2021 P T D 1035
[Balochistan High Court]
Before Naeem Akhtar Afghan and Rozi Khan Barrech, JJ
COLLECTOR, MODEL CUSTOMS COLLECTORATE, CUSTOM HOUSE
GAWADAR AT GADDANI
Versus
ABDUL RAHEEM
Special Custom Reference Application No.29 of 2020, decided on 23rd July, 2020.
Customs Act (IV of 1969) ---
----Ss.168 & 181--- SRO No. 499(I)/2009 dated 13 -06-2009---Seizure of things liable to
confiscation ---Option to pay fine in lieu of confiscated goods ---Scope ---Department assailed
order passed by Appellate Tribunal whereby the vehicle used in smuggling was released to its owner against 20% redemption fine on the customs value ---Validity ---Secret cavities of
the seized vehicle were found loaded with foreign origin goods in commercial quantity, which were ordered to be confiscated by the Additional Collector vide order -in-original as
neither anyone came forward to claim ownership of the smuggled goods nor any appeal was filed against the said order to the extent of confiscation of the smuggled goods ---Seized
vehicle being wholly used for the purpose of smuggling and in the light of SRO No.
499(I)/2009 dated 13- 06-2009, no option could be given to the owner to pay fine in lieu of
confiscation of the seized vehicle ---Adjudication officer had rightly ordered confiscation of
the seized vehicle whereas the order passed by Appellate Tribunal was in violation of the SRO as well as the provisions of S.181 of the Customs Act, 1969--- Reference application
was allowed.
Collector of Customs, Peshawar v. Wali Khan and others Civi l Appeal No. 1050 of
2009 rel.
Syed Ikhlaq Shah for Applicant.
Abdul Zahir and Hussain Ahmed for Respondent.
Date of hearing: 9th July, 2020.
JUDGMENT
ROZI KHAN BARRECH, J. ----This order disposes of Custom Reference No. 29 of
2020.
2. Relevant facts of the case are that on 02.09.2018 on receipt of information by the
Deputy Collector (preventive) the Customs Staff at about 04:30 the Customs Staff mobile
squad Khurkhera suspecting a Coach bearing Registration No. BSA -554 ("vehicle in
question") coming from Bela, signaled the drive to stop but instead of stopping, the driver
accelerated its speed. The Custom staff chased the vehicle and found the same parked near
Winder City, whereas the driver had abandoned the vehicle before the custom staff reached
the sp ot. Upon checking from specially built false cavities foreign origin Betel -nut (05) bags
Monosodium Glutamate (18 bags), Tyres (05 Nos), Auto parts, scrap, Tyres of different sizes
of cars were recovered from false cavities specially designed in the Coach. Since nobody
came forward to claim ownership of the vehicle and recovered goods, therefore the customs staff seized the recovered smuggled goods and the vehicle, whereafter same were brought to Custom House Gaddani under Section 3(1) of the Imports and Exports (Control) Act, 1950, Sections 2(s) and 16 of the Customs Act, 1969 read with SRO No.566(I)/2005 dated 06.06.2005 and SRO No.499(I)/2009 dated 13.09.2009 punishable under clauses (8) and (89) of section 156(1) and section 157(2) of Customs Act, 1969.
Notice under section 171 of the Customs Act, 1969 ("the Customs Act") was issued to
unknown person and copy was also displayed on the Notice Board of the Custom House, Gadani.
