' MUHAMMAD ARIF MOTON (MEMBER JUDICIAL-II).--This order will dispose off Customs Appeal No,K- 671 of 2009 filed by the appellant against Order-in-Appeal No, 3060 of 2009 dated 19-11-2009 passed by the Collector of Customs, Sales Tax and Federal Excise (Appeals), Karachi.
2. Brief facts of the case as reported by the Directorate-General of Post Clearance Audit are that during Post Clearance audit under section 32(3A) read with section 26(A) of the Customs Act, 1969 Messrs H.M.S. International, Jodia Bazar Karachi imported thirty one (31) consignments of Sodium Acid Pyrophosphate and not those cleared while got misclassifying the goods under PCT Heading as 2835.2920 on payment of Custom Duty @ 5% whereas the same was/is correctly classifiable under PCT Heading 2835.3900 (Custom Duty @ 10%). The incorrect classification had also resulted in short payment of Sales Tax and Income Tax on the aforesaid imports. The importer with the active connivance of appellant have thus intentionally and wilfully caused colossal loss to the Government Revenue amounting to Rs,4,516,989.00 by misclassifying the goods under wrong PCT heading which tantamount to violation of sections 32(1) and (2) of the Customs Act, 1969 section 4(C) of Sales Tax 1990 section 148 of the Income Tax Ordinance, 2001, punishable under clause (14) of section 156(i) of the Customs Act, 1969, sections 36(1) and 33(11)(C) of the Sales Tax Act, 1990 and section 148 of the Income Tax Ordinance, 2001. The case was adjudicated by the Additional Director, Directorate of Post Clearance Audit, who passed order-in-original dated 27-5-2009 upholding the charges while observing in paras. 9 and 10:-- "(9) The above referred cases amply show that the contention of the respondent that it was established practice to classify the goods under PCT Heading 2835.2920 and there was no evidence of its classification under PCT Heading 2835.3900 during the period in question is incorrect I agree with the representative of the Directorate that reference to the ITP fixing manual indicating the PCT 2835.2920 does not legally constitute authority for classification under this heading as mentioned in condition number 1 to the notification dated 20-2-1999 (Valuation manual 5th Edition) which reads as under: "The PCT headings are given for the purposes of reference only. At the time of assessment, appropriate classification of imported goods is determined by the respective Customs Collect orate. The change in PCT heading will have no effect on the notified prices."
' It is therefore, established that the goods were and are classifiable under PCT Heading 2835.3900, hence the short levied amount of duty and taxes, as stated in the show-cause notice is payable.
(10) Misclassification of the goods under wrong PCT heading with the intention to pay less duty and taxes attracts provisions of section 32(1)(2) of The Customs Act, 1969. Therefore, impose a personal penalty of Rs,10,00,000 (Rupees ten Lac) only under clause (14) of section 156(1) ibid upon Messrs HMS International 207, Ismail Trade Centre, Rambharti Street, Jodia Bazar , Karachi. This evasion would not have been possible without collusion of the clearing agent as he prepared the goods declaration. For on behalf of the importer and submitted the same to the customs. Had he not been involved in evasion , he would have advised the importer correctly and prepared the GD's properly. I therefore impose a penalty of Rs, 300,000.00 (Rupees three lac) only under clause (14) of section 156 (I) ibid upon Messrs Kaka Traders Rooms Nos. 6 and 7 Mezzanine floor, Jumbo Centre, Bohri Road, Opp. Custom House, Karachi (clearing agent) also for colluding with the importer in evading the duty and taxes. In case the short paid amount of duty and taxes along with penalties is not paid within thirty days of the issuance of the order, they may be recovered under section 202 of the Customs Act, 1969, read with Customs Recovery Rules, 2001."
3. The order was challenged before respondent No, 2 who also vide his order dated 19-11-2009 rejected the appeal by observing in paras. 6 and 7 that:-- "(6) the proceedings in this case could not be finalized within the stipulated time limit due to extended hearing and adjournments granted on the request of both parties. Therefore, the requisite extension of 90 days in the time limit was granted in terms of first proviso to subsection
(3) of section 193-A of the Customs Act, 1969.
