SYED ARSHAD ALI, J. This Custom Reference has been filed under Section 196 of the Customs Act, 1969 ("Act") to call in question the judgment of the worthy Custom Appellate Tribunal, Special Divisional Bench, Islamabad ("Tribunal") dated 01.11.2022 setting aside the order-in-original dated 09.02.2022 of learned Collector, of Customs (Adjudication), Islamabad being passed, beyond the statutory period provided under Section 179 (3) of the Act.
2. Brief facts of the case are that a credible information was received from the Collector and Additional Collector, Collectorate of Customs (Appraisement), Peshawar through the Assistant Collector, Customs Dryport, Azakhel that the importer M/s. Allied Associates, Peshawar and his clearing agent M/s. Mashallah Enterprises are involved in theft/clandestine removal of non-duty- paid mobile accessories ("goods") from We imported consignments without payment of leviable duty and taxes through illegal means and that a light Truck (Shahzor) bearing Registration No. 3757 was present at the bonded/restricted area of dryport and loading thereof was in process. In order to verify veracity of the information, the Assistant Collector raided and found that 120 cartons of the goods were loaded in the aforesaid vehicle whereas 76 cartons of the goods were in the process of being loaded. The vehicle along with goods were taken into custody and handed over to the Assistant Traffic Manager, Pakistan Railways being its Custodian. FIR No. 101/2021 dated 18.09.2021 was registered against the culprits.
3. On completion of requisite formalities, the matter was placed before the Adjudicating Officer, who issued a show-cause notice to the respondents on 22.10.2021 and thereafter passed the Order- in-Original No. 38/2022 dated 09.02.2022 whereby the goods were confiscated and directions were issued for initiation of proceedings against the person involved in this game.
4. The respondents feeling aggrieved filed an appeal before the worthy Tribunal. The worthy Tribunal has allowed the appeal and set aside the order-in-original vide judgment dated 01.11.2022; hence, the instant customs reference.
5. The learned counsel appearing on behalf of the petitioner has mainly argued that the findings of the Tribunal are not correct because in the present case various adjournments sought by the respondent itself and even proceedings at some time remained stayed by the High Court, therefore, the said judgment of the Tribunal is not legally correct.
6. On the other hand, the learned counsel for the respondents, while rebutting the aforesaid arguments, has argued that even if the said period is excluded the time line provided i.e. 30 days for adjudication of the case still has not been complied with by the Adjudicating Officer, therefore, the findings of the Tribunal are not open to any exception.
7. We have given anxious consideration to the submissions of learned counsel for the parties and have also perused the record with their able assistance.
8. In order to appreciate whether the order-in-original was passed within the time provided under Section 179 of the Act. For ease reference, the said section reads as under:-
179. Power of adjudication- (1) Subject to subsection (2), in cases involving confiscation of goods or recovery of duty and other taxes not levied, short levied or erroneously refunded, imposition of penalty or any other contravention under this Act or the rules made thereunder, the jurisdiction and powers of the officers of Customs in terms of amount of duties and other taxes involved, excluding the Conveyance, shall be as Follows, namely:- (i)Collector no limit (ii)Additional Collectornot exceeding three million rupees (iii)Deputy Collector not exceeding one million rupees (iv)[Omitted]
(v) Superintendent not exceeding [one hundred) thousand rupees (vi)Principal Appraisernot exceeding [one hundred] thousand rupees.
Provided that in cases of goods to be exported, the above officers of Customs shall have their jurisdiction and powers in terms of FOB value and twice their respective monetary limit.
(2) Notwithstanding the provisions of subsection (1), the Board may, by notification in the official Gazette, fix or vary the jurisdiction and powers of any Officer of Customs or a class of officers, and may also assign or transfer [,by an order,] any case to any [Officer) of Customs, irrespective of the territorial jurisdiction.
(3) The cases shall be, decided within [ninety] days of the issuance of show-cause notice or within such period extended by the Collector for which reasons shall be recorded in writing, but such extended period shall in no case exceed [sixty] days: Provided that in cases, wherein the provisions of clause (s) of section 2 have been invoked, such cases shall be decided within a period of thirty days of the issuance of show-cause notice: Provided further that any period during which the proceedings are adjourned on account of a stay order or alternative dispute resolution proceedings or the time taken through adjournment by the petitioner not exceeding thirty days, shall be excluded for the computation of aforesaid periods: Provided further that in cases where in goods are lying at sea-port, airport or dryport, these shall be decided within thirty days of the issuance of show-cause notice which can be extended by another fifteen days by Collector of Customs, if required so.
