KHYBER TEA AND FOODS COMPANY, PESHAWAR VS COLLECTOR CUSTOMS, MODEL CUSTOMS COLLECTORATE, PESHAWAR, 2013 PTD-CUSTOMS-APPELLATE-TRIBUNAL-PESHAWAR 600 (2012)

Nov. 20, 2012 CUSTOMS APPELLATE TRIBUNAL PESHAWAR 2013 PTD 600

2013 PTD-CUSTOMS-APPELLATE-TRIBUNAL-PESHAWAR 600

KHYBER TEA AND FOODS COMPANY, PESHAWAR VS COLLECTOR CUSTOMS, MODEL CUSTOMS COLLECTORATE, PESHAWAR

2013 P T D 600

2013 P T D 600

[Customs Appellate Tribunal Peshawar]

Before Ghulab Shah Afridi, Member (Judicial)

Messrs KHYBER TEA AND FOODS COMPANY,PESHAWAR and 2 others

Versus

COLLECTOR CUSTOMS, MODEL CUSTOMS COLLECTORATE, PESHAWAR and 4 others

Custom Appeal No.108/PB of 2012, decided on 20/11/2012.

Customs Act (IV of 1969)---

----Ss. 2(s), 16, 17, 26, 157, 168, 179, 187 & 194-A---Import and Export (Control) Act (XXXIX of 1950), S.3(1)---Allegation of Smuggling---Seizure and confiscation of goods---Goods/Foreign Origin Black Tea, along with truck carrying said goods, were seized on allegation of smuggling---Additional Collector Customs, vide order-in-original, confiscated goods---Collector Customs on appeal, vide order-in-appeal dismissed the appeal---Adjudicating Officer verified the import documents produced by the appellant/importer at the time of interception of goods and subsequently; it was never pointed out that any document so produced by the importer was false, fabricated or untrue; and he was quite satisfied with the verification reports received in that regard from concerned quarters---Though a number of cases were made out against the importer and litigation had undergone between the department and the importer, but the importer had discharged his onus within the meaning of S.187 of the Customs Act, 1969; and had successfully met with the burden to prove the legal import---Burden to prove smuggling stood shifted to the department and department had no proof contrary to the proof produced by the importer---Department had failed to produce any evidence, which could prove that Tea imported by the importer, was prohibited or restricted by the Government---Department, in circumstances, had failed to prove the charge of smuggling against the importer---Contention of department was that non-mentioning of the country of origin in the sales tax invoice produced by the importer, was not plausible, because there was no such column for the origin in the sales tax invoice---Importer being a manufacturer could blend the tea and repack the same---Case, otherwise did not lie within the pecuniary competence and jurisdiction of Additional Collector of Customs---Under provisions of S.17(3) of Customs Act, 1969 case should be adjudicated within a period of 120 days from the date of show-cause notice but said period had expired and no plausible and cogent reason had been shown by the department for such delay for passing the order-in-original---Importer was established to have been doing business of Black Tea, and was duly registered with Sales Tax, Income Tax Department, and Chamber of Commerce and Pakistan Tea Association bodies etc.---Possession of huge quantity of Black Tea by the importer, did not create a suspicion that the recovered Black Tea was smuggled one---Goods seized, in circumstances,were lawfully imported---Seized/confiscated goods/Tea, could immediately be returned unconditionally to the importer, in circumstances.

PTCL 2004 CL 551; 2001 YLR 635; 1995 SCMR 387; 2003 PTD 2118; SAO No.175 of 2004 dated 11-10-2004; PTCL 2002 CL 95; PLD 1971 SC 124; 2009 PTD 642; 2010 PTD 465; 2010 PTD (Trib.) 2086; 1999 PTD 4126; 2006 SCMR 1713; 2004 SCMR 28; 2004 SCMR 1798; 2003 SCMR 59; PLD 2002 SC 630 and 2011 PTD (Trib.) 2480 rel.

2008 PTD 60 and 2008 PTD 2025 distinguished.

2007 SCMR 1095; 2007 PTD 1495; 2003 PTD 1797; 2003 PTD 1354; 2003 PTD 1361; 2002 MLD 180; 2009 PTD 2004; 2007 PTD 2265; 2009 PTD 762; 2011 PTD (Trib.) 2216; 2011 PTD 1076; PLD 2005 Pesh. 214; 2007 SCMR 1256 and 2010 SCMR 1408 rel.

Ateeq-ur-Rehman, Advocate, Syed Sikandar Hayat Shah, Advocate and Pir Alam Shah, Consultant for Appellants.

Naseer Khan, Superintendent Customs and Zia-ud-Din, Intelligence Officer for Respondents.

JUDGMENT

GULAB SHAH AFRIDI, MEMBER (JUDICIAL):---This appeal filed by Messrs Khyber Tea and Foods Company, Peshawar is against the Order-in-Appeal No.35 of 2012 dated 31-1-2012, passed by the learned Collector Customs (Appeals), Peshawar, whereby he while maintaining the Order-in-Original No.59 of 2011 dated 17-3-2011, dismissed the appeal.

2.Brief facts of the case as reported by the Deputy Superintendent, Intelligence and Investigation - FBR Regional Office, Peshawar are that on 24-11-2009, on prior Information a Mazda Mini Truck bearing RegistrationNo.LES-2924-Lahore,loadedwithforeignoriginBlackTea was stopped near the Motor-Way Toll Plaza, Peshawar. On demand, the occupants of the vehicle could not produce any proof of legal import/lawful possession of the tea loaded on the Truck for detailed examination, the truck was brought to the office of Customs Intelligence, Peshawar, where thorough search led to the recovery of 118 bags of foreign origin black tea. Meanwhile oneAmir Wahab son of Abdul claimed ownership of the recovered goods/tea by producing photo copies of GDs No. CRN, 1HC 944948, 210309dated 21-3-2009 along with Invoice No.12 dated 23-11-2009. On scrutiny however, it was found that the black tea mentioned in the produced GDs did not tally with the recovered black tea. Hence notice under section 17 read with section 26 of the Customs Act, 1969 was served upon the owner of goods to produce attested copies of the GDs, Packing Lists, Invoice etc., along with details of the stock register and Sale/Supply Register of the Importer along with attested copies of Sales Tax Return etc. for the relevantmonthi.e. October/November, 2009.Hewasalsodirectedtosubmitdetailsofthe Supply Register of MessrsKhyberTeaupto26-11-2009 in order to establish the chain of transactions from the time of import to final supply. The owner of the goods however failed to produce the requisite documents on the stipulated date except a copy of the supply Register of Messrs Khyber Tea. The goods were thus seized under section 168 of the Customs Act, 1969 for violation of sections 2(s) and 16 of the Act ibid read with section 3(1) of the Imports and Exports (Control) Act, 1950. The Mazda Mini Truck bearing Registration No.LES-2924/Lahore used for transportation of the aforesaid smuggled tea was also seized under section 157 of the Customs Act, 1969.

3.Subsequently, after completion of the requisite formalities, the matter was placed before the Additional Collector-II, Customs Peshawar, who vide Order-in-Original No. 59 of 2011 dated 17-3-2011 confiscated the goods. However, released the vehicle against 20% Bank Guarantee.

4.AggrievedoftheOrder-in-OriginalNo. 59of2011dated17-3-2011, the appellant filed appeal before the Collector Customs (Appeals), Peshawar, who vide Order-in-Appeal No. 35 of 2012 dated 31-1-2012 dismissed the appeal. Hence the instant appeal on the following grounds:--

(i)Thattheimpugned Order-in-Original No. 59of2011dated17-3-2011 aswellasOrder-in-AppealNo. 35of2012dated31-1-2012 are against the law, facts and evidence available on record.

