MUHAMMAD JAWED VS The DIRECTOR, DIRECTORATE GENERAL OF INTELLIGENCE AND INVESTIGATION, FBR, KARACHI, 2016 PTD-CUSTOMS-APPELLATE-TRIBUNAL-LAHORE 2190 (2015)

2016 P T D (Trib.) 2190

[Customs Appellate Tribunal]

Before Adnan Ahmed, Member (Judicial-II)

MUHAMMAD JAWED and 3 others

Versus

The DIRECTOR, DIRECTORATE GENERAL OF INTELLIGENCE AND INVESTIGATION, FBR, KARACHI and another

Customs Appeals Nos. K-1639 to K-1642 of 2014, decided on 20/01/2015.

(a) Affidavit---

----Non-submission of counter-affidavit whether by will or default, forfeit right of respondent to deny assertion made in the affidavit---Where no counter-affidavit had been filed by respondent, appeal on facts and grounds of case would confirm that deposition made by appellant in memo of appeal and affidavit were to be deemed to be true and correct.

[Case-law referred].

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

----Ss. 162 & 163---Search warrant and arrest without warrant, powers of---Search under S.163 of Customs Act, 1969 had to be made by Officer concerned strictly in accordance with spirit of its expression after exhausting recourse of obtaining a search warrant in terms of S.162 of Customs Act, 1969 from Judicial Magistrate on basis of application made by Department stating therein grounds of belief that goods liable to be confiscated should be useful as evidence in proceeding under the law---Judicial Magistrate after going through request, if felt appropriate, issue search warrant, which had to be executed in same way and had the same effect as of search warrant issued under Cr.P.C.

[Case-law referred].

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

----S. 163---Issue of search warrant, dispensation of---Scope---Requirement of issue of search warrant by Magistrate could be dispensed with under S. 163 of Customs Act, 1969 which empowered Department to make search without warrant if department was satisfied that there was danger of removal of goods if search warrant was obtained---Department had to record such reason in statement so prepared in writing containing ground of belief with regard to danger which it apprehend---Search was conducted under S. 163 of Customs Act, 1969 by an officer of below the rank of Assistant Collector Customs and without recourse to mandated requirement of S.162 of Customs Act, 1969---Search was, therefore, without lawful authority and jurisdiction and no superstructure could be built upon such search.

[Case-law referred].

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

----S.91---Official of department was not empowered under any provision of Customs Act, 1969 to approach any private warehouse---Such official could visit for inspection bounded warehouse/stored goods by public on payment of warehouse charges---Neither Departmental official could ask anything with regard to goods stored, either from owner of warehouse or from person whose goods were stored in the warehouse---No provision with such regard was available in Customs Act, 1969 or by notification---In absence of availability of enabling provision official of customs were barred by law to ask about Goods Declaration or purchase bills/receipts of warehoused goods.

[Case-law referred].

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

----Ss. 168(1) & 171---Seizure of things liable to confiscation---Contention of owner of warehouse was that inspite of searching warehouse and preparation of seizure report department had not served seizure notice as mandated under S. 168(1) of Customs Act, 1969 and notice under S. 171 of Customs Act, 1969---In spite of mentioning name of importer in seizure report, no notice either under S.168(1) or S.171 of Customs Act, 1969 had been served which was prerequisite prior to preparation of seizure report---Validity---Seizure notices under Ss.168(1) & 171 of Customs Act, 1969 were intentionally not served on owner because seizure so conducted was unlawful as no enabling provision exist in Customs Act, 1969 to do so in addition to demanding of Goods Declaration or purchase receipt/bills from owner of warehouse---Such case was framed malafidely which stood vitiated for non-serving of mandatory notices in terms of Ss. 168(1) & 171 of Customs Act, 1969.

[Case-law referred].

(f) Burden of proof---

----One who alleges has to prove the same.

[Case-law referred].

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

----S. 179---Adjudication, power of---Requirements---Powers of adjudication had been defined in S. 179 of Customs Act, 1969---Powers so delegated had to be assumed on basis of amount of duty and taxes involved excluding conveyance---Officials of department had clubbed consignments of four importers into one in seizure report and contravention report and forwarded the same to department for issuance of show-cause notice---Department instead of segregating amount of duty and taxes of each importer, issued a single show-cause notice to all importers---Department interpreted S. 179 of Customs Act, 1969 in accordance with whims and wishes which found no place in legal parlance and assumed the powers which were vested in its subordinate authority---Validity---Functionary of the department was not allowed to assume powers of an appropriate adjudicating authority whether subordinate or superior---Assuming of jurisdiction was a mandated requirement of law and its non-fulfillment would entail entire proceeding to be coram non-judice.

[Case-law referred].

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

----S.168---Detention, seizure and confiscation---Scope---Delay in transporting the goods after clearance---Effect---No limitation was provided in any provision of Customs Act, 1969 to transport or sell goods within such period from date of clearance, importer was to transport or sell goods in accordance with his wishes and convenience---In absence of enabling provision, objection of department about delayed transport of goods was of no legal effect and could not be made basis for detention/seizure/confiscation of goods when those were lawfully imported and cleared and transported to owner for selling as per an agreement executed between importer and owner.

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

----S. 179(3)---Order-in-original, passing of---Delay of 48 days---Show-cause notice was issued by department on 27-03-2014---According to S.179(3) of Customs Act, 1969 an order should be passed by Authority within 120 days from the date of show-cause notice i.e. on or before 25-07-2014---Department passed the impugned order on 11-09-2014---Such order was barred by time, without power/jurisdiction and not enforceable under law---Appeal was allowed, in circumstances.

[Case-law referred].

(j) Jurisdiction---

----Assuming of jurisdiction was a mandated requirement of law and its non-fulfillment would entail the entire proceeding to be coram non judice.

Nadeem Ahmed Mirza (Consultant)/Obayd Mirza and Mirza Muhammad Abeer Nadeem for Appellants.

Ghulam Muhammad Sher, I.O. (for Respondents).

Dates of hearing: 15th 22nd December, 2014 and 5th January, 2015.

ORDER

ADNAN AHMED, (MEMBER (JUDICIAL-II)).---Through this common order, I intend to dispose off these 04 appeals directed against Orders-in-Original No. 128/2014-2015, dated 11.09.2014 passed by the Collector of Customs (Adjudication-I) (here-in-after referred as respondent No. 2).

2.Since, these appeals are based on similar facts and questions of law, therefore it is needless to reproduce facts of each case separately, hence for reference the facts of Appeal No. K-1639/2014 are taken into consideration for decisions and brief facts of the case are that the appellant is a Broker/Commission Agent and he sells the goods imported by different companies of Pakistan and charge commission of 1% on the selling of the goods. He received goods i.e. 270 drums of R.P. Oil from Messrs New White Chemical House through Sitara Sher Hassan Goods Transport Company, Bilty No. 0499 dated 16.02.2014, which he had stored in Tayyaba Open Warehouse before entering into sale agreement with prospective buyers. The Officials of Directorate General of Intelligence and Investigations FBR (here-in-after to be referred as respondent No. 1) conducted a search of the aforementioned warehouse and demanded the appellant to substantiate ownership of the stored goods, which were submitted along with other respective documents pertaining to the import of the said goods, to the Official of Respondent No.1 who despite finding no fault in the documents discarded those as not relevant and seized the goods vide seizure notice dated ---03-2014 and thereafter prepared contravention report and forwarded it to Respondent No.2, who issued Show Cause Notice dated 27.03.2014. The appellant submitted reply dated 09.04.2014 in which he again submitted the respective documents that substantiated his ownership of the goods and controverted the unfounded accusation leveled against him. The Respondent No.2 however disregarded the arguments and documents and passed Order-in-Original dated 11.09.2014, paras 21 and 22 are relevant, which are reproduced here-in-below for ease of reference:---

