ZAFAR IQBAL, MEMBER TECHNICAL-- This order will dispose of Appeal No. 274 through 277/LB/2000 as all these appeals arise out of identical facts and involve common question of law.
2. According to the facts available on record, proceedings against the appellant were initiated alongwith his principal namely, M/s. Atlantic Carpets, Lahore. The said exporter was allegedly involved in a case of fraudulent transactions and mis-declaration in relation to a matter of customs. The said exporter was accordingly penalized and punished by the competent adjudication officer in accordance with the law. However, in the last paragraph of the impugned order, the adjudicating officer did held that the present appellant was also guilty of the same offences as those of the exporter and imposed heavy penalties. This appeal challenges the said order of imposition of penalty against the appellant.
3. The learned counsel appearing on behalf of the appellant has contended that:-
(a) the appellant's role and actions are within the limits prescribed vide Section 209 of the Customs Act, 1969 wherein it has been provided that an agent only represents his principal and his action unless the evidence directly establishes his role as being an offender, anything done or acts committed by him will be presumed to be done on behalf of his principals.
(b) there is no evidence through which it can be assumed that his client was in any way connected with the mis-declaration committed by the exporter.
(c) the evidence on record has been ignored. Mr. Imran Malik, the complainant in this case, in his cross-examination before the Investigation Officer admitted that there were no allegations against the clearing agent in his complaint.
(d) the amendment in relation to value was got approved by the exporter himself when he personally met the concerned Assistant Collector on 2.8.1994. Admittedly the appellant "Was not associated with this exercise, It was the exporter alone who was to get benefit by making an untrue statement and hence the appellant had no interest to participate in any conspiracy.
4. We have heard both the parties at length and case record has been perused. The basic question for consideration in this case is the determination of the limits of the responsibility of an agent under the Customs Act, 1969. In order to examine the responsibility of the clearing agent, it would be appropriate to review the provisions of the Customs Act, 1969. In this regard the relevant provisions are contained in Section 209 of the Customs Act, 1969, for case of reference the same are reproduced below:-- "... 209. Liability of principal and agent. - (1) Subject to the provisions of Sections 207 and 208, anything which the owner of any goods is required or empowered to do under this Act may be done by any person expressly or impliedly authorized by the owner for the purpose.
(2) Where this Act requires anything to be done by the owner, importer or exporter of any goods, any such thing done by an agent, clerk or servant of the owner, importer or exporter of any goods shall, unless the contrary is proved, be deemed to have been done with the knowledge and consent of such owner, importer or exporter so that in any proceedings under this Act the owner, importer or exporter of the goods shall also be liable as if the thing had been done by himself.
(3) When any person is expressly or impliedly authorized by the owner, importer of any goods to be his agent in respect of such goods for all or any of the purposes of this Act, such person shall, without prejudice to the liability of the owner, importer or exporter, be deemed to be the owner, importer or exporter of such goods for such purposes: Provided that where any duty is not levied or is short-levied or erroneously refunded on account of any reason other than willful act, negligence or default of the agent, such duty shall not be recovered from the agent..."
5. Within the framework of said provisions of law, an agent represents the principal or the importer or an exporter, and accordingly for all his acts including making of statement and for submission of documents, the principal is responsible. The agent can be held liable for a criminal act under the relevant provisions of law or for misconduct under the governing rules relating to Licensing of Agents.
6. In the instant case, no specific charge has been attributed to the agent, in the show-cause notice. The respondent stated that since the documents were in possession of the customs agent, therefore, the department assumed guilt against him. The law however, does not authorize the customs authorities to assume guilt without having evidence for the commission of the same.
7. ' The respondent was unable to show us evidence whereby any specific act or statement can be attributed to the appellant or linking him with the alleged offences. The respondent referred to para 13 of the Order-in-Original and submitted that the Collector took cognizance of the facts available on record and perhaps assumed that the appellant was in league with the affairs of his client. The respondent, however, conceded that there is no direct evidence available on record to connect the appellant with the commission of crime alleged against him.
