MUHAMMAD SAJID ABBASI, MEMBER (JUDICIAL-II).-- Through this order , I intend to dispose of Appeal bearing No.K-104/ 2017 filed against Order-in-Original No. 605257 dated 30.11.2016 passed by Additional Collector of Customs, Adjudication-II, Karachi.
2. Brief facts of the lis are that, the appellant is an importer of Jalalabad, Afghanistan, duly registered with the Ministry of Commerce and Industry of Afghanistan (MOCA ) in the said capacity . During the course of his business activities he imported a consignment of 484 packages, weighing to 24800 kgs, stuffed in 1x40" container bearing No.TRLU62227-2 of different items/articles namely ball pens, socks, bras, fabric, calculators, hair bands, loud speakers, radios, blankets, hair clips, cotton coats, flash lights, wall clocks and iron and steel galvanized sheets valuing to US$. 7676.32 to $. 6711.00C&F Karachi in transit to Afghanistan against invoice No. MI EXP 6944-16 dated 06.10.2016 and B/L APLU-069396944 dated 06.10.2016. Upon receipt of documents from the shipper , he delivered those to his clearing agent Messrs N.R. Enterprises, Karachi. (CHAL No.480) for transmitting Transit Trade Information (TTI) on the prescribed format by the Directo rate General of Transit Trade (DGTT ) for the said purpose under the provision of Section 129 of the Customs Act, 1969 (the Act) and Rule 472 of Sub-Chapter VII of Chapter XXI of Customs Rules, 2001 inserted in the Customs Rules through S.R.O. 121(1)/2014 dated 24.02.2014 (the Rules ), with the DGTT , which he did on the strength of the docu ments supplied to him by the appellant. The information so transmitted was accepted and DGTT allotted the TTI bearing No. ITTK-A T-9283-29.10.2016. After receipt of which on his desktop, the Appraiser concerned instead of inspecting container and the seal affixed thereon as declared in TTI, and there after got it scanned and weighed. Inspite finding of weight as declared after getting those weighed, opted to conduct examination, which was not warranted, as no discrepancy was visible, nor the container was falling within the selectivity criteria of 5% within the said period of time. The examination of the goods transpired that fabric color and pattern is akin to the color and pattern used by arm forces, assorted ball pens in excess by 118800 pcs assorted calculators by 380 pieces assorted loud speakers 20 pieces, assorted radios 40 pieces, assorted toys 367.36 kgs and iron and steel galvanized sheet 4115.12 kgs, these discrepancies were construed as an act of misdeclaration of weight attracting Section 32 of the Act and contravention of the Import Policy Order 2016-18 attracting the provision of Section 16 of the Act. On the strength of these discrepancies the Appraiser transmitted the TTI's to respondent No. 1 for initiating proceeding by him in exercise of the powers vested upon him under the proviso to Sub-Rule (6) of Rule 473 ibid. Who instead of issuing explanation memo. to the appellant, framed contravention report and routed that to respondent No. 2, through Collector of Customs, Adjudication-II after obtaining assent from Additional Director , DGTT , who transmitted show-cause notice dated 04.11.2016 stating inter alia that the appellant imported the aforesaid above stated goods without declaring their actual quantity , in addition to transit of fabric specifically used by arm forces uniform, and as such falls within the definition of "Army /Forces Equipment's (accessori es and clothing)" and as such be contravened the provisions of Sections 16, 32(1), 127, 129 and 209 and Rules 473 and 484-Q of the Rules, punishable under clauses 1(1) (9), (14), (64) and (89) of Section 156(1) of the Act and appellant was asked that as to why penal action should not be taken against him under the referred provision of the Act, on or before 14.11.2016 on which hearing was fixed. The consultant of the appellant submitted a befitting and detailed reply vide dated 11.11.2016, through which he challenged the jurisd iction and power of issuing of show-cause notice under the referred provision in the show-cause notice to an importer of Afghanistan, in addition to rebutting the factual aspect of the case, which formed basis for the impugned show-cause notice. The respondent No. 2 disagreed with the submission and opted to pass order-in-original dated 30.11.2016 paras 6 to 10 are relevant, which are reproduced here-in-under for easement: "6- 1 have gone thoroughly through the record of the case at hand and have considered the verbal and written arguments of both the sides. The case of the department is that a certain mixed consignment of items were being declared for afghan transit. Upon examination certain items were found to have excess quantity and these items were identified in the examination report. Moreover , yards of polyester fabric of camouflage pattern, were found to banned allegedly as per Chapter 21 Sub-Chapter 7 rule 484N of the Customs Rules, 2001.
