SHAKOOR ALAM VS ADDITIONAL COLLECTOR OF CUSTOMS (ADJUDICATION), KARACHI
2014 P T D (Trib.) 453
[Customs Appellate Tribunal]
Before Ch. Naimatullah, Chairman/Member Judicial-I, Ghulam Ahmed, Member (Technical-II) and Muhammad Nadeem Qureshi, Member (Judicial-I)
SHAKOOR ALAM
Versus
ADDITIONAL COLLECTOR OF CUSTOMS (ADJUDICATION), KARACHI and another
CustomsAppealNo. K-921of2010,decidedon15thAugust,2013.
(a) Customs Act (IV of 1969)--- ----S. 194-A---Appeal to Appellate Tribunal---Affidavit accompanying appeal was not signed by the appellant---Effect---Contention of the Customs authorities was that affidavit accompanying appeal was not signed by appellant, therefore appeal was not maintainable---Validity---Appellant had engaged an advocate and executed power of attorney/ vakalatnama in his favour and authorized the advocate to prepare the appeal and put his signature thereon and file with the appellate authority---Appeal and affidavit had been signed by the Advocate on the strength of vakalatnama---Appeal could not be dismissed as not maintainable on the strength of technical objection which tantamount to denying justice---Appeal was validly filed and maintainable---Objection raised by the respondent customs authorities was overruled.
Soneri Bank Ltd. v. Classic Denim Mill (Pvt.) Ltd. and others 2011 CLD 408 rel.
(b) Customs Act (IV of 1969)---
----Ss. 16 & 18---Charge levelled under machinery provision of law---Scope---By virtue of S. 16 of Customs Act, 1969, Federal Board of Revenue had been delegated power for prohibiting or restricting importation and exportation of the goods through a notification---Section 16 of Customs Act, 1969 was a machinery section and no charge could be invoked under the same---Section 18 of Customs Act, 1969 being a machinery section provided for levy of, exemption from and payment of customs duties and the said powers rested with the Federal Board of Revenue and same had no nexus with importer, clearing agent and other person---No charge could be invoked under S. 18 of Customs Act, 1969.
(c) Customs Act (IV of 1969)---
----Ss. 32 & 32-A---Mis-declaration---Show-cause notice to "commission agent"---Commission agent was inflicted penalty for mis-declaration---Scope---Contention of the appellant (Commission Agent) was that being commission agent no penalty for mis-declaration could be imposed on him---Validity---Show-cause notice on account of mis-declaration could be served on an importer or exporter or clearing agent or any other person who had submitted a declaration with the customs---Appellant/commission agent least fall in the category of the person defined as he had not submitted any declaration or statement or any documents, which was false in material particular or concocted, altered, mutilated, false, forged, tampered or counterfeit---Commission agent submitted security with the shipping company against the container, subject to refund of the same after delivering empty containers to the terminal of the shipping company after de-stuffing and for providing that service he charged the security amount which instrument was not a document, declaration statement required for obtaining clearance of the import goods---Impugned order penalizing the appellant/commission agent was set aside---Appeal was allowed.
(d) Customs Act (IV of 1969)---
----Ss. 32, 32-A, 121, 157 & 192---Trans-shipment of goods without payment of customs duties---Show-cause notice to "commissionagent"---Scope---Contention of the appellant commission agent was that he was not responsible for trans-shipment of goods without payment of customs duties, therefore penalty imposed by the customs authorities was illegal---Validity---Importer/clearing agent and customs had to follow the rules made for trans-shipment of goods---Appellant/commission agent had not obtained trans-shipment of the impugned goods---Commission agent who had deposited security of the container allegedly cleared by customs could not have the knowledge that the said container had been removed illegally from the port---Commission agent was not a clearing agent, therefore could not be held responsible for transshipment of goods---Impugned orders were set aside---Appeal was allowed.
Afzal Awan for Appellant.
