PLJ 2013 Tax Cases (Qta.) 93 (DB)
Present: Muhammad Noor Meskanzai and Abdul Qadir Mengal, JJ.
COLLECTOR OF CUSTOMS,
CUSTOMS, SALES TAX AND CENTRAL EXCISE, APPELLATE TRIBUNAL-III,
and another--Respondents QUETTA
Custom Appeal No. 2 of 2005, decided on 3.9.2012.
Customs Act, 1969 (IV of 1969)--
----Ss. 194-C(4) & 196--Appellate Tribunal--Pecuniary jurisdiction--Scope--Valuation of smuggled items--Seizure of smuggled goods and vehicle used to transport the same by customs authorities (original order)--Collector Customs (appeal) released the vehicle on payment of redemption fine (appellate order)--Appellate Tribunal set aside the original order--Question was whether appellate order also automatically stood annulled--Contention on behalf of Collector Customs (appellant) was that jurisdiction of Single Member of Appellate Tribunal to hear an appeal was Rs.100,000 at the relevant time, whereas the valuation of seized goods exceeded Rs.500,000, therefore, Appellate Tribunal was not competent to have passed the impugned order--Contention on behalf of vehicle owner was that Single Member of Appellate Tribunal was competent to hear appeals where valuation of smuggled items did not exceed Rs.500,000, and that his appeal was found competent by Appellate Tribunal as valuation of seized goods was Rs. 361,000--Validity--At the time of appeal in question Single Member of Appellate Tribunal was authorized to hear matters involving amounts up to Rs. 200,000 but this was subsequently amended to Rs.500,000--Amendment could not be given retrospective effect and a jurisdictional defect could not be rectified on the same basis--Valuation of smuggled goods collectively exceeded Rs. 500,000--Single Member of Appellate Tribunal did not have jurisdiction to adjudicate upon the matter at the relevant time--Appellate Tribunal had set-aside the original order but appellate order still occupied the field--Case was remanded to Tribunal for decision in accordance with the law. [Pp. 98 & 99] A, B, C & D
2008 PTD Kar. 459 rel.
Ch. Mumtaz Yousaf, Advocate for Petitioner.
Mr. Ehsan Rafique, Advocate for Respondents.
Date of hearing: 24.7.2012.
Muhammad Noor Meskanzai, J.--By this order, we propose to answer the law points involved in the instant reference/application, filed under Section 196 of the Customs Act, 1969 against the order dated 3rd December, 2004 passed by the Customs, Excise and Sales Tax Appellate Tribunal Bench-III, Karachi. The following questions have been proposed by the applicant for the opinion of this Court:--
"(i) Whether the learned Tribunal has failed to appreciate the facts brought on record by the department and during the course of adjudication.
(i) Whether the learned Tribunal seriously erred in law in ignoring (sic) and passed the Customs order-in-appeal.
(ii) Whether the findings of Honourable Appellate Tribunal were based on mis-reading and non-reading of record/ facts placed during hearing leading to the seizure of huge quantity of smuggled scrap along with vehicles.
(iii) Whether the learned Tribunal failed to appreciate that the seizure of such huge quantity of smuggled scrap were based on authentic information."
2. It is important to note that the learned Appellate Tribunal Customs, Excise and Sales Tax Appellate Tribunal Bench-III, Karachi, has set aside the original order dated 6th July, 2004 passed by Collectorate of Customs, Sales Tax and Central Excise (Adjudication), Quetta, whereas the appellate order dated 25th September, 2004 has not been set aside, this situation also requires attention.
