JAHANZAIB WAHLAH, MEMBER JUDICIAL-III .----Through this order , I dispose off Appeal No.K-1 179/2016 preferred against Order-in-Appeal No.531/2016 dated 04.05.2016 passed by the learned Collector of Customs (Appeals) by maintaining the Order-in-Original No.464917 dated 07.01.2016 passed by the Deputy Collector of Customs (Adjudication-I), Custom House, Karachi.
2. Briefly facts of the lis are the appellant during the course of his business activities imported a consignments (i)
48 pieces Multimedia Projectors (ii) 20 pieces Wireless Lan Cards, (iii) 02 pieces Projector Ceiling Mount, (iv) 1 pieces 55" NEC LCD Monitor and (v) 100 kgs Advertisement Material from Singapore for US $ 14334.00 C&F Karachi. Upon receipt of shipping documents delivered those to his clearing agent M/s. Al-Fajar Associates, Karachi for transmitting Goods Declaration (GD) with the MCC of Appraisement-Ea st under the provision of Section 79(1) of the Customs Act, 1969 (Act) and Rule 433 of Sub-Chapter III of Chapter XXI of Customs Rules, 2001 (Rules), which he did and as per pre-requisite for availing the regime of Custom Computerized System (CCS) deposited upfront duty and taxes of Rs.379,339.00 vide cash No.C-KAPE-0578-1 1122015. Consequent to which GD was numbered as KAPE-HC-79249-1 1122015 , upon receipt of which on his workstation the Assessing Officer instead of passing the assessment order under the provision of Section 80 and Rule 438 of the Act/Rules opted to get the goods examined first as per the contemplation of Section 198 and Rule 435 of the ibid., to proceed with adduced his opinion and forwarded to Deputy Collector of Customs, Group-VI, (Respondent No.1) who gave his assent and transmitted the GD to the Deputy Collector of Customs, NLCCT , who nominated the examiner/Appraiser for the said purpose, who carried out physical verification of the goods and found those as uploaded in the reservoir of GD reading as "mis-declaration of origin goods are examined and found as under-1 Multimedia Projectors Brand NEC, Models VE281G, VE281G, I.O. China Qty: 21 Pcs 1-A, Multimedia Projectors Brand, NEC, Model NP-M363XG, I.O. Thailand Qty: 10 Pcs 1-B, Multimedia Projectors Brand, NEC, Model NP- M323XG, I.O. Thailand Qty 15 Pcs I-C Multimedia Projectors Brand NEC Model P451WG, I.O. China Qty: 02 Pcs 2 Wireless Lan Cards Brand NEC I.O. China Qty 20 PCS,
3. Table Projection Monitoring Unit Model NP01TK I.O.
China Qty 2 Pcs 4. 55" Monitors LCD Brand, NEC, I.O. China Qty: 1 Pc.5. Advertisement Material (Calenders, Diaries Broachers) Approx 100 Kgs Brand NEC I/O China and Thailand Origin and Check Weight 100% at NLCCT Weighbridge Vide Slip No.2015121218 dated 12.12.2015 and found weight 387 Kgs Group is requested to check all aspects in the light of ER and after viewed all scanned images including importability as per Import Policy in vogue as the importer has deliberately knowingly and willingly mis-declared the origin of the goods. Therefore, Group may take further necessary action as per law." (Emphasis supplied). Upon perusal of the report, the assessing officer, transmitted view message dated. 14.12.2015 under Rule 437 of the Rules for uploading of documents namely PEMRA NOC, catalogue performa invoice and allied documents which appellant uploaded, the packing list with clarity confirm that 25 pieces of multimedia projector were of Thailand origin. The assessing officer while acting rationally and in positive manner completed the assessment on the basis of application of valuation Ruling No.355, dated 18.07.201 1 at Singaporean $.796/- which are equivalent to the determined value in the Valuation Ruling and routed the GD to PA with the remarks "ER has confirmed description and Qty and origin.
