ABDUL JABBAR QURESHI, MEMBER JUDICIAL-I.----By this Judgment we intend to dispose of the instant appeal filed by appellant, against Order-in-Original No. 875/2021-22 dated 28.02.2022 passed by the Collector of Customs (Adjudication-II), Custom House, Karachi, where in the Adjudicating Authority under clauses 1(i). 14(i), (14A) and 44 of table of Section 156(1) of the Customs Act, 1969 has imposed personal penalty of Rs.1,000,000/- on the Appellant.
2. Brief fact that the per seizure report, that M/s AAA Packages, Plot No # 15; Sector D-11 Phase-II KEP.Z, Landhi Industrial Area Karachi obtained' NOC from 'Export Processing Zone Authority for the importation of a consignment said to contain "Rejected Plastic Rolls Waste Assorted sizes and microns" stuffed in Container BEAU-2567916 covered under Bill of Lading No. 5226009097 and that imported goods were meant for further processing. Subsequently, M/s. Ahsan Traders, S-16 Aslam Motiwala Terrace, Bohre Road Opposite Customs House, Karachi on behalf of M/s. AAA Packages, EPZ Karachi, has filed Goods Declaration No PQZI-EP-7519-04-10-2021 declaring thereby the description of goods as "Rejected Plastic Rolls Waste Assorted sizes and microns" valued at US$ 3366.6 assessable under HS Code 3915.9000. The importer determined his liability of true declaration as envisaged under the provision of Section 79 of Customs Act, 1969. As per seizure report that from the foregoing facts and circumstances of the case it is established that Ms. AAA Packages, EPZ Karachi with the collusion of their authorized clearing agent have committed and offence which fall within the ambit of Sections 32(1), 32(2), 32A(1), 32(2) and 79(1) of Customs Act, 1969 punishable under Clauses 1(i), 14(i), (14A) and 44 of Section 156(1) of the Customs Act, 1969 read with Sections 3, 6 and 7 of the Sales Tax Act, 1990 punishable under Clause 5 of Section 33 (I) ibid thither read with Section 143 (1) of the Income Tax Ordinance, 2001 punishable under Clause 15 of Section 182(1) ibid. As per setae report, that M/s. AAA Packages, EPZ, Karachi.
3. Show-Cause Notice issued and matter was adjudicated by the learned Order-in-Original No. 875/2021-22 dated 28.02.2022, passed by the Collector of Customs (Adjudication-H), Custom House. Karachi. Operative para as under:-- As far as the role of the clearing agent in the subject case is concerned, it is observed that under the Customs Act, 1969, he acts on behalf of the principal for all the purposes of the Act, and cannot be absolved of all responsibility other than merely scanning the documents delivered by the principal/importer. He is required to make a true, statement / presentation to Customs after! analyzing all aspects of the Goods Declaration and the documents delivered to him by his principal. In case mis-declaration is proved, the clearing agent has to be penalized along with the principal/importer. Accordingly, a penalty of Rs.1,000,000/- (Rupees One Million Only) is also imposed on clearing agent, M/s. Ahsan Traders (CHAL KCUS-522). S-16 Aslam MotiwalaTerrace, Bohare Road, Opposite Customs House, Karachi in terms of 1(i), 14(i), (14A) and 44 of the Customs Act, 1969 for violation section quoted in the show-cause notice. The case is disposed off in above terms".
