BBJ PIPE INDUSTRIES LTD. VS COLLECTOR OF CUSTOMS (ADJUDICATION-II), 2018 PTD-CUSTOMS-APPELLATE-TRIBUNAL-LAHORE 2372 (2017)

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

----Ss. 32, 79, 80, 162, 163, 168 & 171---SRO No.565(I)/2006, dated 5-6-2006 (as amended by SRO No.474(I)/2016, dated 24-6-2016)---Misdeclaration and misstatement---Consignment was declared to contain prime quality Hot Rolled Steel Coils at self assessed value depending upon sizes of coils attracting 11% customs duty and sought clearance thereof against 5% concessionary rate of customs duty as per serial No.5 of amending S.R.O. No.474(I)/2016, dated 24-6-2016 of S.R.O. No.565(I)/2006, dated 5-6-2006---Goods declaration was completed under S.80 of the Customs Act, 1969 without physical examination of goods, as per declared description in the light of import documents and goods were allowed release against payment of duty/taxes leviable therein---Meanwhile R & D Section of the Model Customs Collectorate of Appraisement received an information that importers were attempting to clear the Hot Rolled Steel Sheets in Coils of Secondary Quality under the guise of Prime Quality and evading the duty/taxes by claiming inadmissible benefit of SRO by paying 5% customs duty---Goods were examined by R & D Section and consignment thereof was seized under S.168 read with S.171 of the Customs Act, 1969---In the present case, the chemical composition of each coil was different from the other, meaning thereby that the consignment did not comprise coils of single batch/lot having similar composition---By virtue of chemical composition also the quality of goods was found to be secondary quality---When importer was confronted with the documentary proof of mis-declaration, he voluntarily opted for payment of duty and taxes vide additional duty payment challan---Value of offending goods was assessed as Rs.83,668,115 by the Model Customs Collectorate of Appraisement and said act of importer was considered to be an offence of mis-declaration/mis-statement within the meaning of Ss.32(1), 79 & 192 of the Customs Act, 1969---Adjudication authority, imposed penalty of Rs.200,000 upon the Clearing Agent---Being aggrieved and dissatisfied with the impugned order-in-original, importer filed appeal before Appellate Tribunal---Impugned show-cause notice was issued to the importer on the basis of information received by R & D Section of Model Customs Collectorate of Appraisement; wherein they apprehended that the importer attempted to clear the Hot Rolled Steel Sheets in Coils of secondary quality under the guise of prime quality and evading the duty/taxes by claiming inadmissible benefit of SRO---After detailed deliberation in association of all stakeholders, it was observed that goods were incorrectly declared as "prime quality", whereas same were correctly classified as "secondary quality"---Subject imported goods were released, but subsequently were detained and seized---Authority made the seizure without complying proper procedure of law as envisaged and required under Ss.162 & 163 of the Customs Act, 1969---Such transgressional and derogatory act of the Authority, did not have any support or warrant of law to be treated admissible as their rightful act as same was a clear violation of the applied law caused and created by the authorities and their affiliates---Issuance of show-cause notice to the importer by the Customs Officer for the short recovery of tax was against the very spirit of law and the Maxim 'ubi jus ibi remedium' (where there was a right, there was a remedy)---Impugned show-cause notice was vacated and order passed thereon was set aside---Authorities were directed to release the subject goods forthwith; appeal was accordingly allowed.

Akhtar Hussain v. Collector of Customs (Appraisement) and 3 others 2003 PTD 2090; PLD 1996 Kar. 68; 2006 PTD 978; PLD 1971 SC 184 and 2001 SCMR 1822 ref.

(b) Interpretation of statutes---

----Court being custodian of law, was bound to follow the legal obligations laid by the higher courts as well as the legislature---Observations of the superior courts and the intention of the legislature and interpretation which would lead to manifest the absurdity, should, if possible be avoided---Courts were under statutory obligation to supply the omission with a view to prevent the defeat of the very object, rules and could fill in the gap in a piece of legislation, where the plain instructions would lead to absurd results---Interpretation, which was more in consonance with the avowed policy that decipherable from its Title and Preamble and avoid to abridge, abrogate or infringe those rights which had occurred in favour of the parties by any means.

