2010 PTD 794
ORDER
MUHAMMAD ARIF MOTON, MEMBER (JUDICAL-II).--- This order will dispose of Customs Appeal No.K-12 of 2009 (old Customs Appeal No.1105 of 2004) filed by appellant against Order-in-Appeal No.227 of 2004, dated 26-10-2004 passed by learned Collector of Customs , Sales Tax and Federal Excise (Appeals), Karachi.
2. Briefly the facts as stated by the appellant in the appeal are that he is the Agent of Perma Container (UK) Line Limited of UK who in the normal course of their business, through their agents at Dubai issued a Bill of Lading No.PJEAKHI-0670 dated 15-3-2004, as per the details of the goods provided to them by the shipper of the goods which was consigned to Messes Friends International, Ram Talai Road, Sialkot, Pakistan. Being the agents of Perma Container (UK) Line Limited, the carrier of the goods, it was the duty of the appellant to file Import General Manifest showing the detail of the goods as declared in the Bill of Lading and export cargo manifest received from Dubai and also inform the arrival of the goods to the consignee and all also other concerned accordingly and issued notice of arrival of the goods as per the details stated in the bill of lading. The appellant was served by the respondent No.1 with a show-cause notice dated 3rd February, 2003,for violation of provisions of sections 2(s), 32(1), 32(2), 45, 48 and 192 of the Customs Act, 1969, punishable under clauses (1), (8), (9), (14), (23), (24), (26), (42), (77) and (86) of section 156(1) ibid, and as to why penal action under the above mentioned provisions of law should no be taken against them within 14 days of the receipt of this notice. Adjudicating proceedings were initiated against the Appellant and the case was decided against the appellant by respondent No.1 thereby imposing penalty of Rs15,00,000 (Twenty Five Laces only). Hence this appeal filed by the appellant before this forum.
3. Mr. Abdul Ghaffar Khan, learned counsel for the appellant appeared before this forum for hearing. He reiterated the arguments incorporated in the memo of appeal and emphasized on the following points:-
(i) That the appellant has been falsely implicated in the case. The appellant has not misdeclared the description of the goods and the impugned show-cause notice against him is liable to be vacated. He further argued that no specific allegation against the appellant has been levelled in the Show-cause Notice, however, he has been made a party to the Show-cause Notice merely because he was the Agent of the carrier of the goods. It was further argued by the respondent No. 2 has not produced any evidence against the appellant which could prima facie establish that the appellant was in any way involved in the import of the contraband items and not a single allegation to that effect was made in the show-cause notice.
(ii) That the learned respondent No. 1 without taking into consideration the above facts and circumstances of the case and without examination the contention of the appellant and in complete disregard of the principles of natural justice and against the provision of the Customs Act, 1969, decided the case against the appellant by imposing a penalty of Rs.25,00,000.00 (Rupees Twenty-five Lacs only) by the impugned Order-in-Original No.227/2004 dated 26-10-2004.
4. The departmental representative in reply to the above arguments stated that under section 45 of the Customs Act, 1969, it is the responsibility of the person-in-charge of the conveyance of his duly authorized agent to specify all goods imported in such conveyance showing all goods separately to be landed. The departmental representative further submitted that the Commercial Counselor at Embassy of Pakistan, UAE was contacted in this behalf, who informed that Container No. ARPU-490457-7 was shipped on boared from the Port of Jebel Ali, UAE per SS. "CORINTHIAKOS" Voyage 16 and export documents were processed on-line with declared description of Cigarettes by shipper/consignor Messes Imperial Sources Trading Company. The departmental representative further submitted that provisions of Article-III of the Carriage of Goods by Sea Act, 1925 clearly define that even in case of containerized cargo the Shipping Company is required to declare the correct description. The departmental representative argued that the appellant has failed to correctly declare the goods imported and, therefore, the penalty was rightly imposed by the learned respondent No.1.