(ii)That, the seized confiscated goods have lawfully been imported, legitimately purchased and bonafidely transported.

(iii)That, our above contention that the seized/confiscated goods were lawfully imported and bonafidely possessed is supported by the findings of the adjudicating authority embodied in the impugned Order-in-Original No. 59 of 2011 dated 17-3-2011 as mentioned in sub-para (i) of para 13 thereof which reads as follows;

"the respondent's claim of purchase of 10000 kgs black tea against valid sales tax invoice No. 196 dated 10-11-2009 from Messrs SPATCO Karachi is proved/supported by the summary of domestic sales of Messrs SPATCO Karachi for the month of November, 2009 as retrieved from the electronic system of FBR and now available on case file".

(iv)That, seized/confiscated goods were legitimately transacted in terms of section 73 of the Sales Tax Act 1990.

(v)That, our above contention that the seized/confiscated goods were legitimately transacted is supported by the findings of the Adjudicating Authority embodied in sub-para (ii) of the above referred order-in-original which reads as follows;

"The respondent also furnished proof of payment (regarding fulfillment of the mandatory condition of section 73 of the Sales Tax Act, 1990) in the shape of MCB reference CYP/GEN dated 8-2-2010 wherein the following transactions have been confirmed;

S. #	Cheque No. & Date	Amount of Cheque	Cheque used in favour of
1	898480 dt: 14-12-2009	Rs.12,00,000	Messrs SPATCO Karachi A/C No. 10152-6
2	898488 dt: 2-1-2010	Rs.10,10,000	-do-
3	898489 dt: 5-1-2010	Rs.13,00,000	-do-

"The prosecution on the other hand never termed this proof to be fake/forged etc".

(vi)That, Sales Tax Invoices so produced by the appellant were never proved by the prosecution as untrue, false or fabricated.

(vii)That, our above contention that the sales tax invoices were never found false, fabricated or untrue is supported by the findings of the Adjudicating Authority embodied in sub-para (iii) of the impugned Order-in-Original No. 59 of 2011 which reads as follows;

"In so far as the issued of initially sales tax invoice No. 176 dated 20-10-2009 is concerned, the same was also found to be genuine because the summary of the supplier for the tax month/period of October, 2009 retrieved from the online data available at the electronic filling of FBR confirmed the purchases made by the respondent from Messrs SPATCO Karachi as per the following details;

Sales Tax Invoice No. & DateValue

176 dated 20-10-2009Rs.2274461.00

140 dated 2-10-2009Rs.1118803.00

TotalRs.3393264.00

(viii) That, on prosecution as well as respondent No. 2 have failed to establish the case against the appellants whereas on the other hand the appellants have sufficiently proved their case that the seized/confiscated goods were lawfully imported and bonafidely possessed.

(ix)That, our above contention that our case was substantially proved is supported by the findings of the adjudicating authority as contained in para-14 of the impugned Order-in-Original No.59 of 2011 which reads as follows:

"On the fact of it, all the above discussion and references seemingly point to the legality of the seized tea. The contention of the respondent i.e. purchase of tea from Messrs SPATCO Karachi is supported by sales tax invoice, purchase register, electronic filling system of FBR as well as proof of payment and proof of purchase of Bardana from Haji Didar Gul Bardana Merchant. The prosecution on the other hand, has prima facie failed to effectively negate these documentary evidences provided/indicated by the respondent. The prosecution has seemingly relied entirely and solely on the report of Messrs Munir Goods Transport Company wherein the said Goods Transport Company has denied issuance of Bilty No. 2205 dated 10-11-2009, but even in this connection, the respondent brought on record the decision of the jirga regarding the dispute between the respondent and the transport company".

(x)That, the provisions of section 2(s) of the Customs Act 1969 are not applicable in this case because;

(a)the seized goods have been lawfully imported and bonafidely possessed.

(b)the seized goods are not those goods which were imported in breach of any prohibition or restriction for the time being in force.

(c)the seized goods are not those on import of which any custom duties or taxes so leviable thereon were evaded.

(d)the seized goods though notified under a Notification No. S.R.O. 566(I)/2005 dated 6-6-2005 as amended from time to time issued under sub-clause (ii) of clause (s) of section of Customs Act, 1969 are not those goods which cannot be imported into the country.

(e)the seized goods are not those which were brought into the country by any route other than a route under section 9 or10 or form any place other than a customs station as the goods so recovered/seized do not bear the remarks "in transit to Afghanistan"

(xi)That, the provisions of section 16 of the Customs Act 1969 are not applicable in this case because;

(a)the seized/confiscated goods are freely importable.

(b)there is not prohibition or restriction on the import of seized/ confiscated goods.

(c)the seized/confiscated goods were supported with legal documents.

(xii)That, the provisions of section 157 of the Customs Act, 1969 are not applicable in this case because;

(a)the owner of the vehicle was not travelling with the seized vehicle. When intercepted.

(b)the prosecution did not bring any evidence on record which prove any criminal link or association with the owner of the seized goods.

(c)the owner of the vehicle was never issued show cause notice and in absence thereof no penal or punitive action can be taken against the owner of the vehicle nor any redemption fine could be imposed on the vehicle.

(xiii) That, the adjudication officer while passing the order-in-original as well as the Collector Appeals while dismissing the appeal of appellant have been failed to appreciate that the seizing officer has illegally seized the black tea.

(xiv) That the adjudication officer confiscated the black tea on the ground which is not sustainable in the eye of law the adjudication officer has confiscated the black tea on the ground that the bilty produced by appellant was not verified. The appellant clarify that when the tea in question brought at Peshawar some bags of black tea were damaged therefore the appellant stopped the payment of fare to the transport company on which the dispute arose between the appellant and transport company which was later on brought before the office bearer of Peshawar Tea Association by the management of Pak Lucky Peshawar Goods Transport Company and the driver of truck No. P-3433 and they have made an application to the Chairman of the said association. The chairman of the said association constituted a jirga for resolving the dispute between the appellant and transport company. The jirga resolved the matter by the way that the jirga deduct Rs.5000 from Rs.23600 and directed the appellant to pay Rs.18600 to the transport company at that time the jirga brought its verdict in written form. The appellant brought this fact on record by producing the copy of verdict of Jirga. Thereafter the investigation officer investigated the matter in regard with the fact that whether the consignment of appellant was arrived at Pak Lucky Goods Transport Co. Peshawar because the Munir Goods Transport Co. Karachi in its Bilty No.2205 dated 10-11-2009 mentioned the destination of 147 bags of black tea as Pak Lucky Goods Transport Co. Peshawar, whereby the clerk of Pak Lucky goods Transport Co. confirmed in writing this fact that the said bags of black tea were arrived at their Adda. The adjudication officer while passing order-in-original has totally ignored all the said facts. Now the driver namely Alamzeb of Truck No.P-3433 who broughtthesaidblackteainTruckNo.P-3433toPakLuckyGoodsTransportCo.Peshawarhasadmittedthefactof dispute over the fare arose between the appellant and him by an affidavit. Copy of application to Peshawar Tea Association,verdictofjirga,writtenconfirmationofPakLucky Goods Transport Co. Peshawar, affidavit and registration book are annexed as annexure (M-1), (M-2), (M-3), (M-4) & (M-5).