(7) I have examined the entire case record and given deep consideration to the arguments made before me. There is no doubt that the goods imported in this case (sodium acid pyrophosphate) are correctly classifiable under PTC Heading 2835.3900 mad claiming/clearing of the same under PTC heading 2835.3900 involved mala fide intent. It has to be stated that both the importer and the appellants, being well-versed in import of identical goods over a period of time, knew the correct PCT classification of the goods and even then they quoted the irrelevant PCT heading with the intention of defrauding the Exchequer of its substantial legitimate revenue. Under the circumstances, the plea of the innocence taken by the appellants' consultant holds no weight. The legal objections raised by the learned counsel are equally untenable. The record shows that the show-cause notice was dispatched to the appellants through courier service on 7-4-2009, that is, one day after the same was signed by the competent authority and, therefore, I have reason to believe that the same must have been received by them. The appellant's plea to the contrary is accordingly rejected. Moreover , I am convinced that dispatch of the notice through a courier service fulfill the requirements of the provisions of section 215 of the Customs Act, 1969. The objection regarding jurisdiction of the Adjudicating Officer is also irrelevant, in terms of Notification S.R.O.1073(I)/2008 dated 18-10-2008, read with the relevant provisions of the Customs Act, 1969, he was perfectly competent to adjudicate the case. The arguments advanced by the learned consultant do not find any support from the evidence on record and the precedents quoted by him are not relevant to the facts and circumstances of the instant case. The penal action taken against them is also in consonance with the gravity of offence committed in this case. Therefore, I hold that the impugned order is correct in law and on facts and there is no reason to interfere with the same.
The appeal is rejected accordingly."
4. The appellant has now challenged the above order by way of this appeal. The consultant Nadeem Ahmed Mirza appeared on behalf of the appellant who reiterated the arguments incorporated in the memo of the appeal and emphasized that:--
(a) That neither the show-cause notice nor the order-in-original was dispatched/served on appellant as evident from the fact that the order is silent in regards to submission of reply of the appellant and attendance of hearing. The stance of the appellant further stood proven from the fact that respondent office is not in possession of any consignment note from the courier company or postal office confirming dispatch of show-cause notice/order in original to the appellant.
(b) The consignment Note No, 41399292 referred by the respondent No, 2 in para.1 of order-in- appeal, on strength of parawise comments dated 13-10-2009 submitted by respondent No, 1 . Copy of which was not supplied by the respondent No,2 on the hearing date fixed for 15-10-2009 for offering his comments is of leopard courier and against the said consignment note show-cause notice was in fact dispatched to the importer namely Mr. Owais on 8-4-2009 and the said fact can he verified from the Leopard Courier office which is also our source of information. The said fact abundantly reconfirms that the impugned show-cause notice was neither issued nor to this date to the appellant, hence not served in terms of section 215 of the Act.
(c) That merely preparation of show-cause notice/order-in-original is not enough, unless it is served on the person to which these relates in terms of section 215 of the Customs Act, 1969. The same opinion was endorsed by the respondent No, 2 in Order-in-Appeal Nos. 417 to 462 of 2005 dated 29-2-2005 (Service Fabric Ltd. Lahore v Assistant Collector of Customs S.S.C.C. Exports) and 188 of 2007 dated 26-3-207 (Abdullah Garments (Pvt.) Ltd. v. The Assistant Collector of Customs (Exports) Karachi in line with the law laid down by the High Court 'of Sindh in its reported judgment 1989 ALD 518(2) in the case of Messrs Darbar Impex v. Central Board of Revenue" "It is enough that the notice/order is merely issued; if service is mandatory in law. Unless notice is proven to have been served, within the prescribed period, the same would not be considered to be in accordance with the requirement of the Act. Contrary to that in the case of appellant the respondent No, 2 on the basis of merely a consignment note number termed it as service within the meaning of section 215 of the Customs Act, 1969 without having a copy of consignment note or seeking confirmation from Messrs Leopard Courier.
(d) That an appeal against the said order was filed by the Central Board of Revenue with the Supreme Court of Pakistan. Their lordship of Supreme Court found "that the requirement of section 32 as to the service of the show-cause notice had been 'complied with. It was observed that the Board had failed to produce the copy of the notice or any evidence of the service of the notice in spite of the order of the Court and in spite of the order of the challenge made in the petition in paras. 10 and 11, that no demand by the notice dated 29-6-1978 was ever made. There was also no evidence of service of notice dated 19-7-1978, within the period specified in section 32(3). Even otherwise, no evidence had been produced to the court, to show that the notice was tendered to the importer, in accordance with the provisions of section 215 of the Customs Act, 1969 (Central Board of Revenue v. Messrs Darbar Impex, 2002 UC 506 Supreme Court).