7- In contrast the importer and his agent contested the fact the ball point were not in excess and proved their point through calculations. Cartons and pieces or packets in the carton which comes to 10800 pieces....however , within these packets were 12 more pens per packet. So the declaration was in gross both calculation match...therefore there seems to be no intention to defraud. However , the importer have agreed to excess quantity of the excess items and are willing to furnish the extra insurance cover/guarantee for all items found in excess, including the revised/proper count of ball point pens.
8-As far as the allegation that polyester printed fabric of the pattern of camouflage is concerned used by the armed forces the allegation in the contravention was as per violation of Rule 484-N of Chapter XXI of Sub-Chapter VII of the Customs Rules, 2001, is unfounded since, merely being a fabric (which is available freely in the open markets) and not found to be of cotton texture commonly used in military uniforms and whose violation is incorrectly interpreted as per the said rule since the rule mention 484N. The transit of arms, ammunition and military equipment, unless agreed upon by the two contracting parties, the transit of arms, ammunition and military equipment, shall not be allowed .
9- Mr. Shahid Principal Appraiser Direct orate of Afghan Transit Trade appeared before the undersigned and at length discuss the case especially viz a viz the two points of confiscation of excess but manifested cargo and that of the confiscation polyester fabric of camouflage material. He agreed that the interpretation that as per the Chairman Tribunals orders with regards to confiscation of un-manifested cargo may not be applied to the instant case where cargo is manifested but excess quantity is found. He also agreed that since the camouflage polyester fabric is not arms, ammunition or equipment per say as per rule 484-N of Chapter 21 Sub-Chapter 7 of the Customs Rules, 2001 and also agreed that the sole purpose of the fabric may not be to make uniforms, but common clothes as well and moreover , since these are not made ups it doesn 't come under the definition of equipment as per Rule 484-N. However , he insisted that this fabric forms the basis of clothing of uniforms if wished to be made. It is pertinent to mention that neither this fabric is arms, nor is it equipment nor is it ammunition . Also neither it is uniform. Had it been uniform, it could be argued that this may come within the ambit of equipment etc. But its not. It is common polyester fabric . Likely having multiple uses. It is agree d that such fabric will obviously form the basis for making a uniform which may be taken as equipment in the ambi t of Rule 484-N. However , law is supreme than assumption or fears. When the law mentions specifically arms, ammunition and equipment then this is clearly non of it. It is not equipment, since it is fabric. cases have been decided by this adjudication forum, wherein uniforms of this design and pattern are being transited and interpreted as equipment. Yes that is an apt interpretation, but this is fabric in the instant case and as agreed by the Principal Appraiser that it is not equipment per se. But a basis on which such uniform can be prepared, therefore, I find the interpretation of such fabric being banned, illogical, unfounded and in complete variance with the stated words used in Rules 484N of Chapter XXI and thus the prevalent law . Therefore, I find it not banned .
10- In the light of the above discussion It do not find any violation of Section 16 of the Customs Act, 1969.
Accordingly , the item may be released . However , the items mention in the contra vention report as being excess and indeed found to be excess in violation of sections 32(1), 127, 129 and 209 of the Customs Act, 1969 punishable under clauses 156(1), (9), (14), (64) (89) of the Customs Act, 1969. Accordingly , the importer/ transitee is ordered to furnish extra insurance guarantee to cover the excess. Furthermore, a penalty amounting to Rs.
50,000.00 is also imposed on the importer for the violation of the mentioned law .
1. The appellant filed the instant appeal on the basis of grounds enumerated therein and the consultant/advocate on the date of hearing argued in line with those. No cross-objection under subsection (4) of section 194A has been filed within the stipulated period of 30 days by either of the respondent No.1 himself or through his subordinate, instead comments has filed by the Deputy Director , DGTT , which least contains rebuttal on the factual and legal point raised by the appellant in the memo. of appeal, rather are stereo typical and lend no support to the case of respondent No.1. No citation or authority have even been placed at the time of hearing in support thereof.
