SHAKOOR ALAM VS DIRECTORATE OF INTELLIGENCE AND INVESTIGATION FBR, 2014 PTD-CUSTOMS-APPELLATE-TRIBUNAL-LAHORE 618 (2013)

2014 P T D (Trib.) 618

[Customs Appellate Tribunal]

Before Ch. Niamatullah, Chairman/Member Judicial-I, Muhammad Nadeem Qureshi, Member Judicial-I and Ghulam Ahmed, Member Technical-II

SHAKOOR ALAM

Versus

DIRECTORATE OF INTELLIGENCE AND INVESTIGATION FBR

Customs Appeals Nos.K-610 to 640 of 2011, decided on 15/08/2013.

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

----Ss.16 & 18---Show-cause notice to commission agent under machinery provisions of law---Scope---Commission agent/appellant was imposed a penalty--Appeal filed by commission agent before Collector appeals of Customs was dismissed---Contention of the appellant commission agent was that no charge could be levelled against him under machinery provisions of law---Validity---Section 16 of Customs Act, 1969 had delegated power to Federal Board of Revenue for prohibiting or restricting importation and exportation of the goods through a notification---Section 16 of the Customs Act, 1969 was a machinery section and no charge could be invoked under the same---Section 18 of the Customs Act, 1969 was for levy of, exemption from and payment of, customs duties and the powers for the same rested with the Federal Board of Revenue and had no nexus with importer, clearing agent and any other person by invoking machinery section---Impugned order in original and appellate order was set aside---Appeal was allowed.

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

----Ss.16, 18, 32(1)(2), 32-A, 79, 80, 156(1), (9), (14), (14-A), (43), (43-A), (47) &178---Show-cause notice to commission agent---Security submitted with the shipping company---Scope---Certain imported goods were fraudulently cleared without payment of customs duties andtaxes---Appellant/Commission agent was charged for the fraudulent clearance of imported goods---Contention of the appellant was that he was mere commission agent, who submitted security with shipping company against the container and he had nothing to do with clearance of imported goods---Validity---Sections 32 & 32-A of the Customs Act, 1969 could be invoked on an importer or exporter or clearing agent or any other person who had submitted a declaration to the customs department---Appellant/Commission agent least fell 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---Appellant/ Commission agent had submitted security with shipping company against the container, subject to refund of that after delivering empty containers to the Terminal of the Shipping Company after de-stuffing and for providing that service appellant had charged 1% of the security amount---Security submitted with the shipping company was not a document, declaration statement etc. required for obtaining clearance of the imported goods---Provisions of Ss. 32 & 32-A could not be invoked against appellant commission agent, therefore impugned orders were set aside---Appeal was allowed.

(c) 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---Appellant/commission agent deposited security of container allegedly cleared by the customs had no knowledge that the container in question had been removed illegally from the port---Appellant commission agent could not be charged for non informing the commission of offence to the customs station in the absence of tangible evidence that he had the information or knowledge of the occurrence of events---Appellant had been un-necessarily implicated in the impugned case---Impugned orders were set aside---Appeal was allowed.

Afzal Awan present in Appellant.

Ghulam Yasin (P.A.) for Appellant.

Rana Gulzar Ahmed (S.I.O.) for Respondent.

Date of hearing: 22nd July, 2013.

ORDER

GHULAM AHMED MEMBER (TECHNICAL-II).---By this order, we intend to dispose of Customs Appeals Nos. K-610 to 640/2011 filed by the appellant against Order-in-Appeals Nos.5166 to 5196/2011 dated 18-4-2011 passed by the Collector of Customs, (Appeals) Karachi: These appeals have identical issues of law and facts and are, therefore being heard, dealt with and disposed off simultaneously through this common order in the light of judgment of the Hon'ble High Court of Sindh in Custom Reference Application No. 157 of 2008 S.M. Naqi son of Syed Muhammad Hussain, Karachi v. Collector of Custom (Adjudicaiton-1) and others, Karachi.