5. That in reply to the above submissions of the departmental representative it was submitted by the learned counsel for the appellant that the question of misdeclaration by the appellant would only arise when the actual description of the goods was within his knowledge. He has submitted that at the relevant time there was no law in Dubai that requires the shippers to submit a copy of the export customs declaration to the carrier of the goods for the preparation of the bill of lading and further there was no law requiring the carrier to file an Export Manifest to Dubai Customs. The learned counsel for the appellant further submitted that w.e.f from 20th October, 2004, the United Arab Emirates, Department of Dubai Customs enforced Customs Notice No.8 of 2004 dated 10th October, 2004 to the following effect:--
"This is to notify all Shipping Agents/Lines that as from 20th October, 2004 no Bill of Lading should be issued in Dubai for Export/Re-Export/Transshipment Consignment until and unless the Customs Declaration (CD) cleared by Dubai Customs is submitted by the Shipper/Agent. The CD No. must be mentioned in the B/L and all information shown in the Bill of Lading should precisely match the details in respective Customs Declaration."
6. The learned counsel further submitted that even after issuance of the above Notification, there is no law in Dubai for the filing of Export Manifest by the carrier of the goods. Therefore, a copy of the EGM cannot be filed as none was required to be prepared at the time of shipment of goods. In support of his contention the learned counsel has relied upon various letters issued by the shipping companies conducting shipping business in Dubai as well as the affidavits sworn by them confirming the aforementioned contention of the learned counsel as well as certified true copy of the aforementioned Customs Notice which are already on record.
7. The learned counsel for the appellant has further submitted that the Bill of Lading issued at Dubai on 15-3-2004, specifically provides the description of the goods as "IX40' HC Contr STC: 342 Bags Old and Used Cloth" with the condition that "Quality, Quantity and Nature of the cargo stuffed inside the container is unknown to the carrier, shippers load stow and count". He has further submitted that it is also mentioned in the Bill of Lading that "The particulars given above as stated by the shipper and the weight, measure, quantity, condition, contents and value of the Goods are unknown to the Carrier". The learned counsel for the appellant, therefore, argued that these conditions on the bill of lading clearly prove beyond any doubt that the Carrier was unaware of the actual description of the goods. It is further submitted by him that an examination of the above documents clearly establishes beyond doubt that the appellant and/or its principal was not involved in any manner whatsoever in the misdeclaration of the goods and not a single piece of evidence which could prima facie establish the involvement of the appellant was or has been produced by the respondent No.2. All the above documents were handed over to the investigating agency and the appellant has been falsely implicated in the above case without any reason at all. In support of the above contentions the learned counsel for the appellant placed reliance on the following case laws:--
(i) Eastern Federal Union Insurance Company v. American President Lines Ltd., PLD 1992 Supreme Court 291.
(ii) Unreported decision in Special Criminal Bail Application No.33 of 2004, Muhammad Nasir Khan v. The State, passed by the Hon'ble High Court of Sindh at Karachi.
(iii) Messrs P&O Containers Pakistan v. The Collector of Customs, SBLR 2001 (Trib.) 93.
(iv) Messrs Tariq Sheikh International v. The Additional Collector of Customs, 2005 PTD (Trib.) 10.
(v) Judgment passed by the Special Judge (Customs and Taxation) in Case No.54 of 2005 (F.I.R. No. SI/Misc/094-2004 under section 156 (1)(8)(14)(77) of the Customs Act, 1969) lodged by the respondent No.2 against the Directors/employees of the appellant for punishment under the aforementioned provisions of the Customs Act, 1969.
8. The learned counsel for the appellant further argued that the contents of the F.I.R. as well as the show-cause notice in the above case are almost the same. The learned Special Judge after full trial of the case through judgment, dated 27th May, 2008, acquitted all the directors/ employees of the appellant, who were facing trial before the trial Court, with the observations that the "state of affairs the harassment, maladministration, injustice and abuse of powers by the customs authorities are established".