3. Prior to embarking upon to determine the legal points, it would be beneficial to have a brief resume of the case. Facts relevant for the disposal of instant Reference are that the Customs Staff Quetta, received information regarding smuggling of waste and scrap of Iron and Steel from Taftan to
by trucks. On receipt of above information on 25th May, 2004 at about 22-30 hours, the Customs staff intercepted three trucks loaded with scrap near `Kanak'. The drivers of the trucks failed to produce any documents about import of the consignments loaded in the trucks. As such the waste and scrap of Iron and Steel were taken into custody and seized for having been imported unlawfully into country in breach of provisions of Customs Act, 1969. Quetta
4. A show cause notice was issued on 10th June, 2004 to the owners of the seized goods/vehicles calling upon them as to why penal action should not be taken against them and the goods/articles in question should not be confiscated. However, during course of adjudication of the case, the Deputy Collector (Adjudication),
vide Letter No. V-8(226) Cus/2004/4988 dated 16th June, 2004 requested the Assistant Collector (Preventive), Quetta to constitute a committee in the presence of owner of the seized scrap to ascertain the origin whether seized scrap is local or foreign, as such, a committee headed by Superintendent Customs, Dry Port (NLC), Quetta examined the scrap in presence of the owners. The Committee after examination of the seized scrap, vide its report dated Nil held that the whole scrap seized is waste and scrap of iron and steel and is of foreign origin. The owners of the trucks were heard and eventually vide order dated 8th July, 2004, the Deputy Collector ordered for confiscation of scrap as well as the vehicles carrying smuggled scrap in favour of the State. However, an option under Section 181 of the Customs Act, 1969, was given to lawful owners of the vehicles to redeem the same against fine. Quetta
5. The owners of the vehicles, preferred an appeal before Collector (Appeal)
which was disposed of by Customs, Excise and Sales Tax Appellate Tribunal and released the vehicle on payment of redemption fine, vide order dated 8th July, 2004. Quetta
6. The record reflects that this reference was dismissed vide order dated 28th June, 2008 by this Court, however; on appeal the Hon'ble Apex Court remanded the case vide order dated 28th April, 2010 with following observation:--
"Our attention was drawn by learned ASC for the Appellate/Revenue to the memo. of Reference/Appeal filed by the Collector of Customs, Quetta before the High Court of Balochistan, Quetta, under Section 196 of the Customs Act, 1969. We find that number of questions were framed as question of law along with grounds therein. We understand that the learned Division Bench of the High Court, while passing the impugned judgment made general observations that no questions of law had been raised by the appellant. It appears that the grounds (ii) and (iv) giving rise to the legal questions in particular were overlooked by the learned High Court. The above referred grounds are reproduced for clarity.--
(ii) The honourable appellate Tribunal erred in holding that checking by Customs during transportation of those goods within the territory of Pakistan is beyond the jurisdiction of Customs as it is an admitted fact that scrap is smuggling prone item and this Collectorate has performed its legal duty in effecting seizure of the smuggled scrap. There is no legal bar on Customs checking vehicles/goods within
. However, an administrative arrangement was made by abolishing check posts and establishing mobile squads functioning on specific information. territory of Pakistan
(iv) It may also be added that the learned Member (Judicial) Customs Appellate Tribunal has seriously erred in law while holding that the provisions of Section 177 of the Customs Act, 1969 read with S.R.O. 118(I)/83 dated 12.2.1983 has been related in the subject case. Section 177 and any notification issued there underrelates to export of goods and is not relevant to the subject case, which involves transportation of smuggled goods form
Iran to . The contention that the seized scrap was of local gift is a subterfuge and ploy to justify carriage of smuggled goods in an area in which it was seized namely near Kanak Noshki Quetta Road, where there is no generation of scrap in view of non availability of industry there." Pakistan
As recorded above, to our mind the above referred grounds raised question of law that required determination by the learned High Court while dealing with Reference Application under Section 196 of the Customs Act, 1969.
In view thereof, we have no option but to set aside the impugned judgment dated 28-6-2008 of the High Court of Balochistan,
and remand the case for re-decision inter alia on the above grounds as well as other questions of law that may be involved in the case after granting an opportunity of hearing to the parties. Appeal accepted and disposed of as above." Quetta
7. Besides, in view of judgment of the
Apex Court, the learned Standing Counsel formulated an additional law point "Whether in view of the valuation of confiscated items, the learned Single Member of Appellate Tribunal was competent to decide the matter keeping in view the provisions of Section 194 C-3(4) of the Customs Act, 1969?
Another point, though not agitated by the parties at bar, also cropped, as mentioned in Para No. 2 of this judgment keeping in view the legal intricacy involved in the matter, the same also requires consideration, which reads as under:--
"(ii) Whether by mere setting aside the original order, the appellate order automatically stands annulled?"
8. Since a crucial preliminary point i.e. the jurisdiction of single member qua valuation of the smuggled items was involved, therefore, the parties confined their arguments to the extent of jurisdiction.
9. We have heard Ch. Mumtaz Yousaf learned Standing Counsel for appellant, whereas Mr. Ahsan Rafique Rana, Advocate represented the respondents.