"21- I have gone through the case and consider the written replies of the respondents, I have also carefully perused the comments of the Directorate of Intelligence and Investigation, have considered arguments made during hearing of the case. The crux of the issue is whether the goods seized by staff of Directorate General of Intelligence and Investigation on 7th March, 2014 at Messrs Tayyaba Open Place Warehouse are smuggled as defined in Section 2(s) of the Customs Act, 1969 or not. The department pleads that the goods, which were deposited in the warehouse by four different persons, are smuggled Petroleum Product (R.P. Oil, Slack Wax, Foots Oil). All respondents were advised to prove legal import and possession in terms of Section 156(2) of the Customs Act, 1969. Two of the four respondents, namely Shoaib Bhai and Malik Shabbir who attended the hearing claimed to be agents of the importer but were unable to substantiate this claim by any agreement with record of financial transaction establishing their commissions, etc. The documents they submitted too were sketchy as the triplicate copies did not bear the cross border endorsement nor were they able to justify the delay in shipment or weight differences. Messrs Taqdeerwala was represented by an Advocate who also claim to represent the importer Messrs Snow white Chemical House, Quetta. The Advocate could not satisfactorily respond to the objection of the department regarding delay in shipment and weight difference. Messrs Rehan Enterprises claimed he too was an agent of the importer's but in his case; the goods seized were of two different importers Messrs Javed Enterprises and Messrs Frontier Enterprises. It was claimed that the slack wax was imported by Messrs Javed Enterprises, while foots oil was imported by Frontier Enterprises. No one appeared to claim the goods on behalf of Messrs Frontier Enterprises, who it was claimed were represented by Mr. Shahzad Ahmed. Mr. Shahzed Ahmed produced copies of triplicate GD's with cross border endorsement, and he also claimed that all his drums were new and had the manufacturer's name printed on them. He further produced weighment slips for his consignment for weigh bridges in Quetta and Karachi which appeared to confirm his stance that the imported goods were same as ones seized by the staff of D.G. I & I. Two bills of ladings where the goods were transported to Taftaan on 31.12.2013 and 01.01.2014 each carrying 114 and 120 tons were also presented. A release order from Quetta dated 06th January with cross border endorsement on 9th January and date of storage of 9th January all appeared to confirm that the goods were same as those legally imported. The response of the department though is interesting. While they were asked to confirm or deny a simple matter, whether the drums claimed to have been imported by Messrs Javed Enterprises have the manufacturers name printed on them or not, which was confirmed by the DR. However, he continued to tried to established that the goods were smuggled by stating that the bill of lading was only for 114 drums while CMR was for 120 drums. The fact is that both of the documents quoted are in file and are Irani bill of ladings for two truck which transported goods to the Taftaan Borders. Adding these two drums comes to 234 drums for which GD was filed on 6th January. The GD clearly states two truck Nos. JT-9129 and JT5397 and so taking only into account the goods of one truck and not the other is mis-leading the fact that no drums imported in container by land from Iran have any marks and Number on them is a known fact but atleast the marking on the drums confirmed the manufacturers as given in the bill of ladings, which does verify to some extent the claim of the importer. Further the weighment slip produced of Karachi and Quetta also confirm the weight of the goods, which has not been commented upon by the DR in his reply.

22- In view of the above facts I hold that other than the 216 drums of slack wax imported by Messrs Javed Enterprises, Quetta and stored in the name of Messrs Rehan Enterprises, no one else, including the foots oil consignment stored in the name of Messrs Rehan Enterprises have been able to satisfactorily establish that the goods seized were genuine and legitimate imports and that they were no smuggled goods as defined in section 2(s) of the Customs Act, 1969. I accordingly order confiscation of 560 drums of R.P. Oil and foots oil seized from Tayyaba Open Place Warehouse situated at Plot No. D-241 S.I.T.E. Area Karachi under clause 89 of section 156(I) of the Customs Act, 1969. As regards the 216 drums of slack wax hearing inscription "Slack wax made in Iran Esphan Oil Co. I hold that sufficient evidence has been produced to established bona fide import of the same and they are accordingly released to the lawful importer and his agent"

3.The appellant being aggrieved by the order of respondent No. 2 filed Appeal No.K-385/2014 before this Tribunal on the strength of the ground and which read as follows:--

a.That prior to commenting upon the legal aspects of the case it is advantageous to state that indeed the respondent No. 1 are appointed and designated as "Officer of Customs" under Section 3A of the Customs Act, 1969 and they derived power for functioning from notification No. S.R.O. 486(I)/2007 dated 09.06.2007 said to be within the territory of Pakistan for thwarting the act of smuggling but this doesn't means that they have unfettered powers to approach any warehouse situated in Karachi for inspection of the warehoused goods within city. Their jurisdiction in principal is restricted to the territory not falling within the ambit of Sections 9 and 10 of the Customs Act, 1969 and beyond 5 kilometer of the border of India and Iran in terms of Section 177 of the Customs Act, 1969 to be read with notification S.R.O. No. 188(I)/83 dated 12.12.1983. The goods in question does not at all falls with in the ambit of Section 2(s) and section 177 of the Customs Act, 1969, instead are lawfully imported and cleared after completion of all the codal formalities.

b.The official of respondent No. 1 are even not empowered to ask from either the warehouse owner or from the appellant about the legality of the warehoused goods unless there exist any provision in the Act or notified through an SRO that the person who warehouse in Karachi the goods imported and clear from any defined port/dry port of Pakistan. In the absence of availability of any section in the Act and the notification, demanding Good Declaration/receipt is nullity to law and hold no ground and the stance of the appellant stood validated form the reported/un-reported judgments K-719/02, H-720/02, H-686/03, Q-776/04,-2005 PTD (Trib.) 135 and PLD 1991 Supreme Court 630.

c.That the official of respondent No. 1 were not empowered to search the premises of the warehouse in exercise of the power vested with under the provision of Section 163 of the Customs Act, 1969. It is a trite law, that if the search is not carried out in accordance with law and the dictum laid down by the Honorable Supreme Court in a number of judgments, then the whole foundation of the case falls on the ground, and, here in the instant case no search was ever carried out on the premises of M/s. Tayyaba Open Warehouse, S.I.T.E, Karachi, who warehoused the goods in accordance with the rule of business.

d.That the case has been made on the basis of an alleged search under Section 163 of the Customs Act, 1969 on the warehouse Messrs Tayyaba Open Warehouse, S.I.T.E, Karachi without recourse to mandated requirement of section 162 ibid. the search could only be carried out by the Deputy Collector if he believes that there is a danger that before a search could be carried out in terms of section 162 after obtaining a search warrant from the Magistrate, the documents or things or goods liable for confiscation would be removed from the said place, he after preparing a statement in writing of the grounds of his belief and of the goods, documents or things for which search is to be made, search or cause search to be made for such goods, documents or things in that place. However no such details of search were provided to the appellants nor any due process of law was ever disclosed to the appellants and hence the search on the basis of which the whole case has been made out was illegal and all subsequent acts of the respondent including the show cause notice and the impugned order are liable to be set aside on this ground alone. It is now a well settled proposition of law that the search carried out in terms of section 163 of the Customs Act, 1969 without recourse to the mandatory provisions of section 162 of the Act ibid, the same is illegal and any case made out on the basis of documents seized on the basis of such search cannot be used against the person from whose premises the same have been obtained. The following case law is reproduced in support of the above contention and therefore the whole case made out against the appellant is illegal, mala fide, tainted with colorful exercise of use of unfair discretion and hence liable to be set aside.

