. 2, it is advantageous to comment on the validity of demand notices that as to whether these are substitute to the show-cause notice mandatorily to be issued under section 180 of the Custom Act, 1969 by the authority empowered under section 179 of the Customs Act, 1969 read with Notification No. S.R.O. 371(I)/2002 dated 15-6-2002. For recovery of any short paid amount due to inadvertence, error or mis-construction a show-cause notice has to be issued under section 180 of the Customs Act, 1969 by the authority under section 179 of the Customs Act, 1969 and Notification No. S.R.O. 371(I)/2002 dated 15-6-2002. Subsequently after providing opportunity to the person to whom show-cause notice has been issued, the adjudicating authority passed an appealable order for availing the remedies provided in the Customs Act, 1969 and thereafter in the shape of reference with the Hon'ble High Courts and finally through a Civil Appeal before the Hon'ble Supreme Court of Pakistan. When the Apex Court stamp the order of the Adjudicating Authority, it attains finality, then recovery proceeding under section 202 of the Customs Act, 1969 read with Recovery Rules, embodied in Chapter XI of Customs Rules, 2001 can be initiated and the competent authority under the rules is empowered to issue relevant notice/action lined out in the Recovery Rules. No demand notice directly can be issued in derogation of the provision of the Customs Act, 1969, Chapter XI of Customs Rules, 2001 as this is not permissible under law and neither any order can be pass by any authority upon demand notice as the same is without lawful authority and of no legal effect and the same opinion has been formed by the Hon'ble High Court of Sindh in reported judgment 2006 PTD 978 Forte Pakistan (Pvt.) Ltd., Karachi v. The Director General of Intelligence and Investigation (Customs and Excise), Karachi and another, wherein it has been held that "service of notice under section 32 of the Customs Act, 1969 is a condition precedent for initiation of proceedings, in the absence of notice under section 32 on the importer the entire proceeding initiated by the Adjudicating officer and further super structure thereon including the order passed by the learned Tribunal are without jurisdiction, void and in operative. The entire proceeding are accordingly struck off" and the Hon'ble Supreme Court of Pakistan in judgment reported as 2001 SCMR 838 Assistant Collector of Customs, Dry Port Peshawar v. Messrs Khyber Electric Lamp MFG Co., Ltd, Peshawar held that "demand notices in the absence of statutory show-cause notices were without lawful foundation. It is well settled proposition of law that a thing required by law to be done in a certain manner must be done in the same manner as prescribed by law or not at all since pre requisite show-cause notices as required by law have not been served on the respondents, therefore no straight forward demand notice for payment of alleged short levy could be issued. Therefore, in the absence of statutory notice, demand notices dated 25-7-1995 and 26-7-1995 were without lawful authority and thus of no legal effect." We therefore, in accordance with the ratio decidendi by the judicial fora hold that the demand notice dated 23-8-2007 is being issued in vacuum is without any lawful authority, hence, null and ab inito.

8. That when the Secretary Board of Revenue passed order dated 19-4-2009 on the direction of the Hon'ble High Court of Sindh, it was established that it is a case of misconstruction, therefore it was incumbent upon the competent authority having the power/jurisdiction to issue show-cause notice under section 32(3) of the Customs Act, 1969 for making good the recovery of the short paid amount and to pass appealable order as against order of the Secretary, Federal Board of Revenue, no right of appeal has been provided to the tax payer under the provision of the Customs Act, 1969.

9.That for passing an order for recovery for short paid amount of duty and taxes, the appropriate subsection of section 32 is (3), verbatim of which is reproduced herein below:--

"Where, by reason of inadvertence, error or mis-construction any duty or charge has not been levied or has been short- levied or has been erroneously refunded, the person liable to pay any amount on that account shall be served with a notice within 03 years of the relevant date requiring him to show cause why he should not pay the amount specified in the notice."

