RIGHTWAY TRADING COMPANY, KARACHI VS The DEPUTY COLLECTOR OF CUSTOMS, 2018 PTD-CUSTOMS-APPELLATE-TRIBUNAL-LAHORE 1318 (2016)

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

----Ss. 18, 19, 20, 25, 32 & 80----Exemption from payment of customs duty and taxes---Renewable energy equipment---Question before the Tribunal was whether exemption of customs duty, sales tax and income tax was admissible on import of renewable energy equipment for installation of solar system in conformity with provisions of serial No.24 of the Second Schedule to the Customs Act, 1969"---Held, Collectorate had no reason to deny the exemption with no conditions attached for allowing exemption except certificate from Chief Executive Officer, Alternate Energy Development Board regarding the commensuration of the quantities imported---Question was answered in the affirmative.

[Case-law referred].

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

----Ss. 18, 19, 20, 25, 32 & 80----Exemption from payment of customs duty and taxes---Commensuration letter against importer by Alternate Energy Development Board---Scope---Question before the Tribunal was "whether the commensuration letter against the importers' application confirming that goods imported against the bill of lading were exempted from payment of customs duty and sales tax in its entirety was factually issued by the office of the Chief Executive Officer Alternate Energy Development Board"---Held, scrutiny of the letter issued by the office of Chief Executive Officer, along with the connected record of the case indicated that said letter could not have been prepared and scanned by the importer/Clearing Agent since they did not have access to the office of the Chief Executive Officer---Said fact could not be proved either by Chief Executive Officer as well as the two inquiry reports---Various documentary evidence on record indicated that said letter was factually issued from the office of Chief Executive Officer and the importer/Clearing Agent had no role, either in its preparation, posting or scanning---Question was answered in the affirmative.

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

----Ss. 18, 19, 20, 25, 32 & 80----Exemption from payment of customs duty and taxes---Issuance of Second Commensuration letter against importer by Alternate Energy Development Board---Scope---Question before the Tribunal was "whether second commensuration letter against the importer's application issued by the same Assistant Director of Chief Executive Officer's office with lesser quantities of renewable energy equipment already earlier notified by the first letter, could be termed a legally admissible document"---Held, second commensuration letter against Importer's application was issued by the said office---Letter was also issued by the Office of Chief Executive Officer without withdrawing the first letter, which was already issued by the Office of Chief Executive Officer and was in field for all legal practical purposes---Said letter was branded fake and forged and the importer was blacklisted for all their incoming and future consignments to cover the irregularities committed by personnel working at the office of Chief Executive Officer---Vested rights so created and acquired by the importer could not be disturbed or taken away by issuance of letter withdrawing the first letter---Question was answered in the negative.

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

----Ss. 18, 19, 20, 25, 32 & 80----Exemption from payment of customs duty and taxes---Appointment of Adjudication officer as an officer of Inland Revenue---Requirement---Scope---Question before the Tribunal was "whether, Adjudicating Officer had been appointed as an Officer of Inland Revenue under S.30 of the Sales Tax Act, 1990 and S.207 of the Income Tax Ordinance, 2001, and could exercise powers under the provisions of Ss.11 & 162(1) of the Income Tax Ordinance, 2001"---Held, adjudicating authority had invoked Ss.3, 6, 11(c) & 37 of Sales Tax Act, 1990 and S.148 of the Income Tax Ordinance, 2001---Counsel for the importer, had contended that Adjudicating Officer had not been appointed as Officer of Inland Revenue under S.30 of the Sales Tax Act, 1990 and S.207 of the Income Tax Ordinance, 2001, therefore had no powers to proceed in the matter of sales tax and income tax under the sections invoked in the show-cause notice for short paid taxes---Clearance Collectorate, did have the authority to collect sales tax and income tax at import stage in the capacity of collecting agent and could recover escaped/short payment of customs duty and regulatory duty levied on the imported goods under S.18 of the Customs Act, 1969, however, under S.202 of the Customs Act, 1969 after due process of law, collectorate had no power to adjudicate the case of short recovery of sales tax and income tax under S.11 of the Sales Tax Act, 1990 & S.148 of Income Tax Ordinance, 2001---None of the said authorities had the powers to recover the arrears of said taxes on their own, unless they were in receipt of notice from the Officer of Inland Revenue and Commissioner of Income Tax under S. 48 of Sales Tax Act, 1990, S.148, Income Tax Ordinance, 2001--Resultant adjudication proceedings under S.11 of the Sales Tax Act, 1990 and S.148 of the Income Tax Ordinance, 2001, were not legal, justifiable and tenable in the eyes of law---Exercise of jurisdiction by adjudicating authorities, were without lawful authority and jurisdiction---Issuance of show-cause notice and passing of order-in-original was ab initio void and coram non judice---Question was answered in the negative.

[Case-law referred].

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

----Ss. 18, 19, 20, 25, 32 & 80----Exemption from payment of customs duty and taxes---Issuance of fabricated/forged commensuration letter by officer of Alternate Energy Development Board---Inquiry conducted by officers of the Board---Scope---Question before the Tribunal was "whether both the inquiries conducted by Officers regarding issuance of fabricated/forged commensuration letter, were fair and impartial and within the parameters generally observed by Inquiry Officers---Held, two inquiry reports on record had shown that inspite of irregularities committed in the office of Chief Executive Officer by various personnel, no responsibility had been fixed on any particular officer or official regarding issuance of first commensuration letter---All the officers and involved lower staff, inspite their participation in preparation of the said letter, had not been held responsible and recommended for any penal action---Responsibility of forgery was cast upon the importer/Clearing Agent solely because it appeared to be the sole beneficiaries---Inquiry report recommended blacklisting of the importer---Said recommendation itself was indicative of the fact that something went wrong in the office of Chief Executive Officer in preparation of the earlier commensuration letter, its scanning and dispatch to the representative of importer---Inquiries did not seem to be impartial and conclusive and put out the complete responsibility on the shoulders of the Clearing Agent and the importer, who had been unnecessarily victimized---Question was answered in the negative.

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

----Ss. 18, 19, 20, 25, 32 & 80----Exemption from payment of customs duty and taxes---Issuance of commensuration letter to importer and Clear Agent---Effect---Question before the Tribunal was "whether the issuance of commensuration letter made the importer and his Clearing Agent liable for any penal action within the ambit of mischief of S.32 of the Customs Act, 1969, and tantamount to misdeclaration---Held, commensuration letter, was issued by the office of Chief Executive Officer and the importer and his Clearing Agent had no part whatsoever in its preparation and scanning from the office of Chief Executive Officer---Clearing agent, uploaded the letter into WBOC System for claming exemptions of customs duty and taxes while filing Goods Declaration on receipt of the same from the importer's representative---No act of misdeclaration was committed by the importer or his Clearing Agent---Question was answered in the negative---Appellate Tribunal, however, observed that courts, being custodians of law, were required to maintain the norms of justice and equity---Litigants were to be respected not on account of court's power to legalize injustice on technical grounds, but to remove injustice---Orders passed during the hierarchy of customs, based on apparent breach of natural justice and law suffered from grave legal infirmities; were declared illegal, ab initio void and of no legal effect on various---Appeal was allowed---Authorities were directed to issue delay detention certificate in duplicate for shipping terminal, order accordingly counts.

[Case-law referred].

Muhammad Anan Moton for Appellant.