(e) That in yet another case, while declaring the impugned order as void ab initio their lordships of the High Court of Sindh in their reported judgment 2006 PTD 1207 in the case of Sheikh Rashid Ahmed and another v. The Assistant Collector, Special Recovery Cell, Collect-orate of Customs (Exports) Karachi and 4 others held that "We are afraid such high-handedness on the part of officer vested with the extensive powers for recovery of the public revenue has to be strongly discouraged. No date of hearing was ever notified to the petitioner nor the said order was communicated.
(f) That besides above the gross illegality respondent No, 1 transgressed the authority of Additional Collector, despite being an Additional Director for carrying out adjudication under section 179 of the Custom Act, 1969. Under that section an Additional Collector is empowered to adjudicate a case not the respondent No, 1 despite being nominated as Customs Officer under, section 3DD of the Customs Act, 1969. His job was only to audit the books of accounts of an importer and forward his observation to the respective Collect-orate of jurisdiction for proceeding in the matter in accordance with the provision of the Act and Rules and Regulation framed there under. Contrary to the fact, he assumed himself as Additional Collector and issued a show-cause notice and passed order-in-original, while exercising the power vested to only Additional Collector under section 179 ibid. Resultant, the impugned show-cause notice and order-in-original are void and ab into by virtue of lack of power/jurisdiction.
(g) The stance taken by the respondent No, 1 and endorsed by respondent No, 2 that the respondent No, 1 has the authority of issuance of show-cause notice and passing order-in-original under section 179 of the Customs Act, 1969 under S.R.O. 1073(1)/2008 dated 18-10-2008 delegating the power of adjudication is patently erroneous as S.R.O. No,1073(1)/2008 dated 18-10-2008 is ultra- virus and inconsistent besides it is in conflict with the provisions of section 179 of the Custom Act, 1969. Their lordships in the reported judgment 2000 PTD 399 Superior Textile Mills Ltd., v. FOP held that where rules were in conflict with parent Act, the former must yield to the later and the rules to the extent of inconsistency would be void. The said opinion is further fortified by the Supreme Court in its reported judgment 1982 SCMR 522 Messrs Arjun Salt Chemical v. UC Gharo, wherein their lordships of Supreme Court settled the ratio while observing that "it is now well-established principle or statute that rules which are merely subordinate legislation cannot override or prevail on the parent statute and whenever there is inconsistency between the rule and statute the later must prevail." Resultant as per laid down dictum by the Superior Courts the Notification No, S.R.O.
1073(1)/2008 dated 18-10-2008, does not override the provisions of section 179 of the Customs Act, 1969 and section 179 of the Act has to prevail over Notification No, 1073(1)/2008 dated 18-10-2008, which clearly empowers Additional Collector for adjudication.
(h) That it is settled principle in Article 4 of Constitution of Islamic Republic of Pakistan that if the law had prescribed a method for doing a thing in a particular manner such provision of law is to be followed in letter and spirit and achieving or attaining the objective of performing or doing of a thing in a manner other than provided by law would not be permitted. The same view was subsequently fortified by the Hon'ble Supreme Court of Pakistan in its reported judgment 2006 SCMR 129 Director, Directorate-General of Intelligence and Investigation and others v. Al-Faiz Industries (Pvt.) Ltd., and others while holding that "section 196 requires filing of an appeal by the Collector and none else, the appeal filed by the Director of Customs would therefore be absolutely illegal incompetent and not maintainable." In the light of clear and unambiguous expression of provision of section 179 of the Customs Act, 1969 the adjudication process can only be undertaken by Additional Collect of Customs and none else. The issued show-cause notice and passed order- in-original by the-Additional Director of Post Clearance Audit is therefore absolutely, illegal, incompetent and not maintainable under law.
(i) That in support of his stance it is not out of place for the appellant to state further that cases where orders made without jurisdiction/powers were declared as of no legal authority as held by their lordship of Supreme Court of Pakistan that "it is an element to principle that is a mandatory condition for the exercise of jurisdiction by your Court, Tribunal Authority is not fulfilled then the entire proceedings in appeals or revisions equally suffers from illegality and are without jurisdiction". This dictum is further settled in reported judgments of Major Syed Walayat Shah v.
