MASROOR HUSSAIN VS DIRECTOR GENERAL OF P.C.A.
2019 P T D (Trib.) 615
[Customs Appellate Tribunal]
Before Muhammad Nadeem Qureshi, Member Judicial-I, Tahir Zia, Member Judicial-II and Muhammad Nazim Saleem, Member Technical-II
Messrs MASROOR HUSSAIN and 4 others
Versus
DIRECTOR GENERAL OF P.C.A. and 2 others
Customs Appeals Nos.K-928 to K-931 and K-971 of 2013, decided on 13/07/2016.
Per Muhammad Nazim Saleem, Member Technical-II; Tahir Zia, Judicial Member-II dissenting. [Minority View]
(a) Customs Act (IV of 1969)---
----Ss. 25, 32, 79, 80 & 83---S.R.O. No.165(I)/2011, dated 3-3-2011---S.R.O. No. 42(I)/2010 dated 23-1-2010---Pakistan Customs Tarrif Heading 2202.1010, & Heading 2202.9000---Determination of customs value of goods---Misdeclaration of classification of goods---Import of "Aerated Water/Drinks" against goods declaration, which were correctly classified under PCT Heading 2202.1010 chargeable to Federal Excise Duty at 12% of the retail price---Goods were imported through Collectorate of MCC of "Pakistan Automated Customs Clearance System" (PACCS) by declaring incorrect PCT 2202.9000 without payment of Federal Excise Duty---Additional Collector of Customs adjudicated the case and passed order-in-original holding that importer by misdeclaring the classification had deprived the Government of its legitimate revenue and ordered importer to deposit all taxes under the law with penalty within specified period---Appeal against order-in-original was rejected by Collector of Customs (Appeals)---Central issue involved in the case pertained to classification of soft drink (Pepsi, Dew, 7-Up etc.)---Importer classified the same under PCT Heading 2202.9000; whereas the department's contention was that same were classified under PCT Heading 2202.1010, which besides duty and taxes also attracted Federal Excise Duty at 12% of the retail price---Department's case was that importer deliberately misdeclared classification in order to avoid payment of Federal Excise Duty, despite the fact that there was clear PCT classification (by description) of aerated water viz 2202.1010---Department's contention was that the imported goods namely soft drink fell under PCT Heading 2202.1010 attracting Federal Excise Duty at 12% of the retail price---Plea of the importer was that system of 'Paccs' had cleared their goods declarations which would mean that declaration made in goods declaration were correct---Validity---Importers had not given technical point/reason to justify their claim for PCT Heading 2202.9000 whereas department laid emphasis that "Soft drinks" passed through process of inclusion of carbon dioxide, were aerated waters which had specific PCT classification namely 2202.1010 attracting levy of Federal Excise Duty at 12% of the retail price besides duty/taxes---Importer had contended that S.32(2) of the Customs Act, 1969, was not attracted in the case as there was no misdeclaration on their part---Importer had filed goods declaration and self-assessed their goods as per S.79(1)(b) of the Customs Act, 1969 and then the inbuilt system of "PaCCs" had cleared the same under S.80 of the Customs Act, 1969 without any allegation---Impugned order-in-appeal was upheld, in circumstances. [Minority View]
[Case-law referred].
Per Tahir Zia, Member (Judicial-II); Muhammad Nadeem Qureshi, Judicial-I, agreeing. [Majority View]
(b) Customs Act (IV of 1969)---
----Ss. 25, 32, 79, 80, 83, 193 & 198---PCT Heading 2202.1010, PCT Heading 2202.9000---Customs Rules, 2001, Rr.433, 435 & 438---Determination of customs value of goods---Mis-declaration of classification of goods---Importers transmitted goods declaration under S.79(1) of the Customs Act, 1969 and R.433 of Customs Rules, 2001 with the MCC of 'PaCCs', containing description of goods as aerated soft drink, under PCT Heading 2202.9000 which were selected either by the system directly for assessment or examination in terms of S.198 of the Customs Act, 1969 and R.435 of Customs Rules, 2001---Assessing Officer passed assessment order under S.80 of the Customs Act, 1969 and R.438 of Customs Rules, 2001 and communicated the messages to the importers for payment of additional amount of duty and taxes or filing review against the assessment order---Assessing Officer had doubt about the declaration, and suggested for conduction of examination under the respective section/Rule and referred the same to the Assistant/Deputy Collector of the Group for endorcement after affirmation of the said fact---Goods declaration were referred for examination and the officer of the Customs posted at the Terminal, after examining of the goods physically, posted the report in the system, prominently indicating the drinks namely Pepsi, Dew, Miranda, 7-Up etc. for perusal of the Assessing Officer---Assessing orders in the goods declaration corresponding to appeals had been passed by the competent authority under S.80 of the Customs Act, 1969 on the basis of entire declaration after receipt of examination report---Assessment order was validly passed by competent authority---Collector of Customs of clearance Collectorate and Additional Collector of Customs were not allowed to take a complete U-turn at belated stage start adjudication of past and closed transactions through issuance of show-cause notices and adjudication orders under S.179 of the Customs Act, 1969, where a lawful course had been prescribed by the legislature in S.195 of the Customs Act, 1969 for reopening of such decisions or orders by Board of Collectors---Order or decision passed or taken by the subordinate Officer could only be corrected in revisional power and not under S.32 of the Customs Act, 1969---When the consignments were released on the basis of commercial documents and physical examination by the examining and assessing officer, the charge subsequently levelled against the importers under S.32 of the Customs Act, 1969 were unsubstantiated---Framing of contravention report by Director General, and forwarding that to Collectorate as well as issuance of show-cause notice and subsequently passing order-in-original were act of assumption of wrong jurisdiction---Order-in-appeal passed by Collector of Customs (Appeal), had no nexus with the show-cause notice or grounds of memo. of appeal---Said act of Collector of Customs (Appeal) was sufficient to prove that he had travelled beyond the scope of show-cause notice, which was not permitted under the law---Decisions on the basis of fact, not incorporated in the show-cause notice and grounds of appeal, would be deemed to be palpably illegal---Whole proceedings were infested with inherent legal infirmities and substantive illegalities, tantamounted to patent violation of mandatory statutory provisions---Order passed by Collector of Customs (Appeal) was without power/jurisdiction, hence, ab initio void and coram non judice by virtue of the fact that all of them ignored provisions of law and law settled by superior courts---Conduction of audit and preparation of contravention report by Director General, PCA, and show-cause notice and passing of order-in-original as well as order-in-appeal by Additional Collector of Customs and Collector of Customs (Appeal) respectively, were ab initio, illegalandvoidandofnolegal effect---Samewereannulledandset aside---Appeals were allowed accordingly. [Majority View]
[Case-law referred].
Per Muhammad Nadeem Qureshi, Member Judicial-I agreeing with Tahir Zia, Judicial Member II. [Majority View]
(c) Customs Act (IV of 1969)---
----Ss. 25, 32, 79, 80, 83, 193, 194 & 194-A---Constitution of Pakistan, Art.4---Determination of customs value of goods---Mis-declaration of classification of goods---Passing order in excess of jurisdiction---Provisions of Ss.193(1) & 194(1) of Customs Act, 1969, were amended through Finance Act, 2012; by virtue of said amendment, appeals filed againsttheorderpassed by Additional Collector stoodoustedfromthe Collector of Customs (Appeals) jurisdiction w.e.f. 1-7-2012; resultantly, appeal lying with Collector of Customs (Appeals) against the orders of Additional Collector, had to be decided by him on or before 30-6-2012, and in case of non-decision by 30-6-2012, it was mandated upon him to transfer the appeals to Customs Appellate Tribunal to whom jurisdiction was assigned by the legislature under S.194-A of the Customs Act, 1969 w.e.f. 1-7-2012---Collector of Cusoms (Appeals) to the contrary, passed order dated 4-7-2013; rendering the order so passed in excess of jurisdiction and as such void ab initio and coram non judice---Assumption of jurisdiction by Collector of Customs (Appeals) in the present matter, was against said provision of law---No forum could take cognizance of a matter beyond its jurisdiction, prescribed in the relevant law---Inherent defect, could not be cured to defeat the provisions of statute or enactments effecting the jurisdiction of the forum---Every citizen had in alienable right to have protection of law and be treated in accordance with law in terms of Art.4 of the Constitution---Order passed against a person by any forum against express provisions of law on the subject, if allowed to be stayed in tact, would cause serious prejudice to the legal right of citizen---When a forum/court would suffer from want of inherent jurisdiction, no act or consent or acquiescence in the proceedings could vest such forum/court with such jurisdiction---No question of waiver or estopal was attracted in such circumstances---Order passed or an act done by the court or the Tribunal, incompetent to entertain proceedings, was without jurisdiction---Jurisdictional defect could not be removed by mere conclusion of proceedings of passing of order-in-original and order-in-appeal---Decision on the basis of facts/grounds not incorporated in the show-cause notice, would be deemed to be palpably illegal---Collector of Customs (Appeals) passed order-in-appeal on alien facts which had no nexus, either with charter of show-cause notice or the grounds of memo of appeal---Case of importers revolved around the import of cold drinks (aerated water) and the order of Collector of Customs (Appeals) spoke out "Non Alocoholic Bear"---Said act of Collector of Customs (Appeals) proved that he travelled outside the charter of show-cause notice, not permitted under law. [Majority View]
[Case-law referred].
(d) Administration of justice---
----When a law required an act to be done in a particular manner, it had to be done in that manner alone, not otherwise---Being custodian of law, it was the duty of the court to follow the legal obligation and interpretation made thereon by the courts as well as the legislature---Observations of the higher Courts and the intention of the Legislature and interpretations, which led to manifest the absurdity, was to be avoided---Courts were under statutory obligations to supply the omission with a view to prevent the defeat of the very objects of the rules,andcouldfillinthegaps,inapiece of legislature,whenplainconstructionwouldleadtoabsurdresults---Responsibilityofthe Courttogiveeffecttothetrueandpatentintentionsoflawmakers and to supply the omissions in order to avoid and prevent the manifest and try to follow undoubted intentions of the legislation.
[Case-law referred].
(e) Interpretation of statutes---
----Interpretation which was more in consonance with the avowed policy decipherable from its title and Preamble of the statute, was to be preferred to an interpretation with a view to avoid to abridge abrogate or infringe those rights which had accrued in favour of the parties by any mean.
Nadeem Ahmed Mirza for Appellant.
Rizwan Mahmood, Deputy Collector, Arif Maqbool, Senior Auditor and Faiz Mudassir, A.O. for Respondents.
Date of hearing: 19th January, 2016.
JUDGMENT
MUHAMMAD NAZIM SALEEM, MEMBER TECHNICAL-II.--Bythisorder,wedisposeofCustomsAppealsNos. K-928/2013,K-929/2013, K-930/2013, K-931/2013 and K-971/2013 filed by the appellants against Order-in-Appeals Nos. 7564 to 7570/2013 dated 04.07.2013, passed by Collector of Customs (Appeals), Karachi in appeal filed by Messrs Abdul Hai, Tayab and Company and made applicable mutatis mutandis to 6 more appeals including that filed by the instant appellant.
2.Brief facts leading to the above appeals are that the respondent No.1 conducted audit of the imported consignment of the appellants on the strength of data available in the system and observed that the appellant had imported ten (10) consignments of Aerated Water/Drinks against the Goods Declaration bearing CR Nos. (i) I-HC-1400471-04052010,
(ii) I-HC-1522036-30082010, (iii) 1576926-21102010 (iv) I-HC-1589317-01112011 (v) I-HC-1604729-15112010 (vi) I-HC-1644192-21122010
(vii) I-HC-1708253-08042011 (viii) I-HC-1743938-08032011 (ix) I-HC-1792094-18042011 and (x) I-HC-1804186-28042011, which are correctly classified under Pakistan Customs Tariff Heading 2202.1010, chargeable to Federal Excise Duty @ 12% of the retail price. MessrsMasroor Hussain (NTN-1035010) imported above-mentioned goods through the Collectorate of MCC of PaCCS by declaring incorrect PCT 2202.9000 without payment of Federal Excise Duty due thereon. These consignments valuing Rs.1,56,89,527.00 were chargeable to Federal Excise duty @ 12% of the Retail Price amounting to Rs.18,82,743.00, additional amount of sales tax Rs.666,567.00 and withholding tax Rs.917,837.00.The respondent No. 1 issued audit observation vide C.No. PCA/2269/2011/Audit dated 26.09.2011 to Messrs Masroor Hussain (NTN 1035010) F-43, Block B, North Nazimabad, Karachi, at theiraddress,andrequestedforreplytothefindingsofthedepartment and further asked to deposit the amount of Federal Excise Duty, Sales Tax and Withholding Tax, calculated in the sheet annexed to the Audit Observation. MessrsMasroor Hussain (NTN 1035010), F-43, Block-B, North Nazimabad, Karachi did not respond to the Audit Observation. 3.Non-reply of Audit Observation resulted in formulation of Contravention Report No. PCA/2269/2011/Audit dated 26.09.2011. On the strength of Contravention Report, the Respondent No.2 issued Show-Cause Notice No. MCC/SCN/27/PCA-2269/Aerated Water/Masroor Hussain/ADC-Adj/ PaCCS/2012 dated 13.01.2012 to the appellant under sections 32(1), 32(2) 32 (3A) of the Customs Act, 1969, section 36 of the Sales Tax Act, 1990, section 148 of the Income Tax Ordinance, 2001, sections 8 and 14 of the Federal Excise Act, 2005, requiring the appellant as to why the evaded/short paid amount of Rs.34,67,147/- (Federal Excise Duty: Rs.18,82,743.00, Additional Sales Tax: Rs.6,66,567.00, Withholding Tax Rs.9,17,837.00) may not be recovered from them and penal action may not be taken under clause 14 of section 156(1) of the Customs Act, 1969, sections 33(5), 34 of the Sales Tax Act, 1990, section 19 of the Federal Excise Act, 2005, section 148 of the Income Tax Ordinance, 2001. Neither reply to Show-Cause Notice was submitted nor hearing was attended on the dates 27.01.2012, 13.02.2012 and 05.03.2012. Resultantly, the Respondent No. 2 adjudicated the case and passed Order-in-Original No.97/2012 dated 07.05.2012. Para 7 of the said Order-in-Original is reproduced hereunder:-- "I have gone through facts and record of the case. The importers have imported various known brand of soft drinks Essential ingredient of these drinks is carbonated/aerated water and hence these drinks are rightly classifiable under PCT heading 2202.1010. The importer in these cases, by mis-declaring the classification have deprived the Government of its legitimate revenue amounting Rs.34,67,147/- (Federal Excise Duty @ 12% Rs.18,82,743/-, Additional Sales Tax Rs.6,66,567/-, Withholding Income Tax Rs.9,17,837/- which is to be deposited under the provisions of laws referred in the show-cause notice within 30 days of issuance of this order. Failing which recovery proceedings under Section 202 of the Customs Act, 1969, should be initiated. A penalty of Rs.17,00,000/- is also imposed on the importer under clause 14 of Section 156(1) of the Customs Act, 1969."
4.The appellant being aggrieved from the above Order-in- Original filed an appeal before the respondent No.3 who rejected the appeal along with 04 other appeals of different importers through a common Order-in-Appeals Nos.7564 to 7570 dated 04.07.2013. The operative paras thereof are reproduced as under:--
"5. I have carefully examined the record of the case and heard the rival parties patiently. It is noteworthy to clarify here that in the past non-alcoholic and alcohol free beers were being classified and cleared under PCT heading 2202.9000 i.e. on the basis that the same were "aerated water" and that these did not go through the process of inclusion of "carbon dioxide" and were thus termed to be non aerated and since such beers were out of the purview of "aerated beverage" these were not liable for the payment of the additional 12% FED which was levied on aerated waters/beverages of PCT 2202.1010. However, some customs formation held the view that the same were in fact "aerated waters" and were therefore correctly classifiable under the PCT heading 2202.1010 as "aerated waters" attracting 12% FED however no documentary evidence was provided to substantiate their claim.
6. Subsequently, however, some importers of these goods voluntarily started clearing these non alcoholic beers under PCT heading 2202.1010 as "aerated Waters" and the DR has stated that all such beers along with other soft drinks etc., where carbonation is involved, are being classified under 2202.1010 thus 12% FED is being levied on their import in addition to customs duty and taxes. The DR also provided data to the effect that non alcoholic beers as well as soft drinks, energy drinks and beverages were all being cleared under the PCT heading 2202.1010. This relevant data is placed on file.
7. Therefore, in order to be concrete and precise, information was obtained from the internet regarding the making of "non alcoholic" beer which is re-produced as under:
How non alcoholic beer is made:
The conversion from a traditional alcoholic beer to a non alcoholic beer takes place after the seventh step and preceding the finishing step. The un-carbonated beer is brought up to the boiling point of alcohol boils around 78.3 "C (173.5 "F). This temperature will vary slightly with altitude "barometric pressure" higher temperature at lower altitude and lower temperature at higher altitude. Another method of removing the alcohol is to decrease the pressure so the alcohol boils at room temperature. This is the preferred method because the addition of heat this late in the brewing process can greatly affect the flavor of the brew. If brewers decide to convert their brew to a non alcoholic brew they must consider the volume of liquid they have lost from the removal of the alcohol. Typically the volume is reduced by roughly 4% to compensate simply add water. Because water is a key ingredient in beer it will not alter the flavor. Another tip would be avoiding using corn sugars; corn sugars simply increase the alcohol content without adding to the flavor or body of the beer. Once the alcohol is removed proceed with the normal finished process where the beers is carbonated and bottled.
8. Other sources were also tapped which yielded the same result. Hence, in view of the import data produced by the DR and information obtained from the internet, I am of the considered view that non alcoholic and alcohol free beer are correctly classifiable under PCT heading 2202.1010 as "aerated water" and attract 12% FED in addition to leviable duty and taxes. Accordingly, the impugned Order-in-Original No. 98 of 2012 (Manual one Case) dated 07.05.2012 is upheld and the Appeal is not accepted."
5.Being aggrieved and dissatisfied with Order-in-Appeals Nos.7564 to 7570 dated 04.07.2013, passed by the Collector of Customs (Appeals), Karachi, the appellants filed instant appeal before this Tribunal on the grounds which are incorporated in the memo. of appeal as detailed hereunder:--
(i)"That the respondent No. 1 (Directorate General of Post Clearance Audit) are not designated as officer of Inland Revenue under the provision of Section 29 of the Federal Excise Act, 2005. Irrespective of this, the Board delegated power to respondent vide Notification No. 165(I)/2011 dated 03.03.2011 under section 29 of the Act, without realizing that under subsection (3) of Section 29 is empowered to delegate power by name or designation the person/authority listed at clauses (a) to (d) only in these Director General, Director, Additional Director, Deputy Director/Assistant Director figure no where, rendering the notification delegating the power being in contradiction to the provision of Section 29 and as such ultra vires and of no legal effect. Thus the whole exercise conducted by the respondent No. 1 under the provision of Section 46 of the Federal Excise Act, 2005 is coram non judice, hence void and ab-initio.
(ii)That similarly, the respondent No. 1 are not designated as officer of Inland Revenue under Section 228 or any other section of the Income Tax Ordinance, 2001 and as such are not empowered to carry out audit in respect of Section 177 of the Income Tax Ordinance, 2001, rendering the exercise conducted by them in the case of appellant as of no legal effect instead coram non judice, hence void and ab-initio.
