JEHANZAIB WAHLAH (MEMBER JUDICIAL-III).--- Through this order , I intend to dispose off Appeal No, K- 1269/2017 directed against the Order-in-Original No, 234/2017-18 dated 02.10.2017 passed by Additional Collector of Customs, Adjudication-I, Karachi (Respondent No,3).
2. Briefly facts of the case are that the appellant imported 03 consignments of textile fabric and viscose dyed fabric of PCT heading 5407.4200, 5516.1200 and 6301.4000 from China, upon receipt of shipping documents, appellant transmitted Goods Declaration (GD) defined in Section 2(la) under the provision of Section 79(1) of the Customs Act, 1969 (Act) and Rule 433 of Sub-Chapter III of Chapter XXI of Customs Rules, 2001 (Rules), with the MCC of PMBQ, upfront duty and taxes against those on the strength of declarations were deposited in NBP, consequent to which GDs was numbered as KPPI-HC-41740-29122016, KPPI-HC-49996-30012017 and KPPI-HC-5186- 04022017. Upon appearance of these on the work station of the nominating assessing officer, instead of passing assessment orders out-rightly on the strength of the declaration, opted to get the consignments examined by the appropriate authority defined in Section 2(b) under the provision of Section 198 and Rule 435 of the Act/Rules. The assessing officer after adducing his opinion/apprehension referred the GD to the Deputy Collector of Customs, Group-IV (respondent No, 2), who assented that and routed the GDs to the Deputy Collector of Customs, Examination, QICT who marked those to the examiner of his choice on the selection basis. The consignment upon examination were found to be in accordance with the declaration in all aspects and report so prepared by him after approval of the Deputy Collector , QICT were uploaded in the reservoir of the GDs, thereafter the nominating Assessing Officer in the capacity of authority defined in Section 2(a) passed assessment orders in each GDs under the provision of Section 80 and Rule 438 of the Act for levy of duty and taxes while adducing remarks in the assessment note reading as "ER/VR " and "assessed as per ER/VR 784/2015 " on 02.01.2017, 01.02.2017 and 06.02.2017 and transmitted view messages for payment of additional amount of duty and taxes, which were paid by the appellant on the same dates, consequent to which the inbuilt authority of Customs Computerized System
(CCS) passed clearance order as per the contemplation of Section 83 and Rule 442 of the Act/Rules and appellant's represented obtained the delivery from the terminal. After lapse of about four months from the date of clearance of the first consignment, the Deputy Director , Directorate General of PCA, (respondent No, 1) issued order audit observation on the basis of formed opinion that the consignment imported by the appellant's were infact of polyester falling under the PCT 5407.5200 as against declared 5407.4200, upon which benefit under Serial No, 2186 of the Free .Trade Agreement (FTA) of SRO 659(1)/2007 dated 23.06.2017 is not admissible, this act of appellant resulted in short payment/evasion of Rs, 1,590,701.00. This audit observation was not served on the appellant as per the contemplation of Section 215 of the Act, resultant, no reply whatsoever was submitted by the appellant's. The respondent No, 1 subsequently framed contravention report with the allegation that the appellant mis-declared the description and PCT heading of the goods, which is tantamount to contravention of the provision of Section 32(1), (2) and 3(A) of the Act, Sections 3, 6,7,7A and 34 of the Sales Tax Act, 1990 (S.T.A.), Chapter X of the Sales Tax Special Procedure Rules, 2007 (STSPR, 2007) and Section 148 of the Income Tax Ordinance, 2001 (ITO), punishable under clause 14 of Section 156(1) of the Act and Section 33(5) of the S.T.A. and Sections 148 and 182 of the I.T.O. and submitted the same with the Director , PCA, who forward ed that to the respondent No, 3, who issued show-cause notice dated 24.05.2015 containing the same facts and contravening provision of the Act, S.T.A. and I.T.O. as were narrated in the contravention report by the respondent No,
