F.D.A.S. ARMS AND AMMUNITIONS VS DEPUTY COLLECTOR CUSTOMS (IMPORT EXAMINATION), 2013 PTD-CUSTOMS-APPELLATE-TRIBUNAL-LAHORE 2013 (2013)

Customs Act (IV of 1969)---

----Ss. 2(s), 16, 17, 32, 156(1), 157, 168(1), 169(3) & 178---Imports and Exports (Control) Act (XXXIX of 1950), S. 3---Import of 230 authomatic pistols of model Ziagana-63 from Turkey by mis-declaring same as semi automatic under PCT Heading 9302-0092---Seizure of such pistols and registration of criminal case against appellant---Authority alleged such pistols to be automatic for having a hole near trigger thereof, thus, classifiable under PCT Heading 9301.9041 and not importable under Import Policy Order, 2009---Validity---Appellant was licensed dealer of Arms and Ammunitions and authorised by Government to import semi-automatic pistols etc.---Report of Forensic Science Laboratory showed that such pistols were semi-automatic---Inspector of Armamanet, GHQ, reported that standard criteria for auto/semi automatic for all weapons could not be defined in general; that any pistol could be made auto or semi automatic with expert alteration; that current configuration of Ziagana-63 pistols was semi-automatic due to absence of sub-assembly, which could convert same to automatic weapon; and that such pistols as per design were automatic due to provision of 2 holes and a cavity on left side thereof, which could house a sub-assembly for convertion from semi-auto to automatic---Appellant had not imported sub-assembly of such pistols for their conversion into automatic---Both such reports showed such pistols in present condition to be semi-automatic---According to clarification sought by Department from Shipper/ Manufacturer in Turkey, such pistols were semi-automatic; that they could neither manufacture nor export automatic weapon as per rules of Turkish Government; and that small hole under grip of such pistols had been drilled on customer's demand to instal laser pointer thereto---Such pistols in their present design and configuration were semi automatic and importable under Import Policy Order, 2009 and classifiable under PCT Heading 9302.0092---Appellate Tribunal accepted appeal and directed release of such pistols on payment of duty and taxes leviable thereon as per law.

Abdul Salam Sajid for Appellant.

Maqsood Ahmad, D.S. for Respondent.

Date of hearing: 17th June, 2013.

JUDGMENT

CH. MUHAMMAD ASGHAR PASWAL, (MEMBER (JUDICIAL)).---This appeal has been filed against Order-in-Original No.13 of 2013 dated 15-3-2013 passed by the Additional Collector of Customs (Adjudication) Lahore.

2.Brief facts of the case are that Messrs F.D.A.S. Arms Dealers, 101-Ravi Road, Lahore through their clearing agent Messrs Bilal Associates,FazilRoad,Lahorefiled GD No. LAFU-HC-45528dated8-3-2011 at Air Freight Unit, Allama Iqbal International Airport Lahore for clearance of a consignment of 350 pistol imported from Turkey. As per declaration made on the above GD, commercial Invoice No. 105-3 dated 16-2-2011 and Packing lists, the consignment contained 9x19mm (PCT Heading 9302.0092) as under:--

