JEHANZAIB WAHLAH (MEMBER JUDIC IAL-III). Through this common order , I intend to dispose off 02 Appeals bearing Nos.K-950/2017 and K-951/201 7 directed against the Order-in-Original No.699053 dated 12-6-2017 passed by Additional Collector of Customs (Ajudication I, Customs House, Karachi. Since, the both appeals have common facts and questions of law , therefore, it is needless to discuss facts of each appeal separately .
2. Briefly , facts and grounds of Custom Appeal No. K-950/2017 are that the appellant imported a consignment of 1225 kgs of flexible pipe from China, upon receipt of import documents delivered those to his clearing agent Messrs Muneeb Traders, Karachi (appellant No. 2) for transmitting Goods Declaration (GD), MCC of PMBQ 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), which he did and as per pre-requisite deposited upfront duty and taxes of Rs.,633.528.00 on 11.05.2017, conseque nt to which GD was numbered as KPPI-H C-79191. The Assessing Officer (respondent No. 2) on receipt of GD on his workstation opted to get the goods examined first under the provision of Section 198 and Rule 435 of the Act/Rules, to proceed with after adducing his opinion, reasoning for conduction of examination , transmitted the GD to the Deputy Collector of Customs, Group-III MCC of PMBQ , who gave his assent and routed the GD to the Deputy Collector , examination , QICT , who mark ed the GD to the officials of his choice /selection, who conducted the desired physical verification of the imported goods and found the goods as per declared report so prepared was uploaded in the reservoir of the GD for the perusal of respondent No. 2, which read as "examined the goods in the light of GD retrieved through WeBOC System Description : - Flexible Pipe, Packed in assorted ctns Qty: 12310 Kgs....I/O not shown checked Weight 100% vide QICT Slip No. 5800744 dated 13.05.2017 found weight 13710 kgs group to check PCT value importability and all other aspects. Images are attached." The respondent No. 2 upon appearance of the same on his workstation completed the assessment while enhancing the declared value to US$. 1.40/kg in terms of Serial No. 1 of Valuation Ruling No. 1010/2017 dated 12.01.2017 issued by Director , Directorate General of Valuation under the provision of Section 25A of the Act and passed assessment order in the capacity of authority defined in Section 2(a) of the Act under the provision of Section 80 and Rule 438 of the Act/Rules in exercise of the powers vested upon him through SRO. 371(1)/2002 dated 15.06.2002 and thereafter transmitted view message dated 18.05.2017 for payment of additional amount of duty and taxes of Rs. 358,814.00, which appellant No. 1 paid on 18.05.2017 vide Cash No.A- KPPI-001872- 18.05.2017. Consequent to which the competent inbuilt authority of Custom Computerized System
(CCS) passed clearance order under Section 83 and Rule 442 ibid. and to the said effect view message dated 18.05.2017 was transmitted to appellants, wherein the GD of the appellant was send to the gate out staff for check out. On the strength of which the appella nt No. 2 obtained the delivery of the consignment from the Terminal. As soon as the transporter reached the exit gate, the Subordinates of the Deputy Collector of Customs, Customs Intelligence Unit, MCC of PMBQ (respondent No. 1) intercepted the container on the pretext that the goods have not been correctly determined/ assessed for levy of duty and taxes by respondent No. 2 and they desires to re- examine the goods and for that purpose they escort the container again to the terminal located in the vicinity of QICT . Since, the said act was completely unlawful, agitation was tendered by the appellants, but of no avail. The subordinates of respondent No. 1 thereafter carried out the re-examination and uploaded the same in the system and which read as "As per examination order , the examination is carried out by CIU Staff assessment alert (case of misdeclaration of description, PCT and value) documents not foun d inside the container , goods are examined on the basis of information retrieved from the system, documents scanned trader profile and destuffing of the cargo founds goods are as follows: Bathroom Accessories made of plastic, comprising of PVC drained Waste Flexible Pipe and Plastic Joints, Packed in Cartons Net Weight: 12310 Kgs approx I/O not shown Checked Weight vide QICT Weight Slip (attached found is : 13710 Kgs. Images are also attached for further information ....Group may checked all aspects including importab ility of the goods." Irrespective of the fact no mis-declaration in material particular was visible in the light of 1st examination report or the 2nd, the respondent No. 1 detained the container of the appellant and refused to release the same on the pretext that a contravention report is framed and same was forwarded to respondent No. 3 for issuance of show-cause notice and decision thereon. Who on the strength of the contravention report issued show-cause notice dated 02.06.2017 with the allegation that the appellant deliberately concealed and mis-declared the actual description, classification and value of the imported goods in order to get the assessment on suppressed value and tried to evade legitimate amount of duty and taxes to the tune of Rs.1505505.00, the said act of the appellant falls within the ambit of the provision of sections 32(1)(2)&79(1) of the Act, Section 6 of the Sales Tax Act, 1990 (STA) and Section 148 of the Income Tax Ordinance, 2001 ITO) punis hable under clauses (14) and (45) of Section 156(I) of the Act , cause 11(c)of Section 33 of the STA and Section 148 of the ITO to be read with SRO 499(1)/2009 dated 13.06.2009. The appellant replied to the show-cause notice vide letter dated 07.06.2017 throu gh which he controverted the allegation levelled in the show-cause notice well supported by Chapter Note of the Customs Tariff and Classification made by the World Customs Organization of the declared PCT and ascertain as per which the goods imported without any ambiguity falls within the declared description and PCT heading and are assessed @ US$.
1.40/kg. The Respondent No. 3 passed the impugned Order-in-Original dated 12.06.2017 through which he held the charges as levelled in the show-cause notice established and ordered confiscation of the goods subject to redemption of those on payment of 35% fine of Rs. 1380,501.00 , imposed penalty of Rs.200,000/- in addition to the worked out amount of duty and taxes as shown in the show-cause notice. Para 2 of the order is relevant, which is reproduced for easement/perusal.
"I have gone through the case record and considered written/verbal arguments put forth by the respondent. The departments case is that the responden t imported the under reference consignm ent by declaring the goods as "Flexible Pipe under declared HS Code 3917.3990 and sought clearance of goods under self-assessment system.
