JAHANZAIB WAHLAH, MEMBER JUDICIAL III.-.-Through this order , I intend to dispose of Appeal No.K- 1164/2018 directed against Order-in-Ap peal No.1172646 dated 6-8-2018 passed by collector of Customs (Adjudication-II), Karachi and reassessment orders dated 30-6-2018, 07-8-2018 and 8-8-2018 passed by Principal Appraiser , Group-I and the Deputy Collector of Customs, Group-I, MCC of Appraisement-East Karachi.
2. Briefly facts of the case are, appellant No.1 during the course of his business activities imported a consignment of confectionaries from U.K., upon receipt of documents from the shipper delivered those to his clearing agent Messrs U.K. Traders, Karachi (appellant No.2) for transmitting Good Declaration (GD) with the MCC of Appraisement-East under the provision of Section 79(1) and Rule 433 of the Act/Rules, which he did and as pre- requisite for availing the regime of Custom Computerized System (CCS), depo sited upfront duty and taxes of Rs.9,073,2321- with NBP on 19.06.2018, consequent to which GD was numbered as KAPE-HC-219516 dated 19.06.2018, the Appraiser (respondent. No.2) upon receipt of GD on his work station opted to get the goods examined, prior to passing assessment orders under the provision of Section 80 and Rule 438 of the Act/Rules, wherein, goods were found in accordance with the declaration, consequent to which he passed assessment orders against each items on 25.06.2018,' while adducing relevant remarks corresponding to the assessment in the assessment note, the CCS on the strength of those transmitted view message of even date for payment of additional amount of duty and taxes of Rs.1,432,094/-, which appellant No.1 paid on 25.06.2018 and the inbuilt authority of CCS passed clearance order as per the contemplation of Section 83 and Rule 442 of the Act /Rules.
The Principal Appraiser R&D (respondent No.1) put an hold on the GD /detained the consignment under the provision of Section 186 of the Act and directed the Deputy Collector R&D to create re-examination, not permitted under law. Re-examination was carried out by the subordinates of respondent No. 1 in the presence of Deputy Collector Terminal, wherein the declaration was confirmed once again. Neverthele ss, despite no cause or reason respondent No. 1 directed/ordered the Principal Appraiser . Group-I (respondent No.3) to pass reassessment orders, in accordance with rearrangement of the goods desired by him in regards to description, quality , quantity , PCT heading and value, which he did and created a recovery of Rs.5,532,554/-. However , instead of transmitting view message for payment of the said amount, respondent No.1 framed contravention report with the allegations that die appellant No.1 mis-declared the description, quantity , quality , PCT and value of-the goods and as such contravened the provision of Sections 32(1) and 32(2) of the Act, Section 33 of the Sales Tax Act, 1990 (STA) and Section 148 of the Income Tax Ordinance, 2001 (ITO), punishable under respective penal clauses of the respective Section of the Act, STA and ITO. On the strength of which respondent No.5 issued show-cause notice dated 13.07.2017 containing the facts and contravening provisions of the Acts/O rdinance, as narrated in the contravention report without change of even comma and full stop, which was replied by the appellant's counsel vide dated 23.07.2018. No reply whatsoever was submitted by appellant No.2 as no space has been allotted in the CCS regime for clearing agent as has been allotted for the importer with the caption "Trader reply". The respondent No.5 without controverting on the ground of reply passed order-in-original dated 06.08.2018 through which he dropped almost all the charges levelled by respondent No.1, with the exception of assorted Cadbury Chocolate (Whole Nuts) and ordered confiscation of those subject to release on payment of 20% redemption fine of Rs.870,384/- imposed fine of Rs.200,000/- in addition to leviable duty and taxes. Whereas, he also imposed a penalty of Rs.25,000/- on appellant No.2 without any cause or reason. Paras 16 to 18 of which are relevant and which are reproduced here-in under:
(A) DETAILED POSITION OF ITEM ASCER TAINED BY R&D. The R&D has discovered eight new items in its finding, however , when examined in detail the three items out of eight are Bubble gum declared under assorted Gum two items are Cadbury Chocolate wholenut which were declared but with less value item. The fifth item NestleSmarties there is only difference of 10 kgs marked as new item. The Sixth item Cadbury Finger Dairy Milk Biscuit which is already declared as item No.4 but difference is of 115 kgs. The Seventh item i.e. Cadbury and Dark Chocolate ascertained as new item but same is also declared at Serial No.10 and this adjudicating authority does not find excess quantity of this item reconcilable because the difference in weight in this item shown 480 kgs. whereas there is no difference between total weight in both examinations.
(B) MISDECLA TION IN ITEM NO.09 ASSOR TED CADBUR Y CHOCOLA TE FRUIT AND NUTS. The respondent importer declared assorted Cadbury Chocolate Fruit and Nuts at Serial No.09 weighing 776.16 kgs. However , on second examination it was discovered that the same category of Chocolate were clubbed with the items of less value and that quantity of 1446 kgs was concealed addition to 776 kgs. This is the item who has a clear Valuation Ruling. Therefore, declaring less weight and concealing it with less value item is clear mis-declaration. This fact was admitted by the importer that it was a valuation ruling item and he could not apply it. This resulted in huge loss of revenue and intention is very obvious.
(C) ITEM NO.13 ASSOR TED GUMS WHERE VALUA TION RULING APPLICABLE. The respondent importer declared assorted gm at serial No.13 total weight 445.74 kgs. The R&D section of MCC Appraisement-(East) reportedly found same weight but in its report dissected one item into three heading and of which two items falls under Valuation Ruling and recommended for application of VR. On the perusal of the first assessment the value has already been enhanced from declared price of section 6 to section 12/unit and accordingly duty and taxes collected. Here after going through R&D assessment sheet, it is clear that half of the item was already correctly assess and remaining two bifurcated items on which Valuation Ruling is recommended. But the Collectorate is equally responsible to enforce the ruling.
