The COLLECTOR OF CUSTOMS, MODEL CUSTOM COLLECTORATE, HYDERABAD VS BYCO PETROLEUM (PVT.) LTD., 2017 PTD-KARACHI-HIGH-COURT-SINDH 1297 (2016)

Customs Act (IV of 1969)---

----Ss. 2(s), 187 & 196---Reference---Smuggled goods---Proof---High Speed Diesel recovered from respondent was alleged to be smuggled from foreign country but Customs Appellate Tribunal set aside order-in-original---Validity---Receipt of Goods Transfer Note produced by respondent to adjudication authority was duly verified from Petroleum Company and the same was found to be genuine, whereas oil and trucks were intercepted within the local city limits---High Court declined to interfere in order passed by Customs Appellate Tribunal as there was no error or illegality in the same---Authorities did not raise any question of law, arising from order passed by Customs Appellate Tribunal, which was based on findings of fact and there was no misreading or non-reading of evidence---Reference was dismissed in circumstances.

Deputy Collector of Customs and Sales Tax and Central Excise (Adjudication) Quetta at Hyderabad v. Nak Muhammad and others Civil Appeal No.1585 of 2006; Central Board of Revenue and others v. Messrs Al-Hajj Enterprises and another Civil Petition No.869 of 2006; Collector Customs Sales Tax and Central; Excise Qeutta v. Naimatullah 2003 PTD 2118; PLD 1970 SC 282; 1956 Cal. 553 and Collector of Customs, Customs House Peshawar and others v. Zarshad and others 2006 SCMR 973 ref.

Kashif Nazeer for Applicant.

ORDER

1.Urgent application is granted.

2.Deferred for the time being.

3.Exemption application is granted subject to all just exceptions.

4 & 5. Through instant reference, following questions have been proposed, which according to learned counsel for the applicant, are questions of law, arising from impugned order passed by the Customs Appellate Tribunal.

a)Whether the learned Customs Appellate Tribunal Bench-I has misinterpreted the spirit of section 2(s) of the Customs Act, 1969 and sub ordinate legislation made there under, wherein smuggled notified goods falling under clause (s) of section 2 of the Customs Act, 1969 and the vehicle used for transportation and carrying of smuggled notified goods with clause (b) of S.R.O. 499(I)/2009 dated 13.06.2009, is also legally liable to out right confiscation?

b)Whether the learned Appellate Tribunal has bonafidely considered that Seizing Agency had successfully discharged the onus of burden of proof under section 187 of the Customs Act, 1969, before Adjudicating authority by the department?

c)Whether the impugned order of learned Customs Appellate Tribunal also failed to appreciate the settled principle that the initial burden is on respondent, but passed on conjecture, surmise, without application of mind, rather than application of facts and application of law of Articles 117, 119 and 121 of Qanun-e-Shahadat, 1984, as well as the dictum and principles settled by the Hon'ble apex Court in Civil Appeal No. 1585 of 2006, Deputy Collector of Customs and Sales Tax and Central Excise (Adjudication) Quetta at Hyderabad, v. Nak Muhammad and others and Civil Petition No. 869 of 2006, Central Board of Revenue and other v. Messrs Al-Hajj Enterprises and another and 2003 PTD 2118 (Collector Customs Sales Tax and Central, Excise Quetta) v. Naimtullah?

d)Whether the learned Customs Appellate Tribunal and adjudicating authority both have over looked an irrefutable lawful evidence successfully produced before the adjudicating authority in view of Articles 117, 119 and 121 of Qanun-e-Shahadat, 1984, in shape of a report of the off route movement of oil tanker in question against its destination i.e. Sheikhupura as mentioned in the Goods Transfer Note issued by Byco Company?

e)Whether the learned Customs Appellate Tribunal has misconstrued and ignored the facts and warrant of law that 60,000 liters High Speed Diesel loaded in the subject oil tanker established to be smuggled through mensrea of the carrier of goods as an agent of the owner of case property without any inquiry released the said HSD and oil tanker by its impugned order in Violation of Sections 2(s) and 157(2) of the Customs Act, 1969 and clause (b) of S.R.O. 499(I)/2009 dated 13.06.2009, which is also violative against the spirit of judgment of Hon'ble Apex Court (PLD 1970 SC 282) and (1956 Cal 553) or otherwise?

