SHAKEEL AHMED ABBASI, MEMBER JUDICIAL-III.----This Judgment intends to dispose of Customs Appeals Nos.9697/2022, 1698/2022 and 1699/2022 all dated 14.07.2022 tiled by the Appellants against the impugned Customs Orders-in-Original Nos.16/2022 to 18/2022 passed by the Additional Collector of Customs MCC Exports, Custom house, Karachi. The facts leading to filing of the aforesaid three (03) Appeals are identical therefore; the facts of Appeal No.K-1697/2022 are taken for disposal of these Appeals.
1. The Appellant exported a consignment consisting of Pakistani origin pitted dates to M/s. Woolworths Way, Bella Vista NSW, Melbourne, 2153, Australia. The total quantity was 18 metric ton packed in 1800 cartons. The impugned consignment was allowed for export on filing the Goods Declaration bearing number KAPX-SB107645 dated 29.01.2022. After export of the consignment of dates, the Respondent Collectorate issued show-cause notice bearing number SI/Misc/16/2022/Exports-SAPT dated 22.03.2022 and alleged that the Phytosanitary certificate issued by the Department of Plant Protection was tampered with the active support of their clearing agent M/s. A.S.K. Enterprises, Karachi and the tempering was confirmed by the Department of Plant-Protection. The show-cause notice further alleged that the Appellant with the active connivance of the clearing agent exported the goods in violation of Export Policy Order, 2020 and committed violation of Sections 16, 32(1), 131 and 209 of the Customs Act, 1969 read with para 16 (p) of Export Policy Order, 2020 issued vide SRO 901(1)/2020 dated 25.09.2020. The restriction on export of the impugned goods meant that the goods had been exported without compliance with the requirements of the Export Policy Order, 2020 and as such the export would be treated in contravention of the provision of the Import and Export (Control) Act, 1950.
2. The Appellant replied to the show-cause notice and stated that they had exported multiple consignments of agriculture produce i.e. dates as the same being a seasonal crop and got issued the Phytosanitary certificate in each consignment from the Department of Plant Protection, Ministry of Agriculture and Livestock. It happened that the clearing agent had mistakenly submitted Phytosanitary Certificate issued for another consignment due to rush of work and was a human error. The Phytosanitary Certificate was submitted by the clearing agent to the officers of the Collectorate without any mala fide intention. It was pertinent to mention that the Phytosanitary Certificate was procured by the Appellant from the Ministry of Agriculture and Livestock Plant Protection Department which indicated details of the consignment and also confirming that the said consignment had also undergone disinfection treatment. The Adjudicating Authority of the Respondent 'Collectorate without considering factual position of the case passed Order-in-Original No.16/2022 dated 19.05.2022 against the Appellant and held that:- "I have gone through the record of the case and the arguments advanced during the hearing proceedings. The phyto-sanitary certificate issued by the Deportment of Plant Protection was tempered by the exporter in connivance with the clearing agent. The allegation levelled in the show-cause notice stands established. Therefore, in exercise of powers conferred upon me under Section 179 of the Customs Act, 1969, personal penalty of Rs.150,000/- (rupees one hundred and fifty thousand only) is imposed on Messrs Sharmeen Foods (Pvt.) Ltd. (NTN- 7258388) under clauses 1, 9, 14 and 66 of section 156(1) of the Customs Act, 1969 for violation of sections 16, 32(1), 131 and 209 of the Customs Act, 1969, read with paragraphs 16(p) and 17 of Export Policy Order, 2020 and section 3(1) of Import and Exports (Control) Act, 1950. A personal penalty of Rs.50,000/-(rupees fifty thousand only) is imposed on Messrs A.S.K. Enterprises (CIIAL No.1490) under the above mentioned provisions of law."
3. During the course of hearing, the counsel of the Appellant contended that the Adjudicating Authority imposed penalty without taken into consideration that the Phytosanitary Certificate was duly procured from the Plant Protection Department and there was no benefit of submitting a Phytosanitary Certificate which pertained to different consignment. The Counsel of the Appellant further argued that the Appellant's clearing agent had submitted Phytosanitary Certificate pertaining to another consignment due to the rush of work. The counsel of the Appellant stressed that there was no loss of revenue and the impugned consignment was duly fumigated and inspected by the entomologist / authority of the Plant Protection Department therefore, the imposition of penalty was unwarranted and without lawful authority.
4. It was further explained by the learned counsel that the Adjudicating Authority had no jurisdiction to adjudicate the case and the order-in-original passed by the Respondent Collectorate was without lawful authority and jurisdiction. The Appellant referred preamble of the Notification SRO 836(1)/2012 dated 18.07.2012 and pointed out that the power under section 179 Ibid could only be exercised by the Collectorate of Customs Adjudication and the power under section 179 Ibid could not be exercised by the exporting Collectorates. For ease of reference preamble is reproduced below:- "SRO 886(1)/2012 dated 18.07.2012. In exercise of the powers conferred by Section 23 of the Customs Act, 1969 (IV of 1969) read with Section 179 thereof the Federal Board of Revenue is please to direct that subject to paragraph 3, the Collector, Collectorate of Customs Adjudication specified in Column 2 of the table below shall adjudicate the cases relating to areas falling in the jurisdiction of the Collectorate and Directorate mentioned in column 3 of the Table namely."