Muzaffar Khan and 2 other (PLD 1971 SC 184), Omer and Company v. Controller of Customs, (Valuation); (1992'A.L.D. 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 514 Ali Muhammad v.
Hussain Buksh and others and PLD 2001 Supreme Court 514 Land Acquisition Collector, Noshehra and others v. Sarfraz Khan and others.
(j) That irrespective of the above gross illegalities, the appellant states that the last GD indicated in the attached Annexure "A" to the show-cause notice was filed by him. Whereas, rest of the GD's are not related to him. The respondent No, 1 erroneously bracketed unrelated GD with him, on the basis of which he issued the impugned passed order-in-original penalizing the appellant in the absence of availability of any cause cr reason. Which render the impugned order ab initio and ab initio wrong, by virtue of erroneous/faulty prosecution of the appellant, despite not warranted under law in the given circumstances of the under reference case.
(k) That the stance of the appellant in the referred in above para was admitted as correct in its para wise comments dated 13-10-2009 as evident form sub-para (vi) of para 4 at page 6 of the order-in- original Contrary to that the respondent No, 2 held the appellant guilty of connivance and upheld the order-in-original as correct in law and on facts despite not. This clearly proves the bias and malice of respondent No, 2 rendering the orders of respondent No, 2 and order-in-original passed by respondent No, 1 as void and ab into.
(1) The appeal with the respondent was filed on 12-6-2009 and an order under the proviso of subsection (3) of section 193-A of the Customs Act, 1969 and the appeal should had been decided by the respondent within 90 days from the date of filing of appeal or within a further extended period of 90 days during the initial period of 90 days after serving a notice to the person concerned and thereafter the respondent has to record the reason for extension in writing for the extension of the stipulated period. In the instant case the order-in-appeal was passed on 19-11-2009 i,e, after the expiry of initial stipulated period, of 90 days. Rendering the order-in-appeal barred by time by 68 days.
(m) The narration of respondent No, 2 at para. 6 of the order-in-appeal that proceeding in this case could not be finalized within the stipulated time limit due to extended hearing and adjournment granted on the request of both parties, therefore the requisite extension in terms of 1st proviso to subsection (3) of section 193-A of Customs Act, 1969 was extended is without any substance as no adjournment was applied by the appellant or by the respondent No,
1. Hence, the extension granted if any by the respondent No, 2 for adjournment in the light of the narrated facts is unlawful and passed order-in-appeal is hopelessly time-barred and as such is of no legal effect and cannot be enforced. Reliance is placed on the judgments reported vide 2008 PTD 60 Messrs Super 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 Messrs Tanveer Weaving Mills v. Deputy Collector Sales Tax and 4 others and 2009 PTD (Trib.) 1263 Messrs Syed 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.
(n) That the appellant carves the permission of the Hon'ble Tribunal to state for the sake of arguments that no contravention case can be made out against any importer or exporter on the basis of merely mentioning of erroneous /incorrect HS Code in the bill of entry/GD as held by august Courts of Pakistan in innumerable reported judgment (i) Monno Industries Ltd. v. Govt. Of Pakistan PET. D-199/1984 (ii) Collector v. Central India Board Products 1987 (29) E.L.T. 259 (iii)
Collector of C.E. v. v. Chemphar Drugs 1987 (40) E.L.T. 276 (.S.C) (iv) Central Cotton Mills Ltd. v.
Collector 1992 CLC 841 (v) Hindustan Electro Graphites Ltd. v. U.O.I. 1990 (50) E.L.T. 15 M.P. (vi) Metro Tyres Ltd. v. Collector 1994 (74) E.L.T. 964 (vii) Ballarpur Industries Ltd. v. U.O.I. 1994 (74) E.L.T. 795 (Del)
(viii) Northern Plastics Ltd. v. Collector 1998 (101) E.L.T. 549 (S.C.) (ix) Ibrhaim Textile Mills Limited v.
F.O.P. PLD 1989 Lahore 47 (x) Central Board of Revenue v. Jalil Sheep Co. 1987 SCMR 630 (xi)
Government of Pakistan v. Quetta Textile. Mills Civil Appeal (xii) No,860-K/90 decided by the Supreme Court on 25-2-1992."