Ahmed Ali Hussain for Appellant.

Abdul Qadeer A.O. for Respondent.

Date of hearing: 27th February, 2017.

JUDGMENT

MUHAMMAD NADEEM QURESHI, MEMBER (JUDICIAL-I).--By this judgment, we intend to dispose of Customs Appeal No.K-11/2017 filed by Messrs BBJ Pipe Industries Ltd., against Order-in-Original No.208/2016-2017 dated 21-12-2016 passed by the Collector of Customs (Adjudication-II), Karachi.

2.Brief facts of the case are that the appellant imported a consignment declared to contain Prime Quality Hot Rolled Steel Coils weighing 1814.105 MT from Taiwan at self assessed value of US$ 792763 (i.e. US$ 437/MT) under PCT headings 7208.3790, 7208.3890 and 7208.3990 depending upon seizes of coils all attracting 11% customs duty, 17% sales tax and 5.5% income tax (in case of industry) vide GD No.KEWB-HC-3911-25-10-2016 under section 79(1)(a) and (b) of the Customs Act, 1969 and sought clearance thereof against 5% concessionary rate of Customs duty as per Serial No.5 of amending S.R.O. 474(I)/2016 dated 24-06-2016 of S.R.O. 565(I)/2006 dated 05-06-2006. The importer also claimed income tax exemption on the basis of Income Tax Certificate No.100000014229576 150187 duly fed in the system by the Income Tax Authorities. The Goods Declaration was completed under Section 80 of the Customs Act, 1969, without physical examination of the goods, as per declared description in the light of import documents, scanned by the importers and goods were allowed release against payment of duty/taxes leviable thereon. Meanwhile, R&D Section of the Model Customs Collectorate of Appraisement (East), Custom House, Karachi, received an information that importers are attempting to clear the Hot Rolled Steel Sheets in Coils of Secondary Quality under the guise of Prime Quality and evading the duty/taxes by claiming inadmissible benefit of S.R.O. 565(I)/2006 dated 05-06-2006 as amended by S.R.O. 474(I)/2016 dated 24-06-2016 by paying 5% Customs duty, 17% sales tax, 0% regulatory duty and 0% income tax, whereas, Hot Rolled Steel Coils of Secondary Quality are chargeable to 20% Customs Duty, 17% sales tax, 12.5% regulatory duty and 5.5% income tax under PCT headings 7208.3710, 7208.3810 and 7208.3910, respectively.-

