DEWAN SALMAN FIBER LTD. VS The COLLECTOR (APPEALS), 2014 PTD-CUSTOMS-APPELLATE-TRIBUNAL-KARACHI 52 (2013)

2014 P T D (Trib.) 52

[Customs Appellate Tribunal, Karachi]

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

Messrs DEWAN SALMAN FIBER LTD.

Versus

The COLLECTOR (APPEALS) and 2 others

Customs Appeal No.K-1306 of 2011, decided on 19/07/2013.

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

----Ss. 32 (1), (2), (3) & 194-A---Appeal before Appellate Tribunal---Misdeclaration---Short assessed duty, recovery of---Show-cause notice---Prerequisites---Appellant/importer was served with a show-cause notice by the customs authorities---Allegation against the appellant was that he imported ester of Acrylic Acid attracting customs duty, sales tax but with a view to availing inadmissible benefits of zero percent/exemption from customs duty he misdeclared the imported items as Methyl Acrylate---Customs authorities found the appellant guilty of deliberate mis-declaration and passed an order for recovery of exempted amount of customs duty, sales tax and income tax and Collector of Customs (Appeals) dismissed the appeal of the appellant---Appellant in filing goods declaration had not made any false statement regarding the description, quantity of the goods---Appellant was not charged with allegation of any collusion by the customs authorities, therefore show-cause notice under S. 32(2) of the Customs Act, 1969 could not be acted upon---Validity---Appellant transmitted goods declaration with the Model Customs Collectorate (MCC) of Pakistan Customs Computerized System (PACCS) containing description "Methyl Acryalate" on the basis of commodity name in letter of credit, invoice, B/L, certificate of origin and he incorporated the said information of the Goods Declaration (GD) under Pakistan Customs Tariff (PCT) heading with the exemption of customs duty, Sales tax on the basis of infield notifications and Income Tax against certificate issued by the Commissioner of Income Tax---Software of the Pakistan Customs Computerized System (PACCS) had been designed by the agility in such a manner that upon receipt of the goods declaration the system co-relates each declaration with the corresponding Pakistan Customs Tariff (PCT) heading, the claimed notifications and the exemption certificate, which were fed therein either by the FBR/Project Director or Commissioner of Income Tax at their own and after finding those in accordance with the declaration the system pass assessment/clearance order in exercise of its inbuilt vested authority, such fact stood validated from examination of the import documents and goods declaration---Appellant had made no misdeclaration in material and invoking the provisions of S. 32 by customs authorities was erroneous in circumstances---Show-cause notice issued to appellant did not remotely hint the submission of any false documents or statement while transmitting goods declaration with the Model Customs Collectorate (MCC) of Pakistan Customs Computerized System (PACCS) or about the collusion with the project official of Pakistan Customs Computerized System (PACCS) rendering the show-cause notice and the subsequent proceeding void ab initio---Order-in-original passed by customs authorities and order-in-appeal passed by the Collector of Customs (Appeals) was set aside---Appeal was allowed.

Asst. Collector v. Khyber Elec. Lamps 2003 PTD 1275; D.G. Khan Cement v. Collector of Customs 2005 PTD 480; Caltex v. Collector2003 PTD 1593; Union Playing Card Company v. Collector ofCustoms2002MLD130; AtlasTyresv.AdditionalCollector2002MLD 180; Kashmir Sugar v. Collector 1992 SCMR 1898 and SarwarInternationalv.AdditionalCollectorofCustoms2013PTD813rel.

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

----Ss. 32 (1), (2), (3), 3-A & 180-A---Short-levied Customs duties on account of inadvertence, error or misconstruction---Show-cause notice was served in pursuance of contravention report of Directorate of Post-Clearance Audit---Contention was that Customs authorities were not authorized to issue show-cause notice under the provisions of S. 32(1) and (2) of the Customs Act, 1969---Validity---Show-cause notice had been issued under S. 32 (1) and (2) of the Customs Act, 1969, whereas the applicable provision of the Act was S. 32(3A)---No charge had been levelled in the show-cause notice on the basis of the provisions of S.32(1) and (2) of the Customs Act, 1969---Show-cause notice was manifestly defective and without lawful authority in circumstances---No order for creating demand could be passed on the basis of such show-cause notice---Section 180-A of the Customs Act, 1969, provided that it was mandatory requirement upon the competent authority for mentioning the grounds on which proposed action was taken against the appellant/incumbent---Principles of natural justice also imposed condition that all the legal and factual material particulars and applicable provisions of the Customs Act, 1969 must be brought to the notice of the importer---Contravention report/show-cause notice and order in original were patently beyond the expression of Customs Act, 1969 as well as the principles of natural justice---Impugned orders were set aside---Appeal was allowed.

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

----Ss. 32(1), (2), (3) & 3-A---Show-cause notice---Non-observance of mandatory requirements of law---Effect---Appellant was served with a show-cause notice in pursuance of contravention report of Directorate of Post-Clearance Audit---Customs authorities issued show-cause notice under S. 32(1) and (2) of the Customs Act, 1969 instead of 32 (3-A)---Scope---Adjudication on the basis of entire section instead of the applicable provisions of the Customs Act, 1969 rendered the show-cause notice and subsequent order passed as defective and against law---Non observance of mandatory requirement of specific provisions of law was not a commission of technical discrepancy or procedural lapse which was a curable lacuna, it was a substantive illegality which would vitiate all the case proceedings on which the superstructure was built by different quasi-judicial and judicial authorities---Impugned orders were set aside---Appeal was allowed.

Asst. Collector v. Khyber Elec. Lamps 2003 PTD 1275; D.G. Khan Cement v. Collector of Customs 2005 PTD 480; Caltex v. Collector2003 PTD 1593; Union Playing Card Company v. Collector of Customs 2002 MLD 130; AtlasTyres v. Addl. Collector 2002 MLD 180; State Cement v. Collector PTCL 2001 CL 558; Kashmir Sugar v. Collector 1992 SCMR 1898 andSarwar International v. Addl: Collector of Customs 2013 PTD813rel.

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

----Ss. 32 (3) & 3-A---Short-levied customs duties on account of inadvertence, error or misconstruction---Recovery notice to be served "within three years"---Show-cause notice issued after the expiry of stipulated period of three years was time-barred and as such not enforceable.

Dadabuoy Sack Ltd. v. The Collector of Customs, Sales Tax and Federal Excise (Appeals) Hyderabad and others 2009 PTD (Trib.) 500; Shah Murad Sugar Mills and others's case 2007 PTD 117; Messrs Ghandhara Nissan Diesel Ltd., v. The Collector of Customs, Karachi 2005 PTD 2453; PSIC Cutlery, Wazirabad v. Collector of Sales Tax and Central Excise, Gujranwala and others 2008 PTD 981;Joyla Sadat Cotton Industries v. Collector of Customs 1992 SCMR 1898 andFederation of Pakistan v. MessrsEbrahim Textile Mils Ltd. and others 2006 PTD 537 rel.