1. Ironically the said show- cause notice was also not served on the appellant's despite mandated under the provision of Section 215 of the Act. The respondent No, 3 subsequently passed an ex-parte order . dated 02.10.2017 through which he held the charges as levelled in the show-cause notice established and ordered payment of short paid amount of Rs, 1,590,701.00 in addition to imposed penalty of Rs, 150,000.00. Operative part of the order is reproduced here-in- under:- "I have gone through the case record and considered the arguments of the representative of the department. The department's case is that the respondents imported 03 consignments of Polyester Dyed Ladies Suiting Shirting Fabric /Polyester Dyed Fabric by misdeclaring PCT heading as 5407.4200 and cleared the same on payment of Custom Duty @ 12% by availing inadmissible benefit of reduced rates of Custom Duty under SRO 659(1)/2007 dated 30.06.2007. The imported goods are correctly classifiable under PCT 5407.5200 chargeable to Custom Duty @ 15% , where the benefit of FTA is not admissible. The identical/same imports have been declared and assessed by the importers and the Collectorates under PCT 5407.5200. Therefore, the respondents were charged for the violation of Section 32(1) , (2) and (3A) of the Customs Act, 1969, Sections 3, 6 and 7 read with Section 34 of the Sales Tax Act, 1990 and Section 148 of the Income Tax Ordinance, 2001. Durin g the hearing, the departmental representative (DR) defended the stance of the detective agency and stated that the respondents wrongly avail the benefit of FTA and evaded ligtimate amount of duty and taxes to the tune of Rs. 1590,701/- despite hearing notices neither any body appeared for hearing on behalf of the respondent nor any written reply of the Show-Cause Notice was received in this office. It is evident that the respondent have nothing to say in their defense with respect to the charges of misdeclaration and availing the inadmissible benefit of SRO 659(1)/2007 dated 30.06.2007. Hence, the charges levelled in the Show-Cause Notice stand established. The respondents are directed to pay evaded/short paid amount of duty and taxes immediately (along with the default surcharge to be calculated by the department). I also impose a penalty of Rs, 150,000/- (Rupees one hundred and fifty thousand only) on Messrs Star Enterprises, Karachi in terms of Section 156(1), (14) of the Customs Act, 1969 for violation of above mentioned provision of law."
3. The appellant filed the instant appeal on the basis of grounds enumerated therein, the consultant/advocates on the date of hearing argued the case strictly in accordance with those. No cross objection under Subsection (4) of Section 194A of the Act has been filed within the stipulated period of 30 days by the respondent No, 1, instead comments, which are not in any manner qualify memo. of cross objection, deemed to be termed as cross appeal filed under Sub-section (3) by the department as expressed in aforesaid section. Therefore, these are to be considered merely as opinion, having no binding force, however , are placed on record of the case for perusal and consideration.
4. Heard and perused the record and the relied upon documents/ judgments by the appellant's. Prior to dilating upon other factual and legal aspect of the case, it is of vital importance for me to deliberate on the mechanism/procedure outlined by the legislature in the provision of Section 26A of the Act for conduction of audit of record of importer under Section 26(2) of the Act and on the jurisdiction/powers of Directorate General of Post Clearance Audit (PCA) or respondent No, 1 in conduction of audit under Section 25 of the Sales Tax Act, 1990 (S.T.A.) and Section 177 of the Income Tax Ordinance, 2001 (ITO) of the Sales Tax/Income Tax collected at import stage by the Clearance Collectorate/respondent No, 2 or his subordinate as per the enunciation made in Section 6 of the S.T.A. and Section 148 of the I.T.O. in the absence of their appointments as Officer of Inland Revenue under Section 30 of the S.T .A. and Section 228 of the I.T .O.
5. For obtaining answer to the first part of my observation in regards to mechanism/devised procedure of conduction of audit under Section 26(2) of the Act is in Section 26A, reproduction of verbatim of which is of vital importance: 26A. Conducting the Audit:---(1) the appropriate officer of Customs conducting any audit under this Act shall proceed in the manner as the Board may by rules prescribe.