However , on physical examination by R&D Branch the goods were found bathroom accessories made of Plastic (flush tank seal covers, fitting drain waste pipe etc.). low ends brand assessable under HS Code 3922.9000 at customs value US$. 3/kg instead of declared HS Code 3917.3990, The respondent argued that the goods Declaration (GD) was filed as per invoice , packing list and Bill of lading prescribed for automated clearance goods.
The main heading HS Code 39.17 is for "Tubes, Pipes, Hoses and Fittings of plastic therefore, the goods were declared under HS Code 3917.3990 meant for others . Tubes , Pipes and Hoses. Further the goods being flexible pipes reinforced with other material with fittings , in either case, HS Code 3917.3990 or HS Code 3922.9000 attracts the same rates of duty and taxes . The arguments of the respondent are not acceptable as on examination of customs R&D Branch . the description of the goods were found "Bathroom accessories made of plastic comprising of PVC drain waste flexible pipes and plastic joints appropriately classifiable under PCT heading 3922.9000. It is evident that the respondent mis-declared the description , PCT heading and value to get the goods under suppressed assessable value to evade legitimate government revenue amounting to Rs.1,505,505/-. In view of the above, the charges levelled in the show-cause notice stand established. I, therefore, order confiscation of the offending goods under clause 14 of section 156(1), read with sections 32(1), (2) and 79(1) of the Customs Act, 1969. However an option under section 181 of the Customs Act, 1969 is given to the importer to redeem the confiscated goods on payment of Rs. 1,380,501/- (Rupees one million three hund red eight thousand five hundred and one only) as redemption fine @ 35% of the value of offending goods in terms, of SRO 499(1)/2009 dated 13.06.2009 in addition to payment of duty and taxes thereon. I also imposed a penalty of Rs. 200,000/- , (Rupees two hundred thousand only) on the importer and Rs. 50,000/- (Rupees fifty thousand only) on the clearing agent under Section 156(1) (14) of the Customs Act, 1969 for violation of above mentioned provision of law. To: (i)
Business Communication (importer) (ii) M/s. Muneeb Traders (clearing agent)"
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, resultant, lost the right of cross appeal within the contemplation of subsection (3) of aforesaid section. Ergo, comments has been submitted, which least qualify the definition of cross objection. Hence, to be taken as opinion by virtue of having no legal sanction, placed on record of the case after perusing these.
4. Rival parties heard and case record perused and so the relied upon judgments. Consequently framed the following issues for decision:
(i) Whether respondent No. 1 and his subordinates are empowered to detain the imported goods under the provision of section 186 of the Act?
(ii) Whether respondent No. 1 and his subordinates have the powers to intercept and detain the lawful legal cleared consignment by the subordinate of respondent No. 2 after completion of codal formalities i.e. passing of assessment/clearance order under the provision of sections 80 and 83 and Rules 438 and 442 of the Act/Rules in exercise of the powers vested upon them through SRO 371(1)/2002 dated 15.06.2002?
(iii) Whether respondent No. 1 and his subordinates have been appointed as an officer of Directorate General of Post Clearance Audit (DGPCA) by the legislature under Section 3DD of the Act and are empowered to conduct audit the record and books of account maintained under Section 211 and Chapter XI of Act/Rules under the provision of Section 26(2) after serving a notice /summon under Section 26A of the Act post clearance of the imported goods as contemplated in SRO 500(1)/2009 dated 13.06.2009?
(iv) Whether Sections 6,33 of STA and section 148 of the ITO are penal clauses to be invoked for the contravention of the charging /applicable sections of the STA/ITO and as to whether those were correctly invoked by the respondent No. 3 in the show-cause notice?
(v). Whether respondent No. has been appointed as officer of Inland Revenue under Section 30 of the STA or any section of ITO and as to whether she is empowered to issue show-cause notice and pass order-in-original in the matter of sales/income tax?
(vi) Whether respondent No. 1/his subordinates and respondent No.3 are empowered to reopen a valid assessment/clearance order passed by the authority defined in Section 2(a) under the provision of Sections 80 and 83 and Rules 438 and 442 of the Acts/Rules under the provision of Section 195 ibid, while ignoring the provision of Section 193, wherein, right of appeal have been extended to them by the legislatur e and as to whether respondent No. 3 is empowered to pile upon anothe r order under the provision of Section 179 of the Act in the presence of existing infield assessment/clearance orders passed under the aforesaid provision of the Act by the authority defined in section 2(a) ibid?
(vii) Whether classification of the goods imported in the light of conducted examination report in consonance with the Examination Manual, 1996 in compliance of the direction issued by the Board in para 5 .of CGO 12/2002 dated 15.06.2002 rest on the appellant in the presence of availability of provision of section 80 and Rule 438 of the Act/Rules?
(viii) Whether any contravention of Section 79(1) of the Act has been committed by the appellant?
(ix) Whether provision of Section 32 of the Act can be invoked on imported goods when duty and taxes leviable under declared and ascertained PCT heading are one and the same in negation of the direction issued by the Board in para B (ii) of para 101 of CGO 12/2002 dated 15.06.2002?
(x) Whether charge of mis-declaration of value under the provision of Section 32 of the Act can be invoked on the strength of the value determined by the Director , Directorate General of Valuation under the provision of Section 25A of the Act and could be treated as direct evidence as enunciated in paras 78 and 101 of CGO 12/2002 dated 15.06.2002 and clause (d) of SRO 499(1)/2009 dated 13.06.2009?
(xi) Whether flexible pipes imported by the appellant could be termed as sanitary ware as per the contemplation of PCT heading 3922.9000 and Chapter note of WCO?
(xii) Whether appellant No. 2 acted contrary to defined duties in the respective provisions of the Act and Chapter VIII of the Rules?
5. That as regard to Issue No. (i). The power/ jurisdiction of respondent No.1 and his subordinates of putting an hold on the GD/ detention on the consignment under the provision of Section 186 needs to be determined, expression of which read as follows: 186: Detention of Goods pending payment of fine or penalty ;-(1) when any goods or fine or penalty has been imposed, or while imposition of any fine or penalty is under consideration, or pending any inquiry or investigation, in respect of any goods such goods shall not be removed by the owner until such fine or penalty has been paid or such inquiry and investigation has been completed.
