ARIF ASSOCIATES VS PRINCIPAL APPRAISER, 2018 PTD-CUSTOMS-APPELLATE-TRIBUNAL-LAHORE 511 (2017)

2018 P T D (Trib.) 511

[Customs Appellate Tribunal]

Before Tahir Zia, Member (Judicial-II)

Messrs ARIF ASSOCIATES and another

Versus

PRINCIPAL APPRAISER and others

Customs Appeals Nos. K-1287 and K-1288 to 1291 of 2015, decided on 05/01/2017.

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

----Ss. 3, 32, 127, 128, 129, 156(1)(63)(64), 180, 209 & 215---Customs Rules, 2001, Rr. 472, 473 & 484---SRO No. 121(I)/2014, dated 24-7-2014---Transfer of goods across Pakistan to a foreign territory---Mis-declaration---Appellant, a registered clearing forwarding agent with the Customs Department, received document from a foreign company for clearance of a consignment stuffed in container in transit to Afghanistan against invoice---Appellant on the strength of those documents transmitted Goods Declaration, and Appraiser instead of inspecting container and the seal affixed thereon (as declared in Goods Declaration), got it scanned and weighed---Despite finding the weight as declared after, Appraiser opted to get the goods examined, which was not warranted, as no discrepancy was visible, nor the container fell within the selectively criteria of 5% at the relevant time---Examination transpired that goods stuffed in the container were infact 23 in as 4 as shown---Said discrepancy was reported to the Principal Appraiser, who termed said discrepancy as a contravention of the Transit Rules---Deputy Collector of Customs who issued show-cause notice observed that foreign company had concealed the quantity of 19 transit goods and opined that the case was that of "misdeclaration", being in violation of Rr.473 and 484/Q of Transit Rules embodied in Sub-Chapter VII of Chapter XXI of Customs Rules, 2001, read with Ss.127, 128, 129 & 209 of the Customs Act, 1969 punishable under sub-clauses (63)(64) of S.156(1) of the Customs Act, 1969---Deputy Collector of Customs, being dissatisfied from the reply to show-cause notice, validated the charges levelled in the show-cause notice---Appeal against the impugned order was rejected by the appellate authority---Validity---No evidence had been adduced in the show-cause notice for substantiating the alleged connivance of clearing Agent nor any incriminating tangible evidence had been placed before the Tribunal---Clearing Agent, in circumstances, could not be penalized for any wrong of importer of Afghanistan---Appeal was allowed.

[Case-law referred].

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

----Ss. 156, 157, 168 & 180---Seizure and confiscation of goods---Issuance of show-cause notice---Objective---No penal action, could be taken in the absence of compliance of pre-requisite condition to issue a show-cause notice under S.180 of the Customs Act, 1969---Lapse in that respect, could not be simply ignored as procedural irregularity, issuance of show-cause notice was pre-requisite as the show-cause notice contained the brief facts, the offence being committed and the evidence on the presumption of which the allegations were based; the law that had been violated and the penal clauses that were attracted---Main objective of show-cause notice was that the person to whom notice was given was unable as to what were the charges levelled against him---No order could be passed without issuance of show-cause notice as it was mandatory under law and under any condition---Neither Deputy Collector of Customs nor any judicial forum was empowered to dispense with that---No show-cause notice in the present case had been either transmitted or served, rendering the order passed by the Deputy Collector of Customs, followed by the order of Collector of Customs Appeals, as void ab initio---Same was coram non judice and of no legal effect and jurisdiction.

[Case-law referred].

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

----Ss. 3, 32 & 179---Notification 886(I)/2012, dated 18-7-2012---Mis-declaration---Power of adjudication---Federal Board of Revenue, in exercise of the powers conferred upon it under S.3 of the Customs Act, 1969, established a separate forum namely 'Collector of Customs Adjudication' through Notification No.886(I)/2012, dated 18-7-2012---Object of said forum was adjudication of the cases of misdeclaration, causing revenue loss under S.179 of the Customs Act, 1969---Word 'mis-declaration' though was used in the show-cause notice, but provisions of S.32 of the Customs Act, 1969 had not been invoked; neither any revenue loss had been incorporated, rendering the case outside the purview of the Collectorate of Customs, Adjudication and same would fall within the cases pertaining to contravention of technical violation of import or export restriction, without involving of any evasion of duty and taxes---Case of the appellant, at the most would fall under para 3(d) of Notification and the power to adjudicate such type of cases would rest with to Executive Collectorate.

[Case-law referred].

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

----Ss. 207, 208 & 209---Liability of clearing agent for goods for transit trade---Scope---Liability of a clearing agent during the course of clearance of the consignment, had to be evaluated under the provisions of Ss.207, 208 & 209 of the Customs Act, 1969; which indicated that an agent would represent his principal only in such cases, where clearance had been sought for home consumption or warehousing as agent, the case of transit trade, wherein goods had to be allowed to the country of import and an agent undertaking the said job although represent his principal, could not be held responsible for any wrong doing of the importer, until and unless any criminal intent was established on his part---Clearing Agent could not be penalized under the general provision of Customs Act, 1969, unless he would violate the governing conditions of his licence.