(2) Where any audit or inquiry or investigation is to be conducted for the purpose of ascertaining the correctness of any declaration or documents or statement, for determining the liability of any declaration or document or statement, for determining the liability of any person for duty, taxes fees surcharge fines and penalties, or for ensuring compliance with all other laws administered by the Customs, an appropriate officer of Customs may;- (a) Examine, or cause to be examined upon reasonable notice, any record or any statement or declaration or document described in the notice with reasonable specificity , which may be relevant to such audit, inquiry or investigation: (b) Summon, by giving a notice and reasonable time, - The person who imported, or exported or transported or stored or held under customs bond, or filed a goods declaration, drawback or refund claim, Any officer , employee or agent of any person described in clause (a); and Any person having possession custody or care of records and documents required to be kept under the Act and any other person, as deemed proper , to appear before him at a reasonable time and to produce such records and documents as specified in.
6. From bare reading of the provision of Section 26A of the Act, it is abundantly clear that the appropriate designated Officer of Customs empowered by the Board for conducting audit of the record of the importer under Section 26(2) is in the manner prescribed by the Board in Rules. To this date no Rules are framed/issued by the Board despite insertion of Section 26A in the Act through Finance Act, 2006, resultant, the audit of an importer accounts/record maintained by him under the provision of Section 211 and Chapter XI of Act/Rules, has to be conducted by the Officials of Directorate of Post Clearance Audit or respondent No, 1 as per the mechanism provided in the Section itself, wherein appropriate officer of Customs is empowered to conduct audit or inquiry or investigation of an importer for the purpose of ascertaining the correctness of any declaration or documents or statement, for determining the liability of any declaration or document or statement, for determining the liability of any person for duty, taxes, fees, surcharge, fines and penalties, or for ensuring compliance with all other laws.
However , prior to proceeding with the said exercise, the appropriate officer appointed under Section 3DD of the Act for the said purpose and empowered through SRO 500(1)/2009 dated 13.06.2009, which respondent No, 1 have to either summon or give a notice and reasonable time to an importer for the conduction of audit and for the said purpose production of accounts and record as per the expression of clause (b) of Subsection (2). The first ground of the appellant in memo of appeal is that the respondent No, 1 has not either issued to him any notice or served a summon for the purported exercise of audit despite mandated under law and this lapse renders the audit so conducted which is the root cause of the impugned show-cause notice as of no legal effect. Since, no notice is annexed with the memo. of appeal, the representative of respondent No, 1 was asked to place the copy of the notice/summon forwarded/served to the appellant, as the copy of the same would had been available with him in the case file. The query was replied in negative, which flabbergasted me and another query was put to him that how the audit was conducted, without asking for the accounts and record of the import, the answer was on the basis of GD's available in the data reservoir maintained by PRAL under Rule 110 of Rules, upon this the representative of respondent No, 1 was asked to read out the passage available in Section 26A, wherein audit of any importer is permitted on the basis of the record available in the CCS Module, to this the answer was given in negative, confirming that audit of the importer accounts/book could only be conducted upon presentation of those after receiving notice/summon to do so. In the absence of that conduction of audit on the basis of the record available on the CCS Reservoir is not permitted as it is settled proposition of law that a thing has to be done as it has been prescribed to be done, in case of doing the same in any other manner render it illegal and as such void and ab-initio and this have been held in countless reported judgments, reference is 2002 PTD 2457 that "the thing should be done as they are required to be done, or not at all". 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" and 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 net 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. M/s. Al-Fait 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 namely audit observation, show-cause notice and order -in-original no matter how strong those may be have to fall, reference is made to PLD 1996 Karachi 68 which laid down that " where the initial order or notice was void all subsequent preceding, orders or super structure built on it were also void. In reported judgment 2006 PTD 978 it is held that "the entire proceeding initiated by the Adjudicating authority and further super structure thereon including the order passed by the learned Tribunal are without jurisdiction void and in-operative." The Apex Court in PLD 1971 Supreme Court 184 held that "order of a Tribunal found to be without jurisdiction ---all successive orders based upon it illegal and liable to be quashed".
7. That in regards to the second part of my observation available in para 5 supra, I have perused Section 228 of the I.T.O. and found that the respondent No, 1 has not been appointed/designated as Officer of Inland Revenue by the legislature, instead as per Section 29(2) (b) of Federal Excise Act, 2005 and Section 228 of the I.T.O., the.