(o) That beside above judgment, the appellant is tempted to place reliance on the reported judgment 2003 PTD (Trib.) 293 of the Customs Excise and Sales Tax Appellate Tribunal in similar nature of case. While relying on the dictum laid by the Superior Courts referred in above, held that; "We believe 'that clearing agent while filing a bill of entry is required to fill the PCT column for the easement and assistance of the Assessing Officer. The perusal of section 80 of the Customs Act, 1969, indicates that during the process t5f assessment it is the duty of the Assessing Officer not only to examine the goods but also to tally the description, its weight and value of the goods thereof, and to consider any extra information available on the bill of entry in order to arrive at a correct assessm ent of duty and taxes.. Simply assuming that a wrong PCT heading amount to miss-declaration would not be a correct approach to interpret section 32, where emphasis is on the word "material particular" which means something going to root cause of the basic declaration. To our mind, a miss-declaration in material particulars terms has not been made by the appellant."
' In Customs Appeal No, K-333/06 Umme Kulsoom Trading Co. v. Collector of Customs Appeals and others The Division Bench of Customs Tribunal did observe in the following terms: ' It is gathered from the record that only charge against the appellant is that he misquoted PCT heading for which he is being charged for miss-declaration within the frame work of Customs Law.
It is now well-settled law that to constitute a criminal act an element of mens rea and intentional knowledge is necessary and the offending act must be one in which material particulars have been wrongly given or provided to the Customs authorities. It is evident from the record that in the goods declaration all the entries relating to description, quantity and nature of goods were found true and no charge has been framed against the appellant on that count. In such circumstances, alleging a charge of miss-declaration particularly on the basis of wrong classification heading does not constitute an offence within the framework of section 32 of the Customs Act, 1969 as there is no material falsity in the statement made by the appellant. In these circumstances, we would like to allow the appeal and set aside the impugned order as no case has been made out against him.
5. The departmental representative Madan Lal Principal Appraiser, appeared on behalf of the respondent and supported the orders as correct in fact and law:--
(a) The show-cause notice was issued on 6-4-2009 and dispatched on 7-4-2009 through courier vide Receipt No, 41399292. The requirement of Section 215 of the Customs Act, 1969 has been fulfilled.
(b) It is vehemently denied. The respondent No, 1 did not transgresses his authority while acting .As adjudicating authority as he has been delegated with the power of section 32 as well as section 179 of the Customs Act, 1969 vide Notification No, S.R.O. 1073(D/2008 dated 18-10-2008.
(c) The stance of appellant is admitted to the extent that he only filed a single GD of the importer.
(d) The Collector (Appeals) extended the period of passing order under the proviso of subsection
(3) of section 193A of the Customs Act, 1969 correctly and order-in-appeal is not barred by time.
(e) The declaration in regards to PCT heading has to be correctly indicated in the GD by the appellant, failing to do so, attracts the provision of section 32 of the Customs Act, 1969.
6. Rival parties heard and case record perused. As regards serving of show-cause notice and order-in-original within the meaning of section 215 of the Customs Act, 1969, it is not enough that the show-cause notice/order-in-original has to be issued/ passed, rather has to be served as per wording of section 215 of the Customs Act, 1969. No copy of consignment note 41399292 has been placed on record of the Tribuna l by the respondents for the confirmation that the appellant or his official did acknowledge the same, which is basic requirement for the word "served". The same view was held by the High Court of Sindh in reported judgment PLD 1989 Kar. 518(2), wherein, their lordships of the High Court has held in categorical terms that "It is enough that the notice/ order is merely issued; it, service is mandatory in law. Unless notice is proven to have been served, within the prescribed period, the same would not be considered to be in accordance with the requirements of the Act. The said order came under scrutiny of the apex Court wherein it was held vide judgment reported as 2002 UC 506 Supreme Court held that "that the requirement of section 32 as to the service of the show-cause notice had been complied with. It was observed that the board had failed to produce the copy of the notice or any evidence of the service of the notice in spite of the order of the Court and in spite of the order of the Challenge made in the petition in paras 10 and 11, that no demand by the notice dated 29-6-1978 was ever made. There was also no evidence of service of notice dated 19-7-1978, within the period specified in section 32(3). Even otherwise, no evidence had been produced to the court, to show, that the notice was tendered to the importer, in accordance with the provisions of section 215 of the Customs Act, 1969. Whereas, the High Court of Sindh in reported judgment 2006 PTD 1207 held that "We are afraid such high- handedness on the part of officer vested with the extensive powers for recovery of the public revenue has to be strongly discouraged. No date of hearing was ever notified to the petitioner and nor the said order was communicated. In the light of the settled principle by the Superior Courts, I am of the view that neither show cause nor order-in-original was served on the appellant thereby rendering the order-in-original and subsequent order-in-appeal ab initio null and void as those were passed without fulfilling the mandatory requirement of law pertaining to service as per the wording of Section 215 of the Customs Act, 1969.