(xv)That the adjudication officer has totally ignored the confirmation of purchasing 118 pepper bags and 118 jute bags from Haji Didar Gul Safi Bardana Merchant. However the investigation officer during the course of investigation has contacted the said Bardana Merchant for confirmation of purchasing the aforesaid empty bags whereby the said Bardana Merchant confirmed in written the selling of above mentioned empty bags to appellant. Copy of written confirmation along with postal receipt is annexed as annexure (N-1) & (N-2).

(xvi) That the appellant has successfully proved that the seized black tea is a legally imported one but the adjudication officer while passing the impugned order-in-original has totally ignored the documentary evidence produced by the appellant which is against the principle of justice.

(xvii) That during the course of adjudication the respondents has verified the documents from the concerned quarters which become genuine but the adjudication officer while passing the order-in-original totally ignored the verification reports of concerned quarter however the adjudication officer has admitted in his order-in-original that the documents produced by the appellant were dully verified by the concerned quarters despite this the adjudication officer deprived the appellant from the fruit of verified documents.

Copy of letter for confirmation of Bank Transaction to Manager MCB by Superintendent I and I FBR Regional Office Peshawar, Confirmation Report by the Manager MCB Chowk Yadgar Branch, Peshawar, Electronically Confirmation Report of Invoice Nos. 140 and 176 for the month of October, 2009 and Electronically Confirmation Report of Invoice No. 196 for the monthofNovember,2009areannexedasannexure (O-1),(O-2), (O-3) & (O-4).

(xviii) That the order-in-original is illegal because the Additional Collector has no jurisdiction to entertain and hear the instant case because the duty and taxes involve in the instant case is Rs.405207 as mentioned in the seizure report. According to section 179(1) clause (ii) of the Customs Act, 1969 the instant case falls with in the jurisdiction of Deputy Collector. In view of admitted position of monitory limit the jurisdiction could only be exercised by the Customs officers according to language of section 179 of the Customs Act, 1969 and no deviation could be made on one or any other pretext. The Additional Collector has passed the order-in-original with out having competency given under section179 of the Customs Act, 1969 therefore the order-in-original is illegal, unlawful and with out jurisdiction. The adjudication officer has been failed to mention the reason that why he has not decided the instant case with in the limitation provided by law.

Placed reliance on 2010 PTD (Trib.) 2086 + (2010 PTD 465) + (PLD 1971 SC 124) + (2009 PTD 642)

(xix) That the impugned order-in-original is against the law because theadjudicationofficerhasdecidedtheinstantcaseafterexpiry of the limitation provided for the decision of a case. Section 179(3) of the Customs Act, 1969 provides that the cases shall be decided with in 120 days of the issuance of show cause notice are with in such period extended by the Collector for which reasons shall be recorded in writing, but such extended period shall in no case exceed 60 days. The adjudication officer issued show cause notice on 5-1-2010, and then the original limitation for deciding the instant case ended on 5-5-2010. The extended period of 60 days if any extended by the Collector ended on 5-7-2010. but the Adjudication officer passed the impugned order-in-original on 17-3-2011. The adjudication officer while passing the impugned order-in-original exceeds the limitation for decision of case provided by the section 179(3) of the Customs Act, 1969 therefore the impugned order-in-original is illegal and unlawful.

(xx)That without prejudice as supplies are made by the importer and issued a sales tax invoice therefore Customs Act, 1969 is not applicable.

(xxi) That the appellant has successfully discharged the burden of proof under section 187 of the Customs Act, 1969. The adjudication officer while passing the impugned order-in-original totally ignored this aspect of the case.

5.In rebuttal, the respondent-department filed their para wise comments to the following effect:--

(i)Noadmitted. Both Order-in-OriginalNo. 59of2011dated17-3-2011 and Order-in-Appeal No.35 of 2012 dated 31-1-2012 are legal and lawful having been passed on merit and evidence available on record.

(ii)Not admitted. This Para is the repetition of Part - A & B, the reply of which has already been given in the preceding Paras in adequate manner.

(iii)Not admitted. As far as reference of Para - 13(i) of the order-in-original is concerned, reference in this regard is invited to the Para - 16 of the said order-in-original, wherein the stance of the appellant has been turned down by the adjudicating officer stating therein that:--

"In so far as this particular case is concerned, it is clear that since the fact of transportation of the tea from Karachi to Peshawar has not been established therefore the only possibility that remain is that any imported tea was disposed off in the local market of Karachi while the documents in respect thereof were being used to cover up smuggled tea in Peshawar. Since Peshawar and its vicinity is a known hub of illegal tea smuggled in from Afghanistan therefore there is this constant temptation and phenomenon of using such documents to disguise smuggled tea as being legitimate tea. It is clear that in the instant case this modus operandi was adopted with the obvious intention to hoodwink the law enforcing agencies. Considering the above position I am inclined to accept the version of seizing agency. The black tea thus being confirmed to be non duty paid and smuggled is therefore, confiscated outrightly".

(iv)Not admitted. As stated in the preceding paragraphs.

(v)Not admitted. As stated in Para-3 above read with reply in part A & B.

(vi)Not admitted. The Quoted tax invoice is irrelevant in the subject matter, because the confiscated tea stated to have been purchased from SPACTO Karachi has never been brought to Peshawar. Thus plea of the appellant is baseless and after thought.

(vii) Not admitted. In this regard Para - 3 of Part - C above, is referred.

(viii) Not admitted. As stated above in this preceding paragraphs.

(ix)Not admitted. Although sales tax invoice shows the purchase of tea weighing 10000 Kgs from SPACTO Karachi but on the other side the transportation of aforesaid black tea stated to havetaken place from Karachi to Peshawar by Bilty No. 2205 dated 10-11-2009, proved fake and bogus after verification from MessrsMunir Goods Transport Company, Karachi. The denial has not been turned down till date by the said transport company. When the transportation of confiscated tea has been disowned by the purported transporter, therefore, it is proved that the confiscated tea was never brought from Karachi to Peshawar. Moreover, the marks and number inscribed on the bags of tea also does not tally with the GD provided by the appellant in support of legal import. Therefore, it has been established that the confiscated tea is not the same which indicates in the GD. Further, the adjudicating authority has turned down the stance of appellant in Para - 16 of Order-in-Original No. 59 of 2011, declaring the goods to be the smuggled one on the basis of merit and evidences.

(x)Not admitted. Section 2(s) of the Customs Act, 1969, is very much applicable in the subject matter with the reason that the confiscated tea has been brought into the country through un-frequent routes without payment of duty/taxes leviable thereon. The import documents were being used by the appellant which has not relevancy with the confiscated black tea because most of the gunny bags containing foreign origin Black Tea, bears word "Indonesia (beside other marks and numbers) which was tried to hide by applying ink on it, whereas the origin of goods according to G. D, is Kenya. Further - More tea is also a notified item.

(xi)Not admitted. As stated in the preceding paragraphs.

(xii) Not admitted. Any means of conveyance used in the removal of any goods liable to confiscation under the Act, is liable to confiscation. However, in lieu of confiscation, the adjudicating officer released the vehicle involved in smuggling of contraband goods against payment of redemption fine of 20% of its Customs value by taking a lenient view in terms of section 181 of Customs Act, 1969.

(xiii) Not admitted. The seizing officer has seized the black tea after scrutiny of import documents produced by the appellant, the particulars of which did not tally with the confiscated goods. Further more, the transport company has also denied the transportation of tea in question from Karachi to Peshawar and disowned the purported belty twice which is integral part of the case. Therefore, both the order-in-original and order-in-appeal passed in the instant case are based on evidences available on record.

