SYED SARDAR HUSSAIN SHAH, CHAIRMAN/MEMBER JUDICIAL .----This appeal has been filed by Messrs Fair Trading Company , Karachi (appellant herein) against the Order-in-Original No.119/2014-15 dated 9-9-2014 passed by the Additional Collector of Customs (Adjudication-I), Custom House, Karachi.
2. Brief facts of the case as per record are that the staff of Directorate of Intelligence and Investigation-FBR, Karachi re-examined a consignment bearing IGM No.159/25.06.2014, Index No.776 imported from Dubai by Messrs Fair Trading Company , Karachi against GD No.KAPW -HC-1646-14072014 , which was out of charged from MCC, Appraisement (West), Karachi. Before filing of GD through clearing agent, M/s. Dildar Enterprises, Karachi, the importer vide letter dated 05.07.2014, opted and requested the concerned Deputy Collector for inspection of the goods under Section 79(1) of the Customs Act, 1969 for making correct declaration of the imported goods.
However , re-examination of the consignment on 18/19.07.2014 by the staff of Directorate, Nut and bolts (HS Code 7318-1590) weighing 20 MT were found besides gross discrepancies in other items i.e., radiators, differentials, engines, shock absorbers etc., which were being cleared in the garb of iron/steel remetable scrap. Accordingly , Contravention Report was prepared for alleged violation of Sections 25, 32 and 79 of the Customs Act, 1969 and Show-Cause Notice issued to the appellant.
3. Subsequently , on adjudication of the matter , the case was placed before the Additional Collector of Customs (Adjudication-0, Karachi, who vide Order-in-Original No.119/2014-15 dated 9-9-2014 given an option to the appellant to redeem the goods against 35% redemption fine in addition to payment of customs duty/taxes leviable thereon. He also imposed penalty of Rs.200,000/- on the importer and Rs.200,000/- on the clearing agent. Hence the instant appeal.
4. I have heard both the parties and gone through the record of the case.
5. It is evident that Respondent No.2 intervened in the impugned case when it was still not out of charge from customs. The departmental representative who appeared on behalf of Respondent No.(2) tried to cover this serious lapse on part of Respondent by stating that at the time of intervention of Respon dent No.(2) goods were "out of examination". However , he confessed that goods were still not "out of customs charge" and were at the port and processing by the customs staff was not finished, when the Respondent No.2, detained them initially and then finally seized them. The Advocate draw attention of the Tribunal to very clear instructions of FBR vide No.2(2)
L&P/2014 dated 29-12-2009 which reflect as follows:- S.No. Issued Raised FBR's Clarification
(i) Whether the Customs Intelligence is authorized to examine, detain or seize the goods lying in the Customs area before examination assessment?Directorate General of Intelligence may not examine, detain or seize goods lying in the Customs area before examination and assessment is conducted by the Collectorate.
(ii) Can the Customs Intelligence order joint examination of goods lying in the Customs area?Customs Intelligence may not order joint examination of goods lying in the Customs area on its own. However , before out of charge of goods, if there is any information regarding any misdeclaration etc., Directorate General of Intelligence may approach the Chief Collector for joint examination and the decision of Chief Collector shall be final.
(iii) (b) Customs Intelligence can detain or seize goods which have been allowed out of charge by the Customs and for which gate pass has been issued by the concerned custodian of goods, but goods are still lying in the Customs area or are in the process of removal. The Directorate.
General after taking action need to inform the Collectorate;
(c) However , there is no bar on the Collectorate to take cognizance of such cases other than those mentioned at
(a) above where cognizance has already been taken by the Directorate General of Customs Intelligence and Investigation.
