SHAHEEN CHEMICAL VS DEPUTY COLLECTOR OF CUSTOMS, 2017 PTD-CUSTOMS-APPELLATE-TRIBUNAL-LAHORE 2403 (2017)

Customs Act (IV of 1969)---

----Ss. 25, 79, 80, 157, 168, 193 & 194-A---Assessment of duty---Confiscation of goods---Importer filed Goods Declaration for the import of "Plastic Granules Recycled" and determined his liability of payment of applicable duty and taxes, and sought clearance under S.79(1) of the Customs Act, 1969---In order to ascertain correction of the particulars and amounts of duties and taxes, Goods Declaration was selected for scrutiny in terms of S.80 of the Customs Act, 1969---Importer had provided copy of the non-hazardous certification from the supplier, but same was not accepted---Case was adjudicated and goods were outrightly confiscated---Appeal filed by the importer against the impugned order was dismissed by the appellate authority---Validity---Importability of recycled plastic granules, was essentially governed by the condition, which condition had shown that "certificate" was required from the "exporting country" in respect of the impugned goods and not for any type of waste---Such a certification had undertaken that recycled plastic granules being exported to Pakistan were "free from hazardous substances"---In the present case, certificate by the exporting firm had been furnished with respective Trade Body's authentication; that alone was found to suffice the need for ensuring that the goods imported, were free from any hazardous substance, including any waste, which had been identified and listed in the "Basel Convention"---Same Clearance Collectorate had been accepting identical certificates in the past to allow import of recycled plastic granules---Impugned order was set aside as not maintainable in circumstances.

The State v. Zia-ur-Rehman and others PLD 1973 SC 49; 2009 PTD 1083; Lt. General (Retd.) Shah Rafi Alam v. Lahore Race Club 2004 CLD 373; East West Steamship v. Queen Land Insurance PLD 1963 SC 663; Sahibzada Sharfuddin v. Town Committee 1984 CLC 1517; Abida Rashid v. Secretary, Government of Sindh PLD 1995 Kar. 587; Assistant Director v. B.R. Herman Mohata Ltd. PLD 1992 SC 485; Central Insurance v. CBR 1993 SCMR 1232; Nazir Ahmed v. Federation of Pakistan and 11 others PLD 1970 SC 453; 2002 PTD 976; 2002 SCMR 312; 2009 PTD 1507 and 2005 SCMR 492 ref.

Nadeem Mirza for Appellant.

Abid Shah, A.O. for Respondents.

Date of hearing: 13th December, 2016.

JUDGMENT

ZULFIQAR A. KAZMI, MEMBER (TECHNICAL-I).---By this judgment I intend to dispose of the instant appeal filed by the appellant, against Order-in-Appeal No. 349/2016 dated 05.04.2016, passed by the Collector of Customs (Appeals), Karachi.

2.Brief facts of the case on record are that the appellant filed Goods Declaration GD No. KAPE-HC-92850 dated 07.01.2016 for the import of PLASTIC GRANULES RECYCLED from UNITED ARAB EMIRATES, against IGM No. 432, dated 04.01.2016, Index No. 89 with unit value @ US$ 0.55/kg and total value of US$ 14498.00 under PCT heading 3901.9000, Chargeable to CD @ 05%. The appellant determined his liability of payment of applicable duty and taxes and sought clearance under Section 79(1) of the Customs Act, 1969. In order to ascertain correctness of the particular and amounts of duties and taxes, the GD was selected for scrutiny in terms of Section 80 of Customs Act, 1969. It was observed that in terms of Serial No. 52 of Part-I of Appendix-B of the Import Policy Order, 2013 (the I.P.O), it was laid down that Granules made by recycling of plastic "waste" are:--

"Importable subject to certification from the exporting country that the granules being exported are free from hazardous substance as defined in Basel Convention. Customs Authorities shall ensure strict compliance of the condition."