2003 PTD 2037 Messrs Ihsan Yousaf Textile Mills v. Federation of Pakistan (Lahore High Court), 2004 PTD 2952 N.P. Water Proof Textile Mills (Pvt.) Limited v. Federation of Pakistan, 2005 PTD 1933 Collector of Sales Tax and Central v. Messrs Mega Tecch (Pvt.) Ltd. (Supreme Court of Pakistan), 2003 PTD 1034 Federation of Pakistan v. Messrs Master Enterprises (Pvt.) Ltd. (Supreme Court of Pakistan), PLD 1993 SC 630 Collector of Customs (Pvt.) v. Muhammad Mahfooz (Supreme Court of Pakistan) and 2009 PTD 1083 A.M.Z. Spinning and Weaving Mills (Pvt.) Ltd. v. Federation of Pakistan (Karachi High Court).

That irrespective of the referred in above illegality it is appropriate for the appellant to state that it was mandated upon the respondent No. 1 to act within the frame work of the definition of the word "smuggle" given in subsection 2(s) of the Customs Act, 1969. For ease verbatim of the same is reproduced here-in-under:--

(a)"smuggle" means to bring into or take out of Pakistan in breech of any prohibition or restriction for the time being in force, or evading payment of customs duties or taxes leviable thereon,

(i) Gold bullion, silver bullion, platinum, palladium, radium, precious stones, antiques, currency, narcotics and narcotic and pyschotropic substances; or

(ii) Manufactures of gold or silver or platinum or palladium or radium or precious stones, and any other goods notified by the Federal Government in the official Gazette, which, in each case, exceed [one hundred and] [fifty thousand rupees] in value or

(iii) Any goods by any route other than a route declared under section 9 or 10 or from any place other than a customs station and includes an attempt, abetment or connivance of so bringing in or taking out of such goods; and all cognate words and expressions shall be construed accordingly.]

(b)That customs ports etc. as expressed in clause (iii) of Section 2(s) are notified through various notifications in terms of Section 9 of Customs Act, 1969. Whereas, the border area of Pakistan Territory, whereas restriction on the possession of goods in certain areas (borders) as ex-pressed in Section 177 ibid is also notified vide Notification No. S.R.O. 118(I)/83 dated 12.02.1983, ear marking the area of 5 miles adjacent to the Frontier of Pakistan with India and Iran to be the area to which Section 177 of the Customs Act, 1969 shall apply

That the goods warehoused by the appellant were legally imported by his supplier from the MCC of Quetta after fulfillment of all the codal formalities meaning thereby those were neither brought by his supplier or by the appellant into Pakistan in breech of any prohibition or restriction for the time being inforce under the Import Policy Order, 2009 or while evading payment of customs duties leviable thereon as expressed in clause (a) of Section 2(s). Nor were brought into Pakistan by any other route then the routes expressed in section 9 or 10 of the Customs Act, 1969 or from any other place then a customs station as per clause (a)(iii) of Section 2(s) instead were lawfully transported from Quetta by the appellant's supplier and warehoused by him in Karachi through proper bilty and after payment of warehouse charges, those cannot be considered as smuggled by any stretch of imagination. Hence searching of warehouse, seizure subsequently for the purpose of adjudication is nullity to the definition of the word "Smuggle" rendering the entire act of the respondent No. 1 and the respondent No. 2 right from search interruption till issuance of show cause notice and subsequently passing order-in-original on that as ab inito, null and void.

(f)That it is also imperative for the appellant to add that in the light of expressed provision of Section 2(s) and Section 177 of the Customs Act, 1969 and S.R.O. 118(I)/83 confirms that the warehousing of goods within the territorial limit of Pakistan do not constitute an offence, meaning thereby that these cannot be termed as smuggling. It would also not be out of place to state that after clearance of the goods from Customs, either from Area of Sea Port or Dry Port, they are out of the ambit of Customs Department including the respondent No.1 and any subsequent search upon warehousing of those goods within the territory of Pakistan is beyond their jurisdiction as none of the provision of the Customs Act, 1969 authorizes any designated official of Customs to search the warehouse on sham pleas of smuggling. Reference is placed on the order of the Tribunal in Customs Appeals Nos. K-719/02, H-720/02, H-686/03, Q-776/04, 2005 PTD (Trib.) 135 and PLD 1991 Supreme Court 630.

(g)That the respondents have also lost sight of the legal fiction that if the goods found during the search are freely available in the local market without any curb or restriction such goods least falls within the degree of smuggled as defined in Section 2(s) of the Customs Act, 1969 and are presumed to have been duty paid. The said opinion stood validated from the reported judgment of Apex Court 1995 SCMR 387 Sikandar A. Karim v. The State. The Double Bench of the Hon'ble Supreme Court comprised of Justice Saeed-uz-Zaman Siddiqui and Justice Mukhtiar Ahmed Junejo held in unambiguous term that "If the item alleged to be smuggled by the prosecution were freely available in the open market and the import of such goods were not banned in the country, presumption could arrive that the goods in question were lawfully brought in the country unless contrary was shown". As per dictum laid down by the Hon'ble Supreme Court the Appellate Tribunal in Customs Appeal No.339/2000 Mr. Muhammad Hanif v. The State and 301/2003 Nasser Ahmed v. Collector of Customs, Sales Tax and Excise, Quetta that held that "to produce legal import documents is nothing but to put undue pressure on the business community inspite of the fact that it has been observed number of time by the Supreme Court of Pakistan that the goods which are freely available in the market are presumed to be have been legally imported and duty paid. Even otherwise no reasonable ground has been given in the order-in-original that even for the sake of arguments, it is taken that the receipt produced by the appellant and issued by Saifullah Khan have no legal status then also it cannot be concluded that the said transaction was illegal, making way to call upon appellant to produce import documents.

(h)That upon submission of respective import documents and bilty of transportation from Quetta to Karachi, the appellant discharged the initial burden laid upon him and the onus of burden to prove the allegation stood shifted on the shoulders of the respondent No. 1 under Articles 117 and 121 of Qanun-e-Shandat (10 of 1984) as per laid down law by the Superior Courts of Pakistan namely S.M. Anwar Sethi v. South British Insurance Company Ltd., PLD 1975 Kar. 458; Barkat Ali v. The State PLD 1973 Kar. 659; Cross on evidence 1967. 3rd Edn., London Butterworth; A Practical Approach to Evidence by Peter Murphy 1988 3rd Edn. London, Black Stone Press Ltd; The Modern Law of evidence by Adrian Kean 1985, 1st Den. Oxford, Professional Books Ltd., Mst Safia Begum v. Mst Malkani and another PLD 1965 Lah. 576; Akber Ali v. Ehsan Ellahi PLD 1980 Lah. 145; Government of Pakistan v. Moulvi Ahmed Saeed 1983 CLC 414; Muhammad Sarwar v. Fazal Rehman 1982 CLC 1286, Sardar Ghulam Nabi Khan v. Azad Government of State of Jammu and Kashmir 1984 CLC 325; Eastern Rice Syndicates v. CBR PLD 1959 SC (Pak) 364; The Collector Central Excise and Land Customs v. Imdad Ali 1969 SCMR 708 and Messrs Latif Brothers v. Deputy Collector of Customs, Lahore 1992 SCMR 1083.