[Case-law referred].

Nadeem Ahmed Mirza and Mirza Muhammad Abeer (Consultants) and Obaydullah Mirza for Appellants.

Tariq Mahesar, Appraiser for Respondents.

Date of hearing: 7th December, 2016.

JUDGMENT

TAHIR ZIA, MEMBER (JUDICIAL-II).---Through this common order, I intend to dispose of five (05) Appeals bearing Nos.K-1287/2015 and K-1288/2015 to K-1291/2015 filed against Order-in-Appeals Nos. 10262, 10264, 10266, 10268 and 10271 dated 03.07.2015 passed by Collector of Customs, Appeals (hereinafter to be referred as respondent No.3) maintaining the Orders-in-Original Nos. 371255 dated 29.05.2015 and 373136, 373161, 373170, 373145 dated 02.06.2015 passed by the Deputy Collector of Customs, Collectorate of Customs-Adjudication-II (hereinafter to be referred as respondent No.2) in the capacity of Principal Appraiser, these appeals have identical issues of law and facts.

2.Since, these 05 appeals are based on similar facts and questions of law, therefore, it is needless to reproduce facts of each case separately. Hence, being heard and dealt with and disposed off simultaneously though this common order in the light of the judgment of the Honorable High Court of Sindh in Customs Reference No. 157 of 2008, S.M. Naqi son of Syed Muhammad Hussain, Karachi v. Collector of Customs (Adj-I) and others. For reference the facts of Appeal No.K-1287/2015 as reported by the Principal Appraiser, Directorate General of Transit Trade (here-in-after to be referred as respondent No. 1) are taken into consideration, the appellant is a clearing forwarding agent and is registered with the Customs Department in the said capacity. During the course of his business activities he received documents from M/s. Rehmat Ali Ltd., Afghanistan for clearance of a consignment of 2549 cartons, comprising of 658160 pcs stuffed in container No. PCIU864074-5 of different items/articles namely Soaps, LED TV's 24', Radio, Blank CD-R amounting to $. 7816 C&F Karachi in transit to Afghanistan against invoice No. RAL-050/2015 dated 20.03.2015 and B/L No. SINKHI150000050 dated 23.03.2015. The appellant on the strength of these documents transmitted Goods Declaration (hereinafter to be referred as GD) in transit under the provision of Section 129 of the Customs Act, 1969 and Rule 472 of Sub-Chapter VII of Chapter XXI of Customs Rules, 2001 inserted in the Customs Rules through S.R.O. 121(I)/2014 dated 24.02.2014, with the Directorate General of Transit Trade (hereinafter to be referred as DGTT). The information so transmitted was accepted and DGTT allotted number ITTK-AT-23868 on 06.04.2015 to the GD. After receipt of which on his desktop, the Appraiser concerned instead of inspecting container and the seal affixed thereon as declared in GD, and there after get it scanned and weighed. Inspite finding of weight as declared after getting those weighed, opted to get the goods examined, which was not warranted, as no discrepancy was visible, nor the container was falling within the selectivity criteria of 5% within the said period of time. Upon conduction of the examination, it was transpired that the goods stuffed therein are infact 23 in numbers as against shown i.e. 4. The said discrepancy was reported to the respondent No.1 by the examining official through system, who termed the discrepancy corresponding to the excess found quantity as contravention to the Transit Rules and framed contravention report for proceeding in terms of proviso to Sub-Rule (6) of Rule 473 ibid. against Messrs Rehmat Ali Ltd., Afghanistan and transmitted it to respondent No.2, who issued show-cause notice dated 12.05.2015 stating inter alia that Messrs Rehmat Ali Ltd, Afghanistan has concealed the quantity of 19 transit goods detailed above to the contents of show-cause notice on pages 1 and 2 annexed at pages 26-27 as Exhibit "G" of memo. of appeal with the connivance of the appellant and opined that, these undeclared goods falls within the ambit of the term " mis-declaration", which is in violation of clause/rules 473 and 484/Q of Transit Rules embodied in Sub-Chapter VII of Chapter XXI of Customs Rules, 2001, to be read with sections 127, 128, 129 and 209 of the Customs Act, 1969, punishable under sub-Clause (63) and (64) of Section 156(1) of the Customs Act, 1969, the Messrs Rehmat Ali Ltd., Afghanistan and appellant were asked to justify the discrepancy. Since, no box in the system has been given for pasting the reply by the clearing agent. Appellant was handicapped in pasting the reply, resultant he refrained from submitting reply and this was due to the fact that no show-cause notice was infact served to him within the meaning of section 215 of the Customs Act, 1969. The show-cause notice transmitted to Messrs Rehmat Ali Ltd., Afghanistan was appeared on his home page for information. The respondent No. 2 being unsatisfied from the reply of Messrs Rehmat Ali Ltd., Afghanistan passed Order-in-Original dated 11.05.2015 against Messrs Rehmat Ali Ltd., Afghanistan, through which he validated the charges leveled in the show-cause notice. Last 08 lines of para 6 of the order is relevant to the appellant, verbatim of which is reproduced here-in-below:--

6. The duly authorized Clearing Agent Messrs Arif Associates (CHAL No. 1976), for violation of Clause/Rules 473 and 784-Q of S.R.O 121(I)/2014 dated 24.02.2014 read with Sections 127, 128, 129 and 209 of the Customs Act, 1969 punishable under sub-Clause (64) of Section 156(1) of the Customs Act, 1969. The importer as well as their Clearing Agent is also warned to be careful in future regarding fulfillment of their legal responsibilities.