Ghulam Yasin (P.A.) and Rana Gulzar Ahmed (S.I.O.) for Respondents.
Date of hearing: 22nd July, 2013.
ORDER
GHULAM AHMED, (MEMBER (TECHNICAL-II)).---Theappeal, filed by the appellant, is directed againstOrder-in-Appeal No. 4072 of 2010 dated 7-7-2010 passed bythe Collector of Customs (Appeals), Karachi maintaining the Order-in-Original No. 3 of 2010 (Manual) dated 19-1-2010passed by the Additional Collector of Customs, (Adjudication), Model Customs Collectorate of PaCCS, Custom House, Karachi.
2.(sic) Insert brief facts here.
3.Insertrelevant portion of para 12 of the order-in-original to the extent of appellant
4.Insert relevant portion of the order-in-appeal to the extent ofappellant.
5.insertgrounds of memo. of appeal
6.insert parawise comments of MCC of PaCCS dated 23-12-2010.
7.Rival parties heard and case records perused.
8.The representative of the respondent raised the objection in the parawise comments dated23-12-2010and even at the barthat the accompanied affidavit with the appeal is not signed by the appellant, renderingthe appeal not maintainable in terms of the provision of section 194-A of the Customs Act, 1969.Therefore, we took the said issue for decisionprior to issuing a detailed judgmentin the instant appeal.
9.The contention of the respondent representative is devoid from law by virtue of the fact that when an appellant engagedan advocate and executed a power of Attorney/vakalatnama in his favour, he authorizedthe advocate to prepare the appeal andput his signature thereon and file with the competent Appellate Authority as prescribed in respective section of the Act. The instant appeal and affidavithad been signed by the Advocate on the strength of Vakalatnamaavailable in the case file. Even otherwise dismissing of appeal as not maintainable on the strength of the said technical objection tantamount to denying justice,rendering the embodiedsection 194-Aof the Customs Act, 1969 and Article 10A(fair trial) of the Constitution of Islamic Republic of Pakistan 1973 as redundant. TheSuperior Judicial Fora observedin manyreported judgmentsthat technicalities/lacunasshould not bemade basisfor rejecting the appeal. In reported judgmente.g.in2011 CLD 408 Soneri Bank Ltd. v. Classic Denim Mill (Pvt.) Ltd., and otherstheir lordship of High Court of Sindhheld that "signing, verification and drafting of plaint in a manner were of mere procedure thus relevant provision could not be strictly construed. Rules regarding verification and signature on plaint, being matter relating to procedure were to be liberally construed. Such presentation or singing could not make plaint a nullity. Rules and regulation are only meant to streamline the procedure and administer the court of justice but not to thwart the same. Duty of the court is to do substantial justice prime object behind all formalities is to safeguard the paramount interest of justice mere technicalities, unless offering insurmountable hurdles should not be allowed to defeat the end of justice. Legal precept are devised with a view to impart certainty, consistency and uniformity to administration of justice and to secure the same against arbitrariness". Besides the "any person" in the respective provisions of the Act also means advocate, consultant or authorized representative of the person who files appeal on behalf of the person against whom order has been passed. Thus the Tribunal holds that the appeal is validly filed and maintainable and the objection of respondent in this regard is overruled.
10.Reverting to themerit of the casethe Tribunal observed that the respondent No. 1 hasinvokeda series ofsection of the Customs Act, 1969 without giving thought to the spirit of thoseand as to whetherthose wereapplicableon the appellantin the light ofRule assignedto him in the show-cause notice. For having a better understanding, verbatim of each invoke sections are reproduced here-in-under:--
16. Powerto prohibit or restrict importation and exportation of goods:---The {FederalGovernment } may, from time to timeby notification in the officialGazetteprohibited or restrict the bering into a taking out of Pakistan of any goods of specified description by air, sea or land.