10.That the order dated 24-5-2008 had been passed by respondent No.2 without issuance of any show-cause notice. Prior to proceeding for adjudication, it is pre-requisite to issue statutory show-cause notice under section 180 of the Customs Act, 1969, enabling the person to know the charges levelled and the applicable contravened provision of the Act and the attracted penal clauses. The adjudicating authorities has no right to ignore the said mandated requirement of law. The FBR through Para 78 of Customs General Order 12/2002 dated 15-6-2002 laid emphasis on the said statutory provision. To lay emphasis on same, the FBR separately renewed the proposition of law and natural justice vide its letter C.No. 730-M(L)/2002. Sub-Para (iii) of Para 2 is relevant in this regard, which read as "show-cause notices should contain the brief facts of the case, the offence(s) committed and the evidence (s) on the presumption of which the allegation are based, the law that has been violated and the penal clauses that are attracted. The main objective of show-cause notices is that the person to whom the notice is given is enable to fully know what are the charges levelled against him." It is mandated to issue show-cause notice under section 180 of the Customs Act, 1969. Even otherwise in cases where request for summary adjudication is made, in the words of Customs, Excise and Sales Tax Appellate Tribunal, Peshawar recorded in his judgment reported as 2004 PTD (Trib.) 1324 it was stated that:--

"It is not understood as to under what law such right, which is primarily the duty of the Adjudicating Officer under section 180 of the Customs Act, 1969 to issue show-cause notice before confiscation of goods or imposition of penalty, could be waived of by the owner of the goods or person, for imposition of penalty on him.

Section 180 stipulates that three mandatory conditions are to be fulfilled step by step in chronological order and not simultaneously by the Adjudicating Officer before confiscation of goods or imposition of penalty.

The provisions of section 180 of the Customs Act, 1969 does nowhere provide for the waiver of show-cause notice on the part of any person who has limited choice under it.

The provisions of section 180 of the Customs Act, 1969 do not absolve the Adjudicating Officer of discharging his responsibility to comply with the given charter."

The impugned order reveals with clarity that no show-cause notice has been issued to the appellant by the Adjudicating Authority. Issuance of show-cause notice is a mandatory requirement for the adjudicating officers while adjudicating issues before them. This is also in violation of the principle of natural justice as held by Superior Courts in umpteenth reported judgments that:-

(i)It is the first principle of natural justice to issue a show-cause notice to the person concerned. It is a mandatory requirement for crystallization of monetary liability against the taxpayer through stating of material particulars of the case along with applicable provisions of the relevant law.

(ii)It is a well settled proposition of law that if a thing is required by law to be done in certain specific manner must be done in the same manner as prescribed by law or not at all as per maxim "Expressum Facit Cessare tacitum" as observed by the Apex Court in their judgments reported as PLD 1964 SC 536, 2003 SCMR 1505, 2006 SCMR 129.

(iii)Violations of principle of natural justice can be equated with violations of provisions of statutory instruments.

(iv)It is the common principle which governs the administration of justice in Islam that in case of liability with penal or quasi penal consequences and/or deprivation of basic rights, a notice as well opportunity of hearing is absolutely necessary. This by itself has to be recognized as a basic right as observed by Honourable Supreme Court, Shariat Appellate Bench in the case of Pakistan v. Public at large reported as PLD 1987 Supreme Court 304.

(v)Even issuance of a proper show-cause notice to a person is an essential ingredient of the expression "audi alterm partem" which literally means that no man shall be condemned unheard. The right of being issued with a show-cause notice and the right of being personally heard are inseparable and inalienable rights of the defendant and cannot be denied to the person concerned under any circumstances.

(vi)In one case, the suspension without issuance of a show-cause notice was quashed by Dhaka High Court and was later confirmed by the Supreme Court that the rule of natural justice applies though there may not be any positive words in the statute, for such requirements and such rules are minimum requirements of fairness as reported in the case of University of Dhaka v. Zakir Ahmed PLD 1965 Supreme Court 90.). This has also been followed by the Honourable Supreme Court of Pakistan in their judgment reported 1994 SCMR 2232. As observed by the Honourable Supreme Court in the judgment M.D. the Bank of Punjab v. Syed Shahzad Hussain reported as 2006 SCMR 1023, it is also a settled principle of law that principle of natural justice must be read in each and every statute unless and until it was prohibited by the wording of the statute itself as the law laid down by this Court in Sir Edward Snelson's case PLD 1961 SC 237, Fazal-ur-Reham's case PLD 1964 SC 410, Zakir Ahmed's case PLD 1965 SC 90, Pakistan Crome Mines' case 1983 SCMR 1208 and Pakistan's case PLD 1987 SC 304.

