MUHAMAMD RAFIQ VS COLLECTOR OF CUSTOMS, KARACHI, 2013 PTD-KARACHI-HIGH-COURT-SINDH 731 (2012)

Customs Act (IV of 1969)---

----Ss.79(1), 155-E & 196---Import Policy Order [2007-2008], Appendix "A" Part-II, Sr.II---Notification S.R.O. No.407(1) dated 3-6-2009---Reference to High Court---Unique User Identifier---Show cause notice, non-receipt of---Importer assailed orders passed by authorities on the plea that no show cause notice was issued to him---Validity---Every information including show cause notice or adjudication orders could be transmitted through customs computerized system using a Unique User Identifier issued to a registered user by customs authorities---Transmission of such information, in absence of proof to the contrary was sufficient evidence that registered user, to whom Unique User Identifier was issued, had transmitted such information---Importer attempted to raise false plea of non-service of show cause notice by ignoring provision of S. 155-E of Customs Act, 1969, whereas no plausible explanation had been offered, which could justify mis-declaration on the G.D.---Importer, besides evading duty and taxes, made an attempt import explosives/fire crackers, which were banned under serial No.11, Part-II, appendix "A" of Import Policy Order 2007-08---Option to get such goods redeemed was not available for import in terms of notification No. S.R.O. No.407(I) dated 3-6-2009, which had rightly been declined by authorities---Order passed by Customs Appellate Tribunal did not suffer from any factual or legal error---Reference was disposed of accordingly.

Yasir Enterprises v. Model Customs Collectorate 2009 PTD 1880 ref.

Shakeel Ahmed for Applicants.

Ghulam haider Shaikh for Respondent No.3.

Date of hearing: 20th November, 2012.

JUDGMENT

AQEEL AHMED ABBASI, J.---This Special Customs Reference Application has been filed against the order of the Customs, Central Excise and Sales Tax Appellate Tribunal dated 10-3-2010 in Customs Appeal No.K-164/2008/1980, whereby the following questions, said to be questions of law, arising from the impugned order, have been proposed for the opinion of this Court.

(1)Whether on the facts and in the circumstances of the case, the show-cause notice is required to be issued under the law?

(2)Whether in the circumstances of the case, the show-cause notice either electronically or through hard copy has been issued to the Applicants/Appellant?

(3)Whether without issuing show-cause notice, the confiscation of goods and other actions are ab-initio illegal, unlawful and having no legal effect in the eye of law?

(4)Whether there is any bar to re-export the subject goods, as provided under section 138 of Customs Act, 1969?

(5)Whether, previously the import of the goods having the same description i.e. "Fire Cracker" have already been allowed for home consumption by the Competent Authority, subject to levy of duty and taxes under the law?

(6)Whether the applicants/appellants has been subjected to discrimination by the respondent, by not releasing the goods?

2.Learned counsel for the applicant while making his submissions in respect of the above proposed questions has candidly submitted that he would press only questions Nos.2, 3 and 4 as referred to hereinabove, which according to learned counsel are questions of law, which arise from the impugned order passed by the Customs, Central Excise and Sales Tax Appellate Tribunal in the instant case.

3.Brief facts of the case as recorded by the Customs, Central Excise and Sales Tax Appellate Tribunal in the instant case are that the Importer filed GD for clearance of old & used excavators under HS Code No.8429.5900 terms of section 79(1) of the Customs Act, 1969. Scrutiny of the documents GD, examination report revealed import of absolutely different goods i.e. fire works classifiable HS Code 3604.1000 & banned in terms of Serial No.11 part-4 of Appendix-A of the Import Policy Order,2007-2008. Show Cause Notice was issued and adjudication proceedings accordingly initiated against the importers culminating in passing of the impugned Order-in-Original No.2259 of 2007 dated 29-8-2007.