18. Gooddutiable.---(I) Exceptas hereinafter provided, customs dutiesshall belevied at such rates as are prescribed in the First Schedule or under any other law for the time being in force on:-
(a)goods imported into Pakistan,
(b)goodsbrought from any foreign country to any customs station and without payment of duty there, transshipped or transported for, or thence carried to, and imported at any other customs station, and
(c)Goods brought in bond from one customs station to another.
(2)No export duty shall be levied on the goods exported from Pakistan.
(3)The Federal Government may, by notification in the official Gazette levy, subject to such conditions, limitations or restrictions as it may deem fit to impose a regulatory duty on all or any of the goods imported or exported, as specified in theFirst Schedule at a ratenotexceeding one hundred percent of the value of such goods as determined under Section 25 [or, asthe case may be section 25A]
(4)The regulatory duty levied under subsection (3) shall:-
(a)be in addition to any duty imposedunder subsection (1) or under any otherlaw forthe time being in force and;
(b)be leviable on and from the duty specified in the notification issued under that subsection notwithstanding the fact that heissue of the officialGazette in which such notification appears is published at any time after that day.]
[(5)The Federal Government may, benotification in the official Gazette levyan additional customs duty on such imported goods as are specified in the First Scheduleat a rate not exceeding thirty five per cent of value of such goods as determined under section 25 [ or, as the case may be section 25A]
{Provided that thecumulative incidence of customs duties leviable under subsections (1), (3) and (5) shall notexceed the ratesagreed to by the Government of Pakistan under multilateral trade agreement]
(6)The additional customs duty levied under subsection (5) shall be,
(a)In addition to anyduty imposed under subsection (1) and (3) or under any other law for the time being inforce and
(b)Leviable on and from the dayspecified in the notification issued under that subsectionnotwithstanding the fact that theofficial Gazette in which such notification appears is publishedat any time after that day.}
Section 32 False statement, error, etc.------If any person, in connection with any matter of customs,---
(a)makes or signs or causes to be made or signed, or delivers or causes to be delivered to an officer of customs any declaration, notice, certificate or other document whatsoever, or
(b) makes any statement in answer to any question put to him by an officer of customs which he is required by or under this Act to answer,
Knowing or having reason to believe that such document or statement is false in any material particular, he shall be guilty of an offence under this section. (Emphasis Supplied)
32A.Fiscal Fraud (1) if any person, in connection with any matter related to customs:--
(a)Causes to submitdocuments including those filed electronically, which are concocted, altered, mutilated, false, forged tempered or counterfeit to a functionary of customs;
(b)Declares in the82 [goods declaration] electronically filed customs declaration, the name and address of any exporter or importer which is physically non-existent at the given address;
(c)Declares in the 82[goods declaration] electronically filed customs declaration an untrue information regarding97 [payment of duties and taxes through self assessment] description quantity, quality origin andvalueof goods;
(d)Alters, mutilates or suppresses any finding of the customs functionary on any documents or in the computerized record; or
(e)Attempts, abets or connives in any action mentioned in clauses (a) (b) (c) and (d) above,he shall be guilty of an offence under this section.
(2)Where, byany reason as referred to in sub section (1) as aforesaid, any duty or tax charged or fee or fine and penalty levied under any provision of law has not been levied or has been short levied or has been refunded, the person liable to pay any amount on that account shall be served with a notice within a period of 180 days of the date of detection of such custom duty and tax fraud, requiring him to show-cause as to why he should not pay the amount specified in the notice along with any other amount imposed as fine or penalty under the provisions of this Act.
"Section79---Declaration and assessment for home consumption or warehousing.--{(1) The ownerof anyimported goods shall make entry of such goods for home consumption or warehousing or for any other approved purposes, within fifteendays of the arrival of the goods, by,--
(a)Filing of a truedeclaration of goods, giving therein complete and correct particulars of such goods, duly supported by commercial invoice, bill of lading or airway bill, packing list or any other documents required for clearance of such goods in such from and manner as the board may prescribe; and.
