JEHANZAIB WAHLAH, MEMBER JUDICIAL-III. The instant appeal has been directed against Order- in-Appeal No.5079/2011 dated 03.03.2011 passed by the Collector of Customs (Appeals), Karachi by maintaining the Order-in-Original No.09/2010 dated 30.09.2010 passed by the Additional Collector of Customs-II, Model Customs Collectorate of Appraisement, Custom House, Karachi.
2. Brief, facts of the case as reported are that officials of the Directorate of Intelligence and Investigation FBR, (DGI&I-FBR) and MCC of Appraisement (MCCA) conducted joint physical examination of the goods imported in container No.MSCU-8889924 at scanning area of PICT and recovered assorted "Alcoholic Beverages" as against the declared description of goods. The details of declared and found goods are as under:- The goods declared S.No.Description Quantity (incases)
1. Coca Cola 330 ML 450 cases (Each contain 24 cans)
2.Sprite 330 ML 420 cases (Each contain 24 cans)
3.Schwepps Soda Water 330 ML400 cases (Each contain 24 cans)
4.Awafi Mineral Water 500 ML530 cases (Each contain 24 cans)
5.Awafi Sparking Water 500 ML150 cases (Each contain 24 cans)
Found Goods S.No.Description Quantity
1. Assorted Beer Carlsberg (500 ML X 24) 500 cartons = 12000 cans Heieken (500 ML X 24) 100 cartons= 2400 cans Amsterdam (500 ML X 24) 900 cartons= 21600 cans Total 36000 cans of 500 ML 2.Assorted Scotch Whisky Johnnie Walker (R.Lable (1 Ltrs x 12)40 cartons = 480 bottles Grants (1.125 ltr x 12) 55 cartons = 660 bottles Ballantine (1.14 ltr x 12) 40 cartons = 480 bottles Black Dog (1 ltr x 06) 100 cartons = 600 bottles Teacher (1.14 ltr x 12) 10 cartons = 120 bottles Whyte and Mackey (1.13 Itr x 12) 15 cartons = 180 bottles Cattos (1.14 x 12) 40 cartons = 480 bottles Johniie Walker (B. Lable) 1 ltd x 12 100 cartons = 1200 bottles Chivas (1 ltd x 12) 50 cartons = 600 bottles Total 450 cartons = 4800 bottles
3. The value of the declared goods as per invoice had been shown as 48,258/- (AED) whereas the value of the goods found as per physical examination had been worked out to Rs.11,519,547/- involving duty / taxes of Rs.15,000,293/-. The clearing agent had filed the Good Declaration for transit (GD-AT) under the provision of Section 129 of the Customs Act, 1969 (Act) purportedly on the instruction of the appellant.
4. The respondent No.2 did not agree with reply of the appellant and passed Order-in-Original No.09 of 2010 dated 30.09.2010 through which he held the charges levelled in the show-cause notice stand established against the appellant and imposed penalty of Rs.10,00,000/-. The appellant being aggrieved with Order-in-Original filed an appeal before respondent No.1, who rejected the same for non deposit of penalty as stipulated in section 195-B of the Act, prior to preferring appeal before him under the provision of Section 193 ibid.
5. The appellant has now challenged the above order by way of appeal. The Advocate Mr. Obaydullah Mirza, appeared on behalf of the appellant and reiterated the arguments incorporated in the memo. of the appeal and summarized facts and grounds. No cross objection as expressed in subsection (4) of Section 194A of the Act have been submitted by any of the respondent within the stipulated period of 30 days instead comments were submitted by the respondent, which are made part of the case record and for consideration in order to meet the end of justice.