3.The vires of the order was challenged before Respondent No.3 by the appellant vide Appeal No. Cus/7076/2015/TT, who also vide his order dated 03.07.2015 rejected the appeal by observing in para 6 that:

6. The order passed in the appeal of Messrs Rehmat Ali Ltd., Afghanistan shall apply mutatis mutandis to another appeal bearing No. Cus/7076/2015 TT filed by Messrs Arif Associates against Order-in-Original No. 371255-29052015 involving the same facts, circumstances and the points of law.

4.Being aggrieved and dissatisfied with the impugned Orders-in-Appeal the appellants filed the these appeals before this Tribunal on the ground incorporated in the Memo. of Appeal, on the date of hearing Mr. Nadeem Ahmed Mirza and Mirza Muhammad Abeer (Consultants) and Obaydullah Mirza (Advocate) appeared and contended that:--

(i)That upon perusal of para 2 of the show-cause notice, the Hon'ble Tribunal will observe that inspite of leveling allegation for connivance, with the importer by the respondent No. 2, no incriminating evidence in support of the same is transmitted despite mandatory under law. Meaning thereby that the allegations are based on assumptions/presumptions and this stood validated from the last para of the show-cause notice, wherein appellant has not been called upon show-cause notice, stood further validated from the fact that the said show-cause notice was not transmitted in terms of sections 155Q and 215 of the Customs Act, 1969 for submitting reply online, for which space is available in the devised software and the importers paste their reply. To the contrary, inspite transmitting the copy of show-cause notice issued to importer to the appellant for information, he is been robbed for submitting reply. No order can be passed, unless show cause is served on the person. The impugned show-cause notice has not either been transmitted to the appellant under the provision of section 155Q or being served as desired in Section 215 ibid. rendering the orders passed by respondent Nos. 2 and 3 as of no legal effect and void and ab-initio.

(ii)That it is also appropriate for the appellant to state that in the case of transit trade no revenue of exchequer is involved. Therefore the case of appellant pertains to technical violation of import or export restriction without the involvement of any evasion of duty and taxes. Hence, the case falls within clause (d) of para 3 of Notification No. 886(I)/2012 dated 18.07.2012 (Exhibit "I"). The appropriate authority to adjudicate such cases rest with the Directorate General of Transit Trade. By laying hands on the Sovereign Territory of the DG T&T, the respondent No. 2 transgressed the powers not vested with. Rendering the show-cause notice and the anticipated order to be passed as without power/jurisdiction, void and ab initio as held in reported judgment PLD 1975 SC 331, Sale Tax Appeal No. 984/98, Sale Tax Appeal 72/04, Sales Tax Appeal 54/09, Sale Tax Appeal No. 2352/99, Sale Tax Appeal No. 106/03, 2002 CLC 705, 2004 PTD 624, 2004 PTD 3020, 2007 PTD 1895, 2009 PTD (Trib.) 1925, 2005 PTD (Trib.) 135, 2010 PTD (Trib) 759, 2010 PTD (Trib.) 1283, Customs Appeal No.K-44/ 2010 and Customs Appeal No. K-435/08 to 455/08, 2010 PTD (Trib) 2523 and K-638/2010- 727/2010.

(iii)That as per proviso of Sub-Rule (6) of Rule 473 of S.R.O. 121(I)/2014 dated 24.02.2014, the discrepancy has to be reported to the Principal Appraiser for further necessary action under the law including initiation of legal proceeding and this is due to the fact that he is the appropriate authority in the matter of APTTA 201. No other authority can eclipse his power. Even otherwise cases of no loss of revenue fall under the jurisdiction of Principal Appraiser in the case of clearance for home consumption by virtue of being appropriate authority under sections 80 and 83 of the Customs Act, 1969 in terms of Notification No. 371(I)/2002 dated 15.06.2002 and none else. To the contrary, respondent No. 2 inspite of being Deputy Collector transmitted the show-cause notice in the capacity of Principal Appraiser, while transgressing the powers of the Principal Appraiser, which is not permitted under law, rendering the show-cause notice without power/jurisdiction, hence void and ab-initio and coram non judice.