(2) when any fine or penalty has been imposed in respect of any goods the appropriate officer may detain any goods belonging to the same owner pending of such fine or penalty .
Upon conscientious analysis of Section 186, it is observed that the said section comes into play during the course of imports, meaning thereby if any case has been adjudicated by the competent authority against an importer and through which he held the charges established as levelled in the show-cause notice and imposed fine and penalty , and the importer has not paid that or any inquiry or investigation in respect of any goods is under way and imposition of penalty is under consideratio n. The appropriate officer is empowered to detain the forthcoming goods of the same owner/importer till the time fine and penalty is not paid. The case of appellant is that against him no order is infield, through which fine/penalty has been adjudged against him and he has not paid that or assailed before the judicial forum, nor any inquiry or investigation in respect of any of his imported goods is under way for imposition of penalty . Resultant, his lawful cleared goods cannot be detained under any pretext by any officer of customs, as regard to the officials of respondent No. 1, they can detained the goods which are either smuggled or of the person involved in smuggling falling within the ambit of Section 2(s) of the Act sans imported goods, power to detain those under the provision of Section 186 of the Act is only available to the official of Clearance Collectorate upon availability of either of the 02 conditions available in subsection (1) of Section 186 of the Act, resultant, detention of the goods of an importer is not permitted even by the officials of the Clearance Collectorate in the absence of availability of any of the 02 conditions. The respondent No. 1 and his subordinates in any way even through stretch of imagination or inapt interpretation of the provision of the aforesaid provision of the Act are not empowered to put an hold on GD/detain the consignment of any importer , appellant is not an exception, due to the fact they are not empowered either to pass assessment/clearance order under the provision of Sections 80, 83 and Rules 438 and 442 against the imported goods, or pass order under the provision of Section 179 for imposing fine/penalty or even recover the adjudge d amount under the provision of Section 202 of the Act. Resultant, they acted without lawful authority/jurisdiction in detaining the appellant goods on the Assumption/formed opinion of mis- declaration of value, rendering the detenti on as ab-initio, null and void and coram non judice as held by the Hon'ble High Court of Sindh in its judgments reported at 2014 PTD 582 Amir Siddiqui v. Federation of Pakistan and 3 others that "authorities could detained such goods in respect of which inquiry or investigation was pending and not the goods which had been or were been imported by a person. The subsequent imported goods belonging to a same owner can only be detained once a fine or penalty has been imposed in respect of any other goods and the same remained un-paid. By no stretch of imagination all subsequent import can be detained or withheld clearance on the premise that some inquiry or investigation is pending in respect of some other goods. In our opinion no such action is permitted under this provision. The respondent are only authorized to take action for issuance of detention notice in terms of section 202 of the Act, once the amount alleged to have been evaded has been finally adjudicated and decided against the person. The procedure and mechanism provided Section 202 of the Custom Act, 1969 is entirely independent of any action taken in terms of Section 186 of the Act. It is not the case of respondent that any adjudication has been done either in respect of the good s allegedly cleared against fake GD's or even the goods covered by the instant petition and thereafter detention notices have been issued. With this the Hon'ble High Court of Sindh declared the detention of the consignment without lawful authority by holding that provision of Section 186 of the Customs Act, 1969 did not empowers the authority to do so." and 2015 PTD 560 Messrs O.S. Corporation v. FOP and others, "where no fine or penalty has been imposed or even under consideration the provision of Section 186 are not relevant---the authorities acting on a hunch have detained goods as the exit gate, even though taxes and duties have been paid and the goods have been released, detaining goods at the exit gate after having releases them is totally contrary to the provision of the Customs Act, 1969". Hence, in categorical terms I hold that detention of appellant goods by the respondent No. 1 and his subordinates is not only without lawful authority even jurisdiction by virtue of being derogation Section 2(s) and Section 186 of the Act. The issue No. (i) is answered in negative.
6. That as regard to issue No. (ii), the respondent No. 1 and his subordinates are indeed appointed as "Officer of Customs" under Section 3 of the Act and they derives power for functioning vide S.R.O. 371(1)/2002 dated 15.06.2002 for thwarting the act of smuggling as defined in Section 2(s). Their jurisdiction in principle is restricted to the territory falling within the ambit of Sections 9 and 10 of the Act. The goods of the appellant were not brought into Pakistan from any other route, instead from the defined port after completion of all codal formalities i.e. passing of assessment/clearance orders under sections 80 and 83 and Rules 438 and 442 of the Act/Rules for levy/realization of the applicable duty and taxes by respondent No. 2 in exercise of the powers vested upon him through SRO 371(1)/2002 dated 15.06.2002. Resultant, the consignment in question stood ousted from the definition of the smuggled goods and cannot be detained under the provision of Section 186 of the Act, the plea of the representative of the respondent No. 1 that they also act as watch dog of the Collectorate, they are empowered to detain, seize any consignment cleared from the defined port by any official of the Collectorate, in case of mis- declaration of description, quantity , quality , weight, PCT, erroneous/non application of valuation ruling and claiming/allow of the exemption under the respective infield SROs. The said formed opinion/assertion of the respondent No. 1 and his subordinates is based on mistaken belief as any action by them has to be initiated only for the act of smuggling, which can be invoked on any importer/appellant even in case of evasion/short payment of duty and taxes on the cleared goods as evident from the definition of the word smuggle available in Section 2(s) of the Act reading as "means to bring into or take out of Pakistan, in breach of any prohibition or restriction for the time being in forced en-route pilferage of transit goods or evading payment of customs duties and taxes leviable thereon. ". Therefore, upon putting a hold on GD /detaining the consignment provision of Section 2(s) is mandatory to be invoked in the contravention report by the respondent No. 1 and his subordinates for availing powers of seizure under the provision of Section 168(1) of the Act, vested upon. Upon perusal of show- cause notice available at pages 29-30 as Exhibit M, I have observed that the provision of Section 2(s) have not been invoked by the respondent No. 1 and his subordinates on the appellant, resultant, they were/are even not empowered to seize the consignment notionally under the provision of section 168(1) of the Act. Non invoking of Section 2(s) on the appellant is fatal and renders the detention, preparation of contravention report and the subsequent proceedings undertaken by respondent No. 3 as of no legal effects /jurisdiction and as such ab-initio, null/void and coram non judice as held by the superior judicial fora in their judgments reported at 2002 PTD 2457 , PLD 1971 Supreme Court 61, PLD 1973 Supreme Court 236, PLD 1964 SC 536, 2001 SCMR 838 and 2003 SCMR 1505 , In PLD 1996 Karachi 68, 2006 PTD 978 and PLD 1971 Supreme Court 184. The Issue No. (ii) Is answered in negative.
