AMIN INTERNATIONAL TRADING COMPANY, PESHAWAR VS SUPERINTENDENT, INTELLIGENCE AND INVESTIGATION-FBR, LAHORE, 2018 PTD-CUSTOMS-APPELLATE-TRIBUNAL-LAHORE 1260 (2015)

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

----Ss. 2(b), (KK), (O), 3, 17, 32, 80, 83, 156(1)(14)(90), 157, 180, 181, 194-A & 195---S.R.O. No.499(I)/2009, dated 19-6-2009---S.R.O. No.581(I)/2013, dated 18-6-2013---Import of goods---Assessment of duty payable---Misdeclaration---Seizure and confiscation of imported goods---Redemption of goods on payment of redemption fee---Staff of Collectorate of Customs physically examined the imported goods, checked the declaration and assessed the duty payable in respect of said goods---Assessment of duty was countersigned by the Principal Appraiser of Customs, Dry Port at "P" and entire customs duty was deposited by the importer with the State Exchequer---Importer, thereafter booked the said goods by road to another city "L" and container stuffed with said imported goods was detained by the department of Intelligence and Investigation, under Ss.2(KK) & 17 of Customs Act, 1969---Importer was refused delivery of goods even after production of requisite Goods Declaration and goods were seized on the premise that said goods had been under assessed by the appropriate Officers of Collectorate of Customs of Dry Port at "P" ---Additional Collector of Customs (Adjudication), at "L" issued show-cause notice under S.180 of the Customs Act, 1969, charging that the reassessment of impugned goods by the Staff of Collectorate of Customs, at "L", had revealed that the importer had committed an offence of mis-declaration and that goods were liable to confiscation under S.156(1)(14)(90) of the Customs Act, 1969---Said Adjudicating Authority, ordered seizure of the goods---Option under S.181 of the Customs Act, 1969, read with S.R.O. No.499(I)/2009, dated 19-6-2009 was allowed and confiscated goods were redeemed to the importer on payment of redemption fine, in addition to payment of duty/taxes leviable thereon---Truck/Trailer was also confiscated---Validity---Provisions of Ss.2(b)(i) & 3 of the Customs Act, 1969, had revealed that only such officers were assigned explicit functions with relation to an area in terms of S.3 of the Customs Act, 1969 would be appropriate officer or officers of customs for that area under the operative and functional sections of the Customs Act, 1969---Specific entrustment of jurisdiction by the Federal Board of Revenue, was the governing test to determine; whether an officer of customs or the appropriate officer had been authorized to exercise powers within a certain area---Under S.R.O. No. 581(I)/2013, dated 18-6-2013 the jurisdiction of officers of Collectorate of Customs, at "P" was well defined and distinct from that of Officers of Model Collectorate Customs (Appraisement), at "L"---Only such Customs Officers, who under S.3 of the Customs Act, 1969 had been assigned through notification by the FBR specific functions of assessment of duty in the jurisdictional area, where the import concerned had been effective, were the officers who were competent to assess the same---Officers of Model Collectorate of Customs, at "P", who wield the powers of assessment in the present case, which included re-assessment under S.80 of the Customs Act, 1969 or review under S.195 of the Customs Act, 1969---Officers working under the Model Customs Collectorate, at "P", within whose jurisdiction, the Goods Declaration had been filed and the consignment had been cleared for home consumption under S.83 of the Customs Act, 1969, would have the jurisdiction to re-assess the goods---Resultant adjudication proceedings were to be initiated by the relevant Collectorate of Customs Adjudication at Federal Capital area---Re-assessment of impugned goods by the Officers of Collectorate of Customs, at "L", was without jurisdiction and ultra vires to the powers conferred upon them under the Customs Act, 1969---Impugned show-cause notice as well as the impugned order-in-original, stood annulled, in circumstances. [

Messrs Yousaf Re-rolling Mills v. Collector of Customs (Appraisement), Karachi and others 1986 CLC 77; Messrs Zeb Traders through Proprietor v. Federation of Pakistan through Secretary, Ministry of Finance, Government of Pakistan, Islamabad and 3 others 2004 PTD 369 and Messrs Safe Way through Proprietor v. Deputy Collector, Customs (Appraisement Group-1), Lahore and others 2009 PTD 201 ref.

(b) Interpretation of statutes---

----Act was required to be read as a whole and while applying its various provisions, the doctrine of harmonious construction was required to be borne in mind.

Malik Muhammad Arshad for Appellant.

Ms. Amna Parveen for Respondent.