Directorate General of Internal Audit has been appointed/designated as officer of Inland Revenue and for overseeing the collection of withholding Tax, Directorate General of Withholding Taxes has been established under Section 230A of the I.T.O., meaning thereby that the respondent No, 1 is not at all appointed/designated as Officer of Inland Revenue. Resultant neither Directorate General of PCA nor respondent No, 1 are empowered to exercise the powers of an Officer of Inland Revenue under Section 207 for conducting audit under Section 177 of the I.T.O.
Rendering the entire act of audit in the matter of Income Tax by the respondent No, 2 without powers/jurisdiction and as such coram non judice. Our opinion stood vindicated from the latest reported judgment [2014 PTD 1733 ] Waseem Ahmed and others v. FOP and another , where it has been held in clear terms that "unless the officer of DGI&I)-FBR are not appointed and an officer of Inland Revenue, powers under the different subsection of the Sales Tax Act, 1990 can not be delegated through any SRO with that the Hon'ble High Court of Sindh declared Notification No, 775(1)/201 1 ultra vires to the Sales Tax Act, 1990". Whereas, the respondent No, 1 is indeed appointed as Officer of Inland Revenue under Section 30DD of the S.T.A. and thereafter Board delegated powers through SRO. 42(1)/2010 dated 23.01.2010 under different Sections of the S.T.A. in column (4) of SRO, subject to exercise of those under the design ation of authorities given in colum n (3), which are (i) Chief Commissioner/Commissioner Inland Revenue (ii) Additional Commissioner of Inland Revenue (ii) Deputy Commissioner Inland Revenue and (iv) Assistant Commissioner Inland Revenue and not in the capacity or designation of (i) Director General/Director-PCA (ii) Additional Director-PCA (iii) Deputy Director-PCA and (iv)
Assistant Director-PCA. In the instant case the entire communication includin g the audit observations and contravention reports were prepared and served in the capacity of either Additional Director or Deputy Director of PCA , which are non existent in column No, (3) of SRO. 42(1)/2010 dated 23.01.2010, rendering the same without power/jurisdiction. Hence ab-initio void and coram non judice. Therefore, entire proceeding right from Audit, audit observations, contravention reports are of no legal effect. Any super structure butt thereon no matter how strong it may be have to crumble down 1 as held by Superior Judicial Fora in umpteenth reported judgment PLD 1971 SC 197 Chittaranjan Cotton Mills Ltd v. Staff Union, Raunaq Ali's PLD 1973 SC 236, SBLR 2002 Karachi 5 in M/s. Unitex Tower Factory v. The Collector of Customs (Appeals) ) and others , K-106/03 in M/s. Silver Corporation v.
The Additional Collector of Sales Tax (Adjudication), Karachi III, Major Syed Walayat Shah v. Muzaffar Khan and 2 others (PLD 1971 SC 184), Omer and Company v. Controller of Customs, (Valuation): (1992 ALD 449 (1) Karachi AAA Steel Mills Ltd. v. Collector of Sales Tax and Central Excise Collectorate of Sales Tax (2004 PTD 624), PLD 1976 Supreme Court 37 Ali Muhammad v. Hussain Buksh and others and PLD 2001 Supreme Court 514 Land Acquisition Collector , Noshehra and others v . Sarfraz Khan and others .
8. The Section 179 of the Act expresses that the powers of adjudication have to be determined by the authority adjudicating the case on the basis of "amount of duty and taxes involved excluding the conveyance. In the instant case the amount of duty and taxes involv ed are Rs. 8,141,152.00 (paid upfront duty and taxes of Rs. 2,800,930.00 + paid additional amount of duty and taxes upon passing of assessment order under Section 80 and Rule 438 Rs.3,749,521.00 + evaded/short paid amount of duty and taxes shown in show-cause notice Rs. 1590701.00. Case of such amount falls within the powers of Collector of Customs in terms of clause (i) of Subsection (1) of Section 179 of the Act . To the contrary , the respondent No. 3 issued show-cause notice and passed order in original by usurping the powers of Collector , which is not permitted under law. Nobody is allowed to usurp the powers of the defined Adjudicating Authority . Rendering the act of issuance of show-cause notice and passing of order-in-original in the instant case without power/jurisdiction, hence ab-initio, null and void and coram non judice. It is also settled principle that the exercise of jurisdiction by an authority is mandatory requirement and its non fulfillment would entail the entire proceeding to be coram non judice . Ref: PLD 1963 SC 663, PLD 1971 SC 184, PLD 1976 Supreme Court 514, 1983 SCMR 1232, 1984 CLC 1517 , PLD 1995 Kar. 587, PLD 1992 SC 486, 2001 SCMR 103, PU 2003 (sic) 1660, PLD 2004 Supreme Court 600, PLD 2005 Supreme Court 842, 2009 PTD (Trib.) 1996, 2009 PTD 1112, 2010 PTD (Trib.) 832, 2010 PTD 465, 2010 PTD (Trib.) 1636, 2011 PTD (Trib.) 2114, 2011 PTD (Trib.)