(iii)That the respondent No. 1 are indeed designated as officer of Inland Revenue under section 30DD of Sales Tax Act, 1990 and they are delegated with the powers of an officer of Inland Revenue through Notification No. S.R.O. 42(I)/2010 dated 23.01.2010, subject to exercise those powers in the capacity of Chief Commissioner/ Additional Commissioner Inland Revenue/ Assistant Commissioner Inland Revenue under the provision of the Sales Tax Act, 1990 listed in column (4) of the notification but not in the capacity of Director General, Director, Additional Director, Deputy Director and Assistant Director. In the instant case of the appellant the respondent No. 1 exercise the power under the provision of Sales Tax Act, 1990 in the capacity of Deputy Director, rendering his act nullity to the provision of Section 30DD and Notification No. S.R.O. 42(I)/2010 dated 23.01.2010, without power/jurisdiction, hence void and ab-initio as held in the reported judgments PLD 1971 SC 197 Chittaranjan Cotton Mills Ltd v. Staff Union, Raunaq Ali's PLD 1973 SC 236, 2002 PTD (Trib.) 889 in MessrsUnitex Tower Factory v. The Collector of Customs (Appeals) and others, K-106/03 in MessrsSilver Corporation v. The Additional Collector of Sales Tax (Adjudication), Karachi III, Major Syed Walayat Shah v. Muzaffar Khan and 2 others (PLD 1971 SC 184), Omer and Company v. Controller of Customs, (Valuation): (1992 ALD 449 (1) Karachi AAA Steel Mills Ltd. v. CollectorofSalesTaxandCentralExciseCollectorate of Sales Tax(2004 PTD 624), PLD 1976 Supreme Court 37 Ali Muhammad v. Hussain Buksh and others and PLD 2001 SC 514 Land Acquisition Collector, Noshehra and others v. Sarfraz Khan and others.
(iv)That the respondent No. 2 is also not designated as officer of Inland Revenue under the provision of Section 14 of the Federal Excise Act, 2005, Clause (c) of subsection (3) of Section 25 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 in respect of matter relating to Federal Excise Duty, Sales Tax and Income Tax under the provision of Section 19 of the Federal Excise Act, 2005, Section 36 of the Sales Tax Act, 1990 and Section 162(1) of Income Tax Ordinance, 2001. Hence, by issuing show-cause notice and passing order-in-original the respondent No. 2 usurped the power of officer of Inland Revenue to which he is not vested, rendering the show-cause notice and subsequently passed order-in-original without power/jurisdiction, hence void ab-initio. Rendering the issuance of show-cause notice and order-in-original being in flagrant violation of law and as such coram non-judice.
(v)That wherein any action is taken in the absence of availability of powers or show-cause notice or order-in-original has been passed without jurisdiction/power, such order and so the subsequent order are of no legal effect as held by their Lordship of Supreme Court of Pakistan that "it is an element to principle that if a mandatory condition for the exercise of jurisdiction by Court, Tribunal or Authority is not fulfilled then the entire proceeding which follows become illegal and suffer from want of jurisdiction/powers. Any order passed in continuation of these proceedings in appeals or revisions equally suffers from illegality and are without jurisdiction"
Major Syed Walayat Shah v. Muzaffar Khan and 2 others (PLD 1971 SC 184), Omer and Company v. Controller of Customs, (Valuation): (1992 ALD 449 (1) Karachi AAA Steel Mills Ltd. v. Collector of Sales Tax and Central Excise Collectorate of Sales Tax (2004 PTD 624), PLD 1976 SC 514 Ali Muhammad v. Hussain Buksh and others and PLD 2001 SC 514 Land Acquisition Collector, Noshehra and others v. Sarfraz Khan and others, S.T.A. 444/03, S.T.A. 465/07, 2010 PTD (Trib.) 1636, 2010 PTD 465 and 2010 PTD 465,2010 PTD (Trib.) 2158, 2011 PTD (Trib) 1010, 2011 PTD (Trib.) 1680, 2011 PTD (Trib.) 2086,
(vi)That it is well settled principle of law that, if the law had prescribed method for doing of a thing in a particular manner such provision of law is to be followed in letter and spirit and achieving or attaining the objectives of performing or doing of a thing in a manner other than provided by law would not be permitted as declared in the landmark judgment of Director, Directorate General of Intelligence and Investigations and others v. MessrsAl-Faiz Industries (Pvt.) Ltd. and others reported as 2006 SCMR 129 wherein their lordship of the Supreme Court had observed as under:--
"INTERPRETATION OF STATUTE"
"Each and every word appearing in a section is to be given effect to and no word is to be rendered as redundant or surplus.
When the Legislature requires the doing of a thing in a particular manner then it is to be done in that manner and all other manners or modes of doing or performing that thing are barred.
If the doing of a thing is made lawful in a particular mannerthen doing of that thing in conflict with the manner prescribed will be unlawful as per maxim "Expression facit cessare tacitum".
(vii)That action of issuance of show-cause notice was ab-intio wrong as much as that the built-in automated authority in the software of PaCCS, the adjudicating authority defined in Section 2(a) of the Customs Act, 1969, who passed the assessment/clearance order in the goods declaration of the appellant under sections 80 and 83 of the Customs Act, 1969 and Rules 438 and 442 of Sub-Chapter (III) of Chapter XXI of Customs Rules, 2001 were satisfied in respect of appellant declaration of the imported goods and so the respective Collector of MCC of PaCCS, who never reopened the assessment order under section 195 of the Customs Act, 1969. Contrary, in order to defeat the legal mechanism, the respondent No. 1 who framed contravention report and respondent No. 2 who issued the show-cause notice on the strength of the contravention report and subsequently passed Order-in-Original No. 97/2012 dated 07.05.2012 were not competent to reopen a past and closed transaction within the framework of Customs Law.
(viii) In order to appreciate the proposition, it would be appropriate to reproduce here-in-below the provisions of Section 195 of the Customs Act, 1969 :
195 Powers of Board or Collector [***] to pass certain order:---(1) The Board or the Collector of Customs [or the Collector of Customs (Adjudication) may, within his jurisdiction, call for and examine the records of any proceedings under this Act for the purpose of satisfying itself, or, as the case may be, himself as to the legality or propriety of any decision or order passed by a subordinate officer and may pass such order as it or he may think fit:
Provided that no order confiscating goods of greater value or enhancing any fine in lieu of confiscation, or imposing or enhancing any penalty, or requiring payment of any duty not levied or short-levied shall be passed unless the person affected thereby has been given an opportunity of showing cause against it and of being heard in person or through a counselor other person duly authorized by him.
(2) No record of any proceedings relating to any decision or order passed by an officer of customs shall be called for or examined under subsection (1) after the expiry of two years from the date of such decision or order.
(ix)As per the said provisions of the section, any proceedings under the Customs Act, 1969 is subject to review either by the FBR or by the respective Collector, and that too for satisfying in respect of legality or propriety of any decision or order passed by a subordinate customs officer. There is no other provision in the Act authorizing a customs functionary to review or reopen a past or closed transaction. Hence, the outcome of audit by respondent No. 1 and its observation and reporting to Collector of Customs, PaCCS regarding procedure impropriety in passed assessment/ clearance order, is an action within the preview of section 195 of the Customs Act, 1969. The act of passing of assessment/ clearance order fall within the preview of the word "proceedings" as all the happening and events before a Tribunal or an authority on whom jurisdiction is conferred by law to dispose off contentious matters are understood by the term proceedings. Therefore, the proper way to dispose off the audit objection was to place it before Collector of Customs, PaCCS for initiation of proceedings as envisaged therein.
(x)In the light of what has been discussed in the preceding para, it is evident that the action of framing contravention report by the officials of respondent No. 1, forwarding that to Collector of Customs, PaCCS, as well as issuance of show-cause notice by the respondent No. 2 in the case of appellant were the acts of assumption of wrong jurisdiction and as such exercise carried out right from preparation of contravention report by the respondent No. 1 till passing of order by the respondent No. 2 were without jurisdiction as contemplated in unreported and reported judgments of Customs, Excise and Sales Tax Appellate Tribunal, High Court and Supreme Court namely PLD 1971 SC 197 Chittaranjan Cotton Mills Ltd. v. Staff Union, Raunaq Ali's PLD 1973 SC 236, 2002 PTD (Trib.) 889 in Messrs Unitex Tower Factory v. The Collector of Customs (Appeals) and others, K-106/03 in Messrs Silver Corporation v. The Additional Collector of Sales Tax (Adjudication), Karachi III, Major Syed Walayat Shah v. Muzaffar Khan and 2 others (PLD 1971 SC 184), Omer and Company v. Controller of Customs, (Valuation): (1992 ALD 449 (1) Karachi AAA Steel Mills Ltd. v. Collector of Sales Tax and Central Excise Collectorate of Sales Tax (2004 PTD 624), PLD 1976 Supreme Court 37 Ali Muhammad v. Hussain Buksh and others and PLD 2001 Supreme Court 514 Land Acquisition Collector, Noshehra and others v. Sarfraz Khan and others.
(xi)That the assumption of the respondents that violation of the said sections did take place appears to be manifestly erroneous. Infact charge against the appellant is wholly misconceived, as his action do not fall within the operative mechanism of sections 32 and 32(A) of the Act. A study of sections 79, 80 and 83 of the Act and Rules 438 and 442 of Customs Rules, 2001 reveals that it is mandated upon the assessing officer to verify the declaration in all respect and in case of some discrepancy, correct that for levy of duty and taxes. In order to abreast the Hon'ble Tribunal it is felt appropriate by the appellant to analyze the scheme and mechanism of the assessment and clearance as provided in the Act andRules, for better understanding the verbatim of provision of the Rules are reproduced herein-in below:
"Section 79---Declaration and assessment for home consumption or warehousing:-{(1) The owner of any imported goods shall make entry of such goods for home consumption or warehousing or for any other approved purposes, within fifteen days of the arrival of the goods, by,-
(a) Filing of a true declaration of goods, giving therein complete and correct particulars of such goods, duly supported by commercial invoice, bill of lading or airway bill, packing list or any other documents required for clearance of such goods in such from and manner as the board may prescribe; and
(b) Assessing and paying his liability of duty, taxes and other charges thereon, in case of a registered user of the Customs computerized System.
[Provided that if, in case of used goods, before filing of goods declaration, the owner makes a request to an officer of customs not below the rank of an Additional Collector that he is unable, for want of full information, to make a correct and complete declaration of the goods, then such officer subject to such conditions as he may deem fit, may permit the owner to examine the goods and thereafter make entry of such goods by filing an goods declaration after having assessed and paid his liabilities of duties, taxes and other charges.
Providing further that no goods declaration shall be filed prior to ten days of the expected time of arrival of the vessel.]
(2) if an officer, not below the rank of Additional Collector of Customs, is satisfied that he rate of customs duty is not adversely affected and that there was no intention to defraud, he may, in exceptional circumstances and for reasons to be recorded in writing, permit, substitution of a goods declaration for home consumption for a goods declaration for warehousing or vice versa.
(3) An officer of customs, not below the rank of assistant Collector of Customs, may in case of goods requiring immediate release allow release thereof prior to presentation of a goods declaration subject to such condition and restriction as may be prescribed by the Board.]
"Section 80---Checking of goods declaration by the Customs---- (1) on the receipt of goods declaration under section 79, an officer of customs shall satisfy himself regarding the correctness of the particulars of imports, including declaration assessment, and in case of the customs computerized system payment of duty, taxes and other charges thereon.
(2) An officer of customs may examine any goods that he may deem necessary at any time after the import of the goods into the country and may requisition relevant documents as and when and in the manner deemed appropriate, during or after release of the goods by customs,
(3) If during the checking of goods declaration, it is found that any statement in such declaration or documents or any information so furnished is not correct in respect of any matter relating to the assessment, the goods shall without prejudice to any other action which may be taken under this Act, be reassessed to duty.
(4) In case of the customs computerized system, goods may be examined only on the basis of computerized selectivity criteria.
(5) The Collector may, however, either condone the examination or defer the examination of imported goods or class of goods and cause it to be performed at a designated placed as he deems fit and proper either on the request of the importer or otherwise.
"Section 83-- Clearance for home consumption: (1) when the owner of any goods entered for home consumption and assessed under section 80 or 81 has paid the import duty and other charges, if any, in respect of the same the appropriate officer, if he is satisfied that the import of the goods is not prohibited or in breach of any restriction or conditions applying to the import of such goods, may make an order for the clearance of the same.
Provided that, at customs stations where the customs computerized system is operational the system may clear the goods through system generated clearance documents.
(2) Where the owner fails to pay import duty and other charges within 3[ten] days from the date on which the same has been assessed under section 80, 80A or 81, he shall be liable to pay surcharge at the rate of [KIBOR] plus three per cent] on import duty and other charges payable on such goods]
Rule 438-- Assessment by Customs Authorities: Where any declaration has been filed under Rule 433 or additional documents have been submitted under rule 437 the Customs shall satisfied itself as to their correctness including its value, classification claim of exemption, payment of duty and taxes and may re-assess the goods during or after clearance
Rule 442-- Release of imported goods: customs release message will be electronically communicated to the importer, his agent and the Terminal Operator. The goods will be release by the terminal Operator subject to fulfilling of any condition specified by customs in electronic message to the Terminal Operator. The Terminal Operator shall submit all collected documents requisitioned through electronic message to customs at the end of the day.
(xii)That in terms of Section 79 of the Act, the Board while commissioning the Pakistan Automated Customs Computerized System framed its rules and embodied that in Chapter XXI of the Customs Rules, 2001, also prescribed the form of good declaration and transmitting the same online with the MCC of PaCCS by intending importer (appellant). The format of GD's so prescribed submission and reporting of detailed information including description of goods its weight, PCT heading and value. The system after receipt of good declaration either select that for examination or assessment at its own, the assessing officer upon receipt of good declaration either complete the assessment if felt satisfied or get the goods examined or tested (as the case may be) for determining, the nature, quantity, description, PCT Heading of the goods and value to assess the amount of duty and taxes thereon subsequently either on declared PCT Heading and value or on the determined one during the course of assessment or even after the clearance of the goods in terms of Section 80 and Rule 438 of Customs Act, 1969 and Customs Rules, 2001.
(xiii)The assessment procedure as provided in Section 80 and Rule 438 of the Act and Rules, are quite exhaustive and detailed. The assessing officer can call for all the relevant documents and any other information which he deems necessary, and still the assessing officer can put questions or require submission of additional information for the purpose of completing the assessment order under section 26 of the Customs Act, 1969 and Rule 437 of Sub-Chapter (III) of Chapter XXI of the Customs Rules, 2001. A perusal of Sections 32 and 32(A) of the Act reveals that in addition to declaration any communication or answer to question put by customs and found wrong in material terms do qualify to constitute an offence within the frame work of the said section. So in order to bring an act or action within the frame work of word 'false' as used in section 32 of the Act, the Act should either be a conscious wrong or culpable negligence and should signify knowingly or negligently untrue. Such issue came up for decision before the Karachi High Court in the case of Muhammad Imtiaz Ahmed Sheikh v. Principal and Chairman Academic Council and others reported as PLD 1976 Kar. 1154. Their Lordship observed:
" In law, the word 'false' usually implies either conscious wrong or culpable negligence, and signifies knowingly or negligently untrue. See United States v. Ninety-nine Diamonds (1). Accordingly to Metropolitan Life Ins. Co. v. Adams (2) the word 'false' has two distinct and well recognized meanings (1) intentionally or knowingly or negligently untrue; (2) untrue by mistake or accident, or honestly after the exercise of reasonable care "
(xiv)The procedure for clearance for goods for home consumption is embodied in Section 83 and Rule 442 of the Act and Rules, which empowers the appropriate officer to make an order of the clearance for home consumption upon satisfaction that the duty and taxes has been paid and the import of the goods is not prohibited or in breech of any restriction or conditions applying to the import of such goods. The clearance order passed by the competent authority in the instant cases were after having satisfaction in regards to the assessment order made under Section 80 and Rule 438 of the Customs Act, 1969 and Customs Rules, 2001 respectively.
(xv)The respondents Nos. 1 and 2 have failed to bring out on record any material in outcome of their inquiry by which it can be assumed that the appellant was in any way linked with the assessment and clearance order passed under sections 80(1) and 83 of the Customs Act, 1969 and Rules 438 and 442 of Customs Rules, 2001 by the competent authorities as expressed in section 2(a) ibid. It is surprising that in the instant case no specific charge has been levelled against the appellant in the show-cause notice and held in order-in-original. An examination of the show-cause notice reveals that the alleged under assessment was made by the customs officials, instead of taking action against them, the respondents accused the appellant for their negligence and subsequently held the appellant guilty of offence falling under sections 32 and 32A of the Act without any basis. This act in itself violated the principal of natural justice. In the circumstances application of section 32 was b-initio wrong and the act of the respondent No. 2 to malign the appellant unnecessarily and to issue him a show-cause notice and passing of an order-in-original are acts of abuse of powers.
(xvi) The order-in-original passed by respondent No. 2 transpires that the appellant has not been held guilty of mis-declaration under the provision of Section 32(1), 32(2) and 32(3A) of the Customs Act, 1969, rendering the charges levelled in the show-cause notice stood diluted instead non existent and is based on dereliction of duties and negligence on the part of the officials of MCC of PaCCS, who wrongly assessed the goods under the alleged wrong PCT heading (despite not). In the case of Eastern Rice Syndicate v. Collector of Customs (PLD 1959 SC 364) the Supreme Court had held that in order to attract penal provision of Section 39 (now Section 32), it must be established that the person who alleged to have made any statement in a document, submitted to the customs authorities must be false to his knowledge, and it would depend upon the circumstances of each case. It is not disputed here that the statement made in the Customs Documents by appellant regarding the nature of the goods imported were in any way wrong; rather that information was found correct and true.
(xvii) The appellant is fortified to rely on the judgment of the Customs Appellate Tribunal given in Customs Appeal No.K-198/ 2004 reported as 2005 PTD (Trib.) 196. Wherein the learned Member of the Tribunal observed "issuance of show-cause notice for confiscation of the goods, in the circumstances of ab initio wrong as within the framework of S. 32 of the Customs Act, 1969 no un-true statement was ever made either by the importer or by the appellant agent.--- Even otherwise if any mischief was done, it was Assessing Officer who should have been found guilty for making a wrong assessment and even otherwise and agent and importer could not be held responsible."
(xviii) That it is settled principle of law in Customs Jurisprudence/ through a series of judicial fora of Indian and Pakistani Jurisprudence starting with the case of Monno Industries Ltd. v GOP reported as 2002 MLD 1980 State Cement Corporation v GOP, wherein it is held that "if the wisdom of Customs Authorities for invoking Sections 32 and 32A despite giving correct declaration is acceded to that no responsibility lays upon the hierarchy of the Customs officials to levy and assess the duty according to law. The provisions of Section 80(I) of the Customs Act, 1969 in such a state of mind would become redundant." The observation of the Honourable Late Justice Sabihuddin Ahmed in the case of State Cement v. Government of Pakistan reported as 2002 MLD 1980 would once again ridicule the irrational approach of the Customs Authorities, which read as " We are rather amazed at the line of reasoning put forward to the effect that while an assessee is required to interpret the law and relevant notification correctly and could be held guilty of a penal offence for not doing so in terms of Section 32(1) of the Customs Act, no responsibility of any kind would devolve on the customs officials." We may add that in case of short levy or evasion became possible due to collusion of some customs officials the mere fact that no such customs official involve and no notice was served in terms of Section 32 of the Customs Act, indicate that the entire exercise was mala fide. Whereas the Hon'ble Supreme Court of Pakistan while dismissing the appeal held in the reported judgment 2011 PTD 2220 Collector of Customs, Preventive, Karachi v. Pakistan State Oil Karachi that "where huge loss has been caused to Government Exchequer namely due to the negligence of relevant functionaries of the customs department against which action may be initiated by the concerned Collector of Customs for dereliction of duty and being inefficient which amounts to mis-conduct."
(xix) That as per amended provision of Section 193 of the Customs Act, 1969 through Finance Act, 2012, the respondent No. 2 was not empowered to lay hands on the appeal filed before him, prior to 30.06.2012 and resting with him for decision as stipulated in Section 193A of the Customs Act, 1969. That after amendment in the provision of the Act, he was barred by law to pass an order against the appeal filed before him against the order of Additional Collector and he was duty bound to transfer the said appeal before the Customs Appellate Tribunal, which has to assume jurisdiction of the said appeal after 30.06.2012. For easement Sections 193(1) and 194-A are reproduced herein below:
193 Appeals to Collector (Appeals) : (1) Any person including an officer of Customs aggrieved by any decision or order passed under sections 33, 79, 80 and 179 by an officer of Customs before below the rank of Additional Collector may prefer appeal to the Collector (Appeals) within thirty days of the date of communication to him of such decision or order.
