2025 P T D 65
[Balochistan High Court]
Before Muhammad Ejaz Swati, ACJ and Sardar Ahmed Haleemi, J
COLLECTOR, COLLECTORATE OF CUSTOMS (ENFORCEMENT), KHUZDAR,
CAMP OFFICE AT CUSTOMS HOUSE, GADDANI
Versus
MUHAMMAD ALI and another
Special Custom Reference Application No.99 of 2024, decided on 30th August, 2024.
(a) Customs Act (IV of 1969)---
----Ss. 2(s), 15, 16, 157 & 181, provisos to the Explanation [as added vide Finance Act, 1992] ---SRO 499(I)/2009 dated 13- 06-2009--- Smuggled goods ---Conveyance ---"Liable to
confiscation" ---Scope ---Confiscated smuggled goods/vehicle, release of ---Payment of fine ---
Collectorate filed Reference Application against order passed by the Customs Appellate Tribunal whereby vehicle/container was released against payment of 20% redemption fine ---
Validity ---Section 157(2) of the Customs Act, 1969, stipulates that "a conveyance used in the
removal of any goods liable to confiscation under the Act such as smuggled goods shall also be liable to be confiscation" ---Expression "liable to confiscation" in said S. 157(2) cannot be
equated with "shall be confiscated" ---On the other hand, S. 181 of the Act, 1969 envisages
that whenever an order for the confiscation of goods has to be passed under the Act, 1969, the officer concerned before passing the confiscation order may give the owner of the goods an option to pay fine in lieu of the said confiscation---However, through Finance Act, 1992, two provisos were added to the Explanation to S.181 of the Act, 1969--- The first proviso has
empowered the Federal Board of Revenue (Board) to specify the goods or class of goods where such options shall not be given--- Second provision further empowered the Board to fix
the amount of fine which in lieu of confiscation shall be imposed on any goods and class of goods imported in violation of provision of S. 15 or notification issued under S. 16 of the Act, 1969---Board had under the said proviso to the Explanation of S. 181 of the Act, 1969 issued various order/SRO's expressly prohibiting inter alia the release of confiscated smuggled goods/vehicle on payment of exemption fine and fixing the fine to be imposed in lieu of confiscation ---Reference Application , filed by the Collectorate, was dismissed.
(b) Customs Act (IV of 1969)---
----Ss. 2(s), 15, 16, 157 & 181--- SRO 499(I)/2009 dated 13- 06-2009 ---Smuggled goods ---
Conveyance ---Confiscated smuggled goods/vehicle, release of ---Payment of fine ---
Collectorate filed Reference Application against order passed by the Customs Appellate Tribunal whereby vehicle/container was released against payment of 20% redemption fine ---
Validity ---Contention of the Applicant/Collectorate, relying on clause (b) of SRO
499(I)/2009 dated 13 -06-2009, was that the smuggled goods were found in a cavity
specifically designed inside the container ---Validity ---Though clause (b) of the SRO
499(I)/2009 dated 13- 06-2009 prohibits the release of vehicle where smuggled goods were
found in secret/false cavity, however in the present case, the Show -Cause Notice issued to
the owner of the goods merely stated that goods were found in a cavity along with front side of the container behind the shoppers, instead of secret/false cavity--- But in the order -in-
original a cavity specifically designed inside the container had been imported which was contrary to the Show -Cause Notice, therefore, the Appellate Tribunal observed that "Neither
the seized vehicle possessed false/ secret cavity nor was used for offending goods" ---
Reference Application, filed by the Collectorate, was dismissed.
(c) Customs Act (IV of 1969)---
----Ss. 196, 2(s), 15, 16, 157 & 181---SRO 499(I)/2009 dated
13-06-2009---Factual controversies ---Tribunal, powers of ---Collectorate filed Reference
Application against order of Customs Appellate Tribunal contenting that the smuggled goods
were found in a cavity specifically designed inside the container ---Validity ---Appellate
Tribunal, which is final fact finding authority, observed that "neither the seized vehicle possessed false / secret cavity nor was used for offending goods" ---It was not permissible to
take into consideration such factual aspects in reference under S.196 of the Customs Act,
1969--- Reference Application, filed by the Collectorate, was dismissed.
Messrs T&N Pakistan Private Limited v. The Collector Customs and others 2022
SCMR 1119 ref.
Raja Jawad Mehmood for Applicant.
Date of hearing: 28th August, 2024.
ORDER
MUHAMMAD EJAZ SWATI, ACJ. ---The applicant is aggrieved against the
judgment dated 03- 06-2024, passed by learned Member (Judicial) Quetta, Bench Customs
Appellate Tribunal Karachi, whereby, vehicle bearing registration No.LSB -8057 along with
container was released (vehicle) against payment of 20% redemption fine on its ascertained
value subject to verification of legal statues of the vehicle.
2. Facts of the case are that Collectorate of Customs, Khuzdar intercepted Nisan Diesel
Truck near Dam Moor Main RCD Road, on checking 166 bags (each contain 25 kg total 4150 kg) plastic shopper were found in a cavity along the front seat of the container (the
goods). The guards/staff seized the said goods along with vehicle container in violation of
Sections 2(s) and 16 of the Custom Act, 1969, Section 3 (1) Imports and Exports Control
Act, 1950 read with SRO 566(I)/2005 dated 06- 06-2005, SRO 499(I)/2009 dated 13- 06-2009
punishable under clauses (8) and (89) of Sections 156(1) and 157(2) of the Act.
