COLLECTOR OF CUSTOMS VS BYCO PETROLEUM PAKISTAN LTD., 2018 PTD-CUSTOMS-APPELLATE-TRIBUNAL-LAHORE 2335 (2017)

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

----S. 32(2)(3)---SRO No.886(I)/2012, dated 18-7-2012---SRO No.371(I)/2002, dated 15-6-2002---Misdeclaration---Powers and functions relating to cases under S.32(3), Customs Act, 1969 had been conferred on Superintendent Customs or Principal Appraiser vide SRO No.371(I)/2002, dated 15-6-2002 and not to the Collector Adjudication---Act of issuance of show-cause notice by the Collector Adjudication was ab intio wrong.

S.M. Naqi son of Syed Muhammad Hussain Karachi v. Collector of Customs (Adj-I) and others Customs Reference No.157 of 2008; PLD 1999 SC 1072; Khyber Electric Lamp's case 2001 SCMR 838; Chitranjan Cotton Mills's case PLD 1970 SC (sic); PLD 1986 Lah. 237; PLD 1969 SC 407 and 1992 SCMR 1652 ref.

(b) Administration of justice---

----Order in field, could not be substituted with another order---Once an order was passed, which attained finality, same could not be subjected to show-cause notice again.

Messrs Smith Kline French v. Pakistan 2004 PTD 3020 ref.

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

----Ss. 32 & 195---Misdeclaration---Revisional power of Federal Board of Revenue or Collector---Order or decision passed or taken by the subordinate officer, could only be corrected in revisional power and not under S.32 of the Customs Act, 1969---Collector or Federal Board of Revenue, would exercise their revisional powers or correctional jurisdiction in terms of S.195 of the Customs Act, 1969---For adjudication of a case through issuance of show-cause notice, the proof of mis-declaration had to be prima facie present at the first instance; if allegation of mis-declaration was to be believed against taxpayer in terms of S.32 of Customs Act, 1969 through issuance of show-cause notice by the officer of original jurisdiction---Where the consignments were released on the basis of commercial documents and physical examination by the Examining and Assessing Officer and the charges subsequently leveled under S.32(3) of the Customs Act, 1969 were unsubstantiated, whole proceedings, were infested with inherent legal infirmities and substantive illegalities tantamounting to patent violation of mandatory statutory provisions and in utter disregard of the provisions of Act---If the law had prescribed method for doing of a thing in a particular manner, such provision of law was to be followed in letter and spirit and achieving or attaining the objective of performing or doing of a thing in a manner other than provided by law, would not be permitted.

S.M. Naqi son of Syed Muhammad Hussain Karachi v. Collector of Customs (Adj-I) and others Customs Reference No.157 of 2008; PLD 1999 SC 1072; Khyber Electric Lamp's case 2001 SCMR 838; Chitranjan Cotton Mills's case PLD 1970 SC (sic); PLD 1986 Lah. 237; PLD 1969 SC 407; 1992 SCMR 1652; Messrs Smith Kline French v. Pakistan 2004 PTD 3020; 2008 PTD 1968; 2010 SCMR 1425; 2002 PTD 2457; PLD 1971 SC 61; PLD 1973 SC 236, PLD 1964 SC 536 and 2003 SCMR 1505 ref.

(d) Administration of justice---

----Assuming of jurisdiction was of great importance and power had to be exercised within the allotted sphere---Acting contrary to said powers was incurable, rather fatal to the case---Order which was coram non judice would have no legal sanction ---Question of jurisdiction of a forum, was always considered to be very important and any order passed by a court or a forum having no jurisdiction, even if it was found to be correct on merit, was not sustainable---Jurisdiction of a court would lay down a foundation stone for a judicial or a quasi judicial functionary to exercise its power/authority and no sooner the question of jurisdiction was determined in the negative, the whole edifice built on such defective proceedings, was bound to crumble down.

PLD 1996 Kar. 68; 2006 PTD 978; PLD 1971 SC 184; Ali Muhammad v. Chief Settlement Commissioner 2001 SCMR 1822 and All Pakistan Newspaper Society and others v. FOP and others PLD 2004 SC 600 ref.

(e) Interpretation of statutes---

----Fiscal statute---Instrument was to be taken as a whole and not in isolation.

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

----S. 19---SRO No.678(I)/2004, dated 7-8-2004---Exemption from customs duty---Equipments and materials imported by the importer stood covered within the framework of SRO No.678(I)/2004, for the release of goods free from duty and taxes on import-cum-export basis---Proceedings initiated by the Collector of Customs against the importer to deny the exemption, were closed door proceedings, and the importer was never given a chance to explain the correct legal position---Such proceedings in circumstances, were in violation of the principles of natural justice to the extent that the person whose rights were being affected, had not been given an opportunity to explain his point of view---Mandatory and established principle of law was that the right to claim exemption under notification issued under S.19 of the Customs Act, 1969 remained available to a party as well as the exemption notification would hold the field---Vested rights could not be taken away, save by express words and necessary intendment.