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

----S. 193-A(3)---Extension oftime in passing order by Collector of Customs (Appeals)---Scope---Extension given without serving notice to the appellant/incumbent importer---Effect---Order on appeal should have been passed within 120 days from the date of filing of appeal or within further extended period of 60 days prior to expiry of initial period of 120 days with reasons to be recorded for extension inwriting---Order of extension was passed after the expiry of initial period with the reasoning that the proceedings in the case could not be finalized within the stipulated time limit due to adjournment obtained by the appellant/counsel---Extension granted by Collector (Appeals) was without any lawful authority as he could not extend the time, unless a notice to the appellant had been served---Impugned orders were set aside---Appeal filed by the appellant/importer was allowed.

Khalid Mehmood v. Collector of Customs, Customs House, Lahore1999 SCMR 1881 rel.

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

----Ss. 193-A(3) & 194-A---Appeal before Appellate Tribunal---Collector of Customs (Appeals) passed order in appeal after the expiry of prescribed initial time period of 120 days---Scope---Order of extension in time period for the decision of appeal was not passed prior to the expiry of initial period of 120 days---Extension in time period granted after the expiry of initial period was unlawful and without jurisdiction---Extension in time period was given without answering the condition prescribed for exercising such powers i.e. Collector (Appeals) had to apply his mind and after making an objective assessment, if it came to the conclusion that the extension of time was to be granted, he had to grant the same prior to expiry of the initial period and not merely on the basis of his personal opinion---Where exercise of jurisdiction by any Authority or Court or Tribunal was made subject to existence of specific condition, then such power could not be exercised intheabsenceofthatcondition---Extensionoftimeinpassingorderin appealwasakintogivinganewleaseoflifeintodeadentity and was tantamount to flogging a dead horse---If an event or documents had become dead on account of non-timely extension oftime period, the same was legally considered dead and new spirit could not be infused into it by means or on account of any reason whatsoever.

2007 PTD 117; 2008 PTD 60; 2007 PTD 2092; 2010 PTD (Trib.) 1636; 2010 PTD (Trib.) 2117; 2009 SCMR 1126; 2002 MLD 180; 2003 PTD 1354; 2003 PTD 1797; 2008 PTD 578; 2009 PTD 762; 2009 PTD (Trib.) 107; 2010 PTD 465; 2011 PTD (Trib.) 79; 2011 PTD(Trib.) 987; 2011 PTD (Trib.) 1010; 2011 PTD (Trib.) 1146 and 2012 PTD (Trib.) 1650 rel.

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

----S. 194-A---Constitution of Pakistan, Art.25---Appeal before Appellate Tribunal---Discriminatory treatment---Facility allowed by the other Collectorate of Customs of the country was denied by the Model Customs Collectorate (MCC) of Pakistan Computerized Collectorate of Customs (PACCS)---Effect---Treatment given to the appellant was against the principles enshrined in Art. 25 of the Constitution---Impugned orders were set aside---Appeal of the importer was allowed.

1990 SCMR 1059; 2002 SCMR 312; 2002 PTD 976; 2007 PTD 361 and 2009 PTD 1507 rel.

Messrs P&G International, Lahore v. Assistant Collector of Customs, Appraisement, Gr-11, Karachi and 3 others 2010 PTD 870; Collector of Customs v. Shaikh Shakeel Ahmad 2011 PTD 495; Assistant Collector of Customs v. Khyber Electric Lamps 2001 SCMR 838; Union Sport Playing Cards Company v. Collector of Customs 2002 MLD 130; PIA v. CBR 1990 CLC 868; Messrs Sarwar International v. Addl: Collector of Customs 2013 PTD 813; Messrs Super Industries (Pvt.) Ltd. v. Central Board of Revenue and others 2002 PTD 955; Messrs Colgate Palmolive Pakistan Ltd. v. Federation of Pakistan 2004 PTD 2516; Collector of Customs v. Power Electronic Pakistan 2011 PTD 2837 and State Cement Corporation of Pakistan v. Collector of Customs and others 2002 MLD 180 ref.

Junaid Ghaffar for Appellant.

Ghulam Yasin for the Respondents Nos.1 and 2.

Fiaz Modassar for Respondent No.3.

Date of hearing: 25th June, 2013.

ORDER

GHULAM AHMED, MEMBER (TECHNICAL-II).---By this order, we will dispose off Customs Appeal No.K-1306/2011 filed by the appellant against Order-in-Appeal No.5794/2011 dated 9-9-2011, passed by the Collector of Customs (Appeals), Karachi.

2.Brief facts of the case as reported that Directorate of Post Clearance Audit, 5th floor, State Life Building, I.I Chundrigar Road Karachi has reported vide its Contravention Report C.No. PCA/958/2009/782 dated 25-5-2010, MessrsDewan Salman Fiber Limited, Dewan Center, 3-A, Lalazar Beach Hotel Road, Karachi have imported thirty nine (39) consignments of Methyl Acrylate vide Goods Declaration (GD) CRN Nos.(1)1902, (2) 2051, (3) 2186, (4) 6148, (5) 10800, (6) 33500, (7) 33520, (8) 34137, (9) 36137, (10) 37316, (11) 38802, (12) 52750, (13) 55424, (14) 60505, (15) 71667, (16) 79753, (17) 89107, (18) 93721, (19) 107529, (20) 112425, (21) 123864, (22) 129411, (23) 146038, (24) 133,143, (25) 175685, (26) 227405, (27) 232209, (28) 282766, (29) 297660, (30) 325400, (31) 336757 (32) 442659 (33) 398762, (34) 3532201, (35) (36) 617175, (37) 631959, (38) 631972 and (39) 749092 and filed the Goods Declarations through their clearing agent namely Messrs Javaid Umar Enterprises, Clearing Agent (CHAL-18), statute at 205, 212, 2nd Floor, Commerce Centre, Hasrat Mohani Road, Karachi misdeclaring the tariff classification of the goods under HS Code 2916,1400 for availing the inadmissible benefits of zero percent / exemption from Customs Duty under S.R.Os. e.g 567(I)/2005 dated 6-6-2005 etc as well as zero sales tax, under different S.R.Os. e.g S.R.O. 536(I)/2005, S.R.O. 621(I)/2005, S.R.O. 525(I)/2006 and S.R.O. 509(I)/2007 etc. The item Methyl Acrylate is appropriately classifiable under HS Code 2916.1200 as ester of Acrylic Acid attracting Customs duty @ 5% and sales tax @ 15%. The items falling under PCT head 2916,1400, liable to zero percent / exempted Customs Duty and zero rated sales tax are esters of Methacrylic Acid whereas the imported item is ester of Acrylic Acid of HS Code 2916.1200. Because of wrong classification of the referred goods, an amount of Rs.5,59,21,363 is found to have been short paid in respect of duties and taxes pertaining to these consignments. Details of the said consignment and calculation of short levied amount are given in the contravention report enclosed herewith.