194-A Appeals to the Appellate Tribunal (1) Any person (or an officer of Customs) aggrieved by any of the following orders may appeal to the Appellant Tribunal against such orders:
[(a) a decision or order passed by an officer of Customs not below the rank of Additional Collector under Section 179]
[(ab) an order passed by the Collector (Appeals) under section 193;]
(c) an order passed under Section 193, as it stood immediately before the appointed day.
(d) an order passed by the Board or the Collector of customs under Section 195 [******]
(e) {an order passed in revision by the Director General Customs Valuation under section 25D, provided that such appeal shall be heard by a special bench consisting of one technical member and one judicial member.}
(xx)That with the amendment through Finance Act, 2012 in Sections 193(1) and 194(1)(a) the appeals filed with respondent No. 2 against the order of Additional Collector automatically excluded from his powers and he was duty bound to transfer those to the Customs Appellate Tribunal for decision. To the contrary, he laid hands on the appeal of the appellant filed against the order of Additional Collector rendering the order so passed as without powers/jurisdiction, hence coram no judice and this opinion stood validated from the judgment of Superior Judicial Fora reported as 2004 PTD 2994 MessrsMazhar Iqbal v Collector of Customs, 2005 PTD 23 MessrsShazad Ahmed Corporation v. FOP, Order-in-Petition No. D-568/2010 Shakeel Ahmed v. FOP and D-710 to 714/2010 Messrs Jamal Din and others and FOP and 2 others and 2002 PTD 2457, PLD 1971 Supreme Court 61, PLD 1973 Supreme Court 236, PLD 1964 SC 536, 2001 SCMR 838 and 2003 SCMR 1505, In PLD 1996 Karachi 68, 2006 PTD 978 and PLD 1971 SC (sic), PLD 1971 SC 184, PLD 1971 SC 197, PLD 1973 SC 236, 1992 ALD 449 (1) Karachi, 2004 PTD 624, PLD 1976 Supreme Court 514, PLD 2001 Supreme Court 514, 2006 PTD 2237, 2006 SCMR 129, 2009 PTD (Trib.) 1996, 2010 PTD 465 and 2010 PTD (Trib.) 832.
(xxi)The order-in-appeal passed/issued by the respondent No. 2 has no nexus with the show-cause notice or grounds of memo. of appeal. Instead he travelled beyond the scope of show-cause notices as evident from order-in-appeal containing narration of some alien issues in para. 7 in regards to preparation of non alcoholic beer with the caption "how non alcoholic beer is made", said fact has not been spelt out in show-cause notice. Said insertion and orders on that is not permitted under law. Decision on the basis of the fact not incorporated in the show-cause notice are termed palpably illegal by the Superior Judicial Fora. Reliance is placed 1987 SCMR 1840, 2004 PTD 1449, 2008 PTD (Trib) 36, 2007 PTD 2265, 2010 PTD (Trib) 1759, 2010 PTD (Trib) 1377 and 2012 PTD (Trib.) 1697.
(xxii) That the appeal with the respondent No. 2 was filed on 11.06.2012 and an order under the proviso of subsection (3) of Section 193-A of the Customs Act, 1969 should had been decided by the respondent within 120 days from the date of filing of appeal i.e. by 09.10.2012 or within a further extended period of 60 days during the initial period of 120 days with reason to be recorded for extension in writing. No extension was granted by respondent No. 2 prior to expiry of initial period of 120 days i.e. by 09.10.2012. Contrary the order-in-appeal was passed on 04.07.2013 i.e. after expiry of 268 days of the initial period and 208 days after the expiry of entire allotted period of 180 days. Rendering the order-in-appeal barred by time by 268 days. Hence, without power/jurisdiction, without lawful authority, rendering it ab-initio void as held in reported judgments 2008 PTD 60 MessrsSuper Asia Muhammad Din Sons (Pvt.) Ltd. v. Collector of Sales Tax, Gujranwala and 2008 PTD 578 Messrs Hanif Strawboard Factory v. Additional Collector (Adjudication) Customs, Sales Tax and Central Excise Gujranwala, 2009 PTD 762 MessrsTanveer Weaving Mills v. Deputy Collector Sales Tax and 4 others and 2009 PTD (Trib.) 1263 MessrsSyed Bhai Lighting Limited, Lahore v. Collector of Sales Tax and Federal Excise, Lahore and 2 others and 2009 PTD 1978 Leo Enterprises v. President of Pakistan and others, 2010 PTD (Trib.) 1010 Innovative Impex v. Collector of Customs, Sales Tax and Federal Excise (Appeal), 2011 PTD (Trib.) 79 Fazal Ellahi v. Additional Collector of Customs, MCC of PaCCS, 2011 PTD (Trib.) 987 Unique Wire Industries v. Additional Collector of Customs, MCC of PaCCS, 2011 PTD (Trib.) 1146 Kaka Traders v. Additional Collector of Post Clearance Audit and 2012 PTD (Trib.) 1650 Pak Electron Ltd. v. Collector of Customs, Lahore and others."
6.The respondent department filed parawise comments as under:--
(i) Paras 1 to 3. The contention of advocate is denied considering the role of Post Clearance audit which is a department working in accordance with CGO - 03/2009 dated 13.06.2009. The prime function of Post Clearance Audit is to verify the correctness of Trade related declaration (mis-declaration) and to detect and investigate commercial and Trade related frauds to propose measures to prevent its occurrence that is to prevent any pilferage of revenue and to point out the same to the concerned authorities for recoveries of short levied amount under section 32 of the Customs Act, 1969. The purpose of Section 32 of the Customs Act, 1969 is also to recover outstanding Government Revenue short levied which read as under:--
32(1) if any person in connection with any matter of customs
(a) Makes or sing or causes to be made or signed or delivers or causes or causes to be delivered to an officer of customs any declaration, notice, certificate or other documents whatsoever or
(b) Makes any statement in answer to any question put to him by an officer of customs which he is required by or under this Act to answer
(c) Submit any false statement or documents electronically through automated clearance system regarding any matter of customs
Knowing or having reason to believe that such document or statement is false in any material particular, he shall be guilty of an offence under this section. (Emphasis Supplied)
(2) Where, by reason of such documents or statement as aforesaid or by reason of some collusion, any duty or charge has been levied or has been short delivered or has been erroneously refunded, the person liable to pay any amount on that account shall be served with a notice within five years of the relevant date, requiring him to show cause why he should not pay the amount specified in the notice.
(3) Where by reason of any advertence error, error or mis-construction any duty or charge has been levied or has been short levied or has been erroneously refunded, the person liable to pay any amount on the account shall be served with a notice within five years of the relevant date, requiring him to show causewhyheshouldnotpaytheamountspecifiedinthenotice.
(3A) Notwithstanding anything contained in Subsection (3), where any duty or charge has not been levied or has been short levied or has been erroneously refunded and this is discovered as a result of an auditor or examination of the documents provided by the importers at the time the goods were imported, the person liable to pay any amount on that account shall be served with a notice within five years of the relevant date requiring him to show cause why he should not pay the amount specified in the notice.
(ii) Paras. 4 to 6. The contention of the advocate is denied due to the fact that Ministry of Law and Justice vide their letter No. F.242/2012-Law-II dated 11.07.2012 has clarified that the subsection (2) of Section 3 of the Federal Excise Act, 2005 provides that any duty in respect of goods imported into Pakistan shall be levied and collected in the same manner and at the same time as if were a duty of Customs payable under the Customs Act, 1969 (IV of 1969), and the provision of the said Act including section 31(A) thereof shall apply. In view of the position, the officer of the customs are competent to take cognizance of any short paid amount Federal Excise Duty pertaining to import stage and to adjudicate/ recover the same.
(iii) Paras 7 to 10. The contents of para are denied. It is submitted that the respondent has not attempted to open a close and past transaction which has attain finality. Factual position is that in terms of Sections 32(2), 32(3) and 32(3A) of the Customs Act, 1969 no transaction can be considered close and past unless either action is taken under the said provision or the time limit given in these legal provisions are lapsed. Therefore, he said transaction cannot be treated as closed and past. It is submitted that the Tax liability of the petitioner cannot be ignored just on the grounds that the petitioner had benefitted the end consumer at the cost of public revenue. If the contention of the applicant is considered and no case for recovery of short levied Government revenue can be initiated under the Customs Act, 1969 then the provision of Section 32 of the Customs Act, 1969 becomes redundant. The purpose of Section 32 of the Customs Act, 1969 is clear to recover short levied or erroneously refunded amount to be recovered further the theory put forth by the Advocate that no assessment can be reopened as it falls under the jurisdiction of Collector of Customs the assessment work in the Collectorate may jeopardize, as whenever assessment made is disputed by the importer no officer below the rank of Collector of customs can reopen it to change it daily assessments are challenged by the importers and are connected/ reassessed by immediate ranking officer without reopening it.
(iv) Paras 11 to 15. The contents of para denied due to the facts that record of the case clearly shows that importers knowingly and deliberately mis-declared the classification with the motive to avoid application of Federal Excise duty which was otherwise leviable on the actual classification therefore the penal clauses invoked as per provisions of law are justified. The perusal of the appeal shows that same point has been agitated in different modes posing several law points which is twist of the issue to make the debate lengthy. The factual position is that the first question is the correct classification of the item in dispute for which no reason/arguments has been submitted which are discussed as below:
2 classification of Pakistan Custom Tariff which clearly shows classification as under:-
2202 .Water including Minerals Waters and aerated waters, containing added sugar or other sweetening matter or flavoured and other non alcoholic beverages, not including fruit or vegetable juices of heading 2009.
2202.1010 .Aerated Waters
2202.1090 ....Other
2202.9000 Others
The Explanatory notes vide page IV 2202.1 shows Scheme of classification of different products according to their constituents and nature of its use which reads as under:
(A) Waters, including mineral water containing added sugar or other sweetening matter or flavoured.
This group includes inter -alia
1-Sweetening or flavoured minerals water (natural or artificial)
2- Beverages such as lemonade, orangeade, colas, consisting of ordinary drinking water, sweetened or not flavoured with fruit juices or essence, or composed extracts, to which citric acid or tartaric acid are sometimes added. They are often aerated with carbon dioxide gas and are generally presented in bottles or other air tight containers.
(B) Others nonalcoholic beverages, not including fruit or vegetable juices of heading 20.09
This group includes inter -alia
1- Tamarind nectar rendered ready for consumption as beverages by the addition of water and sugar staining.
2- Certain other beverages ready for consumption as beverages readyforconsumptionsuchasthosewithabasisofmilkcoca.
The copies of under dispute goods declaration are placed at annexure E it clearly shows that product is packed in air tight cans of different volume (mainly Malt Beverages and other soft drinks 330 mil. 500 ml etc.) which clearly falls under group A as discussed above and below in para 3 therefore is classifiable under PCT 2202.10 and consequently Federal Excise duty is leviable on these imported products.
3- The WCO (World Customs Organization) Rulings on the issue which clearly shows that imported products falls in group A of the nomenclature of PCT 2202 and therefore are classifiable under heading 2202.1.
4- Due to the facts as discussed above the action taken by the adjudicating authority and Collector are in accordance with the Customs Act, 1969 and fulfills all corner of justice.
5- It is evident from the above that respondents knowingly and willfully mis-declared the classification just to avail undue benefits by not paying the Federal Excise Duty which was otherwise payable by them and in this way they cause loss to the public exchequer. Therefore the penal action taken by the adjudicating authority is justified and is in accordance with the provisions of Customs Act, 1969.
6- It is also noticeable that as per general rule of interpretation of the harmonized system, the Federal Board of Revenue is the final authority to determine classification of any item meant to be imported or exported.
7- It is purely a question of facts which is to be dealt in accordance with the directives given by the Federal Board of Revenue vide CGO 10/2001 dated 04.09.2001 in which classification of any product under dispute is to be determined by the PCT committee constituted in accordance with the said CGO. As in a similar case of dispute of classification of Messrs Millennium Pharmaceutical where Honourable Supreme CourtofPakistanset aside the order of HonourableHighCourtofSindh, where Hon'ble High CourtofSindhhasearlier determined the classification of a product and the matter was referred to PCT committee by the Supreme Court of Pakistan.In view of the above facts, it is requested that if Appellate Tribunal deem fit and consider it as dispute of classification, then matter may be referred to PCT committee for resolution of dispute although in the eyes of the department it is a clear case of misdeclaration of classification and its classification is clear under PCT heading 2202.1010 without doubt.
7.We have heard both the contesting parties and also examined the relevant record. The central issue involved in this case pertains to classification of soft drinks (Pepsi, Dew, 7-UP etc.). The appellant imported aforesaid drinks and classified the same under PCT heading 2202.9000 whereas the departmental contention is that the same are classifiable under PCT heading 2202.1010 which besides duty and taxes also attracts Federal Excise Duty @ 12% of the retail price as per Serial No.5 of Table 1 of First Schedule to Federal Excise Act, 2005. The same is reproduced hereunder:- | S.No. | Description of Goods | Heading/ Sub-Heading Number | Rate of Duty |
| 5. | Aerated waters, containing added sugar or other sweetening matter or flavoured. | 2202.1010 | Twelve percent of retail price |
8.The department's case is that the appellant deliberately misdeclared classification in order to avoid payment of Federal Excise Duty notwithstanding the fact that there is clear PCT classification (by description) of aerated water viz. 2202.1010. In presence of the aforesaid classification, there was hardly any scope to classify imported soft drink which is aerated water due to process of inclusion of carbon dioxide. Before dilating upon this issue, it is expedient to highlight main heading of PCT 22.02 along with its sub-headings as under:-
22.02
"Waters, including natural or artificial mineral waters and aerated waters, containing added sugar or other sweetening matter or flavoured, and other non-alcoholic beverages, not including fruit or vegetable juices of heading 20.09."
| Sub-Heading | Description | C.D.(%) | ST/FED(%) | WHT(%) |
| 2202.1010 | ----- Aerated Waters | | 17FED:12% RP | |
| 2202.1090 | ----- Other | | 17 | |
| 2202.9000 | ----- Other | | 17 | |
In view of clear position as above, we are inclined to subscribe to respondent departments' point of view that the imported goods namely soft drink (Pepsi, Dew and 7-UP) fall in PCT heading 2202.1010 attracting FED @ 12% of the Retail Price. 9.The appellant has taken plea that the system of PaCCS (Pakistan Automated Customs Clearance System) cleared their Goods Declaration which means that the declarations made in the G.D. were correct. The relevant portion of their plea as contained in the Rejoinder dated 04.12.2015 is reproduced below:--
"The software of the PaCCS has been designed by the agility in such a manner that upon receipt of the Goods Declaration, the system co-relates each declaration with the corresponding PCT heading, the claimed notifications which are fed therein either by the FBR/Project Director or Commissioner of Income Tax at their own and after finding those in accordance with the declaration the system pass assessment/clearance order in exercise of its inbuilt vested authority under Sections 80 and 83 of Customs Act, 1969 and Rules 438 and 442 of Customs Rules, 2001 and this fact stood validated from examination of the import documents and goods declaration. Resultantly, the appellant has made no mis-declaration in material particular in terms of Section 32(I) of the Customs Act, 1969, hence, invoking of the said is erroneous."
10.It is important point to mention here that the appellant has not given a single technical point/ reason to justify their claim for PCT heading 2202.9000. On the contrary, the respondent department laid emphasis that the "soft drinks" pass through process of inclusion of carbon dioxide hence these are aerated waters which has specific PCT classification namely 2202.1010 attracting levy of FED @ 12% of the retail price besides duty/ taxes. The appellant has contended that section 32(2) of the Customs Act, 1969 is not attracted in this case as there was no misdeclaration on their part. The fact of the matter is that they filed G.D. and self-assessed their goods as per section 79(1)(b) of the Customs Act, 1969 and then the inbuilt system of PaCCS cleared the same under section 80 ibid without any objection. 11.Here, it is imperative that the mechanism of PaCCS is understood in order to comprehend the whole issue in its proper perspective. The Pakistan Customs Automated Clearance System (PaCCS) was launched by FBR in Custom House, Karachi in 2006 with the help of Agility (a Software Company) with clear objective of reducing dwell time in clearance of imported/ export goods so that the cost of doing business in Pakistan might be reduced and to bring the customs procedures in Pakistan in line with best international practices. Prior to the said system, the importers/ exporters had to bear exorbitant charges at ports in the form of container charges, demurrage charges, shipping line charges etc. because of slow manual processes resulting in dwell time of one week on average for clearance of a consignment. Due to the new automated system (erstwhile PaCCS and now WeBOC) dwell time has been reduced to 48 hours on average for G.Ds. falling in Yellow and Red Channels whereas Green Channel G.Ds take only 30 minutes to Gate Out". The Risk Management System (R.M.S.) as incorporated in the PaCCS introduced three different Channels for the clearance of imports namely Green, Yellow and Red. These Channels were defined primarily based on profile of the importer except that few sensitive PCT headings prone to duty/ tax evasion were also made part of Red Channel. If profile of the importer was O.K., the system would automatically allow "Gate Out" except selecting and shifting a few Goods Declarations on random basis to "Yellow Channel" where the Appraising Officer was required to scrutinize declarations made in the G.D. including PCT classification, valuation, Import Trade Contravention (I.T.C.) concessionary notifications including FTAs/PTAs etc. If deemed appropriate, he would also refer the G.D. for physical examination of the goods under assessment. In case of adverse profile of the importer or imports falling in sensitive PCT headings, the G.D. would automatically travel to "Red Channel" which required complete scrutiny of each declaration made in the G.D, besides strict physical examination to verify description of goods. In view of aforementioned brief about the PaCCS, there is no weight in the arguments of the appellant as detailed at para 9 above. On the other hand, the comments of respondent department that "Further as per amended provisions of Section 80 of the Customs Act, 1969, under PaCCS/ WeBOC, the Customs Job is now restricted only to check the declaration and payment of duty/ taxes on selectivity criteria basis and during checking any misdeclaration and less payment if found then the goods not only be reassessed for the payment of differential amount of duty/ taxes but also appropriate penal action under the relevant provisions of law will be taken against the importer," carry substantial weight. As per international best practices, audit is integral part of any self-assessment system whether it is sales tax, customs or any other levy. Therefore, an independent full-fledged dedicated Directorate General of Post Clearance Audit (PCA) was created by FBR in 2007 soon after launching self-assessment system of PaCCS in 2006. The primary objective to create aforementioned Directorate General was to identify such Goods Declarations wherein misdeclaration were made by the importers in breach of trust reposed on them by the system at the cost of legitimate government revenue.
12.Now, we come to technical objections raised by the appellant in their appeal memo as well as during the course of hearing. The appellant has raised objections that the Directorate General of PCA, are not designated as officers of Inland Revenue under provisions of section 29 of the Federal Excise Act, 2005. Furthermore, subsection (3) of section 29 delegates power by name or designation as (a) to (d) and Director General, Director, Additional Director, Deputy/ Assistant Director figure out nowhere rendering S.R.O. 165(I)/2011 dated 03.03.2011 (delegating powers to officers of Directorate General of PCA) under aforementioned provision of law ultra-vires and of no legal effect. Therefore, the whole exercise conducted by the respondent (Directorate General PCA) under the provisions of section 46 of the Federal Excise Act, 2005 is coram non judice hence void ab-initio. In this regard, we view that the aforesaid stance taken by the appellant is not correct as SRO 165(I)/2011 dated 03.03.2011 has been issued under subsection (1) of section 29 of the Federal Excise Act, 2005, and not under subsection (3) ibid. Infact, the objection of the appellant is misplaced. The appellant have also objected that though the Directorate General, PCA is designated as officers of Inland Revenue under section 30DD of Sales Tax Act, 1990, S.R.O. 42(I)/2010 dated 23.01.2010 empowers them to exercise power in the capacity of Chief Commissioner/Additional Commissioner/Deputy/Assistant Commissioner, Inland Revenue, under the provisions of Sales Tax Act, 1990 but not in the capacity of Director General, Director, Additional Director, Deputy/Assistant Director. We feel that it is matter of misperception on the part of the appellant. The study of aforesaid notification clearly shows that the delegation of powers to the officers of Directorate General by designation infact relate to those sections of Sales Tax Act, 1990 which can be exercised by only those officers of Inland Revenue who are at par with them in terms of status (Grade/ Basic Pay Scales) like the powers under specified sections to be exercised by the Chief Commissioner Inland Revenue (BS-21) and Commissioner Inland Revenue (BS-20)havebeendelegatedtotheDirectorGeneralPCA(BS-21) and Director PCA (BS-20). Therefore, appellant's objection is without any substance.