4.The order-in-original was challenged by the applicant before the Collector of Customs, Central Excise and Sales Tax (Appeals), Karachi, who vide Order-in-Appeal No.939 of 2008 dated 20-3-2008 dismissed the appeal, whereafter the applicant preferred an appeal before the Customs, Central Excise and Sales Tax Appellate Tribunal, who vide impugned order dated 10-3-2010, dismissed the appeal of the applicant, which has been assailed by the applicant by filing instant reference application under section 196 of the Customs Act, 1969 by raising the questions of law as mentioned in para 1 hereinabove.

5.It is inter alia contended by the learned counsel for the applicant that both the forums below have erred in law and fact while upholding the order in original passed by the Additional Collector Customs, without realizing that no show cause notice under section 171 of the Customs Act, 1969, was issued before confiscation and adjudication by the respondent. Per learned counsel, in terms of the provision of Section 168, before seizer of any goods liable to confiscation under the Customs Act, the appropriate officer is required to issue a show cause notice under section 180 within two months of the seizer of the goods and if no show cause notice is issued within the prescribed period the goods are required to be returned to the person from whose possession they were seized. Per learned counsel, in the instant matter neither any show cause notice was issued in terms of section 171 while seizing the goods of the applicant nor any show cause notice was issued in terms of section 180 before confiscation of the goods in this case, which according to learned counsel, renders the subsequent adjudication proceedings as well as the order passed by the Collector Appeals and the Customs Appellate Tribunal as nullity in the eyes of law. It has been further argued by the learned counsel that the shipment of the fire crackers was made due to inadvertence and under a bona fide mistake and it was not a case of mis-declaration as wrongfully held by the customs authorities. Per learned counsel, under similar circumstances, the respondents had allowed the re-exportation of similar goods, whereas in the instant case, applicant has been discriminated by the respondents, while declining such request of the applicant. While concluding the arguments, learned counsel for the applicant has argued that goods cannot be confiscated unless seized, whereas, in the instant case, no notice was served upon the applicant before confiscation of the consignment, therefore, per learned counsel, the impugned order is liable to be set-aside. In support of his contention, the learned counsel has placed reliance in the case of Yasir Enterprises v. Model Customs Collectorate reported asPTD 1880.

6.Conversely, learned counsel for the respondent has supported the impugned order passed by the Customs, Central Excise and Sales Tax Appellate Tribunal as well as the order of adjudication and the order of the Collector of Appeals and submitted that since there is concurrent finding of the two forums against the applicant, hence instant reference is liable to be dismissed in limine. It is further submitted by the learned counsel that no question of law as proposed by the applicant in the instant case arises from the impugned order as the Customs, Central Excise and Sales Tax Appellate Tribunal has recorded its finding on facts of the case, which does not give rise to any question of law, as argued by the learned counsel for the applicant. Learned counsel for the respondent has submitted that the present applicant had earlier filed two constitutional petitions bearing Nos.240 of 2007 and 231 of 2007, seeking release of the subject consignment on somewhat similar grounds, however, per learned counsel, both the petitions were dismissed and the consignments were not allowed to be released by this Court. It has been further contended that the provisions of section 168 of the Customs Act are not attracted inthe instant case as the subject consignment was at port. Per learned counsel, a show cause notice under section 180 of the Customs Act, 1969 was electronically issued to the applicant by the respondent, which was transmitted to the User ID of the applicant on 10-9-2007, however the applicant chose not to respond to such notice. Whereas, order in original was passed by the Additional Collector Customs, wherein it has been held that the applicant has indulged in mis-declaration and has also attempted to import banned item i.e. "explosives" in violation of the terms of para 16-A read with appendix A(ii) of Import Policy Order, 2007-2008. Goods were held liable to be confiscated under sections 9, 14, 14-A and 45 of the Customs Act, 1969. Per learned counsel, the request of the applicant for re-export of banned items in terms of section 138 of the Customs Act, 1969 was also misconceived as this is not a case of inadvertence, misdirection or untraceability of the consignee. On the contrary, mis-declaration on the part of applicant has been established. It has been contended by the learned counsel that in view of hereinabove facts, the impugned order does not require any interference by this Court, and the reference is liable to be dismissed.

