1. 'NAZIM HUSSAIN SIDDIQUI, J.---This is a petition under Article 199 of the Constitution of Islamic Republic of Pakistan, wherein the petitioners have prayed for declaring the following that:--- "(a) no misdeclaration has been made by the petitioners so as to attract the provisions of section 32 of the Customs Act, 1969;
(b) no goods were imported by the petitioners into Pakistan nor any duty has been evaded by the petitioners so as to attract the provisions of section 2(s) of the Customs Act, 1969 punishable under section 156(1)(8) of the Customs Act, 1%9 and
(c) while granting such declaration, this Honourable Court may be pleased to set aside the orders passed by the respondents Nos.1 and 2 and waive the penalty of Rs,25,00,000 imposed on the petitioners by way of personal penalty, and quash the proceedings in case State v. Abboo Bakr pending before the Special Judge. Any other relief which this Hon'ble Court may be pleased to deem fit and proper under the circumstances of this case."
2. ' The case of the petitioners is that they are a private Limited company carrying on business of oil storage at Karachi Oil Installation. The oil imported by different importers are discharged at the petitioners' Oil Storage Tanks and thereafter it is cleared on completion of Customs formalities. For this purpose, the Customs Staff is also posted to give clearance and verify the import duties leviable, if any, and payable by the importers. According to the petitioners, the respondent No,3 is one of the leading oil importers and had imported 4,000.00 M/Tons of oil on 19-2-1987 per M.T.
3. "GLOBAL MARS". Before arrival of the ship, the respondent No,3 informed the petitioners that the consignment of 4,000 M/Tons of Palm Fatty Acid would arrive and it would be discharged by the ship at the Oil installation of petitioners. Accordingly, the petitioners arranged for the oil discharge.
4. It is alleged that when the oil was being discharged by the ship an employee of the petitioners noticed that, instead of the Palm Fatty Acid, the ship was discharging R.B.D. Palm Oil. The petitioners immediately contacted the respondent No,3, who informed them that there was some discrepancy in documents and the respondent No,3 was in contact with the respondent No,1 for correction of those documents. The respondent No,3 informed the petitioners that the Customs Authorities had agreed to make necessary correction in the documents and the respondent No,3 was submitted amended Bill of Entry. The petitioners were further informed that the respondent No,1 had allowed discharge of the oil. It is the case of the petitioners that the discharge of oil from the ship was supervised by the Customs staff.
5. ' The petitioners have claimed that they arc only a storage company, whose duty is to store and make lelivery on issuance of delivery orders from the importer. All sorts of checking is done by the Customs staff. It is alleged that the petitioners were not the 'Bonded warehouse' at the relevant time, and they were so declared first time on 5th May, 1988. The respondent No,3, on different dates, had taken delivery of 1,562.82 M/Tons oil. According to the petitioners, after some time the Managing Director of the petitioners, received a call from the respondent No,1 Mr. Maqsood Butt, the then Collector of Customs, Karachi, who asked the Managing Director about said delivery of the oil to respondent No,3. Further, it is said respondent No,1 had informed the petitioners that the respondent No,3 had given a misdeclaration and that no amendment was allowed in the documents. Thereafter, FIR was lodged by the Customs Authorities, which was registered under section 156(1)(8) read with section 32 of the Customs Act, 1969 against the petitioners as well as the respondent No,3.
6. ' It is also case of the petitioners that, in the meantime, the respondent No,3 tendered a cheque of Rs,1,27,20,700 by way of duty on Palm Oil, instead of Palm fatty; which was accepted by the then Collector Mr. Maqsood Butt and the whole dispute was settled. The petitioners, however, were surprised when they received a show-cause notice dated 5-5-1987, calling upon them to explain as to why penalty should not be imposed upon them for illegal removal of oil. The notice was replied, but the respondent No,1 was not satisfied with the explanation and imposed personal penalty of Rs,1 crore on respondent No,3 and of Rs,50,00,000 on the petitioners, vide order dated 11- 7-1987. The petitioners preferred appeal against said order before Member, Judicial, Central Board of Revenue but it was dismissed as per order, dated 15-5-1988. Against said order, the petitioners as well as respondent No,3 filed revision petition before the respondent No,2, who after hearing the parties, waived the personal penalty of rupees one crore of respondent No,3 in full and reduced the personal penalty on the petitioners to half. The orders waiving the penalty as above are dated 26th June, 1989. In the order, dated 11-7-1987 Collector of Customs (Preventive) observed as follows:-- "The case finally came up for hearing on 6-6-1987 when Mr. Suhail Muzaffar, Advocate appeared on behalf of M/s. Rehmania Traders and M/s. Karachi Tanks Terminal. Mr. Abu Bakar of Rehmania Traders and Mr. Abid Raza of K.T.T. Limited were also present. Mr. M.I. Saeed, Assistant Collector (Oil), and Mr. M. Saleem, Chief Law Officer, were present to represent the Department. Mr. Suhail Muzaffar, Advocate submitted the written reply to the show-cause notice, dated 11th May, 1987, and reiterated verbally the arguments given in the reply to the show-cause notice. It was, however, admitted by him in clear terms that his client M/s. Rehmania Traders had been guilty of misdeclaring the description of goods imported and that part of the consignment as stated in the show-cause notice was cleared by his client even before filing of the Bill of Entry. As regards the role of M/s. K.T.T. the Advocate submitted that the tank owner had delivered part of the impugned consignment to the importers against delivery orders given to them by the importers. It was, however, admitted by the counsel that the goods were delivered to the importers without any order of the appropriate officer (out of charge order) as required under section 78(4) of the Customs Act, 1969. The Advocate, however, requested for a lenient action on the ground that the importers had voluntarily paid the amount of Government dues leviable on the goods of which he had taken delivery. The Advocate further submitted that the respondents were innocent which was indicated from the fact that they had not only paid the amount of Government dues in respect of quantities cleared but had also placed the facts of the incident before the adjudicating officer."
