YINGQUAN PANG VS COLLECTOR OF CUSTOMS, 2016 PTD-CUSTOMS-APPELLATE-TRIBUNAL-LAHORE 1222 (2015)

(a) Customs Act (IV of 1969)---

----Ss. 3, 32(1)(a), 32(1)(c) & 179---Foreign Exchange Regulation Act (VII of 1947), S. 22---SRO No. 886(I)/2012 dated 18-07-2012---Import of goods---Powers of Federal Board of Revenue---Establishment of Collectorate of Customs Adjudication---Scope---Board in exercise of powers conferred upon it under S.3 of Customs Act, 1969, established a separate forum namely Collectorate of Customs Adjudication through SRO No. 886(I)/2012 dated 18-07-2012 for adjudication of cases of mis-declaration and causing revenue loss under S.179 of Customs Act, 1969---Show-cause notice showed that allegation had been levelled against importer for mis-declaring the export value and declaration value which attracted provisions of Ss.32(1)(a) and 32(1)(c) of Customs Act, 1969 and S.22 of Foreign Exchange Regulation Act, 1947---Allegations and provisions invoked ousted the case from jurisdiction of Executive Collectorate and fell under jurisdiction of Collectorate of Customs, Adjudication---Inspite of clarity of allegations, show-cause notice and order had been issued by Collector of Customs, Exports who was a Collector on Executive side---Said Collector was not Collector of Customs Adjudication and was not empowered either to issue show-cause notice or pass order-in-original---Collector of executive side issued show-cause notice and passed order-in-original by transgressing exclusive and notified jurisdiction of Collector of Customs Adjudication---Such action of collector of executive side, render show-cause notice and order-in-original as without power/adjudication, void ab initio and as such of no legal effect.

PTCL 2004 CL 2005; PLD 1961 SC 237; PLD 1964 SC 410; PLD 1964 SC 536; PLD 1965 SC 90; 1983 SCMR 1208; PLD 1987 SC 304; 1994 SCMR 2232; 2003 SCMR 1505; 2006 SCMR 129; 2006 SCMR 1023; 2013 PTD (Trib.) 353 and 2015 PTD (Trib.) 1422 rel.

(b) Customs Act (IV of 1969)---

----Ss. 32(1), 32(1)(a) & 32(3)---Import of goods---False statement---Mis-declaration and mis-statement---Scope---Invoking of Ss.32(1) and 32(1)(a) of Customs Act, 1969 by Collector of Customs, Exports was also out of context as spirit and essence of S.32(1) of Customs Act, 1969 was that mis-declaration and mis-statement so made should be conscious and that should inflict injury to exchequer as expressed in Ss.32(2) and 32(3) of Customs Act, 1969 which were to be read in conjunction with S.32(1) of Customs Act, 1969---Mis-declaration/mis-statement so made should be instrumental in monetary gain on the expense of revenue of exchequer---Consignment in question was not subject to payment of any export or regulatory duty nor qualified for payment of duty drawback or refund of Sales Tax, resultantly, no revenue of exchequer was evaded by importer---When there existed no revenue loss, mis-declaration/mis-statement so made was without any significance and no consequences flew out of the same.

Messrs Al-Hamd Edible Oil Ltd. And others v. Collector of Customs and others 2003 PTD 552; Messrs Kamran Industry v. Collector of Customs, (Exports) and 4 others PLD 1996 Kar. 68 and Collector of Customs, Exports and another v. R.A. Hosiery Works 2007 PTD 2215 rel.

(c) Customs Act (IV of 1969)---

----S. 178---Punishment of persons accompanying a person possessing goods liable to confiscation---Scope---Responsibility of Department to follow and observe the dictums of law while taking any initiative against importer or exporter and liable to combat the same with proper and appropriate force of statutory obligations---In the present case, where two persons from the company allegedly held responsible for the act and omissions conducted during procedure of export and clearance thereof, there was no evidence available on record to distinguish between acts of two individual members to prove exactly what part was taken by each of them in the alleged offence---To deal with such circumstances, S. 178 of Customs Act, 1969 laid down as to what act would be deemed to be done by conspirators if any were held responsible---Mandatory and essential ingredient that for attributing joint liability on person accompanying the role and goods of the owner liable to be confiscated under Customs Act, 1969 for creating such liability there should be evidence whether the other persons had the knowledge of the fact that goods were contraband, smuggled and liable to be confiscated---Prime duty of prosecution and seizing agency to prove by some cogent evidence that persons had the knowledge of such goods confiscated and in absence of such evidence, mere finding of mixed goods found in subject case by no means sufficient to make out the case against person who had no knowledge about such activity.