3.The appellant provided copy of the Non-hazardous Certification from the supplier Messrs VAZIR PLASTIC FACTORY, but it was not accepted as not having been provided by an appropriate authority. The case was adjudicated and goods were outrightly confiscated vide Order-in-Original No. 488489 dated 01.03.2016.

4.Appeal filed by the appellant under section 193 of the Customs Act, 1969 was dismissed by Collector (Appeals) vide the impugned order. Concluding part of this Order is reproduced as under:--

I have examined the record. The appellants imported recycled plastic granules from UAE. The import of impugned goods is permissible subject to serial No. 52 of Part-1 to appendix-B of the IPO. It is the case of appellants that since they have provided certification of hazard free goods from the consigner or chamber of commerce is of no consequence as these are not governmental agencies. The appellants have placed on record documents pertaining to following GD's, wherein the department has accepted suppliers certification, endorsed by Chamber of commerce; KAPE-HC-141583-13052015, KAPE-HC-6272-13.07.2015, KAPE-HC-146158-21052015, KAPE-HC-67368-18112015, KAPW-HC-110328-17122015, KAPW-HC-110228-17122015, KAPW-HC-107744-07012016, LAPR-HC-9481-08012016, LAPR-HC-9713-12012016, KAPW-HC-128737-12012016, KAPW-HC-134569-19012016, KAPW-HC-137499-22012016, KPPI-HC-43657-08022016 and KPPI-HC-4486-12022016. It is an established position that aforesaid provision in the IPO was created to give effect to binding commitments under the "Basel Convention on the Control of Trans- boundary movement of hazardous wastes and their disposal". The state of export is required to notify through the channel of "component authorities" about trans boundary movement of hazardous waste or other wastes as per annex V-A of the convention. The "competent authority" and "focal points" are designated by the signatory countries in accordance with Article 5 of the convention. The competent authority and focal point for UAE is the International Cooperation Department, Ministry of Environment and Water, Abu Dhabi, UAE. In view of the above the respondents are justified in ignoring the certification by unconcerned persons and organization. I therefore, hold that there is no infirmity or illegality in the original order, the same is upheld."

5.Being aggrieved, the appellant has preferred this appeal on 26.04.2016, mainly on the following grounds;

i.that the Collector (Appeals) has intentionally and willfully ignored the fact that in the show-cause notice and order-in-original the respondent No. 2 has invoked Section 16 of the Customs Act, 1969 without going through its expression, reading as "Power to prohibit or restrict importation and exportation of goods :- The {Federal Government } may, from time to time by notification in the official Gazette prohibited or restrict the bringing into or a taking out of Pakistan of any goods of specified description by air , sea or land.". From plain reading of the Section, it is observed that this section is incorporated in 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. Invoking of the said section rendered the show-cause notice, null, ab-initio and void.

ii.that the show-cause notice under Section 180 of the Customs Act, 1969 in the case of appellant was issued by the Assistant Collector of Customs, while driving power from Section 179 ibid. Hence, the order has to be passed by him only not by Deputy Collector, which he did in the said capacity while usurping the powers of his subordinate, which are specific and to be exercised by him only and by none else as held by Supreme Court of Pakistan in reported judgment PLD 1973 Supreme Court 49 The State v. Zia-ur-Rehman and others and 2009 PTD 1083 held that "Superior authority cannot exercise the power of his subordinates for adjudication purpose powers of sub-ordinate exercise by superior authority is held as without jurisdiction beside usurpation".

iii.That in addition to the referred in above illegality, it is imperative for the appellant to add further that neither respondent No.1 nor Deputy Collector have any powers under section 179 of the Customs Act, 1969 by virtue of no involvement of duty and taxes and the case in question falls within the ambit of Section 80 of the Customs Act, under which the powers are vested with the Principal Appraiser vide Notification S.R.O. No.371(I)/2002 dated 15.06.2002. to be read with Section 2(a) ibid. Meaning thereby that he is the only authority to proceed in the matter instead of respondent and Order issuing authority, because it is settled elementary principle of law that action of executive functionaries are to be restricted to specific sphere permitted by the statute. In Serial No. 80 of S.R.O. 371(I)/2002 dated 15.06.2002 neither respondent nor order issuing authority figure anywhere, rendering the show-cause notice as well as the order-in-original without power/jurisdiction, hence null void and ab-initio.

