KARACHI: The Customs Appellate Tribunal, responsible for adjudicating customs-related disputes, has come under intense scrutiny due to alleged irregularities in its judgments. These irregularities, according to sources, favor importers at the expense of national revenue. The situation has escalated to the point where almost every judgment issued by the Tribunals is being challenged in the High Court of Sindh. Even the High Court has acknowledged flaws in the Tribunal’s decisions, raising serious concerns about the integrity of the process. Advocate Zafar Hussain is representing Customs in High Court.

The orders passed by the Customs Appellate Tribunals are reportedly flawed, deviating from legal norms. Instead of adhering strictly to the law, these judgments allegedly favor importers, resulting in significant losses to the national exchequer.

The Tribunals have even resorted to serving contempt notices to senior Customs officers. When the Tribunal consistently rules in favor of importers, the Customs department often appeals to the High Court. However, the Tribunals themselves have become party to these cases, imposing contempt charges on Customs officers to prevent them from seeking legal recourse.

Historically, Customs played a role in implementing Tribunal orders without challenging them in higher courts. However, the recent influx of competent and honest officers in Karachi and other stations has changed the landscape. These officers now challenge flawed Tribunal decisions in the High Court, aiming to safeguard government revenue. Unfortunately, this has led to an additional burden on the High Court and increased legal expenses for Customs.

The situation has raised serious questions about the Tribunal’s ability to appreciate accurate facts and apply independent judgment. The Court has taken the exceptional step of issuing a notice to the Chairman of the Tribunal, seeking clarification on the formation of Benches and the conduct of Tribunal members during appeals.

Quite recently, hearing a Special Customs Reference Application (SCRA) filed by Collectorate of Custom, East, a custom appellate bench of High Court of Sindh suspended order dated 28.03.2024 passed by Custom Appellate Tribunal Karachi in Custom Appeal No. 357 of 2024. The Custom Appellate Tribunal allowed the appeal on ground that Order in Original is illegal as it was time barred in terms of mandatory provisions of Section 179(3)of the Customs Act 1969. The customs was ordered to release the security deposited at the time of provisional release of goods.

In another case, SHC suspended an order by Customs Appellate Tribunal  in a Special Customs Reference Application filed by Customs Appraisement East against M/s Dargai Polymer (Pvt) Limited, Malakand. SHC noted whether the Customs Appellate Triubunal erred in law to ignore that importer intentionally and simultaneously was filing Goods Declarations for TP and Home Consumption, hence the claim of refund does not fall in the category of in-advertance error. SHC maintained Customs Appellate Tribunal erred in law to ignore that the importer consciously opted to file HC type of GD instead of TP type of GD and was well aware of the procedural requirement. Moreover the tribunal’s order does not conclusively establishes that HC GDs of the importer were verified to have consumed against the consumption certificates so produced.

In another instance, hearing a Special Customs Reference Application (SCRA) filed by Directorate of Intelligence & Investigations, custom appellate bench of High Court of Sindh suspended the operation of order passed by the Tribunal while ordering issuance of notices to the respondents. M/s Green Power imported a consignment of  Flaker Machines and showed its origin from China. The goods passed through red channel after 100 per cent physical examination and were out of charge when the DIT placed a hold. During processing of case it was found that detained machines of Model SF-3 and SF-1 are shipped from Mumbai, India to LLC Dubai and then to China to establish origin from China. However during re-examination, original packing list was found and it came to the fore that the custom officials avoided to report the actual origin.

The imported challenged the detention but lost as in Order in Original. This Order was also challenged by the Green Power in appeal before the Custom Appellate Tribunal which ruled in favor of the importer/appellant.

Moreover, a customs appellate bench of High Court of Sindh (SHC) hearing a Special Custom Reference Application (SCRA) filed by Directorate of Intelligence & Investigations (DIT) Pakistan Customs while suspending order of the Custom Appellate Tribunal in smuggled Laptops case. As per details DIT got information about dumping of smuggled foreign origin laptops at Shop No 70, Central Plaza, Karachi at which a search warrant was obtained from concerned court of Civil Judge & Judicial Magistrate South and raid was conducted on 20.2.2023. The shop owned by respondent Abdul Bari was locked at the time of raid. No body came forward to claim the ownerships of goods after which customs issued a notice to the respondent/owner who obtained bail and then joined the investigation. The respondent/owner claiming ownership before custom authorities claimed to have purchase the laptops from local market at Quetta. The Order in Original was passed and goods remained confiscated at which respondent/owner filed an appeal before the Custom Appellate Tribunal. The tribunal ruled in favor of the appellant/owner which was challenged in the instant SCRA.

Hearing a Special Custom Reference Application (SCRA 271/2024) filed by Collector of Customs Port Muhammad Bin Qasim challenging a judgment by Member Judicial–I, Karachi of Custom Appellate Court, a custom appellate court of High Court of Sindh suspended the order dated 22.01.2024 while issuing notice to the M/s Fazal Steel, Islamabad.

The controversy pertains to the alleged misdeclaration made by the respondent claiming to be a remeltable furnace which imported 329,820 kilograms goods declared as Iron and Steel Remeltable Scrap in 14 containers.

An ad-interim order passed by the Custom Appellate Tribunal, Karachi bench was suspended on Monday by custom appellate bench of High Court of Sindh while hearing a constitutional petition filed by Sardar Zafar Hussain Advocate on behalf of Collectorate of Custom, East, West, SAPT, Port Muhammad Bin Qasim and Directorate General of Valuation Karachi.

The respondents include Seven Star Tyres, Dhanal Enterprises and Custom Appellate Tribunal. The petition impugns interim order under which Valuation Ruling 1820 and 1821/2023 and an Order in Revision No 05/2024 and 06/2024 were suspended by the tribunal.

There is a long list of ridiculous orders passed by Customs Appellate Tribunals, which were challenged in High Court and suspended. An official said these Customs Appellate Tribunals were doing a disservice to the nation.