APPEAL U/S 194-A OF CUSTOMS ACT, 1969


BEFORE THE APPELLATE TRIBUNAL CUSTOMS, CENTRAL EXCISE & SALES TAX, KARACHI.

Appeal No: _____________/2016

M/S. Spaceship International Shipping
& Freight Agent, Through its Owner / Proprietor
Mohsin Raza S/O Fida Hussain, Muslim, Adult
Having office at Suit No: 313, Al- Rehman Trade Centre,
Oppsite of Gate No: 15,
M.A.Jinnah Road,
Karachi             ………                         ……………..   Appellants.

V/S

1.    The Deputy Collector of Customs,
MCC, Appraisement – West, Custom House,
Karachi.

2.    The Collector of Customs (Appeals)
Collectorate of Customs (Appeals),
81-C, Block-6, P.E.C.H.S,
Karachi.                             ………………………. Respondents.


APPEAL U/S 194-A OF
CUSTOMS ACT, 1969

Being aggrieved and dissatisfied with the ORDER-in-ORIGINAL No: 08/2015 - MCCA(W)-ADJUDICATION, vide case No: ITC-13/2013-IV(V), dated 19-11-2015, passed by the learned Deputy Collector of Customs, MCC, Appraisement – West, (Respondent No: 01) and the ORDER-in-APPEAL No: Cus/7887/2015/A-WEST/154, dated 29-02-2016, passed by the learned Collector of Customs (Appeals), Karachi, (Respondent No; 02), the appellant prefers this appeal on following facts & grounds:

1.                 Preliminary objections:

The order-in-original & order in appeal both are based on assumptions & presumptions but not on any trust worthy or confidence inspiring evidence of MENS REA (Guilty mind) & act of failure to perform a legal duty by appellant. The learned respondents have failed to realize that if there is any element of unlawful act in subject matter then a principal in the first degree actually has committed the crime and who is responsible for which crime and to what degree, is a question which is necessarily involved in just adjudication / legal process of resolving dispute / subject matter / case.

2.                 Back ground of case and Facts:

2.1          The appellant is a freight forwarder & shipping agent, based at Karachi – Pakistan having office at address given above in title of appeal.

2.2          One company / Exporter / shipper based at India and other company M/s Satellite Gas 2 / Importer - (NTN-15366630), 1255-B, Nadir Complex, Satlellite Town, Rawalpindi, Pakistan, had a contract for import & Export of CNG Cylinders in Country - Pakistan.

2.3          Thereon for transshipment, company / Exporter / shipper based at India had made a contract with Freight forwarder M/s. EMEM Shipping Agency who is also based at India, for Export of CNG Cylinders to Country – Pakistan. Thereon upon terms & conditions agreed between them, the M/s. EMEM Shipping Agency had generated / issued H.B.L (House Bill of Lading) of 12 consignments of CNG Cylinders.
It is important to mention here that in country - India the shipping line or freight forwarder as ‘carrier of goods’ can issue bill of lading only after obtaining ‘let export’ order of shipping bill as a proof of completion of customs formalities. (This means, the goods to be exported already arrived at bonded area of customs and the cargo is ready to transfer to ‘carrier’ after necessary export customs formalities).

2.4          Thereafter M/s. EMEM Shipping Agency / Indian Freight Forwarder, contracted with Shipping Company Safemarine – India, for transshipment of said consignments. Thereon the Shipping Company - Safemarine - India, by obtaining Copy of H.B.L (House Bill of Lading) from M/s. EMEM Shipping Agency  / Indian Freight Forwarder, further generated / issued M.B.L (Master Bill of Lading) for said consignment. In continuation of this process, the Shipping Company Safemarine – India, also surrendered M.B.L (Master Bill of Lading) and delivered it to M/s. EMEM Shipping Agency / Indian Freight Forwarder.

2.5          Further in accordance with the directions / circular / notification of State Bank of Pakistan regarding Remittance of Freight Charges by Freight Forwarders/ Consolidators, relevant is
“4.(a) In case of FCL/FCL CY/CY shipments, both MBL and HBL will be attached and sent through bank for the receiver to retire and Freight Forwarders / Consolidators to be given for delivery. Shipping Lines will not deliver cargo unless shipping line’s MBL is surrendered at destination.
The M/s. EMEM Shipping Agency / Indian Freight Forwarder attached both MBL & HBL and sent the same through Bank of exporter in India to Bank of importer i.e Al Habib & Sonehri Bank in Pakistan.

