JAHANZAIB WAHLAH, MEMBER JUDICIAL-III .----Through this common order , I intend to dispose off appeal bearing No H.16/2018 directed against the Order-in-Appeal No.766/2017, dated 22.11.2017 passed by Collector of Customs (Appeals) by maintaining the Order-in-Original No.309 of 2017 dated 13.05.2017 passed by Deputy Collector of Customs (Adjudication), Hyderabad.
2. Briefly fact of the case are the appellant is a petty businessman and operates a small retailer outlet by the name and style of M/s. Nadeem Electronic at Sadiq Colony , Loha Market, Nishat Road, Multan, wherein, he sold old and used electric appliances/tools after refurbishing. He during the course of his business activities purchased old and used goods f om various shops of Sher Shah Scrap Market through proper invoices/bills. Subsequently transported those to Multan through Messrs All Pakistan International Transport Company , Karachi vide bilty No.5313 dated 24.02.2017. On 02.02.2017 the subordinates of the Collector of Customs, MCC of Preventive, Hyderabad stopped the vehicle transporting appellant goods near National Highway Ranipur and made a search under the provision of Section 163 of the Customs Act, 1969 (Act), upon finding the goods of the appellant, demanded import documents of the old and used/scraped goods purchased from the local market, from the driver of the vehicle, who obviously was not having those, called appellant , who supplied the copies of the invoices/purchased bill, which the subordinate of respondent No.1 refused to accept as valid on one pretext and another and seized those under the provision of section of section 168(1) of the Act on the pretext that those were smuggled falling under the provision of Section 2(s) ibid., the subordinate of respondent No.1 thereafter framed contrav ention report and forwarded the same through respondent No.1 to the Collector of Customs Adjudication, Hyderabad, who marked the same to the Deputy Collector of Customs, Adjudication-Hyderabad, who issued show-cause notice dated 25.04.2017, which was replied, in addition to attendance of hearing, but of no avail and he passed order dated 13.05.2017, through which he ordered confiscation of the goods being smuggled on the premise that the appellant gave his assent for payment of duty and taxes. Paras 15 and 16 is relevant, reproduced here-in-under for easement: "15- Mr. Abdul Waheed, owner/claimant of the seized goods appeared and stated that the seized goods were purchased from the local market of Karachi but he could not produce and import documents. He requested to release the seized goods on payment of duty and taxes. Mr. Hidayatullah, Inspector of Customs (Preventive), Sukkur appeared as departmental representative and stated the fact of the case as mentioned in the show-cause notice. He further stated that he has no objection if the goods are released on payment of duty and taxes.
16- I have examined the case record, considered the verbal as well as written argument of both parties.
Consequently , I do not find any reason to agree with the contention of the appellant. I do order confiscation of the seized goods in terms of under clauses (8) and (89) of Section 156(1) of the Customs Act, 1969 for violation of Sections 2(s) and 16 of the Customs Act, 1969 read with SRO 566(1)/2005 dated '06.06.2005 punishable under clauses (8) and (89) of Section 156(1) of the Customs Act, 1969. However , an auction under section 181 of the Customs Act, 1969 is given to the owne r/claimant of the seized goods to redeem the same on payment of fine equivalent to Rs.20% the Customs V alue of the seized goods in addition to duty and taxes leviable thereon."
3. The vires of order passed by respondent No.2 was challenged before the respondent No.3 vide Appeal No.Cus/1761/2017-HYD-SUK on 12.06.2017, after extending multiple hearings, respondent No.3 passed order dated 22.1 1.2017, rejecting the appeal while holding in para 6 of the order as under: "I have examined the record. The appellant, claiming ownership of the seized foreign origin smuggled goods, stated that seized of goods was illegal as the impugned goods were items of free list for import, not seized from border area and that the goods were procured from local market. The appellant, however , could not produce any document showing import of goods or sales tax invoice from local Importer/seller . Regarding his willingness to pay duty and taxes at adjudication stage, the appellant's plea that the offer was made to avoid any delay is not tenable.
I therefore find no reason to interfere with the Order . The appeal being without merit fails."