6. Argument heard, case record perused, in addition with the documents and citations submitted by the appellant counsel during the course of hearing. it is felt appropriate by me to first to deliberate on the issue of non compliance of deposit of leviable duty and taxes and imposed penalty prior to preferring appeal before respondent No. 1 and to the fact that whether appeal so filed was competent and as to whether the respondent No.1 was empowered to dismiss the appeal for non deposit as expressed in Section 195-B of the Act. Taking refuge of respondent No.1 under the provision of Section 195-B of the Act in the order and cross objection are manifestly erroneous, misconceived, illegal and above all discriminatory as the said provision of the Act empowers the Appellate Authority / Tribunal to dispense with the deposit of adjudged amount through order-in- original for the sake of justice, fair play and to mitigate the cause undue hardship to the appellant, irrespective of the expression of the provision which read as the person desirous of appealing against such decision or order appealed against relates to any duty demanded in respect of the goods, which are not under control of customs authorities or any penalty levied under this Act, the person desirous of appealing against such decision or order stand pending the appeal, deposit with the proper officer the duty demanded or penalty levied. The respondents failed to take into consideration the settled proposition of law that if the person is not desirous of depositing the adjudged amount of duty or imposed penalty, he is not barred under sections 193(1) and 194-A of the Act from assailing the impugned orders and neither the respondent No.1 and Appellate Tribunal from hearing the appeal for issuance of decision on merit, as the right of appeal is guaranteed to an aggrieved person against any decision or order passed by Custom officer within 30 and 60 days under the proviso of Sections 193(1) and 194(3) of the Act. The right of appeal is an in- alienable right and cannot be made in effective/redundant on account of non deposit and respondent No.1 and the Tribunal are bound 'to grant opportunity of personal hearing to the parties to the appeal in terms of Section 193-A(3) and 194-B(1) of the Act and then pass order thereon for "extending, confirming, modifying or annulling the decision or order appealed against "and "as it think fit confirming, modifying or annulling the decision or order appealed against". The prerequisite for passing "such order as he/it think fit" is only "after giving both parties to the appeal an opportunity of being heard. The Tribunal is also empowered to record additional evidence for deciding the case instead of remanding, which find no place in the expression of Section 194-B(1) and the principle laid down by the superior judicial fora. The provision of Section 195-B of the Act, is synonymous to the provision of pre-revised Subsection (4) of Section 45-B of the Sales Tax Act, 1990 (STA), so as far as it relates to deposit of adjudged amount before presenting appeal and it is directory in nature and not mandatory. Hence, on the basis of non-deposit of the adjudged amount, the filed appeal cannot be termed as invalid and neither can be dismissed straight away as it is nullity to The Holy Quran, The Sunnah and The Constitution of Islamic Republic of Pakistan, 1973. Even otherwise no consequences are flowing in the expression of Section 195-B regarding the fate of appeal, in case of non deposit of adjudged amount, thus it cannot be taken to mean that non-deposit would automatically mean rejection of appeal in "Limine". Same opinion has been validated by the Lahore High Court, Lahore in reported judgment 1993 MLD 1645 M/s. Meaple Leaf Cement Factory, Lahore v. The Collector of Central Excise and Sales Tax (Appeals), Lahore and others that "In the Islamic polity and system of dispensation of Justice the right of appeal has been held to be a natural right vesting in an individual which cannot be taken away even by a provision in the enactment--- In the Islamic polity and system of dispensation of justice, the importance of the right of appeal cannot be understated. It has been held to be a natural right vesting in an individual which cannot be taken away even by a provision in the enactment. It is ordained by Holy Quran and Sunnah of Holy Prophet that an affected person must have a right to go in appeal against the decision. In Pakistan through Secretary, Ministry of Defense. The General Public (PLD 1989 SC 6), the Supreme Court went to the extent of striking down the laws, which did not provide for a right of appeal". The same view was endorsed by the Lahore High Court and Customs Excise and Sales Tax Appellate Tribunal in reported judgment 1993 CLC 1405, M/s. Riaz Bottlers (Pvt.) Ltd. v. Collector (Appeals) Central Excise and Sales Tax, North Zone, Lahore and 3 others and 2005 PTD (Trib.) 731, Billal Fabric Ltd. and 9 others v. Collector of Customs, Excise and Sales Tax by the Customs, Excise and Sales Tax Appellate Tribunal in its reported judgment 2005 PTD (Trib.) 731 Messrs Bilal Fabrics Ltd. and 9 others v. Collector of Customs Excise and Sales Tax. Beside rejecting of appeal under the garb of section 195-B is nullity to Article 10-A (Fair Trial) of the Constitution of Islamic Republic of Pakistan guarantees to every citizen of Pakistan. The Hon'ble High Court and the Tribunal has issued/passed several judgments, wherein it has been held as per ratio decidendi that rejection of appeal under the garb of Section 195-B is nullity and ultra virus and fails to stand the test of judicial scrutiny.
7. Now we determined the question of power/jurisdiction of the DG I&I-FBR and the respondent No.2 and his subordinate 'under the provision of Section 129 of the Act, invoked in the show-cause notice for dilating on that reproduction of Section 129 is vital: "Transit of goods across Pakistan to a foreign territory. Where any goods are entered for transit across Pakistan to a destination outside Pakistan, the appropriate officer may, subject to the provisions of the rules, allow the goods to be so transited without payment of the duties which would otherwise be chargeable on such goods."
8. The said provision was incorporated in the Act on the strength of the 1965 Convention on Transit Trade of Land locked States signed by the "Government of Member Countries in result of a resolution of the United Nation General Assembly recognizing the need of Land Locked Countries for adequate facilities in terms of International Law and Practice in this regard bearing in mind the future requirement resulting from the economic development land locked countries". In consonance with the said convention the Afghan Transit Trade Agreement 1965 was executed between the Government of Islamic Republic of Pakistan and the Government of Kingdom of Afghanistan on 2nd March 1965 for Regulation of Traffic in Transit. The preamble states "that the Government of Islamic Republic of Pakistan and Government of the Kingdom of Afghanistan being desirous of strengthening the economic ties between their two countries on a mutually advantageous basis, improving the difficulties in the movement of the goods through the two countries and having taking into consideration the present volume and future development of transit trade have decided to conclude an agreement."