Faraz Qazi and Masood Ahmed A.O. for Respondents.

Date of hearing: 15th July, 2016.

JUDGMENT

MUHAMMAD NADEEM QURESHI, MEMBER (JUDICIAL-I).--By this order, we intend to dispose of the Customs Appeal No.K-1343/15 filed by Messrs Right Way Trading Company, Karachi, (NTN 2315531) under Section 194-A of the Customs Act, 1969 against Order-in-Original No. ONO-392026 dated 09.07.2015 passed by the Collector of Customs, Collectorate of Customs (Adjudication-I) Custom House, Karachi.

2. Brief facts of the case are that the Appellant M/s Right Way Trading Company filed Goods Declaration No KAPW-HC-14682 dated 24.7.2014 through his authorized clearing agent Messrs (Rempex Trading) electronically through WeBoc system of a consignment of Solar Panel (157watt and 165watt),Dry Battery 12 V-7AH, Dry Battery 12 V-50AH, Dry Battery 12 V-92AH, Dry Battery 12 V-100AH, Dry Battery 12 V-160AH,Dry Battery ,Solar LED lights , LED Fitting Fixtures. The details of consignment vide goods declaration Invoice No. AMGH/PAK486 and Bill of Lading No. HMDUKKKNO890454 are as under:--

USA Dollars:-- TWENTY THOUSAND FIVE HUNDRED FORTY FIVE CENTS ONLY $20580.45

3.The Appellant declared the solar panel under PCT Heading 8541.4000 and also claimed Custom 0% Sales tax @0% and Income tax @ 0% in terms of 5th Schedule (Part 24.6 of Table 1) 6th Schedule Sales Tax Act 1990.(15.6 of Table iii) Income Tax Ordinance, 2001 CL 77PT/4 2nd Schedule (Serial No 10). Item Nos. 3 to 8 as Dry Battery 12 Volt-7AH, 12Volt-50AH, 2Volt-92AH, 12Volt-100AH, 12Volt- 160AH. Custom duty @ 0% Sales Tax @0% and Income Tax @ 0% in terms of 5th Schedule (Part 24.6 of Table 1) 6th Schedule Sales Tax Act 1990. (15.6 of Table iii) Income Tax Ordinance, 2001 CL 77PT/4 2nd Schedule (Serial No. 10). Item Nos.9 and 10 declared as LED Tube Lights and LED fitting fixture declared under PCT Heading 9405.1090 carrying Custom duty @ 0% Sales Tax @0% and Income Tax @ 0% in terms of 5th Schedule (Part 24.2 of Table 1) 6th Schedule Sales Tax Act 1990. (15.2 of Table iii) Income Tax Ordinance, 2001 CL 77 PT/4 2nd Schedule (Serial No.10). The said GD was referred to physical examination staff for examination in order to check the tax liability in terms of Section 80 of the Customs Act 1969. The container No. DFSU6801823 got examined by the examination staff which reveals the detailed of found item the quantity, description, specification as per declaration. No controversial aspect was reported. That the Customs processing staff processed the said GD item Nos. 1 and 2 Solar Panel got classified under PCT Heading 8541.4000 carrying Customs duty @ 0%, Sales Tax @ 0% and Income Tax @ 0% % in terms of 5th Schedule (Part 24.6 of Table 1) 6th Schedule Sales Tax Act, 1990.(15.6 of Table iii) Income Tax Ordinance, 2001 CL 77PT/4 2nd Schedule (Serial No. 10) in accordance with the FBR letter No. 1(56) Mach/95 dated 7.8.2014 against undertaking and the rest of the items i.e. dry Battery re-chargeable sealed lead Acid and Solar LED Lights and LED fittings under PCT Heading 9405.1090 were assessed against statutory rate of duty Sales Tax and Income tax despite of the fact that the importer was entitled to get the benefit of Custom duty, Sales Tax and Income Tax in terms of 5th Schedule to the Customs Act, 1969 6th Schedule to the Sales Tax Act, 1990 on the strength of AEDB letter. That the Appellant uploaded the same AEDB letter in" WeBoC" system, which were provided by the importer. Subsequently, the Respondent Collectorate forwarded the same letter to the M/S Alternate Energy Development Board Islamabad for the verification of its authenticity/genuineness. The AEDB reported that the above mentioned ummensuration letter had not issued by them.

4.A show-cause notice was issued by the Adjudication Authority dated 30.4.2015 alleging that importer and clearing agent have attempted to defraud the Government exchequer, thereby alleging that Appellant and clearing agent had committed an offence under sections 32(1), 32(A) 32A(2), 79(1) and 192 of the Customs Act, 1969 read with Sections 3, 6, 11(c), and 37 of the Sales Tax, 1990 read with Section 148 of the Income Tax Ordinance, 2001 punishable under clauses (14), (14-A), (43) (77) and (86) of section 156(1) of the Customs Act, 1969, show-cause notice was issued to importer, Messrs Right Way Trading Corporation and a copy of the show-cause notice was forwarded to clearing agent. That the Appellant furnished reply in response to the allegation levelled vide aforesaid show-cause notice, rebutting the charges. That the Respondent adjudicated the case vide Order-in-Original No. 392026 dated 9.7.2015 by imposing penalty of Rs. 100,000/. upon Appellant (Clearing Agent) under clause 14 of section 156(1) of the Customs Act, 1969. Accordingly, the Collector of Customs (Adjudication-I) Custom House, Karachi adjudicated the case vide Order-in-Original No. 392026 dated 09.07.2015. The operative part of the order is reproduced as under:--

"On the issue of submitting fake/ fabricated document of AEDB dated 1.10.2014, it is a fact that the respondents scanned and uploaded the same using their unique user-ID; hence any claim to the contrary is without basis and an attempt to deflect the attention of these proceedings from their own misdemeanors. The Collectorate placed on record copy of the verification report from the Director (Solar) of AEDB confirming the fabricated/forged nature of AEDB letter No. 6/5/9/2013/exemp-RWT/ 002 dated 1.10.2014. Hence their attempt to obtain release on the basis of such an illegal document leaves no doubt as to their attempt to circumvent/escape the legal framework governing the instant imports. In view of above deliberation, it is evident that despondent importer has made mis-statement and made an attempt to evade legitimate government revenue by making in-admissible claim of Fifth Schedule of the Customs Act, 1969 and Sixth Schedule in the Sales Tax Act, 1990 on the basis of fake / fabricated AEDB certificate. The charges levelled in the Show-Cause Notice, thus, stand established. I, therefore, order for confiscation of the offending goods under clause (14) of Section 156(1) read with sections 32(1)(2) and 79(1) of the Customs Act, 1969. However, an option under section 181 of the Customs Act, 1969 is given to the respondent to redeem the confiscated goods on payment of Redemption Fine equal to 20% Rs.2,214,257/- (Rupees two million two hundred fourteen thousand two hundred and fifty seven) of the value of offending goods as assessed by the department in addition to payment of duty and taxes leviable thereon at statutory rate as specified in the first schedule to the Customs Act, 1969. I, impose a penalty of Rs.300,000/- (Rupees three hundred thousand) on the importer in terms of Section 156(1) clause (14) of the Customs Act, 1969. I, also impose a penalty of Rs. 100,000/- (Rupees one hundred thousand) on the Clearing Agent, whose role cannot be ignored as he acted in connivance with the importer, for violation of the aforementioned provisions of law. Total amount of penalty Rs.400,000/- (Rupees four hundred thousand).