Messrs Gatron Industries v. Government of Pakistan and others 1999 SCMR 1072 and Messrs MY Electronic (Pvt.) Ltd. v. Government of Pakistan 1998 SCMR 1404 ref.

(g) Administration of justice---

----Duty of court was to follow the legal obligations made by the legislature---Observations of the higher courts and the intention of the legislature and interpretation which would lead to manifest the absurdity were to be avoided---Court was under statutory obligation to supply the omission with a view to prevent the defeating of a very object of legislation, where the plain instructions would lead to absurd results.

(h) Interpretation of statute---

----Interpretation which was more in consonance with the avowed policy decipherable from title and preamble, of legislation was to be preferred to an interpretation which abridged, abrogated or infringed the rights which had accrued in favour of the parties.

Faisal Khan, D.C. for Appellants.

Zafar Iqbal and Sajjad Haider Janjua for Respondents.

Date of hearing: 17th February, 2017.

JUDGMENT

MUHAMMAD NADEEM QURESHI, MEMBER (JUDICIAL-I).--By this order, we shall dispose of the Customs Appeals Nos. G-2127/ 2016, K-2149/2016 and K-2150/2016 filed by the Collector of Customs, MCC Gawadar, Custom House, Gadani, against Order-in-Original No.117 of 2016 dated 10.10.2016, passed by the Collector of Customs (Adjudication) Quetta. These appeals have identical issue of law and facts, therefore, being heard dealt with and disposed of simultaneously though this common order in the light of the judgment of the Honorable High Court of Sindh in Customs Refence No.157 of 2008, S.M. Naqi son of Syed Muhammad Hussain, Karachi v. Collector of Customs (Adj-I) and others.

2.Since, these 03 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. 2127/2016 is taken into consideration. Brief facts of the case are that, Messrs Byco Petroleum Pakistan Ltd, Karachi had imported Tug, namely "Atlantic", with a declared value of US$ 2,000,0001- (Two Million US$), for the period of two (02) years for vessel mooring on temporary basis and sought clearance vide GO No. QGDN- HC-42 dated 21.06.2014 under clause / condition (VII) of SRO-678(I)/2004, dated 07-08-2004, on import-cum-export basis without payment of duties and taxes against corporate guarantee. As the imports of Tug was not covered under condition No.(vii) read with condition No. (i) of SRO 678(I)/2004 dated: 07.08.2004, therefore, on, importers' request, the Federal Board of Revenue (hereinafter referred as the Board), vide its letter No. 1(7) Mach / 94-Pt-313932 dated: 07.01.2013 allowed release of the impugned Tug on temporary basis under condition (iv) read with condition (vii) of SRO 678(I)/2004 dated 07.08.2004. According to the aforesaid conditions of the notification Messrs Byco Petroleum Pakistan Ltd. Karachi, would submit the required recommendations from the Regularity Authority within sixty (60) days from the date of import of the goods. Messrs Byco Petroleum Pakistan Ltd., Karachi, submitted Office Memorandum No. PL-NPA(4)/2009-(SPM) dated: 28.01.2013, from the Directorate General Refinery, Ministry of Petroleum and Natural Resources to the Board, which was forwarded to the MCC, Gwadar by the Board under letter C.No.1(7) Mach/ 94-Pt-3 /16941 dated: 08.02.2013 for necessary action under the law. The scrutiny in the subject matter revealed that Messrs Byco Petroleum Pakistan Ltd, Karachi, were not entitled for seeking clearance of impugned Tug on impoer-cum-export basis without payment of duties and taxes under SRO-678(I)/2004 dated 07.08.2004 as the impugned Tug is not covered under condition No. (vii) read with condition No. (i) of the said SRO. Further, the condition (iv) of SRO 678(I)/2004 dated 07.08.2004 stipulates that in case of dispute as to whether or not any item is entitled to exemption under this notification, the relevant Regulatory Authority shall issue a certificate to the effect that the item is covered under this notification. Though, the Office Memorandum No. PL-NPA(4)/2009- (SPM) dated: 28.01.2013 issued from the Directorate General Refinery, Ministry of Petroleum and Natural Resources, was produced by the respondent importers; however, it does not certify that the under reference item i.e. Tug is/was covered under the aforesaid SRO. The imported Tug was/is not covered as bona fide project requirement under the aforesaid notification for entitlement of the exemption thereunder, Messrs Byco Fetroleum Pakistan Ltd., Karachi, were/are liable for payment of duties and taxes and allied panel surcharge, in terms of Sections 32(3) and 79(1) of the Customs Act, 1969, punishable under clause (1) and (14) of Section 156(1) ibid read with section 33 of the Sales Tax Act, 1990, punishable under clause 11(c) of the Sales Tax Act, 1990, further read with section 148 of the Income Tax Act, 2001, for getting clearance of impugned goods by violating the provisions of S.R.O. 678(I)/2004, which attract the provisions of Section 156 (1)(10)-A of the Act, dated 07.08.2004. The payable duty and taxes were calculated as Rs. 24,572,631/- which have not been controverted by the respondents during the adjudication proceedings of Section 179 of the Customs Act, 1969. The contravention report was forwarded to the Collector (Adjudication), Quetta, for adjudication of the matter of recovery of the duties and taxes, payable at import stage, in terms of Section 179 of the Customs Act, 1969, read with S.R.O. 886(I)/2012 dated 18-07-2012. Keeping in view the provisions of subsection (1) Section 79 of the Customs Act, 1969, according to the involvement of revenue to the tune of Rs. 24.57 million, the appropriate adjudicating officer i.e. Collector (Adjudication) issued show-cause notice, bearing No. MCCIG-57/ADJ/CUS/SEIZ/2015 dated 17-04-2015. The despondent No. 1 / the importers submitted their reply to the show-cause notice and prayed for vacation of the show-cause notice merely on technical grounds instead of deliberating upon merits of the case i.e. whether the item in question is a bona fide requirement of the project as defined in condition No. (i) of the aforesaid SRO. Though the Appellant Collectorate has properly rebutted the contentions of the respondent importers during the adjudication proceedings, however, the learned Collector (Adjudication) /Respondent No. 02, has passed the following order and vacated the show-cause notice on grounds of lack of jurisdiction. The operative part of the order is reproduce below for ease of reference:--