9. By Article I of the Agreement, the Contacting Party undertook to grant and guarantee to each other the freedom of transit to and from their territories in accordance with the provision of the agreement. It was further stipulated that no distinction shall be made which is based on the flag of vessels, the place of origin departure, entry, exit or destination or any other circumstances relating to the ownership of goods, of vessels or of other means of transport. Article II of the Agreement provides that goods including baggage, and vessels and other means of transport shall be deemed to be in transit across the territory of a contracting party, when the passage across such territory with or without transshipment, warehousing, breaking bulk or change in the mode of transport, is only a portion of a complete journey beginning and terminating beyond the frontier of the contracting party across whose territory the traffic passes----Traffic of this nature is termed in this Agreement "Traffic in Transit". Article III provided the transit route (I) Peshawar- Torkham and vice versa, (2) Chamman--Spin Baldak and vice versa, with further provision that additional routes may be agreed between the Contracting Parties from time to time. It is also provided that the goods moving via these routes shall be entered at the proper customs post prescribed by each party where adequate transit and other facilities shall be provided. Article IV of the Agreement laid down "No Customs duties, taxes, dues or charges of any kind whether national, provincial municipal regardless of their name and purposes, shall be levied on traffic in transit except charges for transportation or those commensurate with the administrative expenses entailed by traffic- in transit or with the cost of service rendered." The Contracting party also agreed to adopt the point of entry and exit the procedures laid down in the Annex to the Agreement. Article V provided that the Government of Islamic Republic of Pakistan shall earmark sheds and open spaces in the Karachi Port Area to be known as Afghan Transit Area, for the goods in transit to and from Afghanistan Article VIII states that each Contracting Party shall appoint Liaison Officer to look into the working of this Agreement and to refer, for expeditious solution, to the appropriate authorities of their own countries and to the liaison official to the other country, any question arising from the operation of this Agreement. Article X of the Agreement laid down "Nothing in this agreement shall be construed to prevent the adoption and enforcement by either party of measures necessary to protect public morals, human, animal or plant life or health and for the security of its own territory" Article XII made provision for resolving any difference relating to the interpretation of the Agreement by negotiation and in the event of failure to reach settlement "to the refer the matter to an arbitrator acceptance to both Parties, whose decision shall be binding".
As per Article XIV, the Agreement was to remain in force for five years from the date of its coming into force with further provision that the agreement shall be automatically renewed for a further period of five years." Unless notice of termination is given in writing by either Contracting Party to the other six months before the expiration of the five years period and thereafter, the Agreement could be terminated by either Party at any time by giving six, months notice of termination.
10. A protocol was annexed to the Agreement containing the provisions "to regulate the transport of goods by Lorries from Peshawar to Kabul, and from Chaman to Kandhar and vice versa." Under the Protocol, the two Governments agreed to grant multiple entry visas to the transporters and also road permits to transport vehicles. It was also agreed that no taxes shall be levied on transport vehicles registered in the territory of the other country except by prior consultation and on basis of equality. Provision was also made regarding the driving license and certificates of fitness in respect of transport vehicle covered by the Protocol. It was further provided in Article VIII of the Protocol that "The two Government shall consult each other with a view to adopting necessary measures to facilitate the flow of traffic between the two countries and shall seek all possible means within their power to remove any factors which may damage the normal accomplishment of the operation fore-seen on this Protocol."
11. That for accomplishment of the Afghan Transit Trade Agreement with Afghanistan and for smooth and uninterrupted flow of Transit goods another Annexure was made a part of the agreement/protocol through which procedure was laid down for adherence by the Customs and others, on the strength of which the respective Collectorate of the clearance issued public notices for the information of clearing agent/importer of Afghanistan. Consequent to which the GD-AT for transit goods were filed by the clearing agent annexed with the document specified therein under the Provision of Section 129 of the Act. The Customs officials after receipt of the GD use to attend that as per devised procedure for processing and allow of transit. These goods were allowed without any objection i.e. as to whether those falls within the ambit of banned, restricted or prohibited under the respective Import Policy of Government of Pakistan. And without examination with the exception of checking of seal on the container and the container so arrived were allowed to be loaded on Wagons of Pakistan Railway or High Mechanical Transport Vehicle of National Logistic Cell for transport to the exit station for crossing border to Afghanistan.