(xiv) Not admitted. The adjudicating officer has passed the order-in-original merely on merit and evidences available on record. When the movement of consignment said to be transported from Karachi through MessrsMunir Goods Transport Company proved fake abinitio and never turned down his denial, then the question of legitimacy does not arise. The stance taken by the appellant that there was a dispute with the Transport Company, is after thought. The story of damage of some bags of tea and repacking in jute bags, is fabricated and have no footing to stand against the truth because when the tea was being transported in the shape of bags and with the same weight then what was the need to change the original bags. What motive was hidden behind this logic. The only possible conclusion the could be drawn from this unnecessary change is that this was deliberately done to evade duty and taxes by giving legal coverage to the foreign origin tea which was in fact a smuggled tea by taking advantage of a GD which was irrelevant to the consignment of confiscated tea.

(xv)Not admitted. As stated in preceding paragraphs. The plea has no relevancy in view of the proven fake rather of the bilty purported to have been issued by Messrs Munir Goods Transport Company Karachi.

(xvi) Not admitted. Sufficient opportunities were provided by the adjudicating officer to prove the legitimacy. The appellant tried their best but could not succeed to prove their case before the learned adjudicating authority. The learned adjudicating officer while passing order-in-original, narrated the whole scenario in detail vide Paras - 15 and 16 of the order-in-original in question. Therefore, order-in-original passed in the instant case is in accordance with the law, having been passed on merit and evidences.

(xvii) Not admitted. As stated earlier in the preceding paragraphs that the particulars of the GD does not tally with the confiscated tea and transportation of tea in question has been denied by the transport company which is enough evidence to establish that the confiscated consignment is not the same for which payment have been made through banking channel.

xviii & xix. Not admitted. Reply has already been given in the preceding paragraphs. xx andxxi. Not admitted. As stated above.

6.The appellant, in reply to the above comments, filed the following rejoinder:--

PART-A

(Facts of the Case)

Paras I to IIIThat, the comments offered in the paras under reference are irrelevant, escaping and evasive because the "denial" of the Transport Company Karachi to have issued the bilty had subsequently converted into" admission" In para 14 of the impugned Order-in-Original No.57 of 2011 passed by the Additional collector has discussed the issue of disputed bilty and has conceded as under

"The prosecution has seemingly relied entirely and solely on the report of Messrs Muneer Goods Transport Company wherein the saidGoods Transport Company has denied issuance of Bilty No.2205 dated 10-11-2009 but even in this connection, the respondent brought on record the decision of the jirga regarding the dispute between the respondent and the transport company."

(iv)That, since the prosecution has failed to verify the contents of the purchase receipt of empty jute bags issued by Haji Dedar Gul Bardana Merchant Peshawar, its contention that the same is after thought does not have any force as the law of land does not authorize them to stick to a opinion which is not based on documentary evidences. If the prosecution was of the firm opinion that the same was after thought they should have visited the shop Haji Dedar Gul Bardana Merchant Peshawar to ascertain the fact as to whether or not the purchase receipt was actually and factually issued by him. Non-verification of the said purchase receipt by the prosecution strongly supports the contention of the appellant that the same was properly and genuinely issued by Haji Dedar Gul Bardana Merchant Peshawar and nothing wrong had happened.

(v)That, theprosecution has, eventually, accepted the stance of the appellant that the seized goods were booked through Pak Al Madina Mini Mazda Goods Transport Company Peshawar and were being "transported" and were not being "smuggled" from Peshawar to inland country. So far as the contention of the prosecution that these goods were being transported without any legal documents, the same is nullified by the adjudicating authority in para 14 of his impugned Order-in-Original No. 59 of 2011 dated 17-3-2011 as under

"on the face of it, all the above discussions and references seemingly point to the legality of the seized tea. The contention of the respondent i.e. purchase of tea from Messrs SPATCO Karachi is supported by Sales Tax Invoice, Purchase Register, electronic filing system of FBR as well as proof of payment and proof of purchase of Bardana from Haji Dedar Gul Bardana Merchant. The prosecution on the other hand, has, prima facie, failed to effectively negate these documentary evidences provided/indicated by the respondent."

(vi)That, non-offering of comments in respect of the para under reference leads to admission of the comments laid down therein and acceptance of the plea of the appellant that input tax amounting to Rs.8,69,685 and output tax amounting to Rs.9,49,134 was also paid.

(vii)That, the stance of the prosecution that though transaction of money to be paid to the buyer was made through banking channel but it was not made through business account is false and farcical as no verification in this regard was ever made by the prosecution because no verification report establishing therein its stance has been produced nor it has been proved that the subject consignment is not the same for which such payment was made. The adjudicating authority in para 13(II) of Order-in-Original No.59/2011 has well concluded as under;

"the respondent also furnished the proof of payment(regarding fulfillment of the mandatory condition of section 73 of the Sales Tax Act 1990) in the shape of MCB reference CYP/GEN dated 8-2-2010 wherein the following transactions have been confirmed:

S.No	Cheque	Date	Amount of cheque Rs.	Cheque used in favour of
1	898480	14-12-2009	12,00,000	Messrs PACTCO Karachi A/c10152-6, Karachi

2	898488	2-1-2010	10,10,000	-do-
3	898489	5-1-2010	13,00,000	-do-

The production on the other hand never termed this proof to be fake/forged etc."

So far as the contention of the prosecution of initially furnishing Sales TaxInvoice No.176 dated 20-10-2009 and then submitting Sales Tax Invoice No.196 dated 10-11-2009 is concerned, the same also looses ground in presence of the verification report and remarks of the adjudicating authority who in para 13(1) and para 13(III) has resolved the said issue as under;

13(i)"The respondent's claim of purchase of 10000 Kgs black tea against valid Sales Tax Invoice No.196 dated 10-11-2009 from Messrs SPATCO Karachi is proved/supported by the summery of domestic sales of Messrs SPATCO Karachi for the month November 2009 as retrieved from the electronic filing system of FBR and now available on the case file."

13(iii)"In so far as the issue of initially furnishing Sales Tax Invoice No.176 dated 20-10-2009 is concerned, the same was also found to be genuine because the summery of the supplier for the tax month/period ofOctober,2009 retrieved from the online data available at the electronic filing system of FBR confirmed the purchase made by the respondentfrom Messrs SPATCO Karachi as per the following:

Sales Tax Invoice No.	Date	Value Rs.
176	20-10-2009	22,74461
140	2-10-2009	11,18,803
		Total 33,93,264

The said amount of both the invoices is reflected in the summary of the supplier available on the electronic system of FBR and in the purchase register of the respondent. This position clearly depicts the respondent to be a regular buyer of imported tea from Messrs SPATCO, Karachi "

(viii to ix) That, the contents of the para are nothing but an abject failure on the part of the prosecution just to give spurious impression and strength to its idea which has since been snubbed by the adjudicating authority at the very early stage of adjudication. As regards detention of goods under section 17 of the Customs Act, 1969 and its seizure under section 168 of the Customs Act, 1969, the prosecution has happened to violate and misconceive the above provisions of law because;

(i)the prosecution could not appreciate the law position as embodiedinsections2(kk)and2(rr)oftheCustomsAct,1969.

(ii)the prosecution could not produce formal approval of the Assistant Collector of Customs for detention of such goods as was mandatory under section 17 of the Customs Act, 1969.

(iii)the prosecution also could not appreciate the law position explained in sections 15, 16 and 17 of the Customs Act, 1969 and interpreted and implemented the same in their own way and style rather construing the same in its true sense.