7. As regards citing of alleged erroneous P.C.T. Heading by the appellant while transmitting GD under section 79(1) of the Customs Act, 1969 read with Rule 433 of Sub-Chapter III of Chapter XXI of the Customs Rules, 2001 the respondents had failed to consider that the determination of PCT Heading is the sole function of the Customs Officer under section 80 ibid read with Rule 438 of Sub- Chapter III of Chapter XXI ibid. The importer/clearing agent only assists the customs by citing the P.C.T. Heading of the goods. At the best citation of P.C.T. Heading may be called a claim for assessm ent of duty and taxes, which means a request, may be accepted or rejected by the competent authority but is not a punishable offence under any of the provisions of the Customs Act or Notification issued thereunder. The citation of a particular P.C.T Heading in the GD either transmitted electronically to Paces or MCC of Appraisement through NIFT does not amount to miss-declaration within the meaning of section 32 of the Customs Act, 1969, as it is a well settled principle of law in Customs Jurisprudence/ through a series of judgments of Superior Judicial fora of Indian and Pakistani Jurisprudence starting with the case of Monno Industries Ltd. v. Government of Pakistan reported as Pet. D. 199/1984 to State Cement Corporation v. Govt. Of Pakistan reported as C.A. No, 43 of 1999. Reference is made to the reported Judgment 2003 PTD (Trib.) 293 of the Customs, Excise and Sales Tax Appellate Tribunal Karachi Bench Karachi in similar nature of case.
"We believe that clearing agent while filing a bill of entry is required to fill the PCT Column for the easement and assistance of the Assessing Officer. The perusal of section 80 of the Custom Act, 1969 indicates that during the process of assessment it is the duty of the Assessing Officer not only to examine the goods but also to tally the description, its weight and value of the goods thereof, and to consider any extra information available on the bill of entry in order to arrive at a correct assessm ent of duty and taxes. Simply, assuming that a wrong PCT Heading amounts to miss- declaration would not be a correct approach to interpret section 32, where emphasis is on the word "material particulars" which means something going to the root cause of the basic declaration. To our mind a miss-declaration in material term has not been made by the appellant."
8. That the allegation under section 32(1) or 32(2) of the Customs Act, 1969 are unwarranted under the circumstances of the case. A correct goods declaration was filed by the appellant with correct description of goods which is undisputed. There was no false statement or any collusion with the officer of the Customs. This is a case of classification of goods and no case can be made out under the provision of section 32 of the Customs Act, 1969 this was held by the honorable Customs, Excise and Sales Tax Appellate Tribunal Karachi in the judgment Messrs Falcon Enterprises v. Collector of Customs vide Appeal No K-723 of 2007 "alleging a charge of miss declaration on the basis of a wrong classification heading does not constitute an offence within the framework if section 32 of the Customs Act, 1969 as there is no material falsity in the statement made by the appellant." That the similar issue of classification was also decided vide Customs Appeal Nos. K-432 others which went up to the apex court and the orders of the Tribunal passed were maintained in which it was held "that difference of opinion with respect to classification does not fall within the mischief of section 32 of the Customs Act, 1969. The confiscation and imposition of penalty in this count, therefore is ab into void and illegal."
9. The incorrect quoting of PCT Heading is not tantamount to miss-declaration within the ambit of mischief of sections 32(1), 32(2) and 32(3)(A) of the Customs Act, 1969 since a positive assertion of facts is a pre requisite for bringing charges of miss declaration against the taxpayer. If the wisdom of the Customs Authorities for invoking section 32 in case of incorrect citing of PCT heading is acceded to no responsibility obviously devolve upon the hierarchy of the Customs officials to levy and assess the duty according to law. The provisions of section 79 and section 80 of the Customs Act, 1969 in such a state of mind would become redundant and the observation of the honorable Late Justice Sabihuddin Ahmed in the case of State Cement v. Government. Of E Pakistan reported as 2002 MLD 180 would once again ridicule the irrational approach of the Customs Authorities. The observation verbatim states. "We are rather amazed at the line of reasoning put forward to the effect that while an assessed 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." In the light of ratio settled by the Superior Fora the show-cause notice in the instant case is un-lawful, rendering it and subsequent orders by the respondents as ab initio null and void.