3. The Appellant filed the instant appeal on the basis of grounds enumerated therein and the consultant/advocate on the date of hearing argued in line with those. No cross-objection under subsection (4) of Section 194A has been filed within the stipulated period of 30 days by either of the Respondent No. 1 himself or through his subordinate, instead comments has filed by the Deputy Director , DGTT , regretfully which least contains rebuttal on the factual and legal point raised by the appellant in the memo. of appeal, rather are stereo typical and lend no support to the case of respondent No. 1. No citation or authority have even been placed at the time of hearing in support thereof.
4. Heard, and perused case record, it is of paramount importance to place reference on the preliminary of Chapter 1 of the Act, subsection (2) with clarity expresses that it extent to whole of Pakistan. Ultimate results of the said provisions is that the provisions of the Act with the exception of provisions of Sections. 127 to 129 of Chapter XIII are applicable only on the person who is citizen of Pakistan and is engaged in the business of Import/Export or manufacturing, who during the course of his business activities commits any contravention of the provisions of the Act, shall be proceeded against under the relevant applicable provisions of the Act and the Rules framed thereunder . The appellant is a citizen of Afghanistan and is duly registered as an importer with the MOCA for importing goods for home consumption in Afghanistan at Karachi for transit to the place of business in Afghanistan under the Afghanistan Pakistan Transit Trade Agreement, 2010 (APTT A). The import for transit to Afghanistan is handled by DGTT , every importer has to get itself registered with the Customs Computerized System (CCS) for filing TTI, he submit an application with the designated authorized Official of MOCA in Afghanistan by the MCC of Appraisement-East, Karachi. The Official of MOCA registered him and allot Unique User ID and password, which the Officials of MOCA through mail along with application and submitted documents forward to the Deputy Collector MIS, MCC of Appraisement -East. In this whole procedure, the appellant has no direct communication with either the Official of MCC of Appraisement-East or DGTT . Any discrepancy found in import documents submitted for transit of the goods or in the goods so imported has to reported by the DGTT to the MOCA through Ministry of Commerce, Pakistan and subsequently has to file a complaint under para (2) of Article 3 of Section II APTT A, before the Afghanistan Pakistan Transit Trade Co-ordination Authority under Article 34 of Section X ibid. under the provision of Act the Official of Customs are not empowered to proce ed. The Ministry of Commerce (MOCA ) is the appropriate Authority to proceed against an importer of Afghanistan in accordance with their Import Policy Order or Custom Act, not the Officials of Customs including DGTT , due to the fact that the provisions of Customs Act, 1969 are not applicable in Afghanistan nor on the citizen of Afghanistan, which the appellant is. As deliberated we are clear in mind that the Officials of DGTT and respondent No. 2 have no locus standi to serve show-cause notice to the appellant.
5. I have also gone through the Revised Kyoto Convention 1999, APTT A and Sub-Chapter VII of Chapter XXI of the Rules and fail to find the said word in these. Confirming that the Word mis-declaration is alien to these, the emphasis laid in proviso to Sub-Rule (6) of Rule 473 ibid speaks about "discrepancy ". Since, no definition of the word discrepancy is given in Article 2 of APTT A, or even in any taxing Statute/notification, ordinary grammatical meaning has to be adopted as it is elementary rule of construction that phrase s and sentences of the statute should be construed according to the rules of grammar and the words of a statute should be interpreted in their plain grammatical sense. The word discrepancy is defined in The Chambers Dictionary 1997 Edition: Disagreement; variance of facts or sentiment and in The Lexicon Webster Dictionary of English Language Encyclopedic Edition : the state of being discrepant; and discr epant means inconsistence; at variance. Meaning thereby that if facts shown in TTI differs or in variance, the word discrepancy is used in the Rules intentionally because the provision of Act, are not applicable on these goods due to non declaration, which an importer of Afghanistan has to file with the Afghan Customs at the port of clearance, goods found contrary to the said declaration, are deems to be mis-declared, consequent of which is that the said person/importer is liable to adjudication proceeding by the Official of Customs under the Customs Act of Afghanistan. The importer of Afghanistan vide transmitting TTI under CCS, narrate the tentative facts of the goods stuffed in container , that could be varied, in description, quantity , quality and weight, which is curable through an amendment or if i.e. not possible, the importer can be asked to submit additional insurance guarantee for the amount of leviable duty and taxes on the value determined under Section 25 or 25A of the Customs Act, 1969 for home consumption in Pakistan under provision of Section 79(1) of the Act. Despite of the said fact the respondent No. 2 termed the discrepancy as misdeclaration as evident from the show -cause notice and Order-in-Original and which falls within the ambit of Section 32 of the Customs Act, 1969 and applicable on the import for Pakistan, clearance of which is obtained under the provision of Section 79(1) of the Act and this is validated from the expression of Section 32, which read as: Section 32 False statement, error , etc. If any person, in connection with any matter of customs, ----
(a) makes or signs or causes to be made or signed, or delivers or causes to be delivered to an officer of customs any declaration, notice, certificate or other document 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 , 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)
The appellant has not filed Goods Declaration (GD) as defined in Section 2(la) under the provision of Section 79(1) of the Act instead under Section 129 of the Act which read as: "Transit of goods across Pakistan to a foreign territory . Where any goods are entered for transit across Pakistan to a destination outside Pakistan, the appropriate officer may, subject to the provisions of the rules, allow the goods to be so transited without payment of the duties which would otherwise be chargeable on such goods."
