JAHANZAIB WAHLAH MEMBER JUDICIAL-III.----Through this order, I intend to dispose off Appeal bearing No. K-77/2018 filed against the Order-in-Appeal No.814/2017 dated 22.12.2017 passed by Collector of Customs (Appeals) by maintaining Order-in-Original No.659142 dated 24.03.2017 passed by Assistant Collector of Customs, (Adjudication), MCC (Export), PMBQ, Karachi.
2. Briefly facts of the case are that the appellant is an exporter of sports / textile goods for the export of fabric towels / sports goods for export to Ghana after getting the. Form "E" verified from the respective bank forwarded the document to the clearing agent Messrs Intikhab Clearing Agency for transmitting Goods Declaration (GD) for export under the provision of Section 130 of the Customs Act, 1969 (Act) and Rule 444 of Sub-Chapter IV of Chapter XXI of Customs Rules, 2001 Rules). The declaration was found correct and GD was numbered as KPPE-SB-1477970 dated 16.03.2017 and a message was received under Rule 447 to pass in the container in terminal. The direction was complied and the GD was selected for examination wherein the declaration was confirmed with the exception of 53 cartons containing 2800 pieces of football as of Nike Brand which is said to be not exportable under para. 4(1) and para 17 and Serial No.4 of Schedule 1 of the Export Policy Order. Resultantly, contravention report was framed and show-cause notice dated 22.03.2017 issued with the allegation of misdeclaration and the exportability .in terms of Section 3(c) of the Act, section 30) of the Import and Export Control Act, 1950 and aforesaid Export Policy Order. The learned Adjudicating Authority established the charges levelled in the show-cause notice and outrightly confiscated the offending goods 2800 pieces of soccer ball with imposition of penalty of Rs.10000/- on the importer.
3. Being aggrieved with aforementioned order the appellant filed an appeal before the learned Collector of Customs (Appeals), Karachi who passed the order as under: "I have examined the case record and heard the arguments of both the side and had given careful consideration to the fact of the case of the appellant has admitted the presence of impugned counterfeit good in the consignment. Their plea that these impugned goods were for local market but dispatched with the export consignment by warehouse Incharge due to inadvertence is not tenable. As this stand has been taken one the consignment was apprehended by the respondent department. Moreover, the invoice and packing list also show presence of impugned goods in the export consignment. Thus the plea of the appellant is clearly and after thought and acceptable the impugned order is upheld. The appeal devoid of merit is rejected."
4. The appellant again aggrieved filed the instant appeal before this Tribunal on the grounds enumerated therein. 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, resultant, lost the right of cross objections within the contemplation of subsection (3) of aforesaid section. Ergo, on the date of hearing made an averment that the order passed by respondents Nos.2 and 3 are correct in fact and law despite legal deficiencies, the football having marking of "Mitre" and "Nike" are not exportable, hence rightly confiscated for destruction and prayed for dismissal of appeal being of no substance and order passed by forum below be maintained.
5. Arguments heard and record perused. In order to determine the legality and validity of the show-cause notice and order-in-original, determination has to be made that who was empowered under law to issue / pass those.
