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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