(d) Customs Act (IV of 1969)---

----S. 156(1)---Import of goods---Punishment for offences---Pitch of penalties---Scope---Prior to imposing penalty, adjudicating authority had to take into consideration the profile of importer and his line of business and relevant clause of S.156(1) of Customs Act, 1969---Indeed clauses of S.156(1) of Customs Act, 1969 defined pitch of penalties and other actions, but none of said clauses were mandatory in nature and it was left for discretion of adjudicating authority and court to impose penalty defined therein to the extent felt appropriate---Adjudicating authority was also empowered to let free person/company with a warning---In the present case, department had imposed huge penalty and also ignored the fact that Special Judge, Customs had also imposed a penalty upon the importer for pleading guilty for return of his passports, which was a vital instrument, desired for travelling---Department also lost sight of the fact that importer was not a habitual offender---Penalty so imposed should be for deterrence and not for crucifying the offender---Penalty which pinched the offender as harsh penalty served no purpose instead it frustrated the offender and he became desperate and hardened criminal---In judging the penalty, certain other factors such as circumstances in which it was committed, age and character of offender and injury to individual and society were required to be considered---Pitch of penalty had to correspond with the gravity of offence and according to the spirit of S.156(1) of Customs Act, 1969.

Sardar Muhammad Ishaque for Appellant.

Ch. Muhammad Younis, AO, for Respondent.

Date of hearing: 20th October, 2015.

ORDER

MUHAMMAD NADEEM QURESHI, MEMBER JUDICIAL-I.---By this order we intend to dispose of the instant appeal filed by the appellants under Section 194-A of the Customs Act, 1969, against order-in-Original No. 02/2015, dated 24-07-2015, passed by the Collector of Customs, MCC-Exports, Karachi.

2.Brief facts of the case are that M/s. Hongda Trading Company, House No. 13/1-1 Main Sabah Avenue Phase-V Extension, DHA, Karachi, holding NTN 4130559, electronically filed a Goods Declaration bearing No. KPEX-SB-86504 dated 11-02-2015, declaring export of (i) dried fish maw (Net weight 3374 Kgs) in 143 PP bags PCT 0305.5900; and (ii) dried fish skin (Net weight 628 Kgs) in 37 PP bags PCT 0305.5900 stuffed in container No.TEMU3925139. According to the exporter's declaration, the said consignment was destined to 21/F A Hung Cheong House 139-Des Voeux West Hong Kong, China against Form-E No. FBL0184683, value US$ 13,379, issued from Faisal Bank, Main Exchange Branch, Karachi and sought shipment availing facility of automated customs clearance system in terms of Section 131(1)(a) of the Customs Act, 1969. The Risk Management System (R.M.S.) selected the subject GD for examination in terms of Section 131(1)(c) of the Customs Act, 1969 and it was found that the consignment contained turtle organs and dried fish maws. For further clarification/confirmation, the Department of Wild Life of Government of Sindh, vide letter dated 21-02-2015, was requested to confirm/ascertain the actual description of the goods. Subsequently, they examined the goods and found that consignment contained dry shells/plastrons/fringes of fresh water turtles of Indus River System. They vide letter No. CW/Gen/4056 dated 24-02-2015 informed that the turtle species were included in CITES Convention- Appendix-I and II, and their poaching, catching, trapping, netting, using as part or whole or derivatives, trading, transporting and export was strictly prohibited as per provisions of Sindh Wild Life Protection Ordinance, 1972 and Sindh Turtle and Tortoises Protection (Conservation Rules, 2014), whereas under Section 131(1)(a) of the Customs Act, 1969, the exporters were bound to file the GD to Customs containing correct and complete particulars of their goods intended to be exported. The Sindh Wildlife Department, vide their letter No. CW/GEN/2015/4056 dated 26-02-2015 conveyed the value of 4342 turtle skulls, plastrons and fringes, weighing 1.90 tons to be Rs. 616.564 million (Compounding Head Value, Compensation and Environmental Services). Therefore, the declared value @ Rs. 1.3486 million was found grossly under invoiced when compared with the value ascertained @ Rs. 616.564 million in the light of Sindh Wildlife Department's aforesaid value advice. The difference of value came to Rs. 615.2154 millions as per determination of Customs value made in terms of Section 25(15) of the Customs Act, 1969, which shows the exporters had tried to hoodwink Customs by mis-declaring the description and PCT heading of the goods with clear intention to export the banned items. Besides, the circumstances of the case also suggested that the value of the goods had also been grossly mis-declared, which attracted the provisions of Section 32(1) of the Customs Act, 1969. Had it not been detected at the time of examination, the exporters would have succeeded to export the otherwise banned turtle dry shells/plastrons/fringes in the grab of fish maw on part of the exporters. This act attracted the provisions of Sections 16 and 131 read with Section 32(1) and 32A(1) of the Customs Act, 1969 and Serial Nos.1 and 5 of Schedule-I of the Export Policy Order 2013 and further read with Section 3 of the Imports and Exports (control) Act, 1950, and also read with Sindh Wild Life Protection Ordinance, 1972 and Sindh Turtle and Tortoises Protection, Conservation Rules, 2014 read with Para-4(1) and 16 of the Export Policy Order and could also have caused extensive damage to the reputation of the Pakistan.