12. Neither the official of DG I&I-FBR nor of Clearance Collectorate are empowered to examine the goods under section 198 of the Act and to assess those under section 80 and passing of clearance order under Section 83 ibid, by virtue of the facts that the goods arrived in transit to Afghanistan are not meant for home consumption as expressed in Section 79(1) of the Act. The entire procedure adopted for clearance of those was under the provision of Section 129 of the 'Act, and the signed protocol by both countries and the respective public notices. By laying hand on the consignment in question despite of the fact that it was meant for Afghanistan, the official of the respondent No.2 exceeded their allotted sphere, rendering the conduction of examination and completing of assessm ent under Section 80 of the Act in the instant case without power/jurisdiction and similarly issuance of show-cause notice by respondent No.2 under the provision of the Act, despite not applicable on the goods in transit. In a case corresponding to import of tyres and tubes for transit to Afghanistan, which were held by the Clearance Collectorate on the bases of letter of the Board and Public Notice issued by the Collector, the Hon'ble Supreme Court of Pakistan in reported judgments PLD 1993 Karachi 93 M/s. Najib Zarab Ltd. v. Government of Pakistan and 1996 SCMR 727 FOP v. Jamaluddin and others and Najib Zarab Ltd. held that: "The question which arise for consideration is whether the CBR and /or the Collector of Customs, could lawfully banned or disallow imports of tyres by Afghan National under the afghan Transit Trade Agreement and refuse the facility through the territory of Pakistan in respect of such tyres during the subsistence of the said agreement. The question when examined on purely legal and jurisdictional plan, it answer is bound to be negative. We quite agree with the view taken by the learned judges of the High Court that keeping in view the back ground of the Transit Agreement and the fact that Afghanistan is a land locked country, the goods imported by Afghan National from other country for use and consumption in Afghanistan could not be said to have been imported into Pakistan merely because they crossed the Customs barer and entered into Pakistan through to be transited to their destination viz Afghanistan. Such goods, in fact are goods in transit to be dealt with and transshipped to Afghanistan in accordance the transit agreement on the Protocol appended thereto. Customs Law relating to importation would not, therefore be applicable to them. Assuming, however, for the sake of arguments that such goods could be construed to have been imported into Pakistan under Customs Act, and the Section 16 of the said Act, could be invoked which give powers to prohibit or restrict the importation and exportation of the goods (though in the earlier round of litigation, both parties has conceded in this Court that section 16 of the Customs Act, 1969 was not applicable in the present case and cases of the goods in transit were governed by Section 129 of the said Act). Still the impugned order/letters could not be cloth with lawful Authority for two reasons. Firstly, the powers under section 16 was conferred on the Federal Government which could not exercise by subordinate authority like Collector of Customs, who in the instant case had issued Public Notice purporting to impose the banned on the import of tyre and secondly the power was to be exercised by a notification in the official Gazzette which requirement was not complied within the present case.
It was further held that the treaty with Afghanistan dealt with import into Afghanistan from Pakistan and the treaty of transit read with protocol dealt with the goods which are in transit in Pakistan coming from other countries. Afghanistan being a land locked country and construing the expression used in Customs Act, in our opinion it would be wrong to say that the moment goods crossed the Customs bearer or entered into Pakistan territorial water as defined in Customs Act, they should be construed to have been imported into Pakistan under the Customs Act, and the other provision relating to importation would be applicable for importation of these goods.
Looking at from another point of view, if we accept the contention of the respondents advanced in this case then that would mean all goods which are prohibited in Pakistan but which are not prohibited in Afghanistan could not have transit as such through Pakistan. That, in our opinion would not be a reasonable construction to make specially keeping in view the back round of the treaty and the protocol we have mentioned herein before. If the grievances of the respondent was as it seems, to have been that the tyres and tubes after entering into Afghanistan illegally re- entered into Pakistan and are mixed up with mess of other tyres and tubes, then other remedies might be opened to the respondent. Similarly, if the allegation of the respondent be true as was sought to be made out that the tyres and tubes which are meant for transit had been stolen and surreptitiously mixed up with the Pakistani goods then other civil and criminal remedies might be open to the respondent but not invoking section of Customs Act as was sought to be done by the respondent in these cases. We are, however of the view that the provision of the Customs Act and Import and Export Control Order dealt with different kinds of situation i.e. after being imported into Pakistan and not imported into Afghanistan. The provision of Customs Act, do not deal with the goods in Transit which are not really imported into Pakistan.
