MR. HAFIZ AHSAAN AHMAD KHOKHAR, CHAIRMAN/MEMBER (JUDICIAL).--(1). This appeal has been filed by M/s. Global Services (Custom Clearing Agent) Opposite Shaheen Cargo Benazir Bhuttu International Airport Islamabad (hereinafter called the appellant's) under Rule 107 of the Customs Licensing Rules notified vide SRO 843(I)/2007, dated 18.08.2007 against the Order No. 04/2009, dated 25.04.2009 passed by the Additional Collector, Customs, AFU Building, Islamabad Airport, (here in after called the respondent).
2. Succinctly the facts of the case are that it was reported to the undersigned by the Customs Staff AFU (Import) PIA Shed, Islamabad International Airport that M/s. Heaven International Traders, Hafiz Building opposite Shaheen Cargo, Rawalpindi imported a consignment of calcium carbonate as per declaration, comprising of 68 cartons, weighing 1,793 Kgs under Air Way Bill No. 214-5067-3593, dated 22.03.2009 and filed Goods Declaration No. 14842, dated 25.03.2009 through their clearing agents M/s. Global Services opposite Shaheen Cargo, Rawalpindi. The Goods Declaration was presented by one Mr. Javed, sub-agent of M/s. Global Services on 25.03.2009 at about 05.00 p.m.
For examination of the said consignment. During random selection/examination of 08 cartons out of 68, one carton was found containing mobile phone sets wrapped in polythene bags in loose condition. On this detection, 100% examination of the consignment was conducted, which revealed that 20 cartons out of 68 contained mobile phones of assorted brands, casing and housings as per details given below:-- Sr.No. Description Quantity
1. Nokia-assorted models: New 5584 Old 286 Total 5870
2. (i) NKTEL-N Series 2008 (new) 371 (ii) NKETL A200 (new) 1474
3. Mobile casing assorted models. 511
4. Inner Housing complete model Nokia 1 112 141
3. The factual position revealed that M/s. Heaven International Traders, Rawalpindi (importer) with the connivance of M/s. Global Services (Customs Clearing Agent) mis-declared the physical description of the consignment and attempted to clear foreign origin mobile phones and accessories without payment of duty/taxes fraudulently under the garb of calcium carbonate.
After necessary formalities, show cause notices were issued to M/s. Heaven International Traders, Rawalpindi (importer) and M/s. Global Services Rawalpindi (Customs Clearing Agent) vide C. No. V.
Cus.(Adj)/04/2009/144, dated 15.04.2009 stating therein as to why penal action should not be initiated for contravention of the legal provisions. Mr. Muhammad Naeem Qazi, Advocate represented the both importer and respondent. After hearing both the parties, the learned Additional Collector/adjudicating officer concluded in respect of the appellants that since, the offence against the clearing agent has been established, his clearing agency licence is liable to be cancellation but taking a lenient view on account of his cooperation with the Customs Authorities for providing important leads towards the offenders, a penalty of Rs. 50,000/- (Rupees fifty thousands) was imposed for failing to exercise due diligence in the performance of his duties with the warning to improve his working performance with the Customs department. Feeling aggrieved of said impugned Order No. 04 of 2009, dated 25.04.2009, the appellants have filed the instant appeal before this Tribunal.
4. The appellants were represented by Mr. Muhammad Naeem Qazi, Advocate whereas the respondent was represented by Mr. Faiz Ali, D.C./D.R, and Mr. Pervaiz Awan, Dy. Superintendent.
5. Learned counsel for the appellant argued that the impugned order passed by the respondent is illegal, ultra-vires and against all facts of the case. He submitted that the appellant filed the G.D. As per documents provided by the importer and there is no discrepancies in the documents and G.D.
The goods declared in the G.D., were as per invoice, packing list and airway bill, under the Customs Licensing Rules, the clearing agent is not empowered or authorized to examine the goods before filing of the G.D. The sole responsibility of the examination rests with the appropriate officer of the Custom, a declaration made by the importer is subject to examination by the Customs Authority and clearing agency has no role to play. He further submitted that the importer hired the services of the appellant as clearing agent, he facilitated the importer and filed the documents provided by the importer, thus if concealment in the declared goods detected by the Customs staff, that is the sole responsibility of the importer and not the appellants. He further argued that the imposition of the penalty on the appellant is illegal as under Custom Clearing Agents Rules no penalty has been prescribed. He asserted that the impugned order has been passed on presumption and no evidence has been deduced to penalize the appellant and the department made the case against the appellant without any evidence. He further submitted that the appellant has not violated any provision of Customs Clearing Agents Licensing Rules and the show cause notice issued by the respondent under rule 105 of the Customs Clearing Agents Rules, 2001 as amended vide SRO 843(I)/2007 punishable under rule 106 are not sustainable and not applicable to the extent of appellant, he lastly argued that the impugned order is not a speaking order to the extent of appellant and therefore, the same is liable to be set aside.