6. Perusal of above cited instructions of the Boards reveals that Respondent No.(2) was restrained to intervene or interfere with the consignments which were under processing and were yet not "out of charge". The Respondent acted beyond his domain and exercised authority without jurisdiction by initially detaining and then seizing the impugned consignment in total defiance of FBR's instruction vide its letter No.C.No.2(2) L&P/2014 dated 29-12- 2009. The instructions of FBR clearly reflects that the official of DG (I&I) office had no authority to detain and examine any consignment which was still not out of Customs charge, however the impugned consignment which was still Under consideration by the customs staff and not out of charge was put illegally on hold by the DCS (I&I)'s staff, then re-examined "Unilaterally , without any legal authority , seized illegally without legal jurisdiction, therefore the Respondent stepped out of his jurisdiction which is legally not sustainable.
7. The instructions of the Board are binding on the field formations of FBR as per Section 223 of the Customs Act, 1969. Whereas, the Respondent willfully defied the Board's instructions and acted against the statutory provisions.
Therefore, this action of the Respondent and resulting show cause notice/order in original are void ab-initio being, based on negation of statutory provisions and therefore legally unsustainable.
8. It is settled proposition of law "that a thing should be done as it is required to be done or not at all" as held by Superior Court of Pakistan in plethora of reported judgments. The same observation has been made by the Honorable Supreme Court of Pakistan in the Civil Petition filed by Director General of Intelligence and Investigation and others v. Messrs Al-Faiz Industries (Pvt.) Ltd. and others reported as 2006 SCMR 129 "if the law had prescribed method for doing of a thing in a particular manner such provision of law is to be followed in letter and spirit and achieving or attaining the objective of performing or doing of a thing in a manner other than provided by law would not be permitted." The legal principle "Expressum Facit Cassare Taciturn" is accepted and practiced by all superior courts around the world. It reflects that "where a law prescribes a particular way to doing something, it is implied that such is the only way that something can be done". The action of DG (I&I)'s staff was in shear disregard to FBR's direction for doing one thing in certain prescribed manner vide C.No.2(2)L&P/2004 dated 29-12-2009 but the action of respondent militated the superior courts judgments and provision of Section 223 of Customs Act, 1969 which bind all the Field formation to abide by the Board's directions, instruction and Orders.
This action was also in defiance of superior court's ruling that officials of DG (I&I) cannot interfere into affairs of customs until unless the goods are out of customs charge. Therefore, I hold that impugned show cause notice of iginated from violation of instructions of the Board as DG (I&I) staff detained and re-examined a consignment for which the appraisernent staff had yet to finalize their findings, hence the impugned show-cause notice was a void show cause notice and the resulting order in original based on a legally fractured and unsustainable show-cause notice, is also equally void and untenable.
9. The other important aspect noticed by the Tribunal from the record and confirmed during the course of hearing is that the Respondent No. (2) while seizing the goods did not serve the notice under Section 171 of the Customs Act, 1969, to the importer or Appellant whereas, the name and address of both the Appellants was depicted on the GD.
When the name and address of Appellant was accessible by the Respondent No.(2), then serving the impugned Notice to the port operator or affixing that on the Notice board, was an effort to circumvent it. Therefore, the search and seizure hold to be effected by the prescribed procedure under provisions of Sections 163, 168 and Section 171 of the Customs Act, 1969, but the same was not done as per law. The apex Court held in judgment PLD 1971 Supreme Court 61 "neglect of plain requirement of an absolute statutory enactment prescribing how something is to be done, would invalidate thing done in some other manner". The Respondent's action of seizure of impugned goods without observing proper method of search and seizure according to law is an act beyond their jurisdiction, and departure from the sphere of activity allotted to them by law. The superior courts have termed such acts as "usurpation of power" and have held all the acts arising out of such usurpation as illegal and without legal authority .