13. For determination of powers of DGI&I-FBR Notification No.486(I)/2007 dated 09.06.2007 has to be examined, same is silent in regards to power under Sections 2(s), 16, 32, 32-A, 80, 83, 178, 198, 202-A of the Act, corresponding to the instant case as evident from the act of the official of DG I&I-FBR and invoked in the show-cause notice by the respondent No.2. The DG 1&I -FBR could not lay hands on the consignment of Afghan Transit imported into Pakistan for clearance for crossing border as per the expression of Section 129, Transit Trade Agreement, 1965 and the annexed Protocol. The officials of the DG I&I FBR examined an identical consignment i.e. of liquor meant for Afghanistan, which arrived at Karachi Port for transit and thereafter detained/seized that on the pretext that since, it is not importable in Pakistan in terms of Appendix "A" to the Import Policy Order, it cannot be allowed to be transited to Afghanistan. The Hon'ble High Court of Sindh declared their act of examining, detaining and seizing without power/jurisdiction through judgment dated 27.10.2010 in C.P. No. D-2410 of 2010, while quashing the FIRs, held that: "How Article X of the Afghan Transit Trade Agreement 1965 comes into play and which is the appropriate authority in Pakistan which would or could be regarded as having jurisdiction with regards thereto especially in light of section 129 of Customs Act. However we are satisfied that these consideration are not relevant for the purpose of this petition and in the. fact and circumstances of the present case, in the present matter a simply allegation is made by the respondent No.2 that a very specific provision of the Customs Act namely Section 32(1) has been violated and the same amounts to Rn offence which could be taken cognizance by the Customs Judge appointed under the Customs Act. In our view, the petitioner's consignment and the description of the goods in the documents accompanying that consignment do not come within the preview of Section 32 and even such description may have been within the ambit of said section the same would amounts to mis-declaration only if the goods were intended for import into Pakistan that obviously does not apply in the present case since the goods admittedly are in transit under the Afghan Transit Agreement.
In so far as the jurisdiction of the respondent No.2 concerned it appears that these goods were seized and examined by the Directorate after these had been cleared and were out of charge and therefore, in our view, the provision relied upon namely sections 197 to 198 of the Customs Act are not attracted in the facts and circumstances of the present case and since admittedly the Directorate has no jurisdiction under section 129 of the Customs Act, therefore the action taken by the respondent No.2 and his subordinate officer in the present case was without jurisdiction.
We would clarify that nothing observed herein above in any way intended to ambit or obstruct the concerned custom authorities or other law enforcing agencies in Pakistan for taking any appropriate action in accordance with law in respect of smuggling or any such offence. However, we would note that smuggling is a technical term which is specifically defined in Customs Act and therefore if any action is to be taken it must come within the parameters of that definition and relevant provision of the Customs Act, Nothing has been shown to us from the record to this effect and even a bare perusal of the FIR's (which had been placed on the record) does not in any manner indicate that the facts of this case come within the meaning of smuggling as defined in section 2(s) of the Customs Act and other provision thereof.
In view of the foregoing we hereby allow this petition to the extent that the FIR's C.No.Appg- 287/DCHESK0/2010 gated 24.05.2010 and FIR C.No. Appg-288/DCI/ESKO/2010 dated 24.05.2010 are quashed and all proceeding there-under are declared to be without lawful authority.
That result is that the petitioner shall be at liberty to take its good in terms of the subject consignment and strictly in accordance with the applicable rule and procedure to Afghanistan by way of transit in terms of Afghan Transit Trade Agreement."
14. I, therefore, hold in the light of expressed provision of Section 129 and law laid down by the Superior Judicial Fora that the DG I&I -- FBR acted beyond their allotted sphere, rendering there act without lawful authority and as such coram non judice as per law laid down herein therefore referred judgments and at 2004 PTD 2994 M/s. Mazhar lqbal v. Collector of Customs, 2005 PTD 23 M/s. Shazad Ahmed Corporation v FOP, Order-in-Petition No.D-568/2010 Ahmed v. FOP and D710 to 714/2010 M/s. Jamal Din and others and FOP and 2 others and 2002 PTD 2457, PLD 1971 Supreme Court 61, PLD 1973 Supreme Court 236, PLD 1964 SC 536, 2001 SCMR 838 and 2003 SCMR 1505, In PLD 1996 Karachi 68, 2006 PTD 978, PLD 1971 Supreme Court (sic) and 2013 PTD (Trib.) 1375.
15. I am also flabbergasted to observe that in the instant case there exist no beneficiary and if that existed as apparent from the record of the case, he has been exonerated for the reason not known to me, and a non entity i.e. a freight forwarder (non vessel operating carrier) (NVOCC) (appellant) has been made an accused. The said attitude of the investigating agency is highly deplorable and fatal for the case. Beside it speaks a lot about the standard of investigation, ultimate results of such type of investigation is quashing of the case at the stage of judicial fora, it seems there exist a dearth of intelligent, honest and upright Investigating Officer in the detecting agencies.