2.Brief, facts of the case as stated in the impugned order are that the Directorate General of Intelligence and Investigation-F.B.R (hereinafter the Directorate General) had reported that MessrsMalik Enterprises, D-49, Aisha Heights, Gulberg, Lahore had fraudulently, cleared a number of consignments of miscellaneous items including electronic goods imported in 5 containers from Port Muhammad Bin Qasim against fake and fictitious Goods Declaration without payment of duty and taxes leviable thereon. In pursuance of the above mentioned information, efforts were made to procure the relevant records pertaining to clearance of containers imported by MessrsMalik Enterprises, D-49, Aisha Heights, Gulberg, Lahore, from the Terminal Operators, MessrsDP World QICT, and MessrsPakistan Revenue Automation Ltd. MessrsDP World, QICT provided the computer generated print-out of Gate Passes bearing Sr. Nos. 1422601, 076749, 076751,076747, 076752, along with photocopy of Goods Declaration bearing Cash No. 328, dated 3-5-2007, showing clearance of 5 x 40ft containers bearing Nos. NYKU-553265-9, NYKU-559065-5, NYKU 581965-4, NYKU-582041-8, NYKU-621643-9, said to contain 4259 cartons of Electronic Goods. The Terminal Operator also provided copy of Delivery Order, dated 1-3-2007, issued by MessrsJames Finlay Ltd., in favour of MessrsMalik Enterprises, D-49, Aisha Heights, Gulberg, Lahore, wherein MessrsAl-Mehran Traders, Karachi were authorized to take delivery of the aforesaid containers. The concerned/shipping company, MessrsNYK Lines, was also approached to procure relevant shipping documents pertaining to the aforesaid consignment. The said shipping company provided copy of Bill of Lading No. NYKS-4 79270034 showing name of consignee as MessrsMalik Enterprises, D-49, Aisha Heights, Gulberg, Lahore, and descriptions of goods as 4259 cartons of electronics goods in five containers. The shipping company also provided copy of import invoice, dated 15-2-2007, showing import value of 4259 cartons of Electronic Goods asUS$ 12777 and copy of delivery order, dated 1-3-2007, in favour of MessrsAl-MehranTraders on behalf of the importer, MessrsMalik Enterprises. The company also provided shipping dues payment receipts in respect of the fine containers. In order to further confirm the veracity of the aforesaid information pertaining to fraudulent/clandestine removal of containerized cargo arriving from foreign destinations at QICT, Karachi, the Directorate General, vide letter C. No. 34-CII Misc/Appg-III0718608, dated 20-10-2007, approached the Collector, Collectorate of Customs, Port Muhammad Bin Qasim, Karachi with the request to supply the copies of Goods Declarations, Invoices, Bills of Lading and Packing Lists in respect of the consignments pertaining to the said containers of Electronic Goods imported by MessrsMalik Enterprises, Lahore and cleared from the Port Qasim Collectorate. Similarly, Manager, National Bank of Pakistan, Custom House Branch, Karachi was also requested vide letter C.No. 34-DCIIMisc/Appg-II/0718672, dated 29-10-2007, to confirm and verify the genuineness of bank stamps/signatures affixed on the face of copies of GDs and payment of duty and taxes in the National Exchequer. In response, the Collector, Collectorate of Port Muhammad Bin Qasim, Karachi, vide letter C.No. SIIMisc/15/2007/PQ-Import, dated 15-11-2007, intimated that the clearance of containerized cargo was the domain of Model Customs Collectorate (PaCCS), Custom House, Karachi. However, the import statistics of the Collectorate with reference to the particulars of Goods Declaration, viz-a-viz, IGM No. and date mentioned in the above referred letter were checked by the Port Qasim Collectorate which revealed that the same were not cleared through the said Collectorate, meaning thereby that no Goods Declarations were, in fact, filed for Customs clearance of the aforesaid five containers in the MCC (Port Qasim), Karachi. The Operation Manager, National Bank of Pakistan, Custom House Branch, Karachi, vide letter No. CHB/ Admn/2007, dated 31-10-2007, intimated that the cash Nos. supplied by the Directorate General including Cash No. 328, dated 5-3-2007, shown on the goods Declaration of MessrsMalik Enterprises, Lahore, contained forged stamps and signatures on the challans. The Manager Operations, (South), PRAL, vide letter No PRAL/KhiiCus/10966, dated 14-11-2007, forwarded a report showing information of relevant Import General Manifest which were found in Customs Computer Database. From the scrutiny of the said report, it was found that no "Gate Out event took place against the listed indexes and no GDs were filed/ processed against the same. It was specifically intimated by PRAL that the gate out programme does not allow any consignment/container to be delivered without filing/processing of a Goods Declaration and without completion of all Customs pre-requisites, such as payment of duties/taxes, etc. Perusal of the GD bearing cash No. 328 revealed that neither IGM Number and date, nor Index No. had been indicated in column 8 of the GD. The Customs Machine Number was endorsed thereon, which was essentially required for filing of Goods Declarations. In order to further verify the genuineness of the GD bearing cash No.328, dated 5-3-2007, statements of Customs Officers, namely, Mr. Abdul Rehman Kurd, Principal Appraiser, and Mr. Gul Muhammad Jokhio, Apprising Officer, Collectorate of Customs, Port Muhammad Bin Qasim, Karachi were also recorded as their stamps and signatures appeared on the GD. It was stated/confirmed by the said officers that neither they processed the aforesaid GD nor it bore their signatures. According to their statements, the GD bore their fake and forged signatures and stamps. From the preliminary investigation, it transpired that neither any Goods Declaration was filed by MessrsMalik Enterprises, Lahore through MessrsN.J International, CHAL No. 2392, Karachi nor duty and taxes shown as Rs.792,456 were paid vide cash No.328, dated 5-3-2007, in the National Bank of Pakistan, Custom House Branch, Karachi. It is relevant to add here that from the scrutiny of the computer print-out supplied by the Manager Operation (South), PRAL, Custom House, Karachi, it transpired that the consignment imported vide IGM No. KPQI 182 of 2007, dated 28-2-2007, Index No.47, VIR No. 1355-2202007, imported by MessrsMalik Enterprises, Lahore was manifested for transshipment to Lahore Dry Port, Lahore through Pakistan Customs Computerized System (PaCCS) in the Model Custom Collectorate (PaCCS), Custom House, Karachi. Subsequent to the fraudulent removal of the said consignment on 6-3-2007 on the basis of fake and fictitious Goods Declaration Cash No.328, dated 5-3-2007, the Transshipment Permit No. 1309, dated 8-3-2007, was manifested with the Model Customs Collectorate (PaCCS), Custom House, Karachi to avoid detection of fraudulent removal of consignment and consequential penal action. Thus, the respondent, MessrsMalik Enterprises, Gulberg Lahore, with the active connivance of respondent Jamal Durrani son of Javed Durrani and Naila Jamal, partner of MessrsN.J International, CHAL No.2392, and other associates in crime, had indulged in the heinous crime of fraudulent and illegal removal of containerized goods from QICT, Karachi, by abusing the Pakistan Customs Computerized System (PaCCS) and had, therefore, defrauded the state exchequer in violation of the provisions of sections 16, 32(1), (2), 32-A, 79, 80 and 178 of the Customs Act, 1969 punishable under clauses (9), (14), (14-A)(43), (47) of subsection (1) of section 156 ibid. Jamal Durrani son of Javed Durrani was then under judicial custody at Peshawar in case F.I.R. No.1/08, dated 4-1-2008, lodged against him and others by the staff of the Directorate General in case of missing transshipment containers destined to upcountry Dry Ports. Subsequent to the lodging of F.I.R., the scope of investigation was broadened and the preliminary statement of Jamal Durrani son of Javed Durrani, who was then under judicial custody at Central Prison, Peshawar in connection with an another F.I.R. lodged against him by the staff of the Directorate General was recorded at Central Prison, Peshawar. During recording of statement, he disclosed that he was engaged in the business of working as Customs Clearing and Forwarding Agents for the last sixteen years. Since 1992-93 up to 2005, he remained partner of MessrsDurrani Traders, Customs Clearing and Forwarding Agent, CHAL No. 1469, Karachi, which was owned by his father. However, in March 2006, he established a new Clearing and Forwarding Agency, namely MessrsN.J. International, Karachi, CHAL No. 2392, Karachi through a partnership deed signed by him and his wife Naila Jamal. Both of them used to give copies of blank Goods Declaration duly signed to one, Naeem Qurehi, and various other persons, for clearance of imported goods against receipt of Rs.1000 per G.D. In the meantime, his wife Naila Jamal established close relationship with Naeem Qureshi Consequently, his wife separated from him and