3. The following order -in-original dated 28.03.2019 was passed by Additional Collector,
Collectorate of Customs. (Adjudication) Custom House Quetta Camp Office Customs House Gaddani:
"Order regarding seized goods
15. Neither anyone has appeared from the defendant's side nor any written reply has been received rebutting the allegations as contained in the Show -Cause Notice against
the seized goods. Being conscious of the universally established legal principle of "Audi Alteram partem" i.e. no one shall be condemned unheard, this office provided
ample opportunity to the claimants/owners through the Show -Cause Notice and the
hearing notices. Despite that, no one appeared in person or through authorized representative t o claim ownership of the seized Monosodium Glutamate 18 bags (each
bag 25 Kg) Total weight 450 kgs. Tyres (Size 11 - 00-R-20) 05 Nos Betel -nut 05 bags
(each bag 15 kgs) Total weight 75 kgs. Auto Parts Scrap 100 kgs Tyres for Cars (old and used) small vehicl es 60 Nos. However Advocate Hussain Ahmed appeared for the
clamant of Auto Parts Scrap 100Kg and Bearings (brand Turb) 11 Boxes (each Box 10 bearings) Total 110 bearings. The advocate/counsel could not offer any legal evidence for the import of items. Inst ead he offered to pay duty and taxes which is
plane admission of the charges contained in the Show -Cause Notice I have therefore
no doubt that all goods seized have been smuggled and brought into the country through an unauthorized route without payment of duty and taxes. Consequently, the
seized smuggled Monosodium Glutamate 18 bags (each bag 25 Kg) Total weight 450 kgs, Tyres (Size 11- 00-R-20) 05 Nos. Betel -nut 05 bags (each bag 15 kgs) Total
weight 75 kgs, Auto Parts Scrap 100 kgs, Tyres for cars (old and used) small vehicle 60 Nos are ordered to be confiscated outright in terms of Clauses 8(i) and (89) of section 156(I) of the Customs Act, 1969 for violation of Sections 2(s) and 16 of the
Customs Act 1969, SRO 499(I)/2009 dated 13.09.2009 and SRO 566(1)/ 2005 dated
06.06.2005 further read with Section 3(1) of the Imports Exports (Control) Act, 1950.
Order regarding, vehicle
16. As for the seized vehicle. No one appeared to defend the charges nor any reply
was received despite that several date and heari ng were fixed. The impugned
conveyance/Coach has been evidently found carrying the smuggled goods. Further the
said vehicle also has false cavities, as reported by the Seizing Agency, for smuggled
goods. Therefore, Hino Coach bearing Reg No. BSA -554. Chass is No. AK1JRKA -
11056. Engine No. Not Traceable, Model: Nil used for smuggling of goods and having false cavities in ordered to be confiscated outright under section 157(2) of the Customs Act, 1969, read with clause (b) of the preamble of SRO 499(I)/2009."
4. The Respondent No. 1 assailed the above order by filing appeal under section 193 of
the Customs Act, 1969, which was dismissed vide Order -in-Appeal No. 2229/2019 dated
02.07.2019.
Being aggrieved the respondent No.1 filed appeal before Customs Appellat e Tribunal
Bench -II, Karachi (hereinafter "the appellate tribunal") who vide its judgment dated
01.01.2020 modified the order -in-original dated 28.03.2019 passed by Additional Collector,
Collectorate of Customs (Adjudication) Custom House, Quetta and relea sed the vehicle in
question to the legal owner against 20% redemption fine on the custom value of the vehicle subject to revaluation.
Being aggrieved from the judgment passed by the appellate tribunal the
appellant/department filed the instant reference.
5. We have heard the learned counsel for the parties, perused the impugned judgment
passed by the Customs Appellate Tribunal, Order of the authority below as well as the
relevant SROs on the subject controversy with their assistance. Admittedly, the se crete
cavities of the seized vehicle were found loaded with foreign origin goods in commercial
quantity, which were ordered to be confiscated by the Additional Collector vide order -in-
original dated 28.03.2019 as neither anyone came forward to claim owners hip of the
smuggling goods nor any appeal was filed against the said order to the extent of confiscation of the smuggled goods.
