JAHANZAIB WAHLAH, MEMBER JUDICIAL-III .----Through this order I intend to dispose off Appeal No. K- 208/2018 directed against Order-in-Original No. 52/2017 dated 18.12.2017 passed by Collector of Customs (Adjudication) Quetta, Camp Of fice, Hyderabad (respondent No.3).
2. Brief, facts of the case are that the appellant imported 02 consignments of Industrial V-Belt from Bulgaria against invoices No. NMAC-009 dated 29.03.2017 and NMAC-099, dated 10.05.2017 and B/L No. AWSL-146222 dated 24.04.2017 and AWSL-148278 dated 04.06.2017, upon receipt of import documents he delivered those to his clearing agent M/s. Ocean Packers and Movers, Karachi for transmitting Goods Declarations (GDs) with the MCC of Appraisement-W est and MCC of PMB Q under the provision of section 84 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 1% surcharge and GDs were numbered as KAPW -1B-227807- 04052 017 and KPPI-IB-90573 dated 20.06.2017, both were selected for examination under Sections 198 and 435 of the Act/Rules, wherein goods were found as per declaration and reports so prepared were uploaded in the reservoir of the GDs. Upon appearance of which on their work stations , the compet ent authority defined in Section 2(a) passed assessment order under the provision of Section 80 and Rule 438 for levy of duty and taxes, in exercise of the powers vested upon them through SRO 371(1)/2002 dated 15.06.2002 and transmitted view messages for payment of additional amount of surcharge, which appellant paid. Consequent to which the inbuilt authority of WeBOC passed clearance order under Section 83 and Rule 442 of the Act/Rules for warehousing. The clearing agent of the appellant accordingly obtained the delivery of the consignments and warehoused those as per the expression of Section 87 of the Act.
Subsequently appellant filed GDs for ex-bonding for home consumption under the provision of Section 104 of the Act and paid the leviable duty and taxes in accordance with the already infield asse ssment orders and the WeBOC passed clearance order under Section 83 and Rule 442 of the Act/Rules. The clearing agent of the appellant thereafter delivered the goods in the warehouse of the appellant, out of which he sold 3 bundles to his buyer in Gujranwala and transported those vide bilty No. 013305 dated 17.08.2017 of Messrs Jeeway Gujranwala Carvan Goods Transport Company , Karachi, which loaded those in container mounted on the Trailer bearing registration No. THP-144, upon reaching Rohri Bypass the subordinates of Deputy Collector of Customs, Preventive, MCC of Hyderabad (respondent No. 1) intercepted the Trailer and asked the driver to show the legal import of the transported goods. Since, it was not warranted under law for any trader of Pakistan to supply the copy of either GD or purchase bill nor on transporter shown his inability , the subordinate of respondent No. 1 escorted the Trailer to their office and detained the same along with Trailer under the provision of sectio n 186 of the Act, subsequently seizure notice was prepared under section 168(1) of the Act for the purpose of adjudication proceeding, for commencement of which contravention report was framed and forwarded to the respondent No. 3.
3. The Deputy Collector of Customs, (Adjudication), Quetta, Camp Office Hyderabad being the competent, authority to proceed in the matter as per the expression of Section 179 of the Act. Accordingly the adjudicating authority issued show-cause notice dated 25-9-2017, against which appellant submitted reply annexed with legal import documents of the transported goods. Instead of passing order in the case, the respondent No. 3 passed order dated 18.12.2017, wherein he brushed aside submission made by the appellant and so the submitted documents and ordered confiscation of the goods out rightly , para 15(a) of the order is relevant and reproduced as under: "The claimant(s) of seized Industrial V-Belts produced photocopy of GD Machine No. KAPW -IB-227507 dated 24.05.2017 and GD Machine No. KPPI-IB-90573 DATED 20.06.2017 in both the GD's importers is M/s. MAC , Corporation, Karachi and the seized goods was found booked in the name of M/s. Mukhtar as consignor and consignee. The goods were seized on 28.08.2017 and the claimant (s) turned up on 09.10.2017 after expiry of approximately two months. Hence, the claimant (s) failed to produce proof of the trail of transaction between importer and purchaser . It is added that Ex-bonding GD Machine No. KPPI-EB-15470 dated 25.08.2017 has also been attached with the documents provided by the claimant (s) which also proves irrelevant, as the goods were booked on 17.08.2017. Besides this packing lists do not bear the name of exporters, whereas the name of exporter are usually printed on the packing lists produced by the claimant(s). The issuance of Sales Tax invoices on receipt of goods as mentioned in the letter of M/s. MAC Corporation, Karachi is not in accordance with the provisions of Sales Tax Rules. After Sales of the goods the supplier is legally bound to issue Sales Tax Invoice and show the same in monthly Sales T ax Return filed within the time prescribed under the Rules."