(D) ITEM NO.7 ASSOR TED CADBUR Y CHOCOLA TE (WHOLE NUTS) ASSESSED ON DATA. The respondent importer declared value of Whole Nut Chocolate Bar at US$. 4.8/kg and the first assessment accepted the same value. However , the R&D increase the value from US$. 42 to US$ 10kg and this assessment by R&D is endorsed by this authority as the Valuation Ruling is available for chocolate with Fruits and Nuts, where value are fixed US$ 16 and USS.18/kg but this item contain whole nuts therefore should be assessed between simple Chocolates and Chocolates with Fruits and Nuts. This chocolate with Whole Nuts cannot be assessed at the value of Chocolate of different brands and flavours and that is only Chocolate not containing anything extra. Chococlates of different brands and flavours and does not attracts same valuation of fruits and nuts, however , this does not come under mis-declaration as there is no Valuation Ruling to be applied on this item by the respondent that there is no issue of classification.
Keeping in view the above finding, the mis-declaration is established in the case of item Cadbury Item with Fruits and Nuts and total value which comes to Rs.4,351,920/- attracting 20% amounting to Rs.870,384/- subject to the condition that the same are otherwise importable as per import policy Order in vogue as prescribed under SRO 499(1)/2009 dated 13.06.2009, in addition to all leviable duty and taxes as per applicable VR on mis-declared and excess weight items. A penalty of Rs.200,000/- (Rupees Two Hundred Thousand Only) is also imposed under clause 14 of Section 156(1) of Customs Act, 1969 on the importer . As far as Cadbury Dairy Milk Whole Nut Chocolate Bar should be assessed as per re-assessment workout by R&D section of Model Customs Collectorate of Appraisement (East) Karachi for remaining items including Bubble Gum, the VR may be applied if available and duty and taxes accordingly may be collected. Furthermore, Collectorate should also look into the role of Assessment Team at the time of First assessment which missed to apply Valuation Ruling relating to different items.
As far as role of clearing agent in the subject case is concerned, it is observed that under the Customs Act, 1969 he act on behalf of principal for the purposes of the Act and cannot be absolved of all responsibility other than merely scanning the documents delivered by the Principal/importer . He is required to make a true statement /presentation to Custom after analyzing all aspects of the Goods Declaration and the documents delivered to him by his Principal. In case mis-declaration is proved, the clearing agent has to be penalized along with Principal/importer . A penalty of Rs.25,000/- .(Rupees Twenty Five Thousand Only) is also imposed on U.K. Traders, (CHAL# 2916) Karachi in terms of clause (14) of Section 156(I) of the Clammy Act, 1969 for violation of Section 32 of the Customs Act, 1969.
3. Upon receipt of order of the respondent No.5, the respondent No.4 passed 2nd reassessment orders dated 07.08.2018 in the absence of availability of enabling provision in the Act, he subsequently on 08.08.2018 passed 3rd reassessment orders once again on the direction of respondent No. 1 against the items, charges against which have been dropped by respondent No.5 on the premise that the order of respondent No. 5 is not correct and the charges levelled by him in the framed contravention report were/are correct and hold field, even in the presence of observation made by respondent No.5 in order dated 06.08.2018, in this manner having no warrant of law, he squeezed an amount of Rs.4.559,720/- from the appellant in the shape of duty and taxes not leviable/payable under law .
4. The appellant filed the 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 or not even to date by the respondent No. 1 .
Non submission of counter affidavit whether by will or default forfeit the respondent No.1 right to deny assertion made in the affidavit. This proposition of law stands validated from the following judgments of the Superior Judicial Fora reported as (1974) 94 ITR-1, 1980 PLC (C.S.) 350; 1982 PLC (C.S.) 757, 1986 CLC 745, KAR. (1984) 146 ITR 140, (1985) 53 Taxation-I (Trib.) 1986 CLC 1119, 1986 CLC 1408 Kar. 1991 MLD 1243 , PLD 1992 SC 317, 1993 SCMR 662, PLD 1996 Karachi 68 and 1986 PLC (C.S.) 560, 2003 PTD 2118. Whereas, the representative of respondents Nos.3 and 4 on the date of hearing averred; that the reassessment orders passed by them on different dates and so of respondent No.5 are correct in fact and law and may please be maintained.
5. Rival parties heard and case record perused. It is just and proper to decide first the vital aspects that as to whether respondent No.1 is empowered to put an hold on the GD/detain the consignment under the provision of Section 186 of the Act, which has been allowed released after passing of valid clearance order under the provision of Section 83 and Rule 442 on the strength of assessment order passed by the authority defined in section 2(a) under section 80 and Rule 438 of the Act/Rules, in exercise of the powers vested -upon him through SRO 371(I)/2002 dated 15.06.2002. Upon perusal of the record of the case, I have observed that the assessment orders under section 80 and Rule 438 in the present case were passed on 25.06.2018 against each imported items and additional amount of duty and taxes and penalty were paid on same date and the goods were ought to be released after passing of clearance order passed by the authority defined in Section 83 and Rule 442 of the Act/Rules, upon removal of objection, of scanning Plant Protection Release Order , raised without any lawful authority as the goods imported by the appellant are not connected in any manner either with plant or plant material. The respondent No.1 put an hold on the GD/detained the cons ignment on the same date under the provision of section 186 of the Act despite having no occasion and the fact in regards to the formation of R&D, other wise illegal, being formed in the absence of availability of enabling provision in the Act, empowering Collector of Customs, to form/establish the said cell, parallel to Directorate General of Intelligence and Investigation-FBR (watch dog) under the provision of 3A of the Act and delegation of power to its officials through SRO 486(1)/2007 dated 09.06.2007. When Collector of Customs is not empowered to form any section or cell on his own, similarly not empowered to delegate powers for functioning to the officers of the said cell/section. For safe guarding of the interest of Government, proper mechanism is available in different relevant sections of the Act. Therefore, any action taken should and ought to be within the devised frame work, not on the basis of personal understanding/opinion having no warrant of law .