5.Being aggrieved and dissatisfied with the Order-in-Original, the appellants filed the instant appeal before this Tribunal on the grounds mentioned in the Memo of Appeal.

6.On the final date of hearing dated 15.07.2016 Mr. Muhammad Adnan Moton, Advocate appeared on behalf of the appellant and reiterated the contents of the appeal and contended that, the Appellant is a commercial importer and deals in alternate energy products. During the course of his business activities he imported a consignment of solar system for installation at Dhadember Village located near Karor in Tehsil and District Rawalpindi as desired by his client Messrs Fazal Muhammad and Sons. Upon receipt of import documents the Appellant delivered those to his clearing agent Messrs Rempex Trading Karachi, who on the strength of those transmitted goods declaration under the provision of Section 79(1) of the Customs Act, 1969 and Rule 433 of Sub-Chapter-III of Chapter XXI to Customs Rules, 2001. He particularly emphasized on the exemption of Customs Duty on the subject goods under Serial No. 24 of the Second Schedule of the Customs Act, 1969, Serial No.15 of the Sixth Schedule of the Sales Tax Act, 1990 and clause 77 Part-(IV), Second Schedule of Income Tax Ordinance, 2001 since the exemption of duty and taxes claimed were as per statute solely for promotion of renewable energy purpose. There was no apparent requirement for fulfillment of any other formalities. Since the claim exemption was correct the Appellants Goods Declaration was numbered vide GD No. KAPW-HC-14682 dated 28.7.2014. That instead of completing assessment outright, the Appraiser officer of Respondent Collectorate opted to get the goods examined, which resulted in confirmation of the declaration of the appellant. The assessing Officer on 5.8.2014, passed assessment order under the provision of Section 80 and Rule 438 and while doing so he applied Valuation Ruling No. 620/2013 dated 12.12.2013 which was stale besides no nexus with the appellant's imported goods. Similarly, he disallowed the exemption on the pretext that the panels are manufactured in Pakistan as evident from incorporation in Serial No.25 of CGO. Like wise, the batteries were also denied exemption consequent to which appellant filed 1st Review under Rule 441, who rejected that, resultant, 2nd review was filed before Respondent Collectorate, who also rejected those while ignoring the serial No. of CGO.

7.He further argued that subsequently, the Respondent No.2, AEDB issued letter dated 1.10.2014, confirming that the goods imported by the Appellant are interconnected and for dedicatedly use for solar energy and as such is entitled for exemption of duty and taxes. However, Respondent No.2, AEDB forwarded yet another letter dated 2.10.2014 with modification to the Collector of Customs, MCC Appraisement West, without cancelling or withdrawing the letter dated 1.10.2014 after receipt of letter dated 1.10.2014. The Respondent Collectorate again passed assessment order once again against each item. Inspite of the said fact the Respondent Collectorate forwarded letter dated 1.10.2014 to Respondent No.2 vide their letter dated 15.11.2014 for verification, the Director of Respondent No.2 office disowned the said letter and term the same fabricated and forged vide letter dated 25.11.2014. This created enormous hardship for the appellant as the Respondent Collectorate established an FIR against the appellant, against which he had to obtain bail inspite of the matter under investigation in the office of Respondent No.2. The Respondent Collectorate framed contravention report and forwarded to adjudication Collectorate who issued show-cause notice dated 30.4.2015, reply of which was submitted by the Appellant vide their letter dated 14.5.2015 but of no avail and the adjudicating authority passed Order-in-Original dated 9.7.2015 against the appellant holding that the charged levelled in the show-cause notice stood established, result of which was that the goods so imported by the Appellant were ordered to be confiscated subject to redemption of those on payment of fine equivalent to 20% and imposed a personal penalty of Rs, 3,00,00/- on the Appellant. He also produced a copy of the letter dated 16.(sic).2015 addressed to CEO Respondent No.2 and eventually met the CEO who on the face of the letter issued autographic orders, which is self-explanatory and which is " what is the issue? Please, ensure, justice/ transparency and fair play none should be victimized. The CEO Respondent No.2 upon receipt of the direction informed the Appellant that an inquiry has already been ordered in the incidence, outcome of which shall be communicated to the appellant and the customs.

8.He also contended that Respondent Collectorate put and hold on the clearance of the Appellants goods on 26.11.2014, upon receipt of AEDB letter dated 25.11.2014. Such hold amount to notional seizure as held by High Court of Sindh in reported judgment PTCL 2005 CL 480 Syed Muhammad Razi v. Collector of Customs ( Appraisement), Karachi and 2 others. That by virtue of notional seizure the provision contained in Sections 171 and 168 of the Customs Act, 1969 comes into operation. Meaning thereby in the case of seizure of goods under Section 168 the reason are to be recorded and notice under Section 171 of the Customs Act, 1969 has to be served on the person from whose possession the goods are seized. In the instant case, inspite of notional seizure as far as 26.11.2014, the Respondent Collectorate once again seized the goods on 22.1.2015 under Section 168(1) which was not warranted as there exists no provision to pile upon another notice on the already existing virtual notice infield since 26.11.2014. Inspite of the said fact the said notice including the notice under Section 171 has been served on the Appellant to this date. Non serving the notice render the whole proceeding infested from legal infirmity and as such of no legal effect as held by Superior Judicial Fora in umpteenth reported judgment. In case of seizure under section 168(1) of the Customs Act, 1969, a show-cause notice under Section 180 of the Customs Act, 1969 by the authorities vested with powers under Section 179 ibid is also required to be issued within 2 months of the seizure of the goods subject to extension for further two months based on exceptional circumstances by the Collector of Customs after giving notice to the respective person as per law laid down by the Supreme Court of Pakistan in reported judgment 1999 SCMR 1881 Khalid Mehmood v. Collector of Customs, Custom House, Lahore and recording of those exceptional circumstances. That the entire period of 4 months stood lapsed on 26.3.2015 from notional seizure dated 26.11.2014. To, the contrary, the show-cause notice by adjudicating authority has been issued on 29.4.2015 i.e. expiry of entire period of 120 days, rendering it time barred by 93 days from the date of expiry of initial period and as such without powers/ jurisdiction, hence void and ab-initio as held by Superior Courts in umpteenth number of judgments reported as PTCL 1998 CL 435, 2005 PTD 23, PTCL 2005 CL 480 and 2007 PTD 2092. The Adjudicating Authority is not appointed as Officer of Inland Revenue under Section 30 of the Sales Tax Act, 1990 and Section 207 of the Income Tax Ordinance, 2001 and as such is not empowered to issue show-cause notice and pass order in original relating to matters of Sales Tax and Income Tax under Section 11 of the Sales Tax Act, 1990 and Section 162(1) of the Income Tax Ordinance, 2001. Hence, by issuing show-cause notice with the inclusion of amount of Sales Tax and Income Tax, the adjudicating authority usurped the powers of Officer of Inland Revenue to which he is not vested, rendering the show-cause notice and order-in-original being in flagrant violation of law and as such coram non judice as held by the judgments of Superior Judicial Fora and Apex Court reported as PLD 1971 SC 184, PLD 1976 SC 514, 2004 PTD 624, PLD 2004 SC 600, PLD 2005 SC 842, 2010 PTD 465 and 2010 PTD (Trib.) 1636. That invoking of Section 79(1) of the Customs Act, 1969 in the show-cause notice by the adjudicating authority is out of context due to the fact that the said section contains procedure for filing Goods Declaration for home consumption under the said Section and Rule 433 of Sub-Chapter III of Chapter XXI of the Customs Rules, 2001. No charge can be levelled under the said Section by virtue of the fact that it is not a charging Section instead machinery. The declaration filed by the appellant is in conformity with the import documents and he has even not made any procedural contravention in filing the Goods Declaration, rendering the invoking of Section 79(1) without lawful authority and jurisdiction.