manied Naeem Qureshi. As far as the matter of clearance of 10 containers imported by MessrsMalik Enterprises, Lahore and fraudulently cleared from Port Muhammad Bin Qasim, Karachi against fake and fictitious Goods Declaration through MessrsN.J. International, CHAL No. 2392, Karachi without payment of leviable duty and taxes was concerned, he said he had nothing to do with the affairs of the aforesaid Clearing and Forwarding Agency. According to him, the fraudulent clearance of aforesaid 10 containers had been done by his ex-wife, Naila Jamal/and Naeem Qureshi, who had married on 28-2-2007. Moreover, respondent Jamal Durrani absconded after getting transit bail from the Honourable Court of Session Judge, Peshawar on 23-6-2008. Subsequently, MessrsDP World, Terminal Operator, QICT, also provided photocopies of import/clearance documents pertaining to the consignment of five more containers out of 10 containers imported by Messrs Malik Enterprises, Lahore. Messrs DP World, Q.I.C.T, provided the computer generated print-out of Gate Passes bearing Sr. Nos. 1422609, 1422593, 1422392, 1422597, 1422591, along with photocopies of Goods Declarations bearing cash No. 330, dated 26-2-2007, C-338, dated 20-2-2007, C-624, dated 15-3-2007, C-337, dated 26-2-2007 and C-329, dated 26-2-2007, showing clearance of 5 x 40ft Containers Nos. TCNU-909405, MSKU-9551503, FSCU-6529074, NYKU-5952538 and NYKU-5954612, said to contain 682 Cartons, 979 Cartons, 654 Cartons, 666 Cartons and 656 Cartons, respectively, said to contain Electronic Goods. The Terminal Operator also provided copies of Delivery Orders issued in favour of MessrsMalik Enterprises, Lahore by MessrsJames Finlay Ltd., and Messrs Maersk Line Pakistan, Karachi, whereby the aforesaid importing company authorized MessrsAl-Mehran Traders, Karachi to take delivery on their behalf. It is pertinent to mention here that details obtained from MessrsPRAL showed that TP Nos. 1307, dated 6-3-2007, 1308, dated 6-3-2007, 1310 dated 6-3-2007, 1311, dated 6-3-2007, and 2018, dated 17-3-2007, were allocated to the remaining 5 containers out of 10 containers for transshipment to Lahore and were meant to be cleared at Lahore Dry Port. However, these containers were clandestinely removed from QICT on the basis of fake and forged documents with active connivance of every member of this organized crime. Subsequent to the filing of Interim Challan, the Honourable Special Judge (Customs and Taxation), Karachi issued non-bailable warrant of arrest against Muhammad Naeem son ofMuhammad Rustam Qureshi. On receipt of a tip, he was arrested on 26-04-2008 while he was driving a Honda City Car bearing Reg. No. AJZ-238. At the time of his arrest, the personal search as well as of the said Honda City Car was carried out in presence of witnesses, namely, Mr. Muhammad Sadiq, Intelligence Officer, and Mr. Abdul Rasheed, Intelligence Officer, which resulted in the recovery of various incriminating documents/evidences including Passport, cheque books issued by various banks in the name of Muhammad Naeem, and notice sent to Messrs Kashan Traders/importer criminally involved in F.I.R. No. Appg-II/34-F/DCI/Misc/2007, dated 15-4-2008, which proved his direct involvement in the crime. The recovered documents as per inventory duly signed by the respondent and witnesses were seized against mushirnama. The vehicle bearing Regn. No. AJZ-238 was handed over to the claimant, namely, Munir Ahmed Hashmi in compliance of the Court order, dated 14-5-2008. During interrogation, Muhammad Naeem disclosed that he was working in the capacity of Manager in MessrsImex International and Logistics Trading, Karachi, and that the head office of the company was situated at Islamabad. The said firm was clearing the containers of US & NATO Forces operating in Afghanistan through the clearing and forwarding agency Messrs N.J. International, CHAL No. 2392, Karachi. He opened Account No. 6112-349072-050 in the Standard Chartered Bank, Korangi Industrial Area, Karachi. During the year 2006, Faisal Shezad son of Sajjad Haider Awan, his childhood friend, approached him and devised a plan to fraudulently clear the containerized import cargo in the name of various importers from QICT, Karachi on the basis of bogus and fabricated Goods Declarations without payment of duty and taxes. Consequently, respondent Faisal Shezad and Naeem Qureshi contacted phony and dubious firms of Lahore, Karachi, Peshawar and Faisalabad, etc. for this purpose. The modus operandi for illegal removal of the container was also discussed, wherein the bill of lading/invoices were to be supplied to Muhammad Naeem for further fabricating, manipulating, processing, and clearance of the containerized cargo. In sequel to the settlement of modalities of clandestine removal of containers, Faisal Shezad sent Millions of Rupees through his bank Account No. 7405-355985-050 of Union Bank (Standard Chartered Bank), Shadman Branch, Lahore, and also through online deposit in Naeem Qureshi's Bank Account Nos. 6112-349072-050 (Messrs Imex International Logistic), Account No. 6112-349414-053, (US $ Dollar Account) of Standard Chartered Bank, Korangi Branch, Karachi No. 6105-374326-050 of Standard Chartered Bank, 26th Street, DHA, Karachi, accountNo.6208-197915-001, Standard Chartered Bank, I.I. Chundrigar Road, Karachi, all in the name of Muhammad Naeem Qureshi, and Account No. 6105-252546-050, opened in the name of Messrs N.J. International, Karachi from time to time. During the course of investigation, Notices under section 26 of the Customs Act, 1969 were issued to the Managers Standard Chartered Bank, Karachi requiring them to provide information/particulars of accounts along with bank statements, account opening form, and CNIC of introducers of bank accounts in respect of the said accounts. In response, the aforesaid banks supplied the requisite information in respect of Account No.6112-349414-053, 6112-349072-050, 6208-197915-001 and No. 6105-374326-050.Fromthescrutinyofbankstatements, it transpired that during the period 1-10-2006to17-9-2008, an amount of Rs.106,703,375 was credited in Account No.6112-349072-050. Similarly, during the period 17-5-2007 to 17-9-2007 an amount of Rs.14,291,210 was credited in account No. 6105-374326-050, andRs. 11,558,267inaccountNo.6208-197915-001 whereas,US$ 7613 were credited in account No. 6112-349414-053. The involvement of Muhammad Naeem in the crime stood established from the fact that he established his own importing firm, namely, MessrsAl-Huraim International, Karachi, and also opened Account No. 6112-349072-050 in the name and style of Messrs Imex International Logistics Trading, Karachi, whereby the business addresses of both the aforesaid firms had been shown as 1-Marium Palace, Bohri Road, Opp. New Custom House, Karachi, which as per record of the licensing authority (Collectorate of Customs, (Appraisement), Custom House, Karachi) was the business address of Messrs N. J. International, CHAL No. 2392, Karachi, whose numerous Goods Declarations were used by Muhammad Naeem and others, namely, Babar Hussain, Farhan Ibrahim, Naila Jamal and Jamal Durrani, for the fraudulent clearance of containerized Cargo from QICT, Karachi. In order to operate the business of illegal removal of containerized cargo from QICT, Muhammad Naeem supervised the racket from his office situated at Office No.1, Marium Palace Bohri Road, opposite Custom House, Karachi. He detailed two of his close associates and his employee, respondent Babar Hussain son ofAdalat Hussain, and Farhan Ibrahim, (correspondent), to whom he used to hand over the copies of bill of ladings/invoices received from Faisal Shezad from Lahore for further processing at QICT, Karachi. Upon receipt of the said import documents, Babar Hussain and Farhan Ibrahim used to hand-over import documents to Shakoor Alam son of Ilm Din who, on the basis of import documents, used to deposit security amount arranged by him in the concerned shipping agencies, and thereafter received Delivery Orders/NOCs and Gate Passes which were subsequently handed over to Babar Hussain who prepared fake Goods Declaration of various clearing and forwarding agencies, including Messrs N.J. International CHAL No. 2392, Karachi, through Messrs Awan, Typist and Enterprises, near Custom House, Karachi, owned by one, Nasir A wan, under the instructions of Muhammad Naeem. Subsequently, Babar Hussain worked in association with Farhan Ibrahim, an ex-employee of Messrs Pakistan Revenue Automation Limited (PRAL), who was sacked from PRAL on the charges of embezzlement. During his employment, he remained posted at QICT, Karachi, and after losing his job, he started customs clearance business privately and developed association with Muhammad Naeem Qureshi and Babar Hussain. He prepared Goods Declaration by endorsing fake and bogus examination report and also affixed seals/stamps of Customs and Bank, including fake cash nunbers and used to approach Allah Buksh, an employee of Messrs DP World, Terminal operator, QICT, Karachi, who arranged/managed gate passes