BASHARAT HUSSAIN VS COLLECTOR OF CUSTOMS, MODEL CUSTOMS COLLECTORATE OF PREVENTIVE, 2013 PTD-CUSTOMS-APPELLATE-TRIBUNAL-LAHORE 2111 (2013)

Customs Act (IV of 1969)---

----Ss. 2(kk), 13, 95, 168(1) & 156(1)(90)---Foreign origin two Steel Coils---Seizure and confiscation of such coils for being non-duty paid and for non-production of relevant import documents thereof---Dismissal of appeal by Appellate Authority---Validity---Appellant being a registered importer/manufacturer/exporter was engaged in manufacturing of MS Pipes and export thereof and was maintaining a duly licensed manufacturing Bond at Islamabad---Record showed that appellant through Goods Declaration had sought trans-shipment of total 12 Coils from Karachi to his manufacturing Bond at Islamabad, out of which 10 coils had reached in Bond and had been entered in stock register---Nothing was on record to show that disputed two coils had been brought through un-authorised route as same had been seized at Lahore after having been dispatched under Safe Transport Scheme from Karachi to Islamabad---Appellant was entitled to import such coils as raw material without payment of duty and taxes for manufacturing of MS Pipes for exportation thereof---Impugned order had been passed at the back of appellant without addressing factual and legal issues raised by him---Appellant had lawfully imported disputed coils---Tribunal set aside both impugned and original orders in circumstances.

Abdul Salam Sajid for Appellant.

Sajjad Bokhari for Respondent.

Date of hearing: 19th June, 2013.

JUDGMENT

CH. MUHAMMAD ASGHAR PASWAL (MEMBER JUDICIAL).---This appeal is directed against Order-in-Appeal No.43 of 2013 dated 18-3-2013 passed by the Collector of Customs (Appeals), Customs House, Lahore.

2.Briefly stated the facts as contained in the F.I.R. are that in pursuance of an information, the staff of Customs Anti-smuggling Organization, Lahore intercepted a Truck No. K-2367 loaded with some foreign origin Steel Coils near Niazi Chowk, Band Road, Lahore. The truck was being driven by appellant No.1. On examination, the vehicle was found loaded with 2 foreign origin Steel Coils weighing 36255 kgs. Since appellant No.1 could not produce any documentary evidence for lawful possession or as the case may be legal import of the said coils, thus, the coils were determined under section 2 (kk) of the Customs Act, 1969. It was, however, disclosed by appellant No.1 that the coils were belonging to MessrsShaheen Pipe Industry, Islamabad. During investigation, the proprietor of MessrsShaheen Pipe Industry, Islamabad provided GD No. ST-166 dated 19-7-2012 filed and process at Karachi along with invoice as a proof of lawful import of goods in question. Perusal of said documents it transpired that appellant No.2 imported Hot Rolled Coils Pickled and Oiled Secondary quality having size 2.50 x 782 mm from South Africa whereas the physical examination of the detained goods revealed thickness as 3.2 mm and width 1540 mm of one coil and 3.00 mm and 1520 mm of the other coil. Since the import documents provided by appellant No.2 were not relevant and as such both the coils were seized under section 168(1) of the Customs Act, 1969 and a contravention report was sent to respondent No.2 who issued show cause notice dated 16-8-2012 which was replied by the appellants staling therein that the seized coils were part of the consignment of Hot Rolled Secondary Coils quantity 12 coils weighing 128.315 M. Tons (gross) imported from South Africa vide GD ST-166 dated 19-7-2012 for utilization in the manufacturing unit. Respondent No.2 not satisfying with reply filed by the appellants confiscated both the coils, under section 156(1)(90) of the Customs Act, 1969 and allowed appellants to redeem the same on payment of redemption fine equal to 20% of the assessed value along with leviable duty and taxes vide Order-in-Original No.448/2012 dated 10-12-2012. Aggrieved by the said order, the appellant filed appeal before the respondent No.4 but the same was dismissed vide impugned order dated 18-3-2013 which is assailed in the instant appeal.