(i)That the said proposition of law was explained with clarity by their Lordship of High Court of Sindh in reported judgment PLD 1996 Karachi 68 Kamran Industries v. Collector of Customs (Exports) and Order of the Custom Tribunal in Customs Appeal No. K-391/04 Mr. Muhammad Mir v. Collector of Customs (Adjudication), Karachi. While holding that:

"For every offence for which the accused is charged under the Customs Act he shall have to disprove the allegation of the Customs Authorities is entirely without any obligation upon the Customs Department to adduce evidence, it would amount to affording unfettered, naked and arbitrary discretion to the authorities who may at their sweet will make out false cases against importers without the need of proving the sanctity of their actions. Such cannot be the intention of Parliament while the Courts are under an obligation to place such construction on statues which would be beneficial to the widest extent and which would make the legislation operate fairly, justly and equitably and not unreasonably (see Mst. Zainab v. Kamal Khan (PLD 1990 SC 1051). This Court is also of the view that a construction is to be placed upon statutes which would minimize the discretion vested upon the executive authorities. As absolute power corrupts an interpretation fettering the discretion of the executive authority would be more in line with the principles of equity and justice. The issue regarding the applicability of section 187 is to be looked from another angle i.e. in case we were to hold that due to Section 187 the entire burden to dispute the entire case rest upon the accused alone. The executive authorities would be let loose and given a wide, naked and arbitrary discretion to operate without any guidelines which would then leave section 187 susceptible to a Constitutional challenge upon its vires on this score alone. By the interpretation as proposed above any redundancy or illegality would also be avoided.

That the official of respondent No. 1 despite searching the warehouse and subsequently detaining the goods of the appellant prepared seizure report without fulfilling the mandated requirement of law i.e. serving the seizure notice in terms of section 168(1) of the Customs Act, 1969 along with notice under section 171 of the Customs Act, 1969 on the owner of the warehouse due to the reason that in that case show cause notice has to be issued to the warehouse owner and in case of adjudication, the case would had been thrown out by the adjudicating authority on the face of the said officials.

That despite narrating the events and name of the appellant in the seizure report the official of the respondent No. 1 also failed to serve seizure notice and notice under section 177 on the appellant. Non serving the notice render the whole proceeding infested from legal infirmity and as such of no legal effect as held by Superior Judicial Fora in umpteenth reported judgment e.g. PTCL 1994 CL 22 (sic), 1983 PCr.LJ 620, 1983 PCr.LJ 623, 1983 CLC 786, PTCL 1983 CL 47(sic), 1987 PCr.LJ 1413, 1987 PCr.LJ 1091 and 2004 PCr.LJ 1958.

(i)That upon receipt of the contravention report, it was mandated upon the respondent No. 2 to look into the actual facts of the case and the applicable provision of the Act, Rules and Regulation independently and fairly. Instead he copy pasted the facts and allegation of the contravention report in the issued show cause notice rendering it nullity to the law laid down by the Superior Courts of Pakistan. Reliance is placed on the reported judgment 2004 PTD 369 Messrs Zeb Traders v. Federation of Pakistan. Wherein their lordship of the High Court held in unambiguous terms that:

"The proceeding before Adjudicating Officer, under the Customs Act, 1969 are in the nature of quasi judicial proceedings and issuance of notice under section 180 of the Customs Act, is very important documents. The decision to issue show cause notice is to be taken by the Collector, Adjudication, by application of independent mind and not merely signing the draft show cause notice submitted by the investigation agency separate from the Adjudication Department and each category of officers are required to perform their respective functions/duties under the law. The practice to submit draft show cause notice by the Director General of Intelligence and Investigation to the Collector Adjudication is depreciated."

(m)The section 179 of the Customs Act, 1969 expressed that the power of adjudication has to be determined by the authority on the basis of "amount of duty and taxes involved excluding the conveyance. In the case of the appellant as per the calculation of respondent No. 1 the amount of duty and taxes is 1,694,562.00 and the appropriate authority to adjudicate the cases of said amount rest with the Additional Collector instead the respondent No.2 issued a collective show cause notice to the four different parties and for deriving powers of adjudication, he took the entire amount of worked out duty and taxes of Rs.4,864,021.00. This is not permitted, every party has to be issued a separate show cause notice by the empowered authority. The respondent No.2 interpreted the provision of Section 179 of the Customs Act, 1969 as per his whims and wishes for usurping the power of his subordinate. Nobody is allowed to usurp the powers of his subordinates as held by the Hon'ble Supreme Court of Pakistan in reported judgment PLD 1973 Supreme Court 49 The State v. Zia-ur-Rehman and others and 2009 PTD 1083 that "Superior authority cannot exercise the power of his subordinates for adjudication purpose .....powers of sub-ordinate exercised by superior authority is held as without jurisdiction beside usurpation". Rendering the act of issuance of show cause notice and passing of order-in-original in the instant case without power/jurisdiction, hence ab initio, null and void and coram non judice. It is also settled principle that the exercise of jurisdiction by an authority is mandatory requirement and its non fulfillment would entail the entire proceeding to be coram non judice. Ref: PLD 1963 SC 663, PLD 1971 SC 184, PLD 1976 Supreme Court 514, 1983 SCMR 1232, 1984 CLC 1517, PLD 1995 Kar. 587, PLD 1992 SC 486, 2001 SCMR 103, PLJ 2003 (sic) l660, PLD 2004 Supreme Court 600, PLD 2005 Supreme Court 842, 2009 PTD (Trib.) 1996, 2009 PTD 1628, 2010 PTD (Trib.) 832, 2010 PTD 465, 2010 PTD (Trib.) 1636, 2011 PTD (Trib.) 2114, 2011 PTD (Trib.) 2557, PLD 2014 Supreme Court 514.

(n)The objection of the respondent No. 1 and opinion of respondent No. 3 that the goods seized belongs to 02 importers is also not correct as the goods declaration No. 299 dated 23.12.2013 and 1345 dated 31.01.2014 relates to Messrs Snow White Chemical House, Quetta through which they obtained clearance of the impugned goods after payment of the leviable duty and taxes on 285 drums, out of which 270 were forwarded to the appellant for selling. No limitation is provided in any provision of the Act/notification in regards to the time of transportation. It is for the importer to transport the goods in accordance with his wishes and convenience. In the absence of any enabling provision the objection/opinion is of no legal effect and cannot be made basis for detention, seizure and subsequently confiscation of the lawful legal imported goods, which were transported by him to the appellant for selling as per agreement dated 27.03.2010.

(o)That in terms of proviso of subsection (3) of section 179 of the Customs Act, 1969 the adjudication proceeding has to be completed within 120 days of the issuance of show cause notice or within such period extended by the Collector for which reason shall be recorded in writing but such extended period shall in no case exceed 60 days provided that any period during which the proceeding are adjourned on the account of stay or alternative dispute resolution proceeding or the time taken through adjournment by the petitioner not exceeding 30 days shall be excluded for the computation of the aforesaid period meaning thereby, the total period can be extended from 120 days to 180 days or 210 days.

(p)In the instant case the show cause notice was issued on 27.03.2014 and the order should had been passed by the respondent within 120 days i.e. by 25.07.2014, whereas order has been passed on 11.09.2014 without any extension and the said fact stood validated from the operative part of the order, rendering it barred by time by 48 days. Rendering it without power/jurisdiction, hence ab initio void as held in reported judgments 2008 PTD 60 Messrs Super Asia Muhammad Din Sons (Pvt.) Ltd., v. Collector of Sales Tax, Gujranwala and 2008 PTD 578 Messrs Hanif Strawboard Factory v. Additional Collector (Adjudication) Customs, Sales Tax and Central Excise Gujranwala, 2009 PTD 762 Messrs Tanveer Weaving Mills v. Deputy Collector Sales Tax and 4 others and 2009 PTD (Trib.) 1263 Messrs Syed Bhai Lighting Limited, Lahore v. Collector of Sales Tax and Federal Excise, Lahore and 2 others 2009 PTD 1112 Leo Enterprises v. President of Pakistan and others 2010 PTD (Trib.) 1010 Innovative Impex v. Collector of Customs, Sales Tax and Federal Excise (Appeal), 2011 PTD (Trib.) 79, Fazal Ellahi v. Additional Collector of Customs, MCC of PaCCS, 2011 PTD (Trib.) 987 Unique Wire Industries v Additional Collector of Customs, MCC of PaCCS, 2011 PTD (Trib.) 1146 Kaka Traders v. Additional Collector of Post Clearance Audit and 2012 PTD (Trib.) 1650 Pak Electron Ltd. v. Collector of Customs, Lahore and others.