(iv)The powers of adjudication are specific and empowered by the statute. It is an elementary principle of law that where there is a conflict between special and general provision of law, the special provision shall prevails (reference is invited to the case of Lt.-General (Retd) Shah Rafi Alam v. Lahore Race Club, 2004 CLD 373). The power of adjudication, as already observed is special in nature. This cannot be eclipsed by any other general provision. Even otherwise there is another settled principal of interpretation of statute i.e. that the courts can supply construction with a view to avoiding absurdity (reference is invited to the case of Khalid Qureshi v. UBL 2001 SCMR 103). Equally it must be kept in mind that if it is held that sections 4 and 179 and proviso (6) of Rule 473 of Sub-Chapter VII of Chapter XXI of Customs Rules, 2001 occupy the same fields, there is likely to be redundancy in respect of powers conferred proviso (6) of Rule 473 of Sub-Chapter VII of Chapter XXI of Customs Rules, 2001. The Supreme Court in the case of East West Steamship v. Queen Land Insurance PLD 1963 SC 663 has been pleased to hold that redundancy is to be avoided in respect of any provision of the statute. There is also plethora of case law on the point that where there is a conflict between two provision of the statutes, the later provision prevails and has to be given precedents (reference is invited to the case of Sahibzada Sharfuddin v. Town Committee, 1984 CLC 1517. Apart from this law favour actions of the authorities to be confined to their own spheres of jurisdiction conferred by the statute. An action taken by a state functionary beyond the ambit of his jurisdiction is nullity. In this respect the judgment reported as Abida Rashid v. Secretary, Government of Sindh PLD 1995 Kar. 587 is referred. Their lordship observed as under:--

"It is trite law that power vested in an authority should only be exercised by that authority, in default whereof, the exercise of power and authority becomes without jurisdiction, illegal, void, ab-initio and of no legal effect. The term "without jurisdiction" has been judicially interpreted to include usurpation of power warranted by law (The Chief Settlement Commissioner Lahore v. Raja Muhammad Fazil Khan and others PLD 1975 @ p.339) an act done which the person doing, it has no jurisdiction at all to do or which was clearly outside the scope of his activities (The State v. Zia-ur-Rehman PLD 1973 SC 49) and a judgment or order delivered by a court or a judicial or a quasi judicial authority not competent to deliver it (Muhammad Swaleh and others v. Messrs United Grain and Fooder Agencies PLD 1964 SC 97). The Constitution jurisdiction can thus be exercise when it is shown that the order is passed without jurisdiction or in excess of jurisdiction. As observed earlier the respondent No. 1 has no jurisdiction to pass the impugned order. As such we declare the same to be of no legal effect. Accordingly, we allow this petition but leave the parties to bear their own cost".

(v)That while dealing with the powers of adjudication, it is needless to observe, that our Supreme Court has also jealously guarded the same. In Assistant Director v. B.R. Herman Mohata Ltd., PLD 1992 SC 485 a full Bench of Supreme Court was pleased to observe that section 223 of the Customs Act, 1969 could not be employed so as to interfere with the judicial or quasi judicial functionaries. It was clearly observed that the power of the CBR as to prescribed guideline were not relevant for the exercise of judicial function. To similar effect is the judgment of Supreme Court reported as Central Insurance v. CBR 1993 SCMR 1232. In this case the CBR issued direction for the reopening of Income tax Assessment under section 65 of the Income tax Ordinance, 1979. It was held by the Supreme Court that the CBR did not figure in the hierarchy of the officer provided in the statute for the purpose of assessment and adjudication. On the basis of this it was held that the directions of the CBR to reopen the assessment was without jurisdiction and the adjudication officer was directed to apply its own mind. Reliance is placed on the order of the Tribunal in Sale Tax Appeal No. 176/2007 Messrs Muller and Phipps Pakistan (Pvt.) Ltd. v. The Collector of Sales Tax Enforcement LTU, Karachi and 2011 PTD (Trib) 2114 Collector of Customs, Peshawar v. Collector of Customs (Appeals) Peshawar and 2011 PTD (Trib.) 2557 Messrs Wawa Garments Industries (Pvt.) Ltd. v. The Additional Collector of Customs, Export, Karachi.

(vi)That it is imperative for the appellant to invite the attention of the Honorable Appellant Tribunal that where order has been made without any powers/jurisdiction, irrespective of the merit of the case, such order are coram non-judice as held by High Court of Sindh in Customs Reference No.101 and C.M.A. No.1281 of 2009 reported as 2010 PTD 465 Collector of Customs, Model Customs Collectorate v. M/s. Kapron Overseas Supplies Co., (Pvt.) Ltd., filed on the question of law that whether passing of order without jurisdiction is a technical defect and does not render the proceeding as ab-initio void. The Hon'ble High Court dismissed the reference while holding that "any transgression of such jurisdiction for not being a technical defect would render entire exercise of authority to be ab-initio, void and illegal", without discussing the merit of the case, which relates to origin of imported goods and the Hon'ble High Court further held that "the exercise of jurisdiction by an authority is a mandatory requirement and its non fulfillment would entail the entire proceeding to be "coram non judice." The said defect render the show-cause notice as well as Order-in-Original ab-initio, null and void by virtue of suffer of lack of power/jurisdiction. Hence, coram non judice and needs to be struck down.