6. For detention of any consignment by the authority empowered under entry 92 of SRO 371(1)/2002 dated 15.06.2002, adherence of expression of Section 186 is mandatory which read as under: 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 .
7. Upon conscientious analysis of Section 186, it is observed that the said section comes into play during the course of imports, i.e. 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 imposes fine and penalty , which importer has not paid or any inquiry or investigation in respect .of any goods is under way for imposition of fine and penalty . The empowered officer can detain forthcoming consignment of the same owner/importer till the time fine and penalty are paid. The case Of appell ant is that against him, no order is infield, through which fine/penalty has been imposed upon him and that has not been paid or order so passed has not been assailed by him before the forum expressed in the Act. Neither any inquiry or investigation in respect of any of his imported consignment sans the instant is under way for decision for imposition of penalty . Resultant, his lawful imported/cleared consignments after payment of leviable duty and taxes on the strength of assessment order passed by the authority under Section 80 and Rule 438 of the Act/Ru les cannot be detained under any pretext by any officer of customs, respondent No.1 is not exception as held by the Hon'ble High Court of Sindh in its judgments reported at 2013 PTD 628 Muhammad Ali v. FOP that "once goods has been examined and assessed to duty and taxes and reassessed in terms of section 80 of the Customs Act, 1969 and the same were paid and clearance of the consignment had been made and goods were "out of charge" ; Customs Authorities had no jurisdiction to refuse release of such goods nor the same could be detained on the basis of alleged mis-declaration of some previous consignment by the importer --- Customs Authorities could reassess only if duty and taxes were not levied correctly by invoking the provisions of section 32 of the Customs Act, 1969 provided the same were attracte d to facts and circumstances of the case --- Neither any inquiry of investigation was pending nor any proceeding for mis-declaration had been initiated against the petitioner ---- No notice for detention, seizure or confiscation was issued ---- Detention of the petitioner's consignment was therefore illegal and without jurisdiction and in 2014 PTD 582 Amir Siddiqui v.
Federation of Pakistan and 03 others that "authorities could detain 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 opini on no such action is permitted under this provision. The respondents 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 under 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 goods 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 released them is totally contrary to the provision of the Act, 1969". Hence, in categorical terms I hold that puttin g an hold on GD/detaining of consignment of the appellant by the respondent No.1 is not only without lawful authority even jurisdiction and patently in derogation of Section 186 of the Act and the law laid down by the Superior Judicial Fora.
8. The legislature through a money bill formed/established the Directorate General of Post Clearance Audit (DGPCA) by inserting 3DD in the Act and their officers have been delegated powers by the Board through SRO 500(1)/2009 dated 13.06.2009 for conducting audit under section 26(2) of the Act, of the importers books of account maintained under Section 211 after serving notice/summons under clause (a) of Section 26A ibid, they are empowered to look into every aspects of the declaration made by the importer and assessment order passed by the competent authority of the Clearance Collectorate under Section 80 and Rule 438 of Act/Rules and prepare audit observation and forward that to the importer for clarification, if the reply fails to settle the issue, frames contravention report and forward it to the Clearance Collectorate, which onward forward 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 by the authority defined in section 179 ibid. The respondents Nos. 1, 3, 4 and 5 assumed the powers of officials of DGPCA and conducted the audit post clearance of the GD of the appellant under Section 26(2) while exercising the powers specifically delegated to the officials of the DGPCA. Neither of the aforesaid respondents nor superior/subordinates are empowered to encroach the sovereign jurisdiction of DGPCA under any circumstances, as this will render the formation of DGPCA by the legislature, Section 3DD of the Act, and SRO 500(1)/2009 dated 13.06.2009 as redundant. Similarly , the respondent No.1 or any other officer of Customs, are also not appointed/designated as an "Officer of Inland Revenue" under Section 30 of the STA and Section 228 of the ITO. Resultant, are not empowered to conduct audit in the matter of Sales/Income Tax under the provision of Section 25 of the STA and Section 177 of the ITO. Hence, respondents Nos. 1, 3, 4 and 5 acted without power/jurisdiction, in conducting the audit of sales tax and income tax as evident from the assessment orders, containing the amount of sales tax and income tax rendering the act of conduction of audit and passing of reassessment orders ab-initio, null, void. It has been observed by me with great concern that respondents Nos.1, 3 and 4 under the patronage of their superior are running a parallel department to the DGPCA and Directorate General of Internal Audit. This is not permitted under law, if it is left to be perpetuated, anarchy will prevail within the different organs of FBR to encroach powers/jurisdiction of each other , despite having no lawful authority/jurisdiction. This type of intention/act cannot be validated under any circum stances and has to be crushed in the initial stages for maintaining the integrity and sanctity of the different sovereign organs of FBI?. Therefore, the conduction of audit post clearance of the GDs of the appellant under Section 26(2) of the Act, Section 25 of the STA and Section 177 of the ITO by the respondent No.1 or his subordinates, for determination of short levied /collected amount of Sales Tax, Addition al Sales Tax and Income Tax on the imported goods is without lawful authority/jurisdiction. Hence, ab-initio null and void and as such coram non judice. The superstructure built thereupon ought to be crumble down no matter how strong it may be.