9. The learned counsel for the appellant further submitted that no appeal against the decision of the Special Judge in aforementioned case has been preferred by the department, therefore, the decision of the Special Judge has attained finality and in the facts and circumstances of the present case the judgment of the Special Judge stands fully attracted. He contended that in view of the above judgment of the Special Judge it is proved beyond any iota of doubt that the appellant under no circumstances was not involved in the misdeclaration of the goods and the respondent No.2 implicated him illegally without any basis at all and the impugned order passed against the appellant is liable to be set aside and no penalty can be imposed on the appellant.
10. I have perused the records of the case and the contentions of the appellant as well as respondent in the case and also the relevant provisions of the Customs Act, 1969. It is observed that nothing has been brought on record by the department which could prima facie establish that the appellant in any circumstances was involved in the mis declaration of the goods on the bill of lading and was acting in collusion with the importer, Messrs Friends International. In the case of mis declaration the initial burden is on the department to prove the guilt of misdeclaration against the person charged with the allegation. In the present case I have perused the entire contents of the show-cause notice, there is not a single word against the appellant stating that the appellant in connivance and in collusion with the importer misdeclared the description of the goods while on the other hand the appellant-clearly established from the contents of the bill of lading and the disclaimer therein that the "quality, quantity and nature of the cargo stuffed inside the container is unknown to the carrier, shippers load stow and count". The bill of lading in the present case was issued subject to the condition that "the particulars given above as stated by the shippers and the weight, measure, quantity, conditions, contents and value of the Goods are unknown to the Carrier". It, is an admitted position that nothing has been brought on record by the department to disprove that what is stated on the bill of lading is incorrect and the appellant was acting in connivance with and/or in collusion with the importer. In the case of Eastern Federal Union Insurance Company v. American President Lines Limited, PLD 1992 Supreme Court 291, the Hon'ble Supreme Court of Pakistan held as follows:-
" (21) A bill of lading with notations like CY/CY, CFS or SLC is a prima facie evidence as provided by law but its rebuttal by the carrier becomes easier and the burden becomes much lighter than in other cases. Such or similar notations on the bill of lading have gained currency and their meaning is well understood in shipping, commercial and banking circles to mean that the carrier was not associated with the stuffing of the container which was exclusively done by the shipper. In the face of such bill of lading the carrier need not prove these facts unless rebutted..."
" (22) In the present case admittedly the bill of lading was marked with notations CY/CY, STC, which prima facie established that the containers were stuffed exclusively by the shipper. The respondents have proved by cogent evidence that the containers were discharged at Karachi with seals intact. They have further, by evidence in rebuttal, proved that they have discharged their duties as carrier properly. The appellant has not produced any evidence in rebuttal to prove the number and condition of bales stuffed in the containers."
The aforesaid decision of the Hon'ble Supreme Court of Pakistan is fully attracted in the present case. The appellant has lightened their burden by mentioning the above conditions as well as the notation "STC" "said to contain" on the bill of lading but department has failed to bring anything on record in rebuttal to disprove the appellant. The appellant's stance in fortified by judgment rendered in Special Criminal Bail Application No.33 of 2004, Muhammad Nasir Khan v. The State held as follows:--
"I am of the view that the allegation against the applicant will not brand him as complicit in the act of smuggling. The bill of ladings are prepared at the Port of shipment, if anything has been mis-declared out side the country or by the Principal, the criminal liability cannot be shifted on the Agent. The refusal to provide the name and detail will also not bring within the term `complicit' in smuggling."
The Division Bench' of this Tribunal in case of Messrs P&O Containers Pakistan v. The Collector of Customs, reported as SBLR 2001 Tribunal 93, held as follows:
"(6) Having gone through the case record this is our belief that no direct evidence exists which may establish the fact that the carrier was in league with the shipper. A such there is no case against the carrier. There was thus no justification to impose penalty against the appellant and the same is accordingly waived."
In the case of Messrs Tariq Sheikh International v. The Additional Collector of Customs, reported as 2005 PTD (Trib.) 10 it was held that: --
"A custom agent is required to prepare the bill of entry correctly on the basis of documents provided to him, which has been done in the present case. He cannot be held responsible for any misdeed of the improper, unless he is shown to be in collusion with him."