(q)The appellant carves his right to add any fresh grounds at the time of hearing beside placing any valid incriminating evidence/ documents.

4.No cross objection under subsection (4) of Section 194A has been filed within the period specified therein not till the date of hearing instead Mr. Ghulam Muhammad Sher, Intelligence Officer argued and stated in the hearing that the order-in-original passed by respondent No.2 is correct in fact and law and the appeal is without any substance and as such be disallowed.

5.Rival parties heard case record perused. Prior to dilating upon the merit of the case, it is of vital importance to subscribe here that no counter affidavit has been filed by the respondent Collectorate, resultant, the instant appeal can be allowed on this short point of not controverting the affidavit submitted by the appellant on the facts and grounds of the case, confirming that the deposition made by and on behalf of the appellant in the memo of appeal and affidavit are therefore, deems to be true and correct and no controversy is left behind in regards to the fact of the case. Non submission of counter affidavit whether by will or default forfeit the respondent right to deny assertion made in the affidavit. This proposition of law stood validated from the following judgments of the Superior Judicial Fora reported as (1974) 94 ITR I, PLJ 1972, 71 & 72(sic), 1986 CLC 745 Kar. (1984) 146 ITR 140, 1986 PTD (Trib.) 119, 1986 CLC 1119, 1986 CLC 1408 Kar., AIR 1991 MLD 1243, 1992 SC 317(sic); 1993 SCMR 662, PLD 1996 Karachi 68, PLJ 197(sic) Quetta 66 and 2003 PTD 2118

6.Reverting to the main issue it is my considered view that indeed the officials of respondent No. 1 are delegated powers vide notification No. 486(I)/2007 dated 09.06.2007 for functioning as Officer of Customs within the territory of Pakistan for discourage the maniac of smuggling. The delegated power least give them unfettered powers for playing havoc with the business community, their jurisdiction is restricted to the areas falling outside the area expressed in sections 9 and 10 of the Customs Act, 1969 and beyond 5 kilometers of the border of India and Iran as expressed in section 177 of the Customs Act, 1969 and Notification S.R.O. No.188(I)/83 dated 12.12.83, they seized the goods from an open warehouse situated within the city goods stored in warehouse does not at all come within the ambit of smuggle as only imported or purchased goods are invariably stored in the warehouse well supported with valid and lawful legal import documents and purchased receipt/bills and this has been held by the Hon'ble Supreme Court of Pakistan in reported judgment PLD 1991 SC 630 Collector of Customs (Preventive) v. Muhammad Mehfooz that "Federal 'B' Area in which the raid was made and the subject goods were seized was not included within the limit of Port of Karachi. There is no doubt about the appointment of Collector of Customs, Deputy Collector of Custom and Assistant Collector of Customs and other Officer of Customs could have only jurisdiction only in port area and not in entire Karachi," rendering the seizure of appellant's goods from Tayyaba Open Warehouse situated in Karachi is without any lawful authority/jurisdiction hence of no legal effect, as such void and ab-initio.

7.It has been noticed that the case has been made by the Official of respondent No. 1 on the basis of search under section 163 of the Customs Act, 1969 of the Messrs Tayyaba Open Warehouse S.I.T.E. Karachi, where appellant goods were warehoused. Every search under Section 163 of the Customs Act, 1969 has to be made by the Officer concerned strictly in accordance with the spirit of its expression after exhausting recourse of obtaining a search warrant in terms of Section 162 ibid from the Judicial Magistrate on the basis of an application by Gazetted Officer of the Customs, stating the grounds of his belief that the good liable to be confiscation or documents or things, which in his opinion shall be useful as evidence in proceeding under the act and those are hidden in some secret place where search has to be made after having knowledge of the place which was earlier a guarded secret and the Judicial Magistrate after going though the request if felt appropriate issues search warrant, which has to be executed in the same way and have the same effect as of search warrant issued under the CCP 1898. It is beneficial to reproduce Sections 162 and 163 of the Customs Act, 1969 prior to deliberation on the spirit and essence of these:--

162: Power to issue search warrant:--(1) Any Judicial Magistrate may, on application by a Gazetted Officer of Customs stating the ground of his belief that goods liable to confiscation or documents or things, which in his opinion will be useful as evidence in any proceeding under this Act are secreted in any place within the local limits of the jurisdiction of such magistrate, issue a warrant to search for such goods documents or things.

(2) Search warrant shall be executed in same way, and shall have the same effect as the search warrant issued under the Code of Criminal Procedure 1898 (Act V of 1898)

163. Power to search and arrest without warrant:--(1) Whenever any office of Customs not below the rank of an Assistant Collector of Customs, or any other officer of like rank duly employed for the prevention of smuggling having reasonable grounds for believing that any goods liable to confiscation or any documents or thing which in his opinion will be useful for or relevant to any proceeding under this Act are concealed or kept in any place and that there is danger that they may be removed before a search can be effected under Section 16, he may after preparing a statement in writing of the grounds of his belief and of the goods, documents or things for which search is to be made, search or cause search to be made for search goods, documents or things in that place.

(2) An officer or person who makes a search or causes a search to be made under Subsection (1) shall leave a signed copy of the aforementioned statement in or about the place reached and shall at the time the search is made or as soon as practicable thereafter, deliver further more a signed copy of such statement to the occupier of the place at his last known address.

(3) All searches made under this section shall be carried out mutatis mutandis in accordance with the provision of the Codes of Criminal Procedure 1898, (Act V of 1898)

(4) Notwithstanding anything contain in foregoing subsection and subject to previous authorization by an officer of custom's not below the rank of an Assistant Collector of Customs, any officer of the Customs or any person duly empowered as such may be, with respect to an offence related to exportation of such goods as the Federal Government may, by notification in the official Gazette specified in this behalf---

(a) Arrest without warrant any person concerned in such offence or against whom reasonable suspicion exist that he is about to be concerned in such offence;

(b) Enter and search without warrant any premises to make an arrest under clause (a) or to seize any goods which are reasonably suspected to be intended for exportation contrary to any prohibition or restriction for the time being enforce, and all documents or things which in his opinion will be useful for relevant to any proceeding under this Act; and

(c) for the purpose of arresting detaining or taking into custody or preventing the escape of any person concerned or likely to be concerned in such offence, or for the purpose of seizing or preventing the removal of any goods in respect of which any such offence has occurred or is likely to occur use or cause to be used such force to the extent of causing death as may be necessary.

(5) the provision of subsection (4) shall apply only to the areas within 5 mils of the land of frontier or Pakistan, and within 5 miles belt running along the sea coast of Pakistan.

(6)No suit, prosecution or other legal proceeding shall be instituted except with the previous sanction in writing of the Federal Government against any person in respect of anything done or purporting to be done in exercise of the power conferred by subsection (1) or subsection (2) or, in areas specified in subsection (5) by subsection (4).

