KARACHI: A two-member bench of the Sindh High Court (SHC) allowed a constitutional petition and directed respondents to implement the judgment of the Customs Appellate Tribunal dated 09-11-2021 passed in Customs Appeal No. K-7545/2021 in letter and spirit on a constitutional petition filed by M/s ARA Detergents & Chemicals FZE against Collector of Customs (Enforcement) and others.
On 6 May 2022, a two-member bench, comprising Justice Zulfiqar Ahmad Khan and Justice Adnan Iqbal Chaudhry released detail judgment, court observed in its order that by judgment dated 09-11-2021, the Customs Appellate Tribunal allowed Customs Appeal No. K-7545/2021 filed by ARA Detergents & Chemicals FZE by setting aside Order-in-Original No. 02/2021-22 dated 13-09-2021 to the extent of confiscation of goods, and allowed said appellant to re-export the goods under section 138 of the Customs Act, 1969.
By the subject Reference under section 196 of the Customs Act, the Collector of Customs (Enforcement) has called in question said judgment of the Page 2 of 17 Tribunal to the extent it allows re-export of the goods; whereas by the subject constitution petition, ARA Detergents & Chemicals FZE seeks enforcement of the Tribunal’s judgment
On 24-03-2021, show-cause notice was issued to the Master of the vessel for violation of certain provisions of the Customs Act. At the hearing on 27-03-2021, the Master of the vessel is said to have admitted to the charges, accepting that the port of loading was BIK, Iran, and that the vessel never voyaged to Iraq or Oman but came directly to Karachi. He requested for leniency, offered to pay the penalty and requested for an immediate decision so as to leave Pakistan the same day.
By Order-in-Original dated 27-03-2021, the Additional Collector imposed on the Master of the vessel a total penalty of Rs. 225,000 under clauses 26(i) and 39A of section 156(1) of the Customs Act, and on payment thereof, allowed the vessel to depart from Pakistan. 8. From here onwards, the record presented before us is confined to the consignment of xylene only inasmuch as the Reference and constitution petition brought before this Court do not concern itself with the consignment of white spirit.
Mr. Shahab Imam, learned counsel for ARADC submitted that an order by the Additional Collector declining an application to re-export goods under section 138 of the Customs Act was appealable before the Customs Appellate Tribunal under sub-section (1)(d) of section 194A of the Customs Act.
He submitted that the allegation of mis-declaration, though misconceived, was leveled only against East Wind Shipping who was the agent of the carrier, not the agent of ARADC; that prior to confiscating the xylene, no show-cause notice was issued to ARADC under section 180 of the Customs Act even though it was in the knowledge of the department that ARADC was Page 8 of 17 claiming ownership to the goods/xylene; that as a consequence of section 168 of the Customs Act, the xylene had to be returned to ARADC; that malafides of the department are apparent from the fact that they do not allow ARADC to either re-consign the goods or to re-export the goods, rather they are bent upon auctioning the goods even though this is not a case of loss of revenue.
He submitted that the bills of lading relied upon by ARADC were true; that the so called admission extracted by the department from the Master of the vessel was clearly by harassment; that the documents allegedly seized from the vessel had never been confronted to ARADC; that the ownership of the goods being a question of fact decided by the Tribunal in the favor of ARADC, the same could not be agitated by the department in Reference jurisdiction as held in Pak Suzuki Motors Co. Ltd. v. Collector of Customs, Karachi PTCL 2007 CL. 78).
He submitted that where the importers/consignees had cancelled their contracts with ARADC due to harassment caused by the department itself, the goods were „frustrated cargo‟ within the meaning of section 138 of the Customs Act which could be re-exported not only under section 138 of the Customs Act but also under para 20(b) of the Import Policy Order, 2020, and for that he placed reliance on judgment dated 05-11-2021 in C.P. No. D-6544/2020, Driveline Motors Ltd. v. Federation of Pakistan”.