In view of the provision of Customs Act, 1969 and above judgments of the Superior Courts the order passed by the respondent No. 2 is ab initio, null and void and the structure built upon this order has no legal value.

11.That from the demand notices and order another apparent illegality is visible as evident from the fact that the order passed by the respondent No. 2 through which demand was raised by the respondent under the provision of section 32(3) of the Customs Act, 1969. The respondent has no power under section 32(3) ibid, instead the authority enjoying the powers under this section is Principal Appraiser/ Superintendent under notification S.R.O. No.371(I)/2002 dated 15-6-2002. Meaning thereby that he is the only authority to proceed in the matter instead of respondent No. 2 because it is settled elementary principle of law that action of executive functionaries are to be restricted to specific sphere permitted by the statute. In S.R.O. 371(I)/2002 dated 15-6-2002 respondent figure no where rendering the order as ab-initio and void. If the opinion oftenly adopted by the authorities that Superior Authorities can exercise the powers of their subordinate under section 4 of the Customs Act, 1969 is considered valid for a while then the hierarchy of distribution of jurisdiction explicitly provided by section 179 of the Act and S.R.O. 371(I)/2002 dated 15-6-2002 shall be rendered redundant. Also the consequent result would be a total anarchy where the superior officers would be making all efforts to exercise the adjudication powers clearly conferred by law upon their subordinates. The powers of adjudication are specific and empowered by the statute. It is an elementary principle of law that where there is a conflict between special and general provision of law, the special provision shall prevails (reference is invited to the case of Lt. General (Retd.) Shah Rafi Alam v. Lahore Race Club 2004 CLD 373. The power of adjudication, as already observed, is special in nature. This cannot be eclipsed by any other general provision. Even otherwise there is another settled principal of interpretation of statute i.e. that the courts can supply construction with a view to avoiding absurdity (reference is invited to the case of Khalid Qureshi v. UBL (2001 SCMR 103). Equally it must be kept in mind that if it is held that sections 4 and 179 occupy the same fields, there is likely to be redundancy in respect of powers conferred under section 179 and S.R.O. 371(I)/2002 dated 15-6-2002. The Supreme Court in the case of East West Steamship v. Queen Land Insurance PLD 1963 SC 663 has been pleased to hold that redundancy is to be avoided in respect of any provision of the statute. There is also plethora of case law on the point that where there is a conflict between two provision of the statutes, the later provision prevails and has to be given precedents (reference is invited to the case of Sahibzada Sharfuddin v. Town Committee, 1984 CLC 1517. Apart from this law favour actions of the authorities to be confined to their own spheres of jurisdiction conferred by the statute. An action taken by a state functionary beyond the ambit of his jurisdiction is nullity. In this respect the judgment reported as Abida Rashid v. Secretary, Government of Sindh PLD 1995 Kar. 587 is referred. Their lordships observed as under:--

"It is trite law that power vested in an authority should only be exercised by that authority, in default whereof, the exercise of power and authority becomes without jurisdiction, illegal, void, ab-initio and of no legal effect. The term "without jurisdiction" has been judicially interpreted to include usurpation of power warranted by law (the Chief Settlement Commissioner Lahore v. Raja Muhammad Fazil Khan and others PLD 1975 SC @ p.339) an act done which the person doing, it has no jurisdiction at all to do or which was clearly outside the scope of his activities (The State v. Zia-ur-Rehman (PLD 1973 SC 49) and a judgment or order delivered by a court or a judicial or a quasi judicial authority not competent to deliver it (Muhammad Saleh and others v. Messrs United Grain and Fooder Agencies PLD 1964 HC 97). The Constitution jurisdiction can thus be exercise when it is shown that the order is passed without jurisdiction or in excess of jurisdiction. As observed earlier the respondent No.1 has no jurisdiction to pass the impugned order. As such we declare the same to be of no legal effect. Accordingly, we allow this petition but leave the parties to bear their own cost".