7. That as regards to Issue No. (iii). The legislature has inserted Section 3DD in the Act, through which DGPCA has been created and its officials had been delegated powers through SRO. 500(I)/2009 dated 13.06.2009 for conducting audit under Section 26(2), of the record /books of an importer maintained under Section 211 and Chapter XI of Act/Rules after serving notice/summon under Section 26A of the Act, wherein, they check all the aspects corresponding to the declaration made under section 79(1) based on defined documents in Section 2(kka) and assessment order passed by the competent authority under section 80 of the Act. Thereafter , upon finding discrepancy or any ambiguity in any context i.e. declaration or the contravention of the law, prepares audit observation and serves that on the importer for clarification, if the reply is not convincing as per their formed opinion, frames contravention report and forward that to the Collector of Customs of the respective Clearance Collectorate, which onward forwards it to the respective Collectorate of Customs, Adjudication for issuance of show-cause notice under section 180 of the Act and passing of order-in-original as per the expression of Section 179 ibid. The respondent No. 1 and his subordinates assumed the powers of officials of DGPCA and conducted the Audit Post Clearance of the GD of the appellant under Section 26(2), in the absence of availability of powers. The respondent No. 1 and his subordinates are not permitted under law to transgress the sovereign jurisdiction/powers of DGPCA and his subordinates under any circumstances as this will render the formation of DGPCA by the legislature under Section 3DD of the Act and the powers delegated under SRO.500(I)/2009 dated 13.06.2009 as redundant. The Tribunal has observed with great concern that the respondent No. 1 and his subordinates are running parallel department of the DGPCA which is in derogation of Section 3DD ibid, not warranted under law being instrumental in creating a situation of anarchy within the different organs of FBR, who will left no stone unturned for exceeding their jurisdiction while encroaching the powers/jurisdiction of the other sovereign organ of the FBR. These type of acts cannot be allowed to be perpetuated under any circumstances instead have to thwart from the very beginning for sustaining the integrity and independence of the different sovereign organs of FM.
Therefore, conduction of audit post clear ance under Section 26(2) by the subordinate of respondent No. 1 of the GD of the appellant is without lawful authority as such without any power/ jurisdictio n, hence, void and ab-initio and coram non judice as held in the relied upon judgments on the said point of law by the appellant. The issue No. (iii) is answered in negative.
8. That as regard to issue No. (iv). That respondent No. 3 invoked certain provision of STA and ITO without going through their expression, and in negatio n of the ratio settled by the Supreme Court of Pakistan in reported judgment 2010 SCMR 1425 Section Officer Government of Punjab Finance Department and others v.
Ghulam Shabbir that the Principle of Administration of Justice and Interpretation of Statute is that "the person who is performing the role of a judge, no matter even in quasi-judicial proceeding must wear all laws of the country on the sleeves of his robes and failure to do so by any reason is not an excuse". Sections 6, 33 STA and 148 of the ITO, Section 6 of STA contains machinery provision and defines mode and manners of collection of Sales Tax as custom duty levied at import stage by the customs authority , resultan t it is not a charging and section 33 contains penal clauses synonymous to Section 156(1) of the Act, Section 148 of the ITO is also a section containing machinery provision akin to Section 6 of the STA , empowering customs authorities to collect levied F income tax alike customs duty on the imported goods. "Provision which provides a mechanism/mode of collection are not to be construed as charging provisions even through inapt interpretation as it could neither abridge nor expand the scope of a charging section in an Act/Ordinance". Reference is made to the decision of Hon'ble Supreme Court of Pakistan in 2019 SCMR 282 Pakistan Television Corporation, Ltd. v. Commissioner Inland Revenue (Legal), LTU, Islamabad and others . Resultant, the aforesaid deliberated sections are independent and cannot be used to invoke a charge. Since, these sections are irrelevant/erroneou s in the matter of customs, 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. Lamps 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. Collector 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 (sic) and 2013 PTD 813 Sarwar International v . Additional Collector of Customs . The Issue No (iv) is answered in negative.
9. That as regard to issue No. (v). In the light of observation made in issue supra Respondent No. 3 in the show- cause notice have invoked certain Sections of STA and Section 148 of the ITO as contended by the Consultant/ Advocate of the Appellant that Respondent No. 3 even has no mandate to issue show-cause notice in the matter of Sales Tax/Income Tax. Whereas, respondents are of the view that incorporation of the word "tax" in sections 32(2) and (3) and 179 of the Act is sufficient for assuming powers under the charging Sections of Section 11 of the STA and 162(1) of ITO. Upon perusal of Section 32(2) and (3) of the Act, I have observed that although the word "tax" is available, this does not empowers the Respondent No. 3 to assume powers under the provision of Section 11(2) and (3) of the STA and 162(1) of the ITO unless Legislature appoint him as "Officer of Inland Revenue/Commissioner of Income Tax", who has powers under these Sections to take cognizance in the matter relating to Sales Tax and Income Tax. It is to be noted that the word "tax" inserted in sections 179 and 32 of the Act is for only assuming of powers on the basis of involved duty and taxes by the appropriate adjudicating authority defined in section 179(1) and in G section 32 of the Act, for empowering the Officer of Customs to charge the importer for mis-declaration under the said provision on the basis of amount of duty and taxes, punishable under the respective provision of section 156(1 ) of the Act. Therefore, despite of insertion of the word taxes in both the Sections adjudicating authority including the Respondent no. 3 have to issue show-cause notice within the respective applicable provision of the Act i.e. 32 only and not under any charging or Section 11 of the STA and section 162(I) of the ITO which are otherwise not invoked in the show-cause notice and no charge against the Appellant has been levelled under any provision of the STA and in ITO, rather Sections 6, 33, of STA and 148 of the ITO have been inserted as penal clauses which are erroneous /irrelevant. Even otherwise, the Respondent No. 3 has also relied upon clauses (14) and (14A) of Section 156(1) of the Act, applicable in the case of mis-declaration falling within the ambit of Section 32 of the Act.