2.The consignment was examined on 9-3-2011 and all the pistols were reported to be semi automatic. The GD was sent to appraisement group for assessment. On Suspicious, The Appraiser Customs also examined the imported pistols and found a hole near trigger of 229 pistols out of 230 pistols of model Zigan-63. Therefore, the Goods Declaration was sent back to the examination staff for verification of the hole near trigger of the above pistols of model Zigna-3 and the same were also detained for further verifications. Two samples of pistols Zigana-63 were sent to the Inspectorate of Armaments, Rawalpindi for examination and report whether these were automatic or otherwise vide letter dated27-9-2011. In the meantime, remaining 120 pistols of model Zigana-F, Zigana-K and Zigana sports were allowed clearance being semi automatic. The Inspectorate of Armaments, Rawalpindi. vide letter dated 18-11-2011, reported that (as per design these weapons are automatic due to conversion from 2xholes auto to auto) As per Rule-2(a) of the General Rules of Interpretation of the First Schedule (Pakistan Customs Tariff) read with section 18 of the Customs Act, 1969, all the imported goods are classified in accordance with their character. Since the aforesaid pistols were automatic by their design, therefore, the same were classifiable as automatic pistols under DTC Heading 9301.9041. As per Appendix-A of the prevailing Import Policy Order, import of automatic Zigana-63 by mis-declaring the same as semi automatic. Therefore, the said 230 automatic pistols is prohibited. In the way an attempt was made to smuggle 230 automatic pistols of model Zigana-63 along with packing material were seized under sections 17, 157 and 168(1) of the Customs Act, 1969 (as per details in packing lists) for contravention of the provisions of sections 2(s), 16 and 32 of the Customs Act, 1969 read with sections 3(1) and (3) of the Imports and Exports (Control) Act, 1950 punishable under clauses (1), (8), (14) of section 156(1) read with section 178 of the Customs Act, 1969. The above Goods Declaration and its related documents were also seized under Section 169(3) of the Customs Act, 1969 for use as evidence. A criminal case vide F.I.R. No. 21 of 2011 dated 25-11-2011 has been registered against the culprits with l&P Cell, Custom House, Lahore. After adopting all legal formalities, the impugned order in original 13 of 2013 dated 15-3-2013 was passed by the Additional Collector of Customs, (Adjudication) Lahore. Being aggrieved and dis-satisfied of the said order, theappellants filed appeal before this Tribunal on certain grounds.

(i)That the outset the impugned order is assailed on the groundthat it is badly barred by limitation specified under section 179(3) oftheCustoms Act, 1969. TheShowCausewas issuedon24-1-2012 whiletheimpugnedorderhasbeenpassedon15-3-2013 i.e. after laps of 425 days whereas respondent No.3 was required to pass the impugned order within 120 days.

(ii)That further 30 days can be included in the aforesaid limitation on account of adjournments if sought by the party. Besides above, the Collector was empowered to grant extension for 60 days and if the aforesaid period is included even then respondent No.3 was under legal obligation to pass the impugned order within 210 days whereas in the instant case the order was passed after laps of 425 days and as such it is barred by 215 days and liable to be stuck down on this score alone.

(iii)That since lawfully imported NP semi automatic pistols were outrightly confiscated and the appellants have been burdened with penalty and, thus, respondent No.3 has created liability against the appellants and as held by this august forum in Yasir Enterprises case reported as (2012 PTD (Trib.) 47) and superior Courts of the country where a liability is created, the limitation specified under section 179(3) would be mandatory and violation thereof shall render the order void ab initio and nullity in the eyes of law.

(iv)That respondent No.1 vide letter dated 24-5-2011 asked the Commercial Counsellors, Embassy of Pakistan in Istanbul (Turkey) for verification as to whether the pistols in question were made originally auto/machine pistols by design or otherwise and in response thereof the supplier in Turkey vide letter dated 29-3-2011 and 7-4-2011 informed respondent No.1 that the same were originally designed semi-automatic and the hole near trigger was drilled in order to install laser pointer to the pistol.

(v)That similarly the same supplier vide letter dated 29-3-2011 aforementioned also confirmed the shipment of 350 pieces on Zigana brand pistols against the contract dated 15-1-2011 to the appellant and clarified that the same were semi-automatic pistols by design.

(vi)That perusal of the report received from Inspectorate of armaments GHQ, Rawalpindi it has been revealed that department sent 2x Zigana 63 pistols as samples and were identical except that a small strip was attached between two holes provided on the left side frame of I x pistol whereas neither any of the pistol was applied with such strip nor any strip was imported. The entire consignment is still lying at the airport and it can be ascertained by this August forum as to whether any strip was attached with any of the Zigana-63 pistol. It is submitted that the said strip was arranged by Customs staff from some where or it was provided to them by the business rivals of the importer and it was applied on the back of the importer in order to get report of their own choice to involve the appellants in a false case stating that they had imported automatic pistols under the garb of semi-automatic. This exercise on the part of customs staff established that they tampered with the representative sample which is criminal offence punishable under clause 87 of the subsection (1) of section 156 of the Customs Act, 1969 besides other provisions contained in general laws.

