ORDER SHEET

IN THE HIGH COURT OF SINDH, KARACHI

Special Customs Reference Application No.150 of 2008

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ORDER WITH SIGNATURE OF JUDGE

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The Director, Intelligence and Investigation FBR, Karachi

Vs.

Tariq Mughal and an other

BEFORE MR. JUSTICE MOHAMMAD ATHER SAEED

MR. JUSTICE ARSHAD SIRAJ MEMON

Date of hearing 22.04.2009

Mr. Aqeel Ahmed Abbasi Advocate for the applicant alogwith Abdul Rasheed, I.O.

Mr. Asim Muneer Bajwa Advocate for the respondent.

MOHAMMAD ATHER SAEED J.- This Special Customs Reference Application has been filed against the order of a Single Bench comprising of Member (Technical) of the Customs Excise and Sales Tax Appellate Tribunal dated 3.3.2008 in Customs Appeal No.K-703 of 2007, by which the following questions said to have arisen out of the said order have been proposed for the opinion of this Court:-

1. Whether the learned Member Technical, Appellate Tribunal, Bench, I Karachi has seriously erred in law and failed to appreciate that Tariq Mughal being fugitive of law did not come forward with clean hands and was not entitled for any equitable relief as the Honourable Court of Special Judge (Customs & Taxation), Karachi, has already issued non-bailable warrant of arrest against him?

2. Whether the learned member Technical, Appellate Tribunal, Bench-I, Karachi has failed to properly read the evidence available on record to establish that the respondents have violated the provisions of Section 2(s), 16, 157 (2) and 178 of the Customs Act, 1969.

3. Whether the learned Member Technical, Appellate Tribunal Bench-I, Karachi, while concluding the impugned Order has seriously erred in law to hold that there was no occasion for the collector to issue a show-cause notice dated 24.-07.2007, in terms of Section 195 of the Customs Act, 1969?

4. Whether the learned Member Technical, Appellate Tribunal, Bench-I, Karachi, was justified to set aside the Order-in-Original No.11 of 2007, dated 25.09.2007, passed by the Collector of Customs (Preventive), Custom House, Karachi, in exercise of the powers conferred under Section 195 of the Customs Act, 1969?

2. Brief facts of the case are that the Staff Directorate General of Intelligence and Investigation FBR had intercepted Oil Tanker LSA-1015 loaded with 25,000 litters diesel of Iranian origin HSD at Shershah Chowk, SITE, Karachi and after completion of investigation order in original No.20 of 2004 dated 13.10.2004 was passed by the then Collectorate of Customs, Sales Tax and Central Excise against which appeal was preferred first before the Collector of Appeal No.II who vide his Order In Appeal No.159 of 2005 maintained the order in original and rejected the appeal filed by the present respondent. Against the said order the appeal was filed before the Tribunal who vide their order dated 2.10.2006 in Customs Appeal No.K-443 of 2005 set-aside the impugned order and remanded the case back to the original authority for deciding it afresh with the following findings:-

"From the letter dated Nil, filed by the Deputy Director, Law, it is, evident that goods were not smuggled. This aspect of the dispute and evidence available on record was not considered by the respondent. The impugned order thus suffers from a procedural impropriety inasmuch as that the respondent failed to read an evidence which was very much available on record.

Having said that the impugned orders are set aside and the case is remanded back to the adjudication officer for deciding it afresh in the light of available evidence."

3. This order was reexamined by the Additional Collector of Customs Preventive who vide her Order in Original No.03 of 2006 vacated the show-cause notice by holding:-

"it is established that seizure of diesel and vehicle in this case had no cover of law as had already been observed by the Customs Appellate Tribunal, Bench-I, Karachi"

4. After passing of the above order in original the Collector of Customs reopened the case under Section 195 of the Customs Act, 1969 and issued a show-cause notice No.114 (Adj-Cell)P/2006 dated 24.06.2007 and on the basis of this show-cause notice passed Order In Original No.11 of 2007 dated 25.09.2007 and out rightly confiscated the diesel and the oil tanker mentioned above. This order was appealed again before the Tribunal and the Member (Technical) once again allowed the appeal and set-aside the impugned order by holding as under:-

"was an appealable order, however the parties, rather following the law on the subject asked the Collector to reopen the case vide a Show Cause Notice dated 24.07.2007. It is strange that findings were given by this Tribunal that no smuggling has been taken place in this case and the department had failed to challenge that order before any court of law and that order become a final order. In presence of such final order, there was no occasion for the Collector to issue a Show Cause Notice dated 24.07.2007, since the issue being reopened by him became a past and closed transaction and provision of Section 195 of the Customs Act, 1969 can not be restored to in such circumstances as the order passed by his subordinate was very much in consonance and direction of the Tribunal's order dated 02.10.2006, which had attained the finality after lapse of time period meant for filing appeal against the said order before a competent court of law. Therefore, the order passed by Collector was not warranted by law the same is accordingly set aside."

5. Being aggrieved by the above order the present reference application has been filed.

6. We have heard Mr. Aqeel Ahmed Abbasi the learned counsel for the applicant and Mr. Asim Muneer Bajwa the learned counsel for the respondent.