on the basis of which containers were removed from QICT, Karachi. It is pertinent to mention here that prior to the removal of containers from QICT, Nisar Ahmed son of Sher Dad Khan, Yard supervisor of Messrs DP World, Terminal operator, QICT, Karachi, used to facilitate the prompt and speedy removal of containers, including containers imported by Messrs Malik Enterprises, Lahore, through public transport. Thus, Allah Buksh and Nisar Khan, while employed with Messrs QICT/DP World. Karachi, in order to facilitate the organized crime of fraudulent clearance of containers on the basis of fake GDs arranged gate passes, made fake entries in the computer system and managed loading of containers on the vehicles for speedy removal/exit from the QICT. The investigation pertaining to Babar Hussain, Farhan Ibrahim, and Nisar Ahmed was further conducted to ascertain their involvement in illicit financial transaction coupled with criminal involvement in manipulation, fabrication and dubious preparation of GDs, and for speedy clearance/fraudulent removal of containerized cargo from QICT. After hectic efforts, few accounts of the aforesaid persons were found. It became evident that Account Nos. 113-010-0132-9 and 6105-364520-050 maintained in Messrs Askari Commercial Bank Limited, Timber Market, Karachi, and Standard Chartered Bank, 26th Street Branch, D.B.A., Karachi, respectively, were operated by Babar Hussain and showed an amount of Rs.43,218,145 which had been depositedduringtheperiod1-1-2007 to 17-9-2007. Similarly, Account No. 6208-335062-001 operated in Standard Chartered Bank, I.I. Chundrigar Road, Karachi by Farhan Ibrahim showed an amount of Rs.19,370,9841, and account No.0081-000164-01-5 of Bank Al-Habib, Jackson Branch, Keamari, Karachi, jointly operated by Nisar Ahmed and his wife, Mst. Irshad, and Account No.107 6-0081-001164-01-07 of Bank Al-Habib Limited, Jackson Bazaar Branch, Keamari, Karachi, operated by Mst. Irshad, wife of Nisar Ahmed, showed deposit of Rs.21,935,916. The aforesaid Account No.1076-0081-000164-01-5, maintained in Bank Al-Habib Limited, Keamari, Karachi, was jointly opened by Nisar Ahmed and his wife. However, the same was operated by Nisar Ahmed himself. The active connivance of Nisar Ahmed with Muhammad Naeem Qureshi had further been firmed up with the transaction of Rs.4,575,00 from the Account No. 6112-349072-050 of Standard Chartered Bank, Korangi Branch, Karachi, maintained and operated by Muhammad Naeem Qureshi, to the Account No.1076--0081-000164-01-5 of Nisar Ahmed in Al-Habib Bank Limited, Keamari, Karachi, through Cheque Nos.3002740, dated 4-1-2007, 4859483, dated 6-2-2007, 4859304, dated 19-2-2007, 5909981, dated 8-5-2007 and 5909990, dated 11-5-2007, paid against his services towards clandestine removal/clearance of containerized cargo from QICT. Besides, huge cash amount was also credited in the aforesaid accounts, which was paid to Nisar Ahmed by Naeem Qureshi. Faisal Shezad son of Sajjad Haider Awan was under judicial custody at Lahore and Shakoor Alam was on bail in case F.I.Rs. Nos. 06107, dated 7-2-2007, 08107, dated 25-7-2007, and 16 of 2007, and 15, 16, 17, 18 and 19 of 2007, lodged by the staff of the Directorate General. Production order issued in the name of Faisal Shezad and ShakoorAlambytheHonourableSpecialJudge,Karachi,dated16-8-2008, were sent to the Superintendent, Central Jail, Lahore for production of the persons at Karachi. The Jail authorities did not produce any of the above mentioned persons in compliance of the Honourable Court's order. Shakoor Alam absconded after getting bail from Lahore. Faisal Shezad was granted bail by the Honourable Special Judge against a surety of Rs.200,000 and PR Bond of like amount on 26-6-2009. During interrogation of Muhammad Naeem son of Rustam Qureshi, it was revealed that in order to fraudulently remove the containerized Cargo, one Raziq Dino Jokhio son of Din Muhammad Jokhio, who happened to be a private person and working at the office of Gate SPO, at Exit gate of QICT, had also assisted and connived in the crime. On the pointation of Muhammad Naeem, the said Raziq Dino Jokhio son of Din Muhammad Jokhio was arrested on 3-5-2008, and Notice under section 171 of the Customs Act, 1969 was served upon him. He was also interrogated. He disclosed that Babar Hussain used to communicate to him details of fraudulently removed containers numbers, Gate Passes, Importers name, and gate-out date, with the direction to remove the gate passes from the Gate record of the Collectorate of Customs (Port Muhammad Bin Qasim), Karachi, and to return the same to him (Babar Hussain) against deal Money Raziq Dino admitted/confessed entire scenario of clandestine removal of containers, removal of official records, i.e. gate passes and his involvement/connivance in this organized crime before senior officers of the Directorate General, MCC (Preventive) and MCC (Appraisement), Karachi recorded on 7-5-2008. He was granted bail by the Court of Special Judge (Customs and Taxation), Karachi vide order dated 16-12-2008. During investigation, ittranspired that Babar Hussain hired the services of Aslam Niazi, Muqadim/commission agent, who arranged local transport for transportation of containers from QICT, Karachi to MessrsZ.K. Niazi, Private Container Yard, Maripur Road, Karachi, owned by one, Amir Niazi, and to other parts of city as per instructions of Babar Hussain. According to Aslam Niazi, further transportation of containers/goods to upcountry was arranged by one Shahid Iqbal of Messrs Arain Logistics, Maripur Truck Stand, Karachi. He also disclosed that local transportation charges in respect of these containers were always paid to him by Muhammad Naeem, through Cash/Cheques at his office situated at 1-Marium Palace, Bohri, Road, opposite Custom House, Karachi. In support of his statement, he provided his Account No.113-01-010-0112-1 maintained in MessrsAskari Commercial Bank. Limited, Timber Market Branch, Karachi. The Manager of MessrsAskari Commercial Bank supplied Bank Statement of Muhammad Aslam Niazi. The scrutiny of Bank Statement revealed that an amount of 0.7 million (Approximate) had been deposited through cheques from Messrs Union Bank/Standard Chartered Bank, Korangi Branch, Karachi (operated by Muhammad Naeem Qureshi) into the aforesaid account of Muhammad Aslam Niazi in Askari Commercial Bank Timber Market Branch, Karachi. However, Muhammad Aslam Niazi produced copies of three Cheques No.3475050, dated 21-1-2007, 3475046, dated 20-1-2007 and 5910490, dated 1-4-2007, amounting to Rs.424,500 in support of his statement that the above mentioned amount was paid to him by Muhammad Naeem Qureshi as transportation charges of containerized cargo. The claim of Naeem Qureshi that millions of rupees transactions in his various bank accounts were the amounts sent by Rana Eijaz Akhtar, proprietor of MessrsImex International Logistics of Islamabad, who was also probed. Raja Ejaz Akhtar was summoned to join investigation in respect of transaction made to Muhammad Naeem Qureshi for rendering his services in transportation of NATO/ISAF stationed in Afghanistan. According to him, Muhammad Naeem Qureshi was employed in the capacity of Manager of Messrs Imex International Logistics and looked after clearance and safe transportation of containerized cargo of NATO/ISAF from Karachi to Afghanistan during period 2005 to 2007. An amount of Rs.25 million (approx.) had been paid to Muhammad Naeem Qureshi through online deposit for clearance of NATO/ISAF cargo in his two accounts of Standard Chartered Bank, Korangi Branch, and I.I. Chundrigar Road, Branch. However, he categorically stated that not a single penny was paid to the said person under the head of transportation charges as claimed by Muhammad Naeem Qureshi. The scrutiny of the bank statement of bank Account No. 6112-349072-050 maintained by Muhammad Naeem Qureshi in Standard Chartered Bank, Korangi Branch, Karachi showed transfer of huge amount of money from the account of Taj Ali and Rizwan Khan from Peshawar, who were also associates-in-crime. The investigation pertaining to Messrs Malik Enterprises situated at D 8, Aysha Heights, Gulberg, Lahore, who had imported 10 containers of electronics goods was carried out. The inhabitant of the locality did not identify the Aysha Heights in the locality. Therefore, the firm was found to be bogus with fictitious address. Subsequent to the lodging of F.I.R. No.34-AIDCIIAppg-IIIMisc/2007/, dated 17-5-2008, and filing of Supplementary Challan No. 34-A/DCIIAppg-IIMisc/2007 dated 17-5-2008, the scope of investigation was further broadened and, Minhaj Ali son of Raza Hussain Wazir Ali, and Zahid Islam Afridi son of Mujeeb Khan Afridi, were arrested on 8-10-2008 and were produced before the Honourable Court of Special Judge (Customs and Taxation), Karachi. The said persons were remanded to the custody upto 22-10-2008 for joint investigation in respect of eight F.I.Rs. including the subject F.I.R. During interrogation, Minhaj Ali disclosed that he had established his