Provided that the Federal government may, by notification in the Official Gazette prohibit the bringing into Pakistan by Sea, land or air in transit to a foreign territory any goods or class of goods.
From conscientious study of the Section 129, it is abundantly clear that the goods imported in Pakistan for transit to foreign country is not leviable to duty and taxes, which are otherwise leviable and to be paid in case of filing GD under the provision of Section 79(1) of the Act, and this has been done in the light of Revised Kyoto Convention Agreement, 1990 and definition given in Article 2 of APTT A, "Customs Transit" means procedure through which goods are transported under Customs Control from one Customs Office of one contracting party to Customs Office of other contracting party under suspen sion of duty and taxes and in Article 30 of Chapter IX of APTT A, the contracting parties agreed that no custom duties and taxes shall be levied on the goods, regardless of their destination and purpose." Since, the appellant has shown facts of the goods stuffed in container on the strength of the documents received by him from the shipper and on those or even found contrary to those or in excess, no duty and taxes are leviable in Pakistan. Using of word mis-declaration in the show-cause notice and order-in-original is out of context, beside based on mis-conception as the provision of Section 32 of the Act, or any other provision are not applicable on the said goods and this stood validated from the judgment of the Hon'ble Supreme Court of Pakistan reported at PLD 1993 Karachi 93 Messrs Najab Zarab Ltd. v. Government of Pakistan and 1996 SCMR 727 FOP v. Jamal Din and others. "Goods imported by Afghan National from other country for use and consumption in Afghanistan could not be said to have been imported into Pakistan merely because they crossed the Customs barrier and enter into Pakistan to be transited to their destination viz Afghanistan, such goods infact are goods in transit to be dealt with and transshipped to Afghanistan in accordance with the transit agreement and protocol appended thereto. Customs Laws relating to importation would not, therefore applicable to them. The Hon'ble judges of the Supreme Court of Pakistan further held "that the provision of Customs Act and Import. Control Order dealt with different kind of situation that after being imported into Pakistan and not imported into Afghanistan. The provision of Customs Act, do not deal with the goods in transit which are not really imported into Pakistan. It is worth stating that in a case where liquor seized by the Directorate General of Intelligence and Investigation FBR after clearance for transit to Afghanistan on the pretext that the goods found in exam ination are liquor as against shown in TTI as mineral water amounts to mis-declaration attracting Section 32 of the Act and so the prohibition laid down in Import Policy Order . The Division Bench of the Hon'ble High Court of Sindh observed vide order dated 27.10.2010 in C.P. No.D-2410 of 2010 that "in the present matter a simple allegation is made by the respondent No. 2 that a very specific provision of the Customs Act namely Section 32(1) has been violated and the same amounts to an offence which could be taken cognizance by the Customs Judge appointed under the Customs Act. In our view , the petitioner's consignment and the description of the goods in the documents accompanying in that consignment do not come within the preview of Section 32 and even such description may have been within the ambit of said section the same would amounts to mis-declaration only if the goods were intended for import into Pakistan that obviously does not apply in the present case since the goods admittedly are in transit under the Afghan Transit Agreement. The Hon'ble Bench on the strength of the said observation allowed the petition to the extent of FIR's C.No. Appg-287//DCl/ ESKO/2010 dated 24.05.2010 and FIR C. No. Appg- 288//DCl/ESKO/ 2010 dated 24.05.2010 and quashed and all proceeding there-under were declared to be without lawful authority ."