The only evidence relied upon by the department against the appellant is the letter of the Consulate General of Pakistan, UAE, who had informed that the disputed container was shipped on board and export documents were processed on-line with the declared description of "Cigarettes" by shipper/consignor Messrs Imperial Source Trading Company LLC. The contents of the letter of the Consulate General cannot be said to be against the appellant as nothing has been stated therein against it. As far as the on-line declaration of the goods as "Cigarettes" by the shipper/consignor and its knowledge to the appellant was concerned, the appellant has submitted copy of Customs Notice No.8 of 2004 dated 10th October, 2004, which confirms that during the relevant time period there was no law in Dubai which requires the shippers/consignors to submit a copy of the export customs declaration to the carrier of the goods for the preparation of the bill of lading. The contents of Customs Notice No.8 of 2004 of the Department of Dubai Customs was also not denied by the department.
11. The Special Judge (Customs and Taxation) in Case No.54 of 2005 (F.I.R. No. SI/Misc/094/2004 under section 156 (1)(8)(14)(77) of the Customs Act, 1969) lodged by the respondent against the Directors/ employees of the appellant for punishment under the aforementioned provisions of the Customs Act, 1969 acquittal all the directors/employees of the appellant who were on trial in the case vide his judgment, dated 27-5-2008 with the following observations:--
"I have considered the arguments and perused the evidence and material on record. The evidence of P.W. Muhammad Ashraf Khan who is complainant in this case shows that he did not state a single word against any of the accused. His entire evidence relates to the importing Firm Messrs Friends International and recovery of goods from the consignment imported under the name of said firm. This P.W. who lodged the F.I.R. after preliminary inquiry nominated the Firm of the accused persons in F.I.R. Exh. 4A but from perusal of the same it transpired that no role whatsoever has been assigned to the accused persons or their Firm in the alleged offence but even then the name of their Firm has been mentioned in the column of accused persons in the F.I.R. for the reasons best known to the complainant. Likewise, other documents produced by this P.W. during his examination-in-chief i.e. mashirnama Exh.4B, notice under 'section 171 of the Customs Act, 1969 Ehx.4C and letter of Consulate General of Pakistan, UAE Exh.4D do not disclose any thing against the present accused persons in the F.I.R. in column of accused persons under the above circumstances is beyond imagination as on what basis/evidence he (complainant) came to the conclusion that present acused played any role in the alleged smuggling by the importer Messrs Friends International.
"The perusal of evidence of P.W.2. Moinuddin shows that he also did not utter a single word against the present accused persons. His entire evidence relates to the recovery of goods from the consignment imported under the name of Messrs Friends International. The evidence of this witness in no way implicate the present accused persons.
"The scrutiny of evidence of P.W.3 Nadeemur Rehman shows that he investigated the crime and filed challan against the present accused persons. This witness in his examination-in -chief did not disclose any criminal role committed by the present accused towards the alleged crime. He only stated that due to association of the accused persons with Messrs Universal Shipping he challaned them. In cross-examination this witness clearly admitted that during investigation, he could not find any link of Messrs Universal Shipping with Messrs Friends International. It is surprising that first the complainant without assigning any role in the alleged offence nominated the Firm of the accused prima facie in the F.I.R. In column of the accused without an iota of evidence and then the Investigation Officer who in clear terms stated in cross-examination that he could not find any link of Messrs Universal Shipping with Messrs Friends International, the importer but surprisingly too, he also challaned the accused persons before this Court for facing trial. From the above state of affairs the harassment, mal administration, injustice and abuse of powers by the customs authorities are established."
12. In view of the above discussion of the relevant legal provisions and the case-law I have come to the conclusion that this is a case of gross miscarriage of justice on the part of the respondents who malafidely involved the appellants in the aforementioned case in spite of the fact B that they did not bring any incriminating evidence either oral or documentary on record and yet they chose to implicate the appellant along with the importer. I therefore, hold that the imposition of penalty on the appellant is illegal and void ab initio. I accordingly allow the appeal and set aside the impugned order.
H.B.T./24/Tax (Trib.) Appeal allowed.