4. 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 section 194A(4) of the Act has been filed within the stipulated period of 30 days by either respondent No.1 or 2, instead comments were filed by respondent No.1, which least qualify in any manner memo. of cross objection, resultant, could not be termed as cross appeal within the meaning of Section 194A(3) of the Act. Theref ore, these are to be considered merely opinion, having no binding force, nevertheless, placed on record of the case.
5. Heard and perused case record. This case can be decided on a short point of limitation. In terms of Section 193A(3) of the Act. The order against filed appeal by respondent No.3 have to pass within 120 days from the date of filing of appeal, which was 12.06.2017 and order should had been passed on or before 10.10.2017, which he failed, no A further extension of 60 days was given by him and this was due to the fact that no "exceptional circumstances" were available and this fact stands validated from the order containing no inscription in this regard. The respondent No.3 passed order on 22.11.2017 i.e. after expiry of 43 days of the initial currency period of 120 days. Rendering it without power/jurisdiction, hence void, ab-initio and not enforceable under law as held by the Superior Judicial Fora in umpteenth reported judgment relied upon the appellant in ground No.(i) of the memo. of appeal and which are applicable on the case of the appellant with full force.
6. The orders passed by the respondents Nos.2 and 3 are sketchy and bald and are based on assumption/presumption and conjectures and adamant attitude and conform that these have not been passed by an independent judicious authority , instead by the contravention framing authority and as such fails the test of judicial scrutiny . Therefore, these are not proper orders through any stretch of imagination, infact least reflect independence and application of judicial mind. Confirming unambiguously that these are non speaking orders and least conform to the mandated requirement of section 24-A of the General Clauses Act, 1897 further validated from the fact, these does not contains substantial reasons showing being not passed on objective consideration. Such type of orders shall always be treated as illegal, void arbitrary and a result of misuse of authority vested in public functionary . No room was available for such illegal, void and arbitrary orders in any system of law. If any authority Court or Tribunal gave a finding of fact which was not based on material available on record was illegal arbitrary without discussing and considering the material available on record it became perverse and a perverse finding of fact which is violative of the established principle of appreciation of evidence on record was not sustainable in law.
The principle that every judicial or quasi-judicial finding should be based on reasons containing the justification for the finding in the order itself is an established principle of dispensation of justice. The orders are being violation of basic principle of the good governance and mandatory requirement of Section 24A of the General Clauses Act, are not only illegal and void but also not sustainable under law. The said position is also fortified by the judgments of Superior Courts reported as 2005 YLR 1019 , 2007 PTD 2500 , 2004 PTD 1973 , 2005 YLR 1719 , 2003 PTD 777, 2003 PTD (Trib.) 2369, 2002 MLD 357, 1983 CLC 2882 , 2005 PTD 2519 , 2005 PTD 1189, 2003 PTD 2369 and PLD 1995 SC (Pak) 272, PLD 1970 SC 158 , PLD 970 SC 173, 1984 SCMR 1014 and 2012 PTD (T rib.) 619 .