3.The Additional Collector of Customs, MCC PaCCs Karachi, did not agree with replies of respondent and passed the Order-in-Original No. 13 of 2011 dated 14-2-2011 reproduced as under:--

"I have gone through facts of the case and submissions made by both the sides. The respondents in the initial stages did not contest the classification determined by the department. Instead they maintained that there was a governmental decision to grant exemption to methyl acrylate and requested to get a confirmation from the Federal Board of Revenue. However, the Board's letter does not confirm that the exemption from customs duty and other taxes was available to methyl acrylate. It simply says that exemption is available to "esters of methacrylic acid" falling under PCT heading 2916.1400. The question then to be examined is whether or not methyl acrylate is classified under 2916.1400. Since this heading relates to esters of methacrylic acid, methyl acrylate shall be entitled to claimed benefit if it is established that it is ester of methacrylic acid. At the final hearing, the respondents argued that the departmental determination that methyl acrylate is ester of acrylic acid is not correct. Their only contention is that laboratory tests established that imported item was ester of methacrylic acid.However, when asked to produce such report they stated that the same can be seen from the departmental record. The record relating to five of the Goods Declarations involved 1-HC-146038-1 11206, 1-HC-325400-130707, I-HC-123864-301006, l-HC-617175-190408 and 1-HC-63 1972-050508 was seen on the computerized system and all of these Goods Declarations were not subjected to any examination. Therefore, no question of a laboratory test arises for these Goods Declarations. In any case, the burden lies on the respondents to proof that a lab report confirmed that imported goods were esters of methacrylic aide. However, on the request of the respondents, the opinion of Mr. Naseer Siddique, Deputy Chemical Examiner, of Custom House laboratory was requested, who attended the hearing and confirmed that methyl acrylate is ester of acrylic and not that of methacrylic acid. He also submitted his view in writing as under: "As per declaration the product is Methyl Acrylate, which comply to the description of ester of acrylic acid and attracts PCT 2916.1200". The question of classification of methyl acrylate has been further examined. Following are some findings: (i) The departmental case is based on the classification of methyl acrylate as provided in European Customs Inventory of Chemicals which is a guide to the tariff classification of chemicals.Acopyofthisdocumenthasbeenprovidedbythe department which confirms that methyl acrylate ism classifiedin PCT heading 2916.1200. This is further confirmed by website of European Customs Inventory of Chemicals Substances (ECICS) of European Commission which identifies the H-S code of Methyl Acrylate (CAS 96-33-3) as 2916.1200. (source.http://ec.europa.eu/taxationcustoms/dd52/ecic5/chemiesubstancc.jsp?LangenandredirectionDate110214. (ii)Theweb page at <http://www.chemicalland21.com/industrialchem/ functional%20Monomer>!METHYL%20ACR YLATE.htm suggest the HS code of Methyl Acrylate as 291612. It further states that "Acrylic acid undergoes the typical reactions of a carboxylic acid and forms acrylic esters basic alkyl esters are methyl, butyl, ethyl acrylate, and 2-ethylhexyl acrylate" This confirms that methyl acrylate is formed from acrylic acid and thus is an ester of acrylic acid and falls under heading 2916.1200. (iii) An entry relating to "Acrylates" was seen on the Wikipedia, the online encyclopedia, at http://en.wikipeclia.orglwiki/Acrylate. This pages states as under. "The acrylate ion (C H2=CHCOO-) is the ion of acrylic acid. Acrylates are the salts and esters of acrylic acid." The above statement clearly confirms that methyl acrylate, being an acrylate, is ester of acrylic acid and thus is classified under HS code 2916.1200. Above findings along with the opinion of Mr. Naseer Siddiqui of Customs Laboratory clearly lead to the conclusion that methyl acrylate is an ester of acrylic acid and is classified under PCT heading 2916.1200. Since this PCT heading is not specified in any of the notifications, the benefit of which was claimed by the respondents, therefore, it is held that methyl acryalte falling in PCT heading 2916.1200 is not entitled to benefit of the exemption of customs duty, zero-rating of sales tax and exemption of income tax as claimed and availed under various notifications referred to above. The question relating to demand being time barred in respect of Goods Declarations older; than three years has been examined. Under section 32(2) of the Customs Act, 1969 and 36(1) of the Sales Tax Act, 1990, the demand of short-paid or unpaid duties and taxes can be raised within five years. The respondents maintain that mis-declaration was result of inadvertence and therefore the demand can be raised only in relation to Goods filed within three year period. However, it is observed that the respondents being an established manufacturing unit and importer and user of various chemicals should have been aware of the fact that methyl acrylate is ester of acrylic acid and should have taken due care in declaring its classification. They have failed to provide any reasonable ground or justification for inadvertently considering Methyl Acrylate as ester of methacrylic acid. This leads to the conclusion that they deliberately chose to mis-declare the description of the imported item so that they could avail the benefit of S.R.Os. referred to above. In view of findings and conclusion above, it is established that the exemption claimed by the respondents was not in order and thus the demand of Rs.55,921,363 (Rs.13,273,657 as customs duty, Its. 41,943,169 as sales tax and Rs.667,542 as income tax) is upheld and ordered to be recovered from the respondents along with surcharge under section 202A of the Customs Act, 1969" and section 34 of the Sales Tax Act, 1990, to be calculated till the time of payment. Further, a penalty of Rs.2,097,158 is imposed on the importer under clauses 1,10A and 14 of section 156(1) of the Customs Act, 1969 and clause 11(c) of section 33 of the Sales Tax Act, 1990."

4.The appellant being aggrieved with Order-in-Original No. 13 of 2011 dated 14-2-2001, filed an appeal before the Collector of Customs, (Appeals) Karachi. The Collector of Customs (Appeals) rejected the appeals as under:--

I have thoroughly examined the entire case record and given very careful consideration to the arguments advanced before me. The learned counsel has pleaded for keeping the instant proceedings pending till receipt of Hon'ble President's decision on the representation filed by the department against findings dated 7-5-2011 of the Hon'ble Federal Tax Ombudsman in Complaint No. 110/KHI/CUSTOMS (42)/261/2011: the learned counsel neither presented a copy of Hon'ble FTO's findings nor a copy of the representation filed against the same. The afore stated plea is untenable because no such directive has been received from any quarter and even the extended time limit stipulated under first proviso to subsection (3) of section 193 of the Act, is close to expiry. I, therefore, take up the case for decision on the basis of the evidence on record. The goods imported in this case, as per the appellant's own declaration, were methyl acrylate which, being ester of acrylic acid, was correctly classifiable under PCT heading 2916.1200 whereas under customs Notification S.R.O. 567(I)/2005 and sales tax Notification S.R.Os. 536(I)/2005 (as amended), the exemption from payment of customs duty and zero rating of sales tax were available to esters of methylacrylic acid classifiable under JCT heading2916.1400.Theabove -stated position wasclarifiedby the FBR as well vide letter No. 3(20)/Ta-I/90-Fiber dated10-2-2011. Therefore, there is no doubt that the exemption from payment of Customs duty and zero rating of sales tax was not available to the goods imported in this case. It is apparent from the record that the appellant deliberately misdeclared classification of the goods and on the basis of misdeclared classification unlawfully availing benefit of the above-referred concessionary notifications: it also stands established from record that neither the goods were examined by Customs nor any laboratory test of the same was conducted. Thus, the appellant deliberately, and with mala fide intent, kept on cheating the system of self-assessment and automated clearance of goods operative under PaCCS over an extended period of time. I observethattheextentofpenalactiontakeninthiscaseisnotharshinviewofthegravityoftheoffencecommittedby the appellant. I, therefore, rule that the arguments advanced as grounds of appeal, reproduced at para 3 above, do not find any support form the evidence on record. Consequently, I hold that the impugned order is correct in law and on facts and there is no reason to interfere with the same. The appeal, being absolutely devoid of any merit, is rejected accordingly.

