GHULAM AHMED, MEMBER (TECHNICAL-II).---By this order, we dispose of Customs Appeal No. H- 261/2013 filed by the appellant against Order-in-Original No. 09/2013 dated 4-2-2013 passed by respondent No. 1 .
2. Brief facts of the case are that the reported by the Senior Intelligence Officer-FIU, Directorate of Intelligence and Investigation-FER, Hyderabad that ""On 3-4-2012 an information was received by the Director, Intelligence and Investigation-FER, Karachi conveyed through Deputy Director Hyderabad, that a cartel of Diesel Smuggler in collaboration with the staff of some Karachi based Oil Marketing Companies is engaged in smuggling of Foreign Origin smuggled High Speed Diesel (Iranian Origin) under the cover of old and used Sales tax Invoices issued by above referred OMCs.
Accordingly a team as mentioned was constituted to foil the attempt". The seizing agency added that "Pursuant upon information the raiding party put a naka bandi near Ghujjo, District Thatta at about 04:00 a.m., a Truck (06 wheeler) bearing Registration No. TTE-436 loaded with Oil Tanker was seen coming from Karachi towards Hyderabad. A uniformed Sepoy signalled to stop the said tanker. The person found sitting in Driver Cabin of the said Oil Tanker introduced himself as Muhammad Akram son of Muhammad Hafeez (Driver of the seized Oil Tanker), upon cursory checking conducted in presence of the witnesses and driver of seized Oil Tanker, the said Oil Tanker was found loaded with smuggled FIO HSD Oil. The driver of the said Oil Tanker was asked to produce legal import documents, the driver could not produce any document regarding its legal import/lawful possession and transportation. As measurement I dip of HSD Oil was not possible on the spot, therefore the said Oil Tanker along with driver and musheers were escorted to the office of the FIU situated at MCC Custom House Hyderabad for detail examination as well as measurement against preparation of musheernama. Subsequently the measurement I dip of the Oil Tanker bearing regd: TTE-436 was carried out in presence of the driver .Muhammad Akram son of Muhammad Hafeez and musheers, which resulted recovery of 15000 liters HSD Oil loaded with Oil Tanker bearing Registration No.TTE-436. The driver's cabin of the said Oil Tanker was also searched and found following old invoices, 02 calibration charts and running paper of Oil Tanker No.TTE-436.
(1) Sales Tax Invoice No.1300038229 dated 26-3-2012 issued by HASCOL Petroleum Ltd, Karachi of 15,000 liters HSD Oil.
(2) Sales Tax Invoice No.1300038082 dated 24-3-2012 issued by HASCOL Petroleum Ltd, Karachi of 15,000 liters HSD Oil.
(3) Sales Tax Invoice No.03-500801 dated 30-1-2012 issued by Bakri Trading Company, Pakistan (Pvt.) Ltd, Karachi of 15,000 liters HSD Oil.
(4) Sales Tax Invoice No. 03-500687 dated 4-1-2012 issued by Bakri Trading Company, Pakistan (Pvt.) Ltd, Karachi of 15,000 liters HSD Oil.
S.No.Description of seized goodsQuantity of the goods 1.. Foreign Origin HSD 15,000 Liters (approx)
One Hino Oil Tanker (Regd)
No.TTB-436,Chasis No. 11812, Engine No. HO6C.TE 17397.One.
