WAZIR ZULFIQAR, PA, SRDP VS COLLECTOR OF CUSTOMS (ADJUDICATION), CUSTOMS HOUSE, LAHORE, 2017 PTD-CUSTOMS-APPELLATE-TRIBUNAL-LAHORE 2022 (2015)

Customs Act (IV of 1969)---

----Ss. 32, 168, 171 & 194-A---Misdeclaration---Seizure of imported goods---Five trucks stuffed with foreign origin TV Remotes etc., were intercepted---Drivers of the trucks produced bilities, issued by Goods Forwarding Agency---Produced goods declaration and examination reports were examined and compared with the recovered foreign origin goods and it was proved that misdeclaration was made in terms of quantity and same were also assessed on lower side---Recovered goods along with five trucks were seized under S.168 of the Customs Act, 1969---Counsel who appeared on behalf of the Seizing Agency, contended that the department had no objection, if the seized goods were released on payment of duty and taxes---Adjudicating Officer, passed order---Collector of Adjudication, had also made remarks against the concerned staff, as they caused huge loss to the national exchequer of its legitimate revenue in active connivance with the importer and clearing agency, and directed to hold departmental inquiry---Validity---Impugned order, had not stated any reason for the conclusion---Judgment in question did not speak a word about the alleged connivance between the concerned customs staff and importer/clearing agent--Conclusion drawn by the Adjudicating authority being without evidence on record, amounted to "non-speaking" order which was expunged, in circumstances.

Ahsan Baqar for Appellant.

Mrs. Amna Parveen for Respondent.

Date of hearing: 7th September, 2015.

JUDGMENT

KHAWAJA UMAR MEHDI, MEMBER (TECHNICAL).---This judgment will dispose of Custom Appeal No. 30/LB/2014 filed by the appellants against Order-in-Original No.58 of 2013 dated 20.12.2013 passed by the learned Collector of Customs (Adjudication), Lahore.

2.Brief facts of the case, as reported in the order-in-original are that in pursuance of an information on 10.12.2013 at about 0300 hours the staff of the Directorate of Intelligence and Investigation-FBR, Lahore, intercepted five trucks stuffed with foreign origin TV Remotes etc. near Babu Sabu, Sherakot Bund Road, Lahore coming from Customs station Sost. The drivers of the trucks produced bilities Nos.233, 225, 218, 217 and 232 all dated 07.12.2013 issued by M/s Khyber Goods Forwarding Agency, KGFA, Sost along with Gds No.825/13 and 824/13 both dated 02.12.2013 along with examination sheets prepared by the Customs authorities in which importer is Messrs Junaid Enterprises, Gilgit. Due to non availability of laborers and darkness, the search of the trucks was not possible at the sport, therefore, the same along with the loaded goods were brought to the office and detained under sections 2(kk) and 17 of the Customs Act, 1969 for thorough sarch and comparison with the produced documents. The produced Gds and examination reports were carefully examined and compared with the recovered foreign origin goods and it is proved that the mis-declaration was made in terms of quantity and the same were also assessed on lower side. Therefor, the recovered goods along with the five trucks were properly seized under section 168 of the Customs Act, 1969 Notice under section 171 ibid was also served upon the drivers and owner of the seized goods. Based on the above reported facts, a show-cause notice was being prepared for issuance to the respondents when on 19.12.2013 Mr. Raza Ahmed Cheema Advocate appeared on behalf of the respondents and submitted power of attorney along with the written application for summary adjudication of the case without issuance of written show-cause notice, showing willingness to pay the duty and taxes leviable on the seized goods. On the other side Mr Mubarik Ali Sherazi, I.O. Appeared on behalf of the seizing agency and contended that the department has no objection if the seized goods are released on payment of duty and taxes etc. After hearing the parties, the learned adjudicating authority passed the impugned order. The learned Collector of Adjudication, Lahore has also made remarks against the concerned staff posted at Sost, as they caused huge loss to the national exchequer of its legitimate revenue in active connivance with the importer and clearing agency and also directed for holding departmental inquiry. Feeling aggrieved by the said order, the appellants filed the present appeal before this Tribunal on the following grounds:--

(1)That the appellants are primarily related to the quantum of goods, description of goods and value of goods brought at customs dry port Sost and cleared after payment of leviable duty and taxes and they are not at all concerned or responsible for the goods which were found in excess of such quantity duly seized by the prosecution.