"The advocate for the respondent bas pointed out that this forum lacks jurisdiction to adjudicate the case in the light of SRO 371(I)/2002 dated 15-06-2002, whereby appropriate office for subsection (3) of section 32 is Superintendent/Principle Appraiser of the relevant Collectorate. The respondent has argued that subsection (3) of Section 32 attracts in advertence, error and misconstruction and no mens-rea is involved. Whereas the department is of the view that penalties prescribed for all subsections of Section 32 and therefore, it is to be adjudicated by the Collector of Customs (Adjudication). The matter has been examined in the light of SRO 371(I)/2002 dated 15-06-2002, which categorical regarding appropriate officer in the context of subsections (2) and (3) of Section 32 of the Customs Act, 1969. It is held that no mens-rea is involved in the instant case, therefore, the appropriate officer for subsection (3) of Section 32 of the Customs Act, 1969, is Superintendent / Principle Appraiser of the Collectorate. The show-cause notice invokes subsection (3) of section 32 of the Customs Act, 1969. Hence it is concluded that this forum lack jurisdiction to adjudicate the contravention report forwarded by the Collectorate. Accordingly, the show-cause notice is vacated on account of lack of jurisdiction"

3.Being aggrieved and dis-satisfied with the impugned Order-in-Original the Collector of Customs, MCC, Gadani, filed the appeals before this Tribunal on the grounds incorporated in the Memo. of Appeal.

4.On the date of hearing Mr. Faisal Khan, Deputy Collector appeared on behalf of the appellant reiterated the facts and contents of the grounds mentioned in the Memo. of Appeal and contended that, the learned Collector (Adjudication) has totally ignored the presence of S.R.O.886(I)/2012 dated 18-07-2012, which has an overriding effect over the provisions of SRO 371(I)/2002. Keeping in view the cardinal principle/doctrine of law i.e. "later in time", it is clear that if there are two (02) legislations on a similar issue, then according to the doctrine of "later in time", the latter shall prevail. Hence, S.R.O. 886(I)/2012 being a later instrument shall be applicable while adjudicating the matters of recovery of the Government's legitimate revenue, therefore, the impugned Order-in-Original is liable to be set aside in limine on the basis of this ground alone. He further contended that, the learned Collector (Adjudication) has also ignored the very in fact and the legal proposition that the provisions of Section 179 of the Act were amended in the year 2012 through Finance Act, 2012, and all recovery cases, irrespective whether it is of subsection (2) or (3) of Section 32 of the Customs Act, 1969, are to be adjudicated by the appropriate officers, according to the pecuniary limits of the duties / taxes involved for adjudication. The text of the amended Section 179(1) of the Customs Act, 1969, is reproduced below for ease of reference:--

179. Power of adjudication.---(1) Subject to subsection (2), in cases involving confiscation of goods or recovery of duty and other taxes not levied, short levied or erroneously refunded, imposition of penalty or any other contravention under this Act or the rules made thereunder, the jurisdiction and powers of the officers of Customs in terms of amount of duties and other taxes involved, excluding the conveyance, shall be as follows, namely:-

5.He further contended that, in cases of goods to be exported, the above officers of Customs shall have their jurisdiction and powers in terms of FOB value and twice their respective monetary limit." The aforesaid amendment in the Section 179(1) was sought in July, 2012 through Finance Act, 2012, and in order to implement the same the Adjudication Collectorates, were created by the Federal Government vide S.R.O. 886(I)/2012, and the clearance Collectorate and the namely constituted Adjudication Collectorate. According to the S.R.O. 886(I)/ 2012, except the following cases all other cases are to be adjudicated by the Adjudication Collectorate which includes recovery cases, irrespective it attract subsection (3) or (2) or (3A) of Section 32 of the Act:--

(a).Cases involving rejection of refund or rebate.

(b).Cases involving technical violations of manifest clearance.

(c).Cases involving violation of baggage rules.