6. The Board in exercise of the powers conferred upon it under Section 3 of the Act established a separate forum namely Collectorate of Customs Adjudication through Notification No. 886(1)/2012 dated 18.07.2012 for adjudication of the cases of mis-declarat ion, causing revenue loss under the provision of Section 179 of the Act w.e.f. 01.08.2012. From perusal of the show-cause notice, it has been observed that although the word mis- declaration is used but provision of Section 32 has not been invoked and neither any revenue loss has been incorporated. Rendering the case outside the purview of the Collectorate of Customs, Adjudication-II and falls within the ambit of para 3(d) of the notification i.e. cases pertaining to contravention of technical violation of Import or Export restriction without involvement of any evasion of duty and taxes. The case of the appellant at the most falls under the said sub-para and the power to adjudicate such type of cases rest with the Executive Collectorate i.e. DGTT . The respondent No. 2 despite of the fact that he is Additional Collector of the Collectorate of Customs Adjudication-II, while assuming the power of Principal Appraiser given in Serial No. (vi) of Section 179 of the Act issued show-cause notice and Deputy Collector Adjudication-II passed order-in-original dated 30.11.2016. This act of their is transgression, which is' not permitted under law . Since, they were also not Principal Appraiser of Collectorate of Adjudication nor the case in question falls within the jurisdicti on of Collectorate of Customs Adjudication, they usurped the powers of the appropriate authority i.e. Principal Appraiser and jurisdiction of DGTT and opted to issue show-cause notice and pass order-in-original by encroaching the exclusive and sovereign powers of Principal Appraiser and jurisdiction of DGTT by respondent No. 2 and Deputy Collector of Customs Adjudication-II. This transgression renders the show-cause notice and Order-in-Original without power/jurisdiction.
Hence, void and ab-initio and as such of no legal effect. The exercise of jurisdiction by the authority is the mandatory requirements and its non-fulfillment, entails the entire proceedings coram non-judice . All relevant quarters having quasi judicial jurisdiction and authority as well as including the Courts are bound to perform their duties in accordance with the laws and in this particular case, the DGTT and respondent No. 2 were required to perform their duties under para 3(d) of the Notification No. 886(I)/2012 dated 18.07.2012 and proviso to Sub-Rule
(6) of Rule 473 of Sub-Chapter VII of Chapter XXI of the Rules. The action taken by the respondents made during the hierarchy of the Customs does not have any warrant of law and assumed the jurisdiction against the norms of statutory obligations embodied in Section 129 of the Act and Rule 473 ibid. For reaching on the said conclusion I am fortified with the decision of the Supe rior Judicial Fora reported at 2005 PTD (Trib.) 1324, PLD 1961 SC 237, PLD 1964 SC 410, PLD 1964 SC 536, PLD 1965 Supreme Court 90, 1983 SCMR 1208 , PLD 1987 Supreme Court 304, 1994 SCMR 2232 , 2003 SCMR 1505 , 2006 SCMR 129, 2006 SCMR 1023 , PLD 2004 Supreme Court 600, PLD 2005 Supreme Court 842, 2001 SCMR 1822 , PLD 1971 SC 124, PLD 1971 SC 197 and PLD 1973 SC 236, 2013 PTD (T rib.) 353 and 2015 PTD (T rib.) 1422.
7. The reproduction of proviso to sub-rule (6) of Rule 473 of the Rules is vital and which is: "Provided that where some discrepancy has been found, the ATGD shall be marked to the concerned Principal Appraiser for further necessary action under the law including initiation of legal proceeding."
