JAHANZAIB WAHLAH, MEMBER JUDICIAL-III.---- Through this order , I intend to dispose off Appeal No.K- 1505/2018 directed against Order-in-Appeal No.1601/2018 dated 31.10.2018 passed by Collector of Customs (Appeals), rejecting the appeal while maintaining re-assessment order dated 12.06.2018 passed by Appraiser , Group-I, MCC of Appraisement-East, Karachi.
2. Briefly facts of the case are, appellant during the course of his business activities imported a consignment of 15600 Litres 100% Coconut Water of Malee Brand from Thailand. Upon receipt of shipping documents delivered those to his clearing agent M/s. U.K. Traders, Karachi for transmitting Goods Declaration (GD) under the provision of Section 79(1) of the Customs Act, 1969 (Act) and Rule 433 of the Sub-Chapter III of Chapter XXI of the Customs Rules, 2001 (Rules) with the MCC of Appraisement-East under the regime of Custom Computerized System (CCS), which transmitted view message for payment of upfront duty and taxes of Rs.481,222/- which were paid on 09.06.2018, consequent to which GD was numbered as KAPE-HC-215472-09062018, upon appearance of GD on his workstation respondent No.1 pass assessment order under the provision of Section 80 and Rule 438 in the capacity of competent authority defined in section 2(a) in exercise of the powers vested upon him through SRO 371(1)/2002 dated 15.06.2002 on the strength of declaration i.e. under PCT Heading 2009.8900 and at US$.
0.28/L with the application of identical similar value as expressed in Rule 25(5)&(6) and Rules 117 and 118 of the Act/Rules maintained under Rule 110 of the period given in Rule 107(a) of the Rules, while adducing remarks in the assessment note reading as "DATA KAPW -HC-167997-13.04.2018 AND SCANNED DOCUMENTS AND TRADERS PROFILE". Consequent to which the inbuilt authority of the CCS passed clearance order under the provision of Section 83 and Rule 442 ibid. The appellant representative after obtaining delivery order form the shipping company approached the official of terminal operator for obtaining delivery , who showed their inability to entertain appellant representative by virtue of BENCH-III, the fact that the Principal Appraiser (R&D) (respondent No.2) put an hold on the GD/detained the consignment under the provision of Section 186 of the Act. The representative of the appellant rushed to him for inquiring the reason, he opined that it is the case of mis- declaration of PCT Heading warranting adjudication proceeding, when he was confronted that how he arrived on such conclusion and as to whether there exist any mis-declaration in material particular , his answer was in negative. Subsequently , he asked Deputy Collector , Group-I, to create re-examination, which he complied and GD was referred to the Deputy Collector Terminal, who marked to the examiner , who carried out the desired examination, wherein goods were found as declared and report so prepared was uploaded in the reservoir of GD.
Upon receipt of that on his workstation, the respondent No.2 directed him to reassess the GD, which he did and pass reassessment order dated 11.06.2018, wherein he changed the PCT to 2009.8900 as against declared and assessed through valid assessment order dated 09.06.2018 while observing in the assessment note "AS PER CROSS CUST OMS RULING THE GOODS ARE CORRECTL Y CLASSIFIED UNDER PCT HEADING 2209.8900 THE VALUE HAS BEEN TAKEN AS PER DATA FOR COCONUT WATER GD REFERENCE KAPE-HC-216602- 11062018. SCANNED DOCUMENTS." Being aggrieved appellant filed review under Rule 441 before Principal Appraiser , Group-I, through a detailed deliberation but of no Avail and he upheld vide dated "12.06.2018 reassessment order dated 11.06.2018 passed by respondent No.1 Being aggrieved from the impugned reassessment order , appellant filed appeal before respondent No.3 on 25.06.2018 vide appeal No. Cus/2740/2018/A-East, which he after multiple hearing dismissed vide order dated 31.10.2018 while observing in paras 5 to 8 reading as: "4. I have examined the case record and heard the arguments of the appellants and the respondents. The issue involved in the instant appeal is appropriate classification of "Coconut Water", which was declared PCT Heading 2201.9000 by the appellants. The respon dent department, however , changed the PCT heading to 2009.8900. The learned consultant of the appellant has not contested the merit of the case and, instead, has based his appeal on legal grounds. According to him, ones the assessment was finalized by the appropriate officer of the customs, putting hold on the impugned GD under WeBOC system and its subsequent re-assessment was against laws.