3.The goods were found to be in the shape of coils of various sizes, while for prime quality, the coils to be in even/standard sizes. The goods were examined by the R&D Section. The consignment was thereafter seized under section 168 read with Section 171 of the Customs Act, 1969, vide Seizure Memo. of even number dated 02-11-2016 along with Mushirnama. It is worth mentioning that in case of prime quality, goods, the chemical composition of all coils contained in the batch/lot remains same, while in the instant case the chemical composition of each coil was different from each other, meaning thereby the consignment did not comprise of coils of single batch/lot having similar chemical composition, hence, by virtue of chemical composition also the quality of goods was found to be secondary quality. Since the heat numbers were not mentioned on the MTC and it was not the proper format of MTC as it was not issued or signed by the manufacturer where coils were manufactured, therefore, MTC provided in this case was also not found relevant to the imported goods and prima facie, was false in material particulars. The importers when confronted with the said position, provided copy of another MTC which itself authenticated that previous MTC uploaded for seeking release of goods was false in material particular and fabricated. The identical goods from the same supplied were also imported by another importer M/s. I.I.L. through same vessel who declared the goods as Secondary Quality vide GD No.KEAP-IB-710 dated 25-10-2016. The present importer when confronted with the foregoing documentary proof of mis-declaration, voluntarily opted for payment of duty and taxes vide additional duty payment challan No. KEWB-000782-31102016 amounting to Rs. 27,526,609/- while payment of short levied income tax amounting to Rs.11,934,3370 is still outstanding against the importer as the income tax exemption claimed by the importer was also found inadmissible as the same was issued on the basis of L/C and the description along with PCTs mentioned in the said L/C and relevant income tax exemption certificate were subsequently found other than the claimed description and classification. Hence, the importer with an intention to deprive the government from its legitimate revenue to the tune of Rs. 38,593,800/- (customs duty amounting to Rs.12,550,216/- sales tax amounting to Rs. 3,911,485/- regulatory duty amounting to Rs. 10,458,514/- and income tax amounting to Rs.11,673,585/-). The value of offending goods was assessed as Rs.83,668,115/- by the Model Customs Collectorate of Appraisement (East), Karachi. This act of the importer was an offence of mis-declaration/mis-statement within the meaning of Sections 32(1), 32(2), 32(A) 79(1) and 192 of the Customs Act, 1969 read with Section 148 of the Income Tax Ordinance, 2001, Sections 2(37), 6 and 33 of the Sales Tax Act, 1990, punishable under clauses 14, 14A, 45, 86 of the section 56(1) of the Customs Act, 1969, Section 33 of the Sales Tax Act, 1990. In addition, the instant GD was gate out, despite creation of examination by the Deputy Collector RR&D Section and consignment was located in Fatima (Pvt.) Godown, K-28-60 Lyari Hawksbay, Trans Lyari Road, Karachi, which was detained under the provision of Section 186 of the Customs Act, 1969, as per Detention Notice No.MCC/Misc/122/2016-R&D(E) dated 29-10-2016. Subsequently, it was seized vide seizure notice of even number dated 02-11-2016 duly acknowledged by all the addressee. Accordingly a show-cause notice was issued to the present appellant and the matter was adjudicated by the adjudicating officer who passed the order and concluded her observations as follows:--

"In the light of the afore-stated facts, the charges levelled in the show-cause notice stand established. Accordingly, the offending goods are confiscated under clauses (14), (14A), (45) (86) of Section 156(1) of the Customs Act, 1969 for violation of provisions of Sections 32(1), 32(2), 32(A), 79(1) and 192 ibid. However, an option is given to the importer to redeem the goods under Section 181 of Customs Act, 1969 on payment of a fine equal to 35% of the value of offending goods to the tune of Rs.29,283,840/- (35% of ascertained value of offending goods amounting to Rs. 83,668,115/ - subject to the condition that the goods are otherwise importable as per Import Policy Order in vogue) as prescribed under SRO 499(I)/2009 dated 13th June 2009, in addition to leviable duty and taxes thereon, if recoverable. A penalty of Rs. 800,000/ - (Rupees Eight Hundred Thousands Only) is imposed under clauses (14), (14A) of Section 156(1) of Customs Act, 1969 on the importer.

As far as the role of the clearing agent in the subject case is concerned, it is observed that under the Customs Act, 1969 he acts on behalf of the principal for all the purposes of the Act, and is required to make a true statement / presentation to the Customs after analyzing all the aspects of the Goods Declaration and the documents delivered to him by his principal. A penalty of Rs. 200,000/- (Rupees Two Hundred Thousand Only) is, therefore, imposed upon the clearing agent, namely Messrs Chanar Associates, (CHAL # 22525), Room # 18-A, 19-A, First Floor, Pak Chambers, West Wharf, Karachi under Sections 156(1), 32(2) and 32(A) of the Customs Act, 1969. The assessing officer is directed to check all other formalities before release of the said consignment."

4.Being aggrieved and dis-satisfied with the impugned Order-in-Original the appellant filed the instant appeal before this Tribunal on the grounds mentioned in the Memo. of Appeal.