Upon bare reading of the proviso, it is vividly clear that in case of discrepancy found in documents submitted for clearance for transit trade or in the particulars of the goods, found contrary upon conduction of examination, the appropriate authority to initiate legal proceeding rest with the Principal Appraiser of DGTT , due to the fact that the goods are in the terminal and those have to be transited without levy of duty and taxes, meaning thereby that no implication on the revenue to the exchequer of Pakistan. The proceeding whatsoev er has to be under taken for the rectification of the discrepancy through amendment or by securing insurance guarantee for the amount of duty and taxes levied on the excess found goods on the value determined by the Officials of. DGTT on the strength of data maintained under Rule 110 of the Rules or Valuation Ruling issued by Director , Directorate General of Valuation under the provision of Section 25A of the Act subject to its return after cance llation upon receipt of T-1, as enunciated in clause (b) of Rule 484-D(1) of the Rule, bearing cross reference of TTI filed in Pakistan and the certificate to the effect that the transit goods had crossed border and the said effect had been fed in the system by the Cross Border Verification Officer (CBBO). Initiation of legal proceeding in case of discrepancy against the importer of Afghanistan through his clearing agent rest with respondent No. 1 Notwithstanding, it is for the respondent No. 1 to take cognizance of the discrepancy found in the documents and the goods during the course of examination and in case of need he is competent to issue show-cause notice himself to the clearing agent of the importer of Afghanistan for seeking justification for the found discrepancy and if i.e. not convincing, pass an observation, for preparation of complaint for submission with the Ministry of Commerce Pakistan for onward submission with the MOCA for placing before Afghanistan Pakistan Co-ordination Authority in terms of para 2 of Article 3 of APTT A.
In the instant case although the respondent No.1 took the cognizance of the issue and instead of proceeding himself in spite being competent to do so under para 3(d) of Notification No. 886(1)/2012 dated 18.07.2012 opted to frame contravention report instead of complaint and transmitted it to the respondent No. 2, who issued the show- cause notice and subsequently Deputy Collector , Adjudication-II passed order in the capacity of Principal Appraiser , to which they were not empowered being a Additional/ Deputy Collectors of the Collectorate of Customs Adjudication-II, who are even otherwise not empowered to adjudicate the cases where there is technical violation of import and export having no revenue loss and this has been expressed in para 3(d) of Notification No. SRO 886(I)/2012 dated 18.07.2012. It is settled principle of law that the Superior Officer is not empowered to exercise quasi judicial powers of his subordinate in the matter of adjudication and this has been held on countless time by the Superior Judicial Fora in reported judgment referred by the and which are applicable on the instant case with full vigor . Therefore, I hold that the show-cause notice has not been issued by the authority defined in proviso of Sub-Rule (6) of Rule 473 the Rules. Hence, without power/jurisdiction and as such void and ab-initio and coram non judice.
8. Prior to deliberation on the issue, it is beneficial to reproduce clause (64) of Section 156(1) and Rule 484Q of Sub-Chapter VII of the Rules, for better understanding of the essence and spirit of these and so the applicability .
(64): If any person contravenes any rule or condition relateable to section 128 or 129[Such person including the custodian and inland carrier shall be liable to a penalty up to twice the value of the goods and upon conviction by a Special Judge be further liable to imprisonment for a term not exceeding five years, and the goods in respect of which such of fence has been committed shall also be liable to confiscation.]128 and 129 484Q. Penalty under the Act -- Whosoever commits any contravention of the provisions of this Sub- Chapter shall be liable to be proceeded against under Serial No. 64 and the entries relating thereto, in the table of subsection (1) of Section 156 of the Act.
From meticulous study of the above, it is observed that these are applicable in such like situation, wherein the importer of the Afghanistan or his clearing agent remove the goods from the terminal/port in clandestine manner without completion of codal formalities of transit trade envisaged in APTT A and Rules embodied in Chapter VII of Chapter XII of Customs Rules, 2001 or pilfered the goods during the course of transit or wherein, cross border certificate is not submitted along with verification of the Afghanistan Government as per the expression of clause
(b) of Rule 484-D(1) of the Rules. In these circumstances the concerned person shall be charged under Section 2(s) and Section 129 of the Act and have to award punishment of the criminal intent under clause (64) of Section 156(1) of the Act. The case in hand is not of the one deliberated upon, rather contrary , and prior to granting permission for transit. It is immaterial that the goods so found are in excess as those has also to be allowed to be transited without payment of duty and taxes, upon submission of insurance guarantee of the amount of the leviable duty and taxes on the goods imported for home consumption by a Pakistani import er under the provision of section 79(1) ibid on the value determined by the Officials of DGTT on the basis of value available in data reservoir of the Clearance Collectorate under Rule 110 of Rules, or with the application of Valuation Ruling issued by Director , Directorate General of Valuation under section 25A of the Act. Application of Rule 484Q in such like cases is out of context due to the fact that no contrave ntion of the provision of Section 129 of the Act has been made by the appellant. Beside Rules framed for the clearance of transit trade goods cannot be made a tool for creating impediment in implementation of the provision of the statute. Although these are to be complied substantially "but they are not to be applied and operated as "stumbling block " instead of "stepping stones " they should also not be used simply to trap people by technicalities of these rules instead of advancing the purpose for which they are framed. " This has been held by the Hon'ble Supreme Court of Pakistan in reporte d judgment PLD 1989 Supreme Court 222 Nishat Mills Ltd. v . Superintendent of Central Excise Circle-II and 3 others .