5.Being aggrieved and dissatisfied with the Order-in-Appeal, the appellant filed the Instant appeal before this Tribunal on the grounds as under:--

(A)That firstly the learned respondent No.1 has failed to consider the orders of the Honorable Federal Tax Ombudsman in Complaint No.110/KHI/CUSTOMS(42)/261/2011 wherein the Order-in-Original No.13 of 2011 dated 14-2-2011 issued by respondent No.2 has been reopened under section 195 of the Customs Act, 1969 hence the impugned Order-in-Appeal No.5794 dated 9-9-2011 passed by respondent No.1 became infractuous under the law and is liable to be set aside on this ground alone.

(B)That secondly the learned adjudicating officer has seriously erred to invoke such liability which is hit by limitation under the Customs Act, 1969. There is no deliberate or mala fide nor any false statement given by the Appellants Company hence invoke of sections 32(1) and (2) is illegal. What has been imported has been declared on Goods Declaration. The goods were released after proper laboratory test and after application of mind by customs officials hence the impugned order is liable to be set aside.

(C)That the respondents have failed to implement the decision of the Federal Government wherein it was decided that following raw materials shall be exempted for the manufacture of "Acrylic Fibre"

(i)ACN Acrylonitrile Monomer. (ii) MA Methyl Acrylate.

(iii)Malic Acid.

(iv)Dyes.

(v)Amps Acrylamido Methyl Porpone Sulphonic Acid.

(D)That the respondents are subservient to Federal Government and is under huge legal obligation under Federal Board of Revenue Act, 1924 and Federal Board of Revenue Act, 2007 to implement the decision of the Federal Government. In this case the decision of the Federal Government is to allow exemption of customs duties and taxes not only to "Methyl Acrylate" but also to a number of other raw materials as mentioned above.

(E)That the impugned order is liable to be set aside on the ground that the goods have been release after proper test by the Customs House Laboratory which confirmed that the goods are of "easters of methacrylic acid". Therefore, without any documentary evidence or basis on the alleged classification of HS Code 2916.1200 instead of 2916.1400 is liable to be set aside.

(F)That per the long departmental practice the exemption of customs duties and taxes have invariably been allowed in all the 39 impugned Goods Declarations by respondents and a sudden change in practice by invoking the liability against the appellants is liable to be set aside.

(G)That a penalty of Rs.2,097,158 has been imposed on the appellant under clauses 1,10A and 14 of section 156(1) of the Customs Act, 1969 and clause 11(c) of section 33 of the Sales Tax Act, 1990, which is unjust and liable to be set aside on the ground that there is no mala fide on part of the appellants nor there is any false statement given by the appellant. It is well settled law that where there is no wilful, deliberate or mala fide intention of the tax payer the penal action cannot be taken against him. What has been imported by the appellant has been declared on the Goods Declarations. The goods were released after proper laboratory test and after application of mind by customs officials therefore such penalty imposed in the instant case is without jurisdiction, harsh, unjust and liable to be set aside.

6.The respondent department has submitted Para-wise comments which are reproduced as under:--

(i)That in the light of submissions made above the contents of para (A) of the Grounds of appeal are incorrect, hence, denied. It is, however, respectfully submitted that the Order-in-Original was not re-opened and in fact only a recommendation was made by the Honourable F.T.O. which was not accepted by the relevant authorities considering the relevant provisions of law, therefore, the appellant/importer's statement in this regard is totally incorrect.

(ii)That in terms of Chapter-XVI-A of the Act, read with amended provisions of law i.e. sections 79 and 80 of the Act, particularly with reference to self assessment and declaration under PaCCS, the deliberate less payment of revenue through self-assessment is also an offence and mis-statement within the meaning of section 32 of the Act, which covers all sorts of cases "in a matter of customs" where duties and taxes have been short paid. Therefore, the appellant's contention, with reference to section 32 of the Act, in para (B) of Grounds of appeal are totally incorrect, hence, vehemently denied.

(iii)That considering the provisions of section 19 of the Act, and section 13 of the Sales Tax Act, 1990, the respondent authorities are required to follow the restrictions, limitations and conditions embodied in the relevant notification, therefore, the appellant's contention that the five items mentioned in Grounds (C) of the appeal also exempted from payment of customs duty and sales tax is totally incorrect. According to the relevant notifications the item i.e. "Methyl Acrylate", correctly classifiable under PCT Heading 2916.1200, is not qualify for exemption.

(iv)That in terms of sections 4(1)(k), 4(2) & 4(3) of the F.B.R. Act, 2007, the F.B.R. is empowered to implement and clarify the fiscal laws, therefore, the appellant's contention that the Board has not implemented the Federal Government's instructions is totally incorrect, hence, denied. Without prejudice to above, even if the Federal Government decision, if any has not been implemented in that case too as per "doctrine of laches of limitations" the appellant has no case because the Notification S.R.O. 567(I)/2005 was issued on 6-6-2005 and the appellant has made no representation/objection, whatsoever, for non inclusion of the items so mentioned in the para (c) of Grounds of appeal, at the relevant point of time, therefore, taking into consideration aforesaid provisions of law and the F.B.R's clarifications issued vide letter dated 10-2-2011, as reproduced in para. 8 of the order-in-original, the appellant / importer has no case on merits of the case.

(v)That in the light of submissions made above and considering the paragraph 2 of the Order-in-Appeal (annexed at pages 12 and 13 of the appeal) and Paragraphs 11 to 13 of the order-in-original (annexed at pages 26 and 27 of the appeal) the contents of para (E) of Grounds of appeal are incorrect, hence, denied.

(vi)That in the light of submissions made above the contents of para (F) of Grounds of appeal are incorrect, hence, denied. Without prejudice to above, it is, however, respectfully submitted that considering the Honourable High Court of Sindh's reported judgments in the cases of MessrsP&G International, Lahore v. Assistant Collector of Customs, Appraisement, Gr-11, Karachi and 3 others, (2010 PTD 870) and Collector Customs v. Shaikh Shakeel Ahmad (2011 PTD 495) the appellant importer's contention about past evidences is not tenable. In the aforesaid latest judgments on the issue of "past practice" the Honourable Court has held that an unlawful practice can not over ride the law, therefore, considering the relevant provisions of the Pakistan Customs Tariff (First Schedule of the Customs Act, 1969) the appellant importers are liable to make payment of short paid revenue.