9. It is, now a legal fiction that the consignment which has undergone the process of passing assessment order under the provision of Section 80 and Rule 438 of the Act/Rules for levy of duty and taxes, which were paid and thereafter valid clearance orders as contemplated in Section 83 and Rule 442 ibid has been passed by the competent authority in exercise of the powers vested upon him through SRO 371(1)/2002 dated 15.06.2002. Such orders are appealable orders and can't be disturbed by any other authority including respondents, Nos. 1, 3 and 4, with the exception of preferring an appeal under the provision of Section 193 of the Act as was/is invariable done by an importer , in case he felt the assessment orders so passed are nullity to the facts/law . Similarly if the respondents Nos.1, 3 and 4 were of the view in the present case of the appellant proper assessment has not been carried out, the only option left with them to adopt the mechanism available in the Act, for the reopening of the impugned assessment order by filing an appeal before the Collector of Customs, Appeals under the provision of Section 193 of the Act either by him directly or through respondent No. 3 or 4, in which they should had incorporated all of their apprehensions; opinions/findings, including contravening provisions of the Act and so the applicable penal clauses. Upon receipt of that the Collector of Customs, Appeal have to go through the facts and grounds of that, thereafter if he think fit that in the case under appeal correct duty and taxes have not been either levied or paid on the basis of found goods, is empowered to issue a notice under Section 32 of the Act as enunciated in 3rd proviso of Section 193A to the respondent (importer/appellant) and after receipt of reply to the said notice, the Collector of Customs has to decide the appeal in the light of the issued, show-cause notice and reply . In the instant case no appeals have been filed either by respondents Nos.1 or 3 and 4 despite mandated under law, instead respondents Nos.1, 3 and 4 assumed the powers under Section 195 of the Act and reopened valid assessment/clearance orders dated 25.06.2018, passed under the provision of sections 80, 83 and Rules 438 and 442 of the Act/Rules. Neither respondents Nos.1 nor 3 and 4 are empowered to reopen valid assessment order passed by the authority defined in Section 2(a) of the Act, in exercise of powers vested upon him through SRO 371(I)/dated 5.06.2002. All acted without power/jurisdiction, hence, their actions deem to be without any lawful authority and as such ab-initio, null and void as held by Superior Judicial Foras in umpteenth reported judgment e.g. 2014 PTD 1256 Messrs Paramount International (Pvt.) Ltd. v. FOP and others , wherein their lordship of High Court opined that "department or an Officer of Customs, if aggrieved, by any decision or order passed by an officer of customs below the rank of Additional 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 ay 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 C.P.L.A. No.10 5-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.
Whereas the High Court of Balochistan in 2019 PTD 1712 titled as Collector of Customs, MCC, Quetta v. Al- Habib Enterprises and Engineering and others , while dismissing the SCRA of the department held that "after assessment of leviable duty and taxes under section 80 of Customs Act, 1969 and payment thereof and after clearing the vehicle under Section 83 Customs Act, 1969, the available remedy of filing appeal under section 193 of the Customs Act, 1969 was not availed by the concerned officials of the Collectorate of Customs, Additional Collector of Customs, (Adjudication) had no jurisdiction under the provision of Customs Act, 1969 to issue show- cause notice and to pass order-in-origina l. No question of law having arisen out of the impugned of the judgment passed by Appellate Tribunal warranting interference by High Court under section 196, Customs Act, 1969.
References were dismissed in circumstances. "
10. For determination of essence and spirit of reassessment order passed by respondent No.3 dated 30.06.2018 under sections 80(2) and (3) is vital and which are "(2) An officer of customs may examine any goods that he may deem necessary at any time after the import of the goods into the country and may requisition relevant documents as and when and in a manner deemed appropriate, during or after release of the Customs:
(3) If during the checking of goods declaration it is found that any statement in such declaration or document or any information so furnished is not correct in respect of any matter relating to the assessment, the goods, shall, without prejudice to any other action which may be taken under this Act, be reassessed to duty".
11. Upon plain reading of subsection (3) of Section 80, it is observed that it is dependent on subsection (2), unless subsection (2) is not complied in letter and spirit no action can be taken under section 80(3) of the Act. Meaning thereby that re-assessment under Section 30(3) after release of the goods is permitted only after calling for the documents as expressed in Section 30(2) ibid. Upon receipt which or the information so transmitted/submitted or the statement given by the importer to the Customs Authority if are found to be incorrect in respect of earlier assessment. Upon perusal of the import documents, examination report and documents scanned by appellant and assessment order 25.06.2018 passed by respondent No.1, it has been observed that description, quality and quantity were the same as declared. No visible mis-declaration in any aspect has either been made by the appellant in material particular nor any illegality . has been committed by the, competent authority passing the assessment order . In the instant case no re-assessment in the garb of any other manner was warranted under Section 80(3) of the Act. While passing reassessment order in the garb of reviewed the respondent No.3, also acted in nullity to the provision of Section 29 of the Act. It is of vital importance for reaching at a just decision to visit and understand essence and spirit and constitutional and legislature construction of Section 29 containing expression "Restriction on amendment of goods declaration" reading as under: "Section 29: except as provided in section 88 no amendment of goods declaration relating to goods assessed fine duty on declared value, quantity or description thereof shall be allowed after such goods have been removed front the port area or assigned Customs Reference Number electronically , as the case may be." (Emphasis supplied)
12. The rationale and legal construction of the above expression is that no amendment under section 205 of the Act, is allowed in the columns of the declared value, quantity or description after removal of the goods from the customs area for home consumption as contemplated in Section 79(I) after passing of valid assessment/clearance order under Sections 80 and 83 and Rules 438 and 442 ibid, or after shipment of the exported goods through GD for export transmitted under Section 130 and Rule 444 after completion of codal formalities defined in Section 131 and Rules 450 of the Act/Rules or wherein Customs Reference Number is allotted to the GD electronically . A cap has been laid on the importer/exporter for obtaining amendment after out of charge of the GD in case of import or shipped in full in case of GD for export or post 'filing of GD. The phrase "assessed for duty" used in the expression lays restriction on the Customs not to amend itself the contents of GD after clearance under Sections 83 and 130 and Rules 442 and 450 of the Act/Rules on the strength of valid assessment orders for levy and duty and taxes under Sections 80 and 131 and Rules 438 and 442 ibid by the appropriate authority defined in Section 2(a) in exercise of the powers vested upon him through SRO No. 371(1)/2002 dated 15.06.2002. That the respondent.