4. The appellants filed the appeals 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 have been filed within the stipulated period of 30 days by the respondent No. 1 against the appeals preferred by the appellants instead comments, which are not in any manner qualify memo. of cross- objection, to be termed as cross appeals filed under subsection (3) by the respondent No. 1 as expressed in aforesaid section. Therefore, these are to be considered merely as opinion, having no binding force, however , are placed on record of the case for perusal and consideration. Heard and perused case record. This case could be decided on the basis of short point that as to whether the respondent No.1 and his subordinate have any mandate to detain/seize goods for the purpose of adjudication, on the pretext of smuggling or smuggled goods in the light of definition given in clause (iii) section 2(s) and as to whether respondent No. 3 was empowered to usurp the power of his subordinates for passing the impugned order the case in question, the value of the transported Industrial V- Belt is merely Rs.130,000.00 i.e. beyond the limit specified in clause (ii) of Section 2(s) that no case a smuggling be initiated against any person, in case the value of the goods does not exceed Rs.150,000.00. Since, the value of the goods intercepted/detained/seized by the subordinate of respondent No. 1 only Rs.130,000,00. They have no mandate to deny transportation of the same on the pretext of allegation of "smuggling" or "smuggled goods".
Respondent No.. 1 and his subordinates without any lawful authority exceeded their powers in derogation of clear expression available in clause (ii) of Section 2(s) of the Act. Rendering the interception, detention , seizure , framing of contravention report without lawful authority/jurisdiction and as such ab initio, void and coram non judice.
In terms of Section 179 of the Customs Act, 1969, the determination of powers has to assumed on the basis of involved amount of duty and taxes, which in the case of the appellant are not more than Rs. 50,000.00 as the value of the goods is merely Rs. 130,000.00. The power to adjudicate the case of said amount rest with the Principal Appraiser in terms of clause (vi) of the aforesaid provision. To the contrary the show-cause notice has been issued by respondent No. 2 by usurping the powers of his subordinate, which is not permi tted under law and rendered the show-cause notice ab-initio void and as such of no legal effect, any super structure built thereupon ought to be crumble down, no matter how strong it may be as held by Superior Judicial Fora in umpteenth reported judgments.