9.He further contended that the adjudicating authority has also charged the appellant for violation of Sections 32 and 32-A of the Customs Act, 1969. That no misdeclaration in material particular has been made by the appellant while transmitting Goods Declaration under the provision of Section 79(1) and Rule 433 of the Act/Rules and the said fact stood validated from the examination report, confirming the imported goods as per declaration and the assessment order passed by respondent Collectorate or his subordinate containing no such remarks of misdeclaration. Letter of AEDB is not a declaration of the Appellant instead it has been prepared by the official of AEDB which was supplied to the Respondent Collectorate. The said documents least falls within the ambit of Section 32, due to the fact that appellant was not " knowing or having reason to believe" that the same has created some controversy in the AEDB. The provision of Section 32, infact contemplate, the existence of personal "knowledge." The respondents were not available with any cause or reason to disallow the exemption from payment of levy of Customs Duty, Sales Tax and Income Tax in the light of Serial No. 24 of the 2nd Schedule to the Customs Act, 1969, Serial No.15 of the Sixth Schedule to the Sales Tax Act, 1990 and clause 77 PT-VI 2nd Schedule Income Tax Ordinance, 2001 containing no condition for allowing exemption due to the reason that no string is attached with those as evident from the condition, which reads as "nil" and this was done for the reason that certification of the fact that the imported alternate energy product are easily verifiable. Taking shelter behind the certification by the office of Respondent No.2 is of no consequence and least nullify the condition boldly incorporated as "nil" further stood validated from the reported judgment 2014 PTD 796 Messrs Power Link v. Director General Intelligence and Investigation, wherein dispute was created that imported solar panel were not exempted under S.R.O. 575(I)/2006 dated 5.6.2006 and the High Court held these are integral part of the PV modules and relating components " inverters, charge controllers and batteries are eligible for exemption for all duty and taxes irrespective of the fact that whether or not those were imported together or separately. That to this date, neither the Respondent No.2 AEDB nor the Respondent Collectorate proved that the letter dated 1.10.2014 of the respondent No. 2 containing signature of Engr. Suresh Kumar, Assistant Director was prepared and scanned to the Collector of Customs, MCC of Appraisement-West Custom House, Karachi by the appellant or his clearing agent. The fact of matter is that an inquiry is still under way in the AEDB. Notwithstanding, the interim challan submitted by the investigating officer confirms that either in preparation or scanning of the letter, the appellant has no part, it is the inside job of the AEDB. Even otherwise, in the absence of withdrawal of letter dated 1.10.2014, it is still in field by virtue of being prepared/ issued on the letter head of the Respondent No.2 and under the signature of Engr. Suresh Kumar, who is still working with the Respondent No.2. Leading to the conclusion that the same is correct and valid and clearance of the goods of the appellant has to be allowed on the strength of the said letter not letter dated 2.10.2014. It is a settled preposition of law that no body shall be allowed to take a U-Turn. That the letter dated 2.10.2014 confirms that the Respondent No.2 subordinates changed their opinion and modified the quantity of batteries in the letter dated 2.10.2014 which is not permitted at all, therefore, the said letter is of no legal effect in the presence of letter dated 1.10.2014 and which confirms that the goods imported by the appellant commensurate that these are for dedicated use of solar energy and being exempted from payment of duty and taxes under serial No. 15(6) of Table 3 and Serial No. of Table 1 of Sixth Schedule of the Sales Tax Act, 1990. That denial of exemption on the solar panel and batteries on the basis of the opinion that these are being manufactured locally as evident from serial Nos.739 and 825 of CGO 11 of 2007 dated 28.8.2007 is without any substance as evident from letter of the AEDB dated 6.8.2014 forwarded by FBR vide their letter dated 8.12.2014, containing confirmation at para 2 (ii) " Input used in the manufacturing of solar panel and related equipment may also be treated as not manufactured locally till 3.6.2015. Confirming that the imported penal are not manufactured by Messrs Akhtar Solar Ltd., Islamabad That denial of exemption on the batteries by the Respondent Collectorate and adjudicating authority on the pretext that these are being manufactured in Pakistan by Respondent No.3 Messrs Pakistan Accumulator (Pvt.) Ltd., and the said fact has been incorporated by the Board in Serial No. 738A & B of CGO 11/2007 dated 28.8.2007 is also misconceived. The fact of the matter is that the Respondent No.3 manufacturers Sealed Lead Acid Batteries of 12 Value for use in telephone exchange and on which exemption is not allowed in terms of serial No.738A. The Appellants batteries are not for the use in telephone exchanges. Hence, these got excluded from the said serial. Similarly Serial No.738B speaks about other Lead Acid Batteries/ Industrial cells, meaning thereby these batteries are of a kind used for piston engines. Therefore, the said serial is not applicable on the appellant's goods. Confirming that the batteries imported by the appellant are not manufactured by Respondent No.3 and on these exemption is available to him on import. Notwithstanding, to the above fact, certification / proof is not important that the goods so imported are for the purpose of dedicated use for solar energy purpose, if that would had been the case, then why the respondents, ignored that in the case of imported solar panel, LED Lights, LED Lights Strip in rolls and Fittings and Fixtures by other companies and allowed exemption, it is so because these all goods are integral parts of each other and their functions are interconnected with each other and use dedicatedly for the sole purpose for storing of solar energy and consumption of that through Lights etc. This is total absurdity and contrary to the intention of the legislatures in framing Serial No.24 of the 2nd Schedule to the Customs Act, 1969 and Serial No.15 of the Sixth Schedule to the Sales Tax Act, 1990 and clause 77 PT-VI-2nd Schedule Income Tax Ordinance, 2001. Inspite of the said legal preposition, the respondent No.2 vide letter dated 1.10.2014 (which has not been withdrawn and still in field) has confirmed in categorical terms that the goods imported by the appellant through Bill of Lading No.HDMUHKKNO89054 and invoice No:MGH/PAK/486 commensurate with each other and are exempted from payment of duty and taxes. Rendering the assessment order passed by Respondent Collectorate and order-in-original by the adjudicating authority as of no legal effect and as such void and ab-initio.

10.No cross objections were not submitted by the Respondent Collectorate within the stipulated period given in subsection (4) of Section 194-A of the Customs Act, 1969 by the Respondent Collectorate. The subject Appeal was filed by the Appellant on 5.9.2015 whereas the Para Wise Comments were filed on 24.2.2016 on behalf of Respondent No.2 namely AEDB. The advocate of the Appellant referred a rebuttal dated 7.3.2016 on the Para Wise Comments of Respondent No.2. The representative of the Respondent Collector Mr. Maqsood Ahmed Appraising Officer Model Customs Collectorate of Appraisement West Custom House, Karachi along with the Advocate of Respondent No.2 AEDB appeared and defended the Show-Cause Notice dated 30.11.2015 along with the Order-in-Original No. 509321 dated 21.4.2016 passed by the Additional Collector of Customs (Adjudication) Model Customs Collectorate Port Muhammad Bin Qasim Karachi and relied mainly upon the comments of the Respondent No.2.