PART -B

(Legal status of Order-in-Appeal)

(1)That, the outcome concluded by respondent No.2 in the impugned order-in- appeal is quite absurd and uncharacteristic is nothing but a mockery with the law in particular and with the tax-payers in general.

(2)That, the comments embodied in the para under reference stand replied and rebutted in thepreceding sub-para(v) of Parts I and III of PART-A.

Paras 3 to 7That, no plausible reasons and grounds nor any judgment of the higher court has been cited which could support the contention of the prosecution that section 4 empowers the senior officers of customs to exercise the adjudicating powers of the junior officers of customs. In case, the provisions of section 4 of the Customs Act, 1969 were rightly followed as the respondent No.2 vary daringly declaim in the said impugned order-in-appeal, then the provisions of section 179(1) of the Customs Act, 1969 automatically render redundant.

8. That, the prosecution has not offered any plausible reasons and grounds toestablish its contention that the plea taken by the appellant was not relevant to the present case.

9 to 10. That, no plausible reason and grounds have been offered by the prosecution to rebut the view point of the appellant based on legal as well as on the judgments passed the superior courts cited in the paras under reference, instead harping on the same string that the previous plea that the judgments passed in the year, 2005 by the Appellate Tribunal were rightly relied.

11. That, the position with regard to lawful importation of the seized goods, legitimate transportation thereof and consequently its bona fide sale/purchase stand verified and accepted by the adjudicating authority in the impugned order-in-original as explained in the preceding paras of PART-A above.

12 to 13. That, the comments offered by the prosecution as embodied in the paras under reference stand rebutted and replied in proceeding paras of PART-A above.

14. That, the prosecution has totally misconceived the contents of the para under reference in which it was asserted that the owner of the truck was never found indulged in the act of smuggling. It is an elementary principle of law that everybodyisresponsibleforhisowndeedsandmisdeedsandnoliabilitycouldbeincurredonapersonwhohadnotcommittedanyfaultyactionorcrime.Inthiscasethedriverof the truck cannot be enfolded with the act of smuggling or having been colluded with the owner of the goods when the truck was travelling with proper bilty, sales tax invoice and relevant G.D.

PART-C

(Grounds of Appeal)

Paras 1 to 9. No further comments are warranted as nothing new has been added by the prosecution while offering para wise comments in response to the para under reference. Mere assertions not supported with documentary evidences and substantiated by the law in force or judgments of the superior courts is nothing but to grope in the dark especially, when such assertions already stand rebutted through concrete documentary evidences which evidences have already been verified at the adjudication stage.

Para 10. That, the prosecution has burdened us with the charge of smuggling within the meaning of section 2(s) of the Customs Act, 1969 but has miserably failed to establish;

(a)As to which unfrequented route penetrating into the country was used.

(b)As to whether or not the packages in which the goods were packed were containing the marks "in transit to Afghanistan."

Paras 11 to 21. As again para 1 above

PRAYER

In view of the forgoing it is humbly prayed that;

(i)impugned order-in-original may kindly be ordered to be set aside and vacated.

(ii)the impugned order-in-appeal may kindly be ordered to be set aside and vacated.

(iii)the seized/confiscated goods may kindly be ordered to be returned unconditionally.

(iv)in case of disposal of the seized/confiscated goods through public auction or other means, the entire sales proceeds may kindly be ordered to be returned/remitted.

7.I have gone through the case record and due consideration has been given to the written as well as oral submissions made by both the parties. Before going into the exhaustive discussions regarding factual as well as legal points raised in the appeal under reference it would be appropriate to have a bird's eye view on the import, sale and transportation of the seized goods and the emerging positions which are briefly summarized as under:

(i)As per the case record, the appellant purchased 10000 kg blended black tea against purchase sales tax invoice No. 196 dated 10-11-2009 from the importer namely MessrsSPATCO'S 215 Panorama Centre-I Fatima Jinnah Road Karachi and paid sales tax in lieu of such purchase. After purchasing the said blended black tea booked the same through Munir Goods Transport Co. Karachi vide Bilty No. 2205 dated 10-11-2009. After its arrival at Peshawar, the appellant entered the same in his firm's purchase, stock (Inward and Outward) registers for the month of November, 2009, in compliance of section 22 of the Sales Tax Act, 1990.

(ii)The appellant then sold out 8144 kg blended black tea to Haji Saleem Ghala Mandi Sawabi against supply sales tax Invoice No. 12 dated 23-11-2009 and then booked the same through Pak Al-Madina Mini Mazda Goods Transport Company Peshawar for Haji Saleem Khan Ghalla Mandi Swabi vide Bilty No. 212 dated 23-11-2009.

(iii)That while the goods were on way to Swabi, the Customs Intelligence and Investigation FBR Peshawar Staff stopped the Mazda Mini Truck bearing Registration No. LES-2924 near Motor Way Toll Plaza Peshawar on 23-11-2009. Upon demand, the salesman of the company namely Bilal Ahmed son of Iftikhar-ud-Din who was travelling along with the truck presented the documents (in shape of Purchase sales tax Invoice No. 196 dated 10-11-2009 issued by the importer i.e. Messrs SPATCO'S Karachi, GD No. CRN: I-HC-944948-210309 dated 21-3-2009, Supply Sales Tax Invoice No.12dated 23-11-2009) as a proof for lawful possession of the said blended black tea, but the Customs Intelligence Staff Peshawar refused to accept the said documents and brought the said vehicle along with said blended black tea to their office situated at University Town Mulberry Road, Peshawar.

(iv)On next day the elder brother of the appellant namely Amir Wahab son of Abdul Wahab appeared before the seizing officer andproduced the Purchase Sales Tax Invoice No. 196dated10-11-2009 issued by the importer i.e.Messrs SPATCO'S Karachi, GD CRN: I-HC-944948-210309, Purchase, Stock (Inward and Outward), Supply Register for the month of November, 2009 but the seizing officer did not accept the said documentary evidence whereby the seizing officer gave a notice on 24-11-2009 under section 17 read with section 26 of the Customs Act, 1969 and directed him to produce the documents mentioned in the said notice upto 26-11-2009 positively, Annexure(H-1) placed at page 33 of the appeal.

(v)In compliance of the above notices, the appellant submitted written reply to the notice (place at pages 34 to 37 as Annexure H-2 of appeal) and also produced firm's registration, Income Tax Registration, Sales Tax Registration, Membership Certificate of Sarhad Chamber of Commerce and Industry Peshawar, Import and Export Certificate, Sales Tax Invoice No. 196 dated 10-11-2009 issued by importer Messrs SPATCO'S Karachi in favour of Messrs Khyber Tea and Food Company Peshawar, Purchase, Stock and Supply Registers for the month of 11/2009, the record of Supply Invoice No.12 dated 23-11-2009 issued by Messrs Khyber Tea and Food Company in favour of Haji Saleem Ghalla Mandi Swabi.

(vi)The seizing officer refused to accept the written reply to the said notice as well as the documents so produced by the appellant and seized the goods along with vehicle vide Recovery Memo dated 26-11-2009 and submitted seizure Report case No. 62 of 2009 dated 26-11-2009 to the Additional Collector of Customs (Adj) MCC Peshawar for initiation of legal proceedings against the appellant. The very short time of two days given by the seizing officer to the appellant for the production of documents required by him is not a sufficient time. The seizing officer should have given at least period of seven days to the appellant for the production of required documents mentioned in the notice. The appellant in reply to the said notice has given a reasonable cause for non production of some of the documents within a short time. Reply to the said notice under section 17 of the Customs Act, 1969 is Annexure (H-2) on page 34.