4. Being aggrieved with the verdict of Adjudicating Officer the instant appeal was filed by the Appellant against the Order-in-Original No. 875/2021-22 dated 28.02.2018 under. section 194A of the Customs Act, 1969, against the imposition of penalty of Rs.1,000,000/- before this tribunal which has been considered in the light of available record and arguments forwarded by the rival parties. Mr. Tauseef Ahmed, A.O came to represent the department and relied upon the submitted para-wise comments, which are taken on record and appeal grounds are under consideration. That, Appellant filed G.D in good faith on the basis of Invoice and B.L provided by the importer and importer/ industrialist received the same from foreign exporter. It is evident that it was mere a bona fide mistake and no question of criminality or evasion of duty taxes arises when there is no duty taxes livable on goods imported into EPZ. It is clarified that it is not a case of misdeclaration but it was happened due to inadvertence or bona fide error and same can be rectified under' section 205 of the Customs Act, 1969 along with all other enabling provisions of any law. That the authorities have not acted in accordance with the law and above all have not asked to show reason through any letter/documents/correspondence but lodged FIR in haste and seized the goods without jurisdiction. That according to EPZR, 1981 read with SRO 881(1) /80 dated 23.08.1980 Customs authorities only possesses the jurisdiction to look into the fact as to whether the imported items fall into any prohibitory category or not. Further it is upheld by the Hounorable High Court in M/s. Kamran Industries v. Collector, Export, PLD 1996 Khi. 68, that till such time the exemption under SRO 881(1)/80 dated 23.08.2021 is intact or a like facility is available, the custom authorities have no jurisdiction to look into the question of under-Valuation, calculation of duties and misdescription of goods imported into the E.P.Z. That impugned actions of the custom authorities in this case are declared to be completely bereft of jurisdiction. That due to illegal hold of EPZ custom authorities' importer is facing demurrage and detention charges/losses on daily basis and it is also great loss of the national exchequer. Moreover. FIR number 02/2021 (SI/MISC/27/2021/CUS/EPZ/EXP) dated 08.10.2021 was lodged against the importer and Appellant / clearing agent without jurisdiction, any legal justification and reasons, just on mala fide basis for extorting money. Further averred that instant FIR is lodged in clear negation of apex court judgment which amounts to contempt of court. That even otherwise Sections 32 and 32-A of the Customs Act, 1969 cannot be invoked if no revenue loss in shape of Custom duty or Tax involved, which has to be collected by the customs authorities as a collecting agent under the Customs Act, 1969. Once again it is clarified the EPZ is duty and Tax free zone and it is a foreign territory. (Reliance is placed on, 2019 PTD 52, PLD 1996 Karachi 68, 2003 PTD 52 and 2007 PTD 2215). That Appellant appeared along with co-accused in trial court of special judge customs court and they were enlarged on bail by the hounourable court. Moreover importer has lodged complaint before Hounourable FTO as well as filed a Constitutional Petition No. 6150121 in High Court of Sindh at Karachi for quashment of FIR and legal action against customs officials of EPZ. That act and conduct of the customs EPZ staff is tantamount to clear maladministration on their part That it is highly unjustified and in clear negation of mandatory provision of law. That the EPZ staff all actions are in violation of Articles 4, 5, 9, 18, 10-A, 19-A and 25 of Constitution of Islamic Republic of Pakistan, 1973 and is clear negation of principles of natural justice and misuse of discretion which is not permissible under the law for which they are solely responsible for all the damages occurred due to the aforesaid arbitrary action, which is in violative to ruling of Superior Courts given in identical, wherein it is clearly held that only bona fide action of respondents are protected under Section 217 of the Customs Act, 1969 and action which is in violative to mandatory provision of law is without jurisdiction for which they are solely responsible under the law for all the damages occurred due to respondents arbitrary action. 2005 SCMR P.1950, PTD 2012 P.1365. That Hounourable Supreme Court of Pakistan in identical cases also held that public functionaries must act and discharge their duty quite fairly and in accordance with law, if a willful wrong is done to a person by a public functionary and in consequence to such wrong that person has suffered mental torture entitle for damages and also held that mala fide action are not protected under section 217 of the Customs Act, 1969. The exercise of official authority in a manner in which person is made (victim) victim of misuse of process of law is in violative to constitutional guarantee in respect of right of citizen' SCM R 2007 P.10, 2005 SCMR P.1950 and SCM R 2007 P.10. That show cause notices as well as Order-in-Original totally based on EPZ Customs staff mala fide report and ambiguous because SCN and Order-in- Original are silent about the very foundations or plausible reasons which provides evidential basis on which the aforesaid notice has been based/ issued against appellant as the same is very material and also mandatory under section 24-A of the General Clauses Act as well as ruling of Superior Courts given in identical cases: M/s. Muhammad Ilyas Lodhi v. President of Pakistan.