(vii)The fact of matter is that appellant filed Goods Declaration under section 129 of the Customs Act, 1969 and Rule 472 of Sub-Chapter VII of Chapter XXI of the Customs Rules, 2001 well supported by uploaded invoice and packing list received by them from importer. Which was processed by the appropriate officer as notified in Rule 473, consequent to which examination was conducted by the customs officials with the assistance of the terminal operator, in this whole procedure appellant has no access. Thereafter, on the strength of which the respondent No.1 prepared contravention report and forwarded to respondent No.2 for issuance of the impugned show-cause notice.

(viii) That as deliberated above infact appellant in the capacity of clearing agent has no part to play. The entire transaction is between exporter/importer and the customs. The clearing agent only provides services to the exporter/importer on very nominal charges and extends co-operation to the customs officials for carrying out their job. To be most precise, a clearing agent act as a post office or transit station between these two but this assistance is not applicable in the clearance obtained under the regime of "WeBOC".

(ix)That in support of the above submission, it is felt appropriate to place reliance on multiple judgment issued by the Hon'ble Customs Appellate Tribunal in regards to the conduct and commission of the clearing agent, reference is placed to few of those cases titled as Messrs Shoaib Enterprises, Karachi and Sakro Corporation, Karachi, wherein in Order-in-Appeals Nos. K-1833/01 dated 19.01.2002 and K-538/2003 (K-2) dated 25.10.2003, it has been held that provisions of section 209 of the Customs Act, 1969 provide immunity and limited liability against the agent and an agent cannot be charged for mis-declaration under section 32 of the Customs Act, 1969 if he filed documents under the provisions of Customs Act, 1969 in accordance with the export documents and further held that the action taken by the customs of charging agent and thereafter leveling penalty without any fault or default on his part is not only unfair but also illegal. The Lahore High Court in the case of M/s. Ports Ways Custom House Agent and another's v. Collector of Customs and another's reported at 2002 YLR 2651 held that:--

The imposition of penalty on the Clearing Agent / appellant No.1 was all the more unjustified. To hold the clearing agent liable for the act of commissions and omissions on the part of the importer will require a clear finding based upon legally acceptable evidence of his being an active and conscious party to the manipulation. In normal course of his business, a Clearing Agent, files a bill based upon the document and information provided by the importer. He cannot be presumed to be a privy to any illegal arrangement, which the importer may have coined or had intended in his mind. For that purpose some evidence of his direct involvement will have to be brought on record. Particularly when it is not shown that the Clearing Agent was directly or indirectly a beneficiary of invasion of taxes. In the present case no attempt whatsoever was ever made to bring home guilt to the Clearing Agent. The appeal is accepted to the extend of Clearing Agent.

(x)The order passed by the respondent No. 3 shows that it has not been passed with the application of mind and provision of the Act/Rules. Instead is a non speaking order and did not conforms to the mandated requirement of section 24-A of the General Clauses Act, 1897 and this stood validated from the fact that he ignored the contents of show-cause notice specifically para 3 and to the fact that show-cause notice was not transmitted to the appellant as expressed in sections 155Q and 215 of the Customs Act, 1969. No order can be passed by any authority unless a show-cause notice is served. Beside he has not controverted the grounds of appeals and this stood validated from the order containing the arguments of the importer and the order is applied mutatis mutandis on the case of the appellant. Such type of orders are deems to be always treated as illegal, void arbitrary and a result of misuse of authority vested in public functionary. No room was available for such illegal, void and arbitrarily order in any system of law. If any authority Court or Tribunal gave a finding of fact which was not based on material available on record was illegal arbitrarily without discussing and considering the material available on record it became perverse and a perverse finding of fact which is violative of the established principle of appreciation of evidence on record was not sustainable in law. The principle that every judicial or quasi-judicial finding should be based on reasons containing the justification for the finding in the order itself is an established principle of dispensation of justice. The Adjudication/Appellate orders are being violation of basic principle of the goods governance and mandatory requirement of Section 24A of the General Clauses Act, is not only illegal and void but also not sustainable under law. The said position is also fortified by the judgments of Superior Courts reported as 2005 YLR 1019, 2007 PTD 2500, 2004 PTD 1973, 2005 YLR 1719, 2003 PTD 777, 2003 PTD (Trib) 2369, 2002 MLD 357, 1983 CLC 2882, 2005 PTD 2519, 2005 PTD 1189, 2003 PTD 2369 and PLD 1995 SC (Pak) 272, PLD 1970 SC 158, PLD 1970 SC 173 1984 SCMR 1014 and 2012 PTD (Trib.) 619.