2557 and 2014 Supreme Court 514. (Emphasis supplied)
9. I have also noticed with great concern that the respondent No. 3 in the show-ca use notice have 3, 6, 7, 33 and 34 of the S.T.A. and Section 148 of the I.T.O. without realizing that Section 3 while indeed being a charging section cannot be invoked by anyone other than an Officer of Inland Revenue whereas Section 6 is a machinery section that lays down the procedure relating to collection of Sales Tax at the import stage by the customs authorities hence cannot be used to charge anyone including the appellant for an offence under the said section with the exception of official of Clearance Collectorate, upon whom charge under the said section can be invoked. Section 7 speaks about the determination of tax liability at the time of filing of sales tax return cum payment challan under Section 26 of S.T.A., this is also a machinery section. Section 33 contains penal clauses synonymous to Section 156(1) of the Act and Section 34 speaks about imposition of default surcharge, to be paid by the tax payer upon confirmation of the charges levelled in the show-cause notice issued by the officer of the Inland Revenue under the respective Section-of the S.T.A., again this is not a charging section; aforesaid sections are independent and cannot be used to invoke a charge. Since, these sections are irrelevant in the matter of customs and no show- cause notice can be issued by a custom officer under these section, render the issued show-cause notice and passed order-in-original palpably illegal and as such void and ab-initio as held in the following reported judgments: Asst. Collector v. Khyber Elec. Lam 2003 PTD 1275, D.G. Khan Cement v. Collector of Customs 2005 PTD 480, Caltex v. Collector 2003 PTD 1593, Union Playing Card Company v. Collecto r of Customs 2002 MLD 130, Atlas Tyres v. Addl. Collector 2002 MLD 180, State Cement v. Collector PTCL 2001 CL 558, Kashmir Sugar v. Collector 1992 SCMR 1898 , Rose Color v . Chairman, CBR and 2013 PTD 813 International v . Addl. Collection of Customs.
10. In order to further crystallize, the issue relating to recovery of short paid sales tax and income tax, I was indebted to peruse Section 30 of S.T.A. and Section 228 of the I.T.O. and have observed that the legislature appoints under the said Sections differen t organs of the FBR as Officer of Inland Revenue for exercising powers under the respective Sections of the Act/Ordinance, delegated through statutory notifications or under Section 207 of the I.T.O. In these Sections neither respondent No. I nor respondent No. 3 figures anywhere nor in charging section 11 of the S.T.A. or Section 162(1) of the I.T.O. Therefore, the respondent No. 3 under no circumstances was empowered to lay hands on the matter falling within the ambit of Sections 3, 6, 7A and 11 of the S.T.A. and Section 162(1) of the I.T.O. These sections least empowers the Officers of Customs including the respondent No. 3 to initiate adjudication/ recovery proceeding for the short collected/paid Sales Tax and Income Tax either due to collusion or connivance or inadvertent, error or misconstruction. For proceeding for these type of recovery a show- cause notice has to be issued under the Provision of Section 11 of the S.T.A. and Section 162(1) of the I.T.O., the authority to issue show-cause notice under these Sections are Officer of Inland Revenue and the Commissioner of Income Tax, in these sections respondent No. 3 least figures anywhere.