The Rules framed for advancing the purpose of Transit Trade has been applied on the appellant as stumbling blocks, on the presumption that the color and pattern of imported fabric is specifically for the use of army and the excess found goods are not allowed to be transited as presumption is that those were smuggled back to Pakistan.
No case can be initiated either on assumption or presumption, rather should be based on solid tangible evidence.
The respondents were not within their right to hold the consignment nor to confiscate in the light of the judgment of the Supreme Court of Pakistan reported as PLD 1993 Karachi 93 Najab Zarab Ltd. v. GOP and 1996 SCMR 727 FOP v. Jamaludin to clear the stock involved in the petition for immediate transit to Afghanistan inspite of the objection of the Government of Pakistan that in these tyres of Indian origin were imported and presumption was that these shall be smuggled back to Pakistan and the Hon'ble High Court of Sindh in order dated 27.10.2010 in C.P. No. D-2410 of 2010 to allow transit of the seized liquor by the Directorate General of Intelligence FBR, shown in TTI as mineral water . In my view the proper course which should had been adopted by the respondent would had been to allow the transit and report the said fact to the clearance port of the Afghanistan through diplomatic channel. It is of vital importance to adduc e that none of the Customs Authorities operating at Karachi for clearance of the imported goods and Enforcement and even Directorate General of Intellige nce and Investigations FBR are empowered either to hold or detain or examine the goods meant for transshipment under the provision of Section 121 of the Act which is synonymous to Section 129 and read as: "Transshipment of goods without payment of duty:-- (1) Subject to the provision of section 15 and the rules, the appropriate officer may, on application by the owner of any goods imported at any customs station and specially and distinctly manifested at the time of importation as for transshipment to some other customs-station or foreign destination, grant leave to transship the same without payment of duty, if any, chargeable on such goods with or without any security or bond for the due arrival and entry of the goods at the customs station of destination."
That akin to the goods transit to Afghanistan falling under the ambit of Section 129 of the Act, transshipment of the goods for Dry Ports of Pakistan for clearance for home consumption under the provision of Section 79(1) ibid have to be allowed without payment of duty and taxes without any security or bond, presently the goods meant for transit to Afghanistan are subject to submission of insurance guarantee to the extent of the amount of duty and taxes leviable thereon under First Schedule to the Act, returnable after cancellation upon receipt of confirmation to the effect that the goods have been crossed the border . The Customs Officials at Karachi detain a consignment of Messrs Famous Corporation, which was meant for transshipment; on the pretext that substantial mis-declaration has been made by the importer . The importer approached the Hon'ble High Court of Sindh which held in reported judgment 1989 MLD 2322 that "where the goods were meant for transshipment to Lahore Dry Port, it cannot be examined by Customs Officials at Kara chi. Customs Officials may confirm the information from the Dry Port Authority where the Customs Official can examine the question whether there has been factually any contravention of the Customs Laws or any other law and may take action against the petitioner if so warranted. If the consignment has already been examined by the Customs Officer at Karachi, the same may be released and may be forwarded to the Dry Port along with report if any. Similarly , in case relating to Messrs M. Hamidullah Khan, the Directorate General of Intelligence and Investigations detained a consignment of transit shipment on the pretext that the marks and number of the packages on the bill of lading are not in accordance with the marks and number available on the packages of the goods and as such they are empowered to examine the goods for framing contravention report for the purpose of adjudication. The importer filed a petition in the High Court of Sindh which held in reported judgment 1992 CLC 57 M. Hamidullah Khan v. Directorate General of Customs Intelligence and 3 others that " We have already reproduced 'abov e the letter containing the instructions issued by the C.B.R. regarding transshipment of imported cargo to up-country dry ports. After going through the same we are of the view, that under sub-paragraph (i) of the above instruction, if the address of the party to be notified to disclosed in the bill of lading as of an up- country destination or the marks and numbers on the