(d).Cases involving technical violations of import of export restriction without the involvement of any evasion of duty or taxes.

(e).Cases involving determination of value under Section 25-A of the Customs Act, 1969.

(f).Cases specifically remanded by superior Courts to the Officer of the concerned Collectorate by name or by designation, and

(g) Cases involving routine condonation or extension of time and procedural omissions.

6.The aforesaid cases are to be adjudicated by the clearance Collectorates. In the above, exclusion there is no case of recovery of duties and taxes, therefore, from the contents of the S.R.O. 886(I)/2012 it is clear that any sort of recovery, which attracts the provisions of Section 32 of the Act, is ought to be adjudicated by the officers of the adjudication Collectorates, according to the pitch of short paid amount of duties and taxes. The instant case involving recoverable amount of Rs. 97.22 million is beyond the monetary limit of the Superintendent of Customs. The learned Collector (Appeals), has also ignored the very fact that prior to the Finance Act, 2012 the taxt of Section 179(1) of the Act was as under:--

179. Power of adjudication.---(1) Subject to subsection (2), in cases involving, confiscation of goods or imposition of penalty under this Act or the rules made there under, the jurisdiction and powers of the Officers of Customs in terms of amount of duties and other taxes involved, excluding the conveyance, shall be as follows.

(i)Additional Collector Without limit

(ii)Deputy Collector not exceeding eight hundred thousand rupees

(iii)Assistant Collector not exceeding three hundred thousand rupees.

7.The aforesaid provisions of Section 179(1) of the Act, prevailed prior to 01.07.2012, it is clear that the simple recovery of duties and taxes, attracting the provisions of Section 32(3) were not subject to adjudication for imposition of penalty or confiscation of the goods rather only such cases of evasion were included for adjudication under Section 179 of the Act, where the provisions of subsection (2) read with subsection (1) of Section 32 of the Act are/were involved. Therefore, keeping in view the amended Section 179(1) of the Act, w.e.f. 01.07.2012, the cases attracts the provisions of Section 32(3) are also ought to be adjudicated by the officers of the Collectorate of Customs adjudication, according to the pitch of the recoverable amount of duty and taxes. In the instant case recoverable amount was Rs.97,220,667/-. Thus the Collector of Customs Adjudication is the appropriate adjudicating authority in the subject matter. Hence, the impugned order of the Collector (Adjudication), on the basis of the unreasonable opinion, is liable to be set- aside forthwith and the Respondent No. 2/Collector (Adjudication) is required to pass an order, as having jurisdiction, for recovery of the duties and taxes, which are liable to be paid by the respondent importer in terms of Section 79(1) (b) read with Section 80(3) of the Act. He further contended that, Section 4 of the Customs Act, 1969 empowers "an officer of customs to exercise such powers and discharge such duties conferred or unfold upon any officer subordinate to him". The Collector Adjudication was empowered to exercise the powers of his subordinate officer even otherwise if he deemed that the appropriate officer for the purpose of section 32(3) was superintendent. However Collector (adjudication) erred in law and disposed of the case against the department in negation of the enabling legal provisions. The respondents have no answer to merits of the case that the for mooring cannot be termed as a bona fide items as requirement of the project the provisions of condition (i) of the S.R.O. 678(I)/2004 clearly states that the companies, mentioned in condition (i), can get the concession/ exemption for such items which are for their projects of oil and gas exploration and production, refinery, oil and gas pipeline, liquefied petroleum gas (LPG), compressed natural gas (CNG) and natural gas infrastructure. Since, the impugned Tug is not an item to be considered as project requirement, as explained above, therefore, the respondent importers' argument to allow concession/ exemption is patently incorrect. Hence, the appellant Collectorate is entitled, having jurisdiction, to get the case adjudicated through the appropriate officers of Adjudication Collectorate for enforcement of demand for the recoverable amount. In compliance of the order passed by the Tribunal through rejoinder appellant further submitted the statement and documents. In proof of their claim, appellants submitted the copy of order passed in Constitution Petition No.743/2016. After hearing the C.M.A. No. 1776/2016 on 5th of October, 2016, wherein the issue about the claim of exemption has been agitated, which is still pending before the Honorable High Court of Balochistan under reference No.8 of 2016, he pointed out the fact that the respondent had deposited the adjudged duty and taxes inspite of granting the claimed exemption. In the light of the facts/grounds he prayed that, this Honourable Customs Appellant Tribunal may kindly set-aside the impugned Order-in-Original being devoid of merit and legal strength in the interest of justice be met.