f)Whether the learned Customs Appellate Tribunal themselves ought to judge the mensrea of the owner of HSD and oil tanker by conducting separate inquiry to reach at the bona fide and lawful conclusion with regards to credibility of its order, failing which the impugned order appears against the principle and dictum settled by the apex Court in their judgment 2006 SCMR 973 Collector of Customs, Customs House Peshawar and others v. Zarshad and others?

g)Whether the impugned order of the learned Customs Appellate Tribunal missed the purported remand to the original Adjudication Authority for independent inquiry or otherwise?

2(sic). Learned counsel for the applicant has read out the impugned order, passed by the Customs Appellate Tribunal Bench-I, Karachi, as well as the Order-in-Original No.31/2015-16 dated 25.11.2016, passed by the Collector of Customs (Adjudication) Quetta in the instant case, and submitted that the Customs Appellate Tribunal, was not justified to set-aside the Order-in-Original, whereby, according to learned counsel, the allegation of smuggling Iranian Oil were established against the respondent, as the respondents could not discharge the burden of proof in terms of section 187 of the Customs Act, 1969. It has been prayed that questions proposed may be answered in favour of the applicant and against the respondents.

3.We have heard learned counsel and perused the record. From the perusal of impugned Judgment dated 26.03.2016, passed by the Customs Appellate Tribunal Bench-I, Karachi, in Customs Appeal No.H-110/2016, it appears that decision of the Appellate Tribunal is based on findings on facts, whereas, no substantial questions of law arise from impugned judgment. Various illegalities and errors have also been pointed out by the Appellate Tribunal in the Order-in-Original, passed by the Collector of Customs (Adjudication), Quetta, in the instant case. It will be advantageous to reproduce the relevant findings of Appellate Tribunal, as contained in paragraphs 9 to 12 of the impugned order, which reads as follows:--

"09. After going through the arguments extended by both the parties as well as contents of grounds placed on record, it has been noticed and observed that the present case was framed by the Department/Seizing Agency on the ground that the HSD oil was smuggled, non duty paid and brought into country other than the specified route. It is also evident from the record that the subject HSD oil along with oil tanker was intercepted within the city area, that very fact was not controverted nor been rebutted or discredited by the seizing agency through any iota of evidence. Even otherwise, for the reasons better known to the seizing agency/appellant are hopelessly failed to specify the reasons how they came to the conclusion that the said seized HSD oil is of foreign origin and smuggled one. All these facts are mis-conceived from the original facts of the case as such statements are not to be treated as legal evidence for dispensation of justice. The important responsibility left on part of the seizing agency why they have not recovered the samples from the said seized HSD oil for requisite analysis or testing from the forensic laboratory? All such deficiencies found and observed thereon, discredited the levels of allegations allegedly imposed by the appellant against the respondent in the show cause notice, it is also observed from the contents of the show cause notice that without getting the verification of the documents charges were leveled against the respondent, all such allegations are purely based on fictitious and presumptions and under the circumstances found without lawful authority, false, concocted and falls under the dictum of law "corum non judice".

10. It has been observed that during hierarchy of the customs before passing the Order-in-Original, the seizing agency submitted the test report issued by Hyderocarbon Development Institute of Pakistan, copy of the same was also submitted before this august Tribunal. The report of the said test has categorically stated that "to the extent of tests carried out, sample results meet the GOP specification for High Speed Diesel (HSD). "As approved by DG Oil, Ministry of Petroleum and Natural Resources. It is also evident from the record of the case that the 'Good Transfer Note' issued by the company are not fake as described in the show cause notice. In presence of legitimate documentary evidence in proof of the claim made by the respondent, the Department/ seizing agency has not been able to place a single proof to controvert the authenticity of subject evidence. Once it is established that these goods HSD oil was being transported under the valid "Goods Transfer Note", then the allegations attributed against the respondent allegedly made by the seizing agency does not have any warrant of law to be considered admissible.