2.6          Thereafter the company / Importer / M/s Satellite Gas 2, approached to Bank Al Habib & Sonehri Bank in Pakistan for taking delivery of documents i.e Bill of ladings (MBL & HBL). The said Banks got paid all dues / outstanding freight charges and delivered the said documents to the company / Importer / M/s Satellite Gas 2.

2.7          Thereon after obtaining said documents i.e Bill of lading and also as per shipping line’s (Safemarine) requirements to get ensure the Freight is Paid, the company / Importer / M/s Satellite Gas 2, reached / approached to appellant / Spaceship  / Freight forwarder in Pakistan. The appellant / Freight forwarder in Pakistan only & only received endorsement charges Rs: 5500/= from the company / Importer / M/s Satellite Gas 2, and endorsed the Bills of Lading reached in Pakistan through Bank of Exporter to Bank of Importer / Banking Channels and also appellant believes the said Bills of lading which were passed through him to next forum were not fake, manipulated & forged as upon basis of fake, manipulated & forged Bills of lading the transshipment of consignments through involvement of Banking Channal and involvement of shipping  lines / carrier is impossible, because custom authorities of country of export / India and the custom authorities of the country of Import / Pakistan remains involved.

2.8          Thereafter the company / Importer / M/s Satellite Gas 2, by taking said documents engaged the Clearing Agent M/s. Shoan Cargo Services, Room No. 910, 9th Floor, Uni Plaza, I.I. Chundrigar Road, Karachi and further filed Goods Declaration to process for release of said consignments and for custom clearance of said consignment. It is  important to mention that as per procedure, either importer or his clearing agent / customs broker, only one, can file the necessary documents for import clearance and the major documents required, are Bill of Lading, commercial invoice, packing list, Cargo Arrival Notice, Freight certificate, purchase order etc.

2.9          At other hand, once the cargo arrives in port, Vassal or carrier of goods, files Import General Manifest (IGM) with customs department. IGM contains ( MBL Number, Origin / Destination, Vessel details, Shipper’s and Consignee’s name and address, Weight / Volume/ Quantity/ Description of goods, Copy of MBL, HBL, Manifest, Invoice, Packing List etc). Further the carrier, after collecting necessary charges if any, issues delivery order to the custodian of cargo.

2.10     As at the time of manifestation of IGM, if there is any type of discrepancy or mis-declaration is found, the custom authorities are bound to cancel the import permit and to initiate the proceedings U/S 32 and 131 of Act, after getting written explanation from them. If no such proceeding is on record, thereon It is a point to consider, the said consignments & documentation reached in Pakistan because all information & documentations were in order & correct. Thereafter the company / Importer / M/s Satellite Gas 2 and his nominated Clearing Agent M/s. Shoan Cargo Services, were supposed to get custom clearance & to get release the said consignments.

2.11     During Custom Clearance, officers of the directorate of Intelligence and Investigation - FBR. Regional Office, Karachi had intercepted the consignments under reference for joint examination / seizure. Thereafter all of sudden the appellant had come to know that the two FIRs (1) No:  Appg-482- F/ DCI / Enf- I / FIR /2012, dated 29-11-2012 & (2) No: Appg – 482 - E / DCI / Enf – I / FIR /2-12, dated 14.11.2012, are lodged and the appellant is also made involved for allegations leveled through Show Cause notice No: ITC-12/2013-IV, dated 13-02-2013, which are reproduce hereunder.