For further clarity of the issue I have scrupulously gone through the provision of Section 30 of the STA and Section 228 of the ITO and observed that Respondent No. 3 has not been appointed as an Officer of Inland Revenue under these Sections. Resultant, he is not empowered to exercise the powers under Section 11 of the STA and Section 162(1) of the ITO, which empowers Officer of Inland Revenue /Commissioner of Income Tax to initiate adjudication proceeding for recovery of short collecte d/paid Sales Tax/Income Tax either due to collusion or connivance or inadvertent, error or misconstruction. Hence, Respondent No. 3 is not empowered to lay hands on any matter falling under the ambit of Section 11 of the STA and Section 162(1) of the ITO. Assuming powers on the basis of mistaken belief and warrant of law is palpably illegal beside fatal to the health of the case, as these sections least empowers the Officers of Customs including 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 with these type of recoveries a show-cause notice has to be issued under the Provision of, Section 11 of the STA and Section 162(1) of the ITO, by the authority expressed therein i.e. Officer of Inland Revenue/Commissioner , of Income Tax under subsections (3) and (4) of Section 11 of the STA and Section 162(1) of the ITO. In these sections neither Officer of Customs and Respondent No. 3 figures anywhere. He assumed the power not vested with him under the provision of sections 11 and 162(1) of the STA and ITO.
Therefore, I am of the considered opinion that the Customs Collectorates does have powers to collect, Sales Tax and Income Tax as duty at import stage, conversantly , to the plea that 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 Customs Collectorate could recover the amount of Sales Tax and Income Tax upon receipt of notice from the Officer of Inland Revenue and Commissioner of Income. Tax in terms Section 48 of the STA and Section 140 of the ITO for recovery of the adjudged amount of Sales Tax and Incom e Tax after due process of law.
Hence, 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 Section 18 of the Act under Section 202 ibid., after due process of law, but have no powers to adjudicate the cases of short recovery of Sales Tax and Income Tax under sections 11 and 162(1) ibid. and this stood validated from 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 (Trib.) 2463 and 2017 PTD (Trib.)
481.
10. The opinion formed by me also have the validation of the judgments reported at 1994 CLC 1612, 1990 PTD 29, 2005 PTD 23 and 2007 PTD 250 titled as Collector of Sales Tax and Federal Excise v. Messrs Qasim International Container Terminal Pakistan Ltd., wherein it has been held that "There is a clear distinction between the charging provision of Statute and the machinery part thereof. It is axiomatic that mode of manner of recovery does not alter, the nature of tax nor a tax can be introduced or imported by implication." In 2008 PTD 1973 Xen Shahpur Division v. Collector of Sales Tax (Appeal), Collectorate of Customs, Federal Excise and Sales Tax, Faisalabad, for clarity of the Rule of Interpretation of Statute, golden principle was outlined in so many words reading as "That fiscal law is to be applied with full authority and its natural meaning--one has to look merely at what is clearly said and there is no room for any intendment--neither there is equity about a tax nor presumptions as to tax - nothing is to be read in, nothing is to be implied - one can only look fairly at the language used" The Hon'ble Supreme Court of Pakistan in reported judgment 2006 SCMR 129 titled as DGI&I and others v. Al-Fait Industries (Pvt.) Ltd. and others held that: "If the law have prescribed method for doing a thing in a particular manner such provision of law is to be followed in letter and spirit and achieving or retaining the objective of performing or doing of a thing in a manner other than provided by law would not be permitted--- each and every words appearing in a Section is to be given effect and no other word is to be rendered as redunda nt or surplus -- when the legislature required the doing of a thing in a particular manner then it is to be done in that manner and all other manner or modes of doing or performing that things are barred -- if the doing of a thing is made lawful in a particular manner the doing of that thing in conflict with the manner prescribed will be unlawful as per maxim "Expression facit cessare taciturn "
I, therefore hold in the light of the law laid down in the referred in above 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 passing of Order-in-Original are ab-initio void and as such coram non judice on this point also.
The issue No. (vii) answered in negative.
11. That as regards to issue No. (vi), upon passing of assessment order dated 17.05.2017 under section 80 and Rule 438 of the Act/Rules, by the authority defined in section 2(a) of the Act and Serial No. 30 of SRO. 371W/2001 dated 15.06.2001, it cannot be disturbed by any authority for preparing contravention report overlapping the existing assessment order for initiation of adjudication proceeding, on the basis of which Respondent No. 3 issued show-cause notice and passed order-in-original. The only course available under law for Respondent No. 1 was to challenge the assessment order dated 17.05.2017 before the Collector of Customs Appeal under section 193 of the Act. In the filed appeal, Respondent No. 1 is empowered to incorporate all the apprehension, misreading of the facts and contravention of the provision of the Act/Rules. Upon receipt of the appeal and going through the facts and grounds the Collector of Customs Appeal, if thinks fit that the contention of the Respondent No. 1 seems to be correct and the duty and taxes have 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) under the provision of Section 32 as expressed in 3rd proviso to section 193A(3) of the Act. Instead of adherence of the prescribed method available in the Act, the Respondent No. 1 reopened the assessment/clearance order under Section 195 of the Act under which no powers are vested with Respondents 1 and 3. 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 J and cannot be exercised even by the authority defined therein and this has been valida ted 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 addit ional 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" The CPLA No.105-K of 2014 filed by Collector of Customs and others against the order of the High Court has been dismissed by the Hon'ble Supreme Court of Pakistan while refusing leave to appeal. It is also settled proposition of law that in the presence of an appealable order , fresh order cannot be passed even in the shape of reassessment order or through issuance of show-cause notice under section 180, while exercising powers under the provision of Section 179 ibid. These acts are piling upon multiple orders 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 against the assessment order dated 17.05.2017 as elaborated above by Respondent No. 1 on or before 16.06.2017. The transaction stood passed and closed and attained finality and cannot be disturbed. For reaching at the said conclusion 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 Reve nue could not open up an order that has attained finality , under the Sea Customs Act, 1878 and against which sou moto revision. Notwithstanding, the act of issuance of show-cause notice and passing of order-in-original by 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 orders passed by the forum below i.e. respondents Nos. 3 and 4 for piling upon an existing appealable order are without lawful autho rity and jurisdiction and as such void and ab-initio and of no legal effect.