8.No cross objections under subsection (4) of Section 194-A of the Customs Act, 1969 have been submitted by Respondents, subsequently filed the para wise comments on behalf of the Respondent/Messrs Byco Petroleum Limited. Mr. Zafar Iqbal, Advocate appeared on behalf of Respondent No.1 and strongly opposed the arguments of the appellant and reiterated the contents mentioned in the Para-wise comments and contended that, the Order-in-Original was very much legal, lawful and is liable to be maintained as the same has been passed after considering all aspects of the case. He further contended and argued that, the Order-in- Original has been correctly passed in accordance with the law and show-cause notice in question stand vacated. S.R.O.886(I)/2012 dated 18-7-2012 is irrelevant as regards the imposition of penalties and fine. It only relates to territorial jurisdiction whereas S.R.O. 371(I)/2002 have not been rescinded. The later SRO does not add any section to the powers of the Adjudicating Collectorate. Hence cases of section 32(3) will continue to be dealt with by the Executive Collectorate. It is a common practice even today in all Customs Houses to raise demand under section 32(3) of the Customs Act, by the executive Collectorate and only cases of section 32(1) and (2) are sent to the adjudicating authorities. He further contended that, perusal of S.R.O.886(I)/2012 dated 18-7-2012 would show that adjudication of cases under section 32(3) has not been added in the SRO. It only excludes certain cases from the jurisdiction of Collector (Adjudication) but does not add any new section. Even today the practice in all Customs houses is that where fines and penalties are not leviable, a demand is raised by the executive Collectorate. If every re-calculation of duty and taxes has to be sent to Adjudication Collectorate, the Customs Houses would not be functioning as they are. He also contended that cases under Section 32(3) are also subject to adjudication. Every day the duties and taxes are recalculated and demanded at each Customs House daily without sending them for adjudication. He further contended that, the Collector Adjudication can take up responsibilities/powers of his own Collectorate and not of any other Collectorate. Hence the show-cause notice was correctly vacated by the Collector Adjudication. A perusal of the show-cause notice would further show that it provides for enforcement of penal provisions of the Customs Act under clauses (1) and (14) of Section 156(1), which negates the version of the respondent that it was only for recovery of duties and taxes. The merits of the case had already been discussed and it had been argued that the tugs were bona fide item as already allowed by FBR on recommendation of the Regulatory Authority. In this connection Para 3 - 20 of the Order-in-Appeal has been referred along with (e) and (f) at the prayer in Para 20. It is evident that the appellant has failed to comprehend the argument given therein. It has been held at the level of the Supreme Court that a right/privilege/ concession or exemption always remains available to a party as long as the notification holds the field. (Reliance is placed on PLD 1999 SC 1072). In view of the foregoing, he prayed that, the appeal may kindly be dismissed along with costs.

9.The respondent has also contended that in a case of audit, officers have been specified and they belonging to Post Import Directorate General and instances like one in hand can only be reopened by the Director Post Import Audit in terms of Section 195 of the Customs Act, 1969, unfortunately, the mater was not re opened by the revenue as has been prescribed under the regulations namely S.R.O. 500(I)/2009, the permitted period of limitation stood at two years which in all these cases had stood lapsed and the assessment proceedings did become final, being past and closed transaction. And since the action of the appellant is in violation of SRO 500(I)/2009 which did confer the powers of re-opening of a decided case to the Director of Post Import Directorate for the purpose of audit, the action initiated and taken by the appellant and respondent No.2 were illegal and a nullity in the eyes of law. Another aspect of the case is that show-cause notices issued in these cases have failed to specify any defect in the assessment proceedings, for example, subsection (3) of section 32 can be applied when an assessment proceeding had a defect on the basis of inadvertence, error or misconstruction. Unfortunately the notices have failed to specify any of these grounds, that means, the show-cause notices by its nature were defective and not enforceable in the light of Supreme Court's judgment given in Khyber Electric Lamp case [2001 SCMR 838]. He prayed that since there is no demand against the tugs imported by Messrs Byco, the same may be declared to be illegal detention of goods involved and the same be directed to be released forthwith.