2.A The appellant filed instant appeal against the impugned order on the following grounds:--

(a)That at the outset the impugned order is assailed on the ground that the same has been passed ex parte on the back of the appellants by respondent No.4. Since the appellants have been condemned un-heard and as such the impugned order being void in nature is liable to the struck down on this score alone.

(b)That besides above, respondent No.4 has completed entire proceedings and decided the case in hasty manner within 26 days. The case was fixed on 20-2-2013 and respondent No.4 was requested to grant adjournment as the counsel for the appellants was not available and as such it was adjourned to a date in office. Perusal of the impugned order revealed that later-on the case was fixed for hearing on 26-2-2013 for which no intimation was received either by the appellants or as the case may be his counsel. In order to meet the ends of justice, if the counsel was not present on 26-2-2013 it was obligatory for respondent No.4 to issue notice to the appellants but he did not bother to do so and dismissed the appeal of the appellants in haphazard manner.

(c)That perusal of the impugned order further revealed that even no one appeared on behalf of the respondent-department to rebut the grounds taken by the appellants in their appeal and as such the respondent No.4 was under legal obligation to address the grounds mentioned in the memo. of appeal while passing the impugned order but he did not utter a single word in this behalf which also rendered the impugned order nullity in the eyes of law.

(d)That both the coils involved in this case were part and partial of a consignment consisting of 12 x coils out of which, 10 coils were in-bonded while the two were seized by the staff of respondent No.3 as isevident from the perusal of the stock register (Annex. "H") of the appellant No.2.

(e)That the stance taken by appellant No. 2thatboththecoilswerelawfullyimportedalsogetssupportfromtheletterdated 29-9-2012 (Annex. "J") and letter dated 6-10-2012 (Annex. "K") where-under the clearing Collectorate has asked for certificate of in-bonding of 12 x coils while the intimation given to the Collectorate of Customs, Model Customs Collectorate, Islamabad that 2 x coils were seized by the staff of respondents Nos.1 and 3.

(f)That on denial release of the coils, appellant No.2 vide letter dated 6-8-2012 (Annex. "L") informed respondent No.1 that these coils were seized while in transit from Karachi to Islamabad and that the same be released but no action, whatsoever, was taken on the application of appellant No.2.

(g)That totally bogus and false case was made against the appellants on the allegation that the coils were non-duty paid more particularly when the vehicle was carrying these coils from Karachi to Islamabad and it was intercepted near Lahore. It is further added that there was nothing on record to show that these coils were brought through un-authorized route or as the case may be the same were non-duty paid. It is humbly pointed out that on presentation of import documents, the burden of proof stood shifted upon the seizing agency which was never discharged and as such the entire action of seizure and subsequent proceedings were void, illegal and of no legal effect.

(h)That appellant No.2 isimporter,manufacturerandexporter.Heisengagedinmanufacturing of MS Pipes byimportingHRC Coils which is used as raw material. Appellant No.2 is also maintaining manufacturing Bond licence issued under sections 13 and 95 of the Customs Act, 1969 by MCC, Islamabad. The goods were being transported under the Safe Transport Scheme at the time of seizure thereof. 12 x coils imported vide GD No. ST-166 dated 19-7-2012 were loaded on different trucks at Karachi and the vehicle carrying 10 x coils reached Islamabad while truck No. K-2367 loaded with 2 x HRC coils weighing 36 M. Ton was intercepted and seized by the staff of respondents Nos.1 and 3 from near Lahore on false and frivolous allegation.

(i)That perusal of the import documents revealed that 12 x coils weighing 127.74 M. Ton (net) were imported having detail of each coil as per attached list. Perusal of packing list revealed that out of 12 coils, 02 coils were 18210 kgs and 18000 kgs having dimension thickness 3mm and width 1500 mm. It is also stated that exporter has allowed tolerance up to 10% of the total quantity and value on individual sizes too. Thus, the variation report by the seizing agency and taking the same into consideration by the adjudicating authority is immaterial.

(j)That both the coils were part and partial of consignment of 12 x coils imported by the appellant No.2. The truck in question started its journey from Karachi Port and it was destined for Islamabad. There is no material to show that these coils were brought through un-authorized route or were of non-duty paid. The impugned order as well as original order are void and as such not sustainable at law.