7.We have heard both the learned counsel, perused the record and also examined the impugned order and orders passed by the authorities below. From perusal of the record, it has emerged that goods declaration was filed showing import of used and old excavator with HS code 8429.5900 in terms of section 79 of the Customs Act, 1969. On scrutiny of the documents and the G.D, and on perusal of examination report, it was seen that instead of goods as declared in the G.D, import of banned articles i.e. "Fire Works" classifiable under HS Code 3604.1000 and banned in terms of Serial No.11 part-4 of Appendix-A of the Import Policy Order 2007-2008 was made by the applicant. Accordingly a computerized show cause notice was issued and transmitted electronically to the applicant on its user ID on 10-9-2007 at about 12-00 noon on the same address wherefrom the G.D. was filed. (Copy of the show cause available as Annexure `D' in the Court file). However, it appears that no reply or response was furnished by the applicant. As per order of the adjudicating officer, it is noted that several opportunities were given to the applicant by granting extension of time again and again but no response whatsoever was furnished.

8.The Additional Collector of Customs (MCC), Custom House, Karachi vide Order-in-Original No.2259 of 2007, dated 29-8-2007, passed the following order:--

"I have gone through the goods declaration, the examination report the facts of the case as well as the relevant provisions of the Import Police Order. The importer in this case has not only indulged in mis-declaration, he has also tried to import a banned item which is not importable in terms of Para 16A read with Appendix-A Part II of Import Policy Order. The offending goods are therefore liable to be confiscated under clauses 9, 14, 14A and 45 of the Customs Act, 1969 which I order accordingly. Option to get the goods redeemed is not allowed in view of clause (d) of S.R.O 487(I)/2007 dated 9-6-2007. Accumulative penalty of Rs.1000000 is also imposed on the importer for contravening the provisions of Customs Act, 1969 and Import Policy Order as stated above."

9.The above order in original was challenged by the respondent, who filed an appeal before the Collector of Customs, Sales Tax and Federal Excise (Appeals), Karachi, who vide Order-in-Appeal No.939 of 2008, dated 20-3-2008 has held as under:-

"I have gone through record of the case and also considered submission of both the sides. According to the evidence available and produced clearly show the case of outright mis-declaration. There is huge and tremendous difference between the goods declared by the importers and found by the customs. It abundantly proves that the importers tried to seek undue advantage of the system of automation adopted in the MCC. Infact the new system is introduced to facilitate the genuine importers for seeking quick and expeditious clearance, based on their correct and complete declaration. In this case the importers/appellant were caught red handed and subjected to the process of adjudication. The appellants have not been able to present strong defence Appeal is silent about the serious and the core issue of intentional misdeclaration of goods. Request for re-export is also aimed to thwart and defeat the quasi-judicial proceedings. Goods were filed and duty and taxes assessed on the misdeclared non-existent items than the impugned goods found by the customs. Provisions of section 168 are not applicable as the goods were not seized in this case. The case law referred by the learned counsel is not relevant with the facts and the provisions of law invoked in this case. The impugned order-in-original does not suffer from illegality of impropriety."

10.The order of the Collector of Customs (Appeals) was again challenged by the respondent before the Customs Appellate Tribunal, who after having examined the relevant facts and the case relied upon by counsel for the respondent, formulated the following points for determination and resolution of the dispute:--

(a)Whether it is a case of gross misdeclaration or otherwise?

(b)Whether shipment of Fire Crackers was bona fide or inadvertent and as to whether letter received from the shipper at China is genuine or otherwise?

(c)Whether precedents relied upon by the appellant are applicable in this case?

(d)Whether the imported goods of the appellant/importer are redeemable under the provisions of the Customs Act, 1969 or could be allowed its re-exportation or otherwise?