3.A show cause notice was issued to the appellant and the matter was referred to the adjudicating officer who adjudicated the matter and concluded his observations as follows:--

"35.Similarly, during adjudication proceedings, the respondents had also failed to refute the charges of mis-declaration of description of goods, PCT heading, value and exportability of the goods in question. There remains no doubt that the exporters had tried to export banned fresh water Turtles of the Indus River System (in dried form, i.e. Turtle Dry Skulls/Shells/Plastrons/Fringes) in the grab of dried fish maw. Their importance can be gauged from the fact that these fresh water turtles clean the aquatic environment by feeding upon dead organic material and diseased fish. According to the World Wild Life Organization, Turtle species of the world are confronting serious threats to their likely survival due to pessimistic environmental changes. The major problem with existing wild populations of turtles in the country is caused by illegal trade in body parts of species on commercial scale and this case is a classic example of this ongoing phenomenon. It is due to this very reason that the poaching, catching, trapping, netting, using as part or whole or derivatives, trading, transporting and export of turtle had been strictly prohibited as per various indices of the Convention of International Trade in Endangered Species of Wild Fauna and Flora (CITES) as contained in Schedule-I of the Export Policy Order 2013 as well as under the provisions of Sindh Wild Life Protection Ordinance, 1972 and Sindh Turtle and Tortoises Protection, Conservation and Compounding Rules, 2014. There remains no doubt that the exporters had indulged in a heinous crime and do not deserve any leniency.

36. In addition, it was established that the exporters had grossly under invoiced the value of the consignment as verified by the Sindh Wildlife Department. The respondents failed to find fault with it. Besides, the postal address declared on GD, NTN, STRN and other related documents as House No 13/1-1 Main Sabah Avenue, Phase-V Extension, DHA, Karachi, was also found fake and non-existent during investigation, which further established criminal intent of the exporters.

37. The charges framed in the show cause notice, therefore, stand conclusively established. I order outright confiscation of the consignment under clauses 1, 9, 14, 14A and 66 of section 156(1) of the Customs Act, 1969. A penalty of Rs. Twenty Five (25) million is imposed upon the exporters, Messrs Hongda Trading Company including all its owners and beneficiaries. Besides, a penalty of Rs. One (1) million is imposed upon Mr. Ali Ahmad Soomro son of Ali Hassan Soomro under the aforesaid provisions of law. The confiscated consignment may be destroyed as per relevant legal provisions by a joint team of the Collectorate, Sindh Wildlife Department and Marine Fisheries Department, after completing all formalities and if otherwise not required by these concerned departments."

4.Being aggrieved and dis-satisfied with the impugned Order-in-Original the Appellant filed the appeal before this Tribunal on the ground incorporated in the Memo of Appeal. On the date of hearing Mr. Sardar M. Ishaq Advocate appeared on behalf of the Appellant reiterated the fact and contents and argued strictly in accordance with the grounds mentioned in the Memo of Appeal and further contended that:--

(i)The government of Pakistan in exercise of the power conferred under Section (3) of the Customs Act, 1969, Section 179 thereof has withdrawn the powers of adjudication from the Executive Collectorate and has formed Collectorate of Customs (Adjudications) through notification No. S.R.O. 886(I)/2012 dated 18.07.2012, which is effective from 01.08.2012. In accordance with the notification every adjudication, wherein loss of revenue is visible or calculated on the basis of presumption or on the basis of valuation supplied by any of the Organization has to be done by the Collectorate of Customs (Adjudication) after 01.08.2012 and not by the Executive Collectorate. While issuing show cause notice and passing Order-in-Original dated 09.04.2015 and 24.07.2015 respectively the Collector of Customs Exports usurp the powers vested with the Collector of Customs (Adjudication-II), who is empowered to adjudicate the case corresponding to the MCC of Export, Karachi rendering both being issued and passed in flagrant violation of law and as such coram non judice, hence, void and ab-initio.