JUDGMENT

OMAR ARSHAD HAKEEM, MEMBER (JUDICIAL).---This judgment shall decide the above mentioned Customs Appeal filed against an Order-in-Original No. 19/2014 dated 24.02.2014 passed by the learned Additional Collector of Customs (Adjudication), Lahore.

2.Precise facts for deciding the core controversy involved in the instant appeal are that the present appellant imported a consignment containing assorted electrical sockets at Peshawar, Dryport and the filed Goods Declaration No. PCSI-HC-2905 for Home Consumption on 04.02.2014. The staff of Collectorate of Customs Peshawar, while exercising powers delegated under Section 80 ibid 83 of the Customs Act, 1969, physically examined the goods and checked the declaration and assessed the duty payable in respect of the said goods. The assessment of duty was countersigned by the Principal Appraiser of Custom, Dry Port Peshawar and the entire customs duty amounting to Rs. 5,68,997/-was deposited with the state exchequer, consequently the goods were out of charged on 06.02.2014.

3.The appellant thereafter booked the said goods by road to Lahore. Whence, trawler No. JT-5175 hauling container No.YMLU-8132521(1x40) stuffed with impugned merchandise reached Begum Kot Motorway Interchange Lahore on 06.02.2014, the same was detained by the Department of Intelligence and Investigation, Lahore under sections 2(kk) and 17 of the Customs Act, 1969; Even after production of requisite Goods Declaration by the appellant and verification thereof with impugned merchandise, he was refused delivery of goods and subsequently a seizure report dated 07.02.2014 was communicated on behalf of the Directorate informing him that they had seized the said goods on the premise that merchandise had been under assessed by the appropriate officers of Collectorate of Customs, Peshawar.

4.Consequently, on 24.02.2014 the Additional Collector of Customs (Adjudication), Lahore, issued the impugned show-cause notice under Section 180 of the Customs Act, 1962, wherein it was charged that reassessment of impugned goods by the staff of Collectorate of Custom, Lahore revealed that the appellant had committed an offence of mis-declaration, thus inflicting a loss to the state kitty to the tune of Rs. 11,38,264/-, consequently the goods were liable to confiscation under Sections 156(1)14, 90 of the Customs Act, 1969.

5.The Learned Additional Collector of Customs (Adjudication), Lahore thereafter held the adjudication proceedings and passed an order against the appellant wherein he precisely ruled as follows:--

a)The seized goods mentioned in this order are confiscated under clauses (14) and (90) of section 156(1) of the Customs Act, 1969. However, an option under section 181 of the Customs Act, 1969 read with SRO 499(I)/2009 dated 19.06.2009 is allowed and confiscated goods are redeemed to its lawful owner on payment of redemption fine equal to 35% (thirty five percent) of the customs value of seized goods as specified in the aforesaid SRO, in addition to payment of duty/taxes leviable thereon, as the difference between ascertained value (21,76,543/-) and declared value (Rs. 11,12 874/-) is more than 30%.

b)The seized Truck/Trailer bearing Registration No. JT-5157 and container bearing Registration No. YMLU-8132521 (1x40') is confiscated under section 157 of the Customs Act, 1969. However, an option under section 181 of the Customs Act, 1969 is allowed and confiscated Truck/Trailer bearing registration No. JT-5157, and container bearing registration No. YMLU-8132521 (1x40') is redeemed to its lawful owner on payment of redemption fine Rs. 50,000/- (Pak Rupees Fifty Thousand only).

c)Penalty each of Rs. 10,000/- (Pak Rupees Ten Thousand only) is also imposed on Messrs Amin International Trading Company, Haji Altaf Plaza 2nd Floor, Cantt Shopping Centre, Peshawar and Messrs Group Seven, Customs Agency, Room No. 8. New Marhaba Building Masjid, Mohabat Khan Road Peshawar.