Accordingly , assessed as per Valuation Ruling (VR)/evidential data base value, keeping in view profile and scanned documents for ER pointation GD fwd to PA GR-6 for perusal. In principle the Princ ipal Appraiser (PA) upon receipt of GD should had ascent the opinion of the Assessing Officer, formed contrary opinion and framed contravention report and referred that to respondent No.1, stating inter alia that the appellant intentionally transmitted erroneous origin which is tantamount to mis-declaration, the respondent No.1 after giving his validation, transmitted the same to Additional Collector-Law , who after approval transmitted to respondent No.2. Who transmitted show-cause notice dated 16.12.2015 stating inter alia that the appellant has mis-declared the origin of 25 pieces of multimedia projector for paying less amount of duty and taxes of Rs.151,559.00 worked out on the basis of determined value of US $.295.00 of Thailand origin goods by the Director , Directorate General of Valuation vide Valuation Ruling No.355 dated 18.07.201 1. This act of the appellant falls within the ambit of word mis-declaration as expressed in Section 32(1) of the Act. Hence, contravened the provision of Sections 32(1), 32(2), Section 79(1) of the Act, Section 33 of the Sales Tax Act, 1990 (STA) and Section 148 of Income Tax Ordinance, 2001 (ITO). The consultant of the appellant replied to the allegation levelled in the show-cause notice through letter dated 17.12.2015, wherein he challenged the powers of respondent No.2 under the provision of Section 179(1) of the Act and Sales Tax and Income Tax and the charges levelled in the show-cause notice being baseless and of no legal effect and requested the respondent No.2 to vacate the show-cause notice being without power/jurisd iction and lawful authority . The respondent No.2 on 07.12.2016 passed Order-in-Original through which he held that the charges levelled in the show-cause notice stood established against he appellant and ordered confiscation of 25 pieces of multimedia projector subject to redemption of those upon payment of 20% fine i.e. Rs.301698/- in addition to imposed penalty of Rs.50,000.00. Since the goods were suffering terminal demurrage/storage charges, the appellant paid the imposed fine and penalty vide cash No.A-KAPE-001468-18122016, consequent to that the competent authority passed clearance order under Section 83 of Customs Act, 1969 and Rule 442 of Customs Rules, 2001 and forwarded message to gate staff to let the container gate out. The vires of order passed by respondent No.2 was challenged before the respondent No.3 vide Appeal No.Cus/0129/2016/A-East on 04.02.2016, hearing in the case was fixed for 12.02.2016, wherein after hearing both the sides the respondent No.3 passed order dated 04.05.2016, rejecting the appeal while holding in para 5 of the order as under: "I have examined the case record. The appellant had imported various NEC Brand goods, including projector from Singapore and declared all the goods as China origin. As such most of the goods were to be assessed as per valuation Ruling No.355/201 1 for China origin goods. However , 10 pieces of Model NP-M363XG and 15 pieces of NP-M323XG were found as Thailand origin which attracts padding of 10% over and above the value of China origin under the same VR. The appellant states that they provided catalogue, packing list upon documents calling notice and the packing list mentioned these 25 pieces as Thailand origin and as it is the part of the declaration as such they have not committed an offence of mis-declaration. It is clearly case of an after thwart; the appellant had made self assessment and made a declaration of their liability under section 79 of the Customs Act, 1969. It was the assessing officer who called documents under section 80(2) of the Act and detected incorrect information provided by the appellant. I therefore, find that the order has been lawfully passed according to the fact of the case. There are no grounds to interfere to the order , the appeal being without merit fails"
3. The appellant filed the instant appeal on the basis of grounds enumerated therein, the consultant/advocates on the date of hearing argued the case strictly in accordance with those. No cross objection under subsection (4) of Section 194A of the Act has been filed within the stipulated period of 30 days by either respondent No.1 or 2, instead comments were filed by responde nt No.1, which does not qualify in any manner memo. of cross objection, resultant, could not be termed as cross appeal within the meaning of subsection (3) of Section 194A of the Act.