5.On the date of hearing the appellant argued the matter and contended that the impugned Order has been passed by the Respondent No.1 without giving due consideration to the questions of law and facts agitated by the Appellant vide their response and during the time of the hearing. The Respondent has failed to rebut the assertions / arguments made by the Appellant and has given no finding on the same and hence the judgment is liable to be set aside on that score alone. The respondent No.1 has failed to apply its independent judicious mind while passing the impugned order and the same is devoid of any rationale and hence is liable to be set aside. The Respondent No.1 has failed to appreciate that the Appellant had voluntarily made all the due payments and hence no action was warranted under Section 32 of the Customs Act, 1969, since no amount was/is recoverable and no goods are liable to confiscation under Section 181 of the Customs Act, 1969. The action/inaction of the Respondent No.1 is illegal, unlawful, mala fide, arbitrary and without jurisdiction. The Respondent No. 1 has failed to appreciate that the initial detention and seizure was illegal and ultra vires and hence all decisions flowing from therein are liable to be set aside. The Respondent No.1 has acted in a discriminatory and malicious manner and has refused to follow the directives issued by the higher forum. The entire action is based on alleged complaints filed by the competitors of the Appellant and the same have never been confronted to the Appellant. Even otherwise the Appellant has every right to be shown the allegations against it, however, the Respondent No.1 has refused to do the same. The case is contingent upon the fact that M/s. IIL, had allegedly imported the same consignment as the Appellant and that too from the same producer and such good arrived on the same vessel. Respondent No.1 failed to appreciate that M/s. IIL primarily exports its goods and hence it is highly implausible that they imported secondary goods, rather in all probability they imported primary goods and declared them as secondary to evade taxes. Even otherwise, if they imported the consignment from the same producers as the Appellant, then there is no reason to declare the consignment as secondary, the entire actions indicate that the common producer in Taiwan only prepares secondary goods and such presumption is based on no facts or evidence. The Respondent No. 1 was informed that the office alleged that the goods were in the same vessel, such position was completely false as the Appellants goods arrived on MV Heilan Journey dated 17.10.2016 IGM No. 385 Index Nos. 2 and 3, whereas the goods of M/s. IIL were imported on My Dato Lucky dated 21.10.2016 IGM No. 391, Index Nos. 21 and 22, therefore the entire basis of the Collectorate case was false, however the Respondent No. 1 never deliberated such point and passed an illegal order. The denial/ inaction of the Respondent No.1 amounts to an action in derogation of law and based on mala fides. The Petitioner is suffering unnecessary losses as a result of the illegal, capricious and fanciful conduct of the Respondent No.1, which cannot be allowed by this Honorable Court. That even otherwise the officers of Respondents have no lawful authority or jurisdiction to do what they have done. The Respondent No. 2 has refused to follow Public Notice No. 01/2002 dated 09.01.2002, read with Minutes of the meeting of Technical Committee dated 20.04.2006 read with Guidelines dated 30.06.2012, when he is bound by the same. The Respondent No. 1 has blatantly deviated from past departmental practice without any cogent reasoning, which is not permissible under the law. The Respondent No. 1 has applied its own reasoning in adding additional taxes on to the Appellant, which is not permissible under the law. The Respondent No. 1 failed to appreciate that no examination has taken place and the allegations are based on whimsical evidence at best. The Respondent No.1 has taken help from a forced confession which is liable to be set aside. The Respondent No.1 has failed to appreciate that there was a delay of 6 days between the assessment notes, which clearly show that the officers of the Collectorate were taking dictation from the competitors of the Appellant. The Respondent No. 1 has failed to appreciate that the seizure memo was sent on 02.11.2016, whereas the goods were given gate out on 26.10.2016. hence the entire action of seizure is liable to be set aside. The Respondents have acted in violation of the Fundamental Rights of the Petitioner under Articles 4, 10A and 18 of Constitution of Pakistan. He prayed to set-aside the Order dated 20.12.2016, passed by the Respondent No. 1 being illegal, mala fide and beyond jurisdiction.

6.The departmental representative/respondent has not filed the counter objections as required under Section 194-A(4) of the Customs Act, 1969. However their representative argued the matter in favour of the respondent and vehemently opposed the grounds of appeal and prayed that the orders passed during hierarchy of customs be upheld as the same are well reasoned order and passed in accordance with law.