business in the name and style of MessrsMurad Trading Co, Karachi and that the basic function of the said company was to deposit securities with the various shipping companies at Karachi on behalf of the Consignees/ Transporters through scheduled banks in the shape of pay orders against bills of lading regarding imported containers arriving at different ports at Karachi. Subsequent to the deposit of security amount, he received Delivery Orders and Gate Passes from the concerned shipping companies/lines on behalf of the importers/transporters and subsequently delivered the same to the transporter. Minhaj Ali further disclosed that during the month of February/March 2007, Zahid Islam Afridi approached him and delivered five Bills of Lading Nos. NYKS-479269281, 512258979, NYKS-479268182, NYKS-479268467 and NYKS-479270034, in respect of 10 x 40ft containers Nos.TCNU-9009405, MSKU-9551503, NYKU-5952538, NYKU-5954612, NYKU-5532659, NYKU-5590655, NYKU-5819654, NYKU-5820418, FSCU-6529074 and NYKU-6216439 imported by MessrsMalik Enterprises, D-49, Aysha Heights, Gulbarg, Lahore and asked him to deposit securities with concerned shipping lines through Bank pay orders and get the delivery orders and Gate Passes from Messrs Maersk Pakistan (Pvt.) Ltd., Karachi and Messrs NYK Shipping Line, Karachi. In response, he (Minhaj Ali) deposited securities vide Pay order Nos. (1822768, 1822771), 1822758, (1822767, 1822769), 1822779, against aforesaid 10 containers, issued by MessrsBank Al-Habib Ltd., Keamari, Karachi in favour of MessrsMaersk Pakistan (Pvt.) Ltd., Karachi and MessrsNYK Shipping Line, Karachi, and received Delivery Orders and Gate Passes from the aforesaid shipping lines, which he handed over to Zahid Islam Afridi. Subsequent to the clearance of aforesaid 10 containers, Minhaj Ali received back the security amount from Messrs Maersk Pakistan (Pvt.) Ltd., Karachi and Messrs NYK Shipping Lines Karachi in respect of 05 containers out of 10 containers. However, Messrs NYK Shipping Lines Karachi did not return the security amount of remaining five containers to Minhaj Ali and issued a crossed Cheque No.0265038, dated 16-5-2008, through their sub-agent Messrs James Finlay Ltd., in favour of Messrs A1-Mehran Traders, Karachi amounting to Rs.188,778 as refund amount of security, deposited for 5 containers vide pay Order No. 1822,779 dated 6-3-2007, which had arrived under Bill of Lading No. NYKS-479270034, because Messrs Malik Enterprises, Lahore had authorized MessrsAl-Mehran Traders, Karachi (a fictitious company). On this issue, Minhaj Ali contacted Zahid Islam Afridi and demanded an amount of Rs.200,000 which was deposited by him through aforementioned Pay Orders as security amount of the said five containers. Subsequently, Zahid Islam Afridi returned the aforesaid security of containers to him through cash: Similarly, during interrogation, Zahid Islam Afridi disclosed that he was proprietor of MessrsAzad Afridi Goods Transport Company, situated at Hawkes bay Road, Karachi. Four years back, he established business terms with Muhammad Naeem Qureshi when he was providing his transport company's services to MessrsImex International Logistics, Islamabad. At that time, MessrsImex International was clearing containerized cargo for NA TO Forces based at Afghanistan through Muhammad Naeem Qureshi, who at that time was representative of Messrs Imex International Logistics, Islamabad at Karachi. During that period, Muhammad Naeem Qureshi had started clearance of commercial import. In connection with the import of 10 containers imported in the name and style of Messrs Malik Enterprises, Lahore, Muhammad Naeem Qureshi delivered five original Bills of Lading to Zahid Islam Afridi at his office, situated at 1-Marium Palace, Bohri Road, Opposite Custom House, Karachi, which he delivered to Minhaj Ali for deposit of securities and subsequent issuance of Delivery Orders and Gate passes. Minhaj Ali, deposited securities and received Delivery Order and Gate passes from the concerned shipping lines, which were subsequently handed over to him (Zahid Islam Afridi). Upon receipt of these Delivery Orders and Gate Passes from Minhaj Ali, he delivered the same to Muhammad Naeem Qureshi. After that, Muhammad Naeem Qureshi arranged the clearance and transportation of these containers from QICT to a private container yard, namely, MessrsZ.K Niazi Container Yard, situated at Hawksbay Road, Mauripur Road, Karachi. To further transport these containers to Lahore, Muhammad Naeem Qureshi contacted Zahid Islam Afridi, who transported these containers at the required destinations at Lahore on the instructions of Muhammad Naeem Qureshi. The transportation charges of these containers were paid to Zahid Islam Afridi by Muhammad Naeem Qureshi. Subsequent to the clearance of said 10 containers, Minhaj Ali informed Zahid Islam Afridi that Messrs NYK Shipping Lines, Karachi, had not returned back an amount of Rs. 2 Lac deposited as security pertaining to 05 containers arrived under Bill of Lading No. NYKS479270034. Zahid Islam Afridi- further disclosed that, in this regard, he contacted Muhammad Naeem Qureshi and informed him about the refusal of security deposit refund by MessrsNYK Shipping Lines, Karachi. Muhammad Naeem Qureshi, informed Zahid Islam Afridi that he would settle the dispute by himself with the shipping lines regarding disputed pay order and he paid Rs.2 Lac (Cash) to him which he (Zahid Islam Afridi) delivered to Minhaj Ali. During the course of investigation, it was found that the refunded amount of security of five containers imported by Messrs Malik Enterprises, Lahore, amounting to Rs.188,7781 through crossed Cheque No.0265038, dated 16-5-2008, issued in favour of MessrsAl-Mehran Traders, Karachi, was finally deposited in Account No.113-0 1010-0197-8 of Askari Commercial Bank Limited, Timber Market Branch, Karachi, under the title of MessrsN.J. International, Karachi, and the proprietor of the firm had been shown as respondent Nailajamal. This account was operated by the main Muhammad Naeem Qureshi. It was an 'ample proof of Muhammad Naeem Qureshi being in association with MessrsN.J International, Karachi, MessrsAl-Mehran Traders, Karachi, and MessrsMalik Enterprises, Lahore in the mega scam of removal of non duty paid containers on the basis of fake and fictitious documents from QICT. In the light of interrogation/investigation of the aforesaid two persons, Notice under section 26 of the Customs Act, 1969 was issued to the Manager Bank Al-Habib, Ltd., Keamari, Karachi, requiring them to supply the copies of Pay Orders issued in favour of concerned shipping companies on behalf of MessrsMurad Trading Company, Karachi, vide Account No. 0081-000471-017, operated by Minhaj Ali in respect of said 09 containers out of 10 containers. In response, the Branch Manager, Bank Al-Habib, vide letter, dated 16-10-2008, supplied the copies of security deposit of containers through cheques issued by Minhaj Ali of Messrs Murad Trading Company, and Pay orders issued in favour of various shipping companies/lines. During interrogation, Minhaj Ali and Zahid Islam Afridi, volunteered to depose their statements under section 164, Cr.P.C. before the Judicial Magistrate, Karachi. Therefore, applications were moved before the Honourable Comi of Civil Judge (V) Judicial Magistrate, Malir, Karachi, praying for recording of voluntarily/ confessional statements of the aforesaid two persons under section 164, Cr.P.C. The Honourable Comi of Civil Judge (V) Civil Judge Judicial Magistrate, Karachi, on 21-10-2008 recorded the confessional statements of the said persons and remanded them to the judicial custody at Malir Prison, Karachi. As regard the role of Mr. Javed Durrani owner/ proprietor of Messrs Durrani Traders, CHAL No.1469, situated at 139-Al-Rehinan, Trade Center, New Challi, Karachi, as per the investigation conducted in the case and the documents scrutinized during investigation, there existed no substantial evidence and reasonable grounds to criminally involve him in the commission of the offence as the main accused of this mega scam along with his other associates in the crime had manipulated, forged, and fabricated the GDs of the said clearing agent for clandestine removal/clearance of the containerized cargo from QICT without payment of leviable duty and taxes. Since the GDs filed in the name of M/s Durrani Traders were found to be forged by the principal accused Muhammad Naeem Qureshi, hence Messrs Durrani Traders were not be implicated in this tax fraud. The appellant Messrs DP World, Qasim International Container Terminal, (QICT) had been licensed by the Customs for proper receipt, discharge, storage, handling, delivery, and loading of impmis, transit, and transshipment of containerized cargo by sea other than off-dock terminals within the/meaning of Rule 423 (xxiv) of the Customs Rules, 2001, as notified vide S.R.O. 450(I)/2001, dated 18-6-2001, and amended vide S.R.O.704(I)/2007, dated 14-7-2007, with online facility of electronic filing of documents with the PaCCS.