The seizing agency further added that "It is pertinent to mention here that without any requisition the HASCOL Petroleum Ltd, Karachi vide a letter No. Nil dated 3-4-2012 issued a certificate that the GST invoice i.e. 1029-911304126-03-2012 (copy enclosed Annex-A) was prepared by mistake showing the date of 26-3-2012 instead of 20-4-2012, since the above produced GST invoice has been prepared electronically by a computer, therefore, there is no any chance of mistake of date which seems that it is an attempt to hoodwink the law enforcement agencies". The seizing agency concluded that "As the act of smuggling was to be committed, thus the vehicle i.e. Truck (06 wheeler) bearing registration Mark No.TTB-436, Oil Tanker loaded with smuggled F/o HSD Oil 15,000 liters, is hereby seized for violation of section 2(s), 16 and 157 of the Customs Act, 1969 read with relevant provision of Petroleum Act, 1934 punishable under clauses (8) & (89) of subsection 156 of the Customs Act, 1969 after serving of notice under section 171 of the Customs Act, 1969 upon driver of seized Oil Tanker namely Muhammad Akram son of Muhammad Hafeez and display of notice under section 171 of Customs Act, 1969 on the notice board of office of I&IFBR, FIU situated at M.C.C, Custom House, Hyderabad. The representative samples were also taken and sealed under signature of two musheers. Therefore, the owner(s) I claimant(s) were called upon to show-cause as to why the seized goods not be confiscated for violation of sections 16 and 2(s), (ii) & (iii) & 157 of the Customs Act, 1969 punishable under clauses (8) & (89) of section 156(1) & (2) of the Customs Act, 1969.
3. On the strength above facts, Mr. Zakir Hussain son of Muhammad Hussain owner of the seized oil tanker and Mr. Muhammad Akram son of Muhmmad Hafiz driver of the same were called upon to show-cause vide No. 37-Cus/Seize/DC/Adj-FIU/Hyd dated 12-5-2012, their advocate/consultant reply to the show-cause notice, through which they controverted the allegation levelled in the show-cause notice and prayed for the release of the HSD Oil and so the tanker. The respondent No.1 after consideration of the submissions, disagreed and passed Order-in-Original No. 09/2013 dated 4-2-2013, paras 41 and 42 of the order are relevant and which states inter-alia:-- I have examined the case record, considered the verbal as well as written arguments of both sides.
Consequently I do conclude as under:- (i) According to the Oil and Gas Regulatory Authority
(OGRA) Ordinance, 2002; the marketing of refined oil products is a regulated activity and the Authority has the exclusive power to grant licenses for marketing of refined oil under chapter N of the OGRA Ordinance, 2002. The section 23 (2) of the OGRA Ordinance, 2002 is very clear in this regard and is reproduced below: Section 23(2): "No person shall: (e) Undertake storage of oil (f)
Undertake marketing of refined oil products; Unless a general or specific license to undertake such activity has been issued and is in full force and effect and is in full force and the person is the licensee". (ii) It is pertinent to mention here that Messrs Oil and Gas Regulatory Authority vide their letter No. OGRA (Oit)-19-(9)/2.006 dated 5-11-2012 have clarified the matter of direct sales by OMCs to various entities. This clarification reads " As per Rule 109 (I) of the Petroleum Rules, 1937, industrial consumers and construction companies can purchase/store Heavy Petroleum (HSD and Furnace Oil) directly from OMCs in bulk quantities not exceeding 10,000 gallons without any license from Department of Explosives only for self consumption and their sale (directly or indirectly) is prohibited." (iii) Initially both the seized items i.e. 15000 litres HSD and the oil tanker were claimed by Mr. Zakir Hussain who is the registered owner of the seized oil tanker No. TTB-436. But at any stage of the proceedings the defendant could not suceeded in establishing that he is the owner of the seized HSD. The defendant says that the HSD was loaded from Messrs Al-Raheem Trading Co.