(2)That so far as excess quantity of goods so found along with the imported goods is concerned, the basic responsibility for lawful import and bona fide possession thereof lies upon the person from whose possession the same were seized.

(3)That there is no evidence documentary or otherwise available on record that the excess quantity of goods was also imported and brought at customs dry port Sost or was cleared in a clandestine manner without payment of leviable duty and taxes with the alleged connivance of the importer, customs clearing agent and the appellants.

(4)That to allege the appellants of the said charge, it was obligatory upon the prosecution and the respondent to bring on record some concrete and corroborating evidence but hopelessly they both failed to bring to fore any such evidence which could substantiate their charge and view point.

(5)That in absence of any evidence or proof, the appellants could not be burdened with such charge on mere presumption that since the goods confirming to the details given in the Gds were imported and cleared at SRDP Sost, the excess quantity so found was also an integral part of the said consignment and coming from Sost.

(6)That a wide difference of period between date of importation of goods effected on 2.12.2013 and date of seizing of goods which took place on 10.12.2013 nullifies the said charge particularly when the bilities shown to have been issued at Sost by the Goods Transport Company Sost travelling with the goods are destined till Rawalpindi and were not meant to be transported for Lahore against these bilities.

(7)That it is more important to point out here that the custodians of goods of imported goods are always the Dry port authorities and not the customs functionaries. The respondents as well as the prosecution could not approach them to ascertain as to whether or not the excess quantity was ever imported and brought at SRDP Sost.

(8)That the goods imported against GD Nos.824 and 825/13 both dated 2.12.13 which were conforming to the description value and quantity of the goods so imported were illegally detained under section 2(kk) and section 17 of the Customs Act, 1969.

(9)That the goods imported against Gds under reference were illegally seized under section 168(1) of the Customs Act, 1969.

(10)That the appellants have unnecessarily been involved in the case as the seizure reported submitted by the prosecution does not find mention of the names of the appellants and have not been made a party to the said case and thus the appellants have been forced to face with an odd and awkward situation coupled with agony, distress and defamation when they were not made party in the seizure report and no show-cause notice was issued and no proper opportunity of being heard was provided by the respondent.

(11)That no orders under the Customs Act, 1969 could be passed for confiscation of goods or for imposition of any penalty on any person or any adverse action could be taken causing him undue loss mandatory or otherwise.

(12)That the appellants never consented in writing or orally to be dealt with summarily and as such the respondent was not empowered to try the case summarily or to deprive the appellants of their basic right to be served with show-cause notice in terms of section 180 of the Customs Act, 1969 and also to be heard or make representation against the charge levelled against them.

(13)That the provisions of section 180 of the Customs Act, 1969 do no where provided for the waiver of show-cause notice on the part of any person who has limited choice under it.

(14)That the provisions of section 180 of the Customs Act, 1969 do not absolve the adjudicating officer of discharging his responsibility to comply with the given charter and to issue show-cause notice to the concerned parties.

(15)That the show-cause notice was not issued to the appellants by the adjudicating authority in any form provided for under section 180 nor they were treated in accordance with the mandatory requirement of the said section of law, the order-in-original confiscating goods or imposition of penalty and adverse action against the appellants is therefore, not sustainable in the eyes of law.

(16)That the entire action of the authorities seizing the goods without determining the same liable to confiscation and without issuance of notice to the concerned parties is illegal, without lawful authority and of no legal effect.

(17)That even where the incumbent files a request for summary adjudication, the mandatory requirement of issuance of show-cause notice prescribed under section 180 for the purpose of adjudication cannot be dispensed with.

(18)That the prosecution as well as the respondents relied upon the only statement of Muhammad Azeem Babar who impersonated himself as importer of the seized goods without requiring from him the necessary documents of ownership of the goods in the shape of his registration under the Income Tax Ordinance, 2001, Sales Tax Act, 1990 and Import and Export (Control) Act, 1950. Had they examined these documents carefully, they would have not considered him as an authorized representative of the owner and the customs clearing agent concerned or even the appellants.