(ii)The notice dated 03.03.2015 served on the appellant under Section 171 of the Customs Act, 1969 shows that the Officer concerned seized the entire goods on the presumption that these contain 1900 kgs (4342 pieces Turtles skulls) dry shell/ plastrons/fringes of fresh water turtle of Indus River System, on the presumption that these are not exportable under Serial Nos. 1 and 5 of the Export Policy Order, 2013, which is construed as contravention of Sections 16, 25(15), 32(1), 32A, 131 and 161 of the Customs Act, 1969. Without realizing that the remaining goods comprised of dried fish maw and fish skin weighing to 2102 kgs cannot be seized as these are allowed to be exported freely.

(iii)That for seizing goods, said to be banned for export from Pakistan under the respective Appendix of the Export Policy Order 2013, Section 2(s) has to be invoked. Upon perusal of the show cause notice it can be observed that the said section has not been invoked, instead the provision of Section 32, which has no nexus with the impugned goods. Non invoking the correct section render the show cause notice and order-in-original without lawful authority/jurisdiction as held in reported judgments Asst. Collector v. Khyber Elec. Lamps 2003 PTD 1275, D G Khan Cement v Collector of Customs 2005 PTD 480, Caltex v. Collector (2003) 88 Taxation 128 (Lah), Union Playing Card Company v. Collector of Customs 2002 MLD 130, Atlas Tyres v. Addl. Collector 2002 MLD 180, State Cement v Collector PTCL 2001 CL 558, Kashmir Sugar v Collector 1992 SCMR 1898, Rose Color v. Chairman, CBR and 2013 PTD 813 Sarwar International v. Addl. Collector of Customs.

(iv) That the determination of the offended goods by the Collector of Customs, Exports on the basis of the letter of Wild Life of the Conservator of Wild Life Sindh dated 26.02.2015 is alien with the expression of Section 25(15) of the Customs Act, 1969, under which the value of the exported goods has to be determined, which has not been determined, instead reliance has been placed on the letter dated 26.02.2015, which is of no legal effect, even otherwise i.e. based on the notified penalties for contravention of the provision of Sindh Wild Life Ordinance, 1972 and Sindh Turtle and Tortoises Protection Conservation Rules, 2014. The appropriate authority to take cognizance for the said offence is Government of Sindh not the Federal Government or any associated department like the Collector of Custom, Export. Rendering the determination of value as of no legal effect and so the order passed by the Collector of Customs, Exports based on such value and with transgression of power of the appropriate authority defined in Sindh Wild Life Protection Ordinance, 1972 and Sindh Turtle and Tortoises Protection Conservation Rules, 2014.

(v)That invoking of Section 32(1) & 32(1a) of the Customs Act, 1969 by the Collector of Customs, Export is out of context due to the fact that the sub section (1) is not to be read in isolation, instead in conjunction with Section 32(2) or (3) i.e. the mis-declaration within the meaning of Section 32(1) should be instrumental in causing loss to the exchequer. No charge for mis-declaration under the provision of Section 32(1) can be invoked when the mis-declaration so made is not instruments in causing loss to the exchequer. The alleged mis-declaration made by the appellant is of no consequence as due to that no injury to the exchequer has been inflicted. The stance of the appellant stood validated from reported judgment 2003 PTD 552 Messrs Al-Hamd Edible Oil Ltd. and other v. Collector of Customs, PLD 1996 Karachi 68 Messrs Kamran Industry v. Collector of Customs, (Exports) and 04 others and 2007 PTD 2215 Collector of Customs, Exports and another v. R.A. Hosiery Karachi.

5.The departmental representative filed counter objections as required under Section 194-A(4) of the Customs Act, 1969. However, he argued the matter in favour of the respondent and vehemently opposed the grounds of appeal and prayed that the impugned order be upheld as the same is well reason order passed the Collector of Customs MCC-Exports, Karachi.