Secondly , the respondent department in order to change long standing practice of one classification, failed to follow legal course of action as provided in para 2 of CGO 12/2002 dated 15.06.2002.
5. As regard re-assessment after putting hold on the impugned Goods Declaration under WeBOC is concerned the assessment note to impugned GD do not support contention of the appellant. As per said assessment notes, the GD was filed on 09.06.2018 and assessment thereof completed the same day. The departmental representative stated that the department had an information of mis-declaration in the consignment, therefore hold was placed on the Goods Declaration in system less it is clear through green channel. The goods were still under custody and vigilance of the customs when their examination resulted in detection of aforesaid mis-declaration. Rule 438 of the Customs Rules, 2001 issued vide SRO 450(1)/2000 dated 18.06.2001 allowed such re-assessment before or after clearance. The said Rule is reproduced as under: 438; Where any declaration has been filed under Rule 433 or additional documents have been submitted under Rule 437 the Customs shall satisfied itself as to their correctness including its value, classification claim of exemption, payment of duty and taxes and may re-assess the goods during or after clearance"
3. Moreover , an option of review of assessment is also available in WeBOC wherein, if the importer disagree with first assessment officer, he may file a request for review to the Principal Appraiser and then to AC/DC assessment if he still feel dissatisfy with decision of Principal Appraiser . Not opting to challenge the assessment of the Principal Appraiser and accepting it as such by the appellant shows his satisfaction to the impugned assessment.
4. In view of the aforesaid discussion, the ground that the impugned goods were reassessed after finalization of assessment under section 80(3) is not tenable.
5. The second ground of the appellant pertains to non-formation of Classification Committee under CGO 12/2002 to resolve the instant classification dispute. Para 2(i) of CGO ibid specify the matte r which needs to be referred to Classification Committee. The said para is reproduced as under: 2(i): Routine classification issue will continue to be decided by the respective Collectorates at their own level.
Complicated classification dispute will be refer to classification centre established at the Collectorate of Customs (Appraisement), Karachi with effect from October 01, 2001. In addition to deciding the classification disputes, the centre will also issue binding pre-entry classification Rulings on the specific request of an importer .
6. The fact in hand suggest that it was a routine classification issue wherein the respondent department applied appropriate classification to the imported goods. The importer neither contested the said classification by filing request for review as per Rules nor did he submit application requesting the respo ndent to refer the matter to the Classification Committee.
7. In view of the aforesaid discussion, I do not find any merit in the appeal, which is hereby rejected. The assessment order is upheld.
8. The appellant filed the appeal on the basis of grounds enumerated therein, the consultant of the appellant argued the case strictly in accordance with the ground enumerated therein. No cross objections under Section 194A(4) of the Act have been submitted within the stipulated period of 30 days by the respondent No.2, resultant, lost right of cross appeal within the contemplation of section 194A(3) ibid. Non submission of counter affidavit whether by will or default forfeit the respo ndent No.2 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-1 (Trib.)
1986 CLC 1119, 1986 CLC 1408 KAR, 1991 MLD 1243 , PLD 1992 SC 317, 1993 SCMR 662, PLD 1996 Karachi 68, 1986 PLC (C.S.) 560, 2003 PTD 2118. However , on the date of hearing the representative of respondent No.1 supported he orders passed by the respondents stating inter alia that these are correct in fact and law. Hence, same may be maintained and appeal be dismissed being devoid of merit/substance.
9. Rival parties heard and case record perused. It is just and proper to decide first the vital aspects that as to whether respondent No.2 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 to be 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(1)/2002 dated .15.06.2002. Upon perusal of the record of the case, I have observed that the assessment order under section 80 and Rule 438 in the present case was passed on 09.06 .2018 by respondent No.1 and penalty was paid on the same date and so the clearance order dated 09.06.2018 under section 83 and Rule 442 of the Act/Rules. Resultant, no occasion was available for respondent No.2 or his superior to put an hold on the GD/detain the consignment of the appellant under section 186 of the Act. Notwithstanding, to the formation of R&D, otherwise 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(I)/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 .