Karachi who do possess the Public Warehouse License issued by the Collector of Customs (Preventive) MCC Karachi. The defendant produced a licnese bearing No.PWL No.01/95 which shows inter alia that Messrs Al-Raheem Trading Co. is licensed under Section 12 of the Customs Act, 1969 for storage of goods which includes edible/inedible oil and other goods. When confronted as to how the Customs Authorities can issue licnece for the storage of HSD oil, the defendant's counsel replied that the nomenclature of Inedible Oil covers all the Oils which are not edible and HSD Oil is also inedible. (iv) As mentioned at sub Para (i) above; Messrs OGRA have the exclusive authority to grant licence for the storage of refined oil products. The Seizing Agency states that "The Departmental Representative stated that old and used Sales Tax Invoice issued by HASCOL and Bakri OMCs, it is clear that the claimant of seized HSD Oil in collaboration with the staff of HASCOL was engaged in smuggling of Foreign Origin High Speed Diesel Oil under the cover of old and used Sales Tax Invoices issued by above referred OMCs. The departmental representative further stated that Sales Tax Invoice is an Electronically (Computerized) generated one in which no iota of mistake is possible because, if the computer is shutdown, even then the date and time is updated.
In the case in hand the date on Sales Tax Invoice is very much clearly legible. In the light of above submission this office holds that the produced documents are after thoughts and have no relation with the case at all, therefore the same need not to be verified, The Departmental Representative further stated that Public Bonded Ware House Licenses are , issued under Section 12 of the Customs Act, 1969 only for storage of dutiable imported goods to facilitate such importers for clearance of bonded goods against payment of duty and taxes leviable thereon as and when required during the year. The list of items allowed to be stored mentioned in the subject Public Bonded Warehouse, the HSD is not shown, therefore it is very strange to know that the advocate has produced copy of legal documents i.e. PBHL No.01/95 for giving legal coverage to smuggled HSD Oil. In the light of above position, this office holds that the produced documents have no relation with the case therefore, the seized smuggled HSD oil 15000 litres and Oil tanker bearing Registration No.TTB-436 being used for transportation of smu ggled HSD Oil exclusively may be kindly be confiscated out- rightly." (v) During the protracted adjudication proceedings spanning over more than 08 months neither Messrs AI-Raheem Trading Co nor Messrs Hescol Ltd. entered their appearance. In this scenario the ownership claim of Mr. Zakir Hussain the registered owner of the seized oil tanker makes the case more dubious. (i) Factoring in the above facts, I do hold that the defendant have failed to come up with plausible reasons to prove the legal status of the seized HSD. I therefore, agree with the contention of the Seizing Agency that old and used Sales Tax Invoice are an afterthought and have no relation with this case. Consequently, I do hereby order out right confiscation of 15 000 litres HSD in terms of clauses (8) & (89) of section 156(1) of the Customs Act, 1969 for violation of sections 16 and 2(s), (ii) & (iii) of the Customs Act, 1969. (ii) Nevertheless, it has been established that the seized oil tanker has been used for the transportation of smuggled goods. Therefore, the oil tanker is also confiscated. However the owner is given an option to redeem the vehicle on payment of fine equivalent to 20% Customs Value of the oil tanker as the Seizing Agency has not brought on record any material to prove that the tanker was used previously for the transportation of smuggled goods nor any false cavity has been reported in the oil tanker.
4. Messrs Hascol Petroleum (Pvt.) Ltd., (Hascome), Karachi has now challenged the above order by way of this appeal. Mt. Syed Ali Zaheer Jafri appeared on behalf of the appellant who reiterated the arguments incorporated in the memo of the appeal and further stated that:--
(a) That the appellant is Oil Marketing Company licensed by OGRA and thus have the legal right to marketing the POL products throughout the Country freely.
(b) That the learned respondent No.1 did not ask the respondent No.2 to test and verify the specification from any laboratory nor Messrs Pakistan Refinery. Ltd. contacted to verify as to whether goods are locally manufactured or produce of their Refinery, even the respondent No.2 has been failed to provide any concrete proof in support of his allegation and the respondent No. I ignored this virtual fact.
(c) That the confiscation of the HSD Oil has been taken place in violation of section 180 of the Customs Act, 1969, because no order for confiscation can be passed for any goods or for imposition of any penalty on any person unless the owner of the goods is informed in writing of the grounds on which it is proposed to confiscate the goods or impose a penalty and is given a reasonable opportunity of being heard personally or through a counsel or duly authorized agent.