Therefore, these are to be considered merely opinion, having no binding force, nevertheless, placed on record of the case.
4. Heard and perused the record and the relied upon documents/judgments by the appellant's. Prior to dilating upon other factual and legal aspect of the case, it is of vital importance for me to dilate upon invoking of Section 33 of the STA and Section 148 of the ITO and jurisdiction of Collectorate of Customs Adjudication and power of respondent No.2 in the matter pertaining to Sales Tax and Income Tax, falling under the ambit of the provision of Section 11 and Section 162 of the STA/ITO , which respondent No.2 assumed on the strength of letter of clarification issued by the Federal Board of Revenue vide letter No.3(32) TAR-1/90 dated 06:08.2012 after obtaining a legal opinion from the Ministry of Law and Justice, legality of which has been challenged by the consultants with the submission that neith er Board nor Ministry of Law have any mandate to interpret the provision of statute passed by the legislature for obtaining the desired results of their choice as the job of interpretation of statute rest with the High/Supreme Courts of Pakistan and in support of their stance relied upon reported judgments 1993 SCMR 1232 Central Insurance Company v. CBR and 2005 PTD 2462 M/s. Lever Brothers Pakistan Ltd. v. Customs, Sales Tax and Central Excise Appellate Tribunal and in regards to the jurisdiction and powers of the Officer of Clearance Collectorate and Adjudication relied upon several reported judgments of this Tribunal and High Courts.
5. Upon perusal of the show-cause notice, I have noticed with great concern that the respondent No.2 have invoked section 33 of the STA and section 148 ITO without going through their expressions, despite being mandatory as it is settled proposition of law that a judge should wear all the laws of the land under his sleeves, section 33 of the STA is a penal section and contains penal clauses, which are to be invoked on the contravention of charging/respective sections of the STA this Section is synonymous to Section 156(1) of the Act. Meaning thereby , that the clauses of Section 33 cannot be-invoked unless charging /relevant sections by the authority empowered under the respective provision of STA. Similarly , Section 148-of the ITO contains procedure for collection of Income Tax at import stage by the authorities referred therein.. Meaning thereby that these sections are independent under which no charge can be invoked. Issuance of show-cause notice on the basis of irrelevant sections renders it and the order-in-original as ab-initio and void and as such of no legal effect as held in reported judgment 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 Sarwar International v . Addl. Collector of Customs .
6. For further crystallizing, the issue relating to recovery of short paid sales tax and income tax, I am indebted to peruse Section 30 of STA and Section 228 of the ITO and have observed that the legislature appoints under these Sections different organs of the FBR as Officer of Inland Revenue for exercising powers under the respective Sections of the Act/Ordinance, delegated through statutory notifications or under Section 207 of the ITO. In these Sections neither Officers of Clearance Collectorate nor respondent No.2 figures anywhere nor in charging section 11 of the STA or Section 162(1) of the ITO. Therefore, the respondent Collectorate/respondent No.2 under no circumstances assume jurisdiction in the matter of Sales Tax/Income Tax. Therefore, none of them are empowered to lays hand on the matter falling within the ambit of Section 11 of the STA and Section 162 (1) of the ITO. These sections empowers the Officers of Inland Revenue/ Commissioner of Income Tax 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 proceeding have to be carried out under the aforesaid provision of the ST A and IT O.