11. In order to lend clarity expression of Section 11 of the S.T.A. and Section 162 (1) of the I.T.O. are referred, which empowered the Officer of Inland Revenue and Commission of Income Tax to initiate adjudication / recovery proceeding for the short collected/paid, Sales Tax and Income Tax either due to collusion or connivance or inadvertent, error or misconstruction. Respondent No. 3 figures no where in these sections. He assumed the power not vested with him under the provision of Sections 11 and 162(1) of the S.T.A. and I.T.O. Therefore, I hold without any reservation that the Customs Collectorates does have powers to collect and enforce payment of Sales Tax and Income Tax at the time of clearance. The plea that the Customs is empowered to recover the short paid amount of sales tax and income tax at the import stage under Section 202 of the Act is also based on mistaken belief. The fact of matter is Customs Collectorate could recover the amount of Sales Tax and Income Tax only upon receipt of notice from the Officer of Inland Revenue and Commissioner of Income Tax in terms Section 48 of the S.T.A. and Section 140 of the I.T.O. for recovery of the adjudged amount of Sales Tax and Income Tax after due process of law. Therefore, it is my considered opinion that the Clearance Collectorates does have the authority to collect Sales Tax and Income Tax at import stage in the capacity of collecting agent and can recover escaped/short payment paid Custom Duty and Regulatory Duty levied on the imported goods under Sections 18, 18A and 18C of the Act under Section 202 ibid, after due process of law, but have no powers to adjudicat e the cases of short recovery of Sales Tax and Income Tax falling within the ambit of Section 11 of the S.T.A. and Section 162(1) of the I.T.O., my opinion stands fortified from the reported/unreported judgment of the superior Judicial Fora namely 2011 PTD (Trib.) 110, 2010 PTD (Trib.) 2086, SCRA No. 01/2010, 2004 PTD 801, C.P. No. D-216/2013, 2015 PTD 702, 2016 PTD (Trib.) 969, 2016 PTD (Trib.) 1008, 2016 PTD (Trib.) 2125, Appeal No. K-1635/2014, Appeal No. K- 1029/2016 Appeal No.K-1030/2016, Appeal No. K-1343/2015, 2016 PTD (T rib.) 2463 and 2017 PTD (T rib.) 481 .
12. I, therefore hold in the light of the law laid down in the referred in above deliberation and cases reported at, that the exercise of jurisdiction on this point by Respondent No. 3 is without lawful authority and jurisdiction. Hence, issuance of show-cause notice and passin g of order-in-original are held to be ab-initio void and as such coram non judice on this point also.
13. Upon passing of assessment order under Section 80 and Rule 438 of the Act/Rules and thereafter passing of clearance order under section 83 and Rule 442 ibid by the authority defined in section 2(a) of the Act and SRO 371(I)/2001 dated 15.06.2001, it cannot be disturbed by any authority for the purpose of preparing contravention report and adjudication proceeding. The only course left for the respondent No. 1 was to challenge the said order before the Collector of Customs (Appeals) under Section 193 of the Act in exercise of the powers delegated upon him through SRO 500(1)/2009 dated 13.06.2009. In the filed appeal the respondent No 1 is empowered to incorporate all the apprehension, misreading of the facts and contravention of the provision of the Act/Rules. The Collector of Customs, upon receipt of the appeal and going through the facts and grounds if thinks fit that the contention of the respondent No. 1 seems to be correct and the duty and taxes has not been either not levied or short paid on the basis of the goods found subsequent to clearance, is empowered to issue show-cause notice to the importer (appellant) as expressed in 3rd proviso to subsection (3) of Section 193A of the Act. Instead of the adhering the prescribed method available in the Act the respondent No. 1 reopened the assessment/ clearance order under section 195 of the Act unde r which no powers are vested with any Officers of the respondent No. 1.When the right of appeal has been accorded by the legislature in the provision of Section 193 of the Act, the provision of Section 195 is un-operational and cannot be exercised even by the authority defined therein and this has been validated by the Hon'ble High Court of Sindh in reported judgment 2014 PTD 1256 Messrs Paramount International (Pvt.) Ltd., Karachi v. Secretary Revenue Division that "department or an Officer of Customs, if aggrieved, by any decision or order passed by an officer of customs below the rank of additional collector could prefer an appeal before the Collector (Appeal)---1st order in original passed in the subject matter was an appealable order for both the parties, therefore option to reopen and order pass under the adjudication hierarchy was not available to the Collector . Even the Collector of Customs Adjudication could not oversee or exercise any right of re-opening of any order which has been passed by an officer lower