CLC 2002 P.244 Pakistan v. M/s. Muhammad Tariq Pirzada, SCMR 1999 P.2189, M/s. Airport Support Services v. Airport Manager, QIAP, SCMR 1998 P. 2268. That the present notice is highly unjustified and clear misuse of discretionary powers which is in violative to principles of natural justice as well as established departmental practice/ procedure and due to the said reason/basis same is discriminatory and also against the ruling of Supreme Court of Pakistan. Reliance is placed on M/s. Walayat Ali Mir v. PIA Corporation, SCMR 1995 P.650. The respondent department failed to produce any conclusive evidence to establish that Clearing agent has previous knowledge of goods under import, filed the GD on the basis of documents provided to him by importer which importer in turn has received "electronically". The department has failed to prove any complicity of the Clearing Agent / Appellant with the Importer and mere filing of GD does not connect the Appellant with alleged mis-declaration. That the excess of jurisdiction committed by the custom officials' amounts to gross violation of codified laws and at the same time it is Contempt of Court on the basis of defiance of superior courts judgments. That the aforesaid brief submissions/grounds/rulings of Superior Courts shall be treated as an integral part of our written arguments in the subject case. That considering the aforesaid facts subject notice cannot be treated as a valid show-cause notice in line with the spirit of law/ principles of natural justice which is liable to be vacated. That the Hounourable Federal Tax (Ombudsman) in identical case of M/s. Nadeem Textile Mills Ltd., 2002 PTD 3087 clearly held that the principles of law enunciated by Supreme Court and High Court is (a) binding force on all the citizen and any defiance from its implementation is tantamount to maladministration.
5. Record of the case has been carefully examined and arguments put-forth by the Appellant and the Respondent have been duly considered. It has been alleged by the Collectorate of Customs, MCC (Export) Port Qasim, Karachi, that with the active connivance of the Appellant M/s. AAA Packages, misdeclared description of goods imported into KEPZ to evade customs duty and taxes to the tune of Rs.9,459,981/-.
6. It is observed that the adjudicating authority has imposed penalty of Rs.1,000,000/- under irrelevant 1(i), 14(i), (14A) and 44 of section 156(1) of the Customs Act, 1969. This clause is for the contravention of section 32 of the Custom Act, 1969 and cannot be invoked against the Customs Agent not involved in any deliberate mis-declaration proven by any concrete evidence of mens- rea, therefore this act is arbitrary as no wrong doing on part of agent was found.
7. From the above we conclude that even on the merits of the case the Appellant who is clearing agent in this case had limited liability under section 209 of the Customs Act, 1969 and cannot be held guilty under sections 32(1), 32(2) and 32A(1)(2) of the Customs Act, 1969 without conclusive proof. The Customs Appellate Tribunal and the superior courts of this country have time and again held that customs agents files GD on the basis of documents furnished to him by the principal, therefore his job is to translate the facts of those documents into GD and file it on behalf of the importer / Principal. Therefore we are of the firm view that any lapse of Customs Agent if found incorrectly depicting the facts from the documents provided to him by the Principal then he will be guilty owing to his failure to discharge his duties as per laid down criteria and parameters. However if the Customs Agent files the GD on behalf of his principal with due diligence and any error or lapse is detected by customs on basis of the documents furnished by the principal, then such discrepancy would not be attributed to the clearing agent who has no role in negotiations with the exporter, shipping agent, bank transactions or signing any contract or agreement. Accordingly in this case the role of Customs Agent was only to file the GD on basis of the documents furnished to him by his principal, hence he cannot be punished for only his association with the principal. This is neither a ease of connivance nor collusion which need a conspiracy to be hatched, however no concrete evidence for it has been provided by the department. Therefore we hold that Customs Agent is not involved in any connivance or collusion on mere assumption. We, remit the penalty imposed on the Customs Agent on the basis of show-cause notice and resulting Order-in-Original.
The Order-in-Original is modified accordingly to the extent of Appellant.
8. The appeal is allowed. No order to cost.