While dealing with the above points of determination, Customs Appellate Tribunal recorded its finding on facts to the effect that the G.D. CRM;1-HC-361190 was electronically filed by the applicant on 18-8-2007, whereas, misdeclaration was detected on 27-9-2007 and thereafter, letter from the shipper at China dated 6-11-2007 was managed by the respondent. It has been observed that the applicant deliberately attempted to misuse the automated clearance by filing G.D. under section 79(1) on the basis of self-declaration, however on checking, misdeclaration was detected whereafter the applicant attempted to raise false plea of inadvertence in the shipment. It has been further held that a show cause notice CR-07955-090082007 was electronically transmitted to the applicant/importer on 10-9-2007, copy of which show cause notice was also placed on record at the time of hearing. It has been further held that the request of the applicant seeking re-export of the subject consignment could not be acceded in view of the fact that it was a clear cut case of misdeclaration and not of inadvertence, whereas the articles imported by the applicant were banned items in terms of Import Policy Order, 2007-2008, which could not allow to be released on payment of redemption and fine, in view of its confiscation in terms of SRO 487(1)/2007 dated 9-6-2007. The Customs Appellate Tribunal has further observed that even in letter dated 6-11-2007 purportedly received from the shippers in China, re-shipment of impugned consignment instead of origin, was sought for Dubai, U.A.E. whereas, the same could only be allowed to be re-exported to the consigner. Moreover, as per Rule 87 (Chapter VII) of the Customs Rule, 2001, an application seeking re-export of the frustrated cargo can be made either by the master of vessel or through his authorized agent, which was not done in the instant case.

11.We have observed that the entire arguments of the counsel for the applicant were based on the plea that no show cause notice was issued to the applicant by the respondent in the instant case, whereas on perusal of the record and the concurrent findings recorded by the two appellate forums below, it appears that a show cause notice was issued and transmitted electronically to the applicant on his user ID. It will be advantageous to reproduce the provision of section 155E, which reads as follows:--

"155E Use of unique user identifier.--(1) Where information is transmitted to the Customs Computerized System using a unique user identifier issued to a registered user by the Collector for that purpose, the transmission of that information shall, in the absence of proof to the contrary, be sufficient evidence that the registered user to whom the unique user identifier has been issued has transmitted that information.

(2)Where a unique user identifier is used by a person who is not entitled to use it, subsection (1) of this section shall not apply if the registered user to whom the unique user identifier was issued has, prior to the unauthorized use of that unique user identifier, notified the Customs that the unique user identifier is no longer secure."

12.From the perusal of the hereinabove provision, it is seen that every information including, show cause notices or the adjudication orders, can be transmitted through the Customs computerized system using a Unique User Identifier issued to a registered user by the collector, whereas, transmission of that information, in the absence of proof to the contrary, is sufficient evidence that the registered user, to whom Unique User Identifier has been issued, has transmitted that information. It appears that the applicant has attempted to raise a false plea of non-service of show cause notice by ignoring the above mentioned provision, whereas no plausible explanation has been offered, which could justify the misdeclaration on the G.D. by the applicant, whereby, besides evading duty and taxes, an attempt was made to import explosives/fire crackers, which were banned under Serial No.11 part-II, Appendix 'A" of Import Policy Order 2007-2008. An option to get such goods redeemed was not available to the applicant in terms of S.R.O. No.407(1) dated 3-6-2009, which has rightly been declined by the respondent in the instant case. We have been further informed by the counsel for the respondent that Constitutional Petitions Nos.D-2403 of 2007 and 231 of 2008 filed by the applicant before this Court seeking release of his consignment have also been dismissed. We may further observe that in the instant case, since no seizer or arrest was made by the respondent, therefore, reference to provision section 171 of Customs Act, 1969, by the learned counsel for applicant is misconceived, whereas it has come on record that while initiating the adjudication proceeding show cause notice in compliance to provision 180 of the Customs Act, i.e. before confiscation of goods or imposition of penalty, was duly issued and transmitted electronically to the applicant through Unique User Identifier.

13.In view of hereinabove facts, we are of the view that the impugned order passed by the Customs Appellate Tribunal does not suffer from any factual or legal error. Whereas, the questions proposed hereinabove are questions of facts and do not give rise to any substantial question of law. Accordingly, we would answer question No.2 in affirmative, against the applicant, whereas, in view of our response to question No.2 hereinabove, question No.3 does not require any response by this Court. As regards question No.4, the same is answered in affirmative against the applicant.

Instant reference application is disposed of in the above terms.

MH/M-21/KOrder accordingly.