3.The Additional Collector of Customs, MC of PaCCS Karachi, did not agree with replies of respondent and passed the Order-in-Original No. 1 of 2011 dated 10-1-2011 reproduced as under:--

"Mr. Shakoor Alam has denied wrongdoing but he also has admitted playing a role in the clearance of goods. He admittedly deposited securities for containers. Other charges against, him are not established particularly in view of the Boards report sent to the president Secretaries (Public), as reproduced above, wherein only act of depositing securities has been mentioned. Keeping in view the lesser significance of the role played by him, a lenient view in taken and a penalty of Rs.20,000 is imposed under clause 189 of section 156(1) of the Customs Act, 1969."

4.Being aggrieved and dissatisfied with the Order-in-Original No.1 of 2011 dated 10-1-2011, the appellant filed an appeal before the Collector of Customs (Appeals) Karachi, Who rejected the same on the following grounds:--

"I have thoroughly examined the entire case record and given very careful consideration to the arguments advanced before me. It is an admitted position that the/appellant had deposited security money with the shipping lines on behalf of the fraudulent elements and had obtained delivery orders on the basis of which fake/forged clearance documents had been prepared for unlawful clearance of several dozen containers from the QICT and the Exchequer had been defrauded of its legitimate revenue to the tune of tens of millions of rupees. It is also apparent from the record that the appellant is absconding and the court of competent jurisdiction has declared him as absconder. Clearly, the appellant has come up with unclean hands and, therefore, there is no reason to remit the penalty imposed on him. The appeals are 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 the impugned order of the respondent is ab initio, illegal, void, mala fide is as much as the same is influenced by circumstances not permitted by law.

(b)That the impugned order is based on whimsical ground/ misinterpretation without following the sprit of mandatory provision of law/ established departmental practice/procedure and due to the said reason/basis same is discriminatory.