8.The requirement of issue of search warrant by the Magistrate could be dispense with under Section 163 of the Customs Act, 1969, which empowers Assistant Collector of Customs or any other Officer of like rank to make search without warrant, if he was satisfied that there was danger of removal of goods if search warrant was obtained and further he had to record such reason in the statement so prepared in writing containing the ground of his belief with regard to danger he apprehend that the goods would be removed before search could be made on the basis of search-warrant and secondly about the goods or documents or things for which the search was to be made. In the instant case the search has been conducted in Tayyaba Open Warehouse under section 163 of the Customs Act, 1969 by the authority below to the rank of Assistant Collector and without recourse to the mandated requirement of section 162 ibid. Resultant, the same is without lawful authority and jurisdiction and no super structure can be built upon such search, rendering the seizure notice and subsequent preparation of contravention report by the Officers of respondent No. 1 and issuance of show cause notice and passing of order-in-original by the respondent No. 2 as of no legal effect and as such void and ab initio and this stood fortified from the reported judgment of superior judicial fora at PLD 1991 SC 630, 2003 PTD 1034, 2003 PTD 2037, 2004 PTD 2952, 2005 PTD 1933, 2006 PTD 1884, 2007 SCMR 1039 and 2009 PTD 1083.

9.That irrespective of the above dicta, the Officials of respondent No. 1 are not empowered under any provision of the Act to approach any private warehouse with the exception of custom bounded warehouses for inspection of the warehouse/stored goods by the public on payment of warehouse charges and neither they are empowered to ask either from the owner of the warehouse or from the person whose goods are warehouse in that, as no provision in this regard is available either in the Act or notification. Therefore, in the absence of availability of enabling section they are barred by law to ask about the Goods Declaration or purchase bills/receipts of the warehoused goods, rendering their act of demanding the corroborated documents corresponding to warehouse goods and this has been held on many occasion by the superior judicial fora in the unreported/reported judgments relied upon by the appellant in ground 3(b) supra.

10.That I am also at loss to digest the fact that in spite of searching warehouse and preparation of seizure report they had not served on the owner of the warehouse seizure notice as mandated under section 168(1) of the Customs Act, 1969 and the notice under section 171 Ibid. Likewise in spite of mentioning the name of the appellant in the seizure report, no notice either under sections 168(1) and 171 has been served on him, which is prerequisite prior to preparation of seizure report. The reason emerged from the perusal of the case is that, seizure notice under sections 168(1) and 171 of the Custom Act, 1969 were intentionally not served on the owner of warehouse because the seizure so conducted was unlawful as no enabling provision exist in the Customs Act, 1969 to do so in addition to demanding of Goods Declaration or purchase receipts/ bills from the owner of the warehoused goods, resultant he is not under obligation to ask for those and supply to the Officials of respondent No. 1. Even otherwise if the case would have been framed against him the adjudicating authority would had thrown the same on their face being of no substance, lawful authority and jurisdiction. Similarly, notices to the appellant was not served as it was in the knowledge of the Officials of respondent No. 1 that their act of terming the warehoused goods as smuggled has no legs to stand in the presence of the submitted documents, confirming that the goods were lawfully imported from Iran and cleared by MCC of Quetta and thereafter transported to Karachi by the importer to their agent for selling in the local market on his behalf and thereafter remit the sale proceed after deducting his commission and transportation expenses and so the warehousing. The case has been framed malafidely and this stood validated (sic) from non serving of mandatory notices in terms of Sections 168(1) and 171 of the Customs Act, 1969, rendering the entire proceeding right from seizure to passing of order-in-original suffer from legal infirmity and as such void and ab initio as held by the Superior Judicial Fora in the reported judgment relied upon by the appellant in the ground incorporated at sub-para (k) of para 3 supra.

11.That as regard to the determination of the fact that as to whether the goods warehoused at Tayyaba Open Warehouse by the appellant are smuggled or not, it is beneficial to reproduce the provision Section 177 of the Customs Act, 1969 and notification S.R.O. 118(I)/83 dated 12.02.1983 with the exception of definition of smuggle, which is reproduced in para 3(e) supra:--

Section 177 Restriction on the possession of goods in certain areas:--(i) This section shall apply to such areas adjacent to the frontier of Pakistan as may , from time to time, be notified by the Board in the official Gazette.

(2) In any area to which this section for the time being applies, no person shall have in his possession or control any such goods or class of goods in excess of such quantity or value as may from time to time be notified by the (Federal Government) or, with the previous approval of the (Federal Government) by the Provincial Government, in the official Gazette, except under a permit granted by the Government which issued the notification in respect of the particular goods or class of goods or by an officer authorized by such Government.

Notification of the Frontier Border area under Section 177 Notification No. S.R.O. 118(I)/83 dated 12th February, 1983.---In exercise of the power conferred by subsection (1) of section 177 of the Customs Act, 1969 (IV of 1969) and in supersession of its Notification No. S.R.O 309(I)/70 dated 22.12.1970 the Central Board of Revenue is pleased to notify the area 5 mile adjacent to the Frontier with India and Iran to be the area to which the said section shall apply.

That after examining the Section 2(s), it is observed that the definition of 2(s) can be applied only if both of two forms are fulfilled. Each of this form have two "limbs" and the form applies if either of its limbs is applicable, These position are narrated here-in-below:

(a) Form (A): The impugned goods should be brought into or taken out of Pakistan either (i) in breech of any prohibition or restriction for the time being in force, or (ii) by evading payment of customs duty and other taxes leviable thereon; and

(b) Form (B): The impugned goods should be (i) either those specifically listed in the definition, i.e. gold bullion, platinum, radium, etc or be notified by the Federal Government in the official Gazette in case those are not freely available in the local market for purchase by the general public, or (ii) be brought into or taken out of Pakistan by a route other than one declared under sections 9 or 10 or from a place other than a customs station.

Unless both forms (A) & (B) applies the case does not falls within the definition of "smuggle" and there can be therefore neither any smuggling of the goods nor can they be held to be "smuggled goods". As far as first form is concerned none of the goods specifically mentioned in the definition are relevant to the present case, therefore for Form (B) to apply, it must be shown that either the goods warehoused have been notified by the Federal Government for the purpose of Section 2(s) and those are not freely available in the local market for purchase by the general public (the first form), or (the second form) the goods in question were brought into Pakistan via route other than one declared in Section 9 or 10 of the Customs Act, 1969 or from a place other than a Customs-Station each of the two forms of course applies to its own footing i.e. , the applicability of one is not dependent on the existence , continuance or occurrence of the other. Obviously, if there is no notification in relation to the goods warehoused, then the first form did not apply and it was only the second form "B" that could apply. The importance of this point can be appreciated by looking at it in reverse. If there is no notification in the field (no application of the form A), and if the goods are brought into Pakistan by the route declared in Sections 9 and 10 and through a customs-station i.e., the form B also does not apply) then form "B" would not apply in such a situation, even though there may be an evasion of customs duty and other taxes or breech of any restriction or prohibition (i.e., form (A) applies). The matter would not come within the ambit of 2(s) in other words, there would be no smuggling of goods, which could not therefore be regarded as "smuggled goods". Another aspect has to be look into in the light of Section 177 of the Custom Act, 1969 and Notification No. 118(I)/83 dated 12.02.1983, which is irrelevant and not applicable in the instant case by virtue of the fact that the goods inspected and seized were warehoused were not within 5 miles of India and Iran Borders, instead at Tayyaba Open Warehouse. S.I.T.E., Karachi. Resultant, the warehousing of the goods by the appellants in Karachi least falls within the meaning of "smuggling" and nor the goods as "smuggled" through any stretch of imagination.