The expression of Section 179 of the Act is unambiguous in regards to assumption of powers by the adjudicating authorities on the basis of involved amount of duty and taxes "amount of duty and taxes involved excluding the conveyance" in the cases of import, whereas in case of export twice to the monitory limit expressed in subsection (1) of Section 179, involving misdeclaration as contemplated in Section 32 of the Act. In the instant case no misdeclaration is apparent and so the revenue loss as evident from show-cause notice which is completely silent in this regard with the exception of exporting counterfeit goods, no offending value of those has been incorporated in the show-cause notice. Powers to adjudicate such like cases rest with the Principal Appraiser, who while exercising his powers vested through SRO 371(1)/2002 dated 15.06.2002 at the time of assessment order under clause (a) of Sub-clause (iii) of Section 131 and Rule 450(2) of the Act/Rules has to take into consideration the conducted examination and uploaded documents and the fact despite no revenue loss there exist an element of misdeclaration is apparent took the cognizance of the case himself and issue show-cause notice to the exporter and this stood validated from the fact that the show-cause notice has been issued B by the respondent No.2, instead of respondent No.1 . It is settled proposition of law that the powers of adjudication are specific and has to be used by the authority being empowered and by none else. By issuing show-cause notice, transgressed the powers of the respondent No.1. Powers of adjudication has to be exercised by the person to whom those are vested no superior authority is empowered to exercise the powers of his subordinate in the course of adjudication, as it is settled elementary principle of law that action of the authority is to be restricted to the specific sphere permitted by the statute. Rendering the show-cause notice as well as the structure built thereupon in the shape of order-in-original/appeal without power/jurisdiction, hence, null void and ab-initio and this have been held in countless reported judgments by the Superior Judicial Fora, refer to Lt. General (Retd) Shah Rafi Alam v. Lahore Race Club (2004 CLD 373), Khalid Qureshi v. UBL (2001 SCMR 103). East West Steamship v. Queen Land Insurance PLD 1963 SC 663, Sahibzada Sharfuddin v. Town Committee 1984 CLC 1517, Abida Rashid v. Secretary, Government of Sindh PLD 1995 Kar. 587, Assistant Director v. B.R. Herman Mohata Ltd. PLD 1992 SC 485, Central Insurance v. CBR 1995 SCMR 1232,S. T.
Appeal No. 176/2007 Messrs Muller and Phipps Pakistan (Pvt.) Ltd. v. The Collector of Sales Tax Enforcement LTU, Karachi and 2011 PTD (Trib.) 2114 Collector of Customs, Peshawar v. Collector of Customs (Appeals)
Peshawar and 2011 PTD (Trib.) 2557 Messrs Wawa Garments Industries (Pvt.) Ltd. v. The Additional Collector of Customs, Export, Karachi and Order-in-Custom Appeal No. H-510/2008 Dewan Farooque Motors Ltd. v.
Collector of Customs (Appeal) and 2014 PTD 199 Collector of Customs, Lahore v. South East Trading.
6. The provisions of Section 32(1) and (2) of the Act, could only be invoked by the respondents, where there exist any revenue loss. In the instant case no duty drawback is payable against the subject export. Therefore, there exist no revenue loss, when there is no revenue loss the provision of Section 32 cannot be invoked in isolation as held in reported judgment 2003 PTD 552 Messrs Al-Hamd Edible Oil Ltd. and others v. Collector of Customs and others wherein, their lordship held: "A bare reading of Section' clearly indicate that it relates to a situation where a person makes any statement or files any documents which is false in any material particular by reason of which any duty or charge is not levied or is short levied or refunded. In such event Customs authorities is empowered to issue to the person concerned a notice to show-cause that why he should not pay the loss of revenue suffered by the department and after giving him a hearing, beside any other action under law order payment of the same, if a case is made out. The entire provision revolves around the central point of loss of revenue suffered by the Customs Department on account of the conduct of any person. Mr. lqbal has not urged that the Department has suffered any loss on account of the conduct of the Appellant. The question of applicability of Section 32 in the present circumstances apparently does not arise." Whereas, the Hon'ble High Court of Sindh in another Landmark judgment reported at PLD 1996 Karachi 68 Messrs Kamran Industry v. The Collector of Customs (Export) and 4 others held in un-equivocal terms: "In the present case the accused has categorically taken the stand that any mis-declaration or under valuation was of no fiscal consequence. Such is also the admitted position which is not disputed where a person submit a declaration in the context of customs clearance and there can possibility be no fiscal consequence contingent upon his declaration and that contingency of no fiscal consequence is either undeniable or regarding which the accused has demonstrated his knowledge or reason to belief that he thought no tax was leviable, by no figment of imagination could it be said that the said person had any knowledge or reason to believe that his declaration / statement was false or untrue in any material particular. In this content the contention that no penalty under Section 32(1) is leviable for any alleged under-valuation and misdescription where there can be no motive to evade tax and where such declaration would carry no fiscal consequences is correct. Any other interpretation would also give rise to an absurd situation, where although no tax would be leviable on the main/basic assessment but there could be no possibility of imposition of penalty. Mere allegation without any concrete or positive evidence produced by the customs authority cannot warrant a finding of falasity to the declaration in material particular in context of section 32(1) of the Customs Act, 1969 and its comparable provisions. The Customs authorities were not justified to levy penalty under section 32(1) when admittedly there was no motive on the part of the accused to evade tax." These has been validated by the Hon'ble Supreme Court of Pakistan in reported judgment 2007 PTD 2215 Collector of Customs Exports and another v. R.A. Hosiery Works, by the Bench presided by their lordship (Late) Justice Rana Bhagwandas that "Provision of Section 32(1) of the Customs Act, 1969 would be attracted only when the mis-declaration or misstatement was made with a view to obtain illegal gain by evasion of payment of custom duties and other taxes or by causing loss to the government revenue. Misdeclaration alleged to have been made in the case, was neither for evasion of payment of Customs duty or other taxes /charges nor the same had caused any financial loss to the Government. Petition for leave to Appeal by the authority being without merit, was dismissed." Rendering the show-cause notice and subsequent orders passed by respondents Nos.2 and 3 without lawful authority and legal effect and as such ab-initio, null and void.