(vii)That according to para 2 of the report dated 18-11-2011 received from the Inspectorate of Armaments GHQ, Rawalpindi, the standard criteria for auto/semi-auto for all weapons cannot be defined in general and any pistols can be made auto or semi-automatic with expert alteration. However, revolver is only hand arm whose mode of fire cannot be altered. As per recommendations of the said Inspectorate of Armaments, GHQ Rawalpindi, currently both pistols Zigana-63 are semi-automatic due to absence of sub-assembly which can convert these to automatic weapons. It was further reported that as per design, these weapons are automatic due to provision of two holes and a cavity on left side of pistol which can house as assembly forconversion from semi auto to auto.

(viii) That on arrival of consignments a representative sample was drawn by respondent No.1 and sent to forensic Science laboratory, Punjab Lahore and accordingtoitsreportdated21-4-2011 the pistols were found to be semi-automatic. On receipt of said report there was no requirement for sending other samples to any other institution. However, the perusal of the report received from Inspectorate of Armaments, GHQ, Rawalpindi that the pistols in question in their present configuration are semi-automatic also confirmed the declaration made on the GD. So far as the availability of the provision for converting it into automatic, it is humbly pointed out that according to the said report, every pistol can be converted into automatic or semi automatic and as such the pistols imported by the importer cannot be deemed to be automatic by any stretch of imagination. Hence the department is under legal obligation to release the same being semi automatic in their present configuration.

(ix)That the report earlier sought from the Forensic Science Laboratory, Punjab, Lahore clearly shows that the pistols imported in this case are semi automatic. The Forensic Science Laboratory, Punjab, Lahore is an appropriate proper and notified Laboratory for obtaining such expert opinion. Being a notified Laboratory, its report shall prevail over the report dated 18-11-2011 sought form the Inspectorate of Armanents, GHQ, Rawalpindi. This also get supports from the perusal of para 5 of the said report according to which the contents of this letter cannot be produced in litigation. This shows that neither the said institution is an appropriate nor proper nor notified laboratory nor its report can be tendered in evidence in any litigation whereas the report of FSL, Lahore is admissible in evidence in term of section 510 of the Criminal Procedure Code, 1898.

(x)That besides above as per Rule-2 of the General Interpretation of Harmonize System the customs department is duty bound to assess and deal with the goods as "presented". They have nothing to do with the goods once cleared with regards to subsequent utilization thereof. It is humbly pointed out that according to report of Forensic Science Laboratory, Punjab Lahore as well as report received from Inspectorate of Armaments the pistols in their present configuration are semi automatic andas such are freely importable by the authorized dealers against their valid authorization in term of serial 63 of part-I of the Appendix-B read with para. 5(B)(i) of the Import Policy Order, 2010 and further detention or as the case may be denial release on the part of department is patently un-justified and illegal.

(xi)That receipt of aforesaid fresh report from Inspectorate of Armaments, GHQ Rawalpindi declaring the pistol in its present configuration semi-automatic, department instead of releasing the consignment has made this false case against the importer his agent and others on the base that as per report dated 18-11-2011, design configuration of the pistol is automatic due to provision of two holes and a cavity on left side of pistol which can house sub-assembly for conversion from semi automatic to automatic due to mala fide and ulterior motive. It is submitted that according to report received from GHQ each and every semi automatic pistol but not the revolver can be converted into automatic on expert handling by adding additional kit but this does not mean that every semi-automatic weapon can be taken as automatic and import thereof can be denied on such presumption. It is further humbly pointed out that neither any such sub-assembly or as the case may be additional kit has been imported nor the pistols once converted into auto can be sold and entered in the licence issued for NPB weapons. The department is bound to deal and assess the goods as" presented". The release of the pistols cannot be denied merely because they as per design are auto because the present configuration is to be taken for all purposes under the law.