10.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:--
(I) 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 .
11. 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 appellant is that against him, no order was/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/Rules cannot be detained under any pretext by any officer of customs, respondent No.2 is not an 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 attracted 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 3 others that "authorities could detained such goods in respect of which inquiry or investigation was pending and not the goods which had been or were been imported by a person. The subsequent imported goods belonging to a same owner can only be detained once a fine or penalty has been imposed in respect of any other goods and the same remained un-paid. By no stretch of imagination all subsequent import can be detained or withheld clearance on the premise that some inquiry or investigation is pending in respect of some other goods. In our opinion no such action is permitted under this provision. The respondent are only authorized to take action for issuance of detention notice in terms of section 202 of the Act, once the amount alleged to have been evaded has been finally adjudicated and decided against the person. The procedure and mechanism provided Section 202 of the Customs Act, 1969 is entirely independent of any action taken in terms of Section 186 of the Act. It is not the case of respond ent that any adjudication has been done either in respect of the goods allegedly cleared against fake GD's or even the mods covered by the instant petition and thereafter detention notices nave 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 M/s. O.S. Corporation v. FOP and others, "where no fine or penalty has been imposed or even under consideration the provision of Section 186 are not relevant---the authorities acting on a hunch have detained goods as the exit gate, even though taxes and duties have been paid and the goods have been released, detaining goods at the exit gate after having releases them is totall y contrary to the provision of the Act, I969"., Hence, in categorical terms I hold that putting an hold on GD/detaining of consignment of the appellant by the respondent No.2 is not only witho ut lawful authority even jurisdiction and patently in derogation of Section 186 of the Act and the law laid down by the Superior Judicial Fora.
12. 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/summon 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. 2 and 1 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 specifi cally delegated to the officials of the DGPCA. Neither respondent No.2 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.2 or any .other officer of Customs, are also not appointed/designated as an "Officer of Inland Revenue" under Section 30 of the Sales Tax Act, 1990 (STA) and Section 228 of the Income Tax Ordinance , 2001 (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.2 and 1 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 order ab-initio, null, void. It has been observed by me with great concern that respondents Nos.2 and 1 under the patronage of their superior are naming 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 circumstances and has to be crushed in the initial stages for maintaining the integrity and sanctity of the different sovereign organs of FBR. Therefore, the conduction of audit post clearance of the GD of the appellant under Section 26(2) of the Act, Section 25 of the STA and Section 171 of the ITO by the respondent No.1 or his subordinates, for determination of short levied/collected amount of Sales Tax, Additional 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 there-upon ought to be crumble down no matter how strong it may be.
13. 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 order dated 09.06.2018 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 order is an appealable order B and can't be disturbed by any other authority including respondents Nos.2 and 1, with the exception of preferring an appeal under the provision of Section 193 of the Act as was/is invariably done by an importer , in case he felt the assessment order so passed is nullity to the fact/law .
Similarly , if the respondents Nos.2 and 1 were of the view in the instant case of the appellant proper assessment has not been carried out, the only optio n left with them to adopt the mechanis m 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 respondent No.2 himself directly or superior or through respondent No.1, 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 appe al in the light of the issued show cause notice and reply . In the instant case no appeal has been filed either by the respondent No.2 or 1 despite mandated under law, instead respondent No.2 and respondent No.2 assumed the powers under Section 195 of the Act and reopened valid assessment/clearance orders dated 09.06.2018 passed under the provision of sections 80, 83 and Rules 438 and 442 of the Act/Rules. Neither respondent No.2 nor respo ndent No.1 are empowered to reopen valid assessment order passed C by the authority defined in Section 2(a) of the Act, in exercise of powers vested upon him through SRO 371(I)/20 02 dated 15.06.2002. Both acted withou t power/jurisdiction, hence their action deems to be without any lawful authority and as such ab-initio, null and void as held by Superior Judicial Foras in umpteenth reported judgments e.g. 2014 PTD 1256 M/s. 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 office r 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 exercis e any right of re-opening of any order which has been passed by an officer lower in rank but acting as an adjudic ating authority . Impugned order was set-aside and Constitution Petition was allowed" The CPLA No.105-K of 2014 filed by Collector of Customs and others against the order of the High Court has been dismissed by the Hon'ble Supreme Court of Pakistan while refusing leave to appeal. 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 assessme nt 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-original. 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. Reference was dismissed in circumstances."