12.That while dealing with the powers of adjudication, it is needless to observe, that our Supreme Court has jealously guarded the same. In Assistant Director v. B.R. Herman Mohata Ltd. PLD 1992 SC 485 a full bench of Supreme Court was pleased to observe that section 223 of the Customs Act, 1969 could not be employed so as to interfere with the judicial or quasi judicial functionaries. It was clearly observed that the power of the CBR as to prescribed guideline were not relevant for the exercise of judicial function. To similar effect is the judgment of Supreme Court reported as Central Insurance v. CBR 1993 SCMR 1232. In this case the CBR issued direction for the reopening of Income tax Assessment under section 65 of the Income tax Ordinance, 1979. It was held by the Supreme Court that the CBR did not figure in the hierarchy of the officer provided in the statute for the purpose of assessment and adjudication. On the basis of this it was held that the directions of the CBR to reopen the assessment was without jurisdiction and the adjudication officer was directed to apply its own mind. Reliance is placed on the order of the Tribunal in S.T. Appeal No. 176/2007 Messrs Muller and Phipps Pakistan (Pvt.) Ltd. v. The Collector of Sales Tax Enforcement LTU, Karachi and 2011 PTD (Trib.) 2114 Collector of Customs, Peshawar v. Collector of Customs (Appeals) Peshawar and 2011 PTD (Trib.) 2557 Messrs Wawa Garments Industries (Pvt.) Ltd. v. The Additional Collector of Customs, Export, Karachi.

13.That wherein any action is taken in the absence of availability of powers or show-cause notice or order has been passed without jurisdiction/power, such order are of no legal effect as held by their LORDSHIP OF SUPREME COURT OF PAKISTAN that "it is an element to principle that if a mandatory condition for the exercise of jurisdiction by Court, Tribunal or Authority is not fulfilled then the entire proceeding which follows become illegal and suffer from want of jurisdiction/powers. Any order passed in continuation of these proceedings in appeals or revisions equally suffers from illegality and are without jurisdiction" Major Syed Walayat Shah v. Muzaffar Khan and 2 others (PLD 1971 S.C 184), PLD 1976 Supreme Court 514 Ali Muhammad v. Hussain Buksh and others, Omer and Company v. Controller of Customs, (Valuation): (1992 ALD 449 (1) Karachi, AAA Steel Mills Ltd. v. Collector of Sales Tax and Central Excise Collectorate of Sales Tax (2004 PTD 624), PLD 2005 Supreme Court 842, Khyber Tractor (Pvt.) Ltd., v. Pakistan through Ministry of Finance Revenue and Economic Affairs, PLD 2001 Supreme Court 514 Land Acquisition Collector, Noshehra and others v. Sarfraz Khan and others S.T.A. 444/03, S.T.A. 465/07, 2010 PTD (Trib) 1636 and 2010 PTD 465,2010 PTD (Trib.) 2158, 2011 PTD (Trib.) 1010, 2011 PTD (Trib.) 1680, 2011 PTD (Trib.) 2086, 2001 SCMR 1822 Ali Muhammad v. Chief Settlement Commissioner PLD 2004 Supreme Court 600 All Pakistan Newspaper Society and others v. FOP and others .

14.That it is well settled principle of law that, if the law had prescribed method for doing of a thing in a particular manner such provision of law is to be followed in letter and spirit and achieving or attaining the objectives of performing or doing of a thing in a manner other than provided by law would not be permitted as declared in the reported judgments 2002 PTD 2457, PLD 1973 Supreme Court 236, PLD 1964 SC 536, 2001 SCMR 838, 2006 SCMR 129. The super structure built on such foundation no matter how strong it is has to fall. Refer to PLD 1996 Karachi 68, which laid down that "where the initial order or notice was void all subsequent proceedings, orders or super structure built on it were also void. In reported judgment 2006 PTD 978 it is held that "the entire proceeding initiated by the Adjudicating authority and further super structure thereon including the order passed by the learned Tribunal are without jurisdiction void and in-operative." The Apex Court in PLD 1971 Supreme Court 184 held that "order of a Tribunal found to be without jurisdiction---all successive orders based upon it illegal and liable to be quashed".