7.Arguments heard and concluded. Perusal of record as well as arguments extended by both the parties along with ably deliberations on the issue it has been noticed and observed that the impugned show-cause notice was issued on 22.11.2016, on the basis of information received by R&D Section of Model Customs Collectorate of Appraisement (East), Customs House, Karachi, wherein they apprehend that the appellant attempted to clear the Hot Rolled Steel Sheets in Coils of Secondary Quality under the guise of Prime Quality and evading the duty/taxes by claiming inadmissible benefit of SRO-565(I)/2006 dated 05.06.2006 as amended by S.R.O. 474(I)/2016 dated 24.06.2016. It is also observed that the appellant imported two consignments and separate G.Ds were filed under No. KEWB-HC-3915-25-10-2016 and No.KEWB-3911-25-10-2016. A contravention report against G.D No. KEWB-HC-3915-25-10-2016 was forwarded through system to Collector of Customs (Adjudication-II) for mis-declaration of description against which the appellant filed the suit for declaration, mandatory and perpetual injunction and damages before the Honorable High Court of Sindh under Suit No.2368/2016. The Honorable High Court of Sindh invoking the original jurisdiction, passed the interim order dated 08.11.2016, wherein the subject consignment was ordered to be shifted into CPF Bond for resolving question as to whether the goods are prime quality or otherwise is left for conclusion and may be decided after the notices given to the defendant and D.A.G. On 18.11.2016 the Honorable High Court of Sindh after granting the urgent hearing application submitted by the Plaintiff (present appellant) relying on the appellant's statement that the grievances of the plaintiff / present appellant has been redress and as such he does not press the suit along with the pending applications, which was accordingly dismissed as not pressed with no order as to costs. In the line of that order the Collector of Customs, MCC (East) issued the letter dated 11.11.2016, wherein they intimated the concern quarter that, the said Contravention Report against the G.D No. KEWB-HC-3915-25-10-2016. After pursuance of FBR directives and high level meeting headed by the Chief Collector (South Appraisement) examined the issue afresh on the basis of case record. After detailed deliberations in association of all stakeholders it was observed that the goods were incorrectly declared as "Prime quality" whereas same were correctly classifiable as "Secondary quality" in the light of the relevant public notices. However, considering the fact that the importer had already voluntarily paid the recoverable amount of additional duty and taxes, it was decided by the competent authority to withdraw the contravention proceedings against the subject G.D. The said importer, however, under-take to withdraw the suit filed by him in the Sindh High Court against the customs department. Inspite of that settlement on the basis of same contravention report referring the GD No. KEWB-HC-3911-25-10-2016 issued the impugned show-cause notice dated 22.11.2016. It is also observed from the record of the case that on 15.11.2016 Model Customs Collectorate of Appraisement (East) also informed the Collector of Customs (Adjudication-II), that the seizure against GD No. KEWB-HC-3911-25-10-2016, as recoverable amount has also been paid voluntarily by the importer, no action is warranted under section 32 of the Customs Act, 1969. It is difficult to understand, why the Collector of Customs (Adjudication-II) issued the impugned show-cause notice dated 22.11.2016, against the appellant and crossed the legal embargo without complying the proper provision of law specially under the circumstances when the Deputy Collector of Customs R&D submitted the detail counter comments on reply to the show-cause notice submitted by the importer counsel before the Collector of Customs Adjudication-II prior to passing the Order-in-Original. The Deputy Collector of Customs R&D specifically prayed in the light of the submissions that the importer has paid the duty and taxes voluntarily, "therefore, no action is warranted under Section 32 of the Customs Act, 1969 as no amount is outstanding in the instant case, it is, therefore, humbly requested that the show-case notice issued may kindly be withdrawn". Inspite of that Collector of Customs (Adjudication-II) while passing the impugned Order-in-Original in Para-9 of the said order try to rely upon the fact that, the appellant voluntarily paid duty and taxes vide additional duty payment challan, inspite of that, he further calculated the short levied income tax amount which is according to him still outstanding against the importer, as the income tax exemption claimed by the importer was also found inadmissible, as the same was issued on the basis of LC and the description along with PCT, mentioned in the said LC and relevant income tax exemption certificates were subsequently found other than the column description and classification. The said amount calculated by the adjudicating authority still outstanding against the evasion of income tax is not specifically mentioned in the impugned show-cause notice nor any such allegation raised against the appellant through said impugned show-cause notice dated 22.11.2016, which was infact issued against the Seizure Report No.MCC/Misc/122/2016-R&D(East-A) dated 15.11.2016, as such said impugned show-cause notice is not specific as required under the law, even not issued by the competent authority.