10.After giving the anxious thought to the arguments placed by both the parties and perusal of record, ably deliberations guided us to make the observation to the controversy raised specifically in the subject appeals. First of all upon perusal about the contention of the appellant, that under S.R.O. 886(I)/2012, the Respondent No.2 had the jurisdiction to decide the matter, it is pointed out that the preamble of the said notification states that specified officers shall adjudicate the cases relating to area specific Collectorates in the notification, meaning thereby that the said notification is an area specific and it has assigned the work of Collectorates as shown in column 3 of the notification to the adjudication officers shown in column 2, furthermore, in paragraph 3, the cases relating to specified categories have also been excluded from the purview of these officers. The objective study of the notification reveals that, it is an area specific notification concerning territorial jurisdiction by specifying the Collectorates to which Collector Adjudication was conferred territorial Jurisdiction relating to a specific Collectorate. A reading of the notification S.R.O. 371(I)/2002 reveals that subject matter jurisdiction has specifically been assigned and powers of the appropriate officers to deal with cases concerning different provisions of the Customs Act, 1969 have been conferred. Cases relating to Section 32(2) have been assigned to [an appropriate adjudication officers] who in the present case happens to be the Collector of Customs Adjudication Quetta and the powers and functions relating to subsection (3) of Section 32 have been conferred on to a Superintendent Customs or a Principal Appraiser. The Collector Adjudication thus had not been assigned the powers of adjudication relating to the cases falling under subsection (3) of Section 32 of the Customs Act, 1969. That means that the very act of issuance of show-cause notice under review was ab-initio wrong and illegal as the notice was issued by an officer not competent to decide such matters. Hence the tribunal consisting of Collector Adjudication was corum non judice. The Supreme Court in the case of Chitranjan Cotton Mills [PLD 1970 SC (sic)] has held that where a Court or Tribunal has not been properly constituted, it amounts to corum non judice having no authority to decide the matters before it. The conclusion thus arrived at by respondent No.2 was perfectly legal and very much within the framework of law and he rightly concluded that he was not competent to adjudicate the case since he lacked subject matter jurisdiction. As regards the contention that a Collector had jurisdiction to decide any case under section 179 of the Customs Act, it is pointed out that under subsection (2) of Section 179, unfettered powers have been conferred on Board to vary or fix the jurisdiction and powers of any officer of customs or even to change their territorial jurisdiction, and through S.R.O. 371(I)/2002 the board specified and conferred powers of appropriate officers on the officers specified therein, as defined in clause (b) of Section 2 of the Customs Act, 1969, hence the contention that section 179 would override a notification issued within the framework of section 179(2) of the Customs Act, 1969 is misconceived and not tenable. Similarly contention that under section 4 of the Customs Act, a senior officer can do anything of his own choice is misconceived the law has very specifically stated and specified powers and where the Board has issued a notification in terms of powers given to it under sub-section (2) of section 179, no other authority can assume jurisdiction, the contention, of the applicant thus loses its force, even otherwise it appears that section 4 of the act is envisaging administrative powers and not the powers of adjudication, as such there is no force even in this contention. Other aspect and controversy in this case with regard to the assessment and clearance of G.D at initial stage of the import, the Assessment Order passed under Section 80 of the Customs Act, 1969 and Rule 438 of Sub-Chapter-III of Chapter-XXI of Custom Rules, 2001 by the authority defined in Section 2(a) is an order as interpreted in section 193 of the Customs Act, 1969 and reported judgment at PLD 1986 Lah. 237 as follows:--

".......the word 'order' is not being a term of art has no fixed legal meaning. According to Prem's Judicial Dictionary, it covers commands or directions that something shall be done.... the term order in general is comprehensive enough to include all kinds of order including a formal order."

11.In the instant cases, it is an admitted fact that against the Goods Declaration assessment order were validly passed by the competent authority defined in Section 2(a) under Section 80 of the Customs Act, 1969 and these orders are appealable orders as expressed in Section 193 ibid. Since prior to amendment in Section 193 of the Customs Act, 1969 through Finance Act, 2012 right of appeal was not available to the respondent Collectorate, the only option available with the Collector of Customs of its jurisdiction was to reopen a past and closed transaction i.e. assessment orders in exercise of the power vested upon him through the framework of Section 195 of the Customs Act, 1969. Even while considering Section 21 of the General Clauses Act, 1897, the Supreme Court in a case PLD 1969 SC 407 held that, the authority competent to make order has power to undo it, but the order cannot be withdrawn or rescinded once it has taken legal effect and certain rights are created in favour of any individual and that the principle of locus poenitentiae (the power of rescinding till a decisive step is taken) would be available and in case of any exemption granted from payment of any duties and taxes the powers acquires the vested right, the same cannot be denied through a executive instrument, but the same can be denied his vested right only by a legislative provision and not otherwise. Doctrine of promissory estopple is available in Pakistan against the Government and its functionaries. (Ref 1992 SCMR 1652). It is also settled principle of law that, order infield cannot be substituted with another order reference is made to the Hon'ble High Court of Sindh reported judgment Messrs Smith Kline French v. Pakistan reported as 2004 PTD 3020 held that "once an order is passed, which attains finality, the same cannot be subject to a show-cause notice again, considering that no appeal or revision is filed against the first order as this is in derogation of the principles of administration of justice".

12.In these cases the assessment orders passed by the authority defined in Section 2(a) could had only be reopened by the competent authority under Section 195 ibid. to examine the record of any proceedings conducted under this Act for the purposes and satisfying himself as to the legality or the propriety of the order passed by the assessing officer, this has not been done, instead they / department while usurping the powers of the competent authorities, rendering the contravention report and issued the show-cause notice as being without power/jurisdiction, hence ab-initio void and as such coram non judice.

13.It is a settled law that an order or decision passed or taken by the subordinate officer can only be corrected in revisional power and not under section 32 of the Customs Act, 1969 since the Collector or the Federal Board of Revenue exercise their revisional powers or correctional jurisdiction in terms of Section 195 of the Customs Act. For adjudication of a case through issuance of show-cause notice, the proof of mis-declaration has to be prima facie present in the first instance if allegation of mis-declaration is to be levelled against the taxpayer in terms of Section 32 of the Customs Act, 1969 through issuance of show-cause notice by the officer of original jurisdiction. When the consignments were released on the basis of commercial documents and physical examination by the Examining and Assessing Officers, the charges subsequently levelled at against the Respondent under Section 32(3) of the Customs Act, 1969 are unsubstantiated in terms of Hon'ble High Court's judgments reported as 2008 PTD 1968, wherein the Hon'ble High Court of Sindh has observed that "it is a settled principle that after clearance of goods and remand of consignment from customs area, customs authorities are functus officio to reopen the case again as it becomes a past and closed transaction.