15.Notwithstanding to the observations made supra, now as to the merits of the case, it is observed that the appellant has claimed exemption of customs duties and taxes in terms of S.R.O. 436(I)/2001 dated 18-6-2001. As per contention of the Appellant that the ascertainment of their liability for short fall in achieving deletion targets may be computed as per condition No. (iii) of S.R.O. which is reproduced below the sake of ready reference:--

(iii) The manufacturer shall chalk out indigenization programme spreading over a maximum period of five years within which period he shall achieve a minimum indigenization of the manufacture of vehicles, machinery and equipment as approved by the Indigenization Committee of the Engineering Development Board. In case of any default in the indigenization programme, the components imported in violation of the indigenization programme shall attract statutory duty chargeable on the relevant CBU vehicles. Defaulted percentage in the annual indigenization targets will be determined by the Indigenization Committee and continued availability of the exemption under this Notification shall be contingent upon the achievement of progressive annual indigenization"

16. The Federal Government in the above notification has delegated the powers to chalk out the indigenization programme/its monitoring as well as the powers to determine the liability in achieving deletion targets and invoke statutory duty with the Indigenization Committee of the Engineering Development Board being a regulatory authority. The said regulatory authority in the 57th meeting dated 30-1-2002 communicated vide its correspondence ECB letter EDB-005/03/202 dated 16-2-2002 decided following short falls in achieving the indigenization:-

Santro Plus Car 1.27375%.

Kia Classic Car 1.41091%.

Kia Spectra Car 0.53936%

17. The committee further held that "after deliberations the Committee advised EDB to communicate the additional deletion achieved by DFML. Indicated short falls in deletion of following products shall attract statutory rate of duty chargeable on the relevant CBU vehicles on CKD kits imported after 31-10-2001". It appears that the appellants have paid the customs duties and taxes on the short fall in achieving the deletion programme in accordance with the decision of the Engineering Development Board supra on CKD kits imported after 31-10-2001 at CBU rates applicable to the impugned goods.

18. It is observed that under section 30 of the Customs Act 1969, the customs duties and taxes on the above short fall is applicable on CBU vehicles as applicable prior to 31-10-2001 is incorrect and misconceived. The provisions of section 30 are not applicable in the instant case as the scheme of S.R.O. 436(I)/2001 dated 18-6-2001 read with condition (iii) empowers the Engineering Development Board to take decision on case of case basis and such decision become final and conclusive under S.R.O. 436(I)/2001 dated 18-6-2001. Once, it is agreed by the committee with consent of its constituent Members, decision become final for implementation.

19.We further observe that view that the representative of the Federal Board of Revenue was also present in each and every meeting of the Indigenization Committee of Engineering Development Board and the decisions taken on the above dates have never been disputed by the Federal Board of Revenue or their officers for its implementation. If for any reasons the respondents disagree with the decision of the Engineering Development Board, the law requires in all fairness and equity that they should have coasted their disent in the meeting and also communicated to the EDB after that meeting which in the instant case has not happened. In our view, therefore, the decisions of EDB dated 16-2-2002 has attained finality and could not be disputed at later stage by the respondents. At best the respondent can recover the short levied duty and taxes strictly in accordance with the above decision of the Engineering Development Board and recover the customs duties and taxes at CBU rates applicable on imports of CKD kits after 31-10-2001.

20.In view of the above discussion, the orders of the respondents Nos.1 and 2 are held to be null and void. The appeal is allowed with above observation with no order to cost.

21.Order passed accordingly.

JJK/199/Tax(Trib.)Order accordingly.