(vii)That in the light of submissions made above the contents of para (G) of Grounds of appeal are incorrect, hence, denied.

7.The Advocate for appellant has submitted written arguments, which are reproduced as under:--

(a)That at the outset, it is submitted, that the case of the department as narrated in the Show-Cause Notice is of Post Clearance Audit (PCA), hence the Show-Cause Notice in this case ought to have been issued under section 32(3A) of the Customs Act, 1969, wherein at the relevant time, the Limitation to issue such Show-Cause Notice was 3 years. Since, the show-cause notice was not issued within time, out of 39 Goods Declarations (GDs) as referred to in the show-cause notice, 30 GDs are hit by Limitation as the period of 3 years has admittedly expired in all these transactions. Therefore the case made out by the department is time barred and cannot be proceeded against the appellant and hence the impugned orders are liable to be set aside. (A statement GDs is filed as "A").

(b)That even otherwise, and in the alternative, and without prejudice to the above, admittedly this is a case wherein these consignments were cleared by various officers of the department over a period of more than 3 years and further there is no allegation against the appellant in so far as the description, quantity etc. of the goods is concerned. Therefore this cannot be a case of section 32(1) or (2) of the Act ibid, because, neither there is any submission of any false statement or document, nor there is allegation of any collusion, hence and without prejudice this case appropriately falls under subsection (3) of section 32 of the Act. Wherein, again the limitation provided is 3 years. Therefore as submitted above out of 39 Goods Declarations (GDs), 30 GDs are beyond the period of limitation and hence the Show-Cause Notice cannot be acted upon. This issue of issuing notices in terms of subsections (1), (2) and (3) have been dealt with in various judgments of the Hon'able Supreme Court as well as the Hon'able High Courts. In the case reported as (2001 SCMR 838) ASSISTANT COLLECTOR OF CUSTOMS V. KHYBER ELECTRIC LAMPS (Annexure "B") the Honorable Supreme Court has held as under;

Show-cause notice under subsections (2) and (3) of section 32 of the Act are two distinct and separate types of notices as different grounds and different period for service of notice in each subsection has been prescribed under subsection (2) for non-levy short levy or erroneous refund specific allegations of any collusion between the assessee and the customs staff has to be levelled with proper particulars in the show-cause notice which has to be served within three years of the relevant date whereas under subsection (3) if non-levy short levy or erroneous refund is done due to inadvertence error or misconstruction then show-cause notice to the importer has to be served within six months of the non-short levy specific particulars are not stated in the notice the notice would be vague and should not be in consonance with the requirement of subsections (2) and (3) of section 32 the Act show-cause notice.

It has not been alleged in the show-cause notice that the respondents knowingly or having reason to believe that documents which were false in any material particular were filed it is necessary under subsection (1) of section 32 of the Act to show that the declarant had the knowledge or had the reason to believe that declaration or statement made by him was untrue/false and in absence of such allegation notice would be vague and would not be in accordance with law similarly notice under subsection (2) of section 32 of the Act must contain the allegation of collusiveness and notice under subsection (3) of section 32 of the Act should speak of inadvertence error or misconstruction and without such allegations the notice would be defective and against law;

In the case of reported as (2002 MLD 130) UNION SPORT PLAYING CARDS COMPANY V. COLLECTOR OF CUSTOMS (Annexure "C") The Honorable High Court of Sindh while dilating upon the following question of Law, has held as under;

Whether in the given circumstances of the case and the facts and grounds stated hereinafter case of the appellant falls within section 32(2) of the Customs Act, 1969 or within the preview of section 32(3) of the Customs Act, 1969?

"Here the discussion is only for the purpose of ascertaining the period of limitation and determining whether the show-cause notice falls under subsection (3), subsection (2) or subsection (1) of the Customs Act, 1969 the facts discussed elaborately clearly establish that neither is any case of false statement or mis-declaration or filing of false certificate or any other documents on the part of appellant nor the department has alleged any collusion by reason of any document referred to in subsection (1) of section 32 and consequently, the show-cause notice could be issued by the respondent No. 1 under subsection (3) of section 32 of the Customs Act, within a period of six months from the relevant date which is defined subsection (S)(a) of section 32, to be the date on which the order for clearance of the goods is made. The show-cause notice has admittedly been issued after six months of the relevant date and consequently it was barred by time. We are, fortified in our views by an earlier judgment of the court in the case of PIA v. CBR, 1990 CLC 868, in which his lordship Mr. Justice Saeeduzzaman Siddiqui, J, (as his lordship then was) held that when there is no allegation made by the customs department against the petitioner about any fraud misrepresentation or false declaration at the time of obtaining of clearance without payment of customs duty or sales-tax, it was a case of error or inadvertence on the part of customs authorities and therefore, the show-cause notice issued after expiry of period prescribed in section 32(3) of the Customs Act, was beyond time, void and of no legal effect and all orders passed subsequently in pursuance thereto were without lawful authority."

This judgment has been recently followed by the Honorable Sindh Court in another reported case (2013 PTD 813) Messrs SARWAR INTERNATIONAL V. ADDL COLLECTOR OF CUSTOMS (Annexure "D") in the following terms;

"In view of hereinabove facts and circumstances of this case, we are of the opinion that since no allegation of fraud, collusion or deliberate misdeclaration was raised in the cause notice, the case of the application was not covered under the provisions of subsections (1) and (2) of the Customs Act, 1969, whereas at best, the provisions of subsection (3) of section 32 of the Customs Act, 1969, could have been invoked however, since admittedly, the show-cause notice has been issued after a lapse of about of about four years i.e. beyond the period of limitation of three years as provided under subsection (3) of section 32 of the Customs Act, the said provisions could not be invoked in the case of present application we are of the view that the show-cause notice issued by the respondent in the instant case falls within subsection (3) of section 32 of the Customs Act, 1969. The notice has been issued after a period of more than four years and as such the show-cause notice is barred by limitation. The said notice is held to be void and of subsequent proceeding in pursuance thereto are also held to be void and without any legal authority. Accordingly, the proposed question (A) is answered in affirmative, whereas the proposed questions (B), (C) and (D) are answered in negative, all in favour of the applicant and against the respondent."