6.Rival parties heard and the case record perused:

7.Prior to deliberating on other vital aspect of the case, we feel appropriate to determine the validity of show cause notice and the order-in-original under the legal parlance. The Board in exercise of the powers conferred upon it under section 3 of the Customs Act, 1969 established a separate forum namely Collectorate of Customs Adjudication through Notification No. 886(I)/2012 dated 18.07.2012 for adjudication of the cases of mis-declaration, causing revenue loss under the provision of Section 179 of the Customs Act, 1969 w.e.f. 01.08.2012. From perusal of the show cause notice, it has been observed that the allegation has been leveled on the appellant for mis-declaring the export value, which is said to be Rs. 616.3564 millions as against US$. 13,379.00 resultant cause loss of foreign exchange to the tune of US$. 61,635,640.00. The under declaration of value attracts the provision of Section 32(1)(a) and 32(1)(c) of the Customs Act, 1969 and Section 22 of Foreign Exchange Regulation Act, 1947. The allegation and the invoked provision oust the case from the jurisdiction of Executive Collectorate and falls under the jurisdiction of Collectorate of Customs, Adjudication. Inspite of clarity of the allegation, the show cause notice and order has been issued/passed by the Collector of Customs, Exports, who is a Collector on Executive Side. Since, he is not Collector of Customs Adjudication and is not empowered either to issue show cause notice or pass order-in-original. To the contrary, he issued show cause notice and passed order-in-original by transgressing the exclusive and notified jurisdiction of Collectorate of Customs (Adjudication-II), rendering the show cause notice and order-in-original without power/jurisdiction. Hence, void and ab-initio and as such of no legal effect. The exercise of jurisdiction by the authority is the mandatory requirements and its non fulfillment, the entire proceedings become corrum-non-judice. All relevant quarters having qasi judicial jurisdiction and authority as well as including the Courts they are bound to perform their duties in accordance with the laws and in this particular case department is required to perform their duties under the Customs Act, 1969. The action taken by the subsequent officials of the department made during the hierarchy of the Customs does not have any warrant of law and assume the jurisdiction against the norms of statutory obligations and prescribed rules of the Customs Act, 1969 and without Customs Act, 1969, and other laws. Same observation has been decided by the Courts in reported judgments PTCL 2004 CL 2005, PLD 1961 SC 237, PLD 1964 SC 410, PLD 1964 SC 536, PLD 1965 Supreme Court 90, 1983 SCMR 1208, PLD 1987 Supreme Court 304, 1994 SCMR 2232, 2003 SCMR 1505, 2006 SCMR 129, 2006 SCMR 1023, 2013 PTD (Trib.) 353, [(2015)111 Tax 231(Trib.)]

8.That as regard to the determination of value by the Conservator Wild Life Sindh on the basis of the provision of Sindh Wild Life Ordinance, 1972 and Turtle and Tortoises Protection Conservation Rules, 2014 is without lawful authority as i.e. based on penalties specified in the respective penal clauses upon contravention of the Ordinance/Rules. Beside it is based on presumption and assumption and that cannot be considered as value export within the meaning of Section 25(15) of the Customs Act, 1969. The Export price of any goods has to be agreed upon by the seller and buyer. Neither Conservator Wild Life Sindh or the Collector of Customs has any authority to dispute on the declared value. However, this does not means that the customs is not empowered to determine the value of the exported goods under the provision of Section 25(15) of the Customs Act, 1969, which lays the concept of "open market " value of the goods at prescribed time as enunciated in Explanation-II of Section 25(15). The term "open market" has been further elaborated in Explanation-I and had laid down the parameters as to what is a sale in open market between a buyer and seller independent of each other. Therefore, it is explicitly clear that in view of this specific provision regarding the method and mechanism for determination of value of export consignment, it has been determined in arbitrary/unilateral manner which is alien to the provision of Section 25(15) of the Customs Act, 1969 and this has been validated by the Hon'ble Supreme Court of Pakistan in reported judgment 2007 SCMR 1357 Collector of Customs (Valuation) and another v Karachi Bulk Storage and Terminal Ltd, wherein CPLA No. 676-K/2004 was dismissed being of no merit while holding that :--

"In the case in hand, Division Bench of the High Court after examining the contention of the parties and material placed on record has come to a definite finding that there was no material on record as to what were the grounds or reasons which prompted the Customs authorities not accept the declared value of the molasses and for determining the same at US$. 54/MT as against the declared value High Court found that in view of the lack of material, action of rejection of the declared value and fixing enhanced value molasses would appear to be arbitrary, whimsical, capricious and in complete disregard of Section 25 of the Customs Act, 1969, which require the relevant authority to disclose evidence and adequate material for rejecting the declared value and enhancing the same is to Rejection of declared value of the goods and fixation of its enhance value without disclosing adequate material or reason.