3.The learned counsel appearing on behalf of the appellant at the outset contended that the impugned order was passed ex parte without providing an opportunity of hearing to the appellants. He further contended that the entire proceedings were completed in haste by respondent No.4 and the appellant were condemned unheard. He further contended that even no one appeared on behalf of the department. He further contended that respondent No.4 was under legal obligation to address the issues raised by the appellants in the memo. of appeal. According to him not a single word was uttered in this behalf by respondent No.4 and as such the impugned order is totally void and illegal. According to him, 2 coils subject matter of instant appeal were part of a consignment consisting of 12 coils imported by appellant No.2 for utilization in production in his manufacturing unit. Entire import documents were provided. As regards thickness and width, he stated that the coils were secondary in quality and thus the variation in thickness and width is immaterial. He further stated that coils were being transported to the unit of appellant No.2 under Safe Transport Scheme. He also referred to the stock register wherein only 10 x coils were in-Bonded and 2 x coils were shown short as the same were seized by the staff of respondent No.1 enroute at Lahore.

4.On the other hand the learned Departmental Representative has supported the impugned order. According to him, import documents provided by the appellants were not relevant as there was difference in the specification. He, however, admitted that only 10 coils instead of 12 coils reached the factory premises of the appellant No.2 according to the copy of the stock register provided by the appellants. He could not controvert the assertion of the learned counsel that the impugned order was passed without providing opportunity of hearing to the both sides.

5.I have heard the learned counsel appearing on behalf of the appellant as well as DR and perused the record carefully. MessrsShaheen Pipe Industry,Islamabad is registered as importer, manufacturer and exporter. He is engaged in manufacturing of MS Pipes and exportation thereof. The said industrial importer imported a consignment of Hot Rolled Coil quantity 12 weighing 128.3150 M.Ton from South Africa and sought transshipment thereof to the manufacturing Bond at Islamabad vide GD No. ST-166 dated 19-7-2012. Out of 12 coils, 2 x coils were dispatched under Safe Transport Scheme from Karachi to Islamabad on truck No. K-2367 driven by appellant No.1. According to the stock register of the manufacturing Bond, 10 coils reached in the Bond and entered in the stock registered and other documents while 2 x coils were shown pending arrival. The coils imported by appellant No.2 were admittedly of secondary quality andthe difference in specification of such goods cannot be ruled out. The claim of appellant No.2 also gets support from letter dated 29-9-2012 and 6-10-2012 where-under clearing Collectorate has asked for certificate of in-bonding of 12 x coils while the intimation given to MCC, Islamabad was that 2 x coils were seized by the staff of respondent No.1. Appellants also informed respondent No.1 that the seized coils were in Transit from Karachi to Islamabad under Safe Transport Scheme. Moreover, nothing could be brought on record by the department that these 2 x coils were non-duty paid or as the case may be brought into the country through un-authorized route. The interception and seizure of 2 x coils enroute from Karachi to Islamabad at Lahore further strengthened the case of the appellants that the same were lawfully imported and were being transported under Safe Transport Scheme to the manufacturing Bond of MessrsShaheen Pipe Industry, Islamabad engaged in manufacturing of MS Pipes by importing Hot Rolled Coils as raw material. He is also maintaining manufacturing Bond duly licensed under sections 13 and 95 of the Customs Act, 1969 by the Collector of Customs, MCC, Islamabad and thus the appellant No.2 was entitled to import such raw material without payment of duty and taxes for manufacturing of MS Pipes for exportation thereof. The contention of the learned counsel that the impugned order was passed on the hack of the appellants without addressing the factual and legal issues raised by the appellants by respondent No.4 also seems correct. Thus, I feelno hesitation to hold that 2 x coils of Hot Rolled Coils subject matter of thy instant appeal were lawfully imported by MessrsShaheen Pipe Industry, Islamabad vide GD No. ST-166 dated 19-7-2012 and were seized enroute to Islamabad under Safe Transport Scheme. Thus, the appeal is allowed, the impugned order as well as original order are set aside. Parties be informed through registered post A.D. or by UMS.

File be consigned to the record after completion.

SAK/121/Tax(Trib.)Appeal accepted.