iv.That the opinion often adopted by the respondent/Deputy Collector and your authority that superior authority can exercise the powers of their subordinate under Section 4 of the Customs Act, 1969 is considered valid for a while then the hierarchy of distribution of jurisdiction explicitly provided by section 179 of the Act and S.R.O. 371(I)/2002 dated 15.06.2002 shall be rendered redundant. Also the consequent result would be a total anarchy where the superior/subordinate officers would be making all efforts to exercise the adjudication powers clearly conferred by law upon their subordinates/ superiors. The powers of adjudication are specific and empowered by the statute. It is an elementary principle of law that where there is a conflict between special and general provision of law, the special provision shall prevails (reference is invited to the case of Lt. General (Retd) Shah Rafi Alam v. Lahore Race Club 2004 CLD 373). The power of adjudication, as already observed ,is special in nature. This cannot be eclipsed by any other general provision. Even otherwise there is another settled principal of interpretation of statute i.e. that the courts can supply construction with a view to avoiding absurdity (reference is invited to the case of Khalid Qureshi v. UBL 2001 SCMR 103). Equally it must be kept in mind that if it is held that sections 4 and 179 occupy the same fields, there is likely to be redundancy in respect of powers conferred under section 179 and S.R.O. 371(I)/2002 dated 15.06.2002. The Supreme Court in the case of East West Steamship v. Queen Land Insurance PLD 1963 SC 663 has been pleased to hold that redundancy is to be avoided in respect of any provision of the statute. There is also plethora of case law on the point that where there is a conflict between two provisions of the statutes, the later provision prevails and has to be given precedents (reference is invited to the case of Sahibzada Sharfuddin v. Town Committee, 1984 CLC 1517. Apart from this law favor actions of the authorities to be confined to their own spheres of jurisdiction conferred by the statute. An action taken by a state functionary beyond the ambit of his jurisdiction is nullity. In this respect the judgment reported as Abida Rashid v. Secretary, Government of Sindh PLD 1995 Kar. 587 is referred.

v.That while dealing with the powers of adjudication, it is needless to observe, that our Supreme Court has jealously guarded the same. Assistant Director v. B.R. Herman Mohata Ltd. PLD 1992 SC 485 a full bench of Supreme Court was pleased to observe that section 223 of the Customs Act, 1969 could not be employed so as to interfere with the judicial or quasi judicial functionaries. It was clearly observed that the power of the CBR as to prescribed guideline were not relevant for the exercise of judicial function. To similar effect is the judgment of Supreme Court reported as Central Insurance v. CBR 1993 SCMR 1232. In this case the CBR issued direction for the reopening of Income Tax Assessment under section 65 of the Income Tax Ordinance, 1979. It was held by the Supreme Court that the CBR did not figure in the hierarchy of the officer provided in the statute for the purpose of assessment and adjudication. On the basis of this it was held that the directions of the CBR to reopen the assessment was without jurisdiction and the adjudication officer was directed to apply its own mind.

vi.It is erroneous on the part of respondents to construe that the laid down against Serial No. 52 of Part I of Appendix-B of the Import Policy Order, 2013 in regards to certification of exporting country means certification by government authority or any other department/agency/authority authorized by the exporting country to the effect that the granules made by recycling of plastic waste are free from hazardous substance as defined in Basel Convention, if that would had been the case the goods in question would had not been allowed to be exported by the customs authority of the exporting country. The rationale and lawful interpretation of the said condition means that the said certification for the satisfaction the Customs Authorities of Pakistan has to be issued by the exporter under certification of the Chamber of Commerce and Industries of the country of export i.e. U.A.E., as evident from submission made in para supra, which is present in the face of the appellant and that certification fulfill the condition laid down in Serial No. 52.