(b)Assessing and paying hisliabilityof duty, taxes and othercharges thereon, in case ofa registered user of the Customscomputerized System.
[Provided that if, in case of used goods,before filing of goods declaration, the owner makes a request to anofficer of customs not below the rank of an Additional Collector thathe is unable, for want of full information, to make a correct and complete declaration of the goods, then suchofficer subject to such conditions as he may deem fit, may permit the owner to examine the goods and thereafter make entry of such goods by filing an goods declaration after having assessed and paidhis liabilities of duties, taxes and other charges.
Providing further that no goods declaration shall be filed prior to ten days of the expected time of arrival of the vessel.]
(2)If an officer, not below the rank of Additional Collector of Customs, is satisfied that the rate of customs duty is not adversely affected andthat there was no intention to defraud, he may, in exceptional circumstances and for reasons to be recorded in writing, permit, substitution of a goods declaration for home consumption for a goods declaration for warehousing or vice versa.
(3)An officer of customs, not below the rank of assistant Collector of Customs, may in case of goods requiring immediate release allow release thereof prior to presentation of a goods declaration subject to such condition and restriction as may be prescribed by the Board.]
"Section 80--Checking of goods declaration by the Customs---(1) on the receipt of goods declaration under section 79, an officer of customs shall satisfy himself regarding the correctness of the particulars of imports, including declaration assessment, and in case of the customs computerized system payment of duty, taxes and other charges thereon.
(2)An officer of customs may examine any goods that he may deem necessary at any time after the import of the goods into the country and may requisition relevant documents as and when and in the manner deemed appropriate, during or after release of the goods by customs,
(3)if during the checking of goods declaration, it is found that any statement in such declaration or documents or any information so furnished is not correct in respect of any matter relating to the assessment, the goods shall without prejudice to any other action which may be takenunder this Act, be reassessed to duty.
(4)in case of the customs computerized system, goods may be examined only on the basis of computerized selectivity criteria.
(5)the Collector may, however, either condone the examination or defer the examination of imported goods or class of goods and cause it to be performed at a designated placed as he deems fit and proper either on the request of the importer or otherwise.
"Section83---Clearance for home consumption.---(1) When the owner of any goods entered for home consumption and assessed under section80 or 81 has paid the import duty and other charges, if any, in respect of the same the appropriate officer, if he is satisfied that the import of the goods is not prohibited or in breach of any restriction or conditions applying to the import of such goods, may make an order for the clearance of the same:
Provided that, at customs stations where the customs computerized system is operational the system may clear the goods through system generated clearance documents.
(2)Where the owner fails to pay import duty and other charges within 3[ten] days from the date on which the same has been assessed under sections 80, 80A or 81, he shall be liable to pay surchargeat the rate of [KIBOR] plus three per cent] on import duty and other charges payable on such goods]
121 Transshipment of goodswithout payment of duty(I)Subject to the provisionsof section 15and the rules, the appropriate officer may, onapplication by the owner of any goods imported at any customs station and specifically and distinctly manifestly at the time of importationas for transshipment to some other customs station or foreign destination, grant leave to transship the same without payment of duty. Ifanychargeable on such goods with or without any securityor bond for the duearrival and entry of the goods at the customs station of destination.
(2)The Board, may subject to rules and suchconditions as it may deems fits to impose authorities certain carriers to transport goods under the multimodal, scheme Goods transported under themultimodal scheme shall be specificallyand distinctly manifested at the time of importation as for transshipment to some othercustomsstationorforeign destination and shall not:-
(a)require distinct permission for transshipmentfrom the customs station of first entry into the country to be transported to the customs station of destination. The principal carrier issuing the multimodal bill of lading or air way bill will be responsible for the sanctity of the cargo duringtransportationbetweenthe customs station offirst entry into the country to the customs station of destination, and
(b)be subject to the risk management system at the customs station offirstentry.