7. Indeed respondent No.1 and his subordinates are appointed and designated as "Officer of Customs" under Section 3 of the Act and they drives powers for functioning from SRO. 371(1)/2002 dated 15.06.2002 within the territory not falling within the ambit of Sections 9 and 10 of the Act, and beyond 5 kilometer of the border of India and Iran as per the enunciation of Section 177 ibid. and SRO 188(1)/83 dated 12.02.1983. The transported goods of the appellant does not falls within the ambit of Section 2(s) and Section 177 instead were/are lawfully , legally purchased by him from the Scrap Market of Shershah, Karachi, where these types of articles/appliances/tools are freely available for sale to the general public on payment of cash, for which if the buyers demands, sellers issues bills (not sales tax invoices) as none of the scrap dealer/seller is registered with the RTO as registered person in terms of contemplation of Section 14 of the Sales Tax Act, 1990 and clause (b) of Rule 4 of Chapter I of Sales Tax Rules, 2006. In the instant case appellant purchased old and used tools e.g. grinders, pipe cutters drill machines and iron frames etc., on payment of cash against valid bills clearly spelling that those were not in workable condition and could only be sold after repair and refurbishment by the appellant at his workshop namely M/s. Nadeem Electronics, situated at Sadiq Colony , Loha Market, Nishat Road, Multan, after packing in bags he transported those from Karachi to Multan through bility No.5313 dated 24.02.201 7 of M/s. Pakistan International Goods Transport Company , Karachi, which were subsequently detained/seized under the provision of Sections 186 and 168(1) of the Act by the subordinate of respondent No.1 on the presumption that the appellant is involved in the act of smuggling and the goods falls within the ambit of smuggled goods as appellant failed to supply Goods Declaration (GD) confirming the import of these despite having knowledge that the impugned goods were not imported either by the appellant or by the seller of the Scrap Market of Shershah, Karachi, instead acquired these from the scrap/old and used articles/appliances / tools collectors/vendors. In the presence of the given circumstances the question arises that as to whether the respondent No.1 and his subordinates have any mandate to intercept /detain /seize the transported old/ used and worn out articles/appliances/tools and as to whether they can demand furnishing of GDs/Bills. There exist no enabling provision in the Act, nor any notification is in field, wherein either the transporter or owner of the transported goods were/are directed to supply the GD/Bill to the transporter and he should keep those during the course of transportation within country . Resultant, respondent No.1 and his subordinates were not within their right to demand furnishing of GD/Bill of the transported goods in the absence of availability of warrant of law as held by Superior Judicial Fora and this Tribunal in countless, reported / unreported judgments e.g. K-' 19/02, H-720/02, H-686/03, Q-776/04, 2005 PTD (Trib.) 135 and PLD 1991 Supreme Court 630.
8. Notwithstanding to the adumbration made here-in-above, the goods transported by appellant were validly purchased from Scrap Market of Sher Shah, Karachi against cash memos/bills. Meaning 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 than the routes expressed in Section 9 or 10 of the Act, or from any other place than a customs station as enunciated in clause (a)(iii) of Section 2(s) instead were lawfully transported from Karachi to Multan through valid bilty the lone/solitary document warranted for transportation within the country . Hence, these cannot be considered as smuggled through any stretch of imagination. Therefore, interception of vehicle, detention, seizure, and preparation of contravention report for 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/appeal 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 does not constitute an offence, meaning thereby that transportation of the locally purchased goods cannot be termed even 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 acting in good faith.
9. It is of paramount importance to adduc e 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 same. 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 Criminal 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 and 2019 PTD 1716 , Collector , Model Customs Collectorate, Multan, v. Customs Appellate Tribunal, Bench-I, Karachi and 3 others , wherein, 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 according unfettered, naked and arbitrary discretion to the author ities 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." The appellant submitted purchase bill/bilty of the transported goods, hence, he discharged burden laid upon him as held by the Hon'ble High Court of Sindh in the judgment referred in paras 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 prove, evident from the fact that the respondent No. 1 and his subordinate intentionally failed to obtain verification of the bills from the seller or bringing into motion the provision of Section 165 of the Customs Act, 1969 despite mandated prior to levelling the charge of smuggling or transportation of smuggled goods. This was done purposely due to the fact that the purchase bills supplied by the appellant were valid and ignored by the respondent No.1 and his subordinates only for achieving their desired results for depriving the appellant from his lawful legal purchased and transported goods and that also while playing havoc with their specified jurisdi ction/powers, while construing those being unfettered, which is not the intention of neither legislature.
10. Before parting with the judgment, it is vital to comment on the observation made by respondent No.2 in Para 15 of the impugned Order i.e. "release of goods upon payment of fine equivalent to 20% of the custom value of the seized goods, in addition to duties and taxes leviable thereon. The respondent No.2 has no authority to allow release of smuggled goods on payment of redemption fine, smuggled goods are not permitted to be released on any condition including payment of fine as ordered in clause (a) of SRO 499(1)/2009 dated 13.06.2009. Being creature of the statute, adherence is mandated upon him. The fact of matter is the respondent No.2 infact admitted in categorical terms that the goods are not smuggled, instead of releasing those unconditionally opted to squeeze duty /taxes and fine despite not leviable under law on the impugned goods. This is not permitted being an extortion.