3.              Allegations leveled vide Show Cause Notice:

Subject: ILLEGAL IMPORT OF CNG CYLINDERS AGAINST CONCOCTED / BACK DATED CUSTOMS DOCUMENTS / BILLS OF LADING

3.1        The directorate of Intelligence and Investigation – FBR, Regional Office, Karachi vide Seizure Report No. Appg-482- F/ DCI / Eng- I/Seiz /2012/3114 dated 30.01.2013 reported that M/S. Satellite Gas 2 (NTN-1536663), Rawalpindi have imported CNG cylinders in violation of Section 16, 32(1) & (2) and 32A of the Customs Act 1969, read with section 2, 79 and 80 ibid and Section 3(1) of Imports & Exports (Control) Act, 1950 further read with SRO-84(I)/2012 dated 01.02.2012 punishable under clause 9(i), 14, 14A of sub-section (1) of Section 156 of the Customs Act, 1969, and Section 3(3) of Imports & Exports (Control) Act, 1950.

3.2          The government of Pakistan had imposed a ban on import of CNG Cylinders and conversion kits falling under respective PCT headings vide SRO-84(I) / 2012 dated 01.02.2012 in exercise of powers conferred by sub-section (1) of Section 03 of imports & Exports (Control) Act. 1950 (XXXIX 1950), through amendment in the import Policy Order 2009. A new clause (viii) in paragraph 5 and sub-paragraph (A) was inserted, which is reproduced below:
“(viii) Import of CNG cylinders and conversion kits falling under respective PCT heading shall not be importable with immediate effect and until further orders. This ban shall however not apply on CNG cylinders and conversion kits for whom letters of credit were established prior to 15.12.2011. Furthermore, the aforesaid ban shall not apply on CNG fitted public transport vehicles i.e. busses and vans”; and ………..unquote
Subsequently, it was clarified by the Ministry of Commerce vide its Office Memorandum No. 1(1) / 2009-SO(TP)PT dated 18.05.2012 that the ban shall  not apply on imports already made against LCs or B/Ls established or filed prior to the cut-off date of 15.12.2011.

3.3          Credible information was received in the Directorate General, Intelligence & Investigation – FBR, that M/s. Satellite Gas 2, in collusion with freight forwarders M/s. Spaceship International and the Clearing Agent M/s. Shoan Cargo Services, Karachi are violating the provisions of the Imports & Exports (Control) Act, 1950 and the Customs Act, 1969, by illegally importing brining CNG cylinders into the country through Customs by presenting manipulated and backdated Customs documents / Bills of lading.

3.4          The veracity of the information was checked and it transpired that 12 consignments containing 4,975 Nos of CNG cylinders of PCT heading 7311.0010 where actually brought in the country during February to July- 2012 and Goods Declarations were filed to Customs with deliberately backdated / concocted Bills of lading to falsely reflect the shipment dates as 11.12.2011 to circumvent the ban on import. The backdated / concocted Bills of lading were issued by M/s. EMEM shipping Agency, India, through their local agent M/s. Sapaceship International and were presented to MCC (Appraisement) by the importers M/s. Satellite Gas 2, through their Clearing Agents M/s. Shoan Cargo Services. Out of 12 consignments, 04 consignments containing 1975 Nos CNG cylinders were got cleared from MCC (Appraisement) against manipulated backdated / concocted Bills Lading. The following discrepancies have been observed in respect of 4 consignments which have been cleared.
a.   The backdated/ concocted Bills of lading show that goods were shipped on board the vessels at Visakhapatnam India on 11.12.2011 and port of discharge was shown Karachi, Pakistan whereas the goods were actually shipped on 07.01.2012, 15.01.2012 and  03.03.2012. The consignment subsequently arraived  at Karachi on 10-02-2012, 02-03-2012 and 21-03-2012 after transit / re-loading at Colombo / Jable Ali.
b.   The backdated/ concocted bills of Lading are issued by the freight forwarders M/s. EMEM Shipping Agency, India who have further booked the same cargo with the Shipping Line for carriage to Pakistan. The freight forwarder’s Bills of Lading are generally issued after the Bills of lading by the Shipping Lines, because it is only then possible to give the actual date of shipment and the vessel name and voyage number on which the goods are shipped. Yet in the instant case the backdated/ concocted Bills of Lading are issued 2 to 3 months prior to the Bills of Lading by the Shipping Line, which is not possible.
c.   The vessels name and the voyage numbers on the backdated/ concocted Bills of Lading are the same as those in the Shipping Lines, Bills of Lading issued 2 to 3 months later. This is not possible since the exact vessel name and voyage number cannot be predicted over 2 to 3 months in advance.
d.  The actual Bills of lading and container track/ loading record obtained from the shipping line’s agent M/s. Sea falcone agencies and M/s. safmarine Pakistan (Pvt) Ltd. , Karachi show that empty containers were lifted from empty containers Yard of M/S Gateway CFS Visakhapatnam and Mundra, India.
e.   The offending goods / under reference consignment imported, which have already been cleared through MCC (Appraisement) custom house Karachi are liable for outright confiscation beside penal action against the importers and other persons involved. Contravention report was accordingly submitted for adjudication of the case.