7.The assumption of jurisdiction and powers by respondent No.2 on the strength of Board's letter C.No.3(32) TAR- I/90 dated 06.08.2012 is patently based on misconception and lend no help to him as Board have no mandate to interpret the provision of the Act or amend the provision. It can only give opinion, it is for the judicial fora to interpret the provision of statute and our opinion stands validated from the reported judgment 1993 SCMR 1232 in the case of Central Insurance Co., v. Central Board of Revenue . The Hon'ble Supreme Court of Pakistan held that "Board's view as to the interpretation of law do not have the force of law and the exception would be, where a fiscal statute is involved, that should be implemented with strict impartiality" and 2005 PTD 2462 Messrs Lever Brother Pakistan Ltd. v. Customs Sales Tax and Central Excise Appellate Tribunal, Karachi that "CBR has no place to in the Scheme of Law, conferred with the jurisdiction to interpret any law, statutory or in exercise of any deliberate authority i.e. subordinate legislation" whereas, in 2016 PTD (Trib.) 107 Qazi CNG Station, Gujrat and another v. Directorate General of Intelligence and Investigation FBR, Karachi and 02 others, this Tribunal held that "statute can be amended by the Parliament and a notification through a notification not through any communication. In the absence of amendment of notification, clarification issued by the department could only be termed as opinion and it would not at all amend the notification". Therefore, assuming powers on the strength of letter of the Board's is palpably illegal beside fatal for the health of the case. Even otherwise, the letter's speaks about collection of Federal Excise Duty at import stage in the same manner and at the same time, as if it is a duty of customs payable under the Act, (IV of 1969) and for collection of the same the provision of Section 31A also apply . Reference of Section 7 of the Federal Excise Act, 2005 has also been given simply for clarification that for collection of import duty provision of ST A is applicable.
8. In order to lend clarity expression of Section 11 of the STA and Section 162(1 ) of the ITO are referred, which empowered the Officer of Inland Revenue and Commission of Income Tax and none else, which includes also respondent No.2. He assumed the power not vested with him under the provision of Sections 11 and 162(1) of the STA and ITO. Therefore, I, hold without any reservation that the Customs Collectorates does have powers to collect and enforce payment of Sales Tax and Income Tax at the time of clearance. The plea that the Customs is empowered to recover the short paid amount of sales tax and income tax at the import stage under section 202 of the Act, is also based on mistaken belief. The fact of matter is Customs Collecorate could recover the amount of Sales Tax and Income Tax only upon receipt of notice from the Officer of Inland Revenue and Commissioner of Income Tax in terms Section 48 of the STA and Section 140 of the ITO for recovery of the adjudged amount of Sales Tax and Income Tax after due process of law. Therefore, it is our conside red opinion that the Clearance Collectorates does have the authority to collect Sales Tax and Income Tax at import stage in the capacity of collecting agent and can recover escaped/short payment paid Custom Duty and Regulatory Duty levied on A the imported goods under Sections 18, 18A and 18C of the Act under Section 202 ibid., after due process of law, but have no powers to adjudicate the cases of short recovery/evaded amount of Sales Tax and Income Tax falling within the ambit of Section 11 of the STA and Section 162(1) of the ITO, my opinion stands fortified from the reported/unreported judgment of the superior Judicial Fora namely 2011 PTD (Trib.) 110, 2010 PTD (Trib.) 2086, SCRA No.01/2010, 2004 PTD 801, C.P. No. D-216/2013, 2015 PTD 702, 2016 PTD (Trib.) 969, 2016 PTD (Trib.)
1008, 2016 PTD (Trib.) 2125, Appeal No. K-1635/2014, Appeal No.K-1029/2 016 Appeal No. K-1030/2016, Appeal No. K-1343/2015, 2016 PTD (T rib.) 2463 and 2017 PTD (T rib.) 481 .