Investigation is invariably carried out half heartedly and in non professional manner with the sole aim of benefiting the main accused person and this fact stood validated from the instant case, wherein the appellant has been charged for the violation of multiple section of the Act, despite of the fact that he only delivered the documents to the clearing agent for obtaining clearance of the goods for transit to Afghanistan under the provision of Section 129 of the Act, his said act least attract any of the provision of the Act, for better appreciation verbatim of the invoked provision in the show cause notice are reproduced here-in-below: 2(s) "Smuggle" means to bring into or take out of Pakistan in breach of any prohibition or restriction for the time being in force, or evading payment of customs duties or taxes leviable thereon,
(i) Gold bullion, silver bullion, platinum, palladium, radium, precious stones, antiques, currency, narcotics and narcotic and pyschotropic substances; or
(ii) Manufactures of gold or silver or platinum or palladium or radium or precious stones and any other goods notified by the Federal Government in the official Gazette, which in each case, exceed [one hundred and] [fifty thousand rupees] in value or
(iii) Any goods by any route other than a route declared under section 9 or 10 or from any place other than a customs station and includes an attempt, abetment or connivance of so bringing in or taking out of such goods; and all cognate words and expressions shall be construed accordingly.] Section 16:- Power to prohibit or restrict importation and exportation of foods :- The (Federal Government ) may, from time to time by notification in the official Gazette prohibited or restrict the bering into a taking out of Pakistan of any goods of specified description by air, sea or land.
Section 32 False statement, error. etc. If any person, in connection with any matter of customs, --- -makes or signs or causes to be made or signed, or delivers or causes to be delivered to an officer of customs any declaration, notice, certificate or other document whatsoever, or a) makes any statement in answer to any question put to him by an officer of customs which he is required by or under this Act to answer, Knowing 'or having reason to believe that such document or statement is false in any material particular, he shall be guilty of an offence under this section. (Emphasis Supplied)
Section 32A: Fiscal Fraud (1) if any person, in connection with any matter related to customs:- Causes to submit documents including those filed electronically, which are concocted, altered, mutilated, false, forged tempered or counterfeit to a functionary of customs; d) Declares in the 82 [goods declaration] electronically filed customs declaration, the name and address of any exporter or importer which is physically non-existent at the given address; a) Declares in the 82[goods declaration] electronically filed customs declaration an untrue information regarding 97 [payment of duties and taxes through self assessment] description quantity, quality origin and value of goods; b) Alters, mutilates or suppresses any finding of the customs functionary on any documents or in the computerized record; or c) Attempts, abets or connives in any action mentioned in clauses (a) (b) (c) and (d) above, he shall be guilty of an offence under this section.
(2) Where, by any reason as referred to in subsection (I) as aforesaid, any duty or tax charged or fee or fine and penalty levied under any provision of law has not been levied or has been short levied or has been refunded, the person liable to pay any amount on that account shall be served with a notice within a period of 180 days of the date of detection of such custom duty and tax fraud, requiring him to show-cause as to why he should not pay the amount specified in the notice along with any other amount imposed as fine or penalty under the provisions of this Act.
Section 178: Punishment of person accompanying a person possessing goods liable to confiscation:- If any two or more person in company are found together and they or any of them have goods liable to confiscation under this Act, every such person hawing knowledge of this fact is guilty of an offence and punishable in accordance with the provisions of this Act as if goods were found on such person.
Section 202 A: Levy of surcharge:- Notwithstanding anything contained in this Act and without prejudice to any other action that may be taken there-under , if any person fails to pay the arrears, within the prescribed time, he shall, in addition to the arrears be liable to pay surcharge at the rate of [K]IBOR plus three per cent per annum], of the total amount of arrears.
Rule 102(a) of Chapter VIII of Customs Rules, 2001: The licensee has made or cause to be made in any application for any license or permit under this chapter or report filed with Customs, any statement, which was, at the time and in the light of circumstances under which it was made falls or misleading with respect to any material fact, or has omitted to state in any such application or report.
Para 31 of CGO 12/2002: Procedure for transshipment of non-commercial cargo transit to Afghanistan:- for movement of military and humanitarian relief subsistence cargo for International forces and diplomatic mission for transit to Afghanistan, the following procedure is prescribed:- The Consulate/Embassy of the respective country or their authorized representative shall apply to the Collector of customs in whose jurisdiction the transshipment goods arrived, for removal of such goods containing non-commercial government/military subsistence /cargo for Afghanistan, on the prescribed transshipment, Permit in quadruplicate. i) The Embassy or consulate or their authorized representative shall furnish an undertaking to the Collector of Customs concerned duly endorsed by the consulate/Embassy that the goods will not be consumed in Pakistan. ii) The Transshipment goods shall be transferred to the area at ports/airports earmarked for the purpose of stacking and storage of such goods. iii) The shipping line/airline which has issued the through bill of lading shall obtain a serial numbered sticker and seal and will affix on the, same on each transit package/container.