3.5          Since import of CNG Cylinders is not permissible in terms of clause (viii) of sub-paragraph (A) of paragraph 5 of Import Policy Order, 2009, and the offending goods are liable for out-right confiscation, the importers in collusion with clearing agents and freight forwarders, local agents cleared under-reference 04 consignment of CNG Cylinders through mis-declaration and fiscal fraud by submitting manipulated Bills of Lading / documents to Customs. They have violated the provisions of Sections 16, 32(1) & (2) and 32A of the Customs Act 1969, read with Sections 2, 79 and 80 ibid and Section 3(1) of Import & Exports (Control) Act, 1950, reach with SRO- 84(I)/2012 dated 01.02.2012, punishable under clause 9 (i), 14, 14A of sub-section (1) of Section 156 of the Customs Act, 1969, and Section 3(3) of Import & Export (Control) Act, 1950.

3.6          An FIR of the case has also been lodged in the court of Special Judge (Custom and Taxation) Karachi and investigation in prosecution case is underway.

4.              In defense of subject case Proceedings:

4.1          The appellant had joined investigation and got granted bail in subject FIR case and the trial is in process.

4.2          During adjudication proceedings, the plea taken by the appellant i.e who is involved to change, replace, manipulate the documentation record which was in custody of Custom authorities, and who is responsible for which crime and to what degree, is not considered by respondent authorities, in judicious manners, hence this appeal is on following grounds:

[Copy of Letter Head of Proprietorship, Copy of FIRs, Copy of Hearing Notice dated dated 29-10-2015, Copy of Final hearing Notice dated 10-11-2015 & Copy of Order-in-Original dated 19-11-2015, Copy of Order-in-Appeal dated 29-02-2016 are attached as Annexure A, A1, A2, A3, A4, A5, & A6].


5.                 That Order-in-Appeal was passed on 29-02-2016, and the same was received / communicated to appellant on 10-03-2016, hence from the date of receipt, the subject appeal is presented with in time. Further the appellant has left with no other option except to approach this honorable court and in this regard and in consideration of aforesaid facts he prays to be treated as mercy.

6.                 The required court fee stamp is affixed

GROUNDS


1.                That the appellant himself is the victim of circumstances. M/s Safmarine Pakistan (Pvt) Ltd & M/s transasia Karachi are the principal in the first degree, who actually has committed the crime, if any, Upon bases of hearsay and without calling any documents / evidence and just on assumptions or presumptions, to penalize the appellant by learned respondents is illegal and against the law.

2.                That impugned orders (order-in-original & order-in-appeal) are passed without the consideration of section 48, 54, 72[A] of Customs Act 1969 and section 326, 329, 340, 391, 419 of Custom Rules.

3.                That the subject consignments or consignments under reference were already released and not detained or objected at the time of custom clearance process. A long chain of custom officers had found documents of subject consignments as no fault & genuine. All those officer are not called as a witness or as a accused to check the genuineness & veracity of the allegations.

4.                That the appellant had no MENS REA (Guilty mind) & act of failure to perform a legal duty. He is not beneficiary, directly or indirectly. The Bills of lading were received to him through Banking Channel. He has not committed any type of forgery or fraud. His single & sole fault is, in routine matter, he had passed the importer to next forum / stage, by taking endorsement charges Rs: 5500/= only.

5.                That the appellant believes the said Bills of lading which were passed through him to next forum were not fake, manipulated & forged as upon basis of fake, manipulated & forged Bills of lading the transshipment of consignments under reference is impossible.