13.The appellants' objection that the Collector, Customs did not re-open assessment made under section 80 of the Customs Act, 1969 in terms of section 195 ibid proves that the assessment was okay, amounts to confusing the whole situation. As mentioned at para 10 above, the G.D. was self-assessed by the appellant under section 79(1)(b) of the Customs Act, 1969. Moreover, section 195 does not specifically mentions about section 80 or any other provisions of the Customs Act, 1969. Furthermore, the erstwhile system of PaCCS had inbuilt Review system against assessment made by the Appraising Officer. The first Review was filed (electronically) before Principal Appraiser and second Review before the Deputy/ Assistant Collector of Customs. The appellant has also objected that the Additional Collector, Customs (PaCCS), Karachi had no jurisdiction to issue show-cause notice or to pass an Order-in-Original since he was not designated as an officer of Inland Revenue under the relevant provisions of Federal Excise Act, 2005, Sales Tax Act, 1990 and Income Tax Ordinance, 2001. We do not subscribe to aforementioned views of the appellant instead agree with the comments of filed by the respondent department that subsection (2) of section 3 of the Federal Excise Act, 2005 provides that duty in respect of goods imported into Pakistan shall be levied and collected in the same manner and at the same time as if it were a duty of customs payable under the Customs Act, 1969. Similar position does exist in section 6 of the Sales Tax Act, 1990. Furthermore, on a reference from FBR, the Ministry of Law, Justice and Human Rights vide letter No.F.242/2012-Law-I dated 11.07.2012 has also opined that "This Division is of the view that in terms of section 7 read with section 3(2) of the Federal Excise Act, 2005, the officers of Customs are competent to take cognizance of any short paid amount of Federal Excise Duty pertaining to the import stage and to adjust/recover the same. Further, FED as recovered under the Customs Act, 1969 shall be adjusted under FED Head."
14.In view of above-detailed position, we are inclined to uphold the impugned Order-in-Appeals Nos.7564 to 7570/2013 dated 04.07.2013 despite the fact that it specifically relates to imported consignment of flavoured malt drink/ non-alcoholic beer but at para 6, it does discuss soft drink as well. 15.Order passed accordingly.
Sd/-Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â
(Muhammad Nazim Saleem)
Member Technical-II Â Â Â Â Â
Karachi             Â
It is certified that this judgement consists of thirty eight (38) pages and each page has been dictated, read, corrected and signed by me.
Sd/-Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â
(Muhammad Nazim Saleem)
Member Technical-IIÂ Â Â Â Â
Karachi           Â
MR. TAHIR ZIA, MEMBER (JUDICIAL-II).---With due respect to my learned brother Member (Technical-II), Karachi, I do not find myself in agreement with the judgment authored by him in the referred in above 05 appeals, due to the fact that he has not taken into consideration the grounds of Appeals in its essence and spirit. Similarly, he also concealed additional arguments submitted on the comments on appeal of respondent No. 1 and has taken for consideration only one para as evident from para 9 at page 31and the arguments submitted by the consultant at bar on 19.01.2016 and also brushed aside host of judgments relied upon by the appellant, which are binding being precedent in terms of ratio decidendi. Prior to adducing my opinion, it is of vital importance to reproduce the left over additional arguments and the arguments dated 19.01.2016 of the appellant and the judgments copies of which were supplied during the course of hearing and are available on record. (i)The reliance placed on the reported judgment 2012 PTD 377 MessrsGold Trade Impex and others v. The Appellate Tribunal and others is misconceived as the said case has distinguished facts then the case of the appellant. In the said case mis-declaration of description was made and so the PCT, whereas, in the case of the appellant there exist no mis-declaration as evident from good declaration annexed as Exhibit "T" to "T6" confirming that the declared declaration was accepted as true as evident from assessment and the GD is clearly showing that the imported goods were Pepsi, Dew, 7-Up etc., which are soft drinks and there exist no mis-declaration in material particular and this fact stood validated from order-in-original annexed as Exhibit "B" at pages 23-26 of the Memo. of appeal, wherein no charge of mis-declaration in respect of any aspect has been held under the provision of Section 32 or 32A of the Customs Act, 1969. Resultant, the said judgment is not applicable on the cases of the appellant and reliance on the same is an act of deviating the attention of the Hon'ble Tribunal from the power/jurisdiction and the actual fact of the case.
(ii)That as regard the commentary made on the different section of the Act, those stood refuted from the grounds Nos.11 to 15 of the Memo. of Appeal. That for conduction of audit by the respondent No. 1, powers are delegated under Section 26A, it is mandatory to give a notice for submission of record, or any statement or declaration or documents describe in the notice with reasonable specificity no such notice was given to the appellant by the respondent, resultant, audit if conducted is without any legal authority, even otherwise section 32(3A) is not to be read in isolation, rather in conjunction of Section 32(1) as evident from the annexed GD's it is abundantly clear that correct declaration was made and for that reason the respondent No. 2 has not held appellant guilty of mis-declaration in the order-in-original, it is statute principle of law that, if the law had prescribed method for doing of a thing in a particular manner such provision of law is to be followed in letter and spirit and achieving or attaining the objectives of performing or doing of a thing in a manner other than provided by law would not be permitted as declared in the reported judgments 2002 PTD 2457, PLD 1973 Supreme Court 236, PLD 1964 SC 536, 2001 SCMR 838, 2003 SCMR 1505, 2006 SCMR 129. The super structure built on such foundation no matter how strong it is has to fall. Refer to PLD 1996 Karachi 68, which laid down that "where the initial order or notice was void all subsequent preceding, orders or super structure built on it were also void. In reported judgment 2006 PTD 978 it is held that "the entire proceeding initiated by the Adjudicating authority and further super structure thereon including the order passed by the learned Tribunal are without jurisdiction void and in-operative." The Apex Court in PLD 1971 Supreme Court 184 held that "order of a Tribunal found to be without jurisdiction ---all successive orders based upon it illegal and liable to be quashed".
(iii)That as regard to comment offered against ground Nos. 4 to 6 of the memo. of appeal, that Ministry of Law and Justice through letter dated 11.07.2012 has issued ruling that Customs is competent to take cognizance of the short levy of Federal Excise is also misconceived as Ministry of Law has no authority to interpret the law, it is for the court. The said letter cannot alter or amend the provision of the Act and as such the same is of no legal effect as held by the learned Tribunal in the cases of Customs Appeal No. K-24/2013 Messrs Paramount Corporation v. Additional Collector of Customs (Adjudication) MCC (PaCCS) and Custom Appeal No. K-471/2012 Messrs S.S. Trading v. Additional Collector of Customs (Adjudication) MCC (PaCCS) and in Customs Appeal No. K-460/2012 of MessrsM.I. Traders v. Additional Collector of Customs, MCC of PMBQ, Karachi. The Ministry of Law is a non-entity in this regard and it is for the legislature to amend the provision of the Act through a money bill, resultant, the relied upon letter of the Ministry of Law is without power/jurisdiction and as such of no legal effect as held in reported judgments 2002 PTD 2457, PLD 1971 Supreme Court 61, PLD 1973 Supreme Court 236, PLD 1964 SC 536, 2001 SCMR 838, 2003 SCMR 1505, 2006 SCMR 129, PLD 1996 Karachi 68, 2006 PTD 978 and PLD 1971 Supreme Court 184.
(iv)That, the appellant transmitted good declaration under section 79(1) of Customs Act, 1969 and Rule 433 of Sub-Chapter III of Chapter XXI of Customs Rules, 2001 with the MCC of PaCCS containing description "Soft Drinks i.e. Pepsi, 7-Up, Miranda etc." on the basis of commodity name in invoice, B/L, Certificate of Origin and he incorporated the said information in the column of financial information of the GD, falling under PCT heading 2202.9000. The software of the PaCCS has been designed by the agility in such a manner that upon receipt of the good declaration the system co-relates each declaration with the corresponding PCT heading, the claimed notifications which are fed therein either by the FBR/Project Director or Commissioner of Income Tax at their own and after finding those in accordance with the declaration the system pass assessment/clearance order in exercise of its inbuilt vested authority under Sections 80 and 83 of Customs Act, 1969 and Rules 438 and 442 of Customs Rules, 2001 and this fact stood validated from examination of the import documents and goods declaration. Resultantly the appellant has made no mis-declaration in material particular in terms of Section 32(I) of the Customs Act, 1969, hence, invoking of the said is erroneous. Similarly, invoking of subsections (2) and (3) simultaneously by the respondent No. 2 is not relevant in the subject case by virtue of the wording of show-cause notice, which did not remotely hint the submission of any false documents or statement while transmitting good declaration with the MCC of PaCCS or with the respondent No. 2 or about the "collusion" with the Project Official of PaCCS, or MCC of PaCCS, resultant, for the sake of arguments we state that if any subsection is applicable i.e. subsection (3) of section 32 ibid, rendering the show-cause notice and the subsequent proceeding void and ab-initio as held in the reported judgments Asst. Collector v. Khyber Elec. Lamps 2003 PTD 1275, D.G. Khan Cement v. Collector of Customs 2005 PTD 480, Caltex v. Collector 2003 PTD 1593, Union Playing Card Company v. Collector of Customs 2002 MLD 130, Atlas Tyres v. Addl. Collector 2002 MLD 180, State Cement v. Collector PTCL 2001 CL 558, Kashmir Sugar v. Collector 1992 SCMR 1898, Rose Color v. Chairman, CBR and 2013 PTD 813 Sarwar International v. Addl. Collector of Customs.
(v)That since in the case of appellant section 32(3) is applicable, through which recovery has to be made good for the short paid duty and taxes, verbatim is reproduced herein below:
"Where, by reason of inadvertence, error or mis-construction any duty or charge has not been levied or has been short- levied or has been erroneously refunded, the person liable to pay any amount on that account shall be served with a notice within 03 years of the relevant date requiring him to show cause why he should not pay the amount specified in the notice".
(vi)That under the provision of section 32(3) the respondent No. 2 has no power to either issue show-cause notice or pass order, the authority delegated with powers under this Section is Principal Appraiser/ Superintendent as evident from notification S.R.O. No.371(I)/2002 dated 15.06.2002 (copy enclosed). Meaning thereby that he is the only authority to proceed in the matter instead of respondent No. 2 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 S.R.O. 371(I)/2002 dated 15.06.2002 respondent figure no where rendering the order as ab-initio and void. If the opinion oftenly adopted by the authorities that Superior Authorities 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 officers would be making all efforts to exercise the adjudication powers clearly conferred by law upon their subordinates. 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 provision 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. Their lordship observed as under:--
"it is trite law that power vested in an authority should only be exercised by that authority, in default whereof, the exercise of power and authority becomes without jurisdiction, illegal, void, ab-initio and of no legal effect. The term "without jurisdiction" has been judicially interpreted to include usurpation of power warranted by law (the Chief Settlement Commissioner Lahore v. Raja Muhammad Fazil Khan and others PLD 1975 @ p.339) an act done which the person doing, it has no jurisdiction at all to do or which was clearly outside the scope of his activities (The State v. Zia-ur-Rehman PLD 1973 SC 49) and a judgment or order delivered by a court or a judicial or a quasi judicial authority not competent to deliver it (Muhammad Saleh and others v. MessrsUnited Grain and Fooder Agencies PLD 1964 SC 97) . The Constitution jurisdiction can thus be exercise when it is shown that the order is passed without jurisdiction or in excess of jurisdiction. As observed earlier the respondent No. 1 has no jurisdiction to pass the impugned order. As such we declare the same to be of no legal effect. Accordingly, we allow this petition but leave the parties to bear their own cost".
(vii) That while dealing with the powers of adjudication, it is needless to observe, that our Supreme Court has jealously guarded the same. In 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. Reliance is placed on the order of the Tribunal in S.T. Appeal No. 176/2007 MessrsMuller and Phipps Pakistan (Pvt.) Ltd. v. the Collector of Sales Tax Enforcement LTU, Karachi and 2011 PTD (Trib.) 2114 Collector of Customs, Peshawar v. Collector of Customs (Appeals) Peshawar and 2011 PTD (Trib.) 2557 MessrsWawa Garments Industries (Pvt.) Ltd. v. The Additional Collector of Customs, Export, Karachi.
(viii) That wherein any action is taken in the absence of availability of powers or show-cause notice or order has been passed without jurisdiction/power, such order are of no legal effect as held by their Lordship of Supreme Court of Pakistan that "it is an element to principle that if a mandatory condition for the exercise of jurisdiction by Court, Tribunal or Authority is not fulfilled then the entire proceeding which follows become illegal and suffer from want of jurisdiction/powers. Any order passed in continuation of these proceedings in appeals or revisions equally suffers from illegality and are without jurisdiction" Major Syed Walayat Shah v. Muzaffar Khan and 2 others (PLD 1971 SC 184), PLD 1976 Supreme Court 514 Ali Muhammad v. Hussain Buksh and others, Omer and Company v. Controller of Customs, (Valuation): (1992 ALD 449 (1) Karachi, AAA Steel Mills Ltd., v. Collector of Sales Tax and Central Excise Collectorate of Sales Tax (2004 PTD 624), PLD 2005 Supreme Court 842, Khyber Tractor (Pvt.) Ltd. v. Pakistan through Ministry of Finance Revenue and Economic Affairs, PLD 2001 Supreme Court 514 Land Acquisition Collector, Noshehra and others v. Sarfraz Khan and others, S.T.A. 444/03, STA 465/07, 2010 PTD (Trib) 1636, and 2010 PTD 465, 2010 PTD (Trib.) 2158, 2011 PTD (Trib.) 1010, 2011 PTD (Trib.) 1680, 2011 PTD (Trib.) 2086, 2001 SCMR 1822 Ali Muhammad v. Chief Settlement Commissioner, PLD 2004 Supreme Court 600 All Pakistan Newspaper Society and others v. FOP and others .
(ix)The rest of the comments are irrelevant and need no comments being of different sets of facts, having no nexus with the cases of the appellant's.
18.That on 19.01.2016 the final hearing of the case was conducted and during the course the consultant Mr. Nadeem Ahmed Mirza further argued in addition to the ground of appeal and additional arguments incorporated in the paras supra:
(i)That Section 19A has to be read in juxtaposition and to further elaborate he stated that in the said Section the principle has been laid down that "every person who has paid the custom duty and other levies on any goods under this Act cannot claim refund unless the contrary is proved by him, be deemed to have passed on the full incidence of such custom duty and other levies to the buyers as a part of the price of such goods. Likewise, if any person has not been charged /paid the custom duty or other levies on any goods under this Act, under what mechanism he can be asked to pay the same after post clearance, when no mechanism is available with him to pass the said levy to the ultimate buyer as the part of the price of the such goods. Notwithstanding, the amount adjudged in the case of appellant is not the levy under the Customs Act, 1969 i.e. this Act. Instead under the Federal Excise Act, 2001, Sales Tax Act, 1990 and Income Tax Ordinance, 2001. Resultant, these levies can only be recovered under the respective charging sections of the Act/Ordinance, meaning thereby when the levies at import stage under the different Act/Ordinance has not been collected at import stage it cannot be collected subsequently as stood validated from reading of Section 19A in juxtaposition. Upon conclusion following judgments were placed on record.
(i)2001 SCMR 1822 Ali Muhammad v. Chief Settlement Commissioner.
(ii)PLD 2004 Supreme Court 600 All Pakistan Newspaper Society v. FOP.
(iii)PLD 2005 Supreme Court 842, Khyber Tractor (Pvt) Ltd., v. FOP through Ministry of Finance.
(iv)2005 PTD (Trib) 196
(v)2008 PTD 60 Super Asia Muhammad Din and Sons v. Collector of Sales Tax, Gujranwala.
(vi)Order-in-Customs Reference No. 71/2009 Collector of Customs, MCC of Islamabad v. Global Marketing, Islamabad.
(vii)2011 PTD 1010 Innovative Impex, Karachi v Collector of Customs, Sales Tax and Federal Excise (Appeals), Karachi.
(viii) Order of High Court of Sindh in C.P. No. D-216 of 2013 Lucy Cement v. DG Intelligence and Investigation-FBR.
(ix)2011 PTD (Trib) 1146 Kaka Traders v. Additional Director, PCA.
(x)2014 PTD (Trib.) 299 MessrsM.I.Traders, Lahore v. Additional Collector of Customs, PMBQ
(xi)Order of Tribunal dated 23.02.2015 in Customs Appeal
No. K-1606/2014 Muhammad Ilyas of MessrsM.I. Traders, Lahore v. Additional Director, PCA
(xii) Order of Tribunal dated 19.12.2015 in Customs Appeals Nos. 554-556/2015 of M/s. Philip Morris Pakistan Ltd v. Clearance Collectorate of Karachi.
(xiii) Reported judgment [(2015) 112 Tax (Trib.)] of Appellant Tribunal Inland Revenue.
19.Upon perusal of Section 29 of the Federal Excise Act, 2005 and Section 228 of the Income Tax Ordinance, it is abundantly clear that the respondent No. 1 has not been appointed/designated as Officer of Inland Revenue by the legislature, instead as per Section 29(2)(b) and Section 228 of the Income Tax Ordinance, 2001 the Directorate General of Internal Audit has been appointed/designated as officer of Inland Revenue and for overseeing the collection of withholding Tax, Directorate General of Withholding Taxes has been established under Section 230A of the Income Tax Ordinance, 2001, meaning thereby that the respondent No. 1 is not at all appointed/designated as officer of Inland Revenue. The Board to the contrary issued Notification No. 165(I)/2011 dated 03.03.2011 under which the Officer of respondent No. 1 has been delegated powers under different Sections of Federal Excise Act, 2005 in exercise of the powers given in Section 29 ibid without taking into consideration that the legislature has not appointed the officer of respondent No. 1 as Officer of Inland Revenue under the said Section rendering the issuance of notification without powers, hence invalid ultra vires, therefore and not enforceable they cannot, exercise powers under the Sections of the Federal Excise Act, 2005 specified in column (4) of thenotification.Likewise therespondent No. 1 are also not empowered to exercise the powers of an Officer of Inland Revenue under Section 207 for conducting audit under section 177 ibid. Rendering the entire Act of audit and subsequent proceeding of audit in the matter of Federal Excise and Income Tax by the official of respondent No. 1 without powers/jurisdiction and as such coram non judice and this stood validated from the latest reported judgment 2014 PTD 1733 Waseem Ahmed and others v. FOP another, where it has been held in clear terms that "unless the officer of DGI&I)-FBR are not appointed and an officer of Inland Revenue, powers under the different sub section of the Sales Tax Act, 1990 can not be delegated through any SRO with that the Hon'ble High Court of Sindh declared Notification No. 775(I)/2011 ultra vires to the Sales Tax Act, 1990" . That since the judgment of High Court is binding on all the subordinate judicial forum under Article 201 of the Constitution of Islamic Republic of Pakistan. This Tribunal formed the same opinion in orders at Serial Nos. (xii) and (xiii) of para. 17 supra.
20.The Official of respondent No. 1 are indeed appointed as Officer of Inland Revenue under Section 30DD of the Sales Tax Act, 1990 and thereafter Board delegated powers under Notification No. 42(I)/2010 for different sub section of the Act, specified in column (4) of notification subject to exercise of the vested power under the designation of authorities given in column (3), which are (i) Chief Commissioner/ Commissioner Inland Revenue (ii) Additional Commissioner of Inland Revenue (ii) Deputy Commissioner Inland Revenue and (iv) Assistant Commissioner Inland Revenue andnotinthecapacityordesignationof (i) Director General/Director-PCA (ii) Additional Director-PCA
(iii) Deputy Director-PCA and (iv) Assistant Director-PCA. In the instant case the entire communication including the audit observation and contravention report was prepared and served in the capacity of either Additional Director or Deputy Director of PCA, which are non existent in column No. (3) of Notification No. 42(I)/2010 dated 23.01.2010, rendering the same without power/jurisdiction hence ab-initio void and rendered the entire proceeding right from Audit, Audit observation, contravention report as of no legal effect. Any super structure built thereon no matter how strong it may be had to fall as held by Superior Judicial Fora in umpteenth reported judgments, which are fully applicable with force in the instant case.