Learned Standing Counsel submitted that the order passed by the Appellate Tribunal is contrary to law. It was maintained that there is an inherent defect in the impugned order i.e. want of jurisdiction, on account of valuation. To substantiate the contention learned Standing Counsel referred to Finance Act, 2004 and stated that the jurisdiction of Single Member to hear an appeal was/is Rs. 100,000 (rupees one hundred thousand) whereas the valuation of the seized goods exceeds Rs.500,000 (rupees five hundred thousands), therefore, the appellate Single Member of the Tribunal was not competent to have passed the impugned order.
Learned counsel for respondents controverted the arguments and submitted that in view of Section 93 of the Customs Act, appeal against the order in original does not lie if the valuation of the smuggled items exceeds Rs.500,000 (rupees five lacs only), however, the appeal filed by respondent was found competent as the valuation of the seized goods was Rs.3,61,000 (Rupees three lacs and sixty one thousand only). The tribunal was competent to hear the matter.
10. We have considered the contentions put forth by both the counsel for the parties and gone through the record.
11. The point raised by the learned Standing Counsel is one that affects the very jurisdiction of the Tribunal, therefore, at first juncture, we proposed to hear the arguments qua the jurisdiction. We have given our anxious thought to the submissions made by the parties on the point of jurisdiction. Though the appeal was filed by one of the owners of the trucks but since as per the impugned order the valuation of the smuggled items collectively exceeds Rs.500,000 (rupees five hundred thousands). It may be observed that the learned Single Member decided the case in the year 2004. Till the year 2003, under Section 194-C of the Customs Act, 1969, the learned Single Member was authorized to hear the matters involving amount of "rupees one hundred thousands" but vide Act No. 1 of 2003, an amendment was made in Section 194-C, in sub-section (4) whereby the words "one hundred thousand rupees was substituted to that of "five hundred thousand rupees". It would be beneficial to reproduce the amendment referred to hereinabove:
"(33) in Section 194-C, in sub-section (4), for the words "one hundred thousand rupees" the words "five hundred thousands rupees shall be substituted";
In view of above legal position, we are of the considered opinion that the Tribunal did not had jurisdiction to adjudicate upon the matter but while deciding the appeal this legal position was not adhered to.
12. No doubt now the Single Member is competent to hear an appeal involving the valuation as mentioned in the subject matter, at the strength of amendment introduced with effect from 1st July, 2007, because there is no cavil to the legal proposition that amendment cannot be given retrospective effect and this jurisdictional defect cannot be rectified. Reliance is placed on the judgment reported in 2008 PTD Karachi page 459 case titled as Messrs Aman and Amin Trading Co. through Proprietor v. Deputy Collector of Customs, Appraising Intelligence Branch, Karachi, relevant observations are reproduced as under:--
We have considered the submissions of the learned counsel and perused the material placed on, record particularly the provision of Section 194-C(3)(4) before its amendment vide Finance Act, 2007 thereafter and noticed that the time of passing of impugned order the learned Single member of Customs, Excise and Sales Tax Appellate Tribunal had no jurisdiction to proceed with the matter while sitting as single member of the Bench, as one of the controversy involved in the appeal was about the dispute of valuation. Moreover, the relevant amendment brought through Finance Act, 2007 has no retrospective applicability so as to rectify such jurisdictional defect in the impugned order dated 16.4.2007.
This being the position and following our earlier view, contained in the order dated 30-8-2007 passed in Special Customs Appeal No. 53 of 2007, we answer the Question No. (a) in the negative and consequently set aside the impugned order dated 16-4-2007 and remand the case to the Customs, Excise and Sales Tax Appellate Tribunal Karachi for re-hearing of the appeal. We may clarify that after the amendment in Section 194-C by virtue of Finance Act, 2007 w.e.f. 1-7-2007 the learned Single Member of the Tribunal has now the jurisdiction to proceed with the appeal looking to the controversy involved therein."
13. Looking the case with this perspective, we have no doubt in our mind that the point of jurisdiction raised by the learned Standing Counsel has got sufficient force and as such, is bound to succeed. Secondly; the learned Appellate Tribunal has set aside the original order whereas the appellate order still occupies the field. We are afraid that the order impugned under such circumstances may not be redundant, thus; we answer the additional law points formulated subsequent to remand order in negative by setting aside the impugned order dated 3rd December, 2004 passed by Customs, Central Excise and Sales Tax Appellate Tribunal Bench-III,
. Resultantly, the case is remanded to Appellate Tribunal, for decision in accordance with law. Karachi
(R.A.) Case remanded