11.Argument heard and concluded. Case record perused along with the citation relied upon. We take up the case for decision and frame following issues for determination:--

i)Whether exemption of Customs Duty, Sales Tax and Income Tax was admissible to the Appellant on their import of renewable energy equipment for installation of solar system in conformity with provisions of different relevant statutes namely Serial No.24 of the Second Schedule to the Customs Act, 1969, Serial No.15 of the Sixth Schedule to the Sales Tax Act, 1990 and Clause 77 PT-IV Second Schedule Income Tax Ordinance, 2001?

ii)Whether the Commensuration letter No.B/5/9/2013/Exmp-RWTC(002) dated 1.10.2014 against Appellants application dated 5.8.2014 confirming that goods imported by him against Bill of Lading No. HDMUHKKNO890454 and Invoice No. MGH/PAK/486 from china are exempted from payment of Customs Duty and taxes in its entirety was factually issued by the office of Respondent No.2?

iii)Whether the second commensurate letter dated 2.10.2014 against the Appellants Application dated 5.08.2014 issued by the same Assistant Director of Respondent No.2 office AEDB with lesser quantities of renewable energy equipment already earlier notified by first letter dated 1.10.2014 can be termed a legally admissible document since it disturbed the vested rights already created and acquired by the Appellant through Respondent No.2 earlier letter dated 1.10.2014?

iv)Whether Adjudicating Officer has been appointed as an Officer of Inland Revenue under Section 30 of the Sales Tax Act, 1990 and Section 207 of the Income Tax Ordinance, 2001 and whether can exercise powers under the provision of Sections 11 and 162(1) of the Income Tax Ordinance, 2001?

v)Whether both the inquires dated 27.11.2014 and 7.9.2015 conducted by officers of Respondent No.2 and taken on record regarding issuance of fabricated forged commensuration letter dated 1.10.2014 are fair and impartial and within the parameters generally observed by inquiry officers?

vi)Whether the issuance of commensuration letter dated 1.10.2014 by the office of Respondent No.2 makes the Appellant and his clearing agent liable for any penal action within the ambit of mischief of Sections 32 and 32(a) of the Custom Act, 1969 tantamount to misdeclaration?

12.As regards issue No.(1) the Respondent Collectorate had no reason to deny the exemption on the import of renewable energy equipment for installation of solar system from payment of levy of Customs Duty, Sales Tax and Income tax in the light of Serial No.24 of the Second Schedule to the Customs Act, 1969, Serial No.15 of the Sixth Schedule to the Sales Tax Act, 1990 and clause 77 PT-VI, Second Schedule Income Tax Ordinance, 2001, with no conditions attached for allowing exemption except certification from the Respondent No.2 regarding the commensuration of the quantities imported. However, the Appellant may bring it on record that Certification of the fact that imported Alternative Energy Products are easily verifiable and have been allowed exemption of Customs Duty and Sales Tax even without the production of such certificate of Respondent No.2 in a number of like cases. To quote an evidential Goods Declaration reference is made to GD No. KAPE-HC91790202-2015 where in the Solar Inverters were cleared under the orders of learned Collector West in consultation with Collector East Custom House, Karachi. However, the issue of certification from the office of Respondent No.2 is no more a bone of contention and is of no legal consequence since the office of the Respondent No.2 issued commensuration certificate dated 1.10.2014 to the Appellant which has not been withdrawn or cancelled as of to date and is still in the field. It is also observed the same letter dated 1.10.2014 issued by Assistant Director of Respondent No.2 office was received in the office of Collector of Customs PACCS Custom House Karachi vide Diary No.7050 dated 6.11.2014. As such issue No.(i) is answered in affirmative.

13.As regards issue No.(ii) a scrutiny of the letter dated 1.10.2014 issued by office of Respondent No.2 along with the connected record of the case indicates that the aforesaid letter could not have been prepared an scanned to the Respondent by the Appellant/ clearing agent since they did not have access to the office of Respondent No.2. This fact could not be proved either by the Respondent No.2 as well as the two inquiry reports conducted by the officers appointed to hold inquires in respect of preparation of Commensuration letter dated 1.10.2014. The interim challan submitted by the investigating of the Respondent Collectorate who had lodged in his interim challan submitted before the Special Judge Customs and Taxation also confirms that the Appellant had not part in the preparation of scanning of the letter dated 1.10.2014 which was an inside job of the office of Respondent No.2. The preparation of the letter at Respondent No.2 end is further proved by the entry in the outward register of Respondent No.2 at serial No.3 as well as Leopard Courier Tracking ID No. 38001447 on the envelope bearing Address of the representative of the Appellant Muhammad Aslam Khan F-S14/7 Malir Extension Colony Karachi along with his Cell Number. It also bears the official stamp Government of Pakistan Ministry of Water and Power and was sent from the office of Respondent No.2 namely Mr. Imtiaz Ali Shah (Director (Solar/ BE) Alternative Energy Board 2nd Floor OPF Building G-5/2 Islamabad.The tracking ID detail procured from the Lepoard Courier Service shows that the letter was picked in Islamabad from the Respondent No.2 office on 29.10.2014 and dispatched to Karachi on the same date. These various documentary available on record before us indicate that the letter dated 1.10.2014 was factually issued from the office of Respondent No. 2 and the Appellant/clearing agent had no role either in its preparation, posting or scanning as alleged by Respondents Nos.1 and 2. As such issue No.(ii) is answered in the affirmative.

14.As regards issue No.(iii) we have observed that the second commensuration letter dated 2.10.2014 against Appellants Application dated 5.8.2014 was issued by the same office of Respondent No.2 namely (Engr. Suresh Kumar) Government of Pakistan Alternative Energy Development Board Ministry of Water and Power Islamabad.This letter was also issued by the office of Respondent No.2 without withdrawing the first letter dated 1.10.2014 which was already issued by the office of Respondent No.2 and was in field for all legal and practical purposes. Strange enough, the letter was branded fake and forged by the Respondent No.2 and the Appellant Company was blacklisted for all their incoming and future consignments to cover the irregularities committed by personal working in the office of Respondent No.2. Irrespective of this factual position the letter dated 1.10.2014 has created vested rights in favour of the Appellant for availing the exemption of duty and taxes as per certification by Respondent No.2. The vested rights so created and acquired by the Appellant cannot be disturbed or taken away by issuance of letter dated 2.10.2014 by Respondent No.2 without withdrawal of the first letter dated 1.10.2014 on their part. Strictly, legally speaking two contradictory documents conferring vested rights on the incumbent cannot exist side by side in any legal system. Branding of their first commensuration letter dated 1.10.2014 as fake and forged by Respondent No.2 AEDB cannot alter the legal validity and admissibility of the said letter unless it is withdrawn by the issuing authority. The second commensuration letter dated 2.10.2014 would have been valid had it been issued in supersession or rectification of the earlier letter of the same subject by the same officer of Respondent No.2. As such issue No.(iii) is answered in negative.