14: For determination of essence and spirit of reassessment order passed by respondent No.2 dated 12.06.2018 in the deceit of "reviewed" reproduction of section 80(2) & (3) is vital and which are as under: "(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 wizen 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 documents or any information so furnished is not correct in respect of any matter relating to the assessment, the goods, shall, without prejudiced to any other action which may be taken under this Act be reassess to duty":
15. Upon plain reading of section 80(3), 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 80(3) after release of the goods is permitted only after calling for the documents as expressed in Section 80(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 09.06.2018 passed by respondent No.1, it has been observed that description and quantity was the same as declared. No visible misdeclaration 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 assessm ent order . In the instant case no re-assessment in the garb of any other manner including "reviewed" was warranted under Section 80 (3) of the Act.
While passing reassessment order in the garb of reviewed the respondent No.2, 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 for duty on declared value, quantity or description thereof shall be allowed after such goods have been removed from the port area or assigned Customs Reference Number electronically , as the ccise may be." (Emphasis supplied)
16. 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(1) 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 Rule 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(I)/2002 dated 15.06.2002. That the respondent No.2 while making reassessment of the appellant's GD after clearance of the goods in fact amended PCT Heading to 2009.8900 as against declared/assessed 2201.9000 of the GD under 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 empowe red to reassess a GD after clearance of the goods under provision of section 80(3) without adhering the proce dure 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 respondents Nos.2 and 1. 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/shipm ent under Sections 83 and 130 and Rules 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 subse quently before Assistant/Deputy Collector of the Group as the case may be. Therefore, I hold that the reassessme nt made by Respondent No.2 in garb of "reviewed" 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)&(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.
17. The reassessment order in any shape /manner by all means falls within the definition of demand notice for recovery of short paid amount of duty and taxes due to commission of inadvertence by the Officials of Clearance Collectorate. Such type of recovery can only be created upon passing of an order after issuance of show-cause notice under Section 32(3) of the Act, expression of which read as: "Where, by, reason of inadvertence, error or mis-construction any duty or charge has not been levied or has been short- levied or has been erroneously refunded, the person liable to pay any amount on that account shall be served with a notice within 03 years of the relevant date requiring him to show cause why he should not pay the amount specified in the notice".
18. In the instant case no show-cause notice has been issued despite mandated under law, issuance of show- cause notice is pre-requisite and cannot be dispense with under any circumst ances. While creating recovery through reassessment order respondent No.1, in fact committed violation of the provision of Section 32(3) of the and principle of natural justice rendering the recovery so created without any lawful authority and as such void and ab-initio as held in 2006 PTD 978 Forte Pakistan (Pvt.) Ltd, Karachi v. The Director General of Intelligence and Investigation (Customs and Excise ), Karachi and another , wherein it has been held that "service of notice under section 32 of the is a condition precedent for initiation of proceedings, in the absence of notice under section 32 on the importer the entire proceeding initiated by the Adjudicating Officer and further super structure thereon including the order passed by the learned Tribunal are without jurisdiction, void and in operative. The entire proceeding are accordingly struck off" and the Hon'ble Supreme Court of Pakistan in judgment reported as 2001 SCMR 838 Assistant Collector of Customs, Dry Port Peshawar v. M/s. Khyber Electric Lamp MFG Co., Ltd., Peshawar held that "demand notices in the absence of statutory show-cause notices were without lawful foundation. It is well settled proposition of law that a thing required by law to be done in a certain manner must be done in the same manner as prescribed by law or not at all since pre requisite show-cause notices as required by law have not been served on the respond ents, therefore no straight forward demand notice for payment of alleged short levy could be issued. Therefore,. in the absence of statutory notice creation of recovery through reassessment order dated 12.06.2018 by respondent No.1 was/is without lawful authority and as such of no legal effect." In accordance with the ratio decidendi by the judicial fora. I therefore hold that the reassessment order through which recovery was created in isolation is without lawful authority , hence, null, void and ab initio.