Customs staff shall endorsed confirmation to this effect on transshipment Permit filed by Consulate/Embassy or their representative in this regard. iv) The Embassy/consulate or their representative shall apply to the officer of Customs for removal of such package/container at least 24 hrs before removal, of such package/container. v) After verifying the shipping/airline's seal, viz a viz goods/containers and the reflective sticker affixed on such goods/container the customs staff supervising, the transshipment, shall allow loading and transshipment of such goods/containers the original copy of the permit would be retained by customs, at the port of origin the rest of the copies would be handed over would be handed over to the concerned Embassy/Consulate or their authorized representative. iv) Such transshipment shall be allowed without levying any transhipment fee and without payment of duty and taxes. vii) Transportation shall be made by Pakistan Railways, N.L.C. by air or by any other mode of transport specifically authorized by the CBR. viii) The Customs staff at the port/Airport of Exit shall verify the Shipping Line Seal Customs Bullets Seal and endorse the same on Duplicate and Quadruplicate copy of the transshipment permit.
They shall retain the quadruplicate copy for their own record and hand over the duplicate copy to the transporter for re-submission by the representative of the consulate/shipping/Airline Agent at the Port of Origin. ix) The Consulate /Embassy or their representative shall re-submit the Duplicate copy at the Port/air port of origin within 15 days of Crossing Border by the goods." x) In case of transshipment goods/container is damaged or the shipping/airline seal or Customs Bullets Seals affixed on such container is found broken or tempered with, the goods/containers will not be allowed to enter Afghanistan unless the cargo contain therein is examined by customs staff in the presence of Consulates representative at port of exit and permission/approval of the Assistant Collector (Torkham or Chamman) as the case may be is obtained for the entry of such goods/container into Afghanistan. Expenses if any incurred on examination and re-sealing of such goods/container shall be borne by Consulate or their representative. xi) If the Embassy/Consulate or their representative request for the return of empty container from Afghanistan the request may be acceded to subject to the condition that procedure may be followed for movement of Inland containers as laid down. xii) In case any wrong doing is detected in the cargo in transit in Pakistan, the Consulate/Embassy, their representative/Pakistan Railways/NLC shall be liable to pay the leviable taxes in addition to any other proceeding as envisaged in the Customs Act, 1969.
16. From perusal of Section 2(s), there least exist any iota of evidence that goods imported in transit to Afghanistan through defined ports in Sections 9 and 10 can be termed under any figment of imagination within the definition of smuggling and our this opinion stand validated from the judgment of the Superior Judicial fora referred in the paras supra, resultant, invoking of the same on the appellant is erroneous as he is a non entity in the instant case as evident from the narrated facts. As regards to Section 16, it is observed that this section is incorporated in the Act for delegating power to FBR for prohibiting or restricting importation and exportation of the goods through a notification, resultant, it is a machinery section and no charge can be invoked under the said section. It is also evident from the expression of sections 32 and 32A of the Act can be invoked on an importer or exporter or clearing agent or any other person who submit a declaration with the customs under section 79 of the Act not under section 129 ibid. The appellant least fall in the category of the person defined as he has not submitted any declaration or statement or any documents, which is false in material particular or concocted, altered multilated, false, forged, tampered or counterfeit. To the contrary delivered documents to the clearing for clearance of goods for transit to Afghanistan for crossing border Resultant, neither section 32 or 32A is applicable in the case of the appellant. Invoking of section 178 is also out of place as record demonstrate that the appellant was not found together either with the clearing agent or importer or the authorized representative with the goods liable to confiscation under the Act, by virtue of the fact that the impugned goods are of transit trade goods, on which no provision of the Act, is applicable as discussed in paras above. Invoking of section 202A is also remarkable as that speaks about payment of levy of surcharge if a person fails to pay the arrear within the prescribed time, question of arrear least arise in the instant case as no duty and taxes are leviable on transit trade goods under the Afghan Transit Trade Agreement, 1965 and signed protocol, beside the goods are still with the customs and not released for home consumption in terms of Sections 79(1), 80 and 83 of the Act, resultant, invoking of these sections are erroneous rather absurd and render the show- cause notice/order-in-original as ab-initio null and void.
17. The respondent No.2 also invoked Rule 102(a) of Chapter VIII of Customs Rules, 2001 (Rules) on the appellant, without realizing that the same is applicable on clearing agent and appellant is not a clearing agent and as such he has not submitted any application for issuance of Custom House Agent License, therefore, the question of filing of any false documents or misleading statement in respect of in material fact is not existent. Similarly, invoking the contravention of para 31 of CGO 12/2002 on the appellant is without any substance by virtue of the fact that the goods in question were not allowed clearance for transit to Afghanistan as per direction contained in para 31, resultant no action can be taken in terms of clause (xiii) of the para , if it is assumed for the sake of arguments that action can be taken under the said clause then it should had been against the.