(19)That the prosecution as well as the respondent could not catch the sight of address given in the respective Gds and passed the impugned order without ensuring that the person who had filed application for the summary adjudication of the case, was actually and factually the same who imported the goods at Customs dry port Sost paid the leviable duty and taxes, transported the goods from Sost to Rawalpindi and then to Lahore.

(20)That the prosecution was not authorized to take cognizance of the case under section 32 of the Customs Act, 1969 and respondent also failed to appreciate that S.R.O. 486(I)/2007 dated 9.7.2007 issued by the Board in exercise of the powers conferred by section 3E of the Customs Act, 1969, the officers of the Directorate General Intelligence and Investigation FBR were not empowered and authorized to initiate action under section 32 ibid.

(21)That once the consignment is examined, assessed, out of charged removed from the customs area in terms of sections 79, 80 and 83 of the Customs Act, 1969 it becomes past and closed transaction in terms of section 29 of the Customs Act, 1969 and no any presumption could be stretched that the goods so cleared were not those which were actually examined, assessed or made out of charge.

(22)That the seizure report submitted by the prosecution does not fall under section 32(1) or 32(2) or 32(3) as no specific allegation has been made that any forged documents were filed or there was collusion with the customs officers or there was inadvertence, error or misconstruction. Seizure report in terms of section 32 must disclose all the material facts on the basis of which the charges of misdeclaration, connivance are intended to be raised.

(23)That no specific provision of law was quoted in the seizure report as to whether the appellants were guilty of offence falling under sub section 2 or 3 of section 32, it would therefore, be difficult to observe that whether the appellants had been guilty of misdeclaration, collusion, inadvertence, error or misconstruction.

(24)That any subsequent proceedings initiated against the appellants on the basis of seizure report and on the alleged charge of misdeclaration were without jurisdiction and in complete defiance and disregard of directions given by the FBR in para 101 of the CGO 12 of 2002 which was a binding effect on all its subordinate functionaries, when the goods were cleared under first appraisement system.

(25)That section 32 of the Customs Act, 1969 cannot be invoked only on the basis of valuation ruling because valuation rulings are estimates, if the same are not followed at the time of earlier appraisement, the same cannot be used against the appellants particular when such ruling is admittedly challenged before the Director General Valuation Custom House Karachi in terms of section 25-D of the Customs Act, 1969 and the said valuation Ruling No.581/2013 dated 16.0.13 never reached the hands of the appraising/assessing staff at Customs Dryport Sost as the same was evidently never endorsed to the Collector of Customs MCC Gilgit Baltistan by the Director Valuation Customs House, Karachi nor the same was ever endorsed to the Collector MCC Gilgit Baltistan by the Chief Collector of Customs MCC Islamabad to whom the same was endorsed.

(26)That sub-paragraph (g) of paragraph 7 of the impugned order is not sustainable in the eyes of law as it was incumbent upon the learned Collector of Customs (Adj) to have adopted a pragmatic course instead of disposing of the matter in an arbitrary and whimsical fashion and any order which is devoid of any evidentiary material or record and which do not meet the causes of natural justice is liable to be set aside.

3.On the other side the respondent department submitted the written reply wherein it is stated that in accordance with the directions of the Collector Customs adjudication a copy of the order-in-original was forwarded to the office of the Chief Collector North vide letter dated 01.01.2014 for further necessary action. It is further submitted that this ' appeal has been filed by Customs officials who are neither related to the case nor were mentioned in the seizure report/show-cause notice. The adjudicating authority directed to investigate the role of Customs staff in the case. The said investigation/inquiry is a departmental proceeding which is covered under the Esta code. It is added that in case the department holds an inquiry against the appellants and initiates disciplinary action, even then the appellants have departmental options available with them to defend themselves.

4.We have perused the record and heard the arguments of both the parties and have come to the following conclusions:--

That the impugned order has not stated any reason to come to the conclusion as stated in para 7 sub-clause 'g'. The entire judgment does not speak a word about the connivance between the concerned customs staff and importer/clearing agent. Resultantly conclusion reached at para 7 sub-clause 'g', being without any evidence on record amounts to non-speaking order, hence being expunged. Only to the extent of expunging sub-clause 'g' para 7, the impugned order is modified as a result of this appeal.

HBT/147/Tax(Trib.) Appeal allowed.