21.I have also noticed with concern that, the respondent No. 2 in the show-cause notice have invoked Section 14 of the Federal Excise Act, 2005, Section 36 of the Sales Tax Act, 1990 and Section 148 of the Income Tax Ordinance, 2001.The consultant of the appellant has strongly contended that, he has not been appointed as Officer of Inland Revenue under Section 29 of the Federal Excise Act, 1990, Section 30 of the Sales Tax Act, 1990 and Section 228 of the Income Tax Ordinance, 2001 therefore has no powers to proceed in the matter of Federal Excise, Sales Tax and Income Tax under the invoked sections in the show-cause notice for recovery of short paid duty and taxes. On the other hand the respondent are of the opinion that the Customs is empowered to collect the Federal Excise Duty, Sales Tax and Income Tax at import stage under Section 3 of the Federal Excise Act, 2005, Section 6 of the Sales Tax Act, 1990 and Section 148 of the Income Tax Ordinance, 2001 and can also recover the Federal Excise Duty and Taxes under the provision of Section 202 of the Customs Act, 1969 as clarified by the Ministry of Law and Justice vide O.M. No. F.242/2012-Law-I dated 11.07.2012 circulated by Board vide letter C. No. TAR-1/90 dated 06.08.2012. For determination of the jurisdiction.
Now for further distinction of powers and observations made thereon, the conscientious study of Section 29 of the F.E. Act, 2005, Section 30 of Sales Tax Act, 1990 and Section 207 of the Income Tax Ordinance, 2001, it is observed that the legislature appoints under the said Sections different organs of the FBR as Officer of Inland Revenue for exercising powers under the respective Sections of the Act / Ordinance, delegated through statutory notifications. In these Sections neither Collectorate of Customs PaCCS nor respondent No. 2 figures anywhere and as such they are not appointed as Officer of Inland Revenue under these sections. Hence, cannot lay hands on any matter falling under the ambit of Sections 14, 14A of Federal Excise Act, 2005 Section 36 of the Sales Tax Act, 1990 and Section 162 (1) of the Income Tax Ordinance, 2001. Reliance of respondents on the O.M. No. F.242/2012-Law-I dated 11.07.2012 lend no help as Ministry of Law and Justice has no mandate to interpret the provision of the Act or amend the provision. It can only give opinion, it is for the judicial fora to interpret the provision of statute and my opinion stood validated from the reported judgment 2005 PTD 2462 Messrs Lever Brother Pakistan Ltd. v. Customs Sales Tax and Central Excise Appellate Tribunal, Karachi that "CBR has no place in the Scheme of Law, conferred with the jurisdiction to interpret any law, statutory or in exercise of any deliberate authority i.e. subordinate legislation". Whereas in reported judgment 2016 PTD (Trib.) 107 Qazi CNG Station, Gujrat and another v. Directorate General of Intelligence and Investigation-FBR, Karachi and 2 others, this Tribunal held that "statute can be amended by the Parliament and a notification through a notification not through any communication. In the absence of amendment of notification, clarification issued by the department could only be termed as opinion and it would not at all amend the notification". Assuming powers on the strength of letter of the Ministry of Law and Justice is palpably illegal beside fatal to the health of the case. Even otherwise, the letter of the Ministry of Law and Justice speaks about collection of Federal Excise Duty at import stage in the same manner and at the same time, as if it is a duty of customs payable under the Customs Act, 1969 (IV of 1969) and for collection of the same the provision of Section 31A also apply. Reference of Section 7 of the Federal Excise Act, 2005 has also been given simply for clarification that for collection of import duty provision of Sales Tax 1990 is applicable. The emphasis in the O.M. is levy and collection. Therefore, to further elaborate and settling the issue to its logical conclusion, I add while referring to Section 3 of the Federal Excise Act, 2005, Section 6 of the Sales Tax Act, 1990 and 148 of the Income Tax Ordinance, 2001 through which the respondent Collectorate is empowered to collect the Federal Excise Duty and Taxes on the imported goods as like custom duty on the value determined under Section 25 of the Customs Act, 1969. These sections least empowers the Officers of Customs including the respondent No. 1 to initiate adjudication / recovery proceeding for the short collected/paid Federal Excise Duty, Sales Tax and Income Tax either due to collusion or connivance or inadvertent, error or misconstruction. For proceeding for these type of recovery a show-cause notice has to be issued under the Provision of Section 14 of Federal Excise Act, 2005, Section 36 of the Sales Tax Act, 1990 and Section 162(1) of the Income Tax Ordinance, 2001, the authority to issue show-cause notice under subsection (3) of Section 36 of the Sales Tax Act, 1990 and Section 162(1) of the Income Tax Ordinance, 2001 are Officer of Inland Revenue and the Commissioner of Income Tax, in these sections also neither officer of Customs and respondent No. 2 figures anywhere. He assumed the power not vested with him under the provision of Sections 14, 36 and 162(1) of the of Federal Excise Act, 2005, Sales Tax Act, 1990 and Income Tax Ordinance, 2001. Therefore, the Customs Collectorates have powers to collect Import Duty, 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 at the import stage under Section 202 of the Customs Act, 1969 is based on mistaken belief, infact the customs Collectorate could recover the amount of Federal Excise duty, Sales Tax and Income Tax upon receipt of notice from the Officer of Inland Revenue and Commissioner of Income Tax under Rule 60 of the Federal Excise Rules, 2005, Section 48 Sales Tax Act, 1990 and Section 140 of the Income Tax Ordinance for recovery of the adjudged amount of Federal Excise Duty, Sales Tax and Income Tax after due process of law and to further clarify, reference is made to the provisions of Section 14A of the Federal Excise Act, 2005, Rule 60 of the Federal Excise Rules, 2005, Section 48 of the Sales Tax Act, 1990 and Section 140 of the Income Tax Ordinance, 2001, reproduced above. On the strength of above deliberation, it is my considered opinion that the Clearance Collectorates does have the authority to collect Federal Excise Duty, 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 Federal Excise Duty, Sales Tax and Income Tax under sections 14, 11 and 162(1) ibid of the Act/Ordinance respectively. None of the respondents have the powers to recover the arrears of these at their own, unless they are in receipt of notice from the Officer of Inland Revenue and Commissioner of Income Tax under Rule 60, of Federal Excise Rules, 2005 Section 48 and 140 ibid. Resultant adjudication proceeding under section 14 of Federal Excise Act, 2005, Section 11 of the Sales Tax 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, nor inconsonance with the reported/unreported judgments incorporated here-in-below:
MessrsAGP (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 MessrsGlobal Marketing Services and another v. Model Customs Collectorate and another reported at 2010 PTD (Trib.) 2086 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 he 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 principal 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 mis-declaration 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(I) 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 seaside."
"It is declared that the respondent's wrong 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.)299M. I.Tradersv.Additional Collector of Customsheldthat:--
"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 coram 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 the 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 MessrsLucky 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:--
"25 The FIR has been registered by invoking clauses (14), (14A) and (77) of Section 156(I) 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.
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.
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 confirms the conclusions already arrived at.
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, 2005 PTD 23 and -- in 2007 PTD 250 titled as Collector of Sales Tax and Federal Excise v. Messrs Qasim International Container Terminal Pakistan Ltd., it was held that:--
"There is a clear distinction between the charging provision of Statute andthe machinery part thereof. It is axiomatic that mode of manner of recovery does not alter, the nature of tax nor a tax can be introduced or import 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 words 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"
22.Upon examination of the Goods Declaration annexed with the appeals, it can be observed that the appellants transmitted those under Section 79(1) of the Customs Act, 1969 and Rule 433 of Sub-Chapter III of Chapter XXI of Customs Rules, 2001 with the MCC of PaCCS containing description of goods as assorted soft drinks under PCT heading 2202.9000, these goods declarations were selected either by the system directly for assessment or examination in terms of Section 198 of the Customs Act, 1969 and Rule 435 ibid. The assessing officer in case of agreement of the declaration passed assessment orders under Section 80 and Rule 438 of the Act/Rules and communicated the view messages to the appellants for payment of additional amount of duty and taxes or filing review against the assessment order under Rule 441 ibid. In case the assessing officer had doubt on the declaration, they suggested for conduction of examination under the respective section / rule and referred the same to the Assistant/Deputy Collector of the Group for endorsement after affirmation to the said fact, the Goods Declaration were referred for examination and the Officer of the Customs posted at Terminal after examining of the goods physically, posted the report in the system, prominently indicating the drinks namely Pepsi, Dew, Miranda, 7-Up etc., for perusal of the Assessing Officers, who upon appearance of same on their desktop, if being satisfied passed the assessment orders or in case felt that of further confirmation is desired transmitted view messages under Rule 437 for scanning of additional documents, which are mandatory to be scanned being pre-requisite as these form part of declaration under Section 2(kka) of the Customs Act, 1969 made under Section 79 and Rule 433 ibid. The assessment orders in the Goods Declaration corresponding to these appeals have been passed by the competent Authority defined in Section 2(a) under section 80 ibid on the basis of entire declaration after receipt of examination report, scanned documents and after rejection/acceptance of the reviews filed under Rule 441 ibid. In case the competent assessing authority would had felt that the imported goods attract another PCT they are empowered to correct that as this is their in built duty under the provision of Section 80(1) and Rule 438 ibid, which read as "on the receipt of the goods declaration under section 79 an officer of Customs shall satisfied himself regarding correctness of the particulars of the import, including declaration, assessment and in case of customs computerized system payment of duty and taxes and other charges thereon." And "where any declaration has been filed under rule 433 or additional documents have been submitted under rule 437 the customs shall satisfy itself as to their correctness, including its value, classification, claim of exemption, payment of duty and taxes and may re-assess the goods during or after clearance. It is to be noted that the word "assessment" denotes every aspects of goods declaration including description, quantity, value and PCT. Therefore, the representative of the respondent No.1 was confronted with the said fact, he took the plea that the assessment/ clearance order under sections 80 and 83 and Rules 438 and 442 ibid were passed by the software itself, this is contrary to the devised system and the practice in vogue for these types of consignment i.e. soft drink/misc. goods adopted by the official of MCC of PaCCS for the clearance. Notwithstanding, the representative of the MCC of PaCCS was asked that as to whether the reassessment was made subsequent to clearance as expressed in Section 80 ibid and to place before the Tribunal the record of each Goods Declaration and view messages transmitted to appellant under Section 155Q of the Customs Act, 1969 and Rules 433, 435, 437, 438 and 442, in addition to the reviews filed by the appellant before the designated authority under Rule 441 ibid, which are to be kept in record by the Collectorate in terms of Section 155G ibid. or any incriminating evidence confirming that the appellants hacked the system and passed the assessment order themselves, for supporting the allegations and stance taken in the comments on appeals and during the course of hearing on 20.05.2014 as it is on the Customs to prove the allegation in terms of Articles 117 and 121 of Qanun-e-Shahadat (10 of 1984), answer to both the queries were in negative, i.e. since the software of PaCCS has been off loaded, no reassessment has been made to this date and no record is available. This argument amazed us about the standard of working of the respondent Collectorate and adjudication, in addition to flagrant violation of Section 80(1) beside defiance of the provision of Section 155G and Law of Evidence. That as per law laid down in PLD 1975 Kar. 458; PLD 1973 Kar. 659; Cross on evidence 1967, 3rd Edn., London Butterworth; A Practical Approach to Evidence by Peter Murphy 1988 3rd Edn. London, Black Stone Press Ltd; The Modern Law of evidence by Adrian Kean 1985, 1st Den. Oxford, Professional Books Ltd; PLD 1965 Lah. 576; PLD 1980 Lahore. 145; 1983 CLC 414; 1982 CLC 1286, 1984 CLC 325; PLD 1959 SC (Pak) 364; 1969 SCMR 708 and 1992 SCMR 1083. ultimate burden of proof lays upon the Customs Authorities, which has not been discharged, I therefore hold that these cases are based on no evidence while putting reliance on the land mark reported judgments PLD 1952 Federal Court 19 and PLD 1996 Karachi 68 Kamran Industries v. Collector of Customs (Exports) and PLD 1952 Federal Court 19). Wherein their Lordship of the High Court held:-
"For every offence for which the accused is charged under the Customs Act he shall have to disprove the allegation of the Customs Authorities is entirely without any obligation upon the Customs Department to adduce evidence, it would amount to affording unfettered, naked and arbitrary discretion to the authorities who may at their sweet will make out false cases against importers without the need of proving the sanctity of their actions. Such cannot be the intention of Parliament while the Courts are under an obligation to place such construction on statues which could be beneficial to the widest extent and which would make the legislation operate fairly, justly and equitably and not unreasonably (see Mst. Zainab v. Kamal Khan (PLD 1990 SC 1051). This Court is also of the view that a construction is to be placed upon statutes which would minimize the discretion vested upon the executive authorities. As absolute power corrupts an interpretation fettering the discretion of the executive authority would be more in line with the principles of equity and justice. The issue regarding the applicability of section 187 is to be looked from another angle i.e. in case we were to hold that due to Section 187 the entire burden to disprove the entire case rest upon the accused alone. The executive authorities would be let loose and given a wide, naked and arbitrary discretion to operate without any guidelines which would then leave section 187 susceptible to a Constitutional challenge upon its vires on this score alone. By the interpretation as proposed above any redundancy or illegality would also be avoided.
23.The assessment order passed under section 80 of the Customs Act, 1969 and Rule 438 of Sub-chapter IIII of Chapter XXI of Custom Rule, 2001 by the authority defined in Section 2(a) is an order as interpreted in section 193 of the Custom Act, 1969 and reported judgment at PLD 1986 Lah. 237 as follows:--
" .the word 'order' is not being a term of art has no fixed legal meaning. According to Prem's Judicial Dictionary, it covers commands or directions that something shall be done....the term order in general is comprehensive enough to include all kinds of order including a formal order."
In the instant cases, it is an admitted fact that against the appellant Goods Declaration assessment order were validly passed by the competent authority defined in section 2(a) under section 80 of the Customs Act, 1969 and these orders are appealable orders as expressed in Section 193 ibid. Since prior to amendment in Section 193 of the Customs Act, 1969 through Finance Act, 2012 right of appeal was not available to the respondent Collectorate, the only option available with the Collector of Customs of its jurisdiction was to reopen a past and closed transaction i.e. assessment orders in exercise of the power vested upon him through the framework of section 195 of the Customs Act, 1969. As it is settled law that order infield cannot be substituted with another order reference is made to the Hon'ble High Court of Sindh reported judgment MessrsSmith Kline French v. Pakistan reported as 2004 PTD 3020 held that "once an order is passed, which attains finality, the same cannot be subject to a show-cause notice again, considering that no appeal or revision is filed against the first order as this is in derogation of Court to be in derogation of the principles of administration of justice". In these cases the assessment orders passed by the authority defined in Section 2(a) could had been only be reopened by the Collector under section 195 ibid. to examine the record of any proceedings conducted under this Act for the purposes and satisfying himself as to the legality or the propriety of the order passed by the assessing officer, this has not been done, instead the respondent No. 2 reopened the orders while usurping the power of the Collector, rendering the issuance of show-cause notice and subsequent orders passed by respondents Nos. 2 and 3 as being without power/jurisdiction, hence ab-initio void and as such coram non judice.
Notwithstanding, in order to understand the application of section 195 of the Customs Act, 1969, orders can be reopened by the Collector, which suffers from irregularity and impropriety, reference is made to Black's Law Dictionary in respect of the word "illegal" which means unlawful in and of itself and not because of some extraneous circumstances e.g. a contract to assassinate a public official". On the other hand the word "improper" has been defined as "Not suitable; unfit; not suited to the correct time and place. Not in accordance with fact, truth, or right procedure and not in accord with propriety, modesty, good taste, or good manners". These two terms, therefore, have nexus with the abuse of power by the subordinate officers and otherwise the ethical moorings of a civil society, in relation to the relevant law. The revisional powers conferred vide section 195 do not authorize even the Collector of Customs to examine issue not falling within the scope of the terms "legality" and "propriety". It means, that the powers under Section 195 are limited, compared to an appeal before a competent authority.
Setting aside assessment/clearance orders passed under sections 80 and 83 of this Act and Rules 438 and 442 of Sub-Chapter III of Chapter XXI of the Customs Rules, 2001 are type of orders, which could be revised by the Revisional Authority under section 195, for the simple reason, that such orders are subject to the satisfaction of the Collector of Customs which must be arrived at fairly and not arbitrarily as observed in the case East Jamunia Co. (Pvt.) Ltd. Calcutta v. Collector of Customs, Calcutta reported as 1978 ECR 790. In Council of Civil Service Union v. Minister for the Civil Service reported as (1985) AC 374 and 410, it was said by Lord Diplock, that the Courts usually review an exercise of power to ensure that a public body:--
(i)has not made an error of law.
(ii)has considered all the relevant factors, and not taken into account any irrelevant factors.
(iii)has acted for a purpose expressly or impliedly authorized by statute.
(iv)has not acted in a way that is so unreasonable, that no reasonable public body would act in that way;
(v)that the public body has observed statutory procedural requirements of the principles of natural justice or procedural fairness.
Even in those cases where goods are cleared by customs officer after physical verification in exercise of the powers conferred through section 198 and Rule 435 ibid and passing of valid assessment/clearance order under sections 80 and 83 and Rules 438 and 442 ibid, goods cannot be confiscated except in pursuance of orders passed under Section 195 ibid. as adjudged by Bombay High Court in its judgment reported as Union of India v. Popular Dechem 1987 [ELT 63] Bom. Even a bill of entry cleared for home consumption on order of an Appraiser and countersigned by the Assistant Collector constitutes an order of adjudication as observed by the Dehli and Madaras High Courts in their judgments reported as [1982 ELT 43 (Del) and judgment of Madras High Court in W.Ps. Nos.5296, 5297 and 5654 of 1979 and of this Tribunal many unreported judgments for reference see reported judgment 2011 PTD (Trib.) 2480 Malik Vetro Designi and 25 others v. Collector of Customs, Appeals and 3 others.
In these cases the competent officers passed order after scrutinizing the customs/commercial documents scanned by appellant and uploaded examination report, while exercising their authority expertise and wisdom. In view of the aforesaid. The Collector of Customs of Clearance Collectorate and the respondent No. 2 are not allowed to take a complete U-turn at belated stage to start adjudication of past and closed transactions through issuance of show-cause notices and adjudication orders under section 179 of the Customs Act, 1969 when a lawful course has been prescribed by the legislature in Section 195 of the Customs Act, 1969 for reopening of such decisions or orders by Board or Collector. For ease of reference Section 195 of Customs Act is reproduced below: 195 Powers of Board or Collector [***] to pass certain order:---(1) The Board or the Collector of Customs [or the Collector of Customs (Adjudication) may, within his jurisdiction, call for and examine the records of any proceedings under this Act for the purpose of satisfying itself, or, as the case may be, himself as to the legality or propriety of any decision or order passed by a subordinate officer and may pass such order as it or he may think fit:
Provided that no order confiscating goods of greater value or enhancing any fine in lieu of confiscation, or imposing or enhancing any penalty, or requiring payment of any duty not levied or short-levied shall be passed unless the person affected thereby has been given an opportunity of showing cause against it and of being heard in person or through a counselor other person duly authorized by him.
(2) No record of any proceedings relating to any decision or order passed by an officer or customs hall be called for or examined under subsection (1) after the expiry of two years from the date of such decision or order.