(xii)That there are two reports. As per report of FSL, Lahore the pistols are semi-automatic while according to report of inspectorate of Armaments, GHQ, Rawalpindi these are in their present configuration semi-auto but originally designed configuration is auto. The report of FSL is definite and clear whereas the other report is confusing and ambiguous, Thus, if there is any reservation with the department, it should have sent the sample drawn in the presence of importer to any 3rd reputed notified laboratory for obtaining, definite opinion before issuance of show cause notice

(xiii) That the impugned order passed by respondent No.3 is otherwise not sustainable because she did not utter a single word either to address the factually and legal issues raised by the appellants nor she offered any comments on the report received from FSL, Lahore and GHQ, Rawalpindi. She also miserably failed to connect appellants Nos.2, 4 and 5 in this case the entire order passed by her consisted of few lines which cannot be termed as quasi judicial order passed reasonably justly fairly and for the purpose of advancement of the enactment in term of section 24-A of the General Clauses Act, 1897 and as such the same is liable to be struck down on this score alone.

On the other side the learned departmental representative opposed the arguments advanced by the counsel for the appellant and supported the impugned order passed by the learned Collector (Appeals) Lahore.

I have heard the learned counsel appearing on behalf of the appellant as well as learned Departmental Representative and perused the record carefully. The only issue involved in this case is as to whether 230 Nos. of Pistols Zigana-63 imported by appellant No.1 were semi-automatic falling under PCT heading 9302.0092 importable in term ofImport Policy Order, 2009 or automatic classifiable under PCT heading 9301.9041 not importable under the aforesaid Import Policy. These pistols have been imported by appellant No.1 who is Arms and Ammunition Dealer duly licensed as such by the District Magistrate Lahore vide Dealership License No.112/X and 104/XII dated 8-11-1986 in term of sanctionaccordedbytheHomeDepartment,GovernmentofthePunjab,Lahore vide Letter No. SO (Judicial-I 9-912/86dated5-1l-1985. The appellant No.1 was also holding licence No.83/XII dated 8-11-1986 for keeping non-prohibited bore (NPB) weapons in his shop. The aforesaid licences were being renewed time to timeand are still valid. Appellant No.1 was also authorized by the Ministry of Commerce. Government of Pakistan, Islamabad to import NPB shot-guns including pump action non-automatic, NPB semi-automatic pistol and revolvers all bores, rifles and ammunition vide authorization No. 19(117)/2007/Imp.1 dated 15-11-2007 of the total import value of Rs.4,000,000 on annual basis. On filing GD No. LAFU-HC-45528 dated 8-3-2011 at Airfreight Unit, Allama Iqbal International Airport, Lahore for clearance of a consignmentof 350 pistols imported from Turkey, claiming assessment under PCT heading 9302.0092, the consignment was examined and all the pistols were found semi-automatic. However, 4 samples, one from each brand namely Zigana-F, Zigana-K, Zigana-Sport and Zigana-63 were sent to Forensic Science Laboratory, Punjab Lahore and according to its report dated 21-4-2011, all the pistols were found semi-automatic. The description of articles and opinion of the said laboratory is reproduced below:--

DESCRIPTION OF ARTICLES

(1)One pistol of 9mm bore No.T0620-10F01004 now body signed, marked as (P1) along with two magazines.

(2)One pistol of 9mm bore No.T0620-11D00013 now body signed, marked as (P2) along with two magazine.

(3)One pistol of 9mm bore No.TnG2N-11H00085 marked as P3, along with two magazine.

(4)One pistol of 9mm No. T0620-11BJ00122 body signed marked as P4, along two magazines.

OPINION.---The examination of the case has revealed that the pistols of bore marked as P1 to P4 are in working order and fires Semi Automatics in their present condition.

NOTE: Test empty is being sent in each parcel of the weapons.

On receipt of aforesaid report, except Zigna-63 quantity230, the other pistols were released. As regards Zigana-63, it was reported that there was a hole near trigger of 229 pistols out of 230 pistols. Thus, 2 samples of pistols were sent to the Inspectorate of Armaments, GHQ, Rawalpindi for examination and report as to whether these were automatic or otherwise vide letter dated 27-2-1011. The Inspectorate of Armaments, Rawalpindi vide letter dated 18-11-2011 reported that the standard criteria for auto/semi-automatic for all weapons cannot be defined in general. They further reported that any pistol can be converted into auto or semi automatic with expert alteration. According to said report, revolver is the only hand arm whose mode of fire cannot be altered. Para-2 of the letter dated 18-11-2011 reads as under:--

2. It is intimated that the standard criteria for auto/semi automatic for all weapons can not he defined in general. Any pistol can be made auto or semi automatic with expert alteration. However, revolver is the only hand arm whose mode of fire can not be altered.