14.In view of the above narration, the whole proceeding are infested with inherent legal infirmities and substantive illegalities tantamount to patent violation of mandatory statutory provision and that too , in utter disregard of the provision of the Acts/Ordinance and Principle of Law settled by the Superior Judicial Fora. The chronicle events right from assuming of power for audit and issuance of show-cause notice are without power/jurisdiction, hence ab-initio, void and as such coram non judice by virtue of the fact that, the appellants ignored the provision of Acts/Ordinance and also the ratio settled by the Supreme Court of Pakistan in reported judgment 2010 SCMR 1425 Section Officer Government of Punjab Finance Department and others v. Ghulam Shabbir that the Principle of Administration of Justice and Interpretation of Statute is that "the person who is performing the role of a judge, no matter even in quasi-judicial proceeding must wear all laws of the country on the sleeves of his robes and failure to do so by any reason is not an excuse" and reported judgments 2002 PTD 2457, PLD 1971 SC 61, PLD 1973 SC 236, PLD 1964 SC 536, 2001 SCMR 838 and 2003 SCMR 1505 and 2006 SCMR (sic), "if the law had prescribed method for doing of a thing in a particular manner, such provision of law is to be followed in letter and spirit and achieving or attaining the objective of performing or doing of a thing in a manner other than provided by law would not be permitted".

15.It is flabbergasted to note from the record of the case that the appellants also ignored the vital fact that assuming of jurisdiction is of great importance and power has to be exercised within the allotted sphere, acting contrary to that is incurable rather fatal for the health of the case and this has been countless time held by the Hon'ble Supreme Court of Pakistan that in case of assuming wrong jurisdiction, that the super structure built thereon ought to crumble down as held in reported judgments PLD 1996 Kar. 68, 2006 PTD 978 and PLD 1971 Supreme Court 184. Beside it is advantageous to us to refer to 2001 SCMR 1822 Ali Muhammad v. Chief Settlement Commissioner, wherein the Hon'ble Chief Justice of Pakistan Mr. Iftikhar Muhammad Choudhry presiding a bench in the capacity of Judge of Supreme Court held that:--

"whenever order are passed by an officer without caring whether jurisdiction vests in him or not, it is prima facie reflect on his conduct as well as competency. It is also to be noted that whenever authority is exercise in such a manner then no other inference can be drawn except that the functionary has transgressed his jurisdiction for the consideration other than judicial one and the Courts seized with such orders may recommend any action against the said officer because neither the executive authorities nor judicial forum will pass a wrong order because the jurisdiction in both the capacities is conferred upon such authorities to discharge their function in accordance with law which has bestowed upon them to function in that capacity and if there is abuse of power by such officer then no hesitation should be felt in passing stringent stricture against officer keeping in view of norms of justice."

16.Their lordship also held in reported judgment PLD 2004 Supreme Court 600 All Pakistan Newspaper Society and others v. FOP and others that "determination of jurisdiction by Court seized with the matters is one of the important element in administration of justice as if justice has been provided basing upon corum non judice order then same would have no legal sanction behind." And in PLD 2005 Supreme Court 842 Khyber Tractor (Pvt.) Ltd. v. Pakistan Through Ministry of Finance, Revenue and Economic Affairs that "question of jurisdiction of a forum is always considered to be very important and any order passed by a Court or a forum having no jurisdiction, even if it is found to be correct on merit is not sustainable. Jurisdiction of a Court lays down a foundation stone for a judicial or a quasi judicial functionary to exercise its power/authority and no sooner the question of jurisdiction is determined in negative the whole edifice built on such defective proceeding, is bound to crumble down." (Privi to evidence) in these present appeals Order-in-Original covers the ratio decidendi observed by the higher courts (supra).