11. It is mandatory requirement under section 180 of the Customs Act, 1969 that the Show Cause Notice shall be issued for all proper, lawful and legal adjudication of any matter when there is no charge allegedly made or constituted against the owner. The confiscation of the goods or imposition of penalty on any person is barred under the law. Consequently, adjudicating officer could not pass order for confiscation of the goods. It is a legal lacuna which cannot be cured at all. In view of the pronouncements made by the august Supreme Court of Pakistan in the case of Haji Abdullah Jan and others (1994 SCMR 749). It is well settled principle of law that, if the law had prescribed method for doing a thing in a particular manner such provision of law is to be followed in letter and spirit and achieving or attaining the objectives performing or doing a thing in a manner other than provided by law would not be permitted, same view also decided in the hall mark judgment of Director, Directorate General of Intelligence and Investigation and others v. Messrs Al-Faiz Industries (Pvt.) Ltd. and others reported as 2006 SCMR 129.

12. Even otherwise, coming towards the aspect of charges attributed against the respondent through show cause notice, section 2(s) clearly depicts that smuggling means bringing into or take out of Pakistan in breach of any prohibition or restriction for time being in force (enroute pilferage of transit goods) or evading payment of customs duties and taxes leviable thereon. Scrutiny of document clearly reveals that neither the impugned goods were banned, nor brought from unauthorized route (verified documents are privy to it) nor any duty was evaded on this account, therefore, section 2(s) of the Customs Act, 1969, is not attracted in this case and the respondent denies any violation. Similarly, section 16 of the Customs Act, 1969, has not been violated. The penal clause 156(1)(8) (which was invoked for violation of section 2(s) is also not relevant as the impugned goods are lawfully imported into Pakistan. Similarly, section 156(1)(89) is also not relevant as the impugned goods are not smuggled by any standard as the relevant documents are on record. Similarly, no violation of section 3(1) of Import and Export (Control) Act, 1950, is visible as the goods were lawfully imported complying all the dictates of law."

4.While, confronted with the observations and findings as recorded by the Customs Appellate Tribunal, as referred to hereinabove, learned counsel for the applicant could not point out any error or illegality in such findings, which prima facie, are based on the material available on record, particularly, the test report of HDIP laboratory which was in favour of the respondents. The receipt of Goods Transfer Note produced by the respondent to the adjudicating authority was also duly verified from Messrs Byco Petroleum (Pvt.) Limited and the same was found to be genuine, whereas, the oil and the trucks were intercepted within the local city limit. It will be relevant to reproduce the finding of the Appellate Tribunal relating to test report of the oil and the Goods transfer receipt, which reads as follows:--

"The report of the said test has categorically stated that "to the extent of tests carried out, sample results meet the GOP specification for High Speed Diesel (HSD). "As approved by DG Oil, Ministry of Petroleum and Natural Resources. It is also evident from the record of the case that the 'Good Transfer Note' issued by the company are not fake as described in the show cause notice."

It appears that there was no adverse material or evidence whatsoever, available with the applicant department to establish the case of smuggling against the respondent. The Customs Appellate Tribunal after having examined the entire material and the documents available on record has recorded its findings by placing reliance on the decision of superior Courts on the subject controversy, which reliance is well placed to the facts of instant case.

5.Accordingly, we do not find any error or illegality in the impugned order passed by the Customs Appellate Tribunal in this case, which does not require any interference by this Court, whereas, no questions of law, as proposed through instant reference, arise from the impugned order passed by the Customs Appellate Tribunal, which is based on findings of fact, which otherwise, does not suffer from any error, nor the learned counsel for the applicant could assist this Court as to how such finding of facts is based on mis-reading or non-reading of evidence. Accordingly, instant reference application being devoid of any merits, is hereby dismissed in limine along with listed application.

MH/C-17/Sindh Reference dismisse