bill of lading indicate an up- country destination via, Karachi, then in that case the consignment cannot be detain at Karachi. However , if any mis-declaration or suspected contravention is discovered in respect of such consignments. The information is to be conveyed to the respective Collector of customs or Deputy Collector of Custom s, Incharge of Dry Port or the Directorate of Intelligence at the dry port. These instructions are applicable both in cases where either the notifying party is indicated in the bill of lading is situated in up-country destination, or the shipping marks on the consignment indicate the up-country destination via Karachi. In the case before us it is admitted position that the bill of lading was allowed to be amended under section 45 of the Customs Act and the name of the notifying party has been shown as Allied International, Lahore and therefore in terms of the instruction referred to above transshipment of consignment to the dry Port, Lahore should have been allowed. In our view the absence of shipping marks on the consignment, could not give jurisdiction to the Directorate of Customs Intelligence, Karachi to detain the consignment at Karachi Port when the address of notifying part was shown at Lahore, in such a case if the respondents had discovered any contravention of custom law by the importer they should have allowed the consignment to proceed to its destination namely the dry port at Lahore and notified by the Collector or Deputy Collector of Customs at Dry Port as was required under the law." The High Court of Sindh in yet another judgment reported as 2003 PTD 14 N.B. Trading Company , Sambrial, Sialkot v. Collector of Customs, Appraisement and others held that "where there is an information of contravention of Customs, Law, it is to be passed to the respective Dry Port where the imported consignment is destined to which can take action in accordance with an as warranted in law. The action of Customs Officials at Karachi detaining and reopening the said consignment is legally unsustainable, it is without lawful authority and therefore set aside. Therefore it is being held that, neither any action against the appellant was warranted under Rule 484Q or clause (64) of Section 156 (1) of the Act and detention and confiscation of the goods is declared to be without power/jurisdiction and lawful authority .
9. That it is settled proposition of law that a thing should be done as it is required to be done or not at all as held by Superior Court of Pakistan in umpteenth reported judgments .The Hon'ble High Court of Sindh held in 2002 PTD 2457 that "the thing should be done as appellant are required to be done, or not at all". Whereas, the Apex Court held in judgment PLD 1971 Supreme Court 61 "neglect of plane requirement of an absolute statutory enactment prescribing how something is to be done, would invalidate thing being done in some other manner". In PLD 1973 Supreme Court 236 "it is now well established 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 to law recognizes a privilege to err" then such action amounts to a "usurpation of power warranted by law" and as 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." The said ratio was maintained, in the case of E.A. Avans reported as PLD 1964 SC 536 "where it has been unambiguously and categorically held that if the doing of a thing is made lawful in a manner than doing of that thing in conflict with the manner prescribed will be unlawful." The Hon'ble Apex Court in 2001 SCMR 838 and 2003 SCMR 1505 held that "while considering the impact of violation or non-observance of the method prescribed by law for doing an act in a particular manner or mode, 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 observation has been made by the Hon'ble Supreme Court of Pakistan in the Civil Petition filed by Director General of Intelligence and Investigation and others v. Messrs Al-Faiz Industries (Pvt.) Ltd. and others reported as 2006 SCMR 129 "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.". 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 notic e was void all subsequent proceedings, 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.
10. On the strength of the above deliberation and gaining strength from the law laid down by the Superior Judicial Fora particularly the interpretation of law, legal propositions and observations made thereon and to follow the ratio decidendi observed by the Superior Courts, I hereby vacate the impugned show-cause notices, and set aside the orders passed thereon, during the hierarchy of the customs being illegal, void and ab initio and allow the appeal and order the DGTT to refund the G paid penalty of Rs. 50,000.00 imposed on the appellant without lawful authority and warrant of law .
11. Judgment passed and announced accordingly .