It is a settled law that an order or decision passed or taken by the subordinate officer can only be corrected in revisional power and not under section 32 of the Customs Act, 1969 since the Collector or the Federal Board of Revenue exercise their revisional powers or correctional jurisdiction in terms of section 195 of the Customs Act. For adjudication of a case through issuance of show-cause notice, the proof of mis-declaration has to be prima facie present in the first instance if allegation of mis-declaration is to be levelled against the taxpayer in terms of section 32 of the Customs Act, 1969 through issuance of show-cause notice by the officer of original jurisdiction. When the consignments were released on the basis of commercial documents and physical examination by the examining and assessing officers, the charges subsequently levelled at against the appellants under section 32 of the Customs Act, 1969 are unsubstantiated once the goods have left the customs / port area in terms of Hon'ble High Court's judgment reported as 2008 PTD 1968 wherein the Hon'ble High Court of Sindh has observed that it is a settled principle that after clearance of goods and remand of consignment from customs area, customs authorities are functus officio to reopen the case again as it becomes a past and closed transaction. Their lordships also dilated upon the proper application of subsection (2) of Section 32 of the Customs Act in such cases by observing that "even if it is taken under subsection (2) of section 32, which relates to mis-declaration along with the collusion of Customs Authorities then there is nothing on the record that whether the department had initiated any disciplinary proceedings against the alleged customs officers simultaneously along with the appellant. In absence of proceedings against the delinquent officers, who were in collusion with appellant in evading the Government Revenue, the proceedings conducted only against appellant cannot be said to be a penal action under Section 32(2) of the Act, but would be considered as discriminatory action taken only against the appellant/importer." For reaching at conclusion, we have also consulted the judgment reported at 2002 MLD 180 State Cement Corporation v. GOP, wherein, Hon'ble Late Justice Sabihuddin Ahmed held in cleared terms that while observing that "We are rather amazed at the line of reasoning put forward to the effect that while an assessee is required to interpret the law and relevant notification correctly and could be held guilty of a penal offence for not doing so in terms of Section 32(1) of the Customs Act, no responsibility of any kind would devolve on the customs officials." We may add that in case of short levy or evasion became possible due to collusion of some customs officials the mere fact that no such customs official involve and no notice was served in terms of Section 32 of the Customs Act, indicate that the entire exercise was mala fide". From close examination of the import documents it transpired that the appropriate officer as defined in section 2(a) of the Customs Act, 1969 passed assessment/clearance order under sections 80 and 83 and Rules 438 and 442 ibid. on the basis of declaration, examination report scanned documents and which contain the alleged mis-declaration of PCT confirming that "collusion" and "connivance" of the customs officers was there, but they are let free, while ignoring the provision of Section 80 and Rule 438, which cast in built duty on them that while passing assessment order, correct classification has to be made of the goods imported. In case that was not done consequences emerging from the said effects in addition to the alleged revenue loss has to be borne by them only and not by the appellant as this is due to their conduct, reference is made to the reported judgments 2011 PTD 2220 Collector of Customs, Preventive, Karachi v. Pakistan State Oil Karachi that where their Lordship of Supreme Court held "where huge loss has been caused to Government Exchequer namely due to the negligence of relevant functionaries of the customs department against which action may be initiated by the concerned Collector of Customs for dereliction of duty and being inefficient which amounts to mis-conduct." That it is advantageous to say in the light of the above deliberation that framing of contravention report by the official of respondent No. 1 and forwarding that to respondent Collectorate as well as issuance of show-cause notice and subsequently passing order-in-Original by the respondent No. 2 were the acts of assumption of wrong jurisdiction as contemplated in un-reported and reported judgment referred by the appellant while dilating upon the said issue. As being direct authorities in SBLR 2002 Kar. 5 Messrs Unitex Towel Factory v. Collector of Customs (Appeals) and others this Tribunal held that reopening of sales tax refund order passed/sanctioned by the competent authority after scrutinizing of the documents in regards to legality and propriety could not be reopened by any authority with the exception of Collector of Customs under section 45A of the Sales Tax Act, 1990 as the same falls within the ambit of passed and closed transaction . The Tribunal went on to observe that the show-cause notice was ab-initio void while relying on the reported at PLD 1971 SC 197. The relevant extract is as under:-- "Where the Court is not properly constituted all the proceedings must be held to be coram non judice and, therefore, non-existent in the eye of law. There can also be no doubt that in such circumstances " it could never be too late to admit and give effect to the plea that the order was a nullity", as was observed by the Privy Council in the case of Chief Kwame Asante, Tredahone v. Chief Kwame Tawia."
In Raunaq Ali's case [PLD 1973 SC 236], their lordships of the Supreme Court did observe in the following terms:"
It is now well-settled that where an inferior tribunal or Court has acted wholly without jurisdiction or taken any action "beyond the sphere allotted to the tribunal by law and, therefore, outside the area within which the law recognizes a privilege to err", then such action amounts to a "usurpation of power unwarranted by law" and such an act is a nullity; that is to say, "the result of a purported exercise of authority which has no legal effect whatsoever". In such a case, it is well-established that a superior Court is not bound to give effect to it, particularly where the appeal is to the latter's discretionary jurisdiction. The Courts would refuse to perpetuate, in such circumstances, something which would be patently unjust or unlawful".
24It is of vital importance to reproduce the expression of Section 19A of the Customs Act, 1969 prior to dilating upon the issue and which read as follows:--
"19A ..presumption that incident of duty has been passed on to the buyer:- Every person who had paid the custom duty and other levy or other goods under this Act shall unless the contrary is proved by him, be deemed to have passed on the full incidence of such custom duty and other levies to the buyer as part of the price of such goods."
The intention of the legislature in the said provision is that, that no person can claim refund of any duty or other levies which he paid on the goods imported and deemed to have been passed on full incidence of the paid duty/levies to the end buyer as a part of the price of such goods, unless contrary is proved by him through documentary evidence that he has not passed on the duty and levies paid at the time of clearance of the imported goods to end consumer if he successfully proves that he has not passed on these, his claim of refund is admissible and ought to be sanctioned. The said section has to be read in conjunction of section 33 ibid, which governs refund for arising out of error, omission and misconstruction and for that reason proviso to subsection (1) of section 33 was inserted to Finance Act, 2009. However neither section 19A nor Section 33 an applicable on the refund which are outside the ambit of Section 33 as held by in umpteenth reported judgment of the Superior Judicial Fora.
The question arise that when the Clearance Collectorate has not charged/levied any duty or taxes due to error, omission or mis-construction, how it can collect subsequently after clearance of the goods, if the expression of Section 19A is read in juxtaposition, which should be as follows:--
"19A ..presumption that incident of duty has not been levied and collected from the importer and not paid by him:- Every person who had not paid the custom duty and other levies or other goods under this Act, deems to have not passed any part of the incidence of such duties and other levies to the buyer unless the contrary is proved by the customs. "
In the cases of the appellant under judicial scrutiny of the Tribunal, it is admitted fact that the official of respondent No. 2 has not charged the levies of, excise duty, sales tax and income tax at the time of the passing of clearance/assessment order under sections 80 and 83 of the Customs Act, 1969 and Rules 438 and 442 of Sub-Chapter III of Chapter XXI of the Customs Rules, 2001. Levying these at belated stage through adjudication proceeding is not correct beside devoid from legal infirmity as the Federal Excise Act, 2005, Sales Tax Act, 1990 and Income Tax Ordinance, 2001 are silent in regards to mechanism that how the said levy can be passed on by the appellant to the end consumers, which is the spirit and essence of Federal excise duty, Sales Tax and Income Tax. This approach is not correct instead nullity to law as no duty or taxes can be demanded from the appellants just like the available proviso of section 19A explicitly expressing that when a person fails to prove that he has not passed duty and taxes paid by him at import stage, it is presumed to be passed on to the end consumer in full and as such is not entitled for refund. Therefore, in principle instead of adopting the cumbersome litigation process, it would had been appropriate for the respondent No. 2 to approach the Federal Board of Revenue for issuance of notification for regularizing of non-collection of Federal Excise Duty, Sales Tax and Income Tax levied under the Acts/Ordinance on the consignments of the appellants, while taking guidelines from the Section 65 of the Sales Tax Act, 1990, which read as follows:
" 65 Exemption of tax not levied or short levied as a result of general practice.---Notwithstanding, anything contained in this Act, if in respect of any supply the Federal Government is satisfied that inadvertently and as a general practice---
(a)Tax has not been charged in any area or any supply which was otherwise taxable or according to the said practice the amount charged was less then the amount that should have actually been charged;
(b)The registered person did not recovered any tax prior to the date it was discovered that the supply was liable to tax; and
(c)The registered person started paying the tax from the date when it was found that the supply as chargeable to tax.
It may, by a notification in the official Gazette, direct that the tax is not levied or short levied as a result of that inadvertentpractice, shall not be required to be paid for the period prior to the discovery of such inadvertent practice."
25.The Sections 193(1) and 194(1) were amended through Finance Act, 2012, wherein the respondent No. 3 power were reduced to the extent that he could pass order in only those appeals filed before him against the orders of the Officer of Customs below the rank of Additional Collector and Custom Tribunal was re-empowered to pass orders against the appeal filed by the appellant against the order passed by Additional Collector and above under section 179 of the Customs Act, 1969. In Appeals Nos. K-928, K-929 and K-971/2013 the orders were passed by the Additional Collector vide dated 07.05.2012 and 10.05.2012 and the appellant in consideration of un-amended provision of Section 193(1) ibid filed appeal before respondent No. 3 on 11.06.2012 and it was incumbent upon the respondent No. 3 to pass order in those appeals on or before 30.06.2012 as the power vested to him under the said section stood withdrawn w.e.f. on 01.07.2012 by virtue of amendment in Section 193(1). Despite having no power after 01.07.2012, the respondent No. 3 laid hand on these appeals for passing orders despite no power w.e.f. 01.07.2012 as the same rest with the Customs Tribunal. Resulted, he usurped the power not vested with him instead with the Customs Appellate Tribunal. Rendering the orders without power/jurisdiction hence ab-initio, void and of no legal effect. The judgment relied upon by the appellant in are direct authority on the said issue and applicable on the cases of the Appellants Nos. 1, 2 and 4 with full force.
26.Upon scrupulous study of the order-in-appeal passed by respondent No.3, it has been observed that it has no nexuses with the show-cause notice or ground of memo. of appeal as evident from the narration in para 7, wherein deliberation has been made on the Non Alcoholic Beer with the caption " how non alcoholic beer is made", when the cases are of aerated water. The said act of respondent No. 3 is sufficient to prove that he traveled beyond the scope of show-cause notice, which is not permitted under law. Decision on the basis of fact not incorporated in the show-cause notice and grounds of appeal are deems to be palpably illegal as held by judicial fora in reported judgment referred by the appellant. 27.The appeal with the respondent No. 3 was filed on 11.06.2012 and an order under the proviso of subsection (3) of Section 193-A of the Customs Act, 1969 should had been passed by the respondent within 120 days from the date of filing of appeal i.e. by 09.10.2012 or within a further extended period of 60 days during the initial period of 120 days with reason to be recorded for extension in writing. No extension was granted by respondent No. 3 prior to expiry of initial period of 120 days i.e. by 09.10.2012. Contrary the order-in-appeal was passed on 04.07.2013 i.e. after expiry of 268 days of the initial period and 208 days after the expiry of entire allotted period of 180 days. Rendering the order-in-appeal barred by time by 268 days and 208 days respectively. As such, without power/jurisdiction, ab-initio void as held in reported judgments as 2008 PTD 60, 2008 PTD 578, 2009 PTD 762, 2009 PTD (Trib.) 1263, 2009 PTD 1978, 2010 PTD (Trib.) 1010, 2011 PTD (Trib.) 79, 2011 PTD (Trib.) 987, 2011 PTD (Trib.)1146 and 2012 PTD (Trib.) 1650.
28.In view of the above narration, the whole proceeding are infested with inherent legal infirmities and substantive illegalities tantamount to patent violation of mandatory statutory provision and that too, in utter disregard of the provision of the Acts/Ordinance and Principle of Law settled by the Superior Judicial Fora. The chronicle even right from assuming of power for audit by the respondent No. 1, issuance of show-cause notice and passing of order-in-original by respondent No. 2, followed by order passed by respondent No. 3 are without power/jurisdiction hence ab-initio void and as such coram non judice by virtue of the fact that all of them ignored the provision of Acts/Ordinance and the ratio settled by the Supreme Court of Pakistan in reported judgment 2010 SCMR 1425 Section Officer Government of Punjab Finance Department and others v. Ghulam Shabbir that the Principle of Administration of Justice and Interpretation of Statute is that "the person who is performing the role of a judge, no matter even in quasi-judicial proceeding must wear all laws of the country on the sleeves of his robes and failure to do so by any reason is not an excuse" and reported judgments 2002 PTD 2457, PLD 1971 Supreme Court 61, PLD 1973 Supreme Court 236, PLD 1964 SC 536, 2001 SCMR 838 and 2003 SCMR 1505 and 2006 SCMR 129 that "if the law had prescribed method for doing of a thing in a particular manner, such provision of law is to be followed in letter and spirit and achieving or attaining the objective of performing or doing of a thing in a manner other than provided by law would not be permitted". 29.It is flabbergasted to note from the record of the case that the respondents also ignored the vital fact that assuming of jurisdiction is of great importance and power has to be exercised within the allotted sphere, acting contrary to that is incurable rather fatal for the health of the case and this has been countless time held by the Hon'ble Supreme Court of Pakistan that in case of assuming wrong jurisdiction, that the super structure built thereon ought to crumble down as held in reported judgments PLD 1996 Karachi 68, 2006 PTD 978 and PLD 1971 Supreme Court 184. Beside it is advantageous to me to refer to 2001 SCMR 1822 Ali Muhammad v. Chief Settlement Commissioner, wherein the Hon'ble Chief Justice of Pakistan Mr. Iftikhar Muhammad Choudhry presiding a bench in the capacity of Judge of Supreme Court held that:--
"whenever order are passed by an officer without caring whether jurisdiction vests in him or not, it is prima facie reflect on his conduct as well as competency. It is also to be noted that whenever authority is exercise in such a manner then no other inference can be drawn except that the functionary has transgressed his jurisdiction for the consideration other than judicial one and the Courts seized with such orders may recommend any action against the said officer because neither the executive authorities nor judicial forum will pass a wrong order because the jurisdiction in both the capacities is conferred upon such authorities to discharge their function in accordance with law which has bestowed upon them to function in that capacity and if there is abuse of power by such officer then no hesitation should be felt in passing stringent stricture against officer keeping in view of norms of justice."
Their lordship also held in reported judgment PLD 2004 Supreme Court 600 All Pakistan Newspaper Society and others v. FOP and others that "determination of jurisdiction by Court seized with the matters is one of the important element in administration of justice as if justice has been provided basing upon corum non judice order then same would have no legal sanction behind." And in PLD 2005 Supreme Court 842 Khyber Tractor (Pvt.) Ltd. v. Pakistan Through Ministry of Finance, Revenue and Economic Affairs that "question of jurisdiction of a forum is always considered to be very important and any order passed by a Court or a forum having no jurisdiction, even if it is found to be correct on merit is not sustainable. Jurisdiction of a Court lays down a foundation stone for a judicial or a quasi judicial functionary to exercise its power/authority and no sooner the question of jurisdiction is determined in negative the whole edifice built on such defective proceeding, is bound to crumble down."
30.In the light of law laid down by the Superior Judicial fora s, the conduction of audit and preparation of contravention report by respondent No. 1 and show-cause notice and passing of order-in-originals appeals by respondents Nos. 2 and 3 respectively are ab initio, illegal and void and as such is of no legal effect. Therefore, I annul those and set aside the order passed by both the forums below and the subject appeals are accordingly allowed. Sd/-Â Â Â Â Â Â Â Â Â Â
Tahir Zia      Â
(Member Judicial-II)
Karachi       Â
31.InviewofthedifferenceofopinionbetweenMember(Judicial-II), Karachi and the member (Technical-II), Karachi, the matter is referred to worthy Chairman for appointment Referee Member for hearing and decision on the following point of difference:
(i)Whether respondent No. 1 has been appointed as an Officer of Inland Revenue under Section 29 of the Federal Excise Act, 2005 and 228A of the Income Tax Ordinance, 2001 and whether the Board has correctly delegated the powers to the respondent No. 1 through S.R.O. 165(I)/2011 dated 30.03.2011 under Section 29 to be read with Sections 177 and 230A of the Income Tax Ordinance, 2001?
(ii)Whether respondent No. 1 exercised power delegated to it through Notification No. S.R.O. 42(I)/2010 dated 23.01.2010 correctly in the capacity of Additional Commissioner of Inland Revenue?
(iii)Whether respondent No. 2 has been appointed as an Officer of Inland Revenue under Section 29 of the Federal Excise Act, 2005, Section 30 of the Sales Tax Act, 1990 and Section 207 of the Income Tax Ordinance, 2001 and whether it can exercise power under the provision of Sections 14 and 19 of the Federal Excise Act, 2005, clause (c) of subsection (3) of Sections 25 and 36 of the Sales Tax Act, 1990, Sections 207 and 162(1) of the Income Tax Ordinance, 2001?
(iv)Whether the respondent's Collectorate succeeded in proving in terms of Articles 117 and 121 of the Qanun-e-Shahadat that the declaration made by the appellant under Section 79(1) of the Customs Act, 1969 and Rule 433 of Sub-Chapter III of Chapter XXI of Customs Rules, 2001 were false in material particular and falls within the mischief of sections 32(I), 32(2) and 32(3A) of the Customs Act, 1969 as alleged?
(v)Whether cases in which assessment orders have been passed under Section 80, Rules 433, 435, 437, 438 of Sub-Chapter III of Chapter XXI of Customs Rules, 2001 and Section 2(kka) and so the orders of clearance under Section 83 and Rule 442 ibid can be adjudicated upon in terms of section 179 ibid after issuance of show-cause notice?
(vi)Whether the levy not collected/paid at import stage can be levied post clearance and can be collected in the absence of any mechanism to pass the said levy to end consumer in the light of section 19A of the Customs Act, 1969, if read in juxtaposition?
(vii)Whether respondent No. 3 was empowered to pass an order under Section 193A of the Customs Act, 1969 after 01.07.2012 on the appeal filed before him prior to 30.06.2012 against the order passed by the Additional Collector of Customs in the presence of the amendment in Section 193(1) through Finance Act, 2012?
(viii) Whether the order passed by the respondent No. 3 is within the charter of show-cause notice?
(ix)Whether the order-in-appeal is barred by time and without powers/jurisdiction in terms of proviso to subsection (3) of Section 193-A of the Customs Act, 1969 being issued after 260 days from the date of initial period of 120 days and 208 days from the entire period of 180 days?
Sd/-Â Â Â Â Â Â Â Â Â Â
Tahir Zia    Â
(Member Judicial-II)
Karachi     Â
32.MUHAMMAD NAZIM SALEEM, MEMBER TECHNICAL-II.---In addition to points of difference raised by my learned colleague, is above my points are as under:-
(i)Whether aerated waters/soft drink imported by the Appellant in present case is classifiable under PCT heading 2202.1010 or 2202.9000?
(ii)Whether or not S.R.O. 165(I)/2011 dated 03.03.2011 has been issued under subsection (1) of Section 29 of the Federal Excise Act, 2005 or under subsection (3) of Section 29 ibid.
(iii)Whether or not the Ruling No. 242/2012-Law-1 dated 11.07.2012 issued by the Ministry of Law that "the officers of Customs are competent to take cognizance of any short paid amount of Federal Excise Duty pertaining to import stage and Federal Excise Duty so received under the Customs Act, 1969 shall be adjusted under FED head" is rightly enforced by the adjudicating authority in the present case?
(iv)Whether or not in view of circumstances of the case, the respondent department should have to re-open the case under Section 195 of the Customs Act, 1969 instead of adjudicating the matter under section 179 of the Customs Act, 1969?
(v)Whether or not respondent No. 1 has exercised powers delegated through Notification S.R.O. 42(I)/2010 dated 23.01.2010 correctly in the capacity of Additional Commissioner of Inland Revenue?