17.As regards the issue that whether or not the respondent was entitled for the exemption benefit under SRO 678(I)/2004, it is noted that the said SRO grants relief and concessions to the petroleum industry and it exempts machinery, equipment, 10 materials, specialized vehicles, or vessels, pickups, helicopters, aircrafts, accessories, spares, chemical not being manufactured locally imported by exploration and petroleum companies including their contractors and sub-contractors but subject to certain conditions. The contention of the appellant is that imported goods are not covered in terms of condition (vii) of the conditions. It is their point of view that tugs and boats do not fall within the framework of categories of goods specified and that the concession is project specific only. The contention of the appellant has been reviewed by us. It appears that while construing the SRO the department misinterpreted it by endowing meaning of their own choice. The basic principle to interpret a fiscal statute is that an instrument is to be taken as a whole and not in isolation. The Notification No.678(I)/2004 contains two parts, that is, part I through its paras 1-4 is giving right of exemption, the respondent's equipments are covered in para 1 of the notification and exemption is very much available to them, part II of the notification provides governing conditions to extend the benefit of exemption to a right created, this right is to be governed by condition No.(vii) of the subject claimed SRO, this condition states that exemption from duty and taxes will be available for the purpose of construction, erection, exploration and production of petroleum projects. The perusal of this part of the notification clarifies that equipment meant for construction, erection, exploration and production of petroleum products are exempt and the fact that respondent is involved in the production of petroleum products is not denied by the appellant, thus the exemption is not dependant to coniuctive statement, either it is to be imported disjunctly which means that company, who is either engaged in construction, erection, exploration, or production of petroleum product shall be entitled for duty and tax due import, The exemption meant for equipments including tug and boats to a company engaged in production, of petroleum products remains available till the production petroleum company remains engaged in the production of petroleum products. In this regard, attention is invited to a similar issue which came up for decision before UK'S Queens Bench in the case Division of: R.v New Bound [1962] 2Q.B.102 where the phrase "local and public authorities "was reviewed and the court held that the phrase does not mean authorities which are local and public rather it meant authorities which are either local or public. On the same analogy, the phrase exploration and petroleum companies means either exploration companies or a production company. It means that a production company engaged in petroleum production is evenly entitled for the benefit and facilities extended vide SRO-678(I)/2004. It may be noted that the crude oil for the production purposes is a necessary ingredient for a petroleum production company hence equipment required for to disembark crude oil being a requirement for production of petroleum product brings the appellant in the fold of exemption under SRO-678(I)/2004, this point of view is supported by the Federal Board of Revenue's letter dated 04-05-2012 whereby respondent's goods were released in terms of said SRO, on the basis of verification made by the Ministry of Petroleum. The act of verification by the Ministry dissolves the element of doubt and entitles respondent No.1 [who is engaged in the production of petroleum] to avail the benefit of exemption from payment of duty and taxes on all imports including the goods imported on the basis of import cum export. There is thus no doubt that equipments, and materials imported by the respondent stand covered within the framework of S.R.O. No 678(I)/2004, for the release of goods duty and taxes free on import cum export basis. As regards the Board's decision taken in 2013 the same is in contradiction of the position stated in the Notification No. 678(I)/2004. The proceedings initiated by the appellant against the respondent to deny the exemption were closed door proceedings and the respondent was never given a chance to explain the correct legal position, these proceedings were thus in violation of the principles of natural justice to the extent that the person whose rights were being affected had not been given an opportunity to explain his point of view. As has been held many a times by the superior courts of Pakistan, such proceedings are not only illegal but is also ab-initio wrong being in violation of the principles of natural justice. It is mandatory and established principle of law that the rights to claim exemption under a notification issued under Section 19 of the Customs Act, 1969, remained available to a party as well as the exemption notification hold the fields. Section 6 of the Protection of Econdmic Reforms Act (XII of 1992) shows that fiscal incentives for investment provided by the government to the statutory orders listed in the schedule or otherwise shall continue in force for the term specified therein and shall not be altered to the disadvantage of the investors, Notification No.S.R.O. 678(I)/2004, clearly laid down the statutory commitment to the beneficiary. Honorable Supreme Court of Pakistan while deciding the case of Messrs Gatron Industries v. Government of Pakistan and others reported as 1999 SCMR 1072 specifically observed that even otherwise the exemptions already granted through notification the said statutory could not, therefore, be taken away through the subsequent notification by an executive act purported, supersede the first notification, unless the same was taken away through legislative measures. But, in this present case through Notification S.R.O. 678(I)/ 2004 the respondent claimed the exemptions and the same were accordingly granted in the year of 2012. As such the subsequent actions initiated and treated by the appellant are completely destructive of the right vested to the respondent as beneficiary, therefore, without lawful authority and of no legal effect the entitlement of the beneficiary, vested rights could not be taken, away, save by express words and necessary intendment (principles) as held by the Honorable Suprement Court of Pakistan in the case of Messrs MY Electronics (Pvt.), Ltd. v. Government of Pakistan reported in 1998 SCMR 1404.

18.Being custodian of law, it is the duty of the Court to follow the legal obligations observed by the Courts as well as made by the legislature. Observations of the higher Courts and the intention of the legislature and interpretation which leads to manifest the absurdity should, if possible be avoided. The Courts are under statutory obligations to supply the omission with a view to prevent the defeating of a vary object, rules can fill in the gaps, in a piece of legislation, where the plain instructions would lead to absurd results. It is well entrenched legal proposition that an interpretation which is more in consonance with the avowed policy that decipherable from its title and preambles, it is to be preferred to an interpretation with view that, to avoid the pursuance from the abridge, abrogate or infringe those rights which have occurred in favour of the parties by any means. In the light of what has been stated and observed herein above particularly the interpretation of law, legal propositions and observations made thereon and to follow the ratio decidendi observed by the Superior Courts and our additional observations we hereby pass the order and upheld the observations passed in the Order-in-Original No.117/2016 dated 10.10.2016 by the Collector of Customs (Adjudication), Quetta. By doing so, the appeals are accordingly rejected. Since there is no demand against the withheld or detained goods, subsequent to that the same shall be released forthwith.

19.Judgment passed and announced accordingly.

HBT/40/Tax(Trib.) Appeals rejected.