The respondents are bound to comply with all the provisions of the Customs Act, 1969 in letter and spirit but the respondents have totally failed to recourse to the law.
(d) That neither any show-cause notice nor any written information was given to the appellant to join the adjudication proceedings but the learned respondent No. 1 passed the impugned Order at the back of the appellants in violation of mandatory provisions of section 180 read with section 168 of the Customs Act, 1969 which clearly shows an undue favour to the Department.
(e) That the word "SMUGGLE" is defined under section 2(s) of the Customs Act, 1969. The definition is reproduced bellow:-- [" smuggle" means to bring into or take out of Pakistan, in breach of any prohibition or restriction for the time being in force, or en-route pilferage of transit goods, or evading payment of customs duties or taxes leviable thereon,-- From the above definition it is clear that any goods which falls out side the purview of above said 6 underline modes cannot be considered as Smuggled goods.
In the instant case:--
(i) The HSD Oil was neither bringing into or taken out of Pakistan in breach of any prohibition or restriction for the time being in force.
(ii) nor that.was Transit Goods where en-route pilferage was made and, (iii)as far as evading payment of customs duties and taxes is concerned, it is not relevant in the instant case as the goods in question were of locally purchased from Messrs Pakistan Refinery Ltd Karachi as evident from their invoice.
(f) That the impugned order is contradictive to the law thus is unlawful and suffered under the provisions of section 180 of the Customs Act, 1969 read with section 168 ibid.
(g) That without prejudice, to what has been stated above, it is a factual position that the Show- cause notice was not served to the appellant within two months time as such no proceeding can be initiated against appellant under subsection (2) of the section 168 of the Customs Act, 1969 and thus the impugned Order does not meet the norms of prevailing law.
(h) That the findings of the learned respondent No.1 under Para 41 (I) of Order-in-Original, the respondent has quoted clauses (e) and (0 under section 23(2) of OGRA Ordinance, 2002, whereas these clauses i.e. Clauses (e) and (f) do not appear at all in, the Ordinance, 2002 and it is also mentioned here that the Clauses of section 23(2) do not relate to the appellant. The copy of above referred section of the OGRA Ordinance is marked as Annex "I".IX. That the findings of the learned respondent No. 1 under Para-41 (ii) is self contradictory because in this Para the respondent has stated that as per Rule-109(1) of the Petroleum Rules, 1937 Industrial consumers can purchase in bulk quantity of HSD Oil not exceeding 10,000 gallons i.e. equal to 45000 liters without any licence for their own consumption since Messrs Thatta Cement Company, Thatta an Industrial Unit has purchased 15000/ liters HSD Oil which is much less than half of the 10,000 gallons as such there is no contravention of Petroleum Rules, 1937. Moreover appellant has no concern with the allegation.
(i) That the findings of the respondent No.1 under Para-41 (iii) and (iv)are the repetition of Para 41 (ii) which has already been rebutted in the above Para.
(i) That the Sub-Para-V under Parar41 of the impugned Order is unlawful, because according to appellant's best knowledge neither Show-cause notice was issued either to appellant or to Messrs Al-Rahim Trading Co. nor they were summoned to attend the hearing and the allegation is not correct and not sustainable.
(k) That without prejudice to what has been stated above; the oil tanker was seized from the Deh Gajjo enroute to Thatta and not from Border Area I Coastal Area and its seizer is therefore unlawful and shows the misuse of power by the concerned authorities.
(1) That from above arguments it is very clear that there is no iota of doubt that the oil in question was purchased by. Messrs Hascol from Messrs Pakistan Refinery Ltd. for the supply to Thatta Cement and as such the allegation of smuggling is base less unlawful and shows mala fide intention of seizing Agency..
5. The Superintendent has submitted para wise comments which are reproduced as under:--
(i) Needs No Comments.