7. Taking of cognizance under the provision of section 15(a) of the Act and para. 17 and serial No.4 of Schedule 1 of the export Policy Order 2016-2018 by the respondent No.2 at his own is without lawful authority as despite creation of Directorate General of Intellectual Property Rights by insertion Section 3CC in the Act through Finance, Act, 2012, no rules were framed, empowering the authorities delegating powers in the capacity of officers of Directorate General of Intellectual Property, when the consignment in question was detained /adjudicated. Any action under the Intellectual Property Right has to be taken by the Authority defined in Trade Mark Ordinance, 2001 (TMO) and that also after receipt of complaint from the person/company, in whose name that product/item is registered TMO. In the absence of availability of any complaint no action is warranted under law: In the light of any complaint action has to be initiated by the authority defined therein and by none else. No suo motu powers under section 15(a) of the Act or para 17 and serial No.4 of Schedule 1 of the export Policy Order 2016-2018 are available to any authority, respondent No.2 is not an exception. No complaint whatsoever was filed by the right holder of brands namely "Mitre" and "Nike" was filed, nor available with the respondents.
No action even suo motu in the absence of those was warranted under law in the given circumstances, rendering the detention and subsequently seizure of the impugned said to be counterfeit goods by the respondent No.2 is without lawful authority/jurisdiction.
8. Notwithstanding to the adumbration made here-in-above, no occasion was available with for the respondent No.1 to frame contravention report and respondent No.2 to issue show-cause notice and pass order-in-original in the given circumstances of the case. At the most the appellant would had been directed to get the impugned goods dray out/removed from the goods, allowed to be exported as per practice invoke since last many years, validated from the Order-in-Original Nos.26 and 27 of 2004 dated 16.12.2004, wherein, despite finding the goods being hit by intellectual property right and by the respective provision of the Export Policy Order in vogue at that point of time "custom authorities are supposed to adhere to their own precedent in administering taxing Statute" as held by the Lahore High Court Lahore in reported judgment PLD 1977 Lahore 1392 Nazir Ahmed Tajdin v. Deputy Collector of Customs, Lahore and 2 others, while allowing the Petition No. 585 of 1977 on 23.07.1977.