(3)The boardmay,subject to such condition as it may deem first, grantlicenseto anycarrier to carry goods under themultimodal scheme]
157. Extent of confiscation.---(1) Confiscation of any goods under this Act includesany package in which they are found and all other contents thereof:
(2)Every conveyance of whatever kindused in the removal of any goods liable to confiscationunder this Actshall also be liable to confiscation:
Provided that, where a conveyance liable to confiscation has been seized by an officer of customs the [appropriate officer] may in such circumstances as may be prescribed by rulesorder its release pending the adjudication of the case involving in condition if the owner of the conveyancefurnishes him with asufficient guarantee from a scheduled bank for the due production of the conveyance at any time and place it is required by the (appropriate officer to be produced)
(3)Confiscation of any vessel underthis Actincludes her tackle apparel and furniture.
178Punishment of person accompanyinga person possessing goods liable to confiscation:.---Ifanytwo or more person in company are found together and they or any of them have goodsliable to confiscation under this Act, everysuch person having knowledge of this fact is guilty of an offence and punishable in accordance with the provisions of this Act as if goods were found on such person.
192Duty of certain persons to give information.---(1)Any person who come to know of the commission of any offence under this Act, or an attempt or likelyattempt to commit any such offence, shall as soon as may begive information thereof in writing to the officer-in-change of the nearest customshouse or customs station or if there is no such custom houseor customs stations, to the officer in charge of the nearest police station.
(2)Theoffice in charge of a police station who receives any information mentioned in subsection (1)shall as soon as possible communicate it to the office in charge of the nearestcustoms house or custom station.
207Customs house agents to be licensed.---Noperson shall act of {on behalf ofany principal } for the transactionof anybusiness.Relating to the entranceor departure of any conveyance[or anycustoms clearance related activity] or the import or export of goods orbaggage at any custom station unless such person holds a license granted in this behalf in accordancewith the rules [as a customs agent]
11.From perusal ofsection 16, it is observedthatthis section is incorporated in the Actfor delegating power to FBRfor prohibiting or restricting importation and exportationof the goods through a notification, resultant, it is a machinery sectionand no charge can be invoked under the said section.Similarly section 18 is for levy of, exemption fromand payment of, custom dutiesand the powersfor the prescribedAct rest with the Board and have no nexus with importer, clearing agent and any other personby virtue of being machinery section, as such no chargecan be invokedunder the said section.
12.It is evident from the expression of sections 32and32A of the Customs Act, 1969 can be invokedon an importeror exporteror clearing agentor any other person who submita declaration with the customs under section 79 of the Customs Act, 1969. The appellant least fall in the category of the person defined as he has not submitted any declaration or statement or any documents, which is false in material particular or concocted, altered, mutilated, false, forged, tampered or counterfeit. To the contrarysubmittedsecuritywith the shipping company against the container, subject to refund of that after delivering empty containers to the Terminal of the Shipping Company after de-stuffingand for providing that service he charged 1%of the security amount.The said instrumentis nota document, declaration statementetcrequired for obtaining clearance of theimported goods. Resultant, neither section 32 or 32Ais applicable in the case of the appellant.Wheras under section 79 of the Customs Act, 1969 an importer or clearing agent has to file/transmit goods declarationwith the customs not by another personlike appellantwho is none of those. Under section 80 the officer of the Customspassed assessment order on the basis of declaration or in accordance with this own opinion in regards to description, PCT and value for levy of duty and taxes and under section 83 of the Customs Act, 1969 the appropriate officer of the customsafter satisfyingthat the duty has been paid as per assessment completed by the competent authority under section 80 or 81 of the Customs Act, 1969 and that theimport of the goods is not prohibited or in breech of any restriction or condition applying to the import of such goods, passed clearance orderfor obtaining delivery from the Port under the regime of "One Custom" or transmitting view messageto the Terminal, Shipping Companyand Gate Stafffor obtaining delivery of the goods.These sections laysno dutyon theappellantinstead on the custom officials, resultant invoking contravention of the said section on the appellantis highly questionableby virtue of the fact that he figures no where in the expression of these Sections.