19. The appellant declared the goods to be falling under PCT heading 2201.9000 and was assessed by respondent No.1 on 09.06.2018 through assessment order passed under section 80 and Rule 438 of the Act/Rules under the same PCT heading due to the fact that such type of goods namely Coconut Water were invariably assessed/cleared by the Collectorate under the same PCT heading, evident from the data of the said product available in the reservoir of PRAL of the period given in Rule 107(a) of the Rules. In the presence of the availability of the same no occasion was available for the respondent No.2 to asked /direct respondent No.1 to deviate from that and change the classification of the appellant goods abruptly in negation of the precedents, which have binding force, deviation from that is tantamoun t to giving a differential treatment, barred under Articles 4 and 25 of Constitution of Islamic Republic of Pakistan, which respondent gave to appellant in aerogation of the referred articles and law laid down 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 dis-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 judgments 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 Article 25 of the Constitution:"
20. The respondent No.3 is at fault to hold 'that the case of the appellant falls within routine classification, which Collectorate has to do, which is infact not as evident from the data which speaks contrary and substantiate the stance of the appellant. The classification of the goods has been changed by the respondent No.1, prior to which it was mandated upon him or his subordinate to place the same before the Classification Centre, rendering the formed opinion of the respondent No. 3 that appellant has to made a request as of no substance and nullity to the fact of the case adumbrated above. Classification of any goods as against existing under which the assessment is being made for time immemorial could only be made after placing the goods in question before the classification centre in accordance with the devised mechanism given Para 2 of CGO 12/2002 dated 15.06.2002 for deliberation, which upon reaching at a decision placed that before the Collector of Customs for approval as enunciated in Sub- Para of Para 2. Who after assenting that has to forward the same. to the Board for validation, in compliance of the direction given in CGO 09/2004 dated 20.08.2004 due to the fact that Board is the final authority in the matter of classification, which after approving that return it to the Collector for issuance of Public Notice, copy of which has to be forwarded to the Board in addition to circulation among the Collectorate of Pakistan. This adherence, is mandatory under the provision of Section 223 of the Act and for insertion by the Board in para 3 of COO 12/2002, specifically meant for classification and application across the board by the field formation and so the importers.
21. The respondents Nos.1 and 2 without any lawful authority , relied upon the cross border decision of USA, not applicable in Pakistan, unless incorporated in the First Schedule to the Act. Besides assume the power of the Collector/Board under Section 195 of the Act and Classification Committee, rendering their Act without lawful authority and jurisdiction. I am at loss to digest that how the respondents acted so callously only for causing loss to the appellant and inflicting mental torture and that also in negation of Para 74 of CGO 12/2002 dated 15.06.2002 which bars deviation from existing practice and clarifies that in case of change in classification, it has to be applied prospectively not retrospectively . Meaning thereby that even after issuance of public notice on the basis of the decision of the classification committee with the validation of the Board and insertion of that in Para 3, it has to be applied prospectively i.e. after the date of issuance, validated from landmark judgments of the Hon'ble Supreme Court of Pakistan reported at 1989 SCMR 353 Messrs Radhika Corporation and others v. Collector of Customs and others the Hon'ble Supreme Court held that "interpretation that has been consistently followed by the department and which have been became a long standing practice, had almost acquired force of law--Such practice, could not be lightly departed from--Where departmental practice has followed a particular course in implication of some rule, whether right or wrong, it would be extremely unfair to make a departure from it after lapse of man years and thereby disturbed right that had been settled by long and consistent court of practice."
22. The respondent No.3 in its order at the bottom of para 5 after Rule 438 made a reference to the option of review as per the contemplation of Rule 441, simply to reject the appeal, while ignoring the fact that review could only be filed prior to clearance order unde r Section 83 and Rule 442 of the Act/Rules not after that. Evident from its expression reading as: "441: Review of assessment:- The impo rter or his agent may file request for review to Customs online giving detailed reasons for disagreement with Customs shall review the assessment on the basis of submissions by the importer or his agent."