9. It has been noted by me that respondent No.3 despite having predetermined decision in his mind, failed to adhere the provision of law of passing order within the stipulated period, failure to do so would had nullify the order passed by him and by respondent No.2, strict vigilance was warranted on his part, which he failed, evident from the fact that the appellant filed appeal with him on 07.04.2017, in terms of Section 193A(3) of the Act, order has to be passed within 120 days or within further extended period of 60 days in terms of its proviso by the Respondent No 3, himself, upon availability of exceptional circumstances and recording of those after issuance of notice to the exporter as held by Hon'ble Supreme Court of Pakistan in reported judgment 2009 SCMR 1881, Khalid Mahmood v. Collector of Customs. In the instant case, the appeal was filed on 07.04.2017 and the Order should have been passed on or before 14.07.2017 which he failed to pass, additionally no extension whatsoever was given as evident from the contents of order, which are silent. As regards to the extension given by the Board vide letter C.No.1(03)TO-II/2017 dated 14-11-2017, it is not valid by virtue of the fact that it has to be given prior to the lapse of currency of extended period of 60 days after lapse of initial period of 120 days i.e. on or before 14-9-2017. Extending period after lapse of 120 days is tantamount to flogging a dead horse to give a new lease of life, which is not possible, any medication has to be administrated prior to demise of issue not after that, when it has gone to the annuls of history. Hence, order passed by the respondent No.3 on 22-12- 2017, is barred by time by 69 days. Rendering it without power/jurisdiction, hence void, ab initio and not enforceable under law as held in the reported judgments 2017 PTD 1756 and 2017 SCMR 1427 Collector of Customs Sales Tax Gujranwala and others v. Super Asia Mohammad Din & Sons and others, 2008 PTD 60 Messrs Super Asia Muhammad Din Sons (Pvt.) Ltd. v. Collector of Sales Tax,Gujranwala and 2008 PTD 578 Messrs Hanif Strawboard Factory v. Additional Collector (Adjudication) Customs, Sales Tax and Central Excise Gujranwala, 2009 PTD 762 Messrs Tanveer Weaving Mills v. Deputy Collector Sales Tax and 4 others and 2009 PTD (Trib.) 1263, Messrs Syed Bhai Lighting Limited, Lahore v. Collector of Sales Tax and Federal Excise, Lahore and 2 others and 2009 PTD 1978 Leo Enterprises v. President of Pakistan and others, 2010 PTD (Trib.)
1010 Innovative Impex v. Collector of Customs, Sales Tax and Federal Excise (Appeal), 2011 PTD (Trib.) 79 Fazal Ellahi v. Additional Collector of Customs, MCC of PaCCS, 2011 PTD (Trib.) 987 Unique Wire Industries v.
Additional Collector of Customs, MCC of PaCCS, 2011 PTD (Trib.) 1146 Kaka Traders v. Additional Collector of Post Clearance Audit and 2012 PTD (Trib.) 1650 Pak Electron Ltd. v. Collector of Customs, Lahore and others.
10. The order passed by respondent No.3 shows it is a mala fide order based on imported grounds, finding no place in the memo. of appeal of the appellant, validated from the incorporation made by him at pages 2 and 3 of the impugned Order and as such cannot be termed as a judicial order by any stretch of imagination. The fact of the matter is, it is a non-speaking order and does not conform to the mandated requirement of section 24-A of the General Clauses Act, 1897. He passed the impugned order on his personal pre-determined and absurd formed opinion contrary to law and that too is also not containing substantial reasons and did not show it was passed on objective consideration. Such type of orders are deemed to be always treated as illegal, void arbitrary and a result of misuse of authority vested in public functionary. No room was available for such illegal, void and arbitrarily order in any system of law. If any authority Court or Tribunal gave a finding of facts which was not based on material available on record was illegal arbitrary without discussing and considering the material available on record it became perverse and a perverse finding of fact which is violative of the established principle of appreciation of evidence on record was not sustainable in law. The principle that every judicial or quasi judicial finding should be based on reasons containing the justification for the finding in the order itself is an established principle of dispensation of justice. The Order-in-Appeal is in violation of basic principle of the goods governance and mandatory requirement of Section 24A of the General Clauses Act, is not only illegal and void but also not sustainable under law. The said position is also fortified by the judgments of Superior Courts reported as 2005 YLR 1019, 2007 PTD 2500, 2004 PTD 1973, 2005 YLR 1719, 2003 PTD 777, 2003 PTD (Trib.) 2369, 2002 MLD 357, 1983 CLC 2882, 2005 PTD 2519, 2005 PTD 1189, 2003 PTD 2369 and PLD 1995 SC (Pak) 272, PLD 1970 SC 158, PLD 1970 SC 173, 1984 SCMR 1014, 2012 PTD (Trib.) 619 and 2016 PTD 589.
11. What has been discussed hereinabove, particularly the interpretation of law, legal propositions and observations made thereon and to follow the ratio decidendi observed by the Superior Courts, I anul show- cause notice and set aside the orders passed by respondents Nos.2 and 3 being illegal, ab initio, null and void, appeal is allowed. The respondent No.1 is further ordered to issue delay detention certificate under the provision of section 14B(2) of the Act for submission with the terminal operator for waiver of accumulated terminal demurrage/storage charges.
12. Order passed and announced accordingly.