8. To a question that whether or not any evidence exists to implicate the appellant with the alleged offences, the respondent conceded that no such evidence was available. He was further asked to produce direct evidence against the agent, he conceded that no direct evidence against the agent was available. Even the investigation officer conceded that no direct evidence was there.
The respondent stated that the agent rather than filing an amended shipping bill filed a new shipping bill and the said act casted a shadow on his conduct. But the fact is that a procedural lapse does not amount to an offence.
9. The respondent's attention was drawn towards the provisions of Section 209 of the Customs Act, 1969, which are providing immunity and limited liability against the agent. The respondent's representative went through these provisions and thereafter he had no argument to press for.
10. The agent was also charged on an assumed collusion with the exporter. As regards collusion, it means an agreement or understanding between the parties to make someone believe in the existence of a truth which the parties know to be in non-existence. The use of the word collusion suggests that a person knew what he was about and that he did it secretly or fraudulently. The standard of proof required for the proceedings which are criminal in nature is that beyond all reasonable doubt the culprit be found to be linked with the crime committed. If that is not there, then the actions of the concerned authorities will be without jurisdiction, illegal, void and ab initio wrong. The record presented before us does not show any such evidence, whereby any linkage between the actions of the appellant and that of his principal can be established.
11. Even in the show-cause notice, there is no direct charge against the appellant, In the last paragraph of the said notice, suddenly, agent appears and the authorities ask him to explain causes for the deeds of his principal, In other words, there was no direct role which may be attributed against the appellant for the commission of crime.
12. The appellant has also been charged for an offence falling under Section 32 of the Customs Act, 1969. The language used in the said section is creating a penal or criminal liability. Accordingly in order to bring actions of the appellant within the fold of that section one has to determine the presence of the requirements of that section before proceedings further. Broadly speaking, penal or criminal provisions are divided into the provisions prescribing the "actures" i.e., the act in question and the "mens rea" i.e., presence of an element of criminal intent, It is not essential for a penal provision to contain both such ingredients, because the provisions which omit the mens rea are called strict liability offences. There is little doubt that the words "untrue" and "knowledge" and "having reason to believe" appearing in Section 32 clearly points out that the same does not create a strict liability offence. Such has also been the interpretation accorded to the provision of Section 39 of the erstwhile Sea Customs Act, 1878, which are analogous to Section 32 of the present Act. The said view has been expressed in the case of Pakistan v. Hardcastle Waud (Pakistan) Ltd. (PLD 1967 SC 1).
13. The mens rea provided for in the Section 32(1) is the existence of "knowledge" or "reason to believe" on the part of the accused meaning thereby that some declaration made before the customs was false in "material particular". The essential question to determine as to whether in such a case is there a nexus between the mens rea under Section 32(1) and tax evasion. The term a "reason to believe" as appearing in Section 32(1) has been defined under Section 26 of the Pakistan Penal Code to means "a sufficient cause to believe ... And not otherwise". What would constitute a "sufficient cause" shall depend upon the facts and circumstances of the case, while "knowledge" is slightly on a higher plane than "reason to believe". Following, the' said principles of philosophy of law, the perusal of the records of the present case shows that there is no direct evidence implicating the appellant with the alleged offences.
14. The respondent contended that the appellant, after obtaining a permission for making an amendment in the shipping bill, filed a new bill of export rather than amending the same, and this act of the appellant, according to the respondent casted a shadow of doubt regarding his conduct. We do not subscribe to the said idea. After having obtained necessary permission for making an amendment in the shipping documents, presentation of a new bill was a procedural lapse and the same cannot create a criminal liability in absence of a strict liability principle. We are, therefore, of the opinion that the acts of the appellant do not constitute the alleged offences.
15. In these circumstances, we allow this appeal and set aside the impugned order to the extent it applies to the appellant customs agent. The impugned order is modified to this extent only.