O R D E R S H E E T

O R D E R S H E E T

IN THE HIGH COURT OF SINDH AT KARACHI

Spl. Custom R.A. No.555 of 2011

ORDER WITH THE SIGNATURE OF THE JUDGE

1. For orders on CMA No.1921/11 (Exemption (Certified copy of annexures not filed)

2. For Katcha Peshi.

09-09-2011:

Ms Dilharam Shaheen, Advocate for the applicant

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The instant reference has been filed against order dated 10.03.2011 whereby the learned Custom Appellate Tribunal has dismissed the appeal filed by the applicant.

2. Following questions of law are said to have arisen from the order of the Appellate Tribunal.

1. Whether the learned Member Judicial Customs, Appellate Tribunal Karachi has rightly passed time bared order in appeal after 2 years in which as per Section 194-B (1) of the Customs Act, 1969 appeal shall be decided within sixty days of filing the appeal whether time bared order is maintainable in the eye of law?

2. Whether the conclusion arrived upon by the learned Member Judicial Bench-1 Karachi is hit with the judgment passed by the Honourable Karachi High Court reported as M/s Brigstocke Eduljee & Co. V/s Assistant Collector of Customs Appraising Intelligence Branch Custom House Karachi 2003 PTD 2835 whereby it was declared

“We are in conformity with what the petitioners Advocate has stated and would according dispose off the petition that since the petitioner has stated that he does not wish to clear the containers, therefore the respondents would be free to do what they like with the containers in their custody and they shall not claim the redemption fine from the petitioner. The letter, dated 31-07-1990 is therefore set aside as redemption fine can only be claimed if the containers were claimed. Since they are not claimed therefore, there is no question of recovery fine from the petitioner by the respondent. The petition is allowed.”

3. The brief facts of the case are that on 01.01.2009 applicant electronically submitted the declaration of goods imported by him, as being news print in reels, falling under H.S. Code 4801.0000, and sought clearance of the consignment under Section 79 (1) of the Customs Act, 1969. However, the said declaration was selected for scrutiny in terms of Section 80 of the Customs Act, 1969. Such scrutiny revealed that the applicant had mis-declared the goods wrongly claimed the same to be falling under HS Code 4801.000 as the goods upon physical examination were found to be (Both side coated paper Gloss), and (Both sides coated matt finish paper) falling under H.S. code 4810.1310 whereon 20% custom duty was payable. It was held that the applicant had mis-represented and mis-declared the goods as quoted above, to evade the custom duty and taxes, and thus a show cause notice was issued to the applicant. Neither the applicant filed any reply nor appeared before the Deputy Collector but filed an appeal before the Collector of Customs (Appeals) and the Custom Appellate Tribunal, however, the applicant failed to get any relief and the order of the adjudicating authority was confirmed.

4. Learned counsel for the applicant has argued that there was no deliberate mis-declaration by the applicant and the error was on the part of supplier or his shipping company, who have supplied different goods with different HS Code to the applicant. It has been further contended that since there was no deliberate mis-declaration on the part of applicant, therefore, the learned Appellate Tribunal was not justified in upholding the order-in-appeal passed by the learned Collector of Customs (Appeals), concurring with the finding of the Adjudicating Officer. However, the learned counsel has not advanced any arguments in support of the question relating to limitation, being the question No.1.

5. From the perusal of the record, it appears that the questions, as proposed, do not arise from the impugned order passed by the learned Member (Judicial) Customs, Appellate Tribunal, as there is no finding by the learned Appellate Tribunal on the questions so proposed by the applicant. As regards question No.2, which is relating to the merits of the case, it may be noted that the impugned order is based on concurrent finding of facts whereby it has been held by the forums below that there was deliberate mis-declaration by the applicant in his attempt to clear the goods through PaCCs system under Section 79 (1) of the Customs Act, 1969 on the basis of self-assessment by claiming exemption from duty and taxes. Whereas, admittedly the goods imported by the applicant did not fall within HS Code i.e. 4801.0000 as declared by the applicant on goods declaration. Such fact came to the face when the consignment was selected for scrutiny under Section 80 of the Customs Act, and it was found on physical examination of goods that the same were “both side coated paper” and “both side coated matt finish paper”. No plausible explanation has been offered by the applicant, which could support his contention regarding good faith, whereas deliberate concealment and mis-declaration on the part of the applicant is established. Accordingly, we reply question No.2 in negative.

6. As regards question No.1, though the learned counsel for the applicant has not made any submission in support of the question proposed, however, we are of the view that the response to such question would benefit the parties in particular, as well as other parties in general.

7. In terms of proviso to Section 194-B (1) of the Customs Act, 1969, it is provided that the appeal filed before the Customs Appellate Tribunal shall be decided within sixty days of filing of appeal or within such extended period as the Tribunal may, for reasons to be recorded in writing.

8. From perusal of the remaining sub-sections of Section 194-B and other provisions of the Customs Act, it is noted that no consequential penal provision has been provided which may attract in case of default in compliance of such directions. In the case of Niaz Muhammad Khan v. Mian Fazal Raqib PLD 1974 SC 134, the Full Bench of Hon’ble Supreme Court while interpreting the directory and mandatory provision in statute has held as under:

“As a general rule however, a statue is understood to be directory when it contains matter merely of direction, but not when those directions are followed up by an express provision that, in default of following them, the facts shall be null and void. To put it differently, if the Act is directory, its disobedience does not entail any invalidity; if the Act is mandatory disobedience entails serious legal consequences amounting to the invalidity of the act done in disobedience to the provision.”

Recently a Division Bench of this Court in First Appeal No.24 of 2009 (Sajjad Gondal v. Orix Leasing Pakistan Limited), while interpreting the purported effect of the provision of Section 10 (6) of the Financial Institutions (Recovery of Finances) Ordinance, 2001, by respectfully following the dicta laid down by the Hon’ble Supreme Court in the above cited case has reiterated the said proposition of law. Accordingly, we are of the view that since there is no penal consequence in case of default in passing the order within the time as mentioned in proviso sub-section (1) of Section 194-B of the Customs Act, such provision is declaratory and not mandatory as its non-compliance does not entail the penal consequences.

9. In view of hereinabove, we do not find any substance in the reference, therefore, it is accordingly disposed of in the above terms alongwith listed application, whereas question No.2 is answered in negative against the applicant.

JUDGE