Sd/-Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â
(Muhammad Nazim Saleem)
Member Technical-IIÂ Â Â Â Â
Karachi             Â
MR. MUHAMMAD NADEEM QURESHI, (MEMBER JUDICIAL-I).---The following reference was made to me by the Hon'ble Chairman for decision on the point of fact and law listed at pages Nos. 73 to 75 of the order passed by Member (Judicial-II) (Mr. Tahir Zia) and Member (Technical-II) (Mr. Muhammad Nazim Saleem). According to the said split judgement, Member (Technical-II) decided the matter and up-hold the Order-in-Appeals Nos. 7564 to 7570/2013 dated 04.07.2013, while the learned Member (Judicial-II) allowed the subject appeals and set-aside the Order-in-Original as well as the Order-in-Appeal in favour of the appellants. 33.After the appointment and for considering the issues framed by both the learned Members, notices were accordingly issued to the appellants and respondents Finally, the case was heard in detail on 02.08.2017, wherein, Mr. Nadeem Ahmed Mirza consultant of the appellants reiterated the argument incorporated in Memo. of appeals and in support thereof placed the copies of judgments passed by the Hon'ble Supreme Court/High Courts and of the Tribunal and prayed for the acceptance of formed opinion by the Learned Member (Judicial-II) in his judgment, in consonance with the judgments on the issue passed by the Superior Judicial Fora inclusive of Tribunal and same may be maintained in the interest of justice.
34.On behalf of the respondents, Mr. Arif Maqbool, Assistant Director and Mr. Ashfaq Ahmed, Principal Appraiser, reiterated the same argument as incorporated in comments on memo. of appeal and contended that the observation made by the Member (Technical-II) with regards to the controversy and allegation made thereon against the appellant are in accordance with the law and may be maintained being correct in fact and law.
35.Argument heard, concluded. Record perused, in regards to description of the imported goods there exist no dispute between the appellant and respondent, similarly in regards to the determined PCT Heading 2202.1010 by the Respondent No.1., hence, no deliberation / decision is warranted, issue No. (i) framed by learned Member Technical-II is answered in affirmative.
36.That as regard to issue No. (i) framed by learned Member (Judicial-II) and issue No.(ii) by Learned Member (Technical-II). The fundamental question for consideration is the power and jurisdiction of an officer with the designation of 'Inland Revenue Officer', particularly in context of the conduction of audit/adjudication of the cases under Sections 42B and 14 of the Federal Excise Act, 2005, Sections 25, 36 of the Sales Tax Act, 1990 and Sections 177 and 162(1) of the Income Tax Ordinance, 2001. The relevant provisions for determining the powers, jurisdiction and function of an officer are inter-alia, sections 29 and 30 of the Federal Excise Act, 2005, Sections 30, 31 and 32 of Sales Tax Act, 1990 and Sections 207, 208 and 209 of the Income Tax Ordinance, 2001. Section 29 of Federal Excise Act, 2005, 30 of Sales Tax Act, 1990 and 207 of Income Tax Ordinance, 2001 empowers the Board to appoint in relation to an area, person or class of persons as officer of Inland Revenue having specific designation. Section 2(12) of the Federal Excise Act, 2005, 2(18) of Sales Tax Act, 1990 and Section 38A of the Income Tax Ordinance, 2001 define the expression of 'Officer of Inland Revenue' as an officer appointed under Section 29 of Federal Excise Act, 2005, Section 30 of the Sales Tax Act, 1990 and Section 207 of the Income Tax Ordinance, 2001. The said definition are exhaustive and unambiguously shows that the expression in itself is not a specific officer but refer to all the officer appointed under section 29 of Federal Excise Act, 2005, Section 30 of the Sales Tax Act, 1990 and Section 207 of the Income Tax Ordinance, 2001. The appointment is therefore, made on the basis of specific designation of an officer. Clauses (a) & (k) 29 of Federal Excise Act, 2005, Clauses (a) to (j) Section 30 of the Sales Tax Act, 1990 and Clauses (a) to (l) Section 207 of the Income Tax Ordinance, 2001 of subsections (1) of Section 29 of Federal Excise Act, 2005, Section 30 of the Sales Tax Act, 1990 and Section 207 of the Income Tax Ordinance, 2001 explicitly enumerates that various designations of Officer of Inland Revenue, clause (k) of Federal Excise Act, 2005, Clause (j) of Sales Tax Act, 1990, the board appointed its different organ as Officer of Inland Revenue, clause (j) of subsection (1) of Section 30 of Sales Tax Act, 1990 provides that the Board may appoint an officer of Inland Revenue with any other designation. Each officer has to have a specific designation and empowered to exercise powers under the various provisions of Federal Excise Act, 2005, Sales Tax Act, 1990 and Income Tax Ordinance, 2001. The expression of 'Officer of Inland Revenue' is therefore a general expression of phrase for all the officers having specific designation and empowered to exercise powers under the provision of the Section 29 of Federal Excise Act, 2005, Section 30 of the Sales Tax Act, 1990 and Section 207 of the Income Tax Ordinance, 2001.
37.In the instant case the respondent No. 1 conducted audit of the federal excise duty and income tax to be collected/paid at import stage by the Clearance Collectorate/appellant as per the contemplation of Section 3 of Federal Excise Act, 2005, Section 6 of Sales Tax Act,1990 and Section 148 of the Income Tax Ordinance, 2001, in the absence of availability of jurisdiction under Section 29 of Federal Excise Act, 2005 and Section 228 of Income Tax Ordinance, 2001 as neither he or any other officer of Directorate of Post Clearance Audit have not been appointed as Officer of Inland Revenue under the aforesaid sections of FEA, 2005 and Income Tax Ordinance, 2001, instead Officers of Directorate General of Internal Audit have been appointed as an officer of Inland Revenue under Section 29(2) (b) of Federal Excise Act, 2005 and Section 228 of the Income Tax Ordinance, 2001. Notwithstanding, the representative of respondent No. 1 relied upon S.R.O. No.165(I)/2011 dated 03.03.2011, through which Board itself appointed the officers of Post Clearance Audit as Officer of Inland Revenue and delegated powers under the different Sections of Federal Excise Act, 2005 under Section 29 of the Federal Excise Act, 2005 and Section 228 of Income Tax Ordinance, 2001. In my opinion it is for the legislature to appoint the Officers of Directorate General of Post Clearance Audit through money bill as an officer of Inland Revenue under clause (b) of Section 29(2) of Federal Excise Act, 2005 and Section 228 of Income Tax Ordinance, 2001 as have been appointed different organ of the Board under subsection (2). Under subsection (3) Board or the Chief Commissioner with the approval of the Board are empowered by name or designation to appoint any Additional Commissioner or Deputy Commissioner Inland Revenue to exercise any of the powers of a Commissioner or any Deputy Commissioner Inland Revenue or Assistant Commissioner Inland Revenue to exercise any of the powers of Additional Commissioner of Inland Revenue, any Assistant Commissioner of Inland Revenue to exercise any of the powers of a Deputy Commissioner Inland Revenue and any other Officer of Inland Revenue to exercise any of the power of Commissioner Inland Revenue, Additional Commissioner Inland Revenue or Assistant Commissioner of Inland Revenue under Federal Excise Act, 2005 and Rules made there under. The emphasis laid in the said subsection is that the officer must be an Officer of Inland Revenue of either of the designation given therein. When the Officers of Directorate General of Post Clearance Audit including the respondent No. 1 are not appointed as Officer of Inland Revenue through a money bill under clause (b) of Section 29(2) of Federal Excise Act, 2005, Board has no powers to delegate powers to them under different section of Federal Excise Act, 2005 through notification in exercise of the powers conferred upon it through clause (12) of Section 2 of Federal Excise Act, 2005 being in conflict with the statute, which has to prevail on the subordinate legislation, resultant, S.R.O. No.165(I)/2011 dated 03.03.2011 issued by the Board is without lawful authority and jurisdiction and as such invalid and not enforceable under law being ultra virus to the provision of Section 29 of Federal Excise Act, 2005 as held in 2000 PTD 399 Superior Textile Mills Ltd. v. FOP, PLD 2001 SC 600 the Collector of Sales Tax and others v. Superior Textile Mills Ltd. and others, 2012 PTD 302 Saleem Raza v. FOP and others and 2014 PTD 1733 Waseem Ahmed and others v. FOP another, where it has been held in clear terms that "unless the officer of DGI&I)-FBR are not appointed and an officer of Inland Revenue, powers under the different subsection of the Sales Tax Act, 1990 can not be delegated through any SRO with that the Hon'ble High Court of Sindh declared Notification No.775(I)/2011 ultra vires to the Sales Tax Act, 1990". Therefore, neither any officer of Post Clearance Audit, respondent No. 1 is not exception is empowered to conduct audit in the matter of Federal Excise and Income Tax under Section 42B of Federal Excise Act, 2005 and Section 177 of the Income Tax Ordinance, 2001, rendering the act of audit in regards to Federal Excise Duty and Income Tax without powers/jurisdiction, hence void and ab-initio and as such coram non judice. The issue No. (i) framed by the Learned Member Judicial-II and issue No. (ii) framed by Learned Member Technical-II are answered in negative.
38.That as regards to the issue No. (ii) framed by Learned Member Judicial-II and issue No. (v) framed by Learned Member Technical-II. Upon examination of Section 30DD of the Sales Tax Act, 1990, I have observed that legislature has appointed Officer of Post Clearance Audit as Officer of Inland Revenue and have been delegated powers under different Section of the Sales Tax Act, 1990 under Section 31 through S.R.O. No.42(I)/2010 dated 23.01.2010 for conducting audit of the paid/collected or unpaid/deposited Sales Tax at import stage in the capacity of designation specified in column 3 of SRO, which are (i) Chief Commissioner / Commissioner Inland Revenue (ii) Additional Commissioner of Inland Revenue (iii) Deputy Commissioner Inland Revenueand(iv)AssistantCommissionerInlandRevenueandnotinthe capacity or designation of (i) Director General / Director-PCA(ii) Additional Director-PCA (iii) Deputy Director, Post Clearance Audit and (iv) Assistant Director, Post Clearance Audit by virtue of the fact, unless they wear cloak of expressed designation given in column 3 of SRO, they are not empowered to even lay hands on the Sales Tax Act, 1990 what to say about of the powers under the different sections listed at column 4 of SRO. Irrespective of the said legal proposition in the instant case the entire communication including the audit observation and contravention report was prepared and served in the capacity of either Additional Director or Deputy Director of Post Clearance Audit, which are non existent in column No. (3) of Notification No. 42(I)/2010 dated 23.01.2010, rendering the same without power/jurisdiction hence ab-initio void and rendered the entire proceeding right from Audit, Audit observation, contravention report as of no legal effect. Any super structure built thereon no matter how strong it may be had to fall as held by Superior Judicial Fora in umpteenth reported judgments, placed on record of the case and which are squarely applicable with force in the instant case. The issue No. (ii) framed by Learned Member Judicial-II and issue No. (v) framed by Learned Member Technical-II are answered in negative.
39.That as regards to issue No. (iii) framed by Learned Member Judicial and Technical-II at the same time in regards to the powers / jurisdiction of respondent No.2 in the matter of Federal Excise Duty, Sales Tax and Income Tax under the provision of Section 14 of Federal Excise Act, 2005, Section 36 of Sales Tax Act,1990 and Section 162(1) of Income Tax Ordinance, 2001. I have scrupulously gone through the provisions of Section 29 of Federal Excise Act, 2005, Section 30 of Sales Tax Act, 1990 and Section 228 of Income Tax Ordinance, 2001 and has reached upon the conclusion that he is not being appointed through a money bill by the legislature as an Officer of Inland Revenue, resultant, has not been delegated with the powers under Section 29 (2)(b) Federal Excise Act, 2005, Section 31 of Sales Tax Act, 1990 and Section 207 of the Income Tax Ordinance, 2001, resultant, not empowered to initiate any action either for short/non paid Federal Excise Duty, Sales Tax and Income Tax under the provision of Section 14 of Federal Excise Act, 1990, Section 36 of Sales Tax Act, 1990 and Section 162(1) of Income Tax Ordinance, 2001. Reference to the clarification of Ministry of law and Justice vide No. O.M. No.F-242/ 2012-Law dated 11.07.2013 and letter of Board C.No.3(32) TARI/90 dated 06.08.2012 by the respondents are patently based on misconception and lend no help to them as Board is a non entity and is not empowered to appoint any officer of the Customs as an Officer of Inland Revenue it is prerogative of the legislature to appoint Officer of Customs through a money bill as an officer of Inland Revenue by either inserting a fresh section after Section 29 Federal Excise Act, 2005, Section 30 of Sales Tax Act, 1990 and Section 228 of Income Tax Ordinance, 2001 or though amendment in the aforesaid Sections. Even otherwise neither Ministry of Law and Justice nor Board have mandate in the scheme of interpretation to interpret the provision of the Act or amend. They can only extend their opinion, which have no binding force by virtue of the fact that it is for the judicial fora to interpret the provision of statute/rules and my opinion stands validated from the judgment of the Hon'ble Supreme Court of Pakistan reported at 1993 SCMR 1232 in the case of Central Insurance Co. v. Central Board of Revenue the Hon'ble Supreme Court of Pakistan held that "Board's view as to the interpretation of law do not have the force of law and the exception would be, where a fiscal statute is involved, that should be implemented with strict impartiality" and of High Court of Sindh 2005 PTD 2462 MessrsLever Brother Pakistan Ltd. v. Customs Sales Tax and Central Excise Appellate Tribunal, Karachi that "CBR has no place to in the Scheme of Law, conferred with the jurisdiction to interpret any law, statutory or in exercise of any deliberate authority i.e. subordinate legislation" whereas, in 2016 PTD (Trib.)107 Qazi CNG Station, Gujrat and another v. Directorate General of Intelligence and Investigation-FBR, Karachi and 2 others, this Tribunal held that "statute can be amended by the Parliament and a notification through a notification not through any communication. In the absence of amendment of notification, clarification issued by the department could only be termed as opinion and it would not at all amend the notification". Therefore, assuming powers by the respondent No. 2 on the strength of letters of the Ministry of Law and Justice and Board is palpably illegal beside fatal for the health of the case. Even otherwise, the letter's speaks about collection of Federal Excise Duty at import stage in the same manner and at the same time, as if it is a duty of customs payable under the Customs Act, 1969 (IV of 1969) and for collection of the same the provision of Section 31A also apply. Reference of Section 7 of the Federal Excise Act, 2005 has also been given simply for clarification that for collection of import duty provision of Sales Tax Act, 1990 is applicable.
40.To further elaborate and settling the issue to its logical conclusion, I add while referring to Section 3 of the Federal Excise Act, 2005, Section 6 of the Sales Tax Act, 1990 and 148 of the Income Tax Ordinance, 2001 through which the Clearance Collectorates are empowered to collect the Federal Excise Duty and Taxes on the imported goods as like custom duty on the value determined under Section 25 of the Customs Act, 1969 in the capacity of collecting agent. These sections least empowers the Officers of Customs including the respondent No. 2 to initiate adjudication / recovery proceeding for the short collected/paid Federal Excise Duty, Sales Tax and Income Tax either due to collusion or connivance or inadvertent, error or misconstruction. Proceeding for these type of recovery a show-cause notice has to be issued by the Officer of Inland Revenue of the specific designation as circumscribed under Section 29 of the Federal Excise Act, 2005, Section 30 of Sales Tax Act, 1990 and Section 207 of Income Tax Ordinance, 2001, under the contravening provision of Section 14 Federal Excise Act, 2005 Section 36 of Sales Tax Act, 1990 and 162(1) of the Income Tax Ordinance, 2001. One has to note and understand that there is a distinction between the expression 'function' and 'power'. Functions can only be performed by a person who is already conferred with the powers and jurisdiction. Therefore, it is pertinent for me to examine the definition of expressions 'powers', 'function' and 'jurisdiction' so as to explain the distinction between the said expression. The Eight Edition of Black's Law Dictionary defiance 'powers', 'function' and 'jurisdiction' as follows:--
"Powers 1. The ability to act or not act esp. a person's capacity for acting in such a manner as to correct someone else's, response 2 dominance, control, or influence over another; control over one's subordinate. The legal right or authorization to act or not to act; a person's or organization's ability to alter by an act of bill, the rights, duties liabilities, or other legal relations either of that person or of another"
"Function No. 1. Activity that is appropriate to a particular business or profession < a court's function is to administer justice >. To office ; duty; the occupation of an office < presidential function > [ cases : officers and public employees 110. C.J.S. Officers and public employees 234 - 245]"
"Jurisdiction, No. 1. A government's general powers to exercise authority over all persons and things within its territory; esp. a state's powers to create interests that will be recognized under common -law principals as valid in other states < New Jersey's jurisdiction >. [ cases : State 1. C.J.S. States 2, 16] 2. A court's powers to decide a case or issue a decree < the Constitution grant of Federal - question jurisdiction >. - also termed (in sense 2) competent jurisdiction; (in both senses coram non judice [cases; courts 3; Federal Courts 31, 161. CX.J.S. Courts 9, 18]"
41.It is therefore, obvious from the above definition that the three expressions are distinct and separate. The powers or jurisdiction conferred on an officer of Inland Revenue precedes the performance of functions. The conferment of powers or jurisdiction is a pre-condition for the performance of function. By no stretch of imagination, the respondent No. 2 could himself assume that he has been appointed as an Officer of Inland Revenue under the provision of Section 29 and Section 30 of Sales Tax Act, 1990 and the respective section of Income Tax Ordinance, 2001 by the legislature despite not exercise powers under the provision of Section 14 of Federal Excise Act, 2005, Section 36 of Sales Tax Act, 1990 and Section 162(1) of Income Tax Ordinance, 2001. Which empowers Officer of Inland Revenue in accordance with his designation and Commissioner of Inland Revenue. Therefore, it is my considered opinion that the Clearance Collectorates does have the authority to collect Federal Excise Duty, Sales Tax and Income Tax at import stage in the capacity of collecting agent in terms of Section 3 Federal Excise Act, 2005, Section 6 of Sales Tax Act, 1990 Section 148 of Income Tax Ordinance, 2001 sans recovery proceeding. Clearance Collectorates are also empowered to recover escaped/short paid Custom Duty and Regulatory Duty levied on the imported goods under Section 18 of the Customs Act, 1969 in exercise of the powers conferred under Section 202 of the Customs Act, 1969 after due process of law, but have no powers in any case to adjudicate the cases of short recovery of Federal Excise Duty, Sales Tax and Income Tax under section 14 of Federal Excise Act, 2005, Section 36 of Sales Tax Act, 1990 and Section 162(1) of Income Tax Ordinance, 2001. They are also empowered to recover from the amount of importer lying with them the arrear of Federal Excise Duty, Sales Tax and Income Tax only after receipt of notice from the Officer of Inland Revenue and Commissioner of Income Tax under Rule 60, of Federal Excise Rules, 2005, Section 48 of Sales Tax Act, 1990 and Section 140 of the Income Tax Ordinance, 2001 of the adjudged amount through a valid adjudication order passed by the competent authority in terms of Section 14 of Federal Excise Act, 2005, Section 36 of Sales Tax Act, 1990 and Section 162(1) of Income Tax Ordinance, 2001, rendering the adjudication proceeding initiated by respondent No. 2 under the aforesaid sections of the Federal Excise Act, 2005, Sales Tax Act, 1990 and Income Tax Ordinance, 2001 is not legal, justifiable and tenable in the eyes of the law, hence coram non judice nor in consonance with the reported/unreported judgments of Superior Courts, referred by the Learned Member Judicial-II in his judgment.
42.In reaching the instant irresistible decision, I have also been indebted from the judgment authored by Mr. Justice Iftikhar Muhammad Chaudhery, the case Khyber Tractors (Pvt.) Ltd. v. Government of Pakistan Published in PLD 2005 SC 482, while observing the issue of jurisdiction. It has been observed that the question of jurisdiction in form is always considered to be very important and no order passed by a court or a forum having no jurisdiction, even if it is found to be correct on merits, is not sustainable. The Jurisdiction of a court lays down a foundation stone for jurisdiction or as quasi judicial functions to exercise its powers / authority and no sooner the question of jurisdiction is determined in negative. The whole edifice of such defective proceedings is bound to crumble down. It is also an elementary principle of law that if the mandatory condition for exercising of jurisdiction by a Court, Tribunal or authority is not fulfilled then the entire proceedings so followed become illegal and suffers from want of jurisdiction. Any order passed in continuation of these proceedings in built or revisions equally suffers from illegalities and are without jurisdiction. It is one of the mandatory requirement if the statute enacts with certain action shall be taken in certain manner and courts are required to do justice between the parties in accordance with the provisions of law, as the litigant who approach the court for the relief is bound to substitute with the procedure had been adopted by him in accordance with law, because it is elementary principle of law that if a particular thing is required to be done in particular manner it must be done in that manner, otherwise it shall not be done at all. In the present case, proceedings caused, created and conducted during hierarchy of the customs are without any warrant of law. The issue No. (iii) framed by Member Judicial/Technical-II are answered in negative.