No.3 while making reassessment of the appellant GD after passing of assessment/clearance orders in fact amended the descriptions, quantities and values as against declared and assessed in the GD through assessment orders dated 25.06.2018, in terms of Section 205 of the Act, which is in derogation of Section 29 and as such not valid and fail the test of judicial scrutiny . In principle if it is considered for the sake of arguments that the customs is empowered to reassess a GD after clearance of the goods under provision of Section 80(3) without adhering the procedure laid down in Section 80(2), there was no need for the legislature to frame subsection (2) for inserting in Section 80 of the Act. The intention of legislature was not as interpreted by the Principal Appraiser (R&D) and respondent No.3. The fact of matter is no reassessment is permitted under Section 80(3) of the Act, once the goods are cleared for home consumption or shipped on board for export. The reassessment is permitted prior to passing of Order of clearance/shipment under Sections 83 and 130 and Rule 442 and Rule 453 of the Act/Rules upon filing of review by the importer/exporter under Rules 441 and 450(3) ibid against the assessment orders of Appraiser/Principal Appraiser before the Principal Appraiser and subsequent before Assistant/Deputy Collector of the Group as the case may be. Theref ore, I hold that the reassessment orders dated 30.06.2018 passed by Respondent No.3 is tantamount to amendment under Section 205 post clearance/out of charge of the goods, hence, in nullity to the provision of Sections 29, 80(2) and (3) of the Act, besides without any power or jurisdiction under Sections 80, 131 and Rules 438 and 450 of the Act/Rules and as such without any lawful authority , hence void and ab-initio.
13. I have also noticed with great concern that the respondent No.5 in the show cause notice have invoked Section 33 of the STA and 148 of the ITO without realizing that Section 33 contains penal clauses synonymous to Section 156(1) of the Act and 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 income tax alike custom 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 T elevision Corporation, Ltd. v . Commissioner Inland Revenue (Legal), L TU, Islamabad and others.
Resultant, the aforesaid deliberated sections are independent and cannot be used to invoke a charge. Since, these sections are irrelevant/erroneous in the matter of customs, no show-cause notice can be issued by a customs officer under these sections, 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 and 2013 PTD 813 Samar International v . Addl. Collector of Customs .
14. In order to further crystallizing the issue that as to whether respondent No.5 was empowered to issue show- cause notice in the matter of sales/income tax, I have perused Section 30 of STA and Section 228 of the ITO and have observed that the legislature appoin ts under the said Sections different organs of the FBR as Officer of Inland Revenue for exercising powers under the respective Sections of the Act/Ordinan ce, delegated through statutory notifications or under Section 207 of the ITO. In these Sections respondent No.5 least figures nor in section 11 of the STA or section 162(1) of the ITO. Therefore, the respondent No.5 under no circumstances was empowered to lay hands on the matter Sales/Income Tax. These sections least empowers the Officers of Customs including the respondent No.5 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 for these type of recovery a show-cause notice has to be issued under the Provision of Section 11 of the STA and Section 162(1) of the ITO, the authority to issue show cause notice under these Sections are Officer of Inland Revenue and the Commissioner of Income Tax, in these sections respondent No.5 least figures nowhere. Rendering the entire proceeding initiated by respondent No.5 as ab initio null and void and as such coram non judice as held in Major Syed Walayat Shah v. Muzaf far Khan and 2 others (PLD 1971 SC 184), Omer and Company v. Controller of Customs , (Valuation): (1992) ALD 449 (1) Karachi AAA Steel Mills Ltd. v. Collector of Sales Tax and Central Excise Collectorate of Sales Tax (2004 PTD 624), PLD 1976 Supreme Court 514 Ali Muhammad v. Hussain Buksh and others and PLD 2001 Supreme Court 514 Land Acquisition Collector , Noshehra and others v.
Sarfraz Khan and others , S.T.A. 444/03, S.T.A. 465/07, 2010 PTD (Trib) 1636 , 2010 'PTD 465, 2010 PTD (Trib)
2158 , 2011 PTD (T rib) 1010 , 2011 PTD (T rib) 1680 and 2011 PTD (T rib) 2086 .
15. Before adverting on the remaining committed illegalities by the respondents Nos.1, 3, 4 and 5, it is felt just and apt for me to deliberate on the quality and merit of the order passed by respondent No.5 dated 06.08.2018. Upon perusal of which I have observed that he miserably failed to justify in regards to holding that the appellant did make misdeclaration, with the exception of relying upon the version of respondent No.1 and assumed that the appellant is guilty of mis-declaration, which is not allowed by law, conviction/declaring someone guilty needs tangible un- refutable evidence, holding charges of mis-declaration as correct on the basis that ruling for Chocolates with Fruits and Nuts was infield, wherein determina tion of value for levy of duty and taxes has been fixed by the Director , Directorate General of Valuation at US$. 16 and 18/kg, non-application of which is instrumental in short payment of duty and taxes of Rs.2,284,414/- leviab le on its customs value of Rs.2833417/- (erroneously worked out as Rs.4,351,920/- in the contravention report and show-cause notice), on which he imposed fine of Rs.870,384/- and penalty of Rs,200,000/-. The formed opinion of learned respondent No.5 is absurd when anything is not formed in excess, how he can presume that mis-declaration was made and to the extent of value, which can only be levelled on the basis of direct evidence (evidential invoice) of the same goods of the same country of origin and period given in Rule 107(a) of the Rules as per the direction of para 78 of CGO 12/2002 dated 15.06.2002 and clause (d) of SRO 499(I)/2009 dated 15.06.2009 not on the basis of value determined in Valuation Ruling as the same is meant for assessment only not for levelling charge of mis-declaration as held by this Tribunal in 2014 PTD (Trib.)