9.The invoking of Section 32(1) and 32(1a) of the Customs Act, 1969 by the Collector of Customs, Exports is also out of context the spirit and essence of Section 32(1) is that the mis-declaration and misstatement so made should be conscious and that should inflict injury to the exchequer as expressed in subsections (2) and (3), which are to be read in conjunction of Section 32(1) not in isolation. The mis-declaration/misstatement so made should be instrumental in monitory gain on the expense of revenue of the exchequer. The cost of the impugned banned goods is not revenue of the exchequer. The consignment in question is not subject to payment of any export or regulatory duty nor qualify for payment of duty drawback or refund of Sales Tax. Resultant, no revenue of exchequer is being evaded by the appellant. When there exist no revenue loss, the mis-declaration/ misstatement so made is without any significance and no consequences flows out of that and this stood vindicated from the reported judgment 2003 PTD 552 Messrs Al-Hamd Edible Oil Ltd. and others v. Collector of Customs and others wherein, their lordship held:--

"A bare reading of Section clearly indicate that it relates to a situation where a person makes any statement or files any documents which is false in any material particular by reason of which any duty or charge is not levied or is short levied or refunded. In such event Customs authorities is empowered to issue to the person concerned a notice to show cause that why he should not pay the loss of revenue suffered by the department and after giving him a hearing, beside any other action under law order payment of the same, if a case is made out. The entire provision revolves around the central point of loss of revenue suffered by the Customs Department on account of the conduct of any person. Mr. Iqbal has not urged that the Department has suffered any loss on account of the conduct of the Appellant. The question of applicability of Section 32 in the present circumstances apparently does not arise."

10.The Hon'ble High Court of Sindh in another Landmark judgment reported at PLD 1996 Karachi 68 Messrs Kamran Industry v. the Collector of Customs (Export) and 4 others held in un-equivocal terms:--

"In the present case the accused has categorically taken the stand that any mis-declaration or under valuation was of no fiscal consequence. Such is also the admitted position which is not disputed where a person submit a declaration in the context of customs clearance and there can possibility be no fiscal consequence contingent upon his declaration and that contingency of no fiscal consequence is either undeniable or regarding which the accused has demonstrated his knowledge or reason to belief that he thought no tax was leviable, by no figment of imagination could it be said that the said person had any knowledge or reason to believe that his declaration/ tatement was false or untrue in any material particular. In this context the contention that no penalty under Section 32(1) is leviable for any alleged under-valuation and mis-description where there can be no motive to evade tax and where such declaration would carry no fiscal consequences is correct. Any other interpretation would also give rise to an absurd situation, where although no tax would be leviable on the main/basic assessment but there could be no possibility of imposition of penalty. Mere allegation without any concrete or positive evidence produced by the customs authority cannot warrant a finding of falsity to the declaration in material particular in context of section 32(1) of the Customs Act, 1969 and its comparable provisions. The Customs authorities were not justified to levy penalty under section 32(1) when admittedly there was no motive on the part of the accused to evade tax."

11.The said opinion was endorsed by the Hon'ble Supreme Court of Pakistan in reported judgment 2007 PTD 2215 Collector of Customs Exports and another v. R.A Hosiery Works wherein the bench presided by their lordship Justice Rana Bhagwandas held that:--

"Provision of Section S.32 (1) of the Customs Act, 1969 would be attracted only when the mis-declaration or misstatement was made with a view to obtain illegal gain by evasion of payment of custom duties and other taxes or by causing loss to the government revenue mis-declaration alleged to have been made in the case, was neither for evasion of payment of Customs duty or other taxes/charges nor the same had caused any financial loss to the Government. Petition for leave to Appeal by the authority being without merit, was dismissed."

12.Upon examination of the notice under Section 171 of the Customs Act, 1969, it has been observed that it is for the seizure of 1900 kgs (4342 pieces of Turtle skulls, plastron and fringes) not for 2102 kgs of dried fish maw and dried fish skin, resultant, these cannot be ordered to be confiscated by the Collector of Customs, Exports for any purpose including destruction. It has also been observed that the seizing of goods not permissible to be exported under the respective Appendixes of the Export Policy Order, 2013, if attempted to be exported fall within the ambit of Section 2(s) of the Customs Act, 1969. Invoking of the said section is mandatory in the notice under Sections 168(1) and 171 of the Customs Act, 1969 and likewise in the show cause notice. By virtue of non invoking of the said Section in the notice and show cause notice issued/served under Sections 171 and 180 of the Customs Act, 1969, rendered the notice illegal and the followed proceeding also became illegal and void and ab-initio as held by the Superior Judicial For a in reported judgment referred in para 4(iii) supra.

13.Notwithstanding, to the deliberation made here-in-above, it is admitted fact that from the goods anticipated to be exported by the appellant, 1900 kgs of Turtle skulls, plastron and fringes have been found mixed in the goods, which is inhabitant of Indus River System and endangered species and protection of those is mandatory on the countries signing the protocol under the treaty of (CITES), Government of Pakistan is one of the signatory country.