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

5.No cross objection under subsection (4) of Section 194-A of the Customs Act, 1969 has been submitted by the respondents to this date, instead comments were submitted half heartedly in stereo typical manner, having no nexus with the grounds taken by the appellants and least lend any support to the case of department, for validation verbatim of those are reproduced here-in-below:

(i)Ground (i) is vehemently denied. It is denied that the allegation leveled against the appellant on assumption/presumptions. It is respectfully submitted that the appellant is hands in gloves with the importer and have connived in the commission of offence with the importer. It is also denied that the appellant is not served with the show-cause notice. The appellant is served with the show-cause notice. However, the appellant failed to respond the same.

(ii)Ground (ii) is a frivolous ground in the instant case the respondent No. 2 did not adjudicate upon the case nor the show-cause notice had been issued by the said respondent. The appellant has taken this plea without going through the documents. The appellant is therefore may be directed to amend the appeal. The order has been passed by the respondent No. 1. It is further submitted that the appellant in connivance with the importer mis-declared the description of the goods in order to avoid the incident of Insurance Guarantee to be deposited by the importer in lieu of duty and taxes involved on the subject goods, if the same had been imported into Pakistan. The misdeclaration on part on the importer and the clearing agent clearly reflect that they have tried to hoodwink the customs authorities to avoid the incidence of Insurance guarantee whereby the same was agreed to ensure that the goods are not pilfered en-route their transit to Afghanistan via Pakistan.

(iii)That the ground (iii) taken by the appellant is frivolous. It is apparent from the order that the show-cause notice and the order-in-original had been passed by the Principal Appraiser, hence the order is correct and in accordance with law.

(iv)Ground (iv) is frivolous. There is no conflict between any provisions of law. The rules are framed under the statue and they are not in conflict of statue. The appellant has raised a frivolous ground and as such the same is vehemently denied.

(v) Ground (v) is irrelevant and the case law cited has no application on the instant case.

(vi)Ground (vi) is vehemently denied. The order has been passed by the authority competent to adjudicate upon case of the appellant and no irregularity or illegality has been committed in the process of adjudication.

(vii)Ground (vii) is vehemently denied. The appellant has connived in the commission of offence and deliberately, knowingly and intentionally made a wrong declaration. It is vehemently denied that the respondent No. 2 had issued the show-cause notice. The show-cause notice had been issued by the respondent No. 1 and it is evident from the little of the show-cause notice. The appellant has prepared its case on presumption and assumptions and without going through the documents.

(viii) Ground (viii) is vehemently denied it is denied that the appellant did not play any role in the commission of offence. It is respectfully submitted that the liability of the agent is coextensive as that of the principal. The agent is responsible for the act done on behalf of its principal. Therefore, the appellant cannot absolve himself from the liability of the principal.

(ix)Regarding para (ix) it is respectfully submitted that the case law cited by the appellant are irrelevant and cannot be applied to the case of the appellant. The appellant is found involved in the commission of offence and has been charged under the relevant provision of law.

(x)Ground (x) is vehemently denied. The order passed by the learned Collector Appeals is well speaking order. The order has been passed in accordance with law consider the requirement of law while passing the order. Every aspect of the case was considered and an appropriate order was passed.

(xi)Ground (xi) needs no comments.

6.Rival parties heard and the case record perused along with the citation relied upon.

7.Upon perusal of show-cause notice I have observed that the respondent No. 2 in para 2 of the show-cause notice dated 12.05.2015 has used the word "connivance" for implicating the appellant, no evidence has either been adduced in the show-cause notice for substantiating the connivance, nor any incriminating tangible evidence has been placed before the Tribunal, meaning thereby that the respondent No. 2 only use the word connivance without any valid cause or reason because he was well aware of the fact that appellant is not privy to the act and commission of the importer of Afghanistan namely Messrs Rehmat Ali Ltd., and for that reason he never called upon the appellant to show cause as evident from para 3 of the show-cause notice reading as "Therefore the importer is hereby called upon to show cause as to why penal action should not be taken against him under the aforesaid provision of law. Written reply to this show-cause notice should reached the office on or before the date of hearing. The importer or his accredited representative may appear to defend the charges leveled against him on the date of hearing." When show-cause notice was not transmitted in terms of Section 155Q or served under section 215 of the Customs Act,1969 upon the appellant, he cannot expect him to paste the reply of the show-cause notice in the reservoir of GD, option of which has not been provided in the WeBOC System for the clearing agent akin to the column provided for the importer reading as "Trader reply". In the absence of availability of any space, it is not mandated upon the appellant to submit reply to the show-cause notice which is deemed to be not served upon him. Imposing penalty in the presence of the narrated circumstances under law.

8.To further crystallize, It is of paramount importance to abreast the respondents that no penal action can be taken in the absence of compliance of prerequisite condition to issue a show-cause notice under Section 180 of the Customs Act, 1969. Despite availability of express provision of Section 180 of the Customs Act, 1969, the Board time and again issued direction/orders, para 78 of CGO 12/2002 is relevant and so the letter of the Board bearing C.No. 730-M(L)/2002 dated 15.06.2002, these lays stress for issuance of show-cause notice by the adjudicating authority prior to issuance of order. This lapse cannot be simply ignored as procedural irregularity, issuance of show-cause notice is pre-requisite as the show-cause notice contains the brief facts, the offence being committed and the evidence(s) on the presumption of which the allegation are based, the law that has been violated and the penal clauses that are attracted and main objective of show-cause notice is that the person to whom notice is given is enable to fully know what are the charges leveled against him.