190 M/s. Shoaib Tayyab International, Karachi v. Additional Collector of Custom s, MCC of Appraisement- East. Notwithstanding, for reaching on the said opinion the respondent No.5 relied upon Serial No.17 of Valuation Ruling No.1042/2017 (erroneously numbe red as 1042/2016) dated 13.03.2017, while doing so the ignored the fact that a valuation ruling is only valid for period of 90 days for the purpose of assessment i.e. on or before 12.06.2017.
No assessment can be made on the basis of the said ruling of the imported goods arrived on or after 12.06.2017 as held by High Court of Sindh in reported judgments 2018 PTD 1746 Sadia Jabbar v. FOP and 2016 PTD 702 Danish. Jehangir v. FOP and 02 other s that "a valuation ruling issued under Section 25A can, in our view, only apply for a certain period and no more. The reason for this lies in the fact that the valuation ruling must be determined using one of the methods of Section 25/the Valuation Agreement. Now at least three- of those methods the identical goods method, the similar goods method and the deductive value method, require the value to be determined "at or about the same time" as the goods being valued. This expression has been defined in Chapter IX of the Rules (in Rule 107) meaning "within ninety days prior to the importation or within ninety days after the importation of the goods being valued" in the same judgment the Hon'ble High Court nullified para 5 invariably available in all ruling that "in cases where declared/transaction value are higher than the Custom values determined in the ruling, the assessing officer shall apply those value in terms of subsection (1) of Section 25 of the Customs Act, 1969," while holding "that any valuation ruling issued with the said direction is ultra vires to Section 25A because it contemplates and perm its a predetermination of Custom Value. It is impermissible to apply Transaction value in terms of Section 25A". Relying on a stale ruling and in negation of 2014 PTD (Trib.) 190 for penalizing appellant is without lawful authority and as such void and ab-initio and of no legal ef fect.
16. It was not obligatory under law for the respondent No.5 to blindly rely upon the value determined in the valuation ruling, which could be erroneous, rather totally void, by virtue of the fact that it is nullity to the provision of Section 25 of the Act and even of subsection (9) of Section 25, which is in fact apt a subsection under which value can be fixed rather it is amalgamation of Sections 6, 7 and 8, the veracity of the ruling could be visualized from the determination value at serial No.14 till 16, wherein values of Cadbury Brand various flavor and blends of different weight have been fixed between US$. 4.60 to 5.00 /kg, how could value of same chocolate of the same brand containing fruits and nuts could be US$ 16.00/kg, this is completely absurd and stand validated from the fact that all type of chocolate of Cadbury whether with or without fruits and nuts are sold in one and the same price in the local market and even by the exporter . Assessment on the basis of the said ruling is not valid, rather arbitrary/unilateral not permitted under Rule 1 10 of the Rules.
17. The question arises that if the appella nt was aggrieved with the determination of value, why he has not opted to prefer a revision application against that before the Director General Valuation under the provision of Section 25D of the Act, answer to this is simple, when an assessment order is being passed with the application of valuation ruling, it stand merged in the assessment order passed by the competent authority under the provision of Section 80 and Rule 438 or an order passed by an adjudicating authority/respondent No.5, ruling stands merged in the orders as per theory of merger and vires of that could be challenged before the Appellate Authority , no contrary inference could be drawn, in regards to the said principle of law settled by the Hon'ble High Court of Sindh in 2010 PTD 1293 M/s. P.M. International. Karachi v. Federation of Pakistan and 3 others , "wherein their Lordship refused to entertain petition while observ ing that since the order-in-revision passe d by Director General Valuation on revision application filed by the petitioner before him against the vires of the Valuation Ruling, stands merged in the assessment order passed by the Customs Officer under the provision of Section 80 of the Act. Both could be assailed under the provision of Section 193 of the Act being ancillary to each other".
18. Reverting back to the remaining legal deficiencies apparently floating on the surface upon scrupulously going through the fact of the case, it has been observed by me that no mis-declaration in material particular have been reported by the examining officials in any of the examination report in any aspect i.e. description, quantity origin, and weight, resultant, neither the provision of section 32(1) and (2) are applicable, evident from the assessment/reassessment order and the case of appellant at the most could be termed to be of, inadvertence, error and misconstruction, falling under the ambit of Section 32(3) of the Act, under which show-cause notice had to be issued by the Principal Appraiser in terms of Serial No.3(ii) of SRO 371(1) /2002 dated 15.06.2002 and by none else. Whereas, in the case under consideration respondent No.5 issued show-cause notice and passed order-in-original by usurping the powers of his subordinate, which is not permitted under law. Nobody is allowed to usurp the powers of his subordinates as held by the Hon'ble Supreme Court of Pakistan in reported judgment PLD 1973 Supreme Court 49 The State v. Zia-ur-Rehman and others and 2009 PTD 1083 that "Superior authority cannot exercise the power of his subordinates for adjudication purpose powers of sub-ordinate exercised by superior authority is held as to be without jurisdiction beside usurpation". Rendering the transmitting of view message for creating demand/recovery in the garb of reassessment under section 80(3) and order under Section 179 of the Act without power/jurisdiction, hence ab-initio, null and void and coram non judice. Exercise of powers by an authority is mandatory requirement and its non fulfillment would entail the entire proceeding to be coram non judice. Ref: PLD 1963 SC 663, PLD 1971 SC 184, PLD 1976 Supreme Court 514, 1983 SCMR 1232, 1984 CLC 1517 , PLD 1995 Kar. 587, PLD 1992 SC 486, 2001 SCMR 103, 2004 CLD 373, -PLD 2004 Supreme Court 600, PLD 2005 Supreme Court 842, 2009 PTD (Trib.) 1996, 2009 PTD 1112, 2010 PTD (Trib.) 832, 2010 PTD (Trib.)
