K.K. ENTERPRISES, KARACHI VS ADDITIONAL COLLECTOR-II MCC, 2014 PTD-CUSTOMS-APPELLATE-TRIBUNAL-LAHORE 767 (2013)

Customs Act (IV of 1969)---

----S.180---Customs Rules, 2001, Rr. 101 & 102---Penal Code (XLV of 1860), S.489-F---Imported goods released without payment of leviable taxes on submission of post-dated cheques and indemnity bond by Clearing Agent in pursuance of order of High Court passed in constitutional petition filed by importer---Dismissal of such petition by High Court---Issuance of show-cause notice by Customs Authority to importer demanding payment of leviable taxes while endorsing its copy to Clearing Agent---Penalty of Rs.5,00,000 imposed upon Clearing Agent reduced to Rs.50,000 by Departmental Appellate Authority---Validity---Customs Authority had issued show-cause notice to importer on 29-8-2011 and passed order-in-original on 23-2-2012, which was without jurisdiction for being barred by 60 days---Show-cause notice was silent about acts and omission of Clearing Agent---Customs Authority had not provided opportunity to Clearing Agent to submit his reply to show-cause notice and had not lodged F.I.R. under S.489-F, P.P.C. against Clearing Agent---Appellate Tribunal set aside both impugned orders for being without jurisdiction and against natural justice.

Messrs Sikandar Enterprises v. Customs, Excise and Sales Tax Appellate Tribunal Karachi 2008 PTD 1968 ref.

Nadeem Ahmed Mirza, Consultant for Appellant.

None for Respondent No.1.

Date of hearing: 16th July, 2013.

ORDER

ADNAN AHMED, MEMBER (JUDICIAL-II).---Impugned in thisappealistheOrder-in-Original Nos.7269 to 7270 of 2013dated16-10-2012 issued on 29-4-2013 passed by the Collector of Customs (Appeals), Karachi reducing the penalty amount of Rs.500,000 to Rs.50,000 with warning to be careful in future.

2.The first appeal filed by the appellant against the Order-in-Original No.9 of 2012 dated 23-2-2012 issued on 23-2-2012, passed by the Additional Collector of Customs (Appraisement-IV), Customs House, Karachi. Under the said order-in-original, the appellant was directed to pay the penalty of Rs.500,000 (Rupees Five Lac). While consider the provisions of Rules 101 and 102 of the Customs Rules, 2001, the appellant acts were not positive towards the Government exchequer since indemnity bonds and post dated cheques which were found not good to meet the requirement of law.

3.The contention of the appellant is that he is Customs House Agent License Holder bearing No.1714 and is engaged in clearing and forwarding of the consignment of the Traders and Companies of Pakistan meant for import and export for so many years.

4.The appellant has provided his services for clearance of 117 consignment of Plastic Moulding Compound of different grades imported by MessrsStar Plastic Industries, Khyber Agency Peshawar (KPK). Without payment of leviable sales tax and income tax in lieu of which the importer submitted post dated cheques and indemnity bond in pursuance of Hon'ble High Court of Peshawar Order vide Writ Petition No.1845 of 2005 dated 18-2-2005 subsequent the same was dismissed. After dismissal of writ petition the respondent issued show-cause notice dated 29-8-2011 to the importer forpayment of leviable amount. The copy of show case notice was endorsed to the appellant simply for sake of regularization, the appellant has not submitted reply of show-cause notice.

5.The appellant received Order-in-Original No.09 of 2012 dated 23-2-2013 on 26-2-2012 where the appellant was penalized by the respondent imposing Rs.Five lacs penalty. The appellant impugned the order in 1st appeal before the respondent No.2. After admission, the appeal was heard by the respondent No.2 and reduce the penalty amount from Rs.500,000 to Rs.50,000.

6.Mr. Nadeem Ahmed Mirza, Consultant of the appellant has argued that the order-in-original passed by the respondent No.1 without issuing show-cause notice under section 180 of the Customs Act, 1969 which is violation of natural justice and committed gross negligence. Mr. Mirza has further argued that order-in-original was passed after stipulated period which is barred by the limitation by 60 days and refer the case of MessrsSikandar Enterprises v. Customs, Excise and Sales Tax Appellate Tribunal Karachi reported in Journal of 2008 PTD 1968. He contended that order passed by the respondent No.2 is without jurisdiction and refer the provisions under section 193(1) of the Customs Act, 1969.

7.That on other hand on 1-7-2013 Mr. Javed Iqbal, A.O. appeared on behalf of the respondent and request for adjournment which was acceded. But thereafter he called absent in next two hearing dates even after receiving notices. The performance of the respondents represented was very poor and failed to assist the Tribunal.

8.Having gone through the written appeal, the record of the case and verbal arguments advanced by the appellant's counsel. I find that show-cause notice dated 29-8-2011 is issued to importer and copy of the same was endorsed to the appellant where nothing has been mentioned about Act and commission of the appellant. The department has not provided opportunityto the appellant to submit his submissions in reasonable time and penal action has taken against him, and violated the provisions of section 180(b) of the Customs Act, 1969 which is arbitrary decision without cause and reason.

9.The order-in-original was passed on 23-2-2012 without jurisdiction which was barred by 60 days and there is no rebuttal on behalf of thedepartment. The appellant has submitted indemnity bonds and post dated cheques which were not encashed and penalty was imposed to him. Said order was challenged before Collector of Customs (Appeals). The Collector of Customs (Appeals) modified the order-in-original and reduced the penalty from Rs.500,000 to Rs.50,000 which was impugned before this court.

10.The department has not availed the remedy under section 489-F, P.P.C. by lodging F.I.R.against the appellant. The evidence and record does not show such proceeding. In view of above facts, law and circumstances of the case, I am of the considered opinion that impugned order having been passed by the forums below are without jurisdiction and against natural justice. The entire proceedings are struck off. The appeal is allowed as prayed with no order to cost.

11.Order passed accordingly.

SAK/157/Tax(Trib.)Appeal accepted.