vii.That The stance of the appellant stood validated from the fact that all the Clearance Collectorate of Pakistan are regularly allowing clearance of the product in question on the strength of certificate issued by the exporter duly certified by the Chamber of Commerce and Industry.

viii.That The existing departmental constructions since many year in such type of cases is as narrated in para supra, from which no deviation can be made and this has been held in reported judgment PLD 1970 Supreme Court 453 Nazir Ahmed v. Federation of Pakistan and 11 others.

ix.That by issuing show-cause notice and passing order-in-original/appeal, the respondents not only departed from the existing practice, which is not permissible as per law laid down by the Apex Court but also gave a differential treatment to the appellant, which falls within the ambit of discrimination barred under Articles 4 and 25 of Constitution of Islamic Republic of Pakistan and the law laid down by Superior Judicial Fora, reference is placed to the reported judgment 2002 PTD 976 wherein, their lordship held "vacating the show-cause notice in one case and taking action against another person in similar situation, is amount to discrimination which is hit by Article 25". In reported judgment 2002 SCMR 312 and 2009 PTD 1507 the Hon'ble Superior Courts "there exist no power to target incidence of tax in such a way that similarly placed person be dealt not only this similarly, but discriminatingly". Whereas, in reported judgment 2005 SCMR 492 the Hon'ble Supreme Court held that "A facility allowed to some one and denied to other is discrimination".

x.The order passed by the respondent No. 3 shows that it has not been passed with the application of mind and provision of the Act. Instead is a non speaking order and did not conforms to the mandated requirement of section 24-A of the General Clauses Act, 1897 and this stood validated from the fact that no rebuttal on grounds of appeal have been made in the order nor any reasoning/rationale have been adduced for ignoring the copies of the citation supplied to him. The respondent No. 3 instead passed the impugned order on personal absurd opinion contrary to law and that too also is not containing substantial reasons and did not shows it was passed on objective consideration stood validated from it contents. Such type of orders are deems to be always treated as illegal, void arbitrary and a result of misuse of authority vested in public functionary. No room was available for such illegal, void and arbitrarily order in any system of law. If any authority Court or Tribunal gave a finding of fact which was not based on material available on record was illegal arbitrarily without discussing and considering the material available on record it became perverse and a perverse finding of fact which is violative of the established principle of appreciation of evidence on record was not sustainable in law. The principle that every judicial or quasi-judicial finding should be based on reasons containing the justification for the finding in the order itself is an established principle of dispensation of justice. The Adjudication/Appellate orders are being violation of basic principle of the goods governance and mandatory requirement of section 24A of the General Clauses Act, is not only illegal and void but also not sustainable under law.

5.Final hearing in the case was held on 13.12.2016 when Mr. Nadeem Mirza, Consultant, appeared on behalf of the appellant. He elaborated the facts and grounds given in the appeal and also placed on record various judgments of higher fora and copies of identical certificate from the exporters which had been accepted and recycled plastic granules had been allowed import on such certificate in the past to support of his contention. Mr. Abid Shah, A.O represented the respondent. He defended impugned Order and insisted that requisite certificate should have been given by the Government of the country of export. When confronted with the identical certificates accepted by the department in identical cases earlier, the officer could not rebut the same.

6.Record of the case has been carefully examined and the arguments putforth by the appellant have been given duly considered. It is observed that importability of recycled plastics granules is essentially governed by the condition given in column (4) against S. No. 52 of the Table at Part-I of Appendix-B to the I.P.O. This condition is quoted in the impugned order and at para 1 of this Order as well but it needs to be reproduced hereunder for another reading and ready reference as the whole case is pivoted upon this conditions:--

"Importable subject to certification from the exporting country that the granules being exported are free from hazardous substance as defined in Basel Convention. Customs Authorities shall ensure strict compliance of the condition."