The Inspectorate of Armaments. Rawalpindi further reported that the current configuration of Zigana-63 pistols was semi-automatic due to absence of sub-assembly which can convert these to automatic weapons. It was further reported that as per design, these pistols were automatic due to 2 holes and a cavity on left side of pistols which can house a sub-assembly for converting from semi-auto to auto. Para-3 of the said report reads as under:--

3. Recommendation.

a. Current Configuration.---Currently both pistols Zigana 63 are semi auto due to absence of sub-assembly which can convert these to automatic wpn.

b. Design Configuration.---As per design these wpns are automatic due to provision of 2 x holes and a cavity on left side of pistol which can house a sub-assembly for conversion from semi auto to auto.

The contention of the learned counsel that these pistols are semi-automatic in their current configuration is correct. It is also on record that according to report dated 21-4-2011 received from Forensic Science Laboratory, Punjab Lahore, all the pistols including model Zigana-63 were reported to be semi-automatic. It is also admitted fact that no sub-assembly was imported by the appellant No.1. The contention of the learned counsel that according to the report of Inspectorate of Armaments. Rawalpindi, all the pistols of any brand can be converted into auto or semi-automatic and unless and until the same are converted with expert alteration, these pistols cannot be termed as automatic also seems correct. The learned Departmental Representative when confronted with the aforesaid situation that neither these pistols were automatic in their present condition nor any sub-assembly was imported for conversion thereof he was unable to controvert the assertion of the learned counsel that these pistols in their current configuration are semi automatic. He was also unable to deny the contention of the learned counsel that the hole near the trigger was meant for installation of a laser pointer. He, however, admitted that no sub-assembly for converting these pistols from semi-automatic to automatic was imported by the appellant No.1. The report received from the Inspectorate of Armaments when read in harmony with the report of the Forensic Science Laboratory, Punjab Lahore makes it clear that these pistols are semi-automatic. This also gets support from the opinion of the Inspectorate of Armaments, Rawalpindi that every pistol can be converted into automatic or semi-automatic with expert alteration. The current configuration of the pistols can only be taken into consideration for import and classification thereof. The learned counsel for the appellant also referred to the reply dated 29-3-2011 of the Shipper in Turkey in response to query made by respondent No.1 where-under it was declared that the shipment of the 350 pieces of Zigana Brand pistols exported to appellant No.1 consisted of semi-automatic pistols by design. They further confirmed that as per Turkish Government rules they could neither manufacture nor export any automatic weapon to any country. The learned counsel also referred to the clarification dated 7-4-2011 sought from the manufacturer in Turkey by respondent No.1 that Zigana-63 Model pistols shipped to appellant No.1 have a small hole under the grip drilled on customer's demand in order to install laser pointer to the pistol. The report of the Forensic Science Laboratory, Punjab Lahore and the clarification sought by the department itself from the manufacturing/shipper have not been taken into consideration while passing the impugned order. It is further observed that the report of Inspectorate of Armaments, Rawalpindi has also been misinterpreted because the said report too confirmed the result received from Forensic Science Laboratory. Punjab Lahore and the clarification sought from the manufacturer/shipper in Turkey. Although the learned Departmental Representative tried to support the impugned order yet he has nothing to say so far as the report of Forensic Science Laboratory, Punjab Lahore and the clarification sought from the manufacturer in Turkey are concerned. Thus, I feel no hesitation to hold that Zigana-63 Model pistols subject matter of the instant appeal are semi-automatic in their present configuration and also by design appropriately classifiable under PCT heading 9302.0092 importable in term of Import Policy Order, 2009. Consequently the appeal is allowed, the impugned order is set aside and Zigana-63 Model Quantity 230 pistols are directed to be released on payment of duty and other taxes leviable thereon in accordance with law. The penalty imposed on the appellants are also waived off. Parties be informed through registered post A.D. or by UMS.

File be consigned to the record after completion.

SAK/122/Tax(Trib.)Appeal accepted.