6.Being aggrieved from the above said order passed by the learned Additional Collector of Customs (Adjudication), Lahore, the appellant approached this Tribunal. At the threshold the learned counsel for the appellant argued that the assessment was made by the relevant Collectorate of Customs and the appellant by acting upon such assessment deposited the duty and taxes and got his consignment cleared. However, the Deputy Collector MCC, Dry Port. Lahore had no jurisdiction to sit as an appellate authority over the assessment made by MCC, Peshawar under section 80 of the Customs Act, 1969 because there is no such provision of making reassessment in the presence of earlier assessment unless it is set aside by invoking section 193 or 195 of the Customs Act, 1969 nor he can reassess the goods. Hence the entire action in this behalf was without jurisdiction and of no legal effect. The learned counsel for the appellant further contended that the seizure of the consignment on the part of respondent No. 1 and his staff was unjustified and illegal because it is by now a settled proposition of law that once the consignment is examined, classified assessed and out of charged on payment of leviable duty and taxes, the same cannot be detained. However, the department would be at liberty to take action in terms of section 32 of the Customs Act, 1969 to take care of any escaped amount of duty and taxes, if any. Reliance is placed on judgment of learned Division Bench of Hon'ble High Court of Sindh at Karachi in case "Messrs Yousaf Re-rolling Mills v. Collector of Customs (Appraisement), Karachi and others" (1986 CLC 77), Messrs Zeb Traders through Proprietor v. Federation of Pakistan through Secretary, Ministry of Finance, Government of Pakistan, Islamabad and 3 others (2004 PTD 369), Messrs Safe Way through Proprietor v. Deputy Collector, Customs (Appraisement Group-1), Lahore and others (2009 PTD 201); That perusal of law laid down in these cases reveals that interception and seizure of goods earlier examined, assessed out of charged and cleared on payment of duty and taxes by customs authorities were illegal, void and without jurisdiction. Since the initial action was without jurisdiction and illegal, thus the subsequent superstructure built thereon including impugned order is illegal and without jurisdiction; That respondent No.2 did not utter a single word as to how the value assessed by MCC, Peshawar was at lower side. Moreover, as per FBR directive if there was any aspect of evasion of duty and taxes, the matter should have been referred to MCC, Peshawar and that neither MCC, Lahore had any jurisdiction nor value assessed by Deputy Collector, Dry Port could be made basis for reassessment of the goods; That as per 2nd Proviso to section 181 of the Customs Act, 1969, FBR may by an order fix the amount of fine which in lieu of confiscation shall be imposed on any goods or class of goods imported in violation of the provisions of section 15 or a notification issued under section 16 or any other law for the time being in force. It is further stated that the appellant neither imported goods in violation of the provisions of section 15 nor of a notification issued under section 16 nor any other law for the time being in force and as such fixation of fine for the offence of mis-declaration of value was beyond the jurisdiction of Board in terms of proviso to section 223 of the Customs Act, 1969; That earlier section 15 of the Customs Act, 1969 was also including the goods imported in violation of section 32 of the Customs Act, 1969 and as such the Board was competent under 2nd proviso (supra) to fix the fine for mis-declaration vide S.R.O. 499(I)/2009 dated 13.06.2009, but on amending section 15 and omitting words "or goods imported or exported in contravention of the provisions of section 32" there-from the provision at serial-1 (a) to (g) of the Table of S.R.O. 499(I)/2009 dated 13.06.2009 became redundant and neither the Board can now fix the amount of fine to be imposed for violation of section 32 nor adjudicating authority can act upon such fixation; That imposition of redemption fine on the basis of S.R.O. 499(I)12009 dated 13.06.2009 on the allegation that the Clearing Collectorate has assessed the goods of the appellant at lower side is totally unjustified and illegal. That no basis has been given by the Deputy Collector, Dry Port for enhancement of value nor the appellant was confronted with any material. Moreover, the reassessment was made in violation of mandatory provisions contained in subsections (1) to (4), (5), (6), (7), (8) and (9) of section 25 of the Customs Act, 1969 read with Rule 109 of the Customs Rules, 2001.

7.Levelling a variety of allegations and narrating the sequence of events, in all, the learned counsel for the respondent inter alia contended that the goods were not properly examined/assessed in accordance with the relevant provision of law as such it resulted in short levy of taxes to the tune of Rs. 11,38,264/-, The aforesaid act of the importer committed an offence punishable under sections 156(1)14 and 90 of the Customs Act, 1969. The seizure was lawfully made as the recovered goods were got cleared by deliberately assessing on a lower side and government exchequer was deprived of its legitimate revenue. The goods involving short levy of taxes through mis-declaration or otherwise are liable to confiscation under sections 156(1)9, 14 and 90 of the Customs Act, 1969. Any goods liable to confiscation can be seized by the appropriate officer of Customs under section 168 of the Customs Act, 1969. The officers of the Directorate General of Intelligence and Investigation-FBR of the rank of Intelligence Officer and above have been authorized to seize all such goods under S.R.O. 486(I)/2007 dated 9.06.2007. The seizure was thus legal and all legal and codal formalities have been complied with in true letter and sprit. The impugned order passed by the respondent No. 2 is in accordance with law and does not contain any discrimination. Hence he exercised his powers reasonably, fairly and justly; That the appellant committed an offence of violating the provisions of section 156(1)14, 90 and section 157 of the Customs Act, 1969 therefore the redemption fine and penalty imposed on the goods as well as vehicle is under the provisions of Customs Act, 1969 read with S.R.O. 499(I)/2009 dated 13.06.2009 which is justified; That the Deputy Collector, Dryport Lahore assessed the value of the seized goods on the request of the detecting agency on the basis of evidential data of identical goods during the relevant period under the provision of law.