10. The appeal in this case was filed on 12-6-2009 and the respondent No, 2, passed the order on 19-11-2009. The provision of subsection (3) of section 193-A of the Customs Act, 1969 required that the appeal should be decided within a period of 90 days from the date of filing of appeal or within further extended period, which could not be more than 90 days by the Collector of Customs, Appeals with reasons to be recorded. The initial period of 90 days expired on 11-9-2009. The respondent No, 2 in para 6 of the order-in-appeal stated that the proceeding in the case cannot be finalized within the stipulated time limit due to extended hearing and adjournment granted on the request of both parties, therefore requisite extension in terms of 1st provision to subsection (3) of section 193-A of the Customs Act, 1969 is granted. This observation of the Collector (Appeals) is contrary to the fact and there is nothing on record to prove the fact that either of the parties sought any adjournment. To the contrary order in question confirms that extension was granted on 19-11-2009, whereas it should had been granted prior to expiry of initial period of 90 days after serving notice to the appellant as held by Hon'ble apex Court in its judgment reported 1999 SCMR 1881. The record also indicates that no written adjournments were sought by either of the adversaries from the appellate authority. It is admitted fact that extension was granted by the Collector Appeals after expiry of initial period of 90 days. In words of Superior Judicial For a time extension given in such cases is akin to giving a new lease of life into dead entity. It is tantamount to flogging a dead korse if an event or documents has become dead on account of non-timely extension of time period. It is legally considered dead and new spirit cannot be infused into it by any means or on account of any reason whatsoever. Following extract from the judgment of the Hon'ble Sindh. High Court reported as 20078 'PTD 117 is relevant to the merit of this case:-- ' We are of the considered opinion that once a matter become barred by time then the subsequent enhancement in the period of limitation shall not have the effect of reopening the pass and closed transaction and resuscitating the matters which attained finality and had gone in the annals of history.
11. The same principle has been laid down by the Hon'ble Lahore High Court in the case of Messrs Super Asia Muhammad Din Sons (Pvt.) Ltd. v. Collector of Sales Tax Gujranwala and another reported as 2008 PTD 60
(i) "Once limitation had started to run and had come to an end the assesse had acquired a vested right of escapement of assessm ent by lapse of time."
(ii) The claim of the revenue that the prescribed limitation of 45 days from completion of adjudication proceedings as provided through Finance Ordinance, 2000 and enhanced to 90 days by Finance Act, 2003 is merely directory cannot be accepted. It is settled law that where inaction on the part of a public functionary within the prescribed time is likely to affect the rights of a citizen the prescription of time is deemed directory. However, where a public functionary is empowered to create liability against a citizen only within the prescribed time, it is mandatory. The acceptance of contention of the revenue in that regard will make a provision of law redundant and nugatory.
Redundancy or superfluity of an act of Parliament and a provision of law cannot be readily accepted. All the more so when the prescribed limit is beneficial for the citizen and restricts the executive power to touch the pocket of a taxpayer thereby creating threat after its expiry even if there was good case for creation of liability he will not be dragged in."
12. That since the initial period of 90 days stood expired on 11-9-2009, without any extension, the order-in-appeal becomes barred by limitation period by 68 days rendering all the original adjudication and subsequent proceedings ab initio null and void. The said ratio was further fortified by the Superior Judicial For a in their judgments (un-reported reported) vide order in Sales Tax Appeal No .K-255/01 (New No,K-286/04) and K-309/01, 2006 PTD 340 and PTCL 2005 CL 841, finding/decision in Complaint No,958-L/2005, 1998 MLD 650, 2004 PTD (Trib.) 2898, 2004 PTD 369, 2005 PTD 23, 2007 PTD 2092, 2008 PTD 609, 2008 PTD 578, 2008 PTD 60, 2009 PTD (Trib.) 1263, 2009 PTD 762, 2010 PTD (Trib.) 23, 2010 PTD (Trib.) 81, 2010 PTD (Trib.) 1146, 2010 PTD (Trib.) 1469, 2010 PTD (Trib.) 1631, 2010 PTD (Trib.) 1636, 2010 PTD (Trib.) 2117.
12. In view of the above findings, the impugned orders are set aside and appeal is allowed in the above terms.