6.                That to fix liability upon appellant without getting confronts the forged, fake document is unlawful & unwarranted in law. It also cannot be ignored that the question is still unanswered that in long chain who at what time is indulged to change, replace, and manipulate the documentation record which was in custody of Custom authorities. As it has been observed in Paragraph No:6 of the order in appeal that “ It is obvious that custom officials were also on board as they choose to ignore Master Bill of Lading knowing fully well that date of shipment was crucial”. Thereon the possibility cannot be ruled out that to give benefit to exporter, shipper based in India, the actors of custom officials in collusion with carrier / shipping line / Safemarine, had tried to replace or substitute the documentation record to circumvent condition of import policy order. Liabilities & responsibilities of carrier & Custom dealing officers described in law are clear in this regard. As Section 329 (1) of custom rules reads: “(1) Prior to submission of application (Appendix-I) for transshipment, the carrier shall satisfy himself that the actual description, quantity, quality and weight of the goods under transshipment are as per declaration in the IGM of the vessel.  In case any misdeclaration or substitution is found at subsequent stage, the carrier shall be held responsible under sections 32 and 121 of the Act.” Section 339 of custom rules reads: “Time limit for transhipment of goods.- (1) All goods for which transshipment permit has been issued will reach the customs port or stations of destination within seven days of the date of issue of transshipment permit. (2) If there involves unavoidable delay in the transshipment of any goods the carrier shall make a request with specific reason to the concerned Assistant Collector for extension in the prescribed period. This extension shall, however, not be allowed on account of scarcity or non-availability of transport unit to a carrier. (3) In case where the concerned Assistant Collector finds no cogent grounds for delaying transshipment, the already issued transshipment permit shall be cancelled.”  Section 340 of custom rules reads as:  “Contravention of this procedure. Contravention of any of the provisions of these rules shall be deemed contravention of Chapter VIII of the Customs Rules, 2001 and sections 32, 121 of the Act and the carrier shall be liable to penal action under the relevant provisions of section 156 thereof and other relevant rules.” So, if there was any violation on part of them, it may not be allowed to pass on the burden to appellant also. 

7.                That the impugned orders are passed against the principals of natural justice. It is well settled principal of law that “An unfair ought not to be brought upon one person by the act of another”.

8.                That the impugned orders are passed with bad use of discretion, hence require interference of this honorable forum. As It is settled principal law that “while exercising discretion, Authority should not act arbitrarily, unreasonably and in disregard of relevant rules and regulations.

9.                That the subject Bills of lading were generated/ issued to consignor at the country of origin India and were dispatched to the bank of importer through the bank of exporter. The carrier / Shipping Line has transshipped the consignment on basis of documents which were manifested directly by them at the time of unloading the consignment. But the directorate of investigation has outlined the matter without going into fair investigation and with malafide intentions & just to give benefit to party favorable to them, has falsely blamed the appellant.

10.          That the appellant craves leave to urge further more grounds at the time of hearing og this appeal. 

PRAYER

It is therefore respectfully prayed that this honorable tribunal may be pleased to call record and proceedings of the case and after perusal of the same, upon being satisfied to the illegality and irregularity of the impugned orders (order-in-original & order-in-appeal), the same may be set aside. Further it is also prayed in consideration of above said facts & circumstance, the lenient view may taken and any other relief may also be granted which deems fit & proper in the circumstances of the case.

Karachi.                                                                  APPELLANT
Dated:        
              Farhan Khaliq Anwer
                   ADVOCATE FOR THE APPELLANT  

VERIFECATION.

I, Mohsin Raza S/O Fida Hussain, Muslim, Adult, Owner / Proprietor of M/S. Spaceship International Shipping & Freight Agent, holding NIC NO: 42201-0389646-9, office at Suit No: 313, Al- Rehman Trade Centre, Oppsite of Gate No: 15, M.A. Jinnah Road, Karachi, Muslim, adult, resident of Karachi, do hereby verify on oath that whatever stated above is true and correct to the best of my knowledge and belief.                                

        

         DEPONENT

The deponent above named is identified by me:

ADVOCATE

Solemnly affirmed and stated on oath before me at Karachi on this--------- day of April, 2014 by the deponent who is identified to me by Mr. Farhan Khaliq Anwer Advocate who is known to me personally.


                           COMMISSIONER FOR TAKING AFFIDAVITS



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