9.No order can be passed without issuance of show-cause notice as it is mandatory under law and under any condition, neither respondent No. 2 and nor any judicial forum is empowered to dispense with that. Therefore, it was mandated upon the respondent No. 2 to transmit or serve show-cause notice well supported with tangible evidence referred in the show-cause notice, as enunciated in Sections 155Q and 215 of the Customs Act, 1969. It is a fundamental documents which comprehensively described the case made out against the tax payer by making reference to the evidence collected in support of the same and with a narration of facts in the show-cause notice along with supportive evidence which determined the offence attracted to a particular case. It is also of vital importance to adduce further that show-cause notice is not a casual correspondence or a tool or a license to commence a rowing inquiry into the affair based on assumption and speculation but is a fundamental documents that carried definitive legal and factual position of the department against the tax payer, legal enforceability and jurisdictional validity of a show-cause notice vested from its context, that was, the fact suppose to be tangible evidence referred to in the show-cause notice and not from the cosmetic show causing of statutory provision or from the use of statutory keywords in the show-cause notice. No show-cause notice in the instant case of the appellant has been either transmitted or served in terms of the respective provision of the Act referred here-in-above. Rendering the order so passed by the respondent No. 2, followed by the order of respondent No. 3 as void and ab-initio, hence, coram non judice and of no legal effect and jurisdiction as held in reported judgment 2004 PTD (Trib.) 1324, PLD 1961 SC 237, PLD 1964 SC 410, PLD 1964 SC 536, PLD 1965 Supreme Court 90, 1983 SCMR 1208, PLD 1987 Supreme Court 304, 1994 SCMR 2232, 2003 SCMR 1505, 2006 SCMR 129, 2006 SCMR 1023, 2013 PTD (Trib.) 353 and [2015 PTD (Trib.) 1422].

10.The Board in exercise of the powers conferred upon it under Section 3 of the Customs Act, 1969, established a separate forum namely Collectorate of Customs Adjudication through Notification No. 886(I)/ 2012 dated 18.07.2012 for adjudication of the cases of mis-declaration, causing revenue loss under the provision of section 179 of the Customs Act, 1969 w.e.f. 01.08.2012. From perusal of the show-cause notice, it has been observed that although the word mis-declaration is used but provision of Section 32 has not been invoked and neither any revenue loss has been incorporated. Rendering the case outside the purview of the Collectorate of Customs, Adjudication-II and falls within the ambit of para 3(d) of the notification i.e. "cases pertaining to contravention of technical violation of Import or Export restriction without involvement of any evasion of duty and taxes." In the light of clear expression of the SRO, the case of the appellant at the most falls under the said sub-para and the power to adjudicate such type of cases rest with the Executive Collectorate i.e. DGTT. The respondent No. 2 inspite of the fact that being a Deputy Collector of the Collectorate of Customs Adjudication-II, while assuming the power of Principal Appraiser given in Serial No. (vi) of Section 179 of the Customs Act, 1969 issued show-cause notice and passed order-in-original. This act of his is transgression, which is not permitted under law. Since, he is not Principal Appraiser of Collectorate of Adjudication nor the case in question falls within the jurisdiction of Collectorate of Customs Adjudication, he usurped the powers of the appropriate authority i.e. Principal Appraiser and jurisdiction of DGTT and opted to issue show-cause notice and pass order-in-original by encroaching the exclusive and sovereign powers of respondent No. 1 and jurisdiction of DGTT. This transgression renders the show-cause notice and Order-in-Original and subsequent passed by respondent No. 3 without power/jurisdiction. Hence, void and ab-initio and as such of no legal effect. The exercise of jurisdiction by the authority is the mandatory requirements and its non-fulfillment, entails the entire proceedings coram non-judice. All relevant quarters having quasi judicial jurisdiction and authority as well as including the Courts are bound to perform their duties in accordance with the laws and in this particular case. The DGTT and respondent No.1 were required to perform their duties under para 3(d) of the Notification No. 886(I)/2012 dated 18.07.2012 and proviso to Sub-Rule (6) of Rule 473 of Sub-Chapter VII of Chapter XXI of the Customs Rules, 2001. The action taken by the respondents made during the hierarchy of the Customs does not have any warrant of law and assumed the jurisdiction against the norms of statutory obligations laid through Section 129 of the Customs Act, 1969 and Rule 473 ibid. For reaching on the said conclusion I am fortified with the decision of the Superior Judicial Fora reported at PTCL 2004 CL 2005, PLD 1961 SC 237, PLD 1964 SC 410, PLD 1964 SC 536, PLD 1965 Supreme Court 90, 1983 SCMR 1208, PLD 1987 Supreme Court 304, 1994 SCMR 2232, 2003 SCMR 1505, 2006 SCMR 129, 2006 SCMR 1023, PLD 2004 Supreme Court 600, PLD 2005 Supreme Court 842, 2001 SCMR 1822, PLD 1971 SC 124, PLD 1971 SC 197, PLD 1973 SC 236, 2013 PTD (Trib.) 353 and 2015 PTD (Trib.) 1422.