(ii) That contents para-II of appeal are misleading, misconceived and contrary to law. In terms of clause (89) of subsection (1) of section 156 of the Customs Act, 1969, the possession holder of the smuggled goods is responsible to discharge burden of proof of lawful possession and prove that the goods was legally acquired. Similarly, in terms of subsection (2) of section .156 of the Customs Act, 1969, (iii)At the time of Seizure i.e. on 3-4-2012 at 04:00 a.m. driver of Truck/Oil Tanker bearing Registration No.TTB-436 was delivered/received the notice issued under section 171 of the Customs Act, 1969. It is pertinent to mention that on 3-4-2012 Messrs HASCOL Petroleum Ltd, issued a certificate regarding committing a mistake showing the date of 26-2-2012 instead of 2-4-2012 on the Sales Tax Invoice No.1029-911304. The registered owner of seized Oil Tanker (Zakir Hussain) was also given the copy of notice issued under section 171 of the Customs Act, 1969 and the adjudicating Authority also addressed both the drivers and owner of seized Oil Tanker No.TTB-436.
In view of above submission, it is clear that Messrs HASCOL Petroleum Ltd, were very much in the knowledge that their old and used Sales Tax Invoice No.1029-911304 dated 26-2-2012 was used for coverage of F/O smuggled HSD Oil.
(iv)The copy of Show-cause notice was addressed to driver/owner of seized HSD Oil and Oil Tanker No.TTB-436 and it is the driver/owner of Oil Tanker to inform the owner of seized HSD Oil. But it is again pointed out when Messrs HASCOL issued a certificate regarding mistake showing date of 26-2-2012 instead of 2-4-2012 on the Sales Tax Invoice No.1029-911304 than Messrs HAS COL should have claimed the ownership of seized HSD Oil 15,000 liters but they did not bother to do so.
(v)That contents of para 5 of appeal are misleading, misconceived and contrary to law. In terms of clause (89) of subsection (1) of section 156 of the Customs Act, 1969, the possession holder of the smuggled goods is responsible to discharge burden of proof of lawful, possession and prove that the goods was legally acquired.
(vi)That contents of para 6 of appeal are misleading, misconceived and contrary to facts and law.
It is, established without any iota of doubt that Oil Tanker bearing Regd No.TTB-436 were exclusively used for the transportation of 15,000 liters HSD Oil. However on the request of claimants of Oil Tanker No,TTB436, the Adjudicating Authority took a lenient view and allowed released of the same on payment of redemption fine of 20% of the value thereof in lieu of confiscation, which has been availed by the claimant of subject Oil Tanker.
(vii) The subject, seized F/o HSD Oil 15,000 liters loaded on Oil Tanker No.TTB-436 was intercepted/seized on 3-4-2012 and Show-cause notice was issued on 17-5 2012 addressed to driver and owner of seized Oil Tanker No.TTB-436 within stipulated time period of two months and Mr. Asim Munir Bajwa, Advocate appeared before D.0 Adjudication MCC, Hyderabad on 24-5-2012 on behalf of seized HSD Oil 15,000 liters and vehicle No.TTB-436.
(viii)The Adjudicating Authority stated in the subject Order-in-Original that section 23(2) instead of 23(3) which is a typical mistake under clause (e) undertake storage of oil; or and (0 undertake marketing of refined oil products, of subsection (3) of section 23 of OGRA Ordinance, 2002 clearly state that unless a general or specific licence to undertake such activity has been issued and is in full force and effect and the person is the licensee. It is pertinent to mention here that Messrs Oil and Gas Regulatory Authority vide their letter No.OGRA(Oit)-19-(9)/ 2006 dated 5-11-2012 have clarified the matter of direct sales by OMCs to various entities. This clarification reads "As per Rule 109 (I) of the Petroleum Rules, 1937, industrial consumers and construction companies can purchase/store Heavy Petroleum (HSD and Furnace Oil) directly from OMCs in bulk quantities not exceeding 10,000 gallons without any license from Department of Explosives only for self consumption and their sale (directly or indirectly) is prohibited".