(vii)The case record further shows that the appellant at the adjudication stage also produced the documents of import and lawful possession which contained Sales Tax InvoiceNo. 196 dated 10-11-2009, Annexure A-1, page-14, National Bank Payment Challan, GD CRN No. I-HC-944948-210309, Annexure (A-2), page-15, transportation Bilty No.2205dated 10-11-2009fromKarachitoPeshawar(AnnexureB-1,page-16), Purchase, Stock and Supply Registers for the month of 11 of 2009, Cheque No. 898480 (Annexure B-2, page-17), (Annexure D-2, page-20) (Annexure-C, page-18), Cheque No.898488 and ChequeNo. 898489, Acknowledgment Slip (Annexure G-1), Sales Tax Return (Annexure F-1 to F-4), Summary of domestic purchase, summary of sales tax invoices for the month of 11 of 2009, Supply sales tax Invoice No. 12 dated 23-11-2009 (Annexure D-1, page-19), receipt of Empty bagsissuedbyHajiDidarGulBardanaMerchantdated23-11-2009, (Annexure D-3, page 21)BiltyNo. 212dated23-11-2009 of Pak Almadina Mazda Goods Transport Co. Peshawar (Annexure-E, page 22).

(viii) During the course of adjudication, the Superintendent Customs I and I Peshawar also issued a letter to Manager MCB Chowk Yadgar Branch Peshawar for verification of the following cheques: (Annexure O-2, page 137).

S.No	Cheque	Date	Amount of cheque Rs	Cheque used in favour of
1.	898480	4-12-2009	12,00,000	MessrsSPATCO Karachi A/c10152-6
2.	898488	2-1-2010	10,10,000	-do-
3.	898489	5-1-2010	13,00,000	-do-

and also required bank statement of the said account for the period of July to December, 2009.

(ix)In response to the said letter the Manager MCB confirmed that the appellant had issued the following cheques (Annexure O-2, page-138).

S.No	Cheque	Date	Amount of cheque Rs	Cheque used in favour of
1.	898480	4-12-2009	12,00,000	MessrsSPATCO Karachi A/c10152-6
2.	898488	2-1-2010	10,10,000	-do-
3.	898489	5-1-2010	13,00,000	-do-

and also enclosed the system generated account statement along with his confirmation report.

(x)The adjudicating officer/ Additional Collector-II issued show cause notice dated 5-1-2010 to the appellant (Annexure J-1 on page 45). The appellant submitted his written reply to the said show cause notice on 16-1-2010 focusing therein the following main points:-

(i)the seized/confiscated goods were legally imported rightful purchased and properly transported from Karachi to Peshawar.

(ii)the case under reference did not fall within the competence and jurisdiction of the Additional Collector in term of duty and taxes involved under section 179(1) of the Customs Act, 1969 as the duty and taxes involved in the present case are Rs.4,05,207 as per column 5 of seizure report submitted by the seizing officer.

(i)the impugned order-in-original was barred by limitation in terms of section 179(3) of the Customs Act, 1969 as the show-cause-notice in the case was issued on 5-1-2010 and the impugned order-in-original was passed on 17-3-2011 after the expiry of a period of one year, two months and twelve days when the same was required to be decided within four months (one hundred and twenty days). Where the same was required to be decided within four months (one hundred and twenty days).

(iii) The Adjudicating officer, however, confiscated the said black tea and released the vehicle against payment of redemption fine @ 20% of its Customs value vide Order-in-Original No. 59 of 2011 dated 17-3-2011 despite the fact that he in para-14 of his order-in-original had himself observed as under:--

"on the face of it, all the above discussion and references seemingly point to the legality of the seized tea. The contention of the respondent i.e. purchase of tea from Messrs SPATCO Karachi is supported by Sales Tax Invoices, purchases register, electronic filing system of FBR as well as proof of payment and proof of purchase of Bardana from Haji Didar Gul Bardana Merchant. The prosecution on the other hand, has prima facie failed to effectively negate these documentary evidences provided/indicated by the respondent. The prosecution has seemingly relied entirely and solely on the report of Messrs Muneer Goods Transport Company wherein the said Goods Transport Company has denied issuance of Bilty No. 2205 dated 10-11-2009; but even in this connection, the respondent brought on record the decision of the Jirga regarding the dispute between the respondent and the transport company."

8.Being aggrieved of the above decision embodied in the so far as impugned order-in-original is concerned, the party preferred an appeal before the Collector of Customs (Appeals) in which certain main points were raised which are briefly summarized as under:--

(i)all the import documents including Goods Declaration, sales tax Invoice, transaction of money to the seller and transportation of goods stand verified.

(ii)the Additional Collector of Customs (Adj) was not competent to adjudicate the case in terms of section 179(1) of the Customs Act, 1969 in view of the duty and taxes involved in the case.

(iii)the impugned order-in-original passed by the Additional Collector of Customs (Adj) was barred by limitation in terms of section 179(3) of the Customs Act, 1969.

9.Thorough scrutiny of the impugned order-in-original in juxtaposition to the view taken by the appellant before the Adjudicating officer has reveled that the Adjudicating officer though being in total agreement with the contention plea and stance of the appellant that the purchase of tea from Messrs SPATCO Karachi is supported by Sales Tax Invoices, Purchases Register, electronic filing system of FBR i.e. Monthly Sales Tax Return, Purchase and Sales Summary, already verified electronically (Annexure - O/3 & O/4, pages 139-140) as well as proof of payment and proof of purchase of Bardana from Haji Didar Gul Bardana Merchant duly verified from the said seller of Bardana on 14-4-2010 (Annexure - N/1 & N/2, pages 135-136) and the prosecution on the other hand, has prima facie failed to effectively negate these documentary evidences provided/indicated by the respondent. Whereas, the prosecution had relied entirely on the report of Messrs Muneer Goods Transport Company wherein the said Goods Transport Company had denied issuance of Bilty No. 2205 dated 10-11-2009; but even in this connection, the respondent brought on record the decision of the Jirga regarding the dispute between the respondent and the transport company.

10.However, the adjudicating officer despite having been inclined to agree with the appellant concluded otherwise presuming that the story of Bilty having a dispute and Jirga with the transport Company was obviously a belated afterthought and since this was not the first seizure case against the appellant and the department had litigated against each other on quite a few occasions and unnecessarily repacked the imported tea and whenever he was asked why he has repacked it, his only reply was that no law prohibits repacking.

11.In this regard, I do not agree to the observation of the adjudicating officer because after having verified the import documents produced by the appellant at the time of interception of goods or subsequent thereof, and when it was never pointed out that any of the document so produced by the appellant was found false, fabricated or untrue in any sense and he was quite satisfied with the verification reports received in this regard from various quarters concerned and the adjudicating officer also could not substantiate its observation or view point with any documentary evidence which could rebut or nullify the documentary evidences of import, purchase and transportation of the seized goods.