In the instant case the goods warehoused by the appellant were arrived at Karachi through valid bilties of the Goods Transport Company and were imported from Iran and cleared by MCC of Quetta after completion of all codal formalities and payment of leviable duty and taxes thereon and the documents relating to those were supplied by the appellant to the respondents upon demand and during the course of adjudication and even annexed with the appeal in the shape of exhibit, veracity of which has not been denied by the Officials of respondent No. 1, during the course of hearing either orally or through cross objection in terms of subsection (4) of Section 194A of the Customs Act, 1969. Notwithstanding to the said fact, the goods warehoused by the appellant are even freely available in the local market, presumption thereof is that these are duty paid as per the law laid down by the Superior Judicial Fora in the judgments referred by the consultants and advocate and incorporated in this order at para 3(g) supra and which are squarely applicable on the case of the appellant.

12.That upon submission of copies of Goods Declaration, biltties and weigh slips confirming that the goods were imported by Messrs New White Chemical House Quetta, and were cleared by MCC of Quetta and subsequently transported by the importer to the appellant vide Sitara Sher Hassan Goods transport companies through valid bilties and upon reaching Karachi were warehoused in Tayyaba Open Warehouse, S.I.T.E., Karachi the appellant discharge burden laid upon him under Section 187 of the Customs Act, 1969 and stood shifted on the shoulders of the Officials of respondent No. 1 as it is settled principle of law that one who level allegations has to prove those, but they miserably failed, there are umpteenth reported judgment on this issue and has been referred by the appellant in the ground referred here-in-above in para 3(h) and (i) supra. I refer to one of those reported at PLD 1996 Karachi 68 and 2012 PTD 428, in this their lordship of the Hon'ble High Court of Sindh held that:--

23- the next objection raised by the learned Counsel of the respondent is that under section 187 of the Customs Act, 1969 the burden of proof was on the petitioner rather than upon the customs authorities to categorically disproof the allegation of mis-declaration and under declaration leveled by the Customs authorities. In this respect Mr. S.Tariq Ali has contended that ruling relied upon by the petitioner counsel became inapplicable as the law has itself clearly cast the burden upon the petitioner. In order to appreciate this objection it is pertinent to scrutinized the provision of Section 187, which read as follows:-

187:- Burden of proof as to lawful authority, etc:-when any person is alleged to have committed an offence under this Act and any question arises whether he did any act or was in possession of anything with lawful authority or under a permit, license or other documents prescribed by or under any law for the time being enforce the burden of proving that he has such authority, permit, license or other documents shall lie upon him.

It appears to us that section 187 covers 02 situations which we states as follows:--

(a)When a person is charged with an offence under the Customs Act, 1969 the burden of proof is cast upon him to show that he had the lawful authority to commit that act;

(b)When a person is found in possession of any good the burden of proof is cast upon him to show that he was holding such goods under some lawful authority;

The situation (b) is not in issue in present case, however, we feel that it provides for an eventuality where a person is found to be in possession of certain goods which falls under a prohibited category or which, in an unlawful manner find place in the possession or custody of the accused. In such case the burden is upon the accused to show that he falls under some exemption or exception to hold such goods. This type of eventuality as envisaged and stated in situation (b) above is essentially a statement of the general principle of law of evidence contain in Article 121 of the Qanun-e-Shahadat that who ever claim to all under preferential or exempt or excepted category must show that he full fill that condition to fall within that category. This obviously, should not be confused with the factum of possession for which no presumption or burden of proof has been spelt out, in view whereof the possession itself has to be proof independently by the prosecution beyond all reasonable doubts"

Penultimate paragraphs of the aforesaid judgment read as under:-

"we feel that it is due to operation of the principle of incidence of burden of proof viz a viz "legal" and "evidential" burdens as discussed above the process of shifting of burdens become possible we have already sighted the opinion of Adrian- Keane and we hold that in order to determine as to which party based the legal or evidential burden would depend on the terms of statute , case-law on the subject as also common sense and equity. In this case we are of the view that in situation in issue i.e. (a) as discussed in para 23 above section 187 cast upon the petitioner-accused only the obligation to make out a prima facie case as it is only the evidential burden which is born upon it. Once the petitioner were to satisfy this evidential burden the legal burden to bring home the ultimate cases shifted upon the customs authorities."

24.It is situation (a) as stated above in para 23 which is directly in issue in this case i.e. whether the burden of proof solely lies on the petitioner to disproof allegation of mis-declaration - mis-description leveled by the customs authorities and whether the customs authorities are under no obligation to lead evidence and discharge any onus of proof. This part of section 187 of the Customs Act, perhaps appeared to be contrary to the general principle of law of evidence contains in Article 117 of Qanun-e-Shahadat that who ever alleges existence of a particular fact must prove the same. There is little doubt that a special law or a particular statute can provide for a distinct regime of rule of evidence then contained in general law. Infact the law goes on as far as providing that the laws of evidence can be altered even by mutual consent and contrast. See S.M. Anwar Sethi v. South British Company Ltd., PLD (1975 Karachi 458). However, on a closure scrutiny of the provision of Section 187 and the case law settled by our court. On the subject it appears that in such a situation it is only the evidential and tactical burden of proof which is cast upon the accused while the legal burden to bring home the allegation remains with a prosecution. Before we dilate upon the concept of 02 type of burden of proof and explain the terms "tacticle", "evidential" "legal" burden of proof we shall first discuss the case decided by High Court of Sindh in Barkat Ali v. The State PLD 1973 Karachi 659. In this case the controversy resolved around section 177-A of the erstwhile sea Customs Act, 1878 which catered for a similar situation as has reason in the present case i.e. the same provided the burden of proof upon the accused to disproof the case of the prosecution that his intention was not to defraud the exchequer or evade any prohibition or restriction under the Act. Writing for quote Tufail Ali, Rehman C.J. was of the opinion that the said presumption of burden of proof could not be drawn until the expression of the accused was first taken into consideration. According to the learned judge the normal "principle" was applicable i.e. the accused was entitled to benefit of doubt where he offered a reasonable explanation which was either acceptable or raise the doubt. In such cases the burden then shifted upon the prosecution to establish the case.

25."For every offence for which the accused is charged under the Customs Act he shall have to disprove the allegation of the Customs Authorities is entirely without any obligation upon the Customs Department to adduce evidence, it would amount to affording unfettered, naked and arbitrary discretion to the authorities who may at their sweet will make out false cases against importers without the need of proving the sanctity of their actions. Such cannot be the intention of Parliament while the Courts are under an obligation to place such construction on statues which would be beneficial to the widest extent and which would make the legislation operate fairly, justly and equitably and not unreasonably (see Mst. Zainab v. Kamal Khan (PLD 1990 SC 1051). This Court is also of the view that a construction is to be placed upon statutes which would minimize the discretion vested upon the executive authorities. As absolute power corrupts an interpretation fettering the discretion of the executive authority would be more in line with the principles of equity and justice. The issue regarding the applicability of section 187 is to be looked from another angle i.e. in case we were to hold that due to Section 187 the entire burden to dispute the entire case rest upon the accused alone. The executive authorities would be let loose and given a wide, naked and arbitrary discretion to operate without any guidelines which would then leave section 187 susceptible to a Constitutional challenge upon its vires on this score alone. By the interpretation as proposed above any redundancy or illegality would also be avoided.