(ix)According to Rule 109(1) of the Petroleum Rules, 1937 Industrial Consumers Construction Companies can purchase store in bulk quantity of HSD Oil from OMCs not exceeding 10,000 Gallons (45,000 liters) without any license from Department of Explosive only for self consumption and their sale (directly or indirectly) is prohibited.
(x)No comments as already discussed in para IV above.
(xi)No comments as already discussed in para IV above.
(xii) That contents of para 12 are misleading, misconceived and contrary to law. In terms of Clause
(89) of subsection (1) of section 156 of the Customs Act, 1969, the possession holder of the smuggled goods is responsible to discharge burden of proof of lawful possession and prove that the goods was legally acquired. Similarly, in terms of subsection (2) of section 156 of the Customs Act, 1969, "where any goods specified in clause (s) of section (2) or an Notification issued there under are seized under this act in the reasonable belief, that an act to defraud the Government of any duty payable thereon or to evade any prohibition or restriction for the time being enforced by or under this act has been committed in respect of such goods, or that there is intent to commit act the burden of proving that no such act has been committed or there was no such intent shall be on the person from whose possession the goods were seized". However, the appellant failed to discharge burden of proof of lawful possession and transportation of the seized goods which are liable to be confiscated out rightly in accordance with law.
(xiii) Denied. The Oil Tanker bearing Registration No.TTB-436 was intercepted/seized on 3-4-2012 and at time of seizure no any documents of was produced by driver of seized HSD Oil loaded on oil Tanker No.TTB-436. During search of driver cabin 4 old and used Sales Tax Invoices were found issued by Messrs HASCOL Petroleum and Messrs Bakri Trading Company.
6. We have heard the learned consultant of the appellant and examined the case record carefully.
The consultant for appellant pleaded that no show-cause notice has been served on the appellant under section 180 of the Customs Act, 1969, rendering the order void and ab-initio, to this the Tribunal confronted the consultant that whether the order by the respondent No. 1 has been passed against the appellant, answer to this was given in negative, hence Tribunal hold that the ground taken by the appellant is without any substance and least effect the legality of the order-in- original.
7. Notwithstanding, upon perusal of record of the case it transpires that the appeal has been filed by Messrs Hascol Petroleum (Pvt.) Ltd., (Hascome), Karachi, who is the non-entity in the instant case as no order has been passed against it by the respondent No.1, instead the order is against Mr. Zakir Hussain son of Muhammad Hussain owner of the seized oil tanker and Mr. Muhanunad Akram son of Muhammad Hafiz Driver and none of them filed appeal before the Appellate Tribunal against the said order within the time prescribed in section 194-A of the Customs Act, 1969.
Resultantly the Order-in-Original has attained finality through limitation. A fortiori. Orders attained finality cannot be disturbed at any later stage by any authority including Courts as held in reported judgments 1989 M LD 4310 (Messrs World Trade Corporation v. Central Board of Revenue), 2004 PTD 3020 (Messrs Glaxo Smith A Kline Pakistan Limited Karachi v. Collector of Customs, Sales Tax and Central Excise (Adjudication), Karachi-III, Government of Pakistan, Karachi) and 1990 PTD 155 (Messrs Edulji Dinshaw Limited v. Income Tax Officer). Hence we observe that appellant has no locus-standi to file instant appeal in the given circumstances .of the case instead proves mala fide as he intentionally has not joined the Adjudication proceeding before respondent No. 1 for claiming the ownership of the transported oil in spite having knowledge from the owner of the Tanker/Driver regarding detention/seizure of the Oil/Tanker and issuance of show-cause notice. Filing of appeal is an afterthought and as such of no substance, likewise the documents relied upon before the Tribunal are immaterial and need no consideration.
8. In view of the above, we hold that the order of the respondent No.1 is correct in fact and law and appeal is dismissed in limine as no order to the cast.
9. Order passed accordingly.