(c)That the appellant running his business of transport since many years and has a unblemished record. Due to nature of his profession/business he is required to keep contacts with importers/clearing agents/exporters/transport contractors who used to hire the trucks for transportation of their goods from port area to other parts of the country.

(d)That in normal course of business the transporters who carry the imported containers from Karachi to up country are required to deposit the Security against the container for safe return of the same to the Shipping Company. Therefore, it is the duty of the transporter to himself submit the security or arrange the same to meet the above condition of the shipping company and to get the business.

(e)That after deposit of the Security the Shipping Company as per their normal practice issue the Delivery Orders and Gate Passes to the Transport Company.

(f)That it is not alleged in the SCN or observed in the Order-in-Original that the appellant was a member of the racket and conspired with the culprits who illegally got cleared the consignments from the port.

(g)That from perusal of the SCN and Order-in-Original it is clear that Naeem Qureshi contacted (not conspired/connived) the appellant in normal course of business and paid the normal charges of transportation for carrying the containers from one godown of Karachi to another godown at Lahore. The fact of payment of charges for transportation of the containers by Naeem Qureshi to the appellant by itself shows that the appellant transported the containers in normal course of his business and there was no abetment or connivance with the appellant and Naeem Qureshi.

(h)That it is prosecution's own case that importer/clearing agent played role in clearance of the consignment on the basis of fake and fictitious GDs. No role whatsoever has been assigned or even alleged to the respondent in clearance of the consignments from the port area.

(i)That there is absolutely no evidence/material or allegation in the SCN which could show that respondent played any part in the alleged evasion of customs duty and taxes and illegal clearance of the containers stuffed with imported goods.

(j)That from perusal of the SCN it is clear that investigation was not conducted honestly and actual culprits of shipping company, customs authorities, bank staff and port authorities were let off and in their place innocent persons were falsely implicated in this case.

(k)That Honourable Special Judge (Customs) Karachi while granting bail also observed the discriminatory treatment given to the respondent.

(l)That after arrest of the appellant he was produced before the Magistrate who recorded his statement under section 164, Cr.P.C. in which the appellant disclosed the true facts but instead of placing the name of the appellant in column of witnesses, the Investigating Agency with mala fide intention and to protected the actual culprits destroyed the direct and reliable evidence of the appellant, by nominating the appellant as accused.

(m)That allegations against the respondent are based upon the alleged statements of co-accused Naeem Qureshi before the Investigating Officer which is not admissible in evidence/law and no reliance can be placed upon such statements.

(n)That there isabsolutelynoallegationagainsttherespondentthat the transported any container from inside the Port Area to any part of the city which fact clearly show that there was no connivance of the respondent in the clearance of the consignments/containers from the customs/port area.

(o)That the respondent being transporter has no concern with the handling of the containers inside the port area, examination of the containers by the customs staff and payment of customs duty and taxes therefore the question of his involvement in clearance of the consignments/containers from the port/customs does not arise at all.

(p)That it is not the duty of the Transporter to examine the GDs and verify the same from customs prior to transportation of the goods from one city to other whether proper customs duty and taxes have been paid or not against the consignment/containers for which he has been engaged.

(q)That there is no evidence with the prosecution to show that appellant in connivance with importer/clearing agent or any other culprits got cleared the consignment from the customs/ port.

(r)That the same identical cases already decided by the learned Collector of Customs (Appeals), Karachi vides Order-in-Appeals Nos. 5158 to 5165/2011 dated 18-4-2011, that "remitted the penalty imposedon the appellant" relevant para reproduced as under:--

"I have examined the evidence available on record and given due consideration to the arguments advanced before me. The evidence on record strongly suggests that the appellant had only deposited securities with the shipping companies and had obtained delivery orders there from on behalf of the transporter in normal course of business and against usual Commission charges. Clearly, he did not have any contact with the principle culprit of the case that is, Naeem Qureshi. Since criminal involvement of the appellant has not been conclusively established, I hold that imposition of penalty on him is not maintainable in law. Therefore, the penalty imposed on him is remitted. Consequently, the impugned order is modified to the aforesaid extent only and the appeals are allowed accordingly"

That in the light of the above mentioned summary of the case and grounds the impugned order-in-original to the extent of the appellant is illegal, unfounded, arbitrary, prejudice, unjust, without any force of law and is liable to be set aside to the extent of the appellant in the best interest of justice.

6.We have examined the case record and given due consideration to the oral arguments made by the both sides. It is observed that the respondent No. 1 has invoked a series of section of the Customs Act, 1969 without giving thought to the spirit of those and as to whether those were applicable on the appellant in the light of role assigned to hims in the show-cause notice. For having a better understanding, verbatim of each invoked sections are reproduced here-in-under:--

Section 16:- Power to prohibit or restrict importation and exportation of goods.---The [Federal Government] may, from time to time, by notification in the official Gazette, prohibit or restrict the bringing into are taking out of Pakistan of any goods of specified description by air , sea or land.

Section 18:- Goods dutiable (I) Except as hereinafter provided, customs duties shall be levied 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)goods brought 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 the First Schedule at a rate not exceeding one hundred percent of the value of such goods as determined under section 25 [or, as the case may be section 25A]

(4)The regulatory duty levied under subsection (3) shall:--

(a)be in addition to any duty imposed under subsection (1) or under any other law for the 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 he issue of the official Gazette in which such notification appears is published at any time after that day.]

[(5) The Federal Government may, be notification in the official Gazette levy an additional customs duty on such imported goods as are specified in the First Schedule at 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 2 5A]

{Provided that the cumulative incidence of customs duties leviable under subsections (1), (3) and (5) shall not exceed the rates agreed 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 any duty imposed under subsection (1) and (3) or under any other law for the time being in force and

(b)Leviable on and from the day specified in the notification issued under that subsection notwithstanding the fact that the official Gazette in which such notification appears is published at 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 custom :-

(a)Causes to submit documents including those filed electronically, which are concocted, altered, mutilated, false, forged tempered or counterfeit to a functionary of customs;

(b)Declares in the 82[goods declaration] electronically filed customs declaration, thenameandaddressofanyexporteror importer which is physically non-existent at the given address;

(c)Declares in the 82[goods declaration] electronically filed customs declaration an untrue information regarding 97[payment of duties and taxes through self assessment] description quantity, quality origin and value of 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, by any reason as referred to in subsection (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.

"Section 79--Declaration and assessment for home consumption or warehousing.---[(1) The owner of any imported goods shall make entry of such goods for home consumption or warehousing or for any other approved purposes, within fifteen days of the arrival of the goods, by,-

(a)Filing of a true declaration 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 his liability of duty, taxes and other charges thereon, in case of a registered user of the Customs computerized System.

[Provided that if, in case of used goods, before filing of goods declaration, the owner makes a request to an officer of customs not below the rank of an Additional Collector that he is unable, for want of full information, to make a correct and complete declaration of the goods, then such officer 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 paid his 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 he rate of customs duty is not adversely affected and that 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 taken under 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.