In addition to the said illegality another gross illegality is apparent from the impugned order i.e. in the case of the appellant show-cause has been issued by the respondent No. 2 and order in any case has to be passed by him and by none else. To the contrary , respondent No. 3 passed the order , in exercise of the powers of the respondent No. 2 i.e. respondent No 2 on one hand issued show-cause notice while usurping the powers of Principal Appraiser and the respondent No. 3 on the other hand passed order by encroaching the powers vested with Principal Appraiser , in derogation of the clear enun ciation made in Section 179 of the Act and settled elementary principle of law that action of the authority is to be restricted to the specific sphere permitte d by the statute. Rendering the show-cause notice as well as order-in-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 1993 SCMR 1232 . Indeed the respondent No. 1 and his subordinates are appointed and designated as "Officer of Customs" under Section 3 of the Customs Act, 1969 and they derive powers for functioning from S.R.O 371(I)/2002 dated 15.06.2002 within the territory not falling within the ambit of Section 9 and 10 of the Act, and beyond 5 kilometer of the border of India and Iran in terms of Section 177 of the Act, to be read with notification SRO No. 188(I)/83 dated 12.12.1983. The transported goods does not at all falls within the ambit of Section 2(s) and Section 177 of the Act, instead are lawfu lly imported after completion of Codal formalities by the Custom Officials. Respondent No. 1 and his subordinates are not even empowered to ask from either the transporter or owner of the transported goods or from appellant about the legality of the transported goods, in the absence of enabling provision in the Act/Rules. There does not exist any provision in the Act or notification to the said effect i.e. directing the person who is transporting goods from Karachi within the territory of Pakistan should keep either GD or purchase bills of the goods. In the absence of availability of any section in the Act and the notification, demanding GD/ Purchase Receipt is nullity to law and hold no ground and the stance of appellant stand validated form the reported/un-reported judgments K-719/02, H-720/02, H-686/03, Q-776/04, 2005 PTD (T rib.) 135 and PLD 1991 Supreme Court 630.
5. The goods transported by appellant were legally imported and were cleared by the officials of MCC of Appraisement-W est and PMBQ, after fulfillment of all the codal formalities mean ing thereby those were neither brought by the appellant into Pakistan in breach of any prohibition or restriction for the time being in force under the Import Policy Order , 2017-18 or while evading payment of customs duties leviable thereon as expressed in clause
(a) of Section 2(s). Nor were brought into Pakistan by any other route then the routes expressed in Section 9 or 10 of the Act, or from any other place then a customs station as per ,clause (a)(ii) of Section 2(s) and their value is below to Rs.150,000.00 and were lawfully transported from Karachi by appellant to his buyer in Gujranwala through valid bilty, those cannot be considered as smuggled through any stretch of imagination. Hence, interception of Trailer , detention, seizure, and preparation of contravention report of the purpose of adjudication is nullity to the definition of the word "Smuggle" rendering the entire act of respondent No.1 and his subordinates and the issuance of show-cause notice and passing of order-in-original by the respondents Nos. 2 and 3 as ab-initio, null and void.
The expressed provision of Section 2(s) and Section 177 of the Act and SRO 118(1)/83 confirms that the transportation of the goods within the territorial limit of Pakistan do not constitute an offence, meaning thereby that transportation of the goods cannot be termed as smuggled goods. And as such cannot be construed contrary to that. None of the officials are permitted to act beyond their allotted sphere alike respondents only for the purpose of denying transportation of the appellant goods on the sham plea of smuggling or good faith. It is of paramount importance to adduce here that the framer of law in order to thwart the act of smuggling and flourishing business of smuggled goods have formulated a strict confiscatory regime with a very extended connotation and law is set in motion not only against the actual smuggler , but also against those who came into possession of the delinquent goods after having acquired the frame. Section 187 and Clause (2) of Section 156 of the Act come into motion on every occasion when goods are seized. Scrutiny of the essence and spirit of Section of the Act would transpires that these provisions are to be used in juxtaposition, the golden thread of Crimin al Law that "it is the duty of the prosecution to prove the prisoner's guilt" the question that then arise as to what extent such burden lies upon the person found in possession of alleged smuggled or prohibited goods and as to whether same at any stage shift upon the Customs Authorities or not; in this context placing reliance on reported judgment titled Kamran Industries v. Collector of Customs (Export) PLD 1996 Kar.