The issue No. (vi) is answered in negative.
12. That as regard to issue No. (vii). The determination of actual description, quantity , quality and PCT heading after examination of the goods under Sections 198 and 435 of the Act/Rules solely rest upon the respondent No. 1 and his subordinates by virtue of availability of inbuilt powers to them under the provision of Section 80 and Rule 438 of the Act/Rules , which read as "Section 80- Checking of goods declara tion by the Customs ---- (1) on the receipt of goods declaration under section 79, an officer of customs shall satisfy himself regarding the correctness of the particulars of imports, including declaration assessment, and in case of the customs computerized system payment of duty, taxes and other charges thereon. " and "Rule 438-- Assessment by Customs Authorities : Where any declaration has been filed under Rule 433 or additional documents have been submitted under Rule 437 the Customs shall satisfied itself as to their correctness including its value, classification claim of exemption, payment of duty and taxes and may re-assess the goods during or after clearance". The instant case is simp ly of passing of assessment order under section 80 and Rule 438 for levy of duty and taxes by the respondent No. 2, which were exercised by him or alike officials invariably on daily basis and they pass assessment order of the consignments of the importer by changing PCT heading, without any levelling charge of mis-declaration or framing contravention for the said effect, if they starts framing contravention reports, none of the consignment will be cleared and only exercise undertaken by them would had been framing contravention report for the purpose of adjudication, consequent result of which would had been the terminal/port shall be choked to capacity . The fact of matter is the charge of mis-declaration of PCT is levelled on the importer on the basis of pick and choose criteria completely in negation of the provision of Section 80 and Rule 438 of the Act/Rules and well settled law that that no charge of misdeclaration can be invoked on the basis of either transmitting or mentioning erroneous PCT in the GD as held by Judicial Fora in countless reported judgments since, long, for reference 2002 MLD 180 State Cement Corporation v. GOP , wherein, Hon'ble Late Justice Sabihudd in Ahmed held in cleared terms that while observing that "We are rather amazed at the line of reasoning put forward to the effect that while an assessee is required to interpret the law and relevant notification correctly and could be held guilty of a penal offence for not doing so in terms of Section 32(1) of the Customs Act, no responsibi lity of any kind would devolve on the customs officials." We may add that in case of short levy or evas ion became possible due to collusion of some customs officials the mere fact that no such customs official involve and no notice was served in terms of Section 32 of the Customs. Act, indicate that the entire exercise was mala fide" and 2014 PTD 1615 Sadaat Khan v. DG Intelligence and Investigation FBR, wherein the Hon'ble High Court held that that an interpretation of a notification as well as the classification of the goods does not fall within the definition of mis-declaration. " Rendering the charges of mis-declaration within the meaning of Section 32 as of no substance and as such void and ab-initio. The Issue No. (vii) is answered in negative.
13. That as regard to issue No. (viii) . Leveling allegation of contravention of Section 79(1) of the Act is erroneous by virtue of the fact that aforesaid section is not a charging section instead machinery outlining the procedure of transmitting GD with the Clearance Collectorate under the regime of CCS, no charge under the said Section could be invoked in the show-cause notice even in general not particularly when the goods were selected for examination under the provision of Section 198 and Rule 435 and the goods were released after passing valid assessment/clearance order under the provision of Sections 80 and 83 and Rules 438 and 442 of the Act/Rules by the respondent No.2 in exercise of the vested power delegated upon him through SRO 371(1)/2002 dated 15.06.2002 for levy of duty and taxes with the application of value determined by Director , Directorate General of Valuation under the provision of Section 25A of the Act, circulated vide No. 1010/2017 dated 12.01.2017. Since, the goods of the appellant were not either auto cleared by the CCS module, instead after completion of all codal formalities warranted for clearance of the goods/consignment i.e. conduction of examination under Section 198 and Rule 435 and passing of assessment/clearance order under Sections 80 and 83 and Rules 438 and 442 of the Act by the respondent No. 2, his consignment cannot be construed to any stretch of imagination/interpretation cleared on self assessment basis under the provision of Section 79(1) of the Act. Hence, no contravention of the said section despite machinery has been made by the appellant, invoking the contravention of section 79(1) by the respondent No. 3 in the show-cause notice is erroneous/out of place. The Issue No. (viii) is answered in negative.
14. That as regard to issue No. (ix).The Board' order the field formation in sub-para B(ii) of para 101 of CGO 12/2002 dated 15.06.2002 that no case of misdeclaration be initiated against an importer/appellant in the presence of the availability of the following conditions in the GD/ consignment:
(i) Where an importer makes a correct declaration on bill of entry or opts for 1st appraisement for determination of correct description, PCT heading of quantity of goods.
(ii) When a consignment is found to contain goods for description other than the one declared falling under separate PCT heading but chargeable to same rate of duty .
(iii) Where the description of goods is as per declaration but incorrect PCT heading has been mentioned in the bill of entry no mis-declaration case under section 32 of the Customs Act, 1969, be made out provided there is no change in the rate of customs duty as a result of ascertained PCT heading.
In the instant case appellant declared his goods falls under PCT heading 3917.3990, whereas, respondents are of the view that those falls under PCT heading 3922.9000, rate of duty and taxes on both PCTs are one and the same i.e. 20% custom duty, 17% sales tax, 3% additional sales tax, 6% income tax and 1% additional custom duty.