13.The section 121of the Actmeant fortransshipment of the goods without payment of dutyand Board has to frame Rulesfor that. The Rule so made has to be adheredby theimporter/clearing agent and Customs not by the appellant as he has not obtained transshipment of the impugned goods, invoking the said provision of the Actis completelyabsurd. And on perusal of section 157it has been observed that it speaks about confiscation of goods including packages or conveyance. No confiscation of any sort has been made in the subject case, resultant, invoking of the said sectionin the show-cause notice isinsane. The section 192lays duty on a personto give information to upon knowingof the commission of any offence or an attempt or likely attempt to commit any such offenceto the officer-in-charge of the nearest customs-house or customs station orif there is no custom house or customs-station, tothe officer-in-charge of the nearest police station in writing. How can a commission agentwho deposited securityof the containerallegedly cleared by the customs can have the knowledgethatthe said containerhas been removed illegallyfrom the port, when it is next to impossiblebesidein the absence of tangible evidence thathe had the information orhad been giveninformationthrough SMSor he including the general publicwas informedthroughpublication inNational Daily'sNewspaper orthrough ticker on News Channels. None of the said procedure was adopted as admitted by the representative ofthe respondent then howthe said provision of the Actwas invoked on him.That as regard to section 207 of the Customs Act, 1969 it is for Licensingof Customs-House Agentfortransacting of any businessrelating to clearance of the goods, this sectionisnot at all applicableon the appellant as he is not a clearing agent.
14.In addition to the above irregularities committed by the respondent who passed order on the basis of biased and determined opinion and the said fact stood validatedfrom the order of therespondent No. 1 wherein heheldthatcharges against him are not established in view of the Board's report vide U.O.No. 10(18)L&P/2002 dated 17-10-2009 sent to the PresidentSecretariat (Public)that the act of depositing security with the shipping company isinsignificance, thereforethe Directorate General of Intelligence and Investigationconsideringtoassign the appellant role of witness in Final Challan instead ofaccused in the F.I.R.as the evidence on the basis ofwhich the appellant was implicatedin the case are no evidence under the Law of Evidencebeing in sufficient and this stood validatedfrom the Bail Order of The Lahore High Court, Lahore of the appellant in Miscellaneous Bail No. 8429/B of 2008 dated 26-9-2008that " the petitioner was only a commission agentand nothing more than that. The true import of his role and vicariousliabilities shall be assessed after collecting some material evidenceat the time of trial. Even otherwisethe disclosure madeby the petitionerduring Police custody on the basis of which he has been involved in this case isinadmissible in evidence".The respondent No. 1imposed penalty ofRs.50,000.00 on the said insignificance of his role andnon evidence. This confirms that hefailed to distinguish or discussthe law including, insteadmadediscussion of personal naturein regards to fiscal statute, which is not sustainable in comparison to the Law and the judgments of Hon'ble Superior Courts of Pakistan.Hence he erred in passing the orderand it isnot sustainable in lawas this isclearly contrary to the Law/Rules, being erroneous and not in consonance of law, equity and natural justice instead based on mala fideandintellectual dishonesty.
15.To what has been stated/discussed herein above particularly the interpretation of law and legal position referred in the light of prescribed law andobservations made thereon, we hold that, the appellant had been implicated unnecessarily in the case despite not warranted under the invoked Provision of the Custom Act, 1969 by The Directorate of Intelligence and Investigation - FBR and penalizedthrough impugned orders passed during the hierarchy of Customs, being suffering from grave legal infirmities are declared to be illegal and are hereby set-aside to the extent of present appellant only and allow the appeal as prayed with no order as to cost.
16.Order passed accordingly.
JJK/166/Tax(Trib.)Order accordingly.