7. The main contention of the learned counsel for the applicant was that by remanding the above order the Tribunal had directed the adjudicating authority to examine the case for deciding it afresh in light of the available evidence specifically the letter dated Nil filed by the Deputy Director Law from which, according to the Tribunal, it was evident that the goods were not smuggled but the adjudicating authority instead of examining the available evidence i.e. the letter of the Deputy Director Law, vacated the show-cause notice as, according to the adjudicating authority, it had already been observed by the Customs Appellate Tribunal Bench I, Karachi that the goods were not smuggled. The learned counsel placed a copy of the disputed letter on record to fortify his contention that the Deputy Director Law has not conceded that the goods were not smuggled goods. Even otherwise, his contention was that without examining the said letter of Deputy Director Law and holding that in that letter it had been conceded that the goods were not smuggled goods, the adjudicating authority could not have held that the goods were not smuggled because if the Tribunal in its initial order had already reached the conclusion that the goods were smuggled goods it would not have remanded the case back for fresh adjudication. He submitted that the order of the adjudicating authority fell within the ambit of Section 195 and had rightly been reopened under Section 195 of the Customs Act by the Collector. He further submitted that the observation of the Tribunal that the order was appealable was not correct because at that time the department i.e. the present applicant did not have a right to file an appeal against the order of adjudicating authority. The learned counsel, therefore, submitted that the order of the learned Member (Technical) allowing the appeal on the basis that the department should have appealed against the order of adjudicating authority and not taken action under Section 195 and that the adjudicating authority has followed the directions given by the Tribunal in its previous order, is not in accordance with law and the facts of the case and, therefore, cannot be sustained. The learned counsel further submitted that the question whether action can be taken under Section 195 instead of filing an appeal is a question of law and this Court in its judgment in the case of COLLECTOR OF CUSTOMS, MODEL CUSTOMS COLLECTORATE OF PACCS, KARAVHI VS. MUZAMMIL AHMAD (2009 PTD 266) has already held that a Member Technical sitting singly does not have the powers to adjudicate any appeal which involves a question of law. He, therefore, prayed that the matter may be remanded to be placed before an appropriate Bench with directions to finalize the same after giving both the parties proper opportunity of being heard.

8. Mr. Asim Muneer Bajwa the learned counsel for the respondent submitted that the Controversy before the Tribunal was a factual controversy and the adjudicating authority has properly followed the directions of the Tribunal which involve factual controversy and no question of law is involved and, therefore, this Court in its advisory jurisdiction cannot adjudicate in this case. He further submitted that since it is a factual controversy the matter before the Tribunal did not involve questions of law and, therefore, the impugned order is not covered by the judgment of this Court in the case of COLLECTOR OF CUSTOMS, MODEL CUSTOMS COLLECTORATE OF PACCS, KARAVHI quoted supra and, therefore, cannot be remanded back.

8. We have examined the case in the light of the arguments of the learned counsel and have carefully examined the records of the case and reviewed the impugned orders, the letter of the Deputy Director Law and the judgments relied on by the learned counsel.

9. A perusal of the letter of the Deputy Director Law leads to the conclusion that the Tribunal has wrongly observed that in this letter the Deputy Director conceded that the goods were not smuggled goods. On the other hand, it seems that the Deputy Director Law was of the opinion that the evidence produced by the present respondent was not enough to co-relate that the seized smuggled diesel was the same diesel purchased from Coast Guard Price Shop and, therefore, the initial order of the Tribunal was based on wrong assumption. Even then, by the initial order of the Tribunal directions were issued to the adjudicating authority to finalize the case de novo in the light of the available evidence and, therefore, we are of the view that the adjudicating authority could not have vacated the show-cause notice without reviewing the letter of Deputy Director Law only on the basis that the Tribunal had held that the goods were not smuggled goods and consequently the Tribunal was not justified to hold that the order of the adjudicating authority had been passed by following the directions of the Tribunal contained in order dated 02.10.2006 and was in consonance with their order. We are, therefore, of the considered opinion that due to misreading of evidence and distortion of facts the matter before the Member Technical had been converted into the matter of law and is fully covered by the judgment of this Court in the case of COLLECTOR OF CUSTOMS, MODEL CUSTOMS COLLECTORATE OF PACCS, KARAVHI (quoted supra).

10. The above are the reasons in support of our short order delivered in Court on 22.4.2009 whereby after hearing the learned counsel, we had set-aside the impugned order of the Tribunal and remanded the case to the Tribunal to be placed before an appropriate Bench and be disposed of after giving appropriate opportunity of hearing to both the parties.

11. In our said short order we had also mentioned that the respondent, if they so desire, may move an application for release of tanker which will be fixed before this Court within three days and will be decided on its own merits. However, we had directed the learned counsel for the respondent to ensure personal attendance of the owner of the tanker with his National Identity Card on the day of hearing and directed Mr. Aqeel Ahmed Abbasi the learned counsel for the applicant to attend the Court and argue the matter when the application is fixed before this Court.

JUDGE

Farooq PS/*