SYED ARSHAD ALI, J. This consolidated judgment shall dispose of the instant Customs Reference as well the connected Customs References No.101-P/2020, 102-P/2020, 103-P/2020, 104-P/2020, 105- P/2020, 106-P/2020, 107-P/2020, 108-P/2020, 181-P/2020 and 182-P/2020 involving adjudication of common questions of law.
2. The present issue relates to the assessment and evaluation of duties relating to the import of vehicles at Customs Dryport, Peshawar under personal baggage and transfer of residence schemes as described in "Appendix-E" of the Import Policy Order of the relevant period. The respondents had imported vehicles under the aforesaid scheme, the goods declarations filed in respect of the imported vehicle were examined and processed by the appropriate customs officials at per procedure in-vogue at Dryport, Peshawar and on payment of relevant taxes and duties being evaluated, the imported vehicles were released to the importers.
3. Later on the basis of some material, demand notices were issued to the respondents directing them to deposit the enhanced rate of duty as according to the petitioners at the time of clearance of GDs, the duties were not properly evaluated keeping in view the type and age of the vehicle imported. The said demand raised by the petitioners was challenged by the respondents through two constitutional petitions bearing No .5550-P/2018 and 4881-P/2018. During the pendency of these petitions, the petitioners were able to recover the said amount of extra taxes and duties from the respondents, however, this matter was never brought before this Court while holding the said demand raised by the petitioners illegal vide judgment dated 24.04.2019.
4. In the year 2018, show cause notices were issued to the respondents wherein; it is held that leviable taxes and duties as determined by the audit team was deposited in the Government treasury, however, in view of mis-declaration/non-payment of taxes and duties, the respondents were also liable to pay a penalty, therefore, through the show cause notice, their explanation was sought that a penal action under Section 32(1)(a), (3A) of the Customs Act, 1969 read with Section 3(1) of the Imports and Exports (Control) Act, 1950, punishable under Section 156(1)(1)(i) and (14) of the Customs Act, 1969 and Section 3(3) of the Imports and Exports (Control) Act, 1950 should not be taken against them and the matter was referred to the adjudicating officer. The adjudicating officer through an order-in-original dated 07.11.2018 vacated the said show cause notices on the ground that since the relevant duties and taxes were paid voluntarily by the respondents, therefore, the question of imposition of penalty does not arise.
5. This order was challenged before the Collector of Customs (Appeal) on the ground that the respondents were forced to pay the duties and taxes, therefore, it should be returned/refunded to them. The said appeal was dismissed by the Collector of Customs (Appeal) vide order dated 19.06.2019, however, the further appeal filed by the respondents on the same ground was allowed by the Customs Appellate Tribunal, Peshawar Bench vide order dated 29.11.2019 wherein; after a detailed deliberation it was held that the duties and taxes were illegally recovered from the respondents, therefore, the same was refundable to them.
6. The instant Customs References have been filed by the Department on various grounds, however, the essential issue for determination of this Court is that when the issue relating to the recovery of alleged short paid amount of duties and taxes was not the subject matter of the order- in-original and there has been no adjudication upon the validity of the claim of the customs department by adjudicating officer then when the Tribunal which was only seized of the matter (imposition of penalty by the assessing officer), the Tribunal had any jurisdiction to have recorded findings on the refund of taxes and duties recovered from the respondents.
7. The allegations regarding the applicant/respondents were the making of false statement relating to the type of the vehicle which resulted into the alleged short levy of duty in terms of Section 32 of the Customs Act, 1969. The demand raised by the respondents against the department was without any proper adjudication as no show cause notice was issued to the respondents and for that reason that said demand was declared illegal by this Court vide judgment dated 24.04.2019 passed in constitutional petition No.5550-P/2018.
8. However, it is the claim of the department that the said amount was paid voluntarily by the importers through their clearing agents during the pendency of the said petition. It would be pertinent to note that during the proceeding before this Court while adjudicating upon constitutional petition No.5550-P/2018, it was never brought to this Court that any amount was recovered from the respondents and even after the judgment of this Court dated 24.04.2019, the respondents have never made recourse to any legal mechanism for refund/recovery of the said amount.
9. The only issue before the adjudicating officer/assessing officer while passing the order-in- original was the alleged liability of the respondents for penalty in terms of Section 32 of the Customs Act, 1969 and as evident from the order-in-original dated 07.11.2018, the assessing officer had vacated the show cause notices wherein; it was held that since the amount of alleged short levied taxes were paid, therefore, the question of penalty does not arise. Needless to mention that the no issue relating to short levy of amount was adjudged by the assessing officer, therefore, though the order-in-original passed by the assessing officer was appealable to the Collector Customs (Appeal) in terms of Section 193 as well as before the Appellate Tribunal under Section 194-A of the Customs Act, 1969, however, the said appeal could be filed on the issues which were directly and substantially an issue before the adjudicating officer.
10. As stated above, since the issue of short levy or recovery/refund of the taxes and duties paid by the respondents never remained a subject matter of dispute between the adjudicating officer, therefore, in our humble view neither the Collector Customs (Appeal) nor the Appellate Tribunal had any jurisdiction to have dilated upon the said issue.
11. It is well-settled law that appeal is not only a statutory right but is a continuation of proceedings initiated at the lower forum and the appellate fora can adjudicate upon an issue which remained directly and substantially an issue before the first forum and has no authority to go beyond the said issue. In support of the above, this Court is fortified with the law laid down by the august Supreme Court in "Collector Central Excise and Land Customs and another v Rahm din (1987 SCMR 1840)" wherein; it has been held that: - "However, we are of the opinion that it is not necessary to determine this question of law in the facts of the present case as this petition can be disposed of on the short ground that the order of adjudication being ultimately based on a ground which was not mentioned in the show-cause notice, the order was palpably illegal and void on the face of it. We have carefully examined the show-cause notice and find no reference whatsoever or necessary facts relating to the ground that the alleged contraband goods were imported into Pakistan from an unauthorized route. In view of this palpable legal infirmity, we do not consider it necessary to examine the other contentions raised by the learned counsel."
The said law was followed by this Court in the case of "Commissioner Inland Revenue, Zone -II, Peshawar Vs. Messrs Pakistan Mineral Water Bottling (Pvt) Limited, Swabi (2019 PTD 1219 Pesh)."
Similar law has also been followed by other High Courts in the cases of "Abu Bakar Siddique Vs. Collector of Customs and others (2002 CLC 1066 Lahore), Dr. Muhammad Yousaf Vs. Commissioner of Income Tax (2006 PTD 590 Karachi), Commissioner Inland Revenue, Zone II Regional Tax Office II Vs. Messrs Sony Traders wine Shop (2015 PTD 2287 Sindh)." In the present case, the Tribunal has decided the issue relating to the assessment and levy of duties and taxes, which never remained the subject of the show cause notice; hence, the said adjudication is based on extraneous consideration and illegal.
12. In view of the above, the instant Customs Reference as well as connected Customs References are answered in positive. Copy of this judgment be sent to the learned Customs Appellate Tribunal in terms of Section 196 (5) of the Act.