(c)That it is an admitted fact that even prior to grant of exemption on the said product in terms of the relevant S.R.O., the department was assessing the said product under HS Code 2916.1400 and was charging statutory rate of duty and taxes. Therefore, when an exemption of duty and taxes granted on the said item, the appellant was fully justified and legally bound in claiming the assessment of the same item under HS Code 2916.1400. Hence no mis-declaration on the part of the appellant can be attributed as the appellant had acted in good faith and as per the HS Code already determined by the department. In a more or less identical situation the Hon'able High Court in the case reported as (2002 PTD 955) Messrs Super Industries (Pvt.) Limited v. Central Board of Revenue and others (Annexure "E") has held as follows:--

"We are persuaded to agree with the contentions of Mr. Muhammad Ali Sayeed that the revenue cannot be allowed the shifting of versions in respect of the same product with mere change in the law pertaining to the taxability of a product one of the cardinal principle of tax law is that the revenue should be consistent in its practice and version if an assessee or a product is given a particular treatment over course of a long period then the revenue should continue the same even if the assessee or the products is allowed any exemption/benefit or there is any enhancement or reduction in the rate of tax there is another cardinal principle of the law of taxation that an assessee should know his status or the character and status of his product viz-a-viz, the chargeability of the tax the revenue should not be allowed to take inconsistent and changing version as such indiscipline in realm of taxation is always injurious and hazardous to the health of economy industry and business. We are therefore persuaded to agree with the contentions of Mr. Muhammad Ali Sayeed that the revenue cannot be allowed to resort to inconsistent practices merely with the change in the chargeability or exemption of a tax.'"

Therefore in view of the above the department has to maintain consistency and the appellant cannot be penalized due to the acts of the department. This judgment was subsequently followed by the Hon'able High Court of Sindh in the case reported as (2004 PTD 2516) Messrs Colgate Palmolive Pakistan Limited v. Federation of Pakistan (Annexure "F") and has held as follows:--

However it is an admitted fact that prior to this the sodium sulphate imported by the petitioners was being assessed under PCT sub-heading 2833.1900 but in the budget for the year, 1997-98 the government changed the rates of duties and taxes and relative code for sodium sulphate from PCT sub-headings 2833.1900 and 2833.1100 before the above change the rates/tariff of duty under both the sub-headings 2833.1100 and 2833.1900 used to be the same but in the budget of 1997-98 rate of customs duty under PCT sub-heading 2833.1100 was fixed at 45% ad valorem while under sub-heading 2833.1900 for "Other" it was fixed at 15% ad valorem. Mr. Fariduddin, learned advocate for respondents Nos.2, 3 and 4 as well as Mr. Mehmood Alam Rizvi, learned Standing Counsel appearing on behalf of respondent No. 1 were not able to give any satisfactory and plausible reason for assessing the sodium sulphate for levy of customs duty under sub-heading 2833.1100 instead of 2833.1900 which had been the practice in the past in the circumstances, the contention raised on behalf of the petitioners that the change was made illegally with male fide intention and ulterior motive to unnecessarily harass and burden the petitioners by subjecting them to heavy customs duty after the rates of customs duty under the two sub-headings were changed in the financial year, 1997-1998 is not without any substance. Prior to the change of the rates of customs duty in respect of above two sub-headings, the rates of customs duty under both the sub-headings were same, which fact has not been denied either by Mr. Fariduddin or Mr. Mehmood Alam Rizvi. In the budget for the year, 1997-1998 the rates of customs duty under sub-heading 2833.1100 was fixed at 45% whereas the rate of customs duty under sub-heading 2833.1900 was fixed at 15%.

However in view of the past practice of the customs department in assessing the sodium sulphate under sub-heading 2833.1900 some support is lent to the contention of Mr. Junaid Ghaffar it is not known as to why subsequently the Code for sodium sulphate was changed from 2833.1900 to 2833.1100 and in view of any plausible and satisfactory explanation for such change, it is to be assumed that the same was done as under sub-heading 2833.1900 as the rate of customs duty was much lower as compared to the rate of customs duty under the sub-heading 2833.1100 in other words the change of sub-heading by the customs department was with a view to subject the petitioners to higher rate of customs duty under the sub-heading 2833.1100 which was made effective from the financial year 1997-98 prior to this the rates of customs duty under both the sub-headings 2833.1100 and 2833.1900 were the same and therefore the department never raised the issue that sodium sulphate ought to be assessed under sub-heading 2833.1100 and not under sub-heading 2833.1900 as it would not have made any difference to the revenue earned by the government it is an established principle that a long standing departmental practice cannot be ignored or discarded without plausible satisfactory and cogent reasons the customs department could not be allowed shifting of versions in respect of same product with mere change in law pertaining to taxability thereof.

(d)That the case of the appellant is that both the PCT Headings in consideration are in fact sub-headings of 2916 and at the most and without prejudice they can be mis-interpreted and on the basis of such mis-interpretation the goods under question can be declared under any of these sub-headings and in such a situation it cannot be said that the alleged mis-declaration was intentional and deliberate. Therefore, appropriately the case falls under section 32 subsection (3), wherein it would again be hit by limitation. The Honorable High Court of Sindh while placing reliance on earlier judgment of the High Court (2002 MLD 180) in a reported case (2011 PTD 2837) COLLECTOR OF CUSTOMS V. POWER ELECTRONIC PAKISTAN (Annexure "G")

A comparison of two PCT headings which are in dispute show that they can be misinterpreted and on the basis of such misinterpretation the goods in question can be declared under any of these PCT headings and therefore we are of the opinion that it has been proved that the alleged mis-declaration was not intentional and deliberate as far as the claim of exemption is concerned we are of the opinion that they may fall within the ambit of such exemption and it is a settled law that claim of exemption in good faith if it is dis-allowed then penal action cannot be taken for the lesser payment of taxes due to the claim of such exemption the learned tribunal has relied on a judgment of this court in State Cement Corporation of Pakistan v. Collector of Customs and others (2002 MLD 180) and has reproduced the following extract from that judgment:-

"The above decision therefore seems to be of no help to the respondents as in the instant case no mis-declaration of facts has been alleged in fact Raja Muhammad Iqbal placed before us a copy of bill of entry filed by the appellant wherein the rate of duty of 30% was declared but concessionary rate in terms of S.R.O No.286 was claimed in the circumstances we are clearly of the opinion that no conscious mis-declaration of fact can be attributed to the appellant and no conclusion having been alleged the short payment can only be attributed to a misconstruction or error in the interpretation of the relevant notification the provision of section 32(3) of the Customs Act would therefore be clearly attracted in shortfall in the duty could have only been recovered within time specified in section 32(3) of the Customs Act."

We are in respectful agreement with the above judgment and once again observe that the judgment is on the basis of a settled law as to the proposal that penalty cannot be levied when exemption is claimed in good faith we are therefore of the opinion that the decision of the tribunal on this point is unexceptionable and no interference is called from this court. We therefore answer the reframed question in affirmative in favour of the respondents and against the applicant.

(e)That it is also an admitted fact that all the Collectorates in the whole ofPakistan except the present respondent accepted the HS Code as being claimed by the appellant i.e. 2916.1400 and in fact even the Appraisement Collectorate has not taken any action against the appellant although the Post Clearance Audit (PCA) had also forwarded a contravention report to them in the same manner as has been forwarded to the present respondent, who have initiated this case. Therefore the case is of pick and chooses and the appellant has been single out by the present respondent which cannot be justified or sustained.