15.That as regard issue No. (iv), upon perusal of show-cause notice, it has been noticed that the Adjudicating Authority has invoked Sections 3, 6, 11(c) and 37 of the Sales Tax Act, 1990 and Section 148 of the Income Tax Ordinance, 2001. The Advocate of the appellant has strongly contended that he has also not been appointed as Officer of Inland Revenue under Section 30 of the Sales Tax Act, 1990 and Section 207 of the Income Tax Ordinance, 2001. Therefore, has no powers to proceed in the matter of Sales Tax and Income Tax under the Sections invoked in the show-cause notice for short paid taxes. On the other hand the Respondent Collectorate are of the opinion that the customs is empowered to collect the Sales Tax and Income Tax at import stage under Section 6 of the Sales Tax Act, 1990 and Sections 148, 162(1) of the Income Tax Ordinance, 2001 and can also recover the Taxes under the provision of Section 202 of the Customs Act, 1969.

16.From conscientious study of Section 30 of Sales Tax Act, 1990 and Sections 228 to 230A of the Income Tax Ordinance, 2001, it is observed that the legislature appoints under these Sections Officers of different organs of FBR as Officer of Inland Revenue for exercising powers under the respective Sections of the Sales Tax Act, 1990 for which separate statutory Notification is issued and under different Sections of Income Tax powers by these Officials has to be exercised as expressed in 207 of the Income Tax Ordinance, 2001. In these Sections adjudicating authority figures nowhere confirming that he is not empowered to exercise powers under Sections 3, 6, 11(c) and 37 of the Sales Tax Act, 1990 and further read with Sections 148, 162(1) of the Income Tax Ordinance, 2001.

17.To further elaborate and settling the issue to its logical conclusion, we inscribed by referring to Section 6 of the Sales Tax Act, 1990, sections 148 and 162(1) of the Income Tax Ordinance, 2001 through which the Collectorate is empowered to collect the Taxes on the imported goods as like custom duty on the value determined under Section 25 of the Customs Act, 1969. The said Sections least empowers the Officers of Customs including the respondents to initiate adjudication/recovery proceeding for the short collected/paid Sales Tax and Income Tax either due to collusion or connivance or inadvertence, error or misconstruction. For proceeding for these type of recovery a show-cause notice has to be issued under the Provision of Section 11 of the Sales Tax Act, 1990 and Section 162(1) of the Income Tax Ordinance, 2001. The authority to issue show-cause notice under Section 11 of the Sales Tax Act, 1990 and Section 148 of the Income Tax Ordinance, 2001 are Officer of Inland Revenue and the Commissioner of Income Tax. The Adjudicating Authority assumed the powers not vested with him. The fact of matter is Clearance Collectorate have powers to collect Sales Tax and Income Tax as duty at import stage not post importation. As regards to the plea that customs is empowered to recover the short paid amount post clearance under Section 202 of the Customs Act, 1969 is based on mistaken belief. The Clearance Collectorate could recover the amount from the amounts lying with it of the importer upon receipt of notice from the Officer of Inland Revenue and Commissioner of Income Tax under Section 48 of Sales Tax Act, 1990 and Section 140 of the Income Tax Ordinance for recovery of the adjudged amount of taxes by the competent Officer of LTU/RTO after due process of law.

18.On the strength of above deliberation, it is our considered opinion that the Clearance Collectorates does have the authority to collect Sales Tax and Income Tax at import stage in the capacity of collecting agent and can recover escaped/short payment paid Custom Duty and Regulatory Duty levied on the imported goods under Section 18 of the Customs Act, 1969 under Section 202 of the Customs Act, 1969 after due process of law, but have no powers to adjudicate the cases of short recovery of Sales Tax and Income Tax under sections 11 and 148 ibid of the Act/Ordinance respectively. None of the respondents have the powers to recover the arrears of these Taxes at their own, unless they are in receipt of notice from the Officer of Inland Revenue and Commissioner of Income Tax under section, Sections 48 and 140 ibid. Resultant adjudication proceeding under section 11 of the Sales Tax Act, 1990 and Section 148 of the Income Tax Ordinance, 2001 (as mentioned in the Show-Cause notice) is not legal, justifiable and tenable in the eyes of the law and inconsonance with the reported/unreported judgments incorporated here-in-below:

Messrs AGP (Pvt.) Ltd. v. Additional Collector of Customs , Karachi reported at 2011 PTD (Trib.) 110, it was held that:--

"Escaped 'advance tax' cannot be followed and/or recovered by the 'customs Officials' under the powers conferred upon them under Section 148(5) (6) of the Income Tax Ordinance, 2001, rather it is the Commissioner of Income Tax who under Section 162 of the Income Tax Ordinance, 2001 can follow and collect the short recovery of any tax chargeable under Section 148(5)(6) of the Income Tax Ordinance, 2001."

Similarly, the Customs Appellate Tribunal, Islamabad Bench in the case of Messrs Global Marketing Services and another v. Model Customs Collectorate and another reported at PTCL 2010 CL 564 held that:--

"Only the Commissioner of Income Tax can exercise his powers under Section 162 of the Income Tax Ordinance, 2001, on account of default or non payment of tax or if there is a lapse on the part of collecting officer, it could not be said that the collecting Officer can himself automatically presume the jurisdiction of recovery of amount of Income Tax on the basis of assumption or being the Officer of Customs or as a collecting Officer under Section 148 of the Income Tax Ordinance, 2001, until the specific powers have been given to him under the law. Hence, it is observed that the Collector of Customs do not have the authority to recover the Income Tax later on but he is only getting the power of collection of tax under Section 148 of the Income Tax Ordinance, 2001 therefore mere collection does not mean that he can go for the recovery at the later stage, if the default is made by the persons. To whom the amount of Income Tax is due, the best possibility of recovery according to scheme of law is that after realizing the amount of Income Tax in form of audit or investigation, the collecting Officer can refer the matter to the Commissioner of Income Tax for taking the action of recovery under Section 162 of the Income Tax Ordinance, 2001. This is also a settled principle of law that a person cannot be tried on the same offence by two forums, he could be tried only where the clear cut provisions of law are available, therefore, in my opinion Section 148 of the collection to the Customs Department and the power of recovery in case of default under Section 148 of the Income Tax Ordinance, 2001 vests with Income Tax Department and the Commissioner of Income Tax as prescribed can go for recovery."

"The power to collect the advance Income Tax under section 148 (5) of the Income Tax Ordinance, 2001 cannot have the effect of converting Income Tax into Customs duty. Merely providing the manner of collection of tax as an advance tax under any tax enactment, the nature of the tax could not be changed, hence, the short recovery of any tax collectable under Section 148(5)(6) of the Income Tax Ordinance, 2001 to a person in form of short collected short levied or not so collected, either on account of misdeclaration of the importer, or on account or error, or in-advertence or under mistake, vests with the Commissioner of Income Tax along under Section 162(1) of the Income Tax Ordinance, 2001. The Collector of customs do not have the authority to go for the recovery, it is the only the Commissioner of Income Tax alone under Section 162(1) of the Income Tax Ordinance, 2001. The Collector of Customs do not have the authority to go for the recovery, it is the only Commissioner of the Income Tax who can start the proceedings of recovery against the person in case of default on short collected, short levied or not so collected, either on account of mis-declaration of the importer, or on account or error, or inadvertence or under mistake, so the adjudication by the respondent's to the point of recovery of Income tax against the appellants is not legal, justifiable and not tenable in the eye of law and the exercising of jurisdiction on this point by the respondent and also the adoption of recovery procedure by them are hereby set aside."