Conversely, the adjudication power by the Collectorates of Customs (other than Adjudicating Collectorate) could only be exercised under the provision of section 80 Ibid. The appropriate officer under the relevant section 80 ibid was Principal Appraiser who had the jurisdiction and being Appropriate Officer under Notification SRO 371(1)/2002 dated 15.06.2002. The case had been adjudicated by the Additional Collector of Customs by exercising power under section 179 Ibid which was beyond power as such power and justification such power was conferred upon Collectorate of Customs Adjudication. The counsel cited judgment 2009 PTD 1083 and stated that the superior authority had no justification to exercise the power of subordinate for adjudicating purposes and the power of subordinate exercised by the superior authority was held to be without jurisdiction.
The power of Adjudication of cases under section 179 Ibid only pertained to the Adjudication Collectorate. Since in the case, the Adjudicating Authority exercised power and under section 179 Ibid and acted beyond jurisdiction as power of Adjudication that under section pertained to the Adjudication Collectorate. The Adjudication in the impugned case related to Section 80 Ibid and the power of Adjudication was conferred upon the Principal Appraiser / Superintendent under Notification SRO 371(1)/2002 dated 15.06.2002. This Notification assigned the function of the Appropriate Officer referred to various section of the Customs Act, 1969. The Adjudication power in the instant case therefore, should have been exercised by the Principal Appraiser. It was settled law that higher officer could not usurp the power of his junior officer. The Adjudicating Authority adjudicated the case without power and jurisdiction therefore the same being coram non judice.
Reliance is placed 2009 PTD 1083 (The State v. Zia ur Rehman and others). In the case, the show- cause notice and Order-in-Original was issued by the Additional Collector of Customs by usurping the power of the Principal Appraiser which was not permitted under the law. Nobody was allowed to usurp the power of subordinate. The superior authority could not exercise the power of subordinates to adjudicate any case. The power of subordinate exercised by the superior authority was held to be without jurisdiction besides usurpation. The Adjudication order passed under section 179 of the Customs Act, 1969 was without power / jurisdiction and ab-initio, null and void and coram non judice. The exercise of power by an authority being mandatory requirement and is non fulfillment would entail the entire proceeding to be coram non judice. The counsel of the Appellant Reliance placed on the following case laws:- 2001 SCMR 103 PLD 2004 Supreme Court 600 PLD 2005 Supreme Court 842 2010 PTD 465 2014 Supreme Court 514 In view of the above, the counsel submitted that the adjudication order had been passed without jurisdiction by the Additional Collector of Custom Exports and order passed by the Adjudicating Authority was without lawful authority therefore, the order passed may be set aside.
5. The Counsel of the Appellant stressed that there was no element of mens rea involved in the case as the Appellant had bonafidely exported Pakistani origin dates and had earned valuable foreign exchange for the Country. The Appellant had no knowledge that the Phytosanitary Certificate was wrongly submitted by their clearing agent as the edible product was fumigated by the Plant Protection Department as per the fumigation certificate was duly certified by the Department of Plant Protection. Had it not been fumigated the consignment would have been returned from the destination of Export which would have been great loss not only for the Appellant but for Country as well. The Appellant, exercised due diligence and care to obtain Phytosanitary certificate of each consignment. The clearing agent by mistake had taken Phytosanitary certificate issued for another consignment which was regretted. The clearing agent had promised to take due care in future. Since the above named Appellant was not at fault, therefore. the personal penalty imposed may please be set aside. Needless to say that there was no loss of revenue involved in the case and the export consignment was sent by the Appellant to Australia and had earned valuable foreign exchange for the Country.
6. I have carefully perused the record of the case and have heard at length the counsel for the Appellant and Departmental Representative. It was directed to the DR to get the Phytosanitary Certificate placed along with the memo. of Appeal be verified from the Ministry of National Foods, Security and Research, Department of Plant Protection, Karachi. The DR confirmed that the certificates in all the three cases are genuine and verified by the Plant Protection Department.
However, the D.R stressed that at the time of export, the certificate was of other consignments. To a question whether the Appellant inflicted any loss to the government in export of the consignment. the DR replied that no loss of revenue was caused by the Appellant.
7. In view of the above discussion in the Appeals merit acceptance on legal and factual plane both; resultantly, the Appeals are allowed and impugned Orders-in-Original passed in all the three Appeals are set aside and the penalties imposed upon the Appellant as well as on the clearing agent through these orders are remitted.