Consulate General of Islamic Republic of Afghanistan, which issued authority letter/undertaking bearing No. Afg/Seil/102/1557 dated 05.04.2010 and their authorized representative not the appellant who figure nowhere. It is also worth discussing that clause (xiii) speaks about any other proceeding as envisaged in Act, which means the provision of section 129 which is machinery provision for transit and for devising Rules etc. and not a charging section, result no show-cause notice can be issued by any authority under the said provision of the. Act and this stood substantiated from section 156(1), ibid as was prior to amendment through Finance Act, 2012, showing penalty of Rs.25,000/- upon contravention of Rules framed under section 129 of the Act.
Since, there were no rules for Afghan Transit Trade, when the show-cause notice was issued, stands validated from the charter of the show-cause notice, wherein no rules are incorporated, which were contravened, resultant, clause 64 of section 156(1) ibid contain no consequence in case of contravention of section 129 ibid., rendering the show-cause notice as void and ab initio as held by Superior Judicial fora in reported 2001 SCM R 838 and 2006 SCM R 1519 and the order so passed is palpably illegal being outside the scope of show-cause notice as held by Hon'ble Supreme Court of Pakistan in reported judgment 1987 SCMR 1840 Rehm Din v. Collector of Customs, wherein their Lordship of the Supreme Court held that "Order of Adjudication being ultimately based on a ground which was not mentioned in the show-cause notice was palpably illegal on the face of it". In the light of authoritative judgment of the Supreme Court of Pakistan.
18. The appellant has been implicated/charged on the basis of rowing and fishing inquiry not permitted as per law laid down by the Superior Judicial fora in reported judgments (1957) 32 ITR 89 (1967) 64 ITR-516, I. T As. 2400/2401/KB/91-92, 1995 PTD (Trib.) 580, 1995 PTD (Trib.) 1152, (1982) 1381 ITR 742, 1993 PTD 206, 1997 PTD (Trib.) 2209 and PLD 1992 Supreme Court 485 and 2013 PTD (Trib.)
353, instead merely the statement of co-accused Mr. Lal Muhammad of *M/s. Pacific Link International under Section 161, Cr.P.C., made during investigation, which has no legal standing and admissible as an evidence as held in reported judgment 2002 MLD 261, whereas despite categorical statement of the appellant that Mr. Munir Khan is the person, who got the consignment booked through him, therefore, in principle he is deems to be a beneficiary, ironically the Officials of DGI&I--FBR ignored the statement of the appellant and not made him an accused in the case.
Similarly, respondent No.2 instead of investigating properly role of Mr. Munir Khan, referred him summarily in the show-cause notice, consequent to the said lapse the respondent No.1 absolved him from all charges while holding in the order, that the charges levelled in the show cause notice could not be established against the alleged accused Munir Khan, despite standing on the same pedestal as of appellant. This differential treatment amounts to discrimination barred under Articles 4 and 25 of Constitution of Islamic Republic of Pakistan and the law laid down by the High Court of Sindh in its reported judgment 2002 PTD 976 that "vacating the show-cause notice in one case and taking action against another person in similar situation, is amount to discrimination which is hit by Article 25. In reported judgment 2002 SCM R 312 and 2009 PTD 1507 the Hon'ble Superior Courts there exist 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 SCM R 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 SCM R 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 highsoever, must be accorded equal treatment with similarly situated persons---State may classified 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 favoring some within a class and unduly burdening others--- Basic rule for exercise of such discretion and reasonable classification is that all persons laced in similar circumstances 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."
19. It is proved that the treatment given to the appellant against the principle enshrined in Articles 4 and 25 of the Constitution and violate' the principle of law settled by the Superior Court in further judgment reported as 1990 SCMR 1072, 1990 SCM R 1059, 1975 SCM R 352, PLD 1995 SC 396, 1998 SCM R 1404, PLD 1997 SC 582, PLD 1997 SC 334 and 1997 SCM R 1874.
20. To what has been stated / discussed herein above particularly the interpretation of law and legal position referred in the light of prescribed law and observations made thereon, I hold that, the appellant had been implicated unnecessarily in the case despite not warranted under the invoked Provisions of the Act by DG I&I -- FBR and, also penalized through impugned orders passed during the hierarchy of Customs, being suffering from grave legal infirmities are declared to be illegal and are hereby set-aside. It is further ordered that the observations made herein above are only to the extent of the present appellant and does not affect any other proceedings pending before any other forums against any other persons allegedly involved in the matter. The appeal is allowed to the II extent of appellant only.
21. Order passed and announced accordingly.