NASIM SIKANDAR, J-These cross appeals Nos. 31 and 11 of 1998 under section 196 of the Customs Act, 1969 assail an order of the Customs Excise & Sales Tax Appellate Tribunal (for short the Tribunal) dated 24.12.1997.
2. The appellants in Custom Appeal No. 31/98 namely Muhammad Javed and Majid are engaged in business of chemicals and dyes at Faisalabad. On 14.4.1996 their godown in the premises of M/s. Special Soap Factory, Faisalabad was raided and the staff of the Directorate of Intelligent and Investigation (Custom & Excise) Multan took into custody, the following chemicals and dyes on the allegation that these were brought into country unlawfully:-
(i) (ii) #tbs
(iii) 350 Kgs. 34 bags 195 bags 321 bags
(iv) #the
(v) AAA-RS (R) Sodium Alignate.
(vi) GAMMA Acid 9.47 dyes.
(vii) Dyestuff 3.3. Dichlro Biphenyl.
(viii) BENZIDINE 2 HCL.KR.
(ix) Bluish-Black Director Dye.
(Benzidine based). = 221 bags
3. Thereafter the respondent No. 2 served upon the appellants a show cause notice dated 10.8.1996.
After usual proceedings and receiving the reply of the appellants, respondent No. 2 through an Order-in-Original dated 24.7.1997 proceeded to direct of-right confiscation of the aforesaid materials. Also the appellants were burdened with personal penalties of versions sums, In case of Sodium Alignate and Gamma Acid however, the appellants were given an option to redeem them on payment of a fine equal to 20% of the value in addition to custom duties and other taxes payable thereon.
4. On further appeal under section 194-A of the Customs Act, 1969 before the Tribunal the appellants succeeded partly inasmuch as the fine imposed in respect of 3.3. Dichioro biphenyl Diamine was reduced from 20% of the assessable value to Rs. 15,000 (rupees fifteen thousand only). Also Sodium Alginate and Gamma Acid were restored to the appellants unconditionally and without any payment of fine or duty. The personal penalties on the two applicants from Rs.
100,000/- each were reduced to Rs. 10,000/- (rupees ten thousand only) each while in the case of Abdul Latif Butt, (not an appellant) the penalty of Rs. 10,000/- was remitted in toto. However, the of- right confiscation of Benzidine and Blusih Black was maintained. Lastly the Tribunal directed that in the case the provisions of clause (90) of Sec. 156 of the Customs Act, 1969 were attracted and not the provisions of clause 89 of section 156(1) as wrongly thought by the Collector.
5. It is the case of the appellants that the Tribunal was not competent to change the charge-sheet by holding that the case fell under clause (90) of the said section instead of section 89. According to them the Tribunal ought to have accepted the appeal of rightly on the basis of the same finding.
Particularly when the Tribunal was convinced that the seized goods were not notified under section 2(s) read with notification dated 23.5.1985. It is further contended that the change in the applicable provisions had also amounted to change the show cause notice which was not possible after a lapse of almost two years, It is also claimed that the goods were seized on 14.4.1996 while show cause notices were issued on 10.8.1996 which was such beyond the prescribed period under section 168(2) of the Act The extension allowed by the Collector is also assailed on the ground that having been allowed without recording reasons it was illegal on the face of it. The procedure adopted under section 1 58 of the Act is described to be illegal and it is claimed that in the given facts the Department could easily have made resort to section 162 of the Act which provides for issuance of a search warrant by a Judicial Magistrate on an application by a gazetted officer of the Customs Department, It is also claimed that the provisions of Criminal Procedure Code were not strictly adhered to while seizing and taking into possession the goods confiscated.
6. In support of various submission learned counsel of the appellants rely upon re: Abdul Zahir and another v. Director General Pakistan Coat Guards (PLD 1990 Karachi 412), re: The Collector Central Excise and Land Customs and other v. Rahim Din (1987 SCMR 1840) re: S. Ch. Niaz Ahmed and others v. The State (PLD 1978 Karachi 774) and re: Haji Muhammad Jalal v. Ijaz Ahmed Bajwa, Assistant Director Federal Investigation Agency State Bank Circle Lahore and 3 others (2000 MLD 837).
7. On the other hands, the revenue in the cross appeal assails not only the change in the applicable provisions as directed by the Tribunal but also the part relief allowed in the form of return of part of goods seized and reduction in personal fines, In reply to the allegations that recovery witnesses were not competent and that the provisions of section 103 of the Criminal Procedure Code were not properly answered, learned counsel for the revenue relies upon re: Mushtaq Ahmed. v. The State (1995 SCMR 510), re: Syed Muhammad v. State (PLD 1990 SC 1176) and Re: Muhammad Khan v. The State (1994 SCMR 1 543).
8. After hearing the learned counsel for the parties, we are inclined to agree that extension in the period for issuance of show cause notice as contemplated in section 1 68 of the Act was not in accordance with law. Sub-section (2) of section 168 provides that where goods are seized under sub-section (1) and no show cause notice is given under section 180 within a period of two months of the seizure, the goods shall be returned to the person from whose possession they were seized.
The sub-section contains a proviso that the said period of two months could be extended by the Collector "for the reasons to be recorded in writing."