(f)That without prejudice to the above it is further submitted that in the Order-in-Original there is some reference to a statement given by the chemical examiner, to which it is submitted that neither the appellant was confronted with any such statement nor the chemical examiner was put to any cross-examination. Therefore any such statement cannot be made basis to initiate action against the appellant.

(g)That the observation by the learned Adjudicating Authority to the effect that the appellant being an established manufacturing unit should have been aware of or taken due care in declaring the classification of the subject goods. The learned Adjudicating Authority has failed to appreciate that in fact it was the responsibility of the respondent department to thoroughly check and accept the classification so claimed by the appellant and in fact if there was any such error on the part of the department in determining the correct classification of the goods the benefit of the doubt should go to the appellant and not to the respondent. Therefore such an observation of the learned Adjudicating Authority ought to have been interpreted in favour of appellant and not against it.

8.Rival parties heard and case records perused and the following issues are framed for consideration by this forum:--

(i)Whetherthe appellant indulged inthe act ofmis-declaration in material particularunder section 32(1) or (2) of the Customs Act, 1969 while transmitting good declaration under section 79(I)/ibidand Rule 433 of Sub-Chapter III of Chapter XXI of Customs Rules, 2001?

(ii)Whether show-cause notice issued under sections (1) and (2) of section 32 of the Customs Act, 1969 can be adjudicated upon by the respondent No. 2 despite not applicable by virtue of a case of post clearance audit attracting section 32(3A) ibid not mentioned in the show-cause notice in terms of section 180(a) of the Customs Act, 1969?

(iii)Whether show-cause notice in 30 cases is time barred under the provision of section 32(3A) of the Customs Act, 1969 and as such not enforceable under law?

(iii)Whether the Order-in-Appeal is barred by time and without powers/jurisdiction in terms of subsection (3) of section 193-A of the Customs Act, 1969 being issued after 57 days of the initial period of 120 days and extension granted on 9-9-2011 in Para. 5 of the Order by respondent No. 2 on 9-9-2011, after the expiry of initial period of 120 days is illegal, ab initio and void?

(iv)Whetherthe MCC of PaCCS has given adifferentialand discriminatory treatment to the appellant in nullity to the Articles 4 and 25 of the Constitution of Pakistan read with number of judgments of the Superior Judicial fora as evident from the fact thatneitherthe Collectorate of MCC of Appraisement nor PMBQopted to issue show-cause noticeforinitiatingadjudication proceeding, despite receipt ofcontravention reporton the same issuefrom therespondent No. 3?

That as regard to issue No. (i), the appellanttransmittedGoods declarationunder section 79(1)of Customs Act, 1969 and Rule 433 of Sub-Chapter III of Chapter XXI of Customs Rules, 2001 with theMCC of PaCCScontaining description"MethylAcryalate" on the basis ofcommodity nameinletter of credit, invoice , B/L , Certificate of Origin andhe incorporated the said information in the column of financial information of the GD, falling under PCT heading 2916.1400with the exemption of Customs duty under Notification No. 567(I)/2005 dated 6-6-2005,Sales Tax on the basis of infield notifications and Income Tax against Certificate No. 103-XXXIII dated 12-7-2006 issued by the Commissioner of Income Tax. The software of the PaCCS has been designedby the agility in such a mannerthatupon receipt of the goods declaration the system co-relates each declaration with the corresponding PCT heading, the claimed notifications and the exemption certificate, which are fedthereineither by the FBR/Project Director orCommissioner of Income Tax at their own and after finding those in accordance with the declaration the systempassassessment/clearance order in exerciseof its inbuilt vested authorityunder sections 80 and 83 of Customs Act, 1969 and Rules 438 and 442 of Customs Rules 2001 and this fact stood validated from examination of the import documents and goods declaration. Resultantly the appellant has made no mis-declaration in material particular in terms of section 32(I) of the Customs Act, 1969, hence, invoking of the said is erroneous. Similarly, invoking of subsection (2)by the respondent No. 2 is not relevant in the subject case by virtue of the wording of show-cause notice, which did not remotely hint the submission of any false documents or statementwhile transmitting goods declaration with the MCC of PaCCS or with the respondent No. 3 or about the "collusion" with the Project Official ofPaCCS, or MCC of PaCCS, renderingthe show-cause notice and the subsequent proceedingvoid and ab-initio as heldin the reported judgmentsAsst. Collector v. Khyber Elec. Lamps 2003 PTD 1275, D G Khan Cement v. Collector of Customs 2005 PTD 480, Caltex v. Collector2003 PTD 1593, Union Playing Card Company v. Collector of Customs 2002 MLD 130, AtlasTyres v. Addl. Collector 2002 MLD 180, State Cement v. Collector PTCL 2001 CL 558, Kashmir Sugar v. Collector 1992 SCMR 1898, Rose Color v. Chairman, CBR &2013 PTD813 Sarwar International v. Addl. Collector of Customs.The issue No. (i)is answered in negative.

As regards issue No. (ii), evidently in this case show-cause notice has been issued under subsections (1) and (2) of the Customs Act, 1969. Whereas, the applicable provision of the Act in the instant case is section 32(3A), being based on section 26A ibid. No charge has been levelled in the show-cause notice on the basis of the said provision rendering the show-cause notice manifestly defective and without lawful authority, hence ab-initio void, on the basis of such show-cause notice no order can be passed for creating demand under altogether different subsections namely (1) and (2) of section 32 ibid. were relied upon by the officer of original jurisdiction. Section 180(a) of the Customs Act, 1969 laid down the mandatory requirement for mentioning the grounds on which the competent authority proposes to take action against the incumbent. It is a condition precedent that all the legal and factual material particulars and applicable provision of the Customs Act, 1969 must be brought to the notice of the importer. This is also one of the conditions of the famous dictum and principle of natural justice audi alterm partem. The contravention report/ show-cause notice and order-in-original in this case are patently beyond the expression of section 32 (3A) of the Customs Act, 1969.The appellants' advocate has therefore, rightly claimed the ratio decidendi determined vide judgment Asst. Collector v. Khyber Elec. Lamps 2003 PTD 1275, D G Khan Cement v. Collector of Customs 2005 PTD 480, Caltex v. Collector2003 PTD 1593, Union Playing Card Company v. Collector of Customs 2002 MLD 130, AtlasTyres v. Addl. Collector 2002 MLD 180, State Cement v. Collector PTCL 2001 CL 558, Kashmir Sugar v. Collector 1992 SCMR 1898, Rose Color v. Chairman, CBR and 2013 PTD 813 Sarwar International v. Addl. Collector of Customs. Wherein, it has been held in unequivocal terms deprecated the adjudication on the basis of entire section instead of the applicable subsection of the provision of the Act render theshow-cause notice andsubsequent passed order-in-original as defective and against the law, hence without lawful authority rendering those as ab inito void because it is not a case of commission of a technical discrepancy or procedural lapse which is a curable lacuna. It is a substantive illegality for want of non-observance of a mandatory statutory requirement and emphasized upon for complete compliance by the adjudicating authorities since it would vitiate all the case proceedings on which the superstructure is built by different Quasi-judicial and judicial authorities. As such issue No. (ii) is answered in negative.