in rank but acting as an adjudicating authority . Impugned order was set-aside and Constitution Petition was allowed." It is also settled proposition of law that in the presence of an appealable order, fresh order cannot be passed even through issuance of show-cause notice under section 180, while exercising powers under the provision of Section 179 ibid. The said act is piling upon yet another order on the existing appealable order not permitted under law as held by Hon'ble High Court of Sindh in reported judgment 2004 PTD 3020 Messrs Smith Kline French v. Pakistan that "once an order is passed, which attain finality the same cannot be subject to a show-cause notice again, considering that no appeal or revision is filed against the first order". By virtue of non filing of appeal as elaborat ed above. The transaction stood passed and closed and attain finality and cannot be disturbed. For reaching at the decision I have gained strength from the reported judgment 1989 MLD 4310 Messrs World Trade Corporation v. Central Board of Revenue , wherein their lordship of High Court held that "if the order has attained finality through limitation. A fortiori; the Central Board of Revenue could not open up an order that has attained finality , under the Sea Customs Act, 1878 and against which sou motu revision. Notwithstanding, the act of issuance of show-cause notice and passing of order-in-original in the instant case by the respondent No. 3 also falls under the ambit of "double jeopardy" not permitted under Article 13 of the Constitution of Islamic Republic of Pakistan. Rendering the order passed by respondents Nos. 3 and 4 for piling upon an existing appealable order are without lawful authority and jurisdiction and as such void and ab-initio and of no legal ef fect.
14. I have noted with concern that the respondent No. 1 implicated and the respondent No. 3 charged the appellants, for mis-declaration under the provision of Section 32 of the Act merely on the basis of assumption/presumption that the appellan ts transmitted GDs on the basis of erron eous PCT, in order to hoodwink the Customs and to evade the amount of duty and taxes. I am unable to comprehe nd with the line of arguments as in conduction of examination appellants have no part to play instead had to be carried out by the subordinate of respondent No. 2 with the assistance of Officials of Terminal Operator , independently and without any influence as per the expression of Section 198 and Rule 435 and the passing of assessment/cle arance order under sections 80 and 83 and Rules 438 and 442 of the Act/Rules rest with the sole and exclusive domain of the Customs Officer listed at Serial Nos. 30 and 33 of the SRO 371(1)/2002 dated 15.06.2002. The Officials conducting the examination who confirmed the declarations and who passed assessment/ clearance orders while accepting the declaration as true and correct. If it is presumed as stated in the show-cause notice that the alleged clearance of the goods imported by appellant were on the basis of erroneous PCT, that could had not been possible unless these officials were having hands in gloves with the appellants. Meaning thereby that they are standing on the same pedestal.
Ironically , no charges have been levelled under Section 32(2) against those Officials, as of appellant. This act of the respondents proves that the appellant had been met out with partial treatment, which is not permitted under Article 25 of the Constitution of Islamic Republic of Pakistan and the law laid down by the Superior Judicial Fora in reported judgment 2002 SCMR 312 and 2009 PTD 1507 the Hon'ble Superior Courts have observed that "there exists no power to 'target incidence of tax in such a way that similarly placed perso n be dealt not only this similarly , but discriminatingly". Whereas, in reported judgment 2005 SCMR 492 the Hon'ble Supreme Court held that "A facility allowed to some one and denied to other is discrimination". The Apex Court further held in reported judgment 2010 SCMR 431 that: "Doctrine of equality , as contained in Art. 25 of the Constitution, enshrine golden rules of Islam and states that every citizen, no matter how high so ever, must be accorded equal treatment with similarly situated persons--- State may classify persons and objects for the purpose of legislation and make laws applicable only to persons or objects within a class--- In fact all legislations involve some kind of classification whereby some people acquire rights or suffer disabilities whereas others do not--- What however , is prohibited under principle of reasonable classification, is legislation favouring some within a class and unduly burdening others--- Basic rule for exercise of such discretion and reasonable classification is that all persons placed in similar circumstances must be treated alike and reasonable classification must be based on reasonable grounds in given set of circumstances but the same in any case must not offend spirit of Art. 25 of the Constitution. "