14.Coming to the plea of appellant that his partner namely Ali Ahmed Soomro was entrusted with the job of procuring the dried fish maw, dried fish skin by him for the purpose of export and he exclusively prepared the modus oprendi of exporting the Turtles skulls, plastron and fringes and procured the same from the Empress Market and mix that with the dried fish maw and dried fish skin. Present appellant he has no knowledge about the entire activity and he came to know only when Deputy Collector, KICT called him and this stood validated from his plead guilty before the Special Judge (Customs and Taxation), who has penalized him with the penalty of Rs. 500,000.00. We are not inclined to buy the said arguments. Being the Managing Partner, he is responsible to keep a check on his partner and employees, instead of reposing blind trust, which is alien in the norms of business. Negligence or slackness is no excuse, one should be vigilant. But on the contrary it is also the responsibility of the Customs to follow and observe the dictums of law while taking any initiative against the importer or exporter and liable to combat the same with proper and appropriate force of statutory obligations. In this particular case where two persons from the company allegedly held responsible for the act and omissions conducted during the procedure of export and clearance thereof, there is no evidence available on the record to distinguish between the acts of two individual members to prove exactly what part was taken by each of them in said alleged offence. To deal with such circumstances, Section 178 of the Customs Act, 1969 lay down the what act will be deemed to be done by the conspirators if any held responsible. It is mandatory and essential ingredient for attributing the joint liability on to the person accompanying the role. Owner of the goods liable to be confiscation under the Customs Act, 1969, for creating such liability there should be an evidence whether the other persons have the knowledge of the fact that the goods are contraband, smuggled one and liable to be confiscation. It is prime duty of the prosecution and the seizing agency to prove by some cogent evidence that the persons have the knowledge of such goods confiscated in the present case. In absence of such evidence the mere finding of the mixed goods found in the subject case by no means, sufficient to make out the case against the person who has no knowledge about such activity. After perusal of the show cause notice even otherwise the provisions of Section 178 of the Customs Act, 1969 has never been invoked nor been attributed against the appellant.

15.That prior to imposing penalty, the adjudicating authority has to take into consideration the profile of the importer and his line of business and the relevant clause of the Provision of Section 156(1) of the Customs Act 1969. Indeed the clauses of Section 156(1) defines pitch of penalties and other actions, but none of the clause are mandatory in nature, it is left for the discretion of the adjudicating authority and the court to imposed penalty defined therein to the extent of "he" or "it" feel appropriate. The adjudicating authority is also empowered to let free the person/company with a warning. In the instant case the respondent has imposed huge penalty of Rupees 25 million and also while ignoring the fact that Special Judge (Customs and Taxation) has also imposed a penalty of Rs. 500,000.00 upon him for pleading guilty for return of his passports, which is a vital instrument, desired for traveling. The Collector of Customs also lost sight of the fact that the appellant is not a habitual offender and the law laid down by the Superior Judicial Fora that the penalty so imposed should be for deterrence and not for crucifying the offender. The penalty should be of such amounts, which pinch the offender as harsh penalty served no purpose instead it frustrate the offender and he became desperate and hardened criminal. In judging advocacy of the penalty certain other factors, such as circumstances in which was committed, age and character of the offender and injury to individual and society etc. required to be considered, reliance is placed on 2006 PCr.LJ 956. The pitch of penalty has to correspond with the gravity of the offence avoidance from such norms by the respondent cannot be appreciated at all and declare it an act of arbitrariness and nullity to the spirit of the Provision of the Section 156(1) of the Customs Act 1969.