9. The opinion formed by us is well assisted by the judgment reported at 1994 CLC 1612 , 1990 PTD 29, 2005 PTD 23 and 2007 PTD 250 in titled as Collector of Sales Tax and Federal Excise v. M/s. Qasim International Container Terminal Pakistan Ltd., wherein it has been held that "There is a clear distinction between the charging provision of Statute and the machinery part thereof. It is axiomatic that mode of manner of recovery does not alter, the nature of tax nor a tax can be introduced or import by implication." In 2008 PTD 1973 , Xen Shahpur Division v. Collector of Sales Tax (Appeal), Collectorate of Customs, Federal Excise and Sales Tax, Faisalabad , for clarity of the Rule of Interpretation of Statute, golden principle was outlined in so many words reading as "That fiscal law is to be applied with full authority and its natural meaning--one has to look merely at what is clearly said and there is no room for any intendment---neither there is equity about a tax nor presumptions as to tax - nothing is to be read in, nothing is to be implied -- one can only look fairly at the language used" The hon'ble Supreme Court of Pakistan in reported judgment 2006 SCMR 129 titled as DGI&I and others v. Al-Faiz Industries (Pvt.) Ltd . and others held that : "If the law have prescribed method for doing a thing in a particular manner such provision of law is to be followed in letter and spirit and achieving or retaining the objective of performing or doing of a thing in a manner other than provided by law would not be permitted-- each and every words appearing in a Section is to be given effect and no other word is to be rendered as redunda nt or surplus -- when the legislature required the doing of a thing in a particular manner then it is to be done in that manner and all other manner or modes of doing or performing that thing are barred -- if the doing of a thing is made lawful in a particular manner the doing of that thing in conflict with the manner prescribed will be unlawful as per maxim "Expression facit cessare taciturn"
10. It is therefore, held in the light of the expression of statute and law laid down in the referred in above deliberation and cases reported at, that the exercise of jurisdiction on this point by respondent No.2 is without lawful authority and jurisdiction/powers.
Hence, issuance of show-cause notice and passing of Order-in-Original are held to be ab-initio void and as such coram non judice on this point also.
11. Section 179 of the Act expresses that the powers of adjudication have to be determined by the authority adjudicating the case on the basis of "amount of duty and taxes involved (not evaded or short paid) excluding the conveyance. In the instant case the amount of duty and taxes involved are Rs.346,288.00 (paid upfront) on 11.12.2015 Rs.194,729.00 + evaded/short paid amount shown in show-cause notice Rs.151,559.00. Case of such amount falls within the powers of Assistant Collector of Customs in terms of clause (iv) of subsection (1) of Section 179 of the Act. To the contrary , the respondent No.2 issued show-cause notice and passed order in original by usurping the powers of Assistant Collector , which is not permitted under law. The plea adopted by the representative of the respondent that the designation mentioned in the show-cause notice and order-in-original is Assistant Collector , resultant, the instant case was correctly adjudicated by the authority enunciated in aforesaid sections. It is noted that mere inscribing the authority in the show-cause notice and order is not enough, rather the authority issuing the show-cause notice should and ought to be of the same designation. In the instant case, show- cause notice was issued by Mr. Muhammad Ibrahim, who was at that point of time was posted as Deputy Collector , Adjudication-II, evident from Notification No.2426-C-1 1/2015 dated 14-10-2015 and No.2431-C-II/2015 dated 15.10.2015, through which he relinquished the charge of the post of Deputy Collector , MCC of Appraisement-East and assume the charge of Deputy Collector of Customs, Collectorate of Customs (Adjudication-II) on 15.10.2015 simultaneously . Hence, there exist no ambiguity that the show-cause notice and order-in-original was issued/passed by Deputy Collector by encroaching the powers of Assistant Collector . Nobody is allowed to usurp the powers of the defined Adjudicating Authority .
Rendering the act of issuance of show-cause notice and passing of order-in-original in the instant case without power/jurisdiction, hence ab-initio, null and void and coram non judice . It is also settled principle that the exercise of jurisdiction 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 465, 2010 PTD (Trib.) 1636, 2011 P7D (Trib.) 2114, 2011 PTD (Trib.) 2557, 2014 Supreme Court 514.
(Emphasis supplied).