7.A plain reading of this condition shows explicitly that "certification" is required from the "exporting country" in respect of the impugned goods and not for any type of waste. Such a certification has undertake that recycled plastic granules being exported to Pakistan are "free from hazardous substances as defined in Basel Convention". The certificate provided by the appellant does state this. It's contents are reproduced as under;

"Invoice No. 144 date 29.12.2015, is RECYCLED GRANULES UNEVEN SIZE AND IRREGULAR SHAPE PACKED IN NON STANDARD PP WOVEN BAGS it consist of those fractions of plastics generated by various plastic processing operation in a plant which have not been put to any use which are recycled in to viable commercial product using standard plastic processing techniques and does not involve any process whereby effluents are generated. We also further confirm that the material is free any toxic/non-toxic contamination and has not been put to any previous use whatsoever as required under Basel Convention."

8.Here it is essential to read the deliberation given by the Collector (Appeals) in concluding the impugned order. It states as under:--

"It is an established position that aforesaid provision in the IPO was created to give effect to binding commitments under the "Basel Convention on the Control of trans Boundary movement of hazardous wastes and their disposal". The state of export is required to notify through the channel of "component authorities" about trans boundary movement of hazardous waste or other wastes as per annex V-A of the convention. The "competent authority" and "focal points" are designated by the signatory countries in accordance with Article 5 of the convention. The competent authority and focal point for UAE is the International Cooperation Department, Ministry of Environment and Water, Abu Dhabi, UAE. In view of the above the respondents are justified in ignoring the certification by unconcerned persons and organization. I therefore, hold that there is no infirmity or illegality in the original order, the same is upheld."

9.This has led the undersigned to read all the TEXTS and ANNEXES of this convention to actually find out as to where such a binding on such imports has been placed which transgresses and over-side the only statutory document which regulates imports and its restriction and conditionality for all national needs, including the HEALTH AND SAFETY reasons of its land and people. This reading provides various codes to all the wastes which may be created du tot any process. The Basel Convention does not focus 'recycling' of industrial raw-materials, per say coming back to the I.P.O it is observed that condition goods at S. No. 52 of Part-I of its Appendix.

10. The condition of certification does not dilate upon an such specific 'authority' or 'annex V-A of the Convention' or any 'focal point' or a "designated authority". Hence IPO and its conditions, as understood and conceived by the undersigned, are to be read as such and not between the lines. This understanding is supported by the contents of IPO itself as for certain identically hazardous substance listed at S. No. 51 of Part-I of Appendix-B, the conditions are as given under:--

11.As can be seen here, the entry relates to "wastes" as against "recycled granules" mentioned in S. No. 52. And for such wastes the certification regime is stricter and narrower, allowing only their industrial importers to bring such goods with pre-determined requirement by the Government and inspections as well.

12.It is essential also note that the "BASEL CONVENTION ON THE CONTROL OF TRANSBOUNDARY MOVEMENTS OF HAZARDOUS WASTES AND THE DISPOSALS" is an international instrument, to which Pakistan is also a party. It is basically a "Protocol on liability and compensation for damage resulting from Transboundary movement of "hazardous wastes and their disposal" under the United Nation.

13.The upshot of these deliberation is that in this case of import of "recycled plastic granules" the certificate by the exporting firm has been furnished with respective Trade Body's authentication and it alone is found to suffice the need for ensuring that the goods imported are free from any hazardous substance, including any waste, which has been identified and listed in the Basel Convention. More importantly, the same clearance Collectorate has been accepting identical certificates in the past to allow import of recycled plastics granules upon satisfaction of the given I.P.O. restriction/condition. In view of the grounds given in the appeal and deliberations narrated hereinabove I find no reason to uphold the impugned order. The appeal succeeds hence the impugned Order is hereby set-aside as not maintainable.

14.Judgement passed and announced accordingly.

HBT/6/Tax(Trib.) Appeal allowed.