10. It is so far established that neither the Respondent abide by the provisions of Section 223 of the Customs Act, 1969, by defying the Board's instructions vide letter G. No. 2(2) L&P/2014 dated 29-12-2009 nor he proceeded legally for effecting seizure of the goods according to provisions of the law as envisages in Sections 168 and 171 of the Customs Act, 1969, therefore, the action taken by Respondent No.(2) was without any legal force being void ab-initio. The SRO 486(1)/2007 dated June 09, 2007 which depict the Sections of the Customs Act, 1969, under which the staff of Customs Intelligence and Investigation can take action. However , the said SRD did not reflect any powers for the Respondent No.2 under sections 25, 32, 79, 80 and 195 of the Customs Act, 1969, whereas, Respondent No.(2) not only reappraised the value of the goods but also reassessed them by opening the GD which was still under processing of assessment. This is not acceptable specially keeping in view that the goods were still not out of customs charge yet. Therefore, I hold that all the actions of the Respondent No.(2) were without legal authority and void ab-initio. Therefore, the superstructure built in shape of contravention report, show-cause notice and order-in-original are also void. Reliance is placed on Anisa Rehman v . PIA 1994 SCMR 2234.
11. In case of (Hashim Pracha v. Collector of Customs Appraisement ), it was held that "Mohammad Hashim Paracha, a customs agent, was charged for the unauthorized sale of plastic moulding compounds by his principal, after the clearance of the goods, from the port area, it was, however , contended on behalf of the agents that they operated in Karachi only and hence could not be held responsible, if the imported goods cleared under the safe transportation system did not reach the destination in Peshawar and were sold by the importer instead. The agents were not required in law to monitor the arrival of the imported goods at the point of destination. The contention was conceded by the customs department. The Tribunal accordingly held that the charges against its under section 32(1) and (2) of this Act were not maintainable, in the eye of the law. The personal penalty imposed against the agents was accordingly set aside [Muhammad Hashim Paracha v. Collector of Customs (Appraisement)
Customs, Excise and Sales T ax Appellate T ribunal Bench-Ill 2003 PTD (T rib.) 902 ].
12. A clear finding of guilt (based upon legally acceptable evidence) is required, in order to hold a Customs Agent, responsible for his acts of omission or commission, In order to hold the Customs Agent responsible, it would be necessary , to produce some evidence of his direct involvement". The Appellant submitted to the Respondent all the precedents and case laws depicting "limited liability" of clearing agents in the course of hearing for the impugned Show Cause Notice, but learned Respon dent did not elaborate in his order why the submission of the Appellant was not considered or rejected without assigning any cogent reason therefore. Mala fide and mens-rea are necessary ingredients for committing any offence-, including that of smuggling. [Moon International v. Collector of Customs (Appraisement) Lahore [PTCL 2001 CL 133]. There are two questions which need to be addressed before invoking section 32 of the Customs Act, 1969 for mis-declaration (a) whether mens-rea which is essential element for the purpose of subsection (1) of section 32 has been proved and (b) whether a demand for short recovery can be made under the provisions of subsection (2) of section 32, without proving any guilty intention, knowledge, or mens-rea on the part of the appellant. If element of mens-rea is not visible and guilty intention is not proved then provisions of Section 32 cannot as held in the following land mark judgments:-
(a) Union Sport Playing Cards Co. v . Collector 2002 YLR 2651 .
(b) Al-Hamd Edible Oil Limited v . Collector 2003 PTD 552.
(c) AR Hosiery W orks v Collector of Customs (Export) 2004 PTD 2977 .
13. From the above, I conclude that even on the merits of the case the appellant cannot be held guilty of Section 32(1), (2) or 32(A) of the Customs Act, 1969, without conclusive proof, which unfortunately is not on the record.
Therefore, I hold that charges framed against the Appellant are not proved and the impugned Show-Cause Notice No.ADJ-I/ADC/02/DIT/2014-15, C.No.61 1-APPG-III/DCl/2014 dated 21.08.2014 is vacated and the resulting Order- in-Original No.119/2014- 15 dated 09.09.2014 is set aside appeal is allowed. The penalty imposed on the Appellant without citing any provision of law is also remitted. The appeal stands disposed of.