6. On the other hand learned D.R. Assisted by Mr. Pervaiz Awan, Deputy Superintendent supported the impugned Order being well reasoned and prayed that appeal may kindly be dismissed and the impugned order may graciously be upheld.
7. I have heard Mr. Muhammad Naeem Qazi, learned counsel for the appellant and Mr. Faiz Ali, D.C./D.R. For the. Respondent and have gone through the record and the proceedings of the case in minute particulars.
8. Contention of the respondent against the appellant is that the appellant has violated the provision of section 32 of the Customs Act, 1969 punishable under section 161(1)(14) of the Customs Act, 1969 read with SRO 487(I)/2007 by mis-declaring the physical description of the consignment and tried to clear the foreign original mobile phones and accessories without payment of duty/taxes fraudulently under the garb of calcium carbonate. On the other side, the contention of the appellant is that the case has been made against the appellant on presumptions and no evidence has been brought on record, therefore, no case is made out against the appellant.
9. The perusal of record shows that M/s. Heaven International Traders imported the certain items and the appellants only provided his services as a clearing agent. There is no evidence brought by the department, which shows that it was in the knowledge of the appellant that the goods contained in the container were different one from the declaration as made by the appellant at the time of clearing of goods as an agent, but while passing the impugned order, the learned Additional Collector merely relying upon the affidavit of the appellant, and got the presumptions that the importer intentionally cleared his consignments from Islamabad Air Port with the connivance of the appellant, whereas at the same time, the conduct of the appellant has also been appreciated by the learned Additional Collector that the appellant co-operated well with the Customs Authorities for providing important leads towards the offenders, which showed that the appellant helped the Customs department and co-operated with them, that means that there was no mens rea, mala-fide or any existence of connivance of appellant with the importer for importing the other goods as declared in the G.Ds. By the appellant, if it had been so, no cooperation would have been extended by the appellant to the department. It is further observed that no clear cut finding of involvement of appellant in the commission of offence has been adjudged by the learned Additional Collector while passing the impugned order that the appellant involved intentionally with the business of importer and even no direct or documentary evidence was brought by the Department against the appellant at the time of adjudication, but so much so the learned Additional Collector appreciated the conduct of the appellant on the given cooperation to the department towards the importer. Therefore, to my mind, that unless collusion, intentional fraud, mens rea or active connivance is proved against the appellant/ agent, or solid evidence has been brought or the charge or aforementioned allegations are proved according to the provisions of Qanoon-e-Shahadat Order, 1984, until then he is absolved from any liability, responsibility and could not be penalized, punished, held responsible and charged on the assumed act of connivance and mis-declaration. Hence, I am fortified by the judgment of Hon'ble Lahore High Court, Lahore 2002 YLR 2651 titled as Ports Ways Custom House Agent and another versus Collector of Customs and another, wherein his lordship has held:- "To hold the Agent liable for the act of commissions and omissions on the part of the importer would require a clear findings based upon legally acceptable evidence of his being active and conscious party to the manipulation-Where in normal course of his business, the Clearing Agent filed bill based upon documents and information provided by the importer, the Clearing Agent could not be held to be a privy to any illegal arrangement which the importer might have devised or had in his mind-Where it was not shown that the agent was directly or indirectly a beneficiary of evasion of taxes, some evidence of his direct involvement would have to be brought on record- imposition of penalties both on the importer as well as on the Clearing Agent was unjustified and the same was set aside accordingly."
10. Hence, it is of my considered opinion that no clear cut finding of involvement has been observed against the appellant in the impugned order nor any evidence was brought on the record against the appellant on the collusion or connivance by the department, but the charge was made only on the assumed collusion and connivance with the importer, to my mind, in such situation, the charge leveled against the appellant is not legal, justifiable and sustainable in the eyes of law. This Tribunal has already dealt with this proposition and held in its judgment 2003 P.C.T.L.R. 1109 that:- "The standard of proof required for the proceedings which are criminal in nature is that beyond all reasonable doubt the culprits be found to be linked with the crime committed,----- if that is not there, then the actions of the concerned authorities will be without jurisdiction, illegal, void ab initio and wrong."
11. In view of what has been stated above, I allow this appeal and set aside the impugned order to the extent it applies to the Appellant/Customs Clearing Agent. This impugned order is modified to this extent only. Appeal is disposed of accordingly with no order as to costs.
12. Announced.