Hence, by all mean his case squarely falls within the ambit of clause (ii) of para 101(B) of CGO12/202 dated 15.06.2002, initiation of case of mis-declaration against the appellant in such like situation was not warranted under law. Conversely , the representative of the respondents is of the view that upon roll on of CCS and consignment assessed/cleared under the said regime the said para of the CGO is not applica ble as it was the clarification of SRO 374(I)/2002 dated 15.06.2002, which stood cancelled and was issued when there was no clearance of consignment/goods through self assessment under CCS. This assertion is misconceived beside without foundation by virtue of the fact that SRO No.499(I)/2009 dated 13.06.2009 is continuation of proceeding SROs right from SRO. 374(1)/2002, wherein pitch of redemption fine was notified by the Board. Direction given in sub-para B (ii) of para 101 was incorporated by the Board in CGO 12/2002 dated 15.06.2002 for facilitation/minimizing the hardship of the importers . It has not been to this date either amended, altered or rescinded. Compliance of it is mandatory under the provision of Section 223 of the Act without any exception and this stance validated from the judgments of the Hon'ble High Court of Sindh reported at 2003 PTD 2821 Syed Muhammad Razi v. Collector of Customs , Appraisement-Karachi and 02 others that "in the wake of clear instruction contained in Custom General Order No.12/2002 the importer may not be charged for misdecaration under Section 32 of the Customs Act, 1969, the impugned action on the part of Custom officials is not sustainable in law and liable to be stuck down as illegal and without lawful authority and in 2016 PTD 35 Muhammad Waheed v. Customs Appellate Tribunal it has been held that "Direction contained in Customs General Order 12 of 2002 though not binding upon Field Officer of the Department in terms of section 223 of the Customs Act, 1969 --- Field Officer were required to follow such direction or guideline before making any contravention report/case against an importer -- any act of Field officer in violation of such direction would be of no legal consequences" Resultant, it is immaterial whether description and PCT heading differs as both attracts same rate of duty and taxes. No occasion was available with the respondent No. 1 and his subordinate to drag appellant in needless litigation. The issue No. (ix) is answered in negative.
15. That as regard to Issue No. (x), the charge of mis-declaration of value under the provision of Section 32 of the Act can not be levelled on an importer (appellant) on the basis of Valuation Ruling No. 101/2017 dated 12.01.2017 issued by Director , Directorate General of Valuation under the provision of Section 25A or value of identical/similar transaction goods as enunciated in Section 25(5)(6) and Rule 117 and 118 of the Act/Rules, available in data reservoir maintained by PRAL under Rule 110 of the period given in Rule 107(a) ibid. The respondent No. 2 despite performing in the capacity of Adjudicating authority completely and intentionally ignored the Provision of Section 32 of the Act, direction contained in clause (i) of para 78, Sub-Para (3) of para 101 of CGO 12/2002 dated 15.06.2002 and Serial No. (d) of SRO. 499(1)/2009 dated 15.06.2009. Upon examination of the provision of Section 32 of the Act, I have observed that the contravention of the said provision for value misdec laration can only be invoked on the basis of the documents defined in Section 2(kka), delivered, furnished by the importer or the statement given by him before customs authority . In the instant case, nothing is apparent form the record of the case that the appellant delivered or furnished any documents or statement with the Collectorate/respondent No. 2, which were found to be false/untrue in material particular . It is mistaken belief of the respondents that the Valuation Ruling or value available in data are deems to be defined documents warranted for declara tion under Section 2(kka) for transmitting GD under Section 79(I) and Rule 433 of the Act/Rules. The respondents also lost sight of the principle of law that allegation under charging section could only be invoked on the basis of the respective section not on the basis of presumptions or assumption. In the case of the appellant, section 32 was invoked on the basis of non prescribed information/documents to which an importer has no access. Rendering the charge of mis-declaration of value based on mere assumption / presumption. Now it is settled principle of law that no charge of mis-declaration of value can be levelled on any importer or appellant on the basis of valuation ruling by virtue of the fact that it is meant exclusively only for the purpose of assessment not for levelling charges for mis-declaration. If that would had been the case, not a single consignment would had been cleared by any Collectorate because in every case the value is enhanced on the basis of values available in Valuation Rulings without invoking the charges of mis- declaration. Therefore, the charge of mis-declaration of value is without any substance and nullity to the provision of Act and existing practice and as such hold no ground and this has been held by this Tribunal in reported judgment 2014 PTD (Trib.) 190 Messrs Shoaib Tayyab International v Additional Collector of Customs, Karachi , which has been implemented and attain finality . Hence the charges of mis-declaration of value and assessment of the imported goods for levy of duty and taxes are declared to be unsubstantiated and as such of no legal effect, rendering the contravention report, show-cause notice and order-in-original as ab-initio void. The same view has been taken by the Hon'ble Supreme Court of Pakistan and High Courts and Tribunal in judgments reported Customs Appeal No. K-249/2000/I3372, Customs Appeal No. K-35/2002, Customs Appeal No. K- 1670/2001, 2005 PTD (Trib.) 617, 1668/LB and 1669/LB of 2002, Customs Appeal No. K-1281/05, 1986 MLD 790 Karachi, PLD 1996 Karachi 68, 2006 PTD 909,2002 PTD 2957 , 2007 SCMR 1357 = 2007 PTD 1858 , 2008 SCMR 438, 1992 SCMR 1083 , 2008 PTD 1250 , 2008 SCMR 438 (sic) and 2014 PTD (Trib.)
190. The issue No.(x) is answered in negative.
16. That as regard to issue No. (xi), I am at loss to digest the formed opinion of the respondent of classifying appellant goods under PCT 3922.9000, contrary to its expression which reads "baths, shower , baths, sinks, wash-basins, bidets, lavatory pans, seats and cover , flushing cisterns and similar sanitary ware of plastics .
Upon perusal of declaration of appellan t and conducted examination report and the images, it is established without any ambiguity that those are flexible pipes and plastic joints, which find no place in the product listed in Sub-Chapter 22 of Chapter 39 and neither can be stretched these as listed therein through any definition, even within the word "ware" which is being defined in Dictionary .corn as: "1 Articles merchandise or manufacture: goods.
2. a specified kind or class of merchandise or of manufactured article."