"It is declared that the respondent's wrongly assumed the jurisdiction on the show-cause notice and over the corrigendum, therefore, their exercise of jurisdiction was not legal justifiable and also not within the four corners of law. It is further declared that the respondents action/procedure for recovery to recover the amount of Income Tax from the appellants is also not legal, vide ab-initio without any legal jurisdiction/ authority and the same is also against the mandatory provision of law."

This judgment was challenged before the Islamabad High Court through Customs Reference No. 01/2010 by the Collector of Customs, Islamabad and was dismissed by the order dated 15.05.2013, while answering all the questions in negative and against the petitioner. Similarly, Bench-I of this Tribunal held in reported judgment 2014 PTD (Trib.) 299 M.I. Traders v. Additional Collector of Customs held that "It is my considered opinion that respondent does have the authority to collect sales tax, Income Tax and Federal Excise Duty at import stage. In the capacity of collecting agent and not empowered to adjudicate the cases of short payment/recovery due to any reason as expressed in respective Sections of the Acts/Ordinance, hence the contention of the respondent representative that customs is empowered to adjudicate the cases of sales tax, income tax and Federal Excise Duty is not legal, justifiable and tenable in the eyes of law. Instead void and ab-initio and corum non judice." In the issue similar to subject appeal the Hon'ble High Court of Sindh held in reported judgment 2004 PTD 801 Al-Haaj Industrial Corporation (Pvt.) Ltd., Peshawar v. Collector of Customs (Appraisement) that: "it already stand decided that merely by providing manner and time of collection of tax under any tax enactment, the nature of the tax shall not be changed, meaning thereby that if advanced tax under Section 50(5) of the Ordinance can be collected as customs duty and can be recovered by the Customs Officials under Section 202 of the Customs Act, 1969 it will not change the nature of the tax and the income tax shall not become the custom duty... the power to collect the advanced income tax under Section 50(5) of he Ordinance by the Collector of Customs, shall not have the effect of converting the income tax into customs duty and consequently the customs Officials shall be empowered by virtue of the provision contained in the Income Tax and Customs Act, merely to collect the determined amount of tax and shall not have the Authority to resort the chargeability or assessment of a tax. When the income tax shall not be changed into customs duty, the applicability of Section 156 of the Customs Act, 1969 shall be excluded as a logical conclusion. Similarly, the Division Bench of High Court of Sindh in an unreported case of Messrs Lucky Cement Ltd v Federation of Pakistan and others through judgment dated 26.02.2013 in C.P. No. D-216/2013 set-aside and quashed the proceeding emanating out of FIR registered under the Customs Act, 1969 before the Court of Special Judge Customs and Taxation, Karachi by exercising the jurisdiction under Article 199 of the Constitution. The FIR in the matter has been registered for the alleged evasion of advanced Income Tax liable to be deducted at import stage. Inspite of reaching to the conclusion that the petition was liable to pay advance tax at import stage, held in paras 25 to 28 that:--

"Para 25:---The FIR has been registered by invoking clauses (14), (14A) and (77) of Section 156(1) of the Customs Act. Now clause (14) makes a criminal offence of a violation of Section 32(1) and clause (14A) makes a criminal offence of a violation of Section 32A(1) provides as follows: "if any person, in connection with any matter of customs...." And then follows the prescribed acts that are criminalized in clause (14). Section 32A(1) opens as follows "if any person, in connection with any matter related to customs...." And again, then follow the prescribed acts that are criminalized in clause (14A). It will be seen that it is of the essence in each case that the offence should have been committed in connection with any matter of or relating to customs. In our view, this essential element is entirely, and necessarily, missing in the present case. Whatever is done in terms of Section 148 is in connection with or relating to income tax and not to customs. The jurisdiction conferred on the Collector of customs is obviously only by way of administrative convenience. He is a creature of the Customs Act and is empowered and obligated under that statute to collect, and if necessary recover and enforce, customs duty. The 2001 Ordinance (like the 1979 Ordinance) found it expedient to empower him to a carefully limited extent in respect of collection of advance income tax. But the fact that the Collector of Customs is dealing with such collection does not make the matter of it a matter of or relating to customs. It remains and retains its character of being a matter exclusively of income tax. Since a key element, laid down at the very beginning of Sections 32 and 32A is entirely (and necessarily) not applicable in relation to Section 148, it follows that no offence under the former provisions could be made out for the purposes of clauses (14) and (14A) of Section 156(1) of the Customs Act in respect thereof.

PARA 26:- Clause (77) of Section 156(1) has three sub-clauses of which only the first could conceivably apply in the present case. This provides as follows (emphasis supplied).

"if any person counterfeits, falsifies or fraudulently alters or destroys any declaration, statement or documents in the transaction of any business relating to the customs or any seal, signature, initials or other mark made or impressed by any Officer of customs in the transaction of any business relating to customs" [he then commits an offence]

As the portions emphasized indicate, the same reasoning applies in relation to clause (77) as just noted in relation to Section 32/clause (14) and Section 32A/clause (14A), therefore, it likewise follows that no offence under this clause could be made out in respect or for purposes of anything done in relation to Section 148.

PARA 27:- It is also pertinent to note that in the FIR, itself, in para No. 9 where the nature of the offence has to be stated, it is noted as follows: "attempt to evade Income Tax @ 5% amounting to Rs. 44795897/- through fraudulent documentation by misusing exemption". Thus, even the customs authorities themselves expressly recognize that the matter was one relating solely and exclusively to income tax and not to anything in relation to or in connection with customs. This serves to further confirm the conclusions already arrived at.

PARA 28:- In view of the foregoing, we are of the view that the customs authorities had no jurisdiction to register the FIR under the Customs Act in relation to the petitioner's claim that it is not obligated to pay advance income tax and in any case, that matter being entirely in relation to income tax could not be an offence under any of the three clauses of Section 156(1) that have been invoked. It follows that the FIR is a nullity and completely contrary to law. It cannot be sustained and is liable to be quashed in view of the foregoing position. It is not necessary for us to examine the matter on the merits in relation to the FIR."

The Hon'ble High Court of Sindh in reported judgment 2014 PTD 1963 Shujabad Agro Industry (Pvt.) Ltd., v. Collector of Customs and 8 others held that: "the customs authorities has no powers under law to restrict release of duty paid consignment' on the plea that imported goods were liable to be assessed at the rate of 5% of `advance tax' [prescribed for one's own manufacturing used] and not at reduced rate of 3% of 'advance tax' [prescribed for industrial used]. Such act of custom authority was without jurisdiction and lawful authority. Custom authorities under law were merely collection agent on behalf of Inland Revenue Department for collection of 'advance tax'. Denying refusal of the consignment on the pretext that income tax is payable @ 5% as against 3% on the basis of reduced rate certificate issued by the Commissioner of Inland Revenue is not only arbitrary, mala-fide but also without any jurisdiction, hence illegal, void and ab-initio".

The opinion formed further stood validated in addition to the above referred judgments from the judgments of 1994 CLC 1612, 1990 PTD 29, PTCL 2005 CL 500 and PTCL 2007 CL 535 and in PTCL 2007 CL 535 titled as Collector of Sales Tax and Federal Excise v. M/s. Qasim International Container Terminal Pakistan Ltd, it was held that:

"There is a clear distinction between the charging provision of Statute and the machinery part thereof. It is axiomatic that mode or manner of recovery does not alter, the nature of tax nor a tax can be introduced or imposed by implication."