That as regard to issue No.(iii), as discussed in issue No. (i)the subject casesquarely falls under the ambit of subsection (3) or (3A) of section 32 of the Customs Act, 1969. Under which show-cause notice should had to begivenwithinthreeyearsofthedategiveninsub-section (5) ibid. Whereas, show-cause notice available on record dated 20-7-2010 encompassing the 39 GD's of dated 7-6-2005 to 27-8-2005, confirming with clarity thatit was issued after the expiry of stipulated periodofthreeyearsagainst30GD'sof the period 17-6-2005to13-7-2007, rendering it time barred to the extent of these GD's and as such not enforceable. For reference, reliance is placed on the following judgments. S.T.A. 274/05 in Sattar Brothers v. Collector of Customs (Appeals), Hyderabad and others. S.T.A. 179/06 in Dadabuoy Sack Ltd. v. The Collector of Customs, Sales Tax and Federal Excise (Appeals) Hyderabad and others 2009 PTD (Trib.) 500 in Shah Murad Sugar Mills and others 2007 PTD 117, Messrs Ghandhara Nissan Diesel Ltd., v. The Collector of Customs, Karachi 2005 PTD 2453, PSIC Cutlery, Wazirabad v. Collector of Sales Tax and Central Excise, Gujranwala and others 2008 PTD 981,Joyla Sadat Cotton Industries v. Collector of Customs 1992 SCMR 1898, Federation of Pakistan v. MessrsEbrahim Textile Mils Ltd. and others 2006 PTD 537, Collector of Customs, Sales Tax (West) Karachi v. K&A Industries, Karachi. The issue No. (iii) is answered in affirmative.

As regard issue No.(iv) relating to time barred of the order of the respondent No.1, upon perusal of the copy of filed appeal by the appellant with him shows the date of filing as 16-3-2011 and an order under the proviso of subsection (3) of section 193-A of the Customs Act,1969 should had been passed within 120 days from the date of filing appeal i.e. by 14-7-2011 or within further extended period of 60 days prior to expiry of initial period of 120 dayswith reason to be recordedfor extension in writing. No extension was granted by him prior to expiry of initial period of 120 days instead was granted on 9-9-2011 as evident from para. 5 of order-in-appeal, rendering the order barred by time by 57 days hence without power/jurisdiction as such void and ab-initio. The order of extension granted by the respondent No. 1 in para. 5 of order-in-appeal with the reasoning thatthe proceeding in this case could not be finalized within the stipulated time limit due to adjournment obtained by the appellant counsel. This is completely erroneous and without any substance as the counsel of the appellant sought no adjournment instead attended the hearing fixed for 7-7-2011 and 21-7-2011 and 8-8-2011. Hence, the extension grantedby the respondent No. 1 is without any lawful authority because he could not extend the time, unless a notice to the appellant had been served asheld by the Supreme Court of Pakistan in its reported judgment 1999 SCMR 1881 Khalid Mehmood v. Collector of Customs, Customs House, Lahore.

That in the instant case no extension was given by the respondent No. 1 prior to expiry of initial period of 120 days. Rendering the extension granted on 9-9-2011 as unlawful and without jurisdiction, by virtue of the fact that the said extension was given without answering the condition prescribed for exercising suchpowers i.e. he has to apply his mindand after making an objective assessment, if he comes to the conclusion that the extension of time is to be granted,he has to grant the same prior toexpiry of the initial periodandnot merely on the basis of his personal opinion thatthe proceeding in this case could not be finalized within the stipulated time limit due to adjournment obtained by the appellant," which were in fact never applied by the appellant or his counsel as departmental representative failed to corroborate the stance of respondent No. 1 through incriminating evidences, and ironically after expiry of the initial period of 120 days. It is settled principle that where exercise of jurisdiction by any authority or Court or Tribunal is made subject to existence of a specific condition, then such power cannot be exercised in the absence of that condition. In words of Superior Judicial Fora time extension given in such cases is akin to giving a new lease of life into dead entity. It is tantamount to flogging a dead horse. If an event or documents has become dead on account of non timely extension of time period. It is legally considered dead and new spirit cannot be infused into itby any means or on account of any reason whatsoever as held in reported judgments 2007 PTD 117, 2008 PTD 60, 2007 PTD 2092, 2010 PTD (Trib.) 1636, 2010 PTD (Trib.) 2117, 2009 SCMR 1126, 2002 MLD 180, 2003 PTD 1354, 2003 PTD 1797, 2008 PTD 578, 2009 PTD 762, 2009 PTD Trib. 107, 2010 PTD 465, 2011 PTD (Trib.) 79,2011 PTD(Trib.) 987, 2011 PTD (Trib.) 1010, 2011 PTD (Trib.)1146 and 2012 PTD (Trib.) 1650.As such issue No. (iv) is answered in affirmative.

That as regard issue No. (v), the counsel for the appellant placed on record of the Tribunal copies of goods declaration filed by them under the regime of 'one custom' with the MCC of Appraisement and PMBQ for the import of same goods (MethylAcrylate) under PCT2916.1400, which was accepted by the official of the Collectorates as correct and allowed release of those through assessment/clearance orders passed under sections 80 and 83 of the Customs Act, 1969. It is noted with concern that the said Collectorate has not initiated anyadjudication proceeding for recovery of the impugned short paid amount of duty and taxes, despite receipt of contravention report from the respondent No.3 with the exception of MCC of PaCCS, this is against the norms of consistency and nullity to the existing practice adopted by the rest of the Collectorate of Custom of the country, this act of the MCC of PaCCSamounts to single out the appellant for giving him differential treatment in comparison to the treatment given by the other Collectorate of the country specifically Karachi, this attitude amounts to discrimination by virtue of the fact that "facility allowed by the other Collectorate and denied by the MCC of PaCCS"as held by Hon'ble Apex Court in theirjudgment 2005 SCMR 492 and in reported 2010 SCMR 431 and 1990 SCMR 1059, 2002 SCMR 312, 2002 PTD 976, 2007 PTD 361 and 2009 PTD 1507, therefore the treatment givento the appellant isagainst the principle enshrined in Article 25 of the Constitution of Pakistan and violates the Principle of law settled by the Superior Court. As such issue No. (v) is answered in affirmative.

9.In view of the foregoing the order of the respondent No.1 and respondent No.2 are based upon proceeding which are infested with patent illegalities, which are held to be null and void. This being so, the impugned orders of the respondents are set aside. The subject appeal is accordingly allowed as no order to cost.

10.Order passed accordingly.

JJK/147/Tax(Trib.)Appeal accepted.