3. The Collectorate of Customs (adjudication), Quetta Camp Office Custom house
Gaddani vide order in original dated 23- 05-2024 out rightly confiscated the vehicle on the
ground that smuggled goods were found in a cavity specifically designed inside the
container. On filing appeal, the Custom Appellate Tribunal vide impugned judgment released the vehicle as mentioned above.
4. Learned counsel for the applicant mainly raised legal question as under:
"Whether the appellate tribunal failed to appreciate the fact that the impugned vehicle was exclusively used for the transportation of smuggled goods hidden in especially designed "false cavity" to store the smuggled goods and as such attracting clause (b) of the preamble of SRO 499(I)/2009 dated 13- 06-2009 and thus liable to outright
confiscation as envisage under Section 157(2) the Custom Act, 1969?"
5. It is contended that the smuggled goods were found in a cavity specifically designed
inside the container, therefore, clause (b) of SRO 499(I)/2009 dated 13- 06-2009 is fully
attracted.
6. We have heard the learned counsel for the applicant. Section 157(2) of the Act,
stipulates that "a conveyance used in the removal of any goods liable to confiscation under the act such as smuggled goods shall also be liable to be confiscation." The expression "liable to confiscation" in section 157(2) of the Act cannot be quoted with "shall be confiscated". On the other Section 181 of the Act then envisages that whenever an order for the confiscation of goods has to be passed under the act, the officer c oncerned before passing
the confiscation order may give the owner of the goods an option to pay fine in lieu of the said confiscation. However, through Finance Act, 1992, two provisos were added to the explanation to section 181 of the Act. The first proviso has empowered the Federal Board of Revenue (Board) to specify the goods or class of goods where such options shall not be given. The Second provision further empowered the Board to fix the amount of fine which in lieu of confiscation shall be imposed on any goods and class of goods imported in violation
of provision of Section 15 or notification issued under Section 16 of the Act. The Board has under the said proviso to the explanation of Section 181 of the Act issued various
order/SRO's expressly prohibiting inter alia the release of confiscated smuggled
goods/vehicle or payment of exemption fine and fixing the fine to be imposed in lieu of confiscation. The applicant has relied upon preamble of clause (b) of SRO 499(I)/2009 dated 13-06-2009, which is reproduced as under:
"lawfully registered conveyance including packages and containers found carrying smuggled goods in false cavities or being used exclusively or wholly for transpiration of offending goods under clause (s) of section 2 of the Customs Act, 1969 (IV of 1969);"
7. The above clause of the SRO prohibits the release of vehicle where smuggled goods
were found in secret/false cavity. The contention of learned counsel for the applicant that the smuggled goods were found in a cavity specifically designed inside the container is not tenable. The show -cause notice issued to the owner of the goods dated 03.05.2024 merely
contained that goods were found in a cavity along with front side of the container behind the shoppers instead of secret/false cavity, but in the order in original a cavity specifically designed inside the container has been imported which is contrary to the show cause notice, therefore, the learned Member (Judicial) of the Appellate Tribunal, who is final fact finding authority observed that "Neither the seized vehicle possessed false/secret cavity nor used for offending goods".
8. The above factual aspects are not permissible to be taken into consideration in
reference under Section 196 of the Act. Reference in this respect is to be made on case titled Messrs T&N Pakistan Private Limited v. The Collector Customs and others (2022 SCMR 1119), wherein the Honorable Supreme Court of Pakistan observed as under: -
"The precise intent of remedy of reference provided under section 196 to resolve and adjudicate only the question of law originating and stemming from the order passed by the Appellate Tribunal. The High Court cannot embark upon factual aspects or controversy. Here throughout the proceedings, only factual question was involved with regard to the production of certificate of origin. The authorities had not denied or disputed the provision of exemption flowing from the document of S.R.O but they were merely asking the petitioner to produce the certificates of origin as mandatory compliance but despite various opportunities provided by the lower fora, the petitioner failed to fulfill the requisite formalities, even the judgment of the learned High Court depicts that an opportunity was also afforded to the petitioner at the time of hearing of reference to produce the original certificate of origin, but they failed to produce and ultimately the learned High Court reached to the conclusion that no question of law raises in the reference to consider under section 196 of the Custom Act but the entire focus was on factual controversy which could not be agitated as question of law.
In the case of Collector of Customs Karachi and others v. Messrs Haji Ismail Co. and others (2015 SCMR 1383), this court held that it is the Tribunal which is the forum meant for determining factual aspects. The High Court while exercising appellate jurisdiction under section 196 of the Customs Act, is not free to embark upon an unfettered inquiry into factual aspects which have been properly considered and decided by the Tribunal. In another case of Pakistan State Oil Company Ltd. v. Collector of Custom, E&ST (Adjudication- II) and others (2006 SCMR 425), it was
held that a question of law does not require investigation of facts and thus, a question involving factual inquiry into facts or to which answer cannot be given without going into facts is not a question of law. While in the case of Collector of Customs, Port Muhammad Bin Qasim, Karachi v. Messrs Kaghan Ghee Mills (Pvt.) Ltd. (2008 SCMR 1538), it was held that the High Court was correct in observing that the matter was decided at factual stage and no question of law was before it for adjudication which was necessary condition for maintainability of appeal under section 196 of the Customs Act."
In view of the above, Custom Reference Application No.99 of 2024 is dismissed in
limine.
Copy of this judgment be sent to the learned Customs Appellate Tribunal Quetta
Bench in accordance with law..
MQ/99/Bal. Reference dismissed.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,
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