Likewise respondent No.3 needlessly made reference to the import/sales tax invoices of the local importer/seller , this is unwarranted as evident from the deliberation made in paras supra in regards to the import documents, demand of sales tax invoices by him are also out of context as the case in question is of transportation of the goods within the country , not the goods produced/manufactured in the country , which were cleared from the factory/unit without payment of leviable sales tax or the imported goods, clearance of which were obtained without payment of leviable sales tax. The allegation on the appellant was that he is engaged in the act of smuggling or transporting smuggled goods, which are unsubstantiated in material particular . The entire exercise carried out by the subordinate of respondents Nos.1 to 3 is merely for denying justice to the appellant, reliance was placed on sales tax invoices, despite having no mandate of law. The respondent No.3 by adducing the said inscription in the order intentionally , ignored the vital fact that he is a non entity in the matter of sales tax by virtue of the fact that he is not appointed as Officer/Commissioner of Inland Revenue (Appeals) under Section 30 of the Sales Tax Act, 1990, rendering his observation without lawful authority/jurisdiction and as such void and ab-initio and of no legal effect and cannot be made basis for rejection of the appeal, when goods were lawfully legally purchased from the Scrap Market, Shershah, Karachi and were being transported from Karachi to Multan through valid bilty, such goods least falls within the degree of smuggled as defined in Section 2(s) of the Customs Act, 1969 as held in reported judgment of apex Court 1995 SCMR 387 Sikandar A. Karim v. The State that "If the item alleged to be smuggled by the prosecution were freely available in the open market and the import of such goods were not banned in the country , presumption could arrive that the goods in question were lawfully brought in the country unless contrary was shown" and by the High Court of Lahore in C.A. No. 68/2002 titled as Collector of Custom, Lahore v. S.M.
Saleem that : "6- It is not denied before this Court that the goods subject matter of this appeal were importable. It is further not denied that the respondent had produced receipts before the Adjudicating Officer but he did not give any enable reason whatsoever as to why this piece of documentary evidence was not relied upon. The operative Part of the judgment of the Deputy Collector Custo ms (Adjudicating) is to the effect that "since no documentary evidence indicating the proper import thereof has been furnished. It is hereby concluded that watches and watches part seized in this case have been brought into country without payment of duty and taxes."
7- The afore-referred view is not in conso nance with the law laid down by the August Supreme Court in Pakistan v. Ziauddin (PLD 1962 Supreme Court 440). Wherein the receipt of purchase and payment of money produce by the person from whom smuggled items were recovered was accredited with truth and the court held that he has discharged the burden of proof mandate d in section 177-A of the Sea Customs Act, 1978 at page 446 it was observed as under: The section requires reasonable belief on the part of the person seizing the goods that an act to defraud the government of duty has been committed. If a person purchases goods as in an ordinary market then in the absence of any suspicious circumstances of some definite fact leading to that inference the custom officer is not entitled to a reasonable belief that the Government has been defrauded of the duty payable on the goods. The ordinary method of the import of goods from outside into Pakistan is that they come through the customs barrier and the duty payable is infact paid. The presumption therefore, with respect to any goods which may be sold in the open market in the absence of an indication to the contrary would be that duty has been paid on them."
11 In the light of above deliberation and adhering the ratio decidendi set-forth by the judicial fora, I hold that the appellant has been needlessly dragged into litigation in the absence of warrant of law, merely for depriving him from his livelihood, which he earn after repairing and refurbishing of old and used articles/appliances/tools, a common practice among the technician/electricians doing business on small scale. Hence, declare in unequivocal terms that the interception, detention, seizure of the appellant goods, prepara tion of contravention report by respondent No. 1/subordinates and issuance of show-cause notice and passing of order-in-original/appeal by respondents Nos.2 and 3 are ab-initio, 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 restore the goods to the appellant unconditionally . Appeal is allowed with no order as to cost.