It has been held in another judgment of Hon'ble Lahore High Court, Lahore 2008 PTD 1973 titled as XEN Shahpur Division v. Collector of Sales Tax (Appeal), Collectorate of Customs, Federal Excise and Sales Tax Faisalabad, -

"That fiscal law is to be applied with full authority and its natural meaning-one has to look merely at what is clearly said and there is no room for any intendment-neither there is equity about a tax nor presumptions as to tax - nothing is to be read in, nothing is to be implied -- one can only look fairly at the language used"

The Hon'ble Supreme Court of Pakistan in reported judgment 2006 SCMR 129 titled as DGI&I and others v. Al-Faiz Industries (Pvt.) Ltd., and others held that:-

"If the law have 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 retaining the objective of performing or doing of a thing in a manner other than provided by law would not be permitted--- each and every word appearing in a Section is to be given effect and no other word is to be rendered as redundant or surplus - when the legislature required the doing of a thing in a particular manner then it is to be done in that manner and all other manner or modes of doing or performing that things are barred -- if the doing of a thing is made lawful in a particular manner the doing of that thing in conflict with the manner prescribed will be unlawful as per maxim "Expression facit cessare tacitum"

We, therefore hold that the exercise of jurisdiction on this point by the adjudicating authority is also without lawful authority and jurisdiction. Hence, issuance of show-cause notice and passing of Order-in-Original is ab-initio void and as such coram non-judice and answer the issue No. (iv) in negative.

19.As regards issue No. (v) a plain ready of the two inquiry reports dated 27.11.2014 and 7.9.2015 on record shows that inspite of irregularities committed in the office of Respondent No.2 by various personnel no responsibility has been fixed on any particular officer or official regarding issuance of first commensuration letter dated 1.10.2014 under the signature of Assistant Director AEDB (Engr. Suresh Kumar). All the officers and involved lower staff in Respondent No.2 office inspite their participation in preparation of the aforesaid letter dated 1.10.2014 have not been held responsible and recommended for any Penal action. The first inquiry report dated 27.11.2014 in explicit terms states that there is no "involvement" of AEDB staff in issuance of fabricated/ forged commensuration letter to Messrs Right Way Trading Company Karachi". Strange enough the responsibility of forgery was cast upon the Appellant Company/clearing agent solely because it appeared to be the sole beneficiaries. Last but not the least the aforesaid inquiry report dated 27.11.2014 recommended blacklisting of the Appellant Company. The inquiry report also recommended certain remedial measures for future implementation in the internal working of preparation and dispatch of commensurations letters and their deliveries to beneficiary companies as well as Model Customs clearance Collectorates all over Pakistan on Fax and through Courier Service only. This recommendation is itself is indicative of the fact that something went wrong in the office of Respondent No.2 in preparation of the earlier commensuration letter dated 1.10.2014 its scanning and dispatch to the representative of the Appellants company.

The second inquiry report dated 7.9.2015 also failed to pin point any role or responsibility on the staff or officers of Respondent No.2 office despite the fact that the technician working on the computer in Respondent No.2 office was found instrumental in typing/ preparing of the first letter dated 1.10.2014 and also voluntarily submitted a new statement alleging that Mr. Imtiaz Ali Shah Director Solar had directed him to prepare the forged letter. Apparently the inquiry report seemed to be an eye wash for hushing up the internal irregularities in the office of Respondent No.2. Inspite of pin pointing the roles and responsibilities of different personnel's working in the office of Respondent No.2, the inquiry officer recommended to widen the scope of inquiry by handing over the matter to Federal Investigation Agency. As such the inquires do not seem to be impartial and conclusive and put the complete responsibility on the shoulders of the clearing agent and the Appellant who have been unnecessarily victimized. As such issue No.(v) is answered in the negative.

20.As regards issue No.(vi) it is an established fact that the letter dated 1.10.2014 was issued by the officer of Respondent No.2 and the Appellant and his clearing agent had no part whatsoever in its preparation and scanning from the office of Respondent No.2. The communseration letter dated 1.10.2014 was received by Appellants representative Mr. Muhammad Aslam Khan on 30.10.2014 as well as Collector of Customs Model Customs Collectorate of PACCS Custom House, Karachi on 5.11.2014 vide Diary No.7050. The clearing agent uploaded the letter into the WBOC System for claiming exemptions of Customs Duty and Taxes while filing Goods Declaration on receipt of the same from the Appellants representative. As such no act of misdeclaration was committed by the Appellant or his clearing agent who simply forwarded a letter received by them from the office of Respondent No.2 through leopard Courier Service. Perusal of section 32 of the Act reveals, that in addition to declaration any communication, or answers to question, put by customs officers and found wrong in material terms, constitute an offence within the framework of the said Section. " So , in order to bring an act, or action within the framework of the word "false", as used in section 32 of the Act, the Act should either be a conscious wrong, or culpable negligence and should be untrue either knowingly or negligently. [Omalsons Corporation v. The Deputy Collector of Customs (Adjudication) Karachi 2002 PTD (Trib.) 3053, Mala fide and mens-rea are necessary ingredients for committing any offence, including that of smuggling. [Moon International v. Collector of Customs (Appraisement) Lahore reported as PTCL 2001 CL.133. There are two questions which need to be addressed before invoking section 32 of the Customs Act, 1969, for mis-declaration (a) whether mens-rea which is essential element for the purpose of subsection (1) of section 32 has been proved and (b) whether a demand for short recovery can be made under the provision of subsection (2) of Section 32, without proving any guilty intention, knowledge or mens-rea on the part of the maker of the statement. If the element of mens-rea is not visible and guilty intention is not proved then provisions of Section 32 cannot be invoked as held in the judgments which are reported as follows:- Union Sport Playing Cards Co. v. Collector reported as 2002 YLR 2651, AL-Hamad Edible Oil Limited v. Collector reported as 2003 PTD 552 and A.R. Hoisery Works v. Collector of Customs Export reported as 2004 PTD 2977. This celebrated principle of law in customs jurisprudence that mis-declaration charges under Section 32 of the Customs Act, shall not be invoked has now been well settled in a large number of cases i.e. Ibrahim Textile Mills Limited v. F.O.P. reported as PLD 1989 Lahore 47, Central Board of Revenue v. Jalil Sheep Co. reported as 1987 SCMR 630, State Cement Corporation v. GOP C.A. No.43 of 1999 reported as 2002 MLD 180 and Cargill Pakistan Seeds (Pvt.) v. Tribunal 2004 PTD 26. As such issue No. (vi) is answered in negative.

21.Being custodian of law, the courts are required to maintain the norms of justice and equity, litigants are to be respected not on account of Court's power to legalize injustice on technical grounds, but to remove injustice. By doing so, and in respectful agreement with above noted findings and ratio decidendi set forth by the Superior Courts, we therefore, hold that, orders passed during the hierarchy of Customs based on apparent breach of natural justice and law, suffer from grave legal infirmities are declared illegal, ab initio, void and of no legal effect on various accounts described and answered above is accordingly set aside. The Appeal is accordingly allowed with no order as to cost. Under the circumstances the respondents are also directed to issue delay detention certificate in duplicate for shipping terminal in compliance of section 14(2) of the Customs Act, 1969.

22.Judgment passed and announced accordingly.

HBT/91/Tax(Trib.) Appeal allowed.