The word appearing before the word "ware" is sufficient for reaching at the decision as that mean that the ware should be and must be akin to the listed goods without any exception. The goods imported by the appellant in no way are similar to those nor these are accessories as opined by the respondent that these are akin to "soap dishes, towel rails, tooth brush holders, toilet paper holders, towel hooks and similar articles for bathroom, toilets or kitchen ". These stand excluded from the said sub-chapter as evident from the World Customs Organization Explanatory Notes that "this heading covers fittings design to be permanently fixed in a place, in house etc., normally by connection to the water or sewerage systems. It also cove rs other sanitary ware of similar dimension and uses, such as portable bidets, baby bath and camping toilets". Hence, upon perusal of examination report and images I have reached at irresistible opinion that appellant goods are not one of that sort of fittings designed to be permanently fixed. Therefore, these cannot be classified under the said PCT heading. The declared description and PCT of the appellant goods is correct as evident even from the expression of Sub-Chapter 17 of Chapter 39 of Pakistan X Customs Tariff reading as "Tubes pipes, hoses and fitting thereof (e.g. joints , elbows and flanges). The goods of appellant are of course of plastic, as evident from the uploaded examination report in the reservoir of GD reading as "flexible pipe and joints ", which without any exception falls under the said Sub- Chapter , further validated from the Explanatory Note of WCO available in Section VII, wherein tubes pipes and hoses are defined in addition to "tubes, pipes and hoses and fittings therefore may be rigid or flexible and may be reinforced or otherwise combi ned with other material also falls under this Sub-Chapter of Chapter 39". Resultant, classifying the appellant goods in PCT heading 3922.9000 is nothing more than abuse of powers for causing loss and y mental torture to the appellant without any cause or reason. The issue No. (xi) is answered in negative.
17. That as regard to issue No. (xii), the appellant No. 2 as observed from show-cause notice and Order-in-Original and as verbally explained by the learned Counsel, was held guilty of an offence under section 32(1) and (2) of the Act. The charge framed in the notices relates to a claims made by the appellant No. 1 through him, which upon examination found to be excess beside contrary to the declared description/PC T and value being suppressed, meaning thereby that allegation against appellant No. 2 are on the basis of the allegation leveled on the appellant No. 1 in the show-cause notice, so speci fic allegation in regards to his act and commission are apparent from its charter , which means appellant No. 2 only offence is that he transmitted GD for the clearance of the goods of appellant No. 1 and for the said act, for which he is accorded License by the Licensing Authority , assertion is that he should not have made the declaration in the GD on the basis of documents defined in Section 2(kka), since, he made said act of his attracted the provision of Section 32 of the Act. According to the show-cause notice itself and construing it in the light of the Act, the Customs should have made distinction between a declaration or "a statement in answer to any question put" and a "claim". As regards declaration it means a communication by a person in relation to a business being conducted. The word "declaration" came to judicial scrutiny in the case of Vithoba Syamna v. Union of India reported as AIR 1957 Bom. 321. It was held in that case that the word "declaration" refers to the nature, description and value of goods so that assessing officer can apply appropriate Tariff rate for assessment and charging. On the other hand the word "claim" means a demand for something suppose I BI due to or demanded as a right. In the case of Eastern Rice Syndicate v. Collector of Customs (PLD 1959 SC 364), the Supreme Court had held that in order to attract a penal provision of Section 39 now Section 32) it must be established that the person who alleged to have made any statement in a documents submitted to the Customs authorities must be having knowledge and it would depend upon the facts and circumstances of each case. It is not disputed here that the statement made in the Customs documents regarding the nature and value of the goods were in any ways wrong; rather that information was found correct and true. The assumption of the Customs that violation of the said section did take place upon perusal of the conducted examination report under the provision of Section 198 and Rule 435, i.e. also based on mistaken belief as in conduction of examination, appellant No. 2 has no part to play instead to be carried out with the assistance of terminal operator , whereas assessment order is passed by the appropriate author ity defined in Section 2(a) under Section 80 and Rule 438 of the Act/Rule s in exercise of the powers vested upon him through SRO 371(1)/2002 dated 15.06.2002 independently withou t any influence after going through the examination report, uploaded documents with the GD, in compliance of view message transmitted under Rule 437 and First Schedule to the Act, in this whole exercise again appellant No. 2 has no part to play. The charges against the appellant No. 2 were/are wholly misconceived, as his action does not falls within the operative mechanism of Section 32 of the Act. A study of Sections 79 and 80 of the Act reveals that importer or his agent has to file GD for release of the goods on which assessing officer has to made an assessment, any claim made by an importer is subject to scrutiny by the assessing officer who has been vested with unfettered powers to complete an assessment. A claim is a request subject to approval by a competent officer, and where a competent authority grams or reject the claim, no charge of fraud or otherwise can be linked to the agent or to his principal, whose duty is to submit relevant document for processing for release of consignment or application. It appears that the responde nt No. 3 who issued the show- cause notice grossly mis-understood the scheme meaning an operative mechanism of Sections 32 and 80 of the Act. The liability of appellant No. 2 during the course of clearance of the consignm ent has to be evaluated under the provision of Sections 207, 208 and 209 of the Act, which indicate that an agent represent his principal and until and unless any direct evidence is attributed against him or when department is not able to prove any criminal intend on his part, he cannot be penalized under the General provision of the Act, unless he violates the governing condition of his License and this stood validated from the judgment relied upon by the appellant No. 2 and are referred in grounds of memo. of appeal and observation made by their lordship in 2002 YLR 2651 holding that "to hold the clearing agent liable for an act of commission and omission on the part of the importer will require a clear findings based on legally acceptable evidence of his being an active and conscious party to the manipulation. In normal course of his business a clearing agent files a bill based upon the documents and information provided by the importer . He cannot be presumed to be privy to any illegal arrangement, which the importer may have coined or had intended in his mind for that purpose some evidence of his direct involvement will have to be brought on record. Particularly when it is not shown that the clearing Agent was directly or indirectly a beneficiary of evasion of taxes. The answer to issue No. (xii) is answered in negative.
18. 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 Court, I cancel contravention report/show-cause notice framed/issued and set aside the connected order passe d by respondents Nos.1 and 3 being illegal, void and ab-initio, appeal is accordingly allowed within no order as to cost.
19. Judgment passed and announced accordingly .