16.Therefore, export of endangered species of wild Fauna and Flora (CITES) and all animals, mammals, reptiles and endemic birds protected under any provincial wild life act are prohibited for their export but there are some exceptions as per the Export Policy Order, 2013 Schedule-I Serial No.1 Column No.4 where the specific authorization to issue NOC for export is required from National Council for Conservation of Wildlife (NCCW) and after the mandatory checking by the provincial wildlife department at the airports or exit points. It is also evident from the Schedule-I of Export Policy Order, 2013, Serial No.5 Column No.3 the description mentioned about the wild mammals and reptiles and does not mention the parts and articles whatsoever permits dealing to mammals and reptiles in any column No.4 of the said schedule as such, there is no embargo for their export. By taking the advantage of the proposition placed before us it is our considered responsibility to refer one of the statutory obligation which is mandatorily required to be observed and applied by the respondent to overcome such circumstances, in this regard the Majlis-e-Shoora (Parliament) after reviewing the ascent of President of Pakistan on 04-05-2012 passed the Act called Pakistan Trade Control Act of Wild Fauna and Flora 2012. According to that Act the apprehension of export, re-export, import and punishment for contravention was also defined, no person shall export or re-export out of or import into Pakistan in specimen included in any Appendix of the Convention except as provided under Sections 5, 6, 7 and 9. Such export, re-export or import shall be through a customs port of exit or entry, and subject to any other law relating to control on export, re-export and import for the time being in force. Section 5 relates with the export to Pakistan, Section 6 relates with the import from Pakistan, Section 7 relates with the re-export from Pakistan and Section 9 relates with the export or re-exports to or imports from State not a party of the Convention. For the reasons better known to the respondent and their affiliates they hopelessly failed to invoke the Sections of Pakistan Trade Control Act of Wild Fauna and Flora 2012 in the show cause notice. Even otherwise under such circumstances and with effect of the statutory obligations, the proper authority to take cognizance of the said contravention presently dealing with by this Court is originally under the jurisdiction of Government of Sindh, to which the matter should have been reported for taking action under the respective provisions of Sindh Wildlife Protection Ordinance, 1992 and Pakistan Trade Control Act of Wild Fauna and Flora Act, 2012. After perusal of the record it is evident that the subject seizure was conducted by the MCC-Export Collectorate without the involvement of provincial wildlife department, whose mandatory responsibility under the Export Policy Order to check the subject consignment at airport or any exit point at the time of export.

17.It is also imperative to observe here that in the instant matter the appellant has brought the substance to distinguish the unavoidable circumstances which are infact beyond his control. The element of mens rea connivance with officials of Customs to cause any loss to the government exchequer has not been equated by the respondent/seizing agency. Under these circumstances we intend to refer the observations made by the Honourable Supreme Court of Pakistan in hallmark judgment.

18.In order to thwart the commission of unlawful act is derogation of provision of statute the Honourable Supreme Court of Pakistan in reported judgment PTCL 2003 CL 345 held that 'the things should be done as they are required to be done and not at all'. It is now well settled and established principle of law that whether the Court, his ruling without jurisdiction or taking any action beyond the sphere allotted to the courts of law and action taken against the prescribed provisions of law and jurisdiction outside the area within which the subject law recognized his privilege to err, then such action amount to usurpation of power warranted law and such act is in nullity, that is to say, that the result of a purported exercise of authority which has no legal effect whatsoever in such a case, it is well established that a Superior Court is bound not to give effect to it. The said ration was maintained, in the case of E.A Avans reported as PLD 1964 SC 536 "where it has been unambiguously and categorically held that if the doing of a thing is made lawful in a manner than doing of that thing in conflict with the manner prescribed will be unlawful". The Honourable Apex Court in 2001 SCMR 838 and 2003 SCMR 1505 held that "while considering the impact of violation or non-observance of the method prescribed by law for doing an act in a particular manner or mode, such provision of law is to be followed in letter and spirit and achieving or attaining the objective of performing or doing of a thing in manner other than provided by law would not be permitted. The same observations has been made by the Honourable Supreme Court of Pakistan in Civil Petition filed by Director General of Intelligence and Investigation and other v. Messrs Al-Faiz Industries (Pvt.) Ltd., and others reported as 2006 SCMR 129 "If the law had prescribed method for doing of thing in a particular manner, such provision of law is to be followed in letter and spirit and achieving or attaining the objective of performing or doing of a thing in a manner other than provided by law would not be permitted". It is clear from the aforesaid observations that the Federal Government has adopted the policy to observe and implement the law and procedure prescribed and listed in the Convention of International Trade in Endangered Species of Wild Fauna and Flora (CITES) and the Act passed thereon but in this present case the respondent hopelessly failed to comply and adopt the mandatory conditions mentioned in the said laws.

19.By getting the strength, what has been stated and observed herein above particularly the interpretation of law and legal prepositions in the light of prescribed law and to follow the ration decidendi from the judgments of Superior Courts along with our additional observations made thereon, the adjudicating officer passed the impugned order with least application of judicious mind, pitch of penalty does not correspond with the gravity of offence, we hereby pass the order to remit the penalty imposed on the appellant Yingquan Pang Managing Partner of M/s. Hongda Trading Company along with the direction to release the confiscated consignment as per the declaration/GD filed by the appellant. The impugned order is modified only to the extent of observations made above. Respondents are also directed to issue delay detention certificate in accordance with law if so required. Appeal is accordingly disposed of in above terms with no order as to cost.

20.Order passed and announced accordingly.

RR/7/Tax(Trib.)Order accordingly.