11.As observed from show-cause notice and Order-in-Original and as verbally explained by the learned Counsel, was held guilty of connivance. The charge framed in the notice relates to filing of Good Declaration under Section 129 of the Customs Act, 1969 and Rule 472 of Sub-Chapter VII of Chapter XXI of the Customs Rules, 2001 on the strength of documents supplied by the importer of Afghanistan showing goods of 4 different description weighing to 11860 kgs, which were found 23 in numbers i.e. in excess of 19 in numbers as against submitted information in GD i.e. 4 weighing to 11860 kgs. The appellant filed the GD under his specified duties for which he has been accorded License by the Licensing Authority, the assertion is that he should had shown the found goods at the time of filing GD. Since, he has not done the provision of Section 472 of the Transit Rules is attracted. According to the show-cause notice itself and construing it in the light of the Rules, the respondents should have made distinction between an "information" and "declaration/ a statement in answer to any question put" and a "claim". As regards information, it means knowledge that you get about some one or something, facts or detail about a subject. Whereas, declaration means a communication by a person in relation to a business being conducted. The word 'declaration" came to judicial scrutiny in the case of Vithoba Syamna v. Union of India reported as AIR 1957 Bom. 321. It was held in that case that the word "declaration" refers to the nature, description and value of goods so that assessing officer can apply appropriate Tariff rate for assessment and charging. On the other hand the word "claim" means a demand for something suppose due to or demanded as a right. Here the only charge against the appellant is that he filed GD's on the basis of the documents supplied by the importer namely Messrs Rehmat Ali Ltd., Afghanistan. That his transmitted information in respect of description and quantity has been found wrong, whereas in unit of measurement is correct. In the case of Eastern Rice Syndicate v. Collector of Customs (PLD 1959 SC 364), the Supreme Court had held that in order to attract a penal provision of Section 39 (now Section 32) it must be established that the person who alleged to have made any statement in a document submitted to the Customs authorities must be false to his knowledge and it would depend upon the facts and circumstances of each case. The assumption of the Customs that violation of the said section did take place appears to be wrong. In the case under scrutiny, the charge against the appellant is that he transmitted erroneous information in the Goods Declaration and that has been construed to be misdeclaration falling under the ambit of Section 32 of the Act. The formed opinion is wholly misconceived, as charge of misdeclaration can be leveled on a person, who files/transmitted Goods Declaration for home consumption or warehousing under Section 79(1) or 86 and Rule 433 of Sub-Chapter III of Chapter XXI of Customs Rules 200, not under Section 129 and Rule 472 of the Act/Rules. A study of Section 129 of the Act reveals that importer of Afghanistan or his agent has to transmit GD for release of the goods for transit to Afghanistan and the goods are not subject to duty and taxes. It appears that the respondent No. 2, who issued the show-cause notice grossly mis-understood the scheme of Transit Trade, i.e. the operative mechanism of the section 129 of the Act and Sub-Chapter VII of Chapter XXI of the Customs Rules, 2001. The liability of a clearing agent during the course of clearance of the consignment has to be evaluated under the provision of sections 207, 208 and 209 of the Customs Act, 1969, which indicate that an agent represent his principal only in such cases, where clearance has been sought for home consumption or warehousing as against the case of transit trade, wherein goods have to be allowed to the country of import and an agent undertaking the said job although represent his principal, could not be held responsible for any wrong doing of the importer of Afghanistan, until and unless any direct evidence is attributed against him or when department is not able to prove any criminal intent on his part, which is evident from the instant case. He cannot be penalized under the general provision of the Customs Act, unless he violates the governing condition of his License and this stood validated from the judgment relied upon by the appellant No. 2 and are referred in para 4 (ix to x) supra, which are fully applicable on the case of appellant and observation made by their lordship in 2002 YLR 2651 holding that "to hold the clearing agent liable for an act of commission and omission on the part of the importer will require a clear findings based on legally acceptable evidence of his being an active and conscious party to the manipulation. In normal course of his business a clearing agent files a bill based upon the documents and information provided by the importer. He cannot be presumed to be privy to any illegal arrangement, which the importer may have coined or had intended in his mind for that purpose some evidence of his direct involvement will have to be brought on record. Particularly when it is not shown that the clearing Agent was directly or indirectly a beneficiary of evasion of taxes.

12.On the strength of the above deliberation and gaining strength from the law laid down by the Superior Courts, the appeals in hand are allowed as prayed by the appellants.

13.Judgment passed and announced accordingly.

HBT/8/Tax(Trib.) Appeals allowed.