465, 2010 PTD (T rib.) 1636, 2011 PTD (T rib) 21 14, 2011 PTD (T rib) 2557 and PLD 2014 Supreme Court 514.
19. The respondent No.1 implicated and respondent No.5 charged appellants for mis-declaration under the provision of Section 32 of the Act merely on the basis of assumption/presumption that appellant transmitted GD on the basis of erroneous description and PCT, in order to hoodwink the Customs and to evade the amount of duty - and taxes. I am unable to buy the said arguments as in conduction of examination, they have no part to play instead had to be carried out by the official of customs posted at PICT with the assistance of Officials of Terminal Operator , independently and without any influence as per the expression of Section 198 and Rule 435 and the passing of assessment/clearance order under sections 80 and 83 and Rules 438 and 442 of the Act/Rules rest with the sole and exclusive domain of the Customs Officer listed at Serial Nos.30 and 33 of the SRO 371(1)/2002 dated 15.06.2002. The Officials conducting the examination who confirmed the declarations and who passed assessment/clearance orders while accepting the declaration as true and correct. If it is presumed as stated in the show-cause notice that the alleged clearance of the goods imported by appellant were on the basis of erroneous description weight, value and PCT, that could have not been possible unless these officials were having hands in gloves with them. Meaning thereby that they are standing on the same pedestal. Ironically , no charges have been levelled under Section 32(2) against those Officials, as of appellant. This act of the respondents Nos.1 and 5 proves that appellant had been met out with partial treatment, which is not permitted under Article 25 of the Constitution of Islamic Republic of Pakistan and the law laid down by the Superior Judicial Fora in reported judgment 2002 SCMR 312 and 2009 PTD 1507 the Hon'ble Superior Courts have observed that "there exists no power to target incidence of tax in such a way that similarly placed person be dealt not only this similarly , but discriminatingly". Whereas, in reported judgment 2005 SCMR 492 the Hon'ble Supreme Court held that "A facility allowed to someone and denied to other is discrimination". The Apex Court further held in reported judgment 2010 SCMR 431 that: "Doctrine of equality , as contained in Art.25 of the Constitution, enshrine golden rules of Islam and states that every citizen, no matter how high so ever, must be accorded equal treatment with similarly situated persons---State may classify persons and objects for the purpose of legislation and make laws applicable only to persons or objects within a class---In fact all legislations involve some kind of classification whereby some people acquire rights or suffer disabilities whereas . others do not---What however , is prohibited under principle of reasonable classification, is legislation favouring some within a class and unduly burdening others---Basic rule for exercise of such discretion and reasonable classification is that all persons placed in similar circumstanc es must be treated alike and reasonable classification must be based on reasonable grounds in given set of circumstances but the same in any case must not offend spirit of Art. 25 of the Constitution."
20. It is deemed to be appropriate to add further in regards to the allegation of mis-declaration as stated in show- cause notice, I have examined the import documents, examination report and the assessment orders dated 25.06.2018 or reassessment order dated 30.06.2018 and show-cause notice dated 13.07.2018 and has observed that no mis-declaration of any sort is visible from the assessment order passed by the competent authority being based on the declaration, examination report, images and uploaded documents in compliance to Rule 437 ibid., the subsequent reassessment orders dated 30.06.2018 have been passed by the respondent No.3 on the direction of respondent No.1, who changed the description quantity , weight and PCT in accordance to his biased opinion, having no nexus with the fact of the case, only for the purpose of justifying the illegal act of detention after passing of clearance order which is not permitted under law as deliberated in parasupra and the law laid down by the Hon'ble Supreme Court of Pakistan in reported judgment 1990 PTD 155 Edulji Dinshaw Ltd. v. Income Tax Officer that "The Income Tax Officer is seeking to reopen the passed assessment for the last 09 years under section 65 of the Ordinance acting beyond his jurisdiction because all material facts were already on record of the department his predecessor had held that the assessee was liable to be assessed as a property holding company i.e. accompany not carrying on the business of buying and selling properties there was no suppression or concealment of any facts but merely a change of opinion by the I.T.O. as to the inference to be drawn from the same facts, there was thus no legal basis for proceeding under section 65 of the Ordinance.". The assessment order dated 25.06.2018 is without any exception was correct in fact and law as no illegality was committed by the appropriate authority . No goods can be stretched beyond their description only for the purpose of squeezing duty and taxes inspite not leviable. It is settled proposition of law that ''in interpreting the taxing statute the customs must look to the words of the statute and interpret in the light of what is clearly expressed. It cannot imply anything which is not expressed, it cannot import provision in the statute so as to support assumed deficiency . There is no room for intendment. There is no equity about a tax. There is no presumption as to tax nothing is to be read in, nothing is to be implied. One only look fairly at the language used nothing else to be done as held by High Court and Supreme Court of Pakistan in their reported judgment starting from Abbasi Steel Industries Ltd. v. Collector of Customs 1989 CLC 1463 to M/s. Fazal Ellahi v. Additional Collector of Customs , 2011 PTD (Trib.)
79. Even otherwise "if there are two or more interpretations of our provision pertaining to levy of tax on account of anomaly/ambiguity the one favourable to tax payer has to be adopted by the court" as per judgment reported as 1993 SCMR 274, 2005 SCMR 728, 2007 PTD 1656 and 2008 PTD 1227 . It is considered opinion of the Superior Judicial Fora in a number of judgments "that tax payer should not be made to suffer on account of bad drafting of the statute". Reliance is placed on the judgment of High Court of Sindh reported as 2004 PTD 901 ".