15. Notwithstanding, for resolving the issue in hand, I have scrupulously gone through the contents of show-cause notice and the grounds taken by the appe llant and has observed that the allegations levelled by the respondent No. 3 in the show-cause notice are of general nature and for that reason in support of those no intangible incriminating evidence such as the posted examination reports were manipulated and so the assessment order or even the copies of images of the imported goods, which are vital in such type of case were annexed with the show-cause notice or even placed on the record of the Tribunal on the date of hearing. Neverth eless for further confirmation of the charges, the representative of the respondent No. 1 was asked that what is the basis for forming the said opinion, the reply was PCT Heading available in the First Schedule to the Act, wherein, polyester fabric falls under PCT heading 5407.5200 on which benefit of FTA in terms of SRO 659(1)/2007 dated 30.06.2007 is not admissible as against declared PCT heading 5407.4200, when confronted with the FTA certificates annexed as exhibits C to C2 at pages 14 to 16 of the memo of appeal, issued by the People Republic of China containing PCT heading 5407.4200 to the representative of the respondent No. 1, his reply was astonishing that they have to nothing to do with this, to allow/disallow the benefit of FTA rest with the Official of Clearance Collectorate, the action whatsoever to be taken by him/PCA is on the basis of the declaration sans examination report and assessment orders and opined further that FTA certificate are erroneous/invalid and ought not have to be considered by the official of Clearance Collectorate at the time of passing of assessment orders. The representative was further confronted that is it not the fact that the benefit of FTA is allowed after confirmation of the veracity of that, his reply was in affirmative. This Tribunal then inquired that if his submission is taken as correct for the sake of argument , that the.
FTA certificate were erroneous/invalid, whether any confirmation to the said fact was sought prior to framing of contravention report as ordered by the Ministry of Commerce in its Office Memorandum F.No. 1(1)/2014-AP-I dated 17.07.2014 that "it is not for Pakistan Customs, or any other Govt. Agency but Chinese certifying to assess the eligibility of a product for being granted the certificate of origin. If the relevant Chinese Authority has issued a certificate of origin to a product as per the agreed procedure, then that shipment is to be cleared under FTA Tariff concession . However , Customs Authority apprehend any fraudulent practices then the matter can be taken up with the Chinese authority for clarification as provided in the Rules 21 and 22 of Attachment "A" of the Rules of origin of Pak-China Free Trade Agreement." Whereas, as expressed in Rule 15 mino r discrepancies have to be overruled as those does not invalidate the FTA Certificate, verbatim of which read as "The discovery of minor discrepancies between the statement made in the Certificate of Origin of those made in documents submitted to the Customs Authorities of the importing party for the purpose of carrying out the formalities for importing the product shall not 1pso-Fecto in valid the Certificate of Origin, if it does infact correspond to the product submitted," the reply was in negative. Resultant, FTA certificates dated 07.12.2016, 06.01.2017 and 16.01.2017 are deems to be valid documents, issued under Pakistan China Free Trade Agreement notified vide SRO 1286(1)/2005 dated 24.12.2015 for determination of the description and applicable PCT heading of the goods imported by the appellant, column 12 of which states in categorical terms that "the undersigned hereby declared that the above detail and statement are correct and further confirmed that all the goods were produced in China and that they comply with the origin requirement specified for these goods in the China Pakistan Free Trade Area Preferential Tariff for the goods exported to Pakistan." Hence, no contrary inference could be drawn under law, unless proven otherwise. I therefore, hold in unequivocal terms that the case in question is of no evidenc e instead based on assertion, assumption, presumption and conjecture s, reference is placed to the judgments of Hon'ble High Court of Sindh reported at 1991 PTD 551 that "Any action which is based upon no evidence is not permitted by law" and 2006 PCr.LJ 1427 = 2006 PTD 2190 that "mere assertion of the prosecution is no evidence".
16. For the foregoing deliberation/observation and in the light of prescribed law laid down by the Superior Judicial Fora and in adherence of the ratio decidendi , the instant appeal is allowed and the Show-Cause Notice providing the basis thereof for impugned orders issued/passed by respondents Nos. 2 and 3 are hereby vacated/set-aside with no order as to costs.
17. Order passed and announced accordingly .