8.The arguments of the parties heard, provisions of relevant law discerned and the available record of the case thoroughly considered; We are confining ourselves to the question of jurisdiction of Model Collectorate of Customs (Appraisement), Lahore to reassess the goods already assessed and cleared by the Officers of Model Collectorate of Customs, Peshawar as this is the basic threshold question contested by the learned counsel for appellant.

9.Prior to embarking upon the discussion for resolution of captioned controversy, it is observed that in the normal course, an Act is required to be read as a whole and while applying its various provisions the doctrine of harmonious construction is required to be borne in mind. With this principle in view when we address ourselves to the question of jurisdiction we find that insofar as the Customs Act, 1969 is concerned the jurisdiction in respect of any action which is proposed to be taken or has been taken is required to be determined with reference to the operative/functional section(s) read with sections 2, 3 and 4 and/or other relevant sections of the Customs Act, 1969.

10.Adverting to the merits of the proposition set forth by the learned counsel for appellant we deem it necessary to initially advert to section 80 and section 83 of the Customs Act, 1969 which deal with assessment, reassessment and clearance for home consumption of imported goods:--

Section 80 of the Customs Act, 1969 reads thus;

3[80. Checking of goods declaration by the Customs.--(1) On the receipt of goods declaration under section 79, an officer of Customs shall satisfy himself regarding the correctness of the particulars of imports, including declaration assessment, and in case of the Customs Computerized System, payment of duty, taxes and other charges thereon.

(2) An officer of Customs may examine any goods that he may deem necessary at any time after the import of the goods into the country and may requisition relevant documents, as and when and in the manner deemed appropriate, during or after release of the goods by Customs;

(3) If during the checking of goods declaration, it is found that any statement in such declaration or document or any information so furnished is not correct in respect of any matter relating to the assessment, the goods shall, without prejudice to any other action which may be taken under this Act, be reassessed to duty 16[, taxes and other charges levied thereon]

(4) In case of the Customs Computerized System, goods may be examined only on the basis of computerized selectivity criteria.

(5) The Collector may, however, either condone the examination or defer the examination of imported goods or class of goods and cause it to be performed at a designated place as he deems fit and proper either on the request of the importer or otherwise.]

Section 83 thus reads;

1[83. Clearance for home consumption.--(1) When the owner of any goods entered for home-consumption and assessed under section 2 [****] 80 2 [*m] or 81 has paid the import duty and other charges, if any in respect of the same the appropriate officer, if he is satisfied that the import of the goods is not prohibited or in breach of any restrictions or conditions applying to the import of such goods, may make an order for the clearance of the same:

Provided that, at customs-stations where the Customs Computerized System is operational the system may clear the goods through system generated clearance documents.

(2) Where the owner fails to pay import duty and other charges within 3 [ten] days from the date on which the same has been assessed under sections 80, 5[Omitted] or 81, he shall be liable to pay surcharge at the rate of 5[KIBOR plus three per cent] on import duty and other charges payable an such goods.]

11.A bare reading of afore-transcribed provisions of law makes it abundantly clear that under section 80 of the Customs Act, 1969 it is the "Officer of Customs" who can verify the self-assessment of goods or reassess, examine or test any imported goods as may be necessary. Likewise under section 83 ibid, it is the "appropriate officer", who after satisfying himself of all of factual and legal aspects may make an order of clearance of merchandise. We thus deem it proper and necessary to evaluate the true purport of the term "appropriate officer" and the term "Officer of Customs" envisaged under the Act of 1969, for the purpose we have adverted to sub-clause (b) and (o) to section 2 of the Customs Act, 1969:--

Section 2(b) of the Act of 1969 defines "appropriate officer, and it reads thus:

8a["appropriate officer", means the officer of customs to whom such functions have been assigned by or under this Act or the rules made there under;]

Section 2(o) of the Act of 1969 defines "officer of Customs", and it reads thus:

(o) "officer of customs" means an officer appointed under section 3;

12.It is quite evident from above reading the afore-transcribed statutory definitions that the terms Officer of Customs and appropriate officer converge into section 3 of the Customs Act, 1969; Section 3 of the Act of 1969 thus reads;

1[3. Appointment of officers of customs.---For the purposes of this Act, the Board may, by notification in the official Gazette, appoint, in relation to any area specified in the notification, any person to be--

(a)a Chief Collector of Customs;

(b)a Collector of Customs;

(c)a Collector of Customs (Appeals);

(d)an Additional Collector of Customs;

(e)a Deputy Collector of Customs;

(f)an Assistant Collector of Customs;

(g)an officer of Customs with any other designation.]