"While interpreting the taxing statute the Court must look to the word of statute and interpret it in the light of what is clearly expressed. It cannot imply anythin g which is not expressed. It cannot import provision in the statute as to support assumed deficiency ."
"While finding out intention of the legislature language of the law is not be seen and if the intention is cleared from the language used nothing else is to be done." "if the legislature has not sufficiently expressed itself Court has no duty to act for it, for court is concerned with what it lays down and not what it has only in mind, but once it has been articulated enough. Court does not more than give effect to the intention that it has succeeded in expressing. The intention may be expressed in faulty language, in very faulty language in extremely faulty language, this is of no consequence as long as there is no doubt as to the intention. A draftsman mistake as long as it relates to form in which the legislative intend is expressed and not to the substance of it, is of no effect. Of course ones an element of doubt as to the intention of the legislature enter the field consideration otherwise irrelevant may all become relevant.
21. No subsequent assessment orders or order under the provision of Section 80 and Section 179 of the Act is permitted to be passed for piling upon infield order of the adjudicating Authority , respondent No.2 is not an exception, for validation of his act no enabling provisions exit in the Act. The only option available to the respondents Nos.1 and 4 was to file an appeal against the said order the provision of section 194A of the Act before the Customs Appellate Tribunal. To the contrary , the respondent No.4 in the presence of order of respondent No.5 passed 2nd reassessment orders dated 07.08.2018. This is not permitted under Law rendering the reassessment orders as of no legal effect/jurisdiction and as such void and ab-initio and recovery so created for payment is as well without lawful authority , amount so recovered /paid on the basis of subsequent multiple reassessment order/order-in-original for piling upon existing assessment order dated 25.06.2018. Callousness of respondent No.1 is visible and stands proved from the fact that being subordinate of respondent No.4 he directed him to pass subsequent 3rd reassessment orders dated 08.08.2018, which was fourth in number with the exception of order-in-original for levy of duty and taxes on the items Nos.12(i) (ii) (iii) (iv), 13(ii) (iii) & (iv), Cadbury Finger Dry Milk Chocolate Biscuit, Tublerone White Milk and Dark Chocolate, duties and taxes against which had already been paid by the appellant and charges against which has been dropped by the respon dent No.5 in the order and even on Aerated non Alcoholic Super Malt Bevera ges, which he ordered to assess under PCT 2202.1010, despite of the fact that it is specifically meant for aerate d water with added sugar (soft drink) not for Non Alcoholic Beverages, having no sugar imported by the appellant No.1 falls under 2202.9100, on the pretext that the order of respondent No.5 is not correct and duty and taxes have to be charged as per his formed opinion and framed contravention report, despite having no order . The respondent No.4 obeyed and passed the re-assessment order for creating recovery . This order is as well without lawful authority and jurisdiction and as such void and ab-initio and needs to be struck down.
22. Lastly , in regards to the imposed penalty of Rs.25,000/- on appellant No.2 by the respondent No.5 on the basis of allegation of collusion in the show cause notice for which neither respondent No.1 or 5 placed on record even a slightest incriminating evidence in support of the same despite mandatory under law. Meaning thereby that the allegations are based on assumptions /presumptions and this stand validated from the last para 5 of the show- cause notice, wherein appellant No.2 has been called upon show-cause notice, for submitting reply online, for which no space is available in the developed software of CCS as has been provided to the importer in the module reading as "Traders Reply". This confirms that show-cause notice was transmitted on the home page of appellant No.2 was only for information, not for submitting reply , if reply was warranted to be submitted, space would have provided, which is not available. Hence, it is to be construed without any exception that show-cause notice was not served on appellant No.2 as per the contemplation of Sections 155Q and 215 of the Act. Rendering the orders passed by respondent No.5 to the extent of appellant No.2 as of no legal effect and void and ab initio. Even otherwise no cause or reason was available with the respondent No.1 to implicate and respondent No.5 to charge appellant No.2, as he only transmit GD under the provision of Section 79(1) and Rule 433 of the Act and Rules on the strength of the documents supplied by an importer/appellant No.1, appellant No.2 has no knowledge about the actual description, quantity and quality of the goods, which were determined subsequently by the official of Customs upon conduction of examination under the provision of Section 198 and Rule 435, independently without any influence of appellant No.2. In this whole procedure appellant has no access. Therefore, appellant No.2 in the capacity of clearing agent has no part to play and the entire transaction is between exporter/importer and the customs. The clearing agent only provides services to the exporter/importer on very nominal charges and extends co-operation to the customs officials for carrying out their job. To be most precise, a clearing agent act as a post office or transit station between these two but this assistance is not applicable in the clearance obtained under the regime of "CCS ". Hence, imposition of penalty upon him is without any substance and declared to be without any lawful authority .
23. In deciding the subject case, I have given anxious consideration to the arguments of the rival parties and perused the impugned orders, the relevant provisions of law, the case law referred specifically , the interpretation of law, legal propositions and observations made thereon and infield ratio decidendi observed by the Superior Courts, I, have reached to the irresistible conclusion that the appellant has been needlessly dragged into the litigation by the respondent No.1 despite not warranted under law. I hereby vacate the impugned show-cause notice, and set aside the all reassessment orders\order-in-original passed by respondents Nos.3 to 5 being ab initio void and maintains assessment order dated 25.06.2018 passed by respondent number 2 being correct in fact and law.
Appeal is accordingly allowed with no order as to cost. The respondent No.2 is directed to issue delay detention certificate in terms of Section 14A (2) of the Customs Act, 1969.
24. Order passed and announced accordingly .