9. In the present case the extension was granted without giving any reason in writing. Instead a subordinate officer was required to speak on behalf of the Collector to say that extension sought for had been granted by him. This exercise certainly fell short of the requirement of the law as contained in the aforesaid provisions, It will be noted that the law has prescribed a certain limitation. At the same time it has allowed jurisdiction to an officer to extend that limit for another period of two months where the matter directly pertains to seizure of goods liable to confiscation.
The exercise of such power has therefore, been made conditional to record of reasons. The purpose to record a reason obviously is to make extension subject to judicial review if such reasons are fanciful or merely imaginary, It is not mere request of the Department which could be a good reason for the extension in period nor the power is to be employed to cover up in-efficiency of an officer of the Department, It is a settled proposition that when the law requires a thing must be done in a particular manner then that thing to be done in a particular manner should not be done at all.
10. In re: Abdul Zahir and another v. Director-General Pakistan Coast Guards and 4 others (PLD 1990 Karachi 412) a Division Bench of the Karachi High Court interpreted the aforesaid phrase used in section 168(2) viz. "reasons to be recorded in writing". Their Lordships concluded that proviso was not merely mechanical or of procedural Character. Further that mere subjective satisfaction on the part of the Collector in order of extension clearly fell short of the statutory requirement and such order of extension would be invalid and not sustainable.
11. In the case in hand no reason has been brought of in back and white muchless to say of its acceptibility on the touch stone of legality as well as reasonability. Apparently the extension sought for was given by the Collector just for the asking. There is no statement of the kind nor it appears that the Collector was even conscious of the ground on which the extension was being sought for and then granted. The exercise of jurisdiction to extend statutory period of limitation being conditional to the recording of reasons was certainly a jurisdictional fact. That fact having been ignored by the learned Tribunal could very will be taken up for the first time before this Court. Since the mandatory provisions of section 168(2) were not complied with and since issuance of show cause notice under section 180 after stipulated period was bad-in law, the appellants immediately became entitled to the return of the goods seized as contemplated in sub-section (2) of section 168 of the Act. In re: Mansib Ali v. Amir & 3 others (PLD 1971 SC 124) the Supreme Court settled that where mandatory condition for exercise of jurisdiction by a Court, Tribunal or authority was not fulfilled all proceedings which followed become illegal and without jurisdiction. Also we have noted that facts in hand as regards extension in notice period are similar to those considered by this Court in Re: Haji Noor-ul-Haq v. Collector of Customs (1998 MLD 65). In that case this Court considered in detail the purpose of issuance of notice u/S. 180 and the reasons for restricting the period, In that case as well neither the order extending the period contained any reason nor the relevant file was produced to show that the concerned Collector had passed those orders after conscious application of mind and had reasons to do the same.
12. Learned counsel for the appellants is also correct in stressing that the Tribunal stopped short of allowing full relief after finding that the case was not hit by clause (89) of section 156 (1) of the Act.
According to the Tribunal since admittedly the goods were not seized in the border belt at the time when these were brought into Pakistan coupled with the fact that they were not notified under section 2 (s) of the Act, there was no doubt that the case was not hit by clause (89) of the said section. Also conclusions drawn by the learned Collector in the case were found far fetched. On the other hand it is the case of the revenue that the appellants having failed to discharge the burden that goods in question were lawfully imported, the revenue was justified in holding them to have entered into Pakistan through an unauthorized route and therefore, a result of smuggling.
13. The findings of the Tribunal find support from another Division Bench judgment of the Karachi High Court in re: S. Ch. Niaz Ahmed v. The State. (PLD 1978 Kar. 774). In that case their Lordships were considering section 2(s) and section 15)3(9) of the Act. On consideration of facts before them it was concluded that mere factum of importation or exportation of certain goods being prohibited by law did not amount to smuggling. Further that "the goods in order to be "smuggled must either be specified in column- 9 or be notified by the Federal' Government under section 2(s)(a) as such."
The findings of fact as recorded by the Tribunal are not challenged on the ground that there was no material on record to support them, In the given situation, the contention of the learned counsel for the appellants find support from the said judgment of the supreme Court of Pakistan in re: Collector Central Excise and Land Customs and others v. Rahim Din (Supra), In that case their Lordships found the adjudication order to be palpably illegal on the face of it which was found to have ultimately been based on a ground which was not mentioned in the show cause notice, In the case in hand admittedly the appellants were confronted and were asked to show cause as to why proceedings against them should not be initiated and they be charged for the contravention of the provisions under sections 1 56(1), 89, 157 and 78 of the Customs Act, 1969, read with section (3)(1) of the Import and Export (Control) Act, 19,50. The provisions confronted being different from the one which were rightly found to be applicable in the case by the Tribunal all super structure based upon show cause notice must fall to the ground. The Tribunal having so concluded certainly ought to have made a similar direction which they failed to do.
14. As for the factual controversies with regard to the goods seized we would not like to go into them inasmuch as under section 196 of the Act it is only a question of la on which an appeal lies to this Court. The aforesaid two legal issues having been found in favour of the appellants they must succeeded. Their appeal shall accordingly be accepted while that of the Department, for similar reason shall be dismissed.