23. The formed opinion of respondent No.3 is based on misconception, review could be only filed during the course of assessment and prior to passing of clearance order under section 83 and Rule 442 of the Act/Rules. In the present case assessment order under the provision of Section 80 and Rule 438 was passed by the respondent No.1 on 09.06.2018 so the clearance order . No enabling provision is available rin the Rules to file review under Rule 441 on the reassessment order passed, even in the deceit of assessment dated 11.06.2018 made by respondent No.1 and upheld by Principal Appraiser , Group-I vide dated 12.06.2018. The reassessment order dated 11.06.2018 and 12.06.2018 passed by respondent No.1 and Principal Appraiser , Group-I speaks volume about malice on their part as they infact passed reassessment orders under the provision of Section 80(3) of the Act after passing of clearance order dated 09.06.2018 under Section 83 and Rule 442 of the Act/Rules, which is not permitted under law for defeating the settled law by the Superior Judicial Fora that a thing has to be done as it has been to asked to be done or not to done at all as held in 2002 PTD 2457 that "the thing should be done as they are required to be done, or not at all". The apex Court held in judgment PLD 1971 Supreme Court 61 "neglect of plane requirement of, an absolute statutory enactment prescribing how something is to be done, would invalidate thing being done in some other manner" and in PLD 1973 Supreme Court 236 "it is now well established that where an inferior Tribunal or Court has acted wholly without jurisdiction or taken any action "beyond the sphere allotted to the Tribunal by law and therefore outside the area within which to law recognizes a privilege to err" then such action amounts to a "usurpation of power warranted by law" and as such an act is a nullity that is to say the result of a purported exercise of authority which has no legal effect whatsoever" in such a case, it is well established that a Superior Court is not bound to give effect to it." The said ratio was maintained, in the case of E.A Avans reported as PLD 1964 SC 536 "where it . has been unambiguously and categorically held that if the doing of a thing is made lawful in a manner than doing of that thing in conflict with the manner prescribed will be unlawful." The Hon'ble Apex Court in 2001 SCMR 838 and 2003 SCMR 1505 held that "while considering the impact of violation or non- observance of the method prescribed by law for doing an act in a particular manne r or mode, such provision of law is to be followed in letter and spirit and achieving or attaining the objective of performing or doing of a thing in a manner other than provided by law would not be permitted. The same observation has been made by the Hon'ble Supreme Court of Pakistan in the Civil Petition filed by Director General of Intelligence and Investigation and others v. M/s. Al-Fait Industries (Pvt.) Ltd. and others reported as 2006 SCMR 129 "if the law had prescribed method for doing of a thing in a particular manner , such provision of law is to be followed in letter and spirit and achieving or attaining the objective of performing or doing of a thing in a manner other than provided by law would not be permitted.". The super structure built en such foundation namely audit observation, show-cause notice and order-in-original no matter how strong those may be have to fall, reference is made to PLD 1996 Karachi 68 which laid down that "where the initial order or notice was void all subsequent preceding , orders or super structure built on it were also void. In reported judgment 2006 PTD 978 it is held that "the entire proceeding initiated by the Adjudicating authority and further super structure thereon including the order passed by the learned Tribunal are without jurisdiction void and in-operative." The apex Court in PLD 1971 Supreme Court 184 held that "order of a Tribunal found to be without jurisdiction---all successive orders based upon it illegal and liable to be quashed".
Rendering the impugned assessment, which infact was/is a reassessment order, passed by respondent No.1 without lawful authority/jurisdiction and as such void and ab initio not, sustainable and have no legs to stand.
24. In deciding the subject case, I have given anxious consideration to the arguments of the rival parties and perused the impugned order , 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 inesistible conclusion that the appellant has been needlessly dragged into the litigation by the respondent No.1 despite not warranted under law. I hereby set aside the reassessment orders dated 12.06.2018 passed by respondent No.1 and order-in-appeal dated 31.10.2018 passed by respondent No.3 as ab initio, null and void while maintaining the assessment order dated 09.06.2018 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.
25. Order passed and announced accordingly .