12.I also do not agree with the Adjudicating officer that the Bilty having a dispute and Jirga with the transport company was obviously a belated afterthought because the bilty (dated 18-11-2009) was produced to the prosecution on 16-1-2010 when the written reply to the show-cause-notice was submitted to the adjudicating authority. The disputed bilty placed at page No.16 (Annexure-B-1) shows that the consignment was booked from Karachi to Peshawar to be unloaded at Messrs Pak Lucky Goods, Haji Camp, Peshawar. In this connection, the Deputy Superintendent Customs Intelligence, Peshawar had also visited to confirm the genuineness of the bilty in question, which was verified by the concerned Clerk of Messrs Pak Lucky Goods, Peshawar, which is available on page 125 (Annexure-M/3).In case, it was after thought, the appellant would have not submitted a disputed bilty. Moreover, the affidavit (Annexure-M/4, page 126) given by the driver of the truck also confirmed that the seized goods were transported from Karachi to Peshawar.It also confirms that the driver of the truck obtained goods along with the Bilty under reference from Munir Goods Transport Company Karachi and brought the same at Pak Lucky Goods Company Peshawar and when these goods were being transported from Pak Lucky Goods Company Peshawar to the Godown of Messrs Khyber Tea Peshawar, some of the bags of tea were found wet due to seasonal rains and Messrs Khyber Tea Peshawar refused to pay the transportation charges amounting to Rs.23600. The driver of truck has further solemnly affirmed that upon refusal of payment of transportation charges some hot words were exchanged with the owner/proprietor of Khyber Tea and Food Company Peshawar. Consequently, he reported the matter to Pak Lucky Goods Transport Company Peshawar and later on lodged a complaint with the Tea Association Peshawar when he and Pak Lucky Goods Company Peshawar could not succeed in recovering the transportation charges from Messrs Khyber Tea and Food Company Peshawar despite their repeated visits and requests to them. Upon their complaint, the Tea Association Peshawar constituted a Jirga who resolved the dispute by asking Messrs Khyber Tea and Food Company Peshawar to pay Rs.18600 after deducting a sum of Rs.5000 for the loss caused to the said company. Thereafter Messrs Khyber Tea and Food Company paid Rs.18600 as decided by the Jirga. The adjudicating officer neither called for the members of the Jirga to find out the facts of the case nor asked the prosecution to investigate the matter. As nothing has been proved contrary to what has been stated above, the undersigned has no option but to accept the version of the appellant.

13.As regards the observation of the adjudicating officer for confiscation of the black tea thata number of cases were made out against the appellant and litigation had undergone between the department and the appellant, the same is neither plausible nor convincing because the appellant had discharged his onus within the meaning of section 187 of the Customs Act, 1969 who had successfully met with the burden to prove the legal import and now the burden to prove smuggling stood shifted to the prosecution who appear not to have in their possession any proof contrary to the proof produced by the appellant. Black tea is notified item but does not fall in the appendix (A) and is not bended item and freely importable under the Import Policy. The prosecution has been failed to produce any evidence which could prove that the import of such kind of tea (tea in question) was prohibited or restricted by the Federal Government. Mere factum of importation or exportation of certaingoods being prohibited by law would not amount to smuggling. Goods in orderto be smuggled must be banned or restricted by the Federal Governmentunder the Import Policy. On the other hand the appellant produced GDCRN No. I-HC-944948-210309 dully issued by the Pakistan Customs Computerized System proved that the import of black tea is not prohibited nor restricted by the Federal Government. There is no direct evidence on record in this connection therefore the prosecution has been failed to prove the charge of smuggling. PTCL 2004 CL 551, 2001 YLR 635 LHC, 1995 SCMR 387. Burden of proof as laid down under section187 of the Customs Act, 1969 is evidential burden requiring the accused to only establish a prima facie case and ultimate burden or legal burden is on the customs authorities to prove the case against the accused beyond reasonable doubt. The appellant proved that the tea in question is imported one. Reliance takes place on 2003 PTD 2118 - Balochistan High Court, Quetta. If the said documents are irrelevant and afterthought so why the adjudicating officer has issued the show cause notice and why he called upon as to why penal action should not be taken against the appellant and why the seized black tea should not be confiscated under sections 156(1) (8) & (89) of the Customs Act, 1969. The purpose of issuance of show cause notice is that the accused should know about the allegations levelled against him and he prepared to defend himself. This is the right of appellant to defend himself and produce the evidence of legal import and lawful possession of the tea in question. There is no provision in the Customs Act, 1969 and the other laws that the accused cannot produce the documentary evidence in support of his stance at the adjudication stage.

14.The black tea entered into the country by two legal ways one is importation through Karachi Dry port and by Afghan Transit trade under the Afghan Transit Trade Treaty. The goods of Afghan transit trade apprehended on the routes other than the authorized routes would amount to smuggling. The goods under Afghan Transit Trade Treaty carry the wording via "Karachi in transit to Afghanistan". The perusal of record shows that the recovered bags of tea in question didn't carry the words "via Karachi in transit to Afghanistan". It means that the tea in question is imported one. Moreover the goods which are in transit to Afghanistan are to be inscribed with the words via Karachi in transit to Afghanistan as per afghan transit trade agreement and this aspect would have been noticed by the customs authorities Karachi port, Dry port Peshawar and customs station Torkham. In case the argument of original packing by the prosecution is accepted. As regard the word blended tea mentioned in the invoice. The fact is that most of the black tea is blended. Tea leaves from different origins are blended to give it a better flavor and quality. Therefore the prosecution version that perhaps blending is done by the retailer or whole seller is not correct, rather all the black tea are being blended by the manufacturer to give it rich flavor and quality. The appellant produced a certificate issued by the Sales Tax Department shows that the appellant is a manufacturer and is duly registered with the Sales Tax Department. Being manufacturer the appellant can repack the black tea in other bags.

15.The prosecution contended that there is no mentioning of the country of origin in the sales tax invoice produced by the appellant is not plausible because there is no column to be mentioned the origin in the sales tax invoice so no need to be mentioned the origin in the sales tax invoice. Reliance is placed on S.A.O. No. 175 of 2004 dated 11-10-2004 whereby his Lordship Mr. Justice Nasir-ul-Mulk has concluded as under:--

"The sales tax invoice has only mentioned the tea as black tea as distinguished from green tea. In the sales tax invoice the origin of the tea need not be mentioned. The tea imported had been repacked by the importer for distribution to the retailers and, therefore, it was quite un-necessary to mention the countries from which the tea was imported. It was on account of these facts that the Appellate Tribunal as well as the Collector Appeals had found that the tea seized had been lawfully imported and that the burden to prove its lawful import had been duly discharged by the owner on production of the relevant documents".

If there is any doubt of origin in the mind of seizing agency then according to the law as envisaged in section 199 of the Customs Act, 1969 they should have draw the samples in the presence of the owner of the black tea and send the same to expert for obtaining his opinion in regard with the origin of the recovered black tea but the seizing agency didn't do so.

16.The observation of the adjudicating officer that the repacking was made unnecessarily is also frivolous when the appellant has been registered as Manufacturer under the Sales Tax Act, 1990 and has been favored with the issuance of National Tax Number Certificate under the Income Tax Ordinance, 2001. Had he bothered to examine and consult these documents carefully, he would have not made such irrelevant remarks which do not find any legal support and under both the enactments, repacking of goods comes within the scope and definition of manufacturer. Section 2 subsections (16) and (17) of Sales Tax Act, 1990 and section 153 of Income Tax Ordinance, 2001 provides the definition of manufacturer. The appellant being a manufacturer can blend the tea and repacked the same. Moreover once the goods imported into the country for home consumption and issued a sales tax invoice in respect of that goods the provisions of Customs Act, 1969 are not applicable because after process and mixing the same and repacked.