12. Uploaded packing list in compliance to the view message dated 14.12.2015 transmitted by Assessing Officer by the appellant with clarity confirms that 25 pieces of multimedia projectors were of Thailand origin, said packing list formed integral part of the declaration transmitted under section 79(1) and Rule 433 of the Act/Rules as per the enunciation of Section 2(kka), which read as : [{kka} "documents means a goods declaration, application for claim of refund, duty drawback or repayment of, duty , import or export general manifest passenger manifest, bill of lading, airway bill, commercial invoice and packing list or similar other forms or documents used for customs clearance or making a declaration to customs, whether or not signed or initiated or otherwise authenticated, and also includes:- i) any form of writing on material, data or information recorded, transmitted, or stored by means of a tape recorder , computer or any other device, and material subsequently derived from information so recorded, transmitted or stored; ii) a label, marking or other form of writing that identifies anything of which it forms part for to which it is attached by any means; iii) a book, map, plan, graph or drawing, and iv) a photograph, film , negative, tape or other device in which one or more visual images are embodied so as to be capable (with or without the aid of some other equipment of being reproduced; and)]
13. Since, the uploaded packing list formed integral part of the declaration, the Assessing Officer correctly completed the assessment and passed assessment Order under Section 80 and Rule 438 of the Act/Rules without any objection as evident from clarity of the Rule, reading as "Assessment by Customs Authorities: 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.". No occasion was available with the Principal Appraiser and respondents to dispute the remarks endorsed by him in the assessment note, being proper and just as no mis-declaration in material particular was either committed or apparent in the declaration transmitted by appellant. The opinion formed by the Principal Appraiser and respondents Nos. 2 and 3 are in derogation of the provision of Section 2(kka) and Sections 79, 80 and Rules 433, 437 and 438 of the Act/Rules, rendering those, without lawful authority / jurisdiction inclusive of contravention report, show-cause notice and order-in- original/appeal nullity to law and as such void and ab-initio.
14. The charge in the contravention report and show-cause notice prepared /issued by respondents Nos.1 and 2 have been levelled on the basis of found 25 pieces of Thailand Origin of Multimedia Projector of mis-declaration of value on the basis of value issued by Director , Directorate General of Valuation under the provision of Section 25A of the Act of the impugned goods, while ignoring the fact that VR figures no where in the definition of Section 2(kka) of the Act, terming the VR as a document for transmitting declaration under Section 79(1) despite not defined in Section 2(kka) of the Act. VR could not even be construed as a direct evidence warranted for levelling charge of mis-declaration of value within the contemplation available in paras 78, 101 of CGO 12/2002 dated 15.06.2002 and Clause (d) of serial No.1 of SRO 499(1)/2 009 dated 13.06.2009, which is evidential invoice of the similar goods of the same period and country of export, to be supplied mandatorily to the person upon which charge has been levelled, which is non existent. No charge of mis-declaration on the basis of VR can be leveled as that least qualify to the definition of direct evidence warranted under law. VR is only for the purpose of assessment not for levelling charge of mis-declaration of value, as held by my Learned brother Member Technical-II, to which I am in full agreement in reported judgment 2014 PTD (Trib.) 190 M/s. Shoaib Tayyab International v. Additional Collector of Customs, Karachi. Rendering the show-cause notice as of no legal effect and based on no evidence as held by Hon'ble High Court of Sindh in reported judgment 1991 PTD 551 that "Any action which is based upon no evidence is not permitted by law " and in 2006 PTD 2190 that "a mere assertion of the prosecution is no C evidence".
15. What have been discussed herein above, particularly the interpretation of law, legal propositions and observations made thereon and to follow the ratio-decidendi observed by the Superior Courts, I cancel the contravention report show-cause notice framed/issued by respondents Nos.1 and 2 in addition to setting aside the orders passed thereon, during the hierarchy of the Customs being illegal, void and ab-initio, appeal is accordingly allowed with no order as to cost.
16. Judgment passed and announced accordingly .