13.Precisely speaking, a harmonious reading of sub-clauses (o) and (b) of section 2 ibid section 3 of the Act of 1969 reveals that only such Officers who have been assigned explicit functions with relation to an area in terms of section 3 would be "appropriate officers" or "Officers of Customs" for that area under the operative/functional section(s) of the Customs Act, 1969. We are consequently, of the considered opinion that specific entrustment of jurisdiction by the Federal Board of Revenue is, the governing test to determine whether an "Officer of Customs" or the "appropriate officer" had been authorized to exercise powers within a certain area; It is seen that the Federal Board of Revenue has promulgated S.R.O. 581(I)/2013 dated 18.06.2013 in this regard; the relevant portions of said statutory regulatory order thus read:--

S.R.O.581(I)/2013.---In exercise of the powers conferred by section 3 of the Customs Act, 1969 (IV of 1969), sections 30 and 31 of the Sales Tax Act, 1990 and in supersession of its Notification No. S.R.O. 967(I)/2007, dated the 20th September, 2007 the Federal Board of Revenue is pleased to appoint--

(1) the officers specified in column (2) of the Schedule below to be the Chief Collectors of Customs for the areas and functions specified in the corresponding column (3) thereof

(2) the officers specified in column (2) of the Schedule below to be the Collectors of Customs for the areas and functions specified in the corresponding column (3) thereof; and

(3) the Additional Collectors, Deputy Collectors, Assistant Collectors, Principal Appraisers, Appraisers, Superintendents, Senior Auditors, Deputy Superintendents, Auditors, Inspectors of Preventive Services, Senior Preventive Officers, Preventive Officers, Examining Officers, Inspectors and the Ministerial staff, in the respective Chief Collector's Secretariat, Custom Houses and the Collectorates, to be officers of Customs for those areas.

SCHEDULE

14.It is evident from scrutiny of S.R.O. 581(I)/2013 dated 18.06.2013 supra that the jurisdiction of Officers of Collectorate of Customs, Peshawar is well defined and distinct from that of Officers of Model Collectorate of Customs (Appraisement), Lahore and thus would lead one to the sole logical conclusion that only such Customs Officers who under section 3 of the Act have been assigned through notification by the FBR specific functions of assessment of duty in the jurisdictional area where the import concerned has been affected, are the officers who are competent to reassess the same; Any other reading of the Customs Act, 1969 would render the provision of section 3 of the Act redundant in as much as the test contemplated therein is that of specific conferment of such jurisdiction. Even if for arguments sake, the interpretation that every Officer of Customs can exercise statutory powers unfettered by spheres of jurisdiction is accepted, it would lead to a situation of utter chaos and confusion, in as much as each Customs Officer would be considered to have jurisdiction to exercise powers in Customs areas all over Pakistan.

15.In view of above we are of the considered opinion that it is the Offices of Model Collectorate of Customs, Peshawar, who wield the powers of assessment in the instant case, which of course, includes re-assessment under section 80 of the Customs Act, 1969 or review under section 195 ibid; It is consequently concluded that the Officers working under the Model Customs Collectorate, Peshawar within whose jurisdiction the Goods Declaration had been filed and the consignments had been cleared for home consumption under section 83 ibid, will have the jurisdiction to re-assess the goods and resultant adjudication proceedings are to be initiated by the relevant Collectorate of Customs Adjudication Islamabad; therefore we are constrained to hold that the re-assessment of impugned merchandise by the Officers of Collectorate of Customs, Lahore is without jurisdiction and ultra-vires to the powers conferred upon them under the Customs Act, 1969, resultantly the impugned show-cause notice as well as the impugned order in original stand annulled.

16.Before parting with this customs appeal, it is clarified that this judgment shall not preclude the Collectorate of Customs, Peshawar from initiating any proceedings under the Customs Act, 1969 against the importer for recovery of duty, taxes, fine, penalty and other charges recoverable with respect to the subject goods.

17.The appeal stands accepted in the above terms.

18.A copy of this judgment be sent to the Collector, Model Customs Collectorate, Peshawar.

19.Parties be informed through registered post A.D. or by UMS.

20.File be consigned to record after completion.

HBT/2/Tax(Trib.) Appeal accepted.