(4) The Board shall have the powers to regulate the system of adjudication including transfer of cases and extension of time-limit in exceptional circumstance.
(5) Notwithstanding anything contained in this Act, or any other law for the time being in force and notwithstanding any decision or judgment of any forum, authority or court whether passed on or before the commencement of the Finance Act, 2006, the time for adjudication in all the cases pending as on first day of July, 2006, for whatsoever reasons, shall be deemed always to have been extended up to 31st day of December, 2006.
1st proviso of subsection (3) of Section 179 of the Act is very clear that the cases, wherein the provisions of clause (s) of section 2 have been invoked, the adjudication shall be decided within a period of thirty days of the issuance of show-cause notice by excluding the period during which the proceedings are adjourned on account of a stay order or alternative dispute resolution proceedings or the time taken through adjournment not exceeding thirty days. Thus, the total period in which the proceeding will be decided is 30 days whereas in the present case, the contravention report was prepared on 21.09.2021, show-cause notice was issued to the respondents on 22.10.2021 and the learned Collector of Customs (Adjudication), Islamabad has passed the order-in-original on 09.02.2022 obviously beyond the said time line provided under Section 179 of the Act. This issue does not require detailed discussion as it has already been laid at rest by the apex Court in the case of Messrs Mujahid Soap and Chemical Industries (Pvt.) Ltd. v.
Customs Appellate Tribunal, Bench-I, Islamabad and others (2019 SCMR 1735), relying on the judgment of three Member Bench of the Apex Court in the case of The Collector of Sales Tax Gujranwala and others v. Messrs Super Asia Mohammad Din and Sons and others (2017 PTD 1756). The relevant paragraph of the judgment of Mujahid Soap reads as under:- "5. We asked the learned counsel for the respondents to explain what in her view was the meaning of "decided" in the present case. She said that the matter was decided when it has been heard and the judgment was reserved for release of the reasons. However, it is conceded that on 24-12- 2013 no decision was verbally announced by the adjudicating officer nor was any decision communicated to the parties prior to the issuance of the order-in-original dated 19-2-2014. We fail to understand how a decision can be said to have been taken without announcement or communication thereof to the parties. To our understanding the law is quite accommodating for the taxing authority as an extension is available beyond the originally prescribed period of 120 days for rendition of a decision. Even though no decision is communicated within the said period, such an extension can be sought and granted subsequently but in such an event it is mandatory that the decision comes within 180 days after the date of show-cause notice. This view is expressed by the Court in its recent judgment reported as Collector of Sales Tax v. Super Asia Mohammad Din and Sons (2017 SCMR 1427 at paragraph 11).
6. In the present case, however, the respondent-Deputy Collector did not even apply for an extension but consumed 157 days to record the reasons for his judgment and to communicate the same to the parties. We cannot accept the proposition that such decision had taken place as and when the hearing was concluded. It is necessary that an adjudicatory decision be recorded and duly communicated to the parties. That has not happened in the present case. Therefore, according to the record of the case, the decision took place on as contended by the learned counsel for the respondents.
7. As a result, the impugned decision given in the case by the respondent was beyond time as prescribed in section 179(3) of the Act. Therefore, the said decision is invalid. Consequently, the impugned judgment is set aside and this appeal is allowed".
Recently, the apex Court in the case of Commissioner Inland Revenue, Zone-II, Regional Tax Officer (RTO), Mayo Road, Rawalpindi and another v. Messrs Sarwag Traders, 216/1-A, Adamjee Road Rawalpindi and another (2022 SCMR 1333) has re-affirmed the law laid down in the case of Mujahid Soap (supra).
7. As far a the contention of learned counsel for the petitioner regarding staying the proceedings by this Court in Writ Petition No.4402-P of 2021 is concerned, there was no stay order rather this Court declined the interim relief vide order dated 19-11-2021.
8. Thus, we are of the considered view that in view of the judgment passed by the Apex Court in Mujahid Soap, the order-in-original having been passed in violation of law i.e. beyond the time prescribed under Section 179(3) of the Act; hence, the judgment passed by the worthy Tribunal setting aside the order-in-original is according to law.
8 (sic) In view of the above, this reference is dismissed. A copy of the judgment be sent to the worthy Tribunal in terms of section 196(5) of the Act.