08. It is evident from the record of the case that the subject imported goods were released and out of charged which were subsequently detained and sized vide Seizure Notice No. MCC/Misc/122/2016-R&D (East) dated 02.11.2016. After locating the place, where subject released goods were available, the respondent made the seizure without complying proper procedure of law as envisaged and required under sections 162 and 163 of the Customs Act, 1969 respondents raided the premises Fatima (Pvt.) Godown, K-28-60 Lyari Hawksbay, Trans Lyari Road, Karachi, and the alleged goods were detained on 29.10.2016 under Section 186 of the Customs Act, 1969 and later on seized the same on 02.11.2016, such transgressional and derogatory act of the respondents does not have any support or warrant of law to be treated admissible as their rightful act. It is clear violation of the applied law caused and created by the respondents and their affiliates. It is evident from the record of the case that, when the subject released goods were again detained and seized by the respondents on 28.10.2016 and on 02.11.2016 respectively, whereas the seizure report was prepared on 15.11.2016 vide Seizure Report No.MCC/Misc/ 122/2016-R&D (East) and show-cause notice was issued on 22.11.2016, as such there is no inquiry or investigation, in respect of goods (already released, privy to evidence) nor any fine or penalty has been imposed, or adjudged by any competent authority, invocation of such authority as assumed by the seizing agency respondents during the hierarchy of the raid, detention and seizure of the subject goods is the clear violation of law and against the statutory obligations.

9.It is also important to deliberate on the point that whether the Customs Collectorate has the power to recover short levied of income tax under Section 162 of Income Tax Ordinance, 2001 and the show-cause notice issued by the Collector of Customs is beyond jurisdiction or otherwise? In order to address this controversy, let us take up the provisions of Section 4 of Customs Act, 1969, reproduced below:--

"4. Powers and duties of officers of customs: An officer of customs appointed under section 3 shall exercise such powers and discharge such duties as are conferred or imposed on him by or under this Act [or the rules made there under]; and he shall also be competent to exercise all powers and discharge all duties conferred or imposed upon any officer-subordinate to him: Provided that, notwithstanding anything contained in this Act or the rules, the Board may, be general or special order, impose such limitations or conditions on the exercise of such powers and discharge of such duties as it thinks fit."

10.This provision authorizes and delegates certain powers to the customs officers and at the same time imposes some restrictions. When we interpret Section 4 of the Customs Act, 1969, in concrete manner in the light of Sections 148(5) and 162 of the Income Tax Ordinance, 2001, then no ambiguity is left that the recovery of short payment of income tax is the exclusive prerogative of the Income Tax Commissioner / Inland Revenue Authorities. Under Section 4 of the Customs Act, 1969, the customs authorities in addition to customs duty can collect sales tax, income tax etc. only at the time of import or export, but thereafter, once that stage has passed they have no jurisdiction to demand short levied taxes. In terms of Section 148 of the Income Tax Ordinance, 2001, Collectorate of Customs has the power only to collect income tax on the imported goods at the time of export. Thereafter it is a Commissioner Income Tax alone who has the power to recover short levied tax under Section 162 of the Income Tax Ordinance, 2001. Therefore, issuance of show-cause notice by Collector of Customs is beyond jurisdiction. As such the notice is void-ab-initio and liable to be set aside. Honourable High Court of Sindh in case No. C.P. No.216 has also decided that customs authorities cannot recover short levied income tax. At best they can make reference to the income tax department for its recovery and in accordance with prescribed law, to initiate the action and issue proper-show-cause notice.