7. ' The Chairman of C.B.R. in his order dated 26-6-1989 held that the charge of misdeclaration was established and recorded the following finding:-- "The contention of the petitioners that as and when it came to their knowledge they approached the Collector concerned and paid duty and taxes voluntarily is not acceptable in view of the fact that it was paid only after the offence was detected by the Customs and one of the partners of M/s. Rehmania Traders was arrested by the department. The statement of officials of Karachi Tank Terminals and the representatives of Rehmania Traders and of serveyors also strengthen the fact that it was a systematic, preplanned and fraudulent attempt to wilfully remove the consignment in connivance with Karachi Tank Terminal and defraud the Government."
8. ' It is contended on behalf of the petitioners that they, on the relevant date, were not operating as Public-Bonded Warehouse, as such, were not nder any moral or legal obligation to check payment of the Customs Duty.
9. ' Learned counsel also argued that section 78(4) of the Customs Act was not attracted and nor appropriate officer, under said section, could take any action against them. Also, it has been submitted that petitioners were penalised for an offence, which, in fact, was committed by respondent No,3. Mr. Zaheeruddin Khan learned counsel for respondents Nos.1 and 2 conceded that, on the relevant date, the petitioners were not Public-Bonded Warehouse and they were so declared on 5th May, 1988.
10. ' It appears from the order dated 11-7-1987 of Controller Customs quoted above that Mr. Sohail Muzaffar had appeared both for the petitioners and respondent No,3 and as an Advocate for respondent No,3, conceded in clear terms that the respondent No,3 was "guilty of misdeclaring the description of goods imported and that part of the consignment, as stated in the show-cause notice, was cleared by his clients even before filing of bill of entry." It is surprising to note that in spite of above admission made on behalf of respondent No,3 and learned Chairman, C.B.R.'s own finding that the offence was the result of systematic, preplanned, and fraudulent attempt, yet, learned Chairman, C.B.R., without assigning any reason, waived personal penalty of responent No,3 in full. The final verdict of the learned Chairman has no nexus with the conclusion he had drawn after examining the facts. On the one hand he held that mischief was done by the respondent No,3 and on the other he waived the entire personal penalty of said respondent, which, as stated earlier, was of rupees one crore. These two findings are totally incompatible. The respondent No,3 was primarily responsible for said mischief and was absolved from personal liability, while the petitioners, whose liability admittedly was secondary, were penalised to the tune of Rs,25,00,000 (Twenty-five Lac). Mr. Zahiruddin Khan, learned counsel for the respondents Nos.1 and 2 contended that it was within the discretion of the respondent No,2 to waive the personal penalty and said discretionary power- cannot be challenged in writ jurisdiction. Any authority invested with judicial power, while exercising such power, shall decide the matter according to the established judicial norms. The earlier view that an Authority/Tribunal having jurisdiction to decide the case rightly also had jurisdiction to decide it wrongly is no more a valid law. Now the concept is that to whom the jurisdiction is granted shall decide the matter according to law. Viewed in this perspective both the orders, dated 26-6-1989 of learned Chairman, C.B.R. are contrary to the established principles of law. The discretion exercised by him was not in accordance with reasons and sound judicial principles.
11. ' Since now it has been conceded before us on behalf of the respondents Nos. 1 and 2 that the petitioners, at the relevant date, were not bonded-warehouse, the question arises that whether still personal penalty can be imposed upon the petitioners, and whether still they can be held responsible for the violation of section 78(4) of the Customs Act. In the impugned orders, there is no discussion on the above points. On the contrary, the petitioners were treated as Public-Bonded Warehouse. Also, it is to be considered that what was the responsibility of the petitioners before 5th day of May, 1988 as Oil Storing Company.
12. ' Accordingly, we allow the petition, set aside the order, dated 11-7-1987, passed by Mr. Maqsood Ahmed, Collector of Customs (Preventive), Order dated 15-5-1988 passed by Mr. GA. Jahangir, Member, Judicial, and two orders dated 26-6-1989 passed on the Revision Applications of petitioners and the respondent No,3 by Mr. Ghulam Yazdani Khan, Chairman, Central Board of Revenue, and remand the case back to the Collector, Customs (Preventive), Karachi, for deciding it afresh on merits, after hearing all the parties and to fix the responsibility, if any, of the petitioners and the respondent No,3 in the light of above observations. The case is to be finally decided within four months from the receipt of this order.