The respondents have unnecessarily seized/confiscated the goods of the appellant despite not warranted under law as he cannot be burdened with the expression of section 187 of the Customs Act, 1969 as evident from deliberation made herein-above and the judgment of the Superior Judicial Fora. Rendering their acts as unjust, arbitrary and even in derogation to the judgment of High Court of Lahore in C.A. No. 68/2002 Collector of Customs, Lahore v. S.M. Saleem. Wherein appeal was dismissed and order of the Tribunal was maintained while observing in Paras 6 and 7 that:

"6. it is not denied before this Court that the goods subject matter of this appeal were importable. It is further not denied that the respondent had produced receipts before the Adjudicating Officer but he did not give any enable reason whatsoever as to why this piece of documentary evidence was not relied upon. The operative part of the judgment of the Deputy Collector Customs (Adjudicating) is to the effect that "since no documentary evidence indicating the proper import thereof has been furnished. It is hereby concluded that watches and watches part seized in this case have been brought into country without payment of duty and taxes."

7. The afore-referred view is not in consonance with the law laid down by the August Supreme Court in Pakistan v. Ziauddin (PLD 1962 Supreme Court 440). Wherein the receipt of purchase and payment of money produce by the person from whom smuggled items w ere recovered was accredited with truth and the court held that he has discharged the burden of proof mandated in section 177-A of the Sea Customs Act, 1978 at page 446 it was observed as under:

The Section requires reasonable belief on the part of the person seizing the goods that an act to defraud the government of duty has been committed. If a person purchases goods as in an ordinary market then in the absence of any suspicious circumstances of some definite fact leading to that inference the custom officer is not entitled to a reasonable belief that the Government has been defrauded of the duty payable on the goods. The ordinary method of the import of goods from outside into Pakistan is that they come through the customs barrier and the duty payable is infact paid. The presumption therefore, with respect to any goods which may be sold in the open market in the absence of an indication to the contrary would be that duty has been paid on them.

In alike situation the Hon'ble Supreme Court of Pakistan reported 2007 SCMR 10 Collector of Customs, Sales Tax and Central Excise v. Prof. Muhammad Khan and 6 others. Their lordship examined the aspect that whether Directorate General FBR can demand import documents of any goods or item within the city or during their transport within the territory of Pakistan or not and held that "law certainly provided protection to a public servant for doing lawful act in discharge of his duty but no such immunity was to be claimed by a person for committing illegal act in his official capacity as a public servant .. in the absence of proof that the goods in possession of a person were brought into Pakistan in violation of any law, customs authorities and such other public functionaries had no authority to detain such goods merely on suspicion---petitioner had showed documents of registration in his name to customs official who, having detained the car, insisted the production of import documents for release of car---Detention of car was an act of highhandedness which was committed through misuse of official authority and it might constitute misconduct in terms of Civil Servants (Efficiency and Discipline) Rules, 1973 read with Removal from Service (Special Powers) Ordinance, 2000----Exercise of official authority in a manner in which a person was made victim of misuse of process of law was violative of constitutional guarantees of rights of citizens and a person responsible for violation of such rights of citizens and a person responsible for violation of such rights was to face legal consequences---Act of customs officials might also constitute misconduct, therefore, concerned authorities were under legal obligation to initiate appropriate proceedings against officials involved in the matter."

13. The powers of adjudication has been defined in section 179 of the Customs Act, 1969 i.e. the powers so delegated and these has to be assumed on the basis of the amount of duty and taxes involved excluding conveyance. In the case under discussion the amount of duty and taxes to the extent of appellant goods are Rs. 1,694,562.00 as shown in seizure report and the appropriate authority to adjudicate the case of such amount is Additional Collector, The Officials of respondent No. 1 due to mala fide clubbed the consignment of the four appellant's into one in the seizure report and contravention report and forwarded to respondent No. 2 for issuance of show cause notice. Who instead of segregating the amount of duty and taxes of each appellant issued a single show cause notice to all the appellant's, which is erroneous as each case has its own peculiar facts and has to be dealt separately as per principle laid down by the Superior Judicial Fora in umpteenth reported judgments and this stood proved from the order of the respondent No. 2 itself. Since, the amount of duty and taxes in the case of the appellant are Rs. 1,694,562.00 the appropriate authority to adjudicate the said case is Additional Collector as per the expression of Section 179 of the Customs Act, 1969 not the respondent No. 2. To the contrary, he interpreted the provision of Section 179 of the Customs Act, 1969 in accordance with his whims and wishes, which found no place in the legal parlance and assumed the powers vested with his subordinate. Nobody is allowed to assume the powers of an appropriate adjudicating authority whether subordinate or superior, reference is placed to the reported judgment PLD 1973 Supreme Court 49 The State v. Zia-ur-Rehman and others and 2009 PTD 1083, wherein it has been held that "Superior authority cannot exercise the power of his subordinates for adjudication purpose .powers of sub-ordinate exercised by superior authority is held as without jurisdiction beside usurpation". Assuming of jurisdiction is mandated requirement of law and its non fulfillment entail the entire proceeding to be coram non judice. The proceeding has been conducted by the respondent No. 2 by usurping the powers of his subordinate, which is not permitted under law and his this lethal act rendered the issuance of show cause notice and passing of order-in-original, null, void and ab-initio. Hence of no legal effect/jurisdiction.

14. It is also gathered from the order that the documents submitted by the appellant were discarded by the officials of respondent No. 1 while forming opinion that the goods seized belong to two importers and this was bought by respondent No. 2 as stood proved from the order-in-original. After perusal of the relevant documents of import and transportation I hold that the importer Messrs Snow White chemical House Quetta through two goods declaration bearing No. 299 dated 23.12.2013 and 1345 dated 31.01.2014 which correspond to 165 drums and 125 drums respectively, total of which comes to 290 drums, out of which he transported 270 drums to the appellant for selling in the local market of Karachi hence the inference drawn is erroneous and devoid from the fact of the case as regard the objection that the goods has been transported to Karachi after considerably delay from the date of clearance is also of no substance as no limitation is provided in any provision of the Act to transport or sell the goods within such period from the date of clearance, it is for the importer to transport or sell the goods in accordance with his wishes and convenience. In the absence of enabling provision the objection/opinion of the respondent is of no legal effect and cannot be made a basis for detention/seizure/confiscation of the goods when those were lawfully legally imported and cleared and transported to the appellant for selling as per their agreement executed between the importer and the appellant and which is available in the record of the case.

15. The show cause notice in the instant case was issued by the respondent No. 2 on 27.03.2014 and the order under the provision of Subsection (3) of Section 179 of the Customs Act, 1969 should had been passed by the authority within 120 days from the date of show cause notice i.e. on or before 25.07.2014. To the contrary, the order has been passed on 11.09.2014, rendering it barred by time by 48 days and as such without power/jurisdiction and not enforceable under law as held by this Appellate Tribunal and Hon'ble High Courts in umpteenth orders and reported judgments referred in para 3(p) supra.

16. In the light of law laid down and observation here-in-above, conduction of search of the warehouse, preparation of contravention report by the official of respondent No. 1 and issuance of show cause notice and passing of order-in-original by respondent No. 2 are without power/jurisdiction beside based on mis-conception and inapt interpretation of the provision of the Act and Notification. Resultant, void and ab-initio and as such is of no legal effect. Therefore, I cancel the show cause notice while setting aside order-in-original dated 19.09.2014 and allow the appeals as prayed, consequent result of which is that the appellant are free to conduct their business of selling the goods and the owner of Tayyaba Open Warehouse, S.I.T.E., Karachi is ordered to deliver the goods to them as and when required as the phenomena of superdari is alien to the provision of the Customs Act, 1969, which is also declared to be of no legal effect and as such void. Office is directed to forward copy of the order to Messrs Tayyaba Open Warehouse, S.I.T.E., for compliance.

RR/30/Taz(Trib.)Appeal allowed.