11.Now, issuance of show-cause notice by the Customs Officer for the short recovery of Income tax is against the very spirit of law and the Maxim "UBI JUS IBI REMEDIUM" which means that, where ever there is a right, there is a remedy. The Income Tax department and its legal fora are already functioning under a statute. Customs department has been authorized only to collect advance Income Tax under Section 148(5) of the Income Tax Ordinance. However, the department cannot recover any short payment of Income Tax under Section 162 or 166 of the Income Tax Ordinance, 2001, nor can invoke jurisdiction to such effect under the Customs Act, 1969. The guidance is also derived from the plethora of judgements in which the Honourable High Courts of all the Provinces declined to invoke their constitutional jurisdiction on the ground that adequate / alternate and remedy is available to a party.

12.Now the other principle question involved in this case, whether the penal provisions of Customs Act, 1969 read with notification vide S.R.O. 499(I)/2009 dated 13.06.2009 under the option of Section 181 of the Customs Act, 1969 are validly applicable under such circumstances as dealt in present case by the adjudicating officer.

13.When the aforesaid provision of SRO-499(I)/2009 as well as Para 9 of CGO 12 of 2002 are read in juxtaposition, it reflects that though a fine of 35% can be imposed in terms of SRO-499(I)/2009, on the alleged mis-declaration of physical description of goods, however, the executive or the Collectorate who is responsible for assessment of goods, has to ensure before invoking the provisions of 32 of the Customs Act, 1969, that prima facie an element of "Mens rea" is present, i.e. there should be an attempt of willful and deliberate false declaration. The directions contained in CGO 12 of 2002, though not binding upon the authorities performing Quasi Judicial functions, but are mandatory in nature and are binding upon the field officers of the Collectorates in terms of section 223 of the Customs Act, 1969. The field officers are required to follow such directions and or guidelines before making any contravention report / case against an Importer. The field officers are not authorized to act as per their own discretion in a situation wherein, FBR has already issued directions and or guidelines after considering the issue in depth in line with settled principles of law, and any act of the field officers in violation of such directions would be illegal and of no consequence. Reliance in this regard may be placed on the case of Akhtar Hussain v. Collector of Customs (Appraisement), and 3 others (2003 PTD 2090), wherein a learned Division Bench of Honorable High Court, speaking through Mr. Mujeebullah Siddiquie, J, has observed that it is undeniable proposition of law that instructions issued by CBR under section 219 of the Customs Act, 1969 are binding on all the officers of the Customs employed in the execution of Customs Act by virtue of provision contained in section 223 of the Customs Act, if there is any conflict in the instructions issued by CBR and the instructions/orders issued by the Officer subordinate to the CBR, that [ic] the instructions/orders issued by the subordinate official are invalid and inoperative to the extent of conflict. Insofar as the contention of the learned Counsel for the respondent to the effect that after introduction of PaCCS / electronic assessment, CGO 12 of 2002 is no more applicable, we are of the view that such contention appears to be misconceived, as it has been conceded by the learned Counsel as well as by the departmental representative present before us, that CGO 12 of 2002 [Para101 (B)] still exists and is available on the Statute Book. Therefore, in such a situation, and in absence at any clarification and or amendment, to that effect, we have not been able to persuade ourselves to observe that the same would not be applicable in case of assessment of Goods Declarations under PaCCS or Electronic Processing of the same even otherwise in this present case observations and orders passed during hierarchy of the customs are void and without prescribed jurisdiction of law.

14.It is flabbergasted to note from the record of the case that the respondents 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 Karachi 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 is 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."

15.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 very object, rules and 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.

16.By doing so and getting the strength what have been discussed here in above, particularly the interpretation of law, legal propositions and observations made thereon and to follow the ratio decidendi observed by the Superior Courts, we hereby vacate the impugned show-cause notices, and set aside the order passed thereon, during the hierarchy of the customs being illegal, void and ab-initio. Respondents are accordingly directed to release the subject goods forthwith, appeal is accordingly allowed with no order as to cost.

17.Judgment passed and announced accordingly.

HBT/41/Tax(Trib.) Appeal allowed.