43.That as regards to issues No. (iv) framed by Member Judicial-II, I have noted with concern that the respondent No. 1 implicated and the respondent No. 2 charged the appellants, for mis-declaration under the provision of Section 32 of the Customs Act, 1969 merely on the basis of assumption/presumption that the appellants transmitted GDs on the basis of erroneous PCT, in order to hoodwink the Customs and to evade the amount of duty and taxes. I am unable to buy the said arguments as in conduction of examination appellants have no part to play, instead had to be carried out by the subordinate of respondent No. 2 with the assistance of Officials of Terminal Operator, independently and without any influence as per the expression of Section 198 and Rule 435 and the passing of assessment/clearance order under sections 80 and 83 and Rules 438 and 442 of the Act/Rules rest with the sole and exclusive domain of the Customs Officer listed at Serial Nos. 30 and 33 of the SRO 371(I)/2002 dated 15.06.2002. The Officials conducting the examination confirmed the declarations and assessing officers passed assessment / clearance orders while accepting the declaration as true and correct. If it is presumed as stated in the show-cause notice that the alleged clearance of the goods imported by appellants were on the basis of erroneous description and PCT, that could had not been possible unless these officials were having hands in gloves with the appellants. Meaning thereby that they are standing on the same pedestal with the appellants. Ironically, no charges have been levelled under Section 32(2) against those Officials, as of appellants, confirming that the case in question is of inadvertence, error, omission or misconstruction falling within the ambit of Section 32(3) of the Customs Act, 1969, the appropriate authority to adjudicate such type of cases rest with the Principal Appraiser in terms of Clause (ii) of Serial No. 3 of S.R.O. 371(I)/2002 dated 15.06.2002, not respondent No. 2 rendering the show-cause notices and order-in-original without power/jurisdiction hence, ab-initio void and as such coram non judice. Additionally, it has been established that the appellants had been met out with partial treatment, which is tantamount to discrimination not permitted under Articles 4 and 25 of the Constitution of Islamic Republic of Pakistan and the law laid down by the Superior Judicial Fora in reported judgment 2002 SCMR 312 and 2009 PTD 1507 the Hon'ble Superior Courts have observed that "there exists 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 someone and denied to other is discrimination". The Apex Court further held in reported judgment 2010 SCMR 431 that:
"Doctrine of equality, as contained in Art. 25 of the constitution, enshrine golden rules of Islam and states that every citizen, no matter how high so ever, must be accorded equal treatment with similarly situated persons--- State may classify persons and objects for the purpose of legislation and make laws applicable only to persons or objects within a class--- In fact all legislations involve some kind of classification whereby some people acquire rights or suffer disabilities whereas others do not--- What however, is prohibited under principle of reasonable classification, is legislation favouring some within a class and unduly burdening others--- Basic rule for exercise of such discretion and reasonable classification is that all persons placed in similar circumstances must be treated alike and reasonable classification must be based on reasonable grounds in given set of circumstances but the same in any case must not offend spirit of Art. 25 of the Constitution."
44.Notwithstanding, for resolving the issue in hand, I have scrupulously gone through the contents of show-cause notices and the grounds taken by the appellants and has observed that the allegations levelled by the respondent No. 2 in the show-cause notices are of general nature and for that reason in support of those no intangible incriminating evidence such as posted examination reports, copies of images, which were vital in such type of cases were annexed with the show-cause notice or even placed on the record of the Tribunal on the date of hearing. Nevertheless for further confirmation of the charges, the representative of the respondent No. 2 was asked that what is the basis for forming the said opinion, the reply was that the images posted with the examination report, although confirmed the declaration of the goods i.e. "Assorted Soft Drink", which are notified in the First Schedule to the Customs Act, 1969 as Aerated Water under PCT heading 2202.1020. Upon this representative was confronted with the query that whether these images were available with the Assessing Officers who passed the assessment orders after examining those, reply was in affirmative. Consequently, respondents representatives were asked that as to whether determination of PCT/Classification of those does not rest with the Customs Officers in terms of Section 80(1) and Rule 438 of the Act/Rules, which read as "Section 80- Checking of goods declaration by the Customs---- (1) on the receipt of goods declaration under section 79, an officer of customs shall satisfy himself regarding the correctness of the particulars of imports, including declaration assessment, and in case of the customs computerized system payment of duty, taxes and other charges thereon." and "Rule 438--Assessment by Customs Authorities: Where any declaration has been filed under Rule 433 or additional documents have been submitted under rule 437 the Customs shall satisfied itself as to their correctness including its value, classification claim of exemption, payment of duty and taxes and may re-assess the goods during or after clearance". The reply was in affirmative. This amazed me but to further crystallize the issue the representatives were asked to read out the declared description of the goods, to which the description was read out as "Assorted Soft Drink", and thus were asked that the imported goods were aerated water or not the reply was in affirmative. This confirmed that the appellants have not made any misdeclaration in material particular and determination of the actual description of the goods and classification of those rest upon the Custom Officer, there least exist an iota of evidence that the appellant influenced either the examiner or assessing officer for not determining the correct PCT heading in the light of examination reports/images. In the light of the circumstances of the case, the entire fault of not assessing the goods under correct PCT rest with the Customs Officials. These vital facts proves that the respondents miserably failed to prove in terms of Articles 117 and 121 of Qanun-e-Shahadat that the appellant declaration was false in material particular and attracted the mischief of Sections 32(1), 32(2) and 32(3A) of the Customs Act, 1969. The issue No. (iv) framed by learned Member Judicial-II is answered in negative.
45.That as regards to issues Nos. (iv) and (v) framed by Learned Member Technical/Judicial-II. The delivery of the consignment by the terminal operator is being effected upon receipt of online gate out message on their user ID after passing of assessment/clearance order under the provision of Sections 80 and 83 of Customs Act, 1969 and Rules 438 and 442 of Sub-Chapter (III) of Chapter XXI of Custom Rules 2001, which are pre-requisite, order passed by the competent authority as defined in Section 2(a) of the Customs Act, 1969 in exercise of the powers conferred upon them through S.R.O. No.371(I)/2002 dated 15.06.2002. Those orders were/are appealable order as per the contemplation of Section 193(1) of the Customs Act, 1969 verbatim of which is reproduced here-in-under:--
193 Appeals to Collector (Appeals):---(1) Any person including an officer of Customs aggrieved by any decision or order passed under sections 33, 79, 80 and 179 by an officer of Customs before below the rank of Additional Collector may prefer appeal to the Collector (Appeals) within thirty days of the date of communication to him of such decision or order.
46.Upon perusal of Goods Declarations of the appellants, I have observed that these pertains to the period of 01.07.2012 and subsequently against each Goods Declaration valid and legal assessment/clearance orders were passed under the aforesaid provisions of the Act/Rules. Those cannot be disturbed by any authority for the purpose of preparing contravention report and adjudication proceeding. The only course available with the respondent No. 1 was to challenge the said orders before the respondent No. 3 under section 193 of the Act in exercise of the powers delegated upon him through Notification 500(I)/2009 dated 13.06.2009. In the filed appeal the respondent No. 1 is empowered to incorporate all the apprehension, misreading of the facts and contravention of the provision of the Act/Rules. The respondent No. 3, upon receipt of the appeal and going through the facts and grounds if thinks fit that the contention of the respondent No. 1 seems to be correct and the duty and taxes has not been either not levied or short paid. They are empowered to issue show-cause notice to the importer (appellant) as expressed in 3rd proviso to the subsection (3) of Section 193A of the Act. Instead of the adhering the prescribed method available in the Act, the respondents Nos. 1 and 2 reopened the assessment / clearance orders under section 195 of the Act in the absence of availability of power as the power vested therein are for either Board or Collector. None of the respondent figure anywhere, rendering the show-cause notice without power/jurisdiction and as such ab-initio void, the superstructure built thereupon as well ab-initio void. Additionally, it is to be noted when the right of appeal has been accorded by the legislature in the provision of Section 193 of the Act, the provision of Section 195 is un-operational and cannot be exercised even by the authority defined therein and this has been validated by the Hon'ble High Court of Sindh in reported judgment 2014 PTD 1256 MessrsParamount International (Pvt.) Ltd., Karachi v. Secretary Revenue Division that "department or an Officer of Customs, if aggrieved, by any decision or order passed by an officer of customs below the rank of additional collector could prefer an appeal before the Collector (Appeal) --- 1st order in original passed in the subject matter was an appealable order for both the parties, therefore option to reopen and order pass under the adjudication hierarchy was not available to the Collector. Even the Collector of Customs Adjudication could not oversee or exercise any right of re-opening of any order which has been passed by an officer lower in rank but acting as an adjudicating authority. Impugned order was set-aside and Constitution Petition was allowed." It is also settled proposition of law that in the presence of an appealable order, fresh order cannot be passed even through issuance of show-cause notice under section 180, while exercising powers under the provision of Section 179 ibid. The said act is piling upon yet another order on the existing appealable order not permitted under law as held by Hon'ble High Court of Sindh in reported judgment 2004 PTD 3020 MessrsSmith Kline French v. Pakistan that "once an order is passed, which attain finality due to non filing of appeal within the stipulated period of 30 days, the same cannot be subject to a show-cause notice due to limitation and the transaction stood passed and closed and cannot be disturbed. For reaching at the decision I have gained strength from the reported judgment 1989 MLD 4310 MessrsWorld Trade Corporation v. Central Board of Revenue, wherein their lordship of High Court held that "if the order has attained finality through limitation. A fortiori; the Central Board of Revenue could not open up an order that has attained finality, under the Sea Customs Act, 1878 and against which sou motu revision. Notwithstanding, the act of issuance of show-cause notice and passing of order-in-original in the instant case by the respondent No. 2 also falls under the ambit of "double jeopardy" not permitted under Article 13 of the Constitution of Islamic Republic of Pakistan. Rendering the order passed by respondents Nos. 2 and 3 for piling upon an existing appealable order are without lawful authority and jurisdiction and as such void and ab-initio and of no legal effect. That as regards to issues Nos. (iv) and (v) framed by Learned Member Technical/Judicial-II are answered in negative.
47.That as regards to issues No. (vi) framed by Learned Member Judicial-II, it is inscribed that every importer is duty bound to file returns-cum-payment challan of Federal Excise Duty and Sales Tax duty as per the contemplation of Section 4 of Federal Excise Act, 2005 and Section 26 of Sales Tax Act, 1990, in those, he is entitled to claim input of the paid duty and taxes either at import stage or local buying, from which after making adjustment of the output tax charged by him from the buyer of the sale goods, in case input duty and taxes are excess, either he claims refund for that or carry forward for adjustment in the returns of next month as expressed in Section 6 of Federal Excise Act, 2005, Section 7 of Sales Tax Act, 1990, vice versa if the output duty and taxes are excess to the paid input tax, he deposit the difference of tax with the prescribed branch of the National Bank of Pakistan. Similarly, for paid income tax levied on the imported goods, an importer files an annual statement with the FBR in terms of Section 115(4) of the Income Tax Ordinance, 2001 as final tax liability for the tax year. In the presence of availability of the said mechanism, it is mandated upon the Officers of Customs to levy/collect duty and taxes correctly in accordance with the provisions of the Acts / Ordinance or infield notification on the imported goods, enabling the importer to declare the same in his monthly returns of Federal Excise Duty, Sales Tax and Income Tax and annual statement of Income Tax as he has to charge the same from the buyer (end consumer) at the time of selling the goods, if duty and taxes are not levied / collected by the Customs officials correctly due to inadvertence error or misconception, those cannot be recover subsequently through any mechanism e.g. through show-cause notice/order-in-original, as against the said short collected / paid amount of duty and taxes, importer is unable to show the same as input tax, nor output in his monthly return for duty and taxes after sale of the goods, after taking into account the cost of the goods amount of duty and taxes and administrative/selling expenses, charging any amount subsequent to sale is neither ethical or legal. Meaning thereby, in such like situation for adjustment or claiming the short collected amount of duty and taxes, no mechanism have been prescribed in any provision of Federal Excise Act, 2005, Sales Tax Act, 1990 and Income Tax Ordinance, 2001. Resultant, it is deems to be not passed to the end consumer and cannot be recovered, with the exception of approaching the Board as per the expression of Section 65 of the Sales Tax Act, 1990, verbatim of which has already been reproduced by my brother learned Member Judicial-II, in his order for issuance of notification for regularizing of non collection of Federal Excise duty, sales tax and income tax under the respective provisions of Federal Excise Act, 2005, Sales Tax Act, 1990 and Income Tax Ordinance, 2001 on the imported goods of the appellant. That as regards to issues No. (vi) framed by Learned Member Judicial-II, is answered in negative.
48.That as regards to issues No. (vii) framed by Learned Member Judicial-II, the provision of Sections 193(1) and 194(1) were amended through Finance Act, 2012, with the said amendment, appeals filed against the order passed by Additional Collector stand ousted from respondent No. 3 jurisdiction w.e.f. 01.07.2012, resultant, appeal lying with him against the orders of Additional Collector had to be decided by him on or before 30.06.2012 not subsequent to that and in case of non decision by 30.06.2012, it was mandated upon him to transfer the appeals to Customs Appellate Tribunal, to whom jurisdiction was assigned by the legislature under Section 194A (1) of the Customs Act, 1969 w.e.f. 01.07.2012. To the contrary, the respondent No. 3 passed order dated 04.07.2013 in Appeals Nos. K-928, K-929 and K-971/2013 filed against orders dated 07.05.2012 and 10.05.2012 passed by Additional Collector. Rendering the order so passed in excess of jurisdiction and as such void and ab-initio and as such coram non judice. 49.It is settled proposition of law that very assumption of jurisdiction by the respondent No. 3 in the instant matter was against the said provision of law. It is well settled that a forum cannot take cognizance of a matter beyond its jurisdiction, prescribed in the relevant law. Inherent defect cannot be cure to defeat the provision of statute or enactments effecting the jurisdiction of a forum. It is in alienable right of every citizen to have protection of law and be treated in accordance with law, in terms of Article 4 of Constitution of Islamic Republic of Pakistan, 1973. An order passed against a person by any forum against express provision of law on the subject, if allowed to be stay intact, would cause serious prejudice to the legal right of citizen. Reference can be made to Azhar Alam Farooqi Advocate v. Sheikh Abdul Sattar Lasi and others (2008 SCMR 240) Mst. Fateh Bivi and others v. Additional District Judge, Khushab and others (2008 SCMR 1262), Muhammad Anwer and others v. Mst. Ilyas Begum and others (PLD 2013 SC 255) and OMV Energy v. Ocean Pakistan and others (2015 CLC 1504).When a forum/ Court suffer from want of inherent jurisdiction, no act of consent or acquiescence in the proceeding can vest such forum/court with such jurisdiction. No question of waiver or estopal is attracted in such circumstances. There can be no exception to the principal that the order passed or an act done by the Court or a Tribunal, in competent to entertain proceeding is without jurisdiction. Jurisdictional defect could not be remove by mere conclusion of proceedings of passing of order-in- original and order-in-appeal. It is well settled law that when a law required and act to be done in a particular manner it had to be done in that manner alone, not otherwise. Reference in this regard can be made to Muhammad Hussain and another v. Muhammad Shafi and another (2004 SCMR 1947) and Munawar Hussain and 2 others v. Sultan Ahmed (2005 SCMR 1388). That as regards to issues No. (vii) framed by Learned Member Judicial-II, is answered in negative. 50.That as regards to issues Nos. (viii) and (ix) framed by Learned Member Judicial-II, the respondent No. 3 passed the Order-in-Appeal on alien facts which has no nexus either with the charter of show-cause notice or the grounds of memo of appeal. The case of appellants revolves around the import of cold drink (aerated water) and the order of the respondent No. 3 speaks about "Non Alcoholic Bear" and how i.e. produced. This act of his proves that he travelled outside the charter of show-cause notice, not permitted under law. Decision on the basis of fact/grounds not incorporated in the show-cause notice is deems to be palpably illegal. Reference is made to the Collector Excise and Land Customs and others v. Rehm Din reported at 1987 SCMR 1840 and Adam v. Collector of Customs, Karachi PLD 1969 Supreme Court 446, Muhammad Sadqain v. Collector of Customs (Appraisement) 2006 PTD 2742 and MessrsExide Pakistan Ltd. v. Deputy Collector of Customs (Adjudication-III), Karachi, 2004 PTD 1449, "wherein it has been held that "Order of adjudication, being ultimately based on a ground which was mentioned in the show-cause notice is palpably illegal on the face of it". The appeals before the respondent No. 3 were filed on 11.06.2012, orders in those in terms of proviso of subsection (3) of section 193A of the Customs Act, 1969 should had been passed by him within 120 days or within the extended period of 60 days by the Board on availability of exceptional circumstances after serving a notice to the appellant and recording of those, meaning thereby within 180 days at the most. The initial period of 120 days stood lapsed on 09.10.2012 and no extension whatsoever was either obtained by respondent No. 3 or granted by Board, validated from the charter of order-in-appeal. Notwithstanding, to the said fact, the respondent No. 3 passed order-in-appeal on 04.07.2013, rendering the order-in-appeals barred by time by 268 days and as such without powers/jurisdiction and not enforceable under law and as such void and ab-initio. The judgment relied upon by the appellants are fully applicable in the subject cases, in addition to 2012 PTD 1016 MessrsPakistan Ordinance Factory (POF) Wah Cantt. v. Collector of Customs, Sales Tax and Central Excise (Adjudication), Islamabad and others, wherein it has been held "Provision bringing Penal consequences must be invoked or exercised within time prescribed by statute itself --- law required passing of such orders within 180 days including extended /grace period. Such order has been passed after 448 days of show-cause notice with inordinate delay of 313 days. Extension of time obtained on 20.11.2003 was patently time barred authority has not shown any reasonable justification for such delay. Government department could not be put at higher pedestal in matter of limitation, rather they would be suppose to act within statutory period. Order was barred by limitation in circumstances." This order was assailed before the Hon'ble Supreme Court vide C.P. No. 925 of 2012 by the Commissioner Inland Revenue Islamabad, the Apex Court dismissed the same vide order dated 12.03.2013 and maintain the order of Hon'ble High Court of Islamabad. It is also worth for me to rely upon 2017 SCMR 1427, the Collector of Sales Tax, Gujranwala and others v. MessrsSuper Asia Muhammad Din Sons and others, authored by Mian Saqib Nisar, Hon'ble Chief Justice, holding that "the time period given in the respective provision of the Act for passing order-in-original/appeal is mandatory and non-compliance of a mandatory provision would invalidate such act." The answer to the issues Nos. (viii) and (ix) framed by Member Judicial-II is answered in negative and affirmative respectively. 51.Being custodian of law it is the duty of the Court to follow the legal obligations and interpretation made thereon by the Courts as well as the Legislature. The observations of the higher Courts and the intention of the Legislature and interpretations which leads to manifest the absurdity should, if possible, be avoided. The Courts are under statutory obligations to supply the omission with a view to prevent the defeating of the very object of the rules, and can fill in the gaps, in a piece of legislation, where plain constructions would lead to absurd results. It is well entrenched legal preposition that, an interpretation which is more in consonance with the avowed policy that decipherable from its title and preamble, it is to be preferred to an interpretation with view that to avoid the pursuance from the abridge, abrogate or infringe those rights which had accrued in favour of the parties by any mean. 52.In these particular appeals, considering all aspects of the case it is the responsibility of the Court to give effect to the true and patent intentions of the law makers and to supply the omissions in order to avoid and prevent the manifest and try to follow undoubted intentions of the legislature. Evidently the prescribed requirements and minimum facilities as required to be fulfilled by the appellant are not of such nature which could lead to absurd results. 53.After giving the judicious application on the issues/points placed before me and to follow the ratio decidendi observed by the Superior Courts along with additional observations made thereon, I hereby prefer to endorse the findings of the learned Member (Judicial-II), Karachi accordingly. 54.Judgement passed and announced accordingly.
HBT/1/Tax(Trib.)Appeals allowed.