68. In which the Division Bench held in regards to legal and-persuasive burden and the evidential and technical burden on the litigants under Section 187 of the Act in so many words that: "For every offence for which the accused is charged under the Customs Act he shall have to disprove the allegation of the Customs .Authorities is entirely without any obligation upon the Customs Department to adduce evidence, it would amount to affording unfettered, naked and arbitrary discretion to the authorities who may at their sweet will make out false cases against importers without the need of proving the sanctity of their actions. Such cannot be the intention of Parliament while the Courts are under an obligation to place such cons truction on statues which would be beneficial to the widest extent and which would make the legislation operate fairly, justly; and equitably and not unreasonably (see Mst. Zainab v. Kamal Khan (PLD 1990 SC 1051 ). This Court is also of the view that a construction is to be placed upon statutes which would minimize the discreti on vested upon the executive authorities. As absolute power corrupts an interpretation fettering the discretion of the executive authority would be more in line with the principles of equity and justice. The issue regarding the applicability of section 187 is to be looked from another angle i.e. in case we were to hold that due to Section 187 the entire burden to dispute the entire case rest upon the accused alone. The executive authorities would be let loose and given a wide, naked and arbitrary discretion to operate without any guidelines which would then leave section 187 susceptible to a Constitutional challenge upon its vires on this score alone. By the interpretation as proposed above any redundancy or illegality would also be avoided."
6. The appellant submitted import docum ents and bilty of transportation from Karachi to Gujranwala, hence, he discharged burden laid upon him as held by the Hon'ble High Court of Sindh in the judgment referred in para supra and the burden stands shifted on the shoulder of the respondent No. 1 and his subordinates as per the contemplation of Articles 117 and 121 of Qanun-e-Shahadat (10 of 1984), which they miserably failed to proof with the exception that the packing list corresponding to the imported goods are without stamp and signature of the shipper , this is height of absurdity as i.e. for the mode of packing of the imported goods description of which is available with clarity in the invoice, B/L's , which are defined in Section 2(kka) for transmitting GD under the provision of Section 79(1) and Section 433 of the Act/Rules, these are vital documents and cannot be ignored summarily by the respondents for achieving their desired results for depriving the appellant from his lawful legal imported and transported goods and that also while playing havoc with their specified jurisdiction/powers , while construing those being unfettered , which is not the intention of neither legislature and Board. Before parting with the judgment, it is vital to comment on the observation made by respondent No. 3 in regards to sales tax invoices, sales tax return filed within time prescribed under the Rule, finding no place in the charter of show-cause-notice.
Any decision on the ground not taken in the show-cause notice render the order palpably illegal on the face of it as held in reported judgments Collector Excise and Land Customs and others v. Rehm Din reported at 1987 SCMR 1840 , Adam v. Collector of Customs, Karachi PLD 1969 Supreme Court 446, Muhammad Sadqain v.
Collector of Customs (Appraisement) 2006 PTD 2742 and Messrs Exide Pakistan Ltd. v. Deputy Collector of Customs (Adjudication-Ill) , Karachi, 2004 PTD 1449 , "wherein it has been held that "Order of adjudication, being ultimately based on a ground which was mentioned in the show-cause notice is palpably Illegal on the face of it".
Secondly , the maintained record can only be demanded by the Directorate General of Post Clearance Audit for conduction of audit under section 26(2) after serving notice/summon as per the contemplation of Section 26A of the Act. Respondent No. 3 has no power to conduct audit. Likewise, demanding submission of Sales Tax Return along with summary statement of the importer by the appellant is also out of context as submission of Sales Tax Invoices are not warranted as on import by a commercial importer 3% value addition tax is ought to be charged by the customs in addition to the leviable sales tax of 17%, which has already been paid by the appellant validated from the annexed copies of the GDs. Even otherwise, none of the respondents are appointed as Officer of Inland Revenue under Section 30 of the Sales Tax Act, 1990, hence, are non entity rendering the adduced opinion in the said context is without lawful authority/jurisdiction and as such void and ab-initio and of no legal effect and cannot be made basis for confiscation of the goods, when those were lawfully legally impo rted and were transported from Karachi to Gujranwala through valid bilty .
7. In the light of above deliberation and adhering the ratio decidendi set-forth by the judicial fora, I, hold that the interception, detention, seizure, preparation of contravention report by respondent No. 1/subordinates and issuance of show-cause notice and passing of order-in-original by respondents Nos. 2 and 3 are ab initio, G illegal void and as such is of no legal effect. Therefore, I, annul those and set aside the order passed by the forum below and allow the appeal no order to cost.