6. It has come on record that when the vehicle in question was taken into possession by
the customs authorities, the secret/fals e cavities were found in the vehicle and foreign origin
goods were recovered from the same. In view of false cavities found in the seized vehicle
being wholly used for the purpose of smuggling and in the light of SRO No.499(I)/2009 dated 13.06.2009, no opt ion can be given to the owner to pay fine in lieu of confiscation of
the seized vehicle. For ready reference SRO No. 499(I)/2009 dated 13.06.2009 is reproduced here under:
S.R.O. 499(I)/2009
In exercise of the powers conferred by section 181 of the Custo ms Act, 1969 (IV of
1969), and in supersession of its Notification No.S.R.O. 487(I)/2007 dated 9th June. 2007, the Federal Board of Revenue is pleased to direct that no option shall be given to pay fine in lieu of confiscation in respect of the following goods or classes of good namely:
(a) smuggled goods falling; under clause (s) of section 2 of the Customs Act, 1969 (IV of 1969);
(b) lawfully registered conveyance including packages and containers found carrying smuggled goods in false cavities or being used exclusively or wholly for
transportation of offending goods under clause (s) of section 2 of the Customs Act, 1969 (IV of 1969); or
(c) goods imported in violation of section 15 of the Customs Act, 1969 (IV of 1969):
(d) banned items, goods of Israeli original and goods of Indian origin other than those importable from India in accordance with the Import Policy Order for the time being in for; or
(e) job lot and stock lot goods;
(f) restricted and other items which are subject to procedural requirements under Import Policy Order, for the time being in force unless such condition and procedural
requirements are fulfilled; or
(g) commodities which are not importable in used or second -hand condition under the
Import Policy Order, for the time being in force:
Provided that in respect of the following goods or classes of goods where an option is given to pay fine in lieu of confiscat ion, the quantum of fine in lieu of confiscation in
respect of offences specified in column (2) of the Table below shall be at a rate specified in column (3) of that Table and shall be over and above the customs -duties
and other taxes and penalties imposed under the relevant law, namely: --
S.No. Description Redemption fine
on customs value
(1) (2) (3)
1. Offences related to misdeclaration of:
(a) difference between ascertained and declared
weight or quantity subject to the condition that
the percentage difference is more than 5%. 20%
(b) Origin 20%
(c) Physical description 35%
(d) value with difference of more than 30% in declare
viz. ascertained value determined on the basis of
direct evidence after due process of adjudication. 35%
(e) Classification where ascertained PCT attracts
higher rate of duty 20%
(f) Claim of any concession or exemption under an
SRO or a notification whereby duty and taxes are
evaded. 20%
(g) Units of measurement other than as specified in
Pakistan Customs Tariff against the specific tariff
heading where due to incorrect unit duty and
taxes are evaded. 20%
(2) Other offences related to:
(a) Offending goods imported in the bales of second
hand clothing in violation of provisions of Imports and Exports (Control) Act, 1950 (XXXIX
of 1950). 35%
(b) Baggage imported in commercial quantities by
incoming passe ngers. 20%
(c) Old and used machinery parts or components
imported by the industrial importers for their plants, if not importable in terms relevant Import
Policy Order, for the time being in force. 20%
2(d) Old and used spare parts and accessories for use
in second hand plant and machinery used in
manufacturing of goods. 20%
(e) auto-parts imported in used or second hand
condition. 20%
(f) Lawfully registered conveyance including
packages and containers, not covered under clause (b) o f the preamble of this notification, found
carrying offending goods under section 2(s) of the
Customs Act, 1969 (IV of 1969). 20%
[Explanation: The provisions of serial number I, clauses (e), (f) and (g), in the
TABLE of this notification shall apply on the clearance from Model Customs Collectorate (PaCCS) only.]
7. The vehicle in question along with foreign origin goods were seized on 02.09.2018
when the provisions of the SRO No. 499(I)/2009 dated 13.06.2009 were in field. According to clause (b) of the preamble of the said SRO no option shall be given to pay fine in lieu of confiscation in respect of the seized vehicle.
8. The Feder al Board of Revenue is empowered under section 181 of the Customs Act,
1969 to issue SROs from time to time. This controversy has been resolved by an elaborated judgment passed by the Hon'ble Supreme Court of Pakistan in the case of "Collector of Customs, Peshawar v. Wali Khan and others (Civil Appeal No. 1050 of 2009) dated
19.1.2017" wherein under similar circumstances and with the same facts, imposition of redemption fine by the Collector (Appeals) and reduction of same by the Tribunal was declared in vi olation of section 181 of the Customs Act, 1969 read with SRO applicable
thereto and all the orders passed were set aside.
9. In view of above, it is concluded that the adjudication officer has rightly ordered
confiscation of the seized vehicle following t he SRO No.499(I)/2009 dated 13.06.2019,
whereas imposition of 20% redemption fine for release of the same by the appellate tribunal is in violation of the said SRO as well as provision of Section 181 of the Customs Act.
Consequently, the Custom Reference No.29 of 2020 is hereby allowed. The judgment
dated passed by the Customs Appellate Tribunal Bench- II Karachi in Customs Appeal No.G -
1206/2019 dated 1- 1-2020 is set aside. The Order -in-original dated 28- 3-2019 passed by
Additional Collector, Collectorate o f Customs (Adjudication) Customs House, Quetta Camp
Office Customs House Gaddani being lawful is upheld.
SA/174/Bal. Reference allowed.This judgment is reproduced from a publicly available source for informational purposes and does not constitute legal advice. If you believe this listing contains an error,
let us know.