"Section 83--Clearance for home consumption.---(1) when the owner of any goods entered for home consumption and assessed under section 80 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 chargeswithin 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 surcharge at the rate of [KIBOR] plus three per cent] on import duty and other charges payable on such goods]

Section 121 Transshipment of goods without payment of duty (1) Subject to the provisions of section 15 and the rules, the appropriate officer may, on application by the owner of any goods imported at any customs station and specifically and distinctly manifestly at the time of importation as for transshipment to some other customs station or foreign destination, grant leave to transship the same without payment of duty. If any chargeable on such goods with or without any security or bond for the due arrival and entry of the goods at the customs station of destination.

(2)The Board, may subject to rules and such conditions as it may deems fits to impose authorities certain carriers to transport goods under the multimodal, scheme Goods transported under the multimodal scheme shall be specifically and distinctly manifested at the time of importation as for transshipment to some other customs station or foreign destination and shall not:--

(a)require distinct permission for transshipment from 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 during transportation between the customs station of first entry into the country to the customs station of destination, and

(b)be subject to the risk management system at the customs station of first entry.

(3)The board may, subject to such condition as it may deem first, grant license to any carrier to carry goods under the multimodal scheme]

157. Extent of confiscation.---(1) Confiscation of any goods under this Act includes any package in which they are found and allotter contents thereof:

(2)Every conveyance of whatever kind used in the removal of any goods liable to confiscation under this Act shall 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 rules order its release pending the adjudication of the case involving in condition if the owner of the conveyance furnishes him with a sufficient 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 under this Act includes her tackle appareland furniture.

178 Punishment of person accompanying a person possessing goods liable to confiscation.---If any two or more person in company are found together and they or any of them have goods liable to confiscation under this Act, every such 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.

192 Duty 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 likely attempt to commit any such offence , shall as soon as may be give information thereof in writing to the officer-in-change of the nearest customs house or customs station or if there is no such custom house or customs stations, tothe officer in charge of the nearest police station.

(2)The office 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 nearest customs house or custom station.

207 Customs house agents to be licensed.---No person shall act of {on behalf of any principal} for the transaction of any business. Relating to the entrance or departure of any conveyance [or any customs clearance related activity] or the import or export of goods or baggage at any custom station unless such person holds a license granted in this behalf in accordance with the rules [as a customs agent]

7.From perusal of section 16, it is observed that this section is incorporatedin the Act for delegating power to FBR for prohibiting or restricting importation and exportation of the goods through a notification, resultant, it is a machinery section and no charge can be invoked under the said section. Similarly section 18 is for levy of, exemptionfromandpaymentof,customdutiesandthe powersforthe prescribed Act rest with the Board and have no nexus with importer, clearing agent and any other person by virtue of being machinery section, as such no charge can be invoked under the said section.

8.It is evident from the expression of sections 32 and 32A of the Customs Act, 1969 can be invoked on an importer or exporter or clearing agent or any other person who submit a 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 contrary submitted security with the shipping company against the container, subject to refund of that after delivering empty containers to the Terminal of the Shipping Company after de-stuffing and for providing that service he charged 1% of the security amount. The said instrument is not a document, declaration statement etc required for obtaining clearance of the imported goods. Resultant, neither section 32 or 32A is applicable in the case of the appellant. Whereas under section 79 of the Customs Act, 1969 an importer or clearing agent has to file/transmit goods declaration with the customs not by another person like appellant who is none of those. Under section 80 the officer of the Customs passed 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 customs after satisfying that 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 the import of the goods is not prohibited or in breech of any restriction or condition applying to the import of such goods, passed clearance order for obtaining delivery from the Port under the regime of "One Custom" or transmitting view message to the Terminal, Shipping Company and Gate Staff for obtaining delivery of the goods. These sections lays no duty on the appellant instead on the custom officials, resultant invoking contravention of the said section on the appellant is highly questionable by virtue of the fact that he figures no where in the expression of these sections.

9.The section 121 of the Act ibid meant for transshipment of the goods without payment of duty and Board has to frame Rules for that. The Rule so made has to be adhered by the importer/clearing agent and Customs not by the appellant as he has not obtained transshipment of the impugned goods, invoking the said provision of the Act is completely void. The perusal of section 157 of the Act ibid it 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 ease, resultant, invoking of the said section in the show-cause notice is incorrect. The section 192 of the Act ibid. Lays duty on a person to give information to upon knowing of the commission of any offence or an attempt or likely attempt to commit any such offence to the officer-in-charge of the nearest customs-house or customs station or if there is no custom house or customs-station, to the officer-in-charge of the nearest police station in writing. How can a commission agent who deposited security of the container allegedly cleared by the customs can have the knowledge that the said container has been removed illegally from the port, when it is next to impossible beside in the absence of tangible evidence that he had the information or in know of this occurrence of these events none of the said procedure was adopted as admitted by the representative of the respondent then how the said provision of the Act was invoked on him. That as regard to section 207 of the Customs Act, 1969 it is for Licensing of Customs-House Agent for transacting of any business relating to clearance of the goods, this section is not at all applicable on the appellant as he is not a clearing agent.

10.In addition to the above irregularities committed by the respondent the impugned order smacks of biased and determined opinion and the said fact stood validated from the order of the respondent No. 1 whereinit has been held that chargesagainsthimarenotestablishedinviewoftheBoard'sreport vide U.O.No.10(18)L&P/2002dated17-10-2009 sent to the President Secretariat (Public) that the act of depositing security with the shipping company is insignificant therefore the Directorate General of Intelligence and Investigation consideringto assign the appellant role of witness in Final Challan instead of accused in the F.I.R. as the evidence on the basis of which the appellant was implicated in the case are no evidence under the Law of Evidence being in sufficient and this stood validated from the Bail Order of The Lahore High Court , Lahore of the appellant in Misc/Bail No. 8429/B/2008 dated 26-9-2008 "that the petitioner was only a commission agent and nothing more than that. The true import of his role and vicarious liabilities shall be assessed after collecting some material evidence at the time of trial. Even otherwise the disclosure made by the petitioner during Police custody on the basis of which he has been involved in this case is inadmissible in evidence". The respondent No. 1 imposed penalty of Rs.50,000.00 on the said insignificance of his role and non evidence. This confirms that he failed to distinguish or discuss the law including, instead made discussion of personal nature in regards to fiscal statute, which is not sustainable in comparison to the Law and the judgments of the Superior Courts. Hence the order being erroneous10 and in consonant to the legal provisions is not sustainable in law and is patently void of the law.

11.To what has been stated/discussed herein above particularly the interpretation of law and legal position referred in the light of prescribed law and observations made thereon, we hold that, the appellant had been implicated unnecessarily in the case despite not warranted under the invoked Provision of the Customs Act, 1969 by The Directorate of Intelligence and Investigation -- FBR and penalized through 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.

12.Order passed accordingly.

JJK/168/Tax(Trib.)Order accordingly.