17.As regards the impugned order-in-appeal passed by the Collector of Customs (Appeals) Peshawar, it appears as if that the Collector of Customs (Appeals) Peshawar while analyzing the legal points with respect to non-adherence of the provision of subsection (1) and subsection (3) of the Customs Act, 1969, has not given due consideration and attention to these provisions and ignored all the case-laws cited by the consultant and counsel of the appellant at the time of failing of the appeal. Ignoring the case-laws by the Collector Appeals Peshawar is the violation of Article 201 of the Constitution of Islamic Republic of Pakistan 1973. The said article provides that the decisions of High Court are binding on the sub ordinate courts. Reliance takes place on PTCL 2002 CL 95.

18.As regards the contention of the appellant that the provisions of the Customs Act, 1969 were not properly followed and the case under reference did not lie within the competence and jurisdiction of the Additional Collector of Customs (Adj) in view of duty and taxes of Rs.4,05,207 involved in this case which do not exceed Rupees eight hundred thousand. Scheme of section 179 of the Customs Act, 1969 provided that the power was given to the Deputy Collector in this case and such power was not vested with the Additional Collector even the corrigendum power could only be exercised by an officer who was designated with the original jurisdiction under the provisions of section 179 of the Customs Act, 1969 Additional Collector therefore wrongly assumed the jurisdiction by issuing the show cause notice and decision by him was illegal, unlawful and without jurisdiction. I tend to agree with the appellant because if the provisions of section 4 of the Customs Act, 1969 are to be taken in view and the Additional Collector of Customs is allowed to adjudicate the cases falling within the competence and jurisdiction of officers subordinate to him, then the provisions of subsection (1) of section 179 of the Customs Act, 1969 become redundant. The said contention of the appellant gains support from a number of judgments passed by the Superior Courts duly cited in the appeal filed by the appellant such as PLD 1971 SC 124, 2009 PTD 642, 2010 PTD 465, 2010 PTD (Trib) 2086, 1999 PTD 4126, 2006 SCMR 1713, 2004 SCMR 28, 2004 SCMR 1798, 2003 SCMR 59, PLD 2002 SC 630, 2011 PTD (Trib) 2480.

19.So far as the contention of the Collector of Customs (Appeals) that the provisions of subsection (3) of section 179 of the Customs Act, 1969 are not mandatory and are directory in nature, which allegedly find support case-laws reported as PLD 2006 SC 209 and2007 PTD (Trib.) 127. The same is also irrelevant because after examining the judgments, it has been found that the former judgment was passed in case registered under subsection (3) of section 32 of the Customs Act, 1969 and not subsection (3) of section 179 of the Customs Act, 1969 whereas the latter judgment was passed by the Appellate Tribunal and not by the Superior Court after which a number of judgments were passed by the Superior Courts such as 2008 PTD 60, 2008 PTD 2025 and Federal Tax Ombudsman Islamabad in Complaint No.11/KPK/Cus(01)371 of 2012 dated 3-8-2012 in which it has been held that the time limit is mandatory and not directory in nature.

20.The show-cause-notice in this case was issued on 1-5-2010. The provisions of section 179(3) of Customs Act, 1969 required that the case should be adjudicated within a period of 120 days from the date of show cause notice. The said period of 120 days expired on 25-8-2010. Neither the Order-in-Original No. 59 of 2011 dated 17-3-2011 speaks of any approval of extension by the Collector in this Adjudication period nor the learned departmental representative, who possessed the relevant adjudication file at the time of hearing, could show any such extension by the Collector. Neither any plausible and cogent reason has been shown by the learned Departmental representative for the delay in passing the order-in-original. The Order-in-Original No.59 of 2011 passed on 17-3-2011 is manifestly time barred with reference to the date of show cause notice i.e. 1-5-2010 as no reason, valid and lawful extension in terms of the proviso to section 179(3) has been produced by the respondents. The Hon'ble Lahore High Court in its judgment reported in 2008 PTD 60 has held that the limitation period for adjudication is mandatory in nature and not a directory one and that "once limitation has started to run and had come to an end the assessee had acquired a vested right of escapement of assessment by lapse of time". This view also supported by the Superior judiciary reported as 2007 SCMR 1095, 2007 PTD 1495, 2003 PTD 1797, 2003 PTD 1354, 2003 PTD 1361, 2002 MLD 180, 2009 PTD 2004, 2007 PTD 2265 LHC, 2009 PTD 762 LHC, 2011 PTD (Trib.) 2216. Where the adjudication decision is time barred, it becomes unlawful and void on the ground of time barred. It is settle principle that when a law requires a thing to be done in a particular manner, if not so done, the same shall be nullity in the eyes of law. The settle principle of "actus curiae neminem gravabit" (an act of the court shall prejudice no person) would surely apply to the present case." 2011 PTD 1076, PLD 2005 Pesh 214, 2007 SCMR 1256, 2010 SCMR 1408.

21.From the available record it is established that the appellant is doing business of black tea and dully registered with the Sales Tax Department, Income Tax Department, Sarhad Chamber of Commerce and Pakistan Tea association, besides maintain all the relevant record as required under the law. Possession of huge quantity of black tea by the appellant does not create a suspicion that the recovered black tea is smuggled one. Reliance is placed on PTCL, 1983(CL) 75 (Lah HC), which reads as "possession of a very large quantity of gold with person dealing in that business does not create suspicion that gold is smuggled. There is no evidence which can give rise to a reasonable belief for suspicion that gold found in possession of the appellant was smuggled. Appellant and his father were engaged in the business of gold and were members of Sarafa Bazaar Association. The presence of a very large quantity of gold in his possession could hardly be regarded as suspicious circumstances. There were no markings on the gold bars. The fineness of the gold was 999.1. Such gold was available in the local market. In view of these circumstances there was no basis for entertaining any belief or suspicion that the gold found in possession of the appellant was possibly smuggled."

22.The appellant has also produced his previous record (electronically issued by Regional Tax Office Sales Tax Wing Peshawar) which shows that the appellant is regularly paying Monthly Sales Tax since December, 1999 till September, 2012. The appellant also submitted the summary of duty and taxes on import stage from January, 2011 to September, 2012 which shows that the appellant has paid Rs.139250640 in Government Exchequer, which means that the appellant is playing a productive role in promotion of state economy.

23.In view of the foregoing discussions, I am convinced to conclude that the goods seized in this case were lawfully imported on the evidences produced in support of such import, sale and transportation stand verified and the impugned order-in-original was passed by an authority who was not competent for the same in terms of subsection (1) of section 179 of the Customs Act, 1969 and was also barred by limitation in terms of subsection (3) of section 179 of the Customs Act, 1969. Both the Order-in-Original No.59 of 2011 dated 17-3-2011 as well as the Order-in-Appeal No.35 of 2012 dated 31-1-2012 are set aside. It is, therefore, ordered that the seized/confiscated goods may immediately be returned unconditionally to the appellant and in case the same have been auctioned publicly, the entire sales proceeds may be returned/ released to the appellant without any delay. So for as the redemption fine imposed on the vehicle is concerned, the same is booked through a Registered Goods Transport Company and the goods were also found imported one, no connivance of transporting the smuggled goods is found against the owner of the vehicle, therefore, the redemption fine imposed on the vehicle is also remitted. The appeal stands disposed of accordingly.

HBT/29/Tax(Trib.)Appeal accepted.

KHYBER TEA AND FOODS COMPANY, PESHAWAR VS COLLECTOR CUSTOMS, MODEL CUSTOMS COLLECTORATE, PESHAWAR, 2013 PTD-CUSTOMS-APPELLATE-TRIBUNAL-PESHAWAR 600 (2012)

Requisition against illegal voters MTBA

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