MUHAMMAD YAQOOB VS PAKISTAN through Secretary, Ministry of Finance, Islamabad, 2002 PTD-LAHORE-HIGH-COURT-LAHORE 2885 (2002)

Customs Act (IV of 1969)---

---Ss. 181, 185-C & 187---Constitution of Pakistan (1973), Art. 199-- Constitutional petition---Case of contravention---Adjudication proceedings under Customs Act, 1969, and criminal trial ---Distinction-- Onus to prove---Acquittal by Special Judge Customs---Effect---Petitioner faced trial before Special Judge Customs and was acquitted in the trial-- Adjudication proceedings were also initiated by the Authorities against the petitioner on the same facts and petitioner deposited differential amount of customs duty---Plea raised by the petitioner was that the differential amount should have been returned to the petitioner after he was acquitted by the Special Judge Customs---Validity--In criminal trial it is always for the prosecution to establish its case against the accused beyond reasonable doubt---Onus of proving the guilt of the accused at all times remains on prosecution---Accused in criminal trial is not obliged to appear as witness or to testify or even to lead evidence in his defence on the other hand in adjudication proceedings under Customs Act, 1969, after contravention case has been made out by Customs Authorities, adjudicating functionary is required to issue a notice to the person against whom such case is made out to show cause as to why such person should not be proceeded against in the manner set out in such notice-- Accused person has to lead evidence and to show to the adjudicating functionary that such person is not liable for the contravention of provisions of Customs Act, 1969, as alleged in the show-cause notice addressed to him---Even where a person has been acquitted by the Special Judge Customs in a criminal trial, such acquittal may be a consequence of failure of prosecution to prove its case beyond a reasonable doubt---On the very same facts, as have been brought before the Special Judge Customs, the adjudicating functionary under Customs Act, 1969, may conclude that although the strict standard of proof was required of the prosecution for obtaining a conviction in criminal case, the same had not been met---Such evidence is sufficient to result in a decision against acquitted person in adjudication proceedings---High Court declined to interfere with the order passed by the adjudicating Authority and denied return of differential amount deposited by the petitioner---Petition was dismissed in circumstances.

Muhammad Sarwar v. Federal Government of Pakistan and 3 others 1988 PCr.LJ 213 and Muhammad Tahir and others v. Deputy Collector-ate 1989 PCr.LJ 1190 distinguished.

Uzair Karamat Bhindari for Petitioner.

A. Karim Malik for Respondents.

Date of hearing: 10th April, 2002.

JUDGMENT

I have, heard learned counsel for the parties. The case of the three petitioners is that they had imported vehicles into Pakistan and had paid customs duty thereon under Chapter Heading 87.02(C)01 of tile customs tariff. The imported, vehicles were claimed by the petitioners to be delivery vans. The customs duty calculated on the imported vehicles was calculated at the rate of 40% ad valorem in accordance with the aforesaid Chapter Heading.

2. Subsequently, the Customs Department determined that the imported vehicles were in fact passenger vans and not delivery vans. The relevant Chapter Heading of the customs tariff applicable to passenger vans was 87.02(C)02 and not 87.02(C)01. The customs duty payable under the aforesaid Chapter. Heading was 80% ad valorem.

3. The Customs Department also concluded that the petitioners had deliberately made a misdeclaration in respect of the imported vehicles with the object of evading customs duty. As a consequence, adjudication proceedings were initiated by the Customs Department against the petitioners.

4. Three F.I.Rs. were also lodged against them with Police Station East Cantt., Peshawar on 19-9-1988 on the complaint of one Aamer Ahmed, Assistant Director, Customs Intelligence. Pursuant to the said F.I.Rs. the petitioners were tried but were acquitted by the learned Special Judge Customs on 22-12-1992. The said acquittal was not merely on technical grounds but on merits also.

5. However, in the adjudication proceedings before the Customs Authorities, the petitioners paid the differential in duty amounting to Rs.14,89,892, which according to the Customs Department had been evaded. Learned counsel for the petitioners contends that tae said payment was made under protest. This statement is disputed by learned counsel for the respondent-Department, who has placed on record the handwritten statement of the attorney of the petitioners assuring payment of the aforesaid differential amount. The said statement does not, in any manner, indicate that payment of the differential amount of customs duty was agreed to be paid under protest. Even otherwise, learned counsel for the petitioners was unable to refer to any document on record, which would substantiate his contention regarding the aforesaid statement made, on behalf of the petitioners.

6. The record shows that upon payment of the differential amount having been made, the adjudication proceedings against the petitioners were dropped by the competent adjudication functionary. This was done on 12-11-1988 by means of a formal order in Original No.167/88 passed by the Deputy Collector Customs, Lahore. Although an appellate remedy was available to the petitioners, they chose not to invoke the same. As a consequence, the determination of the liability of the petitioners to make payment of the differential amount of Rs.14,89,892, attained finality.

7. It is only after the acquittal of the petitioners by the Special Judge Customs that the petitioners, for the first time, applied for refund of the differential amount of Rs.14,89,892. The claim for refund was denied by the Customs Department vide order dated 26-4-1993. It is this order, which has been impugned in the present petition.

8. The mainstay of the petitioners' case is that the acquittal of the petitioners by the learned Special Judge Customs in the criminal cases prosecuted against them was binding on the Customs Department and that the Customs Department 'was bound to refund the amount of Rs.14,89,892 as a result of the aforesaid acquittal.

9. To support his submissions, learned counsel for the petitioners referred to the case titled Muhammad Sarwar v. Federal Government of Pakistan and 3 others (1988 PCr.LJ 213) and the case titled Muhammad Tahir and others vs. Deputy Collectorate (1989 PCr.LJ 1190).

10. I have gone through the cited precedents with the assistance of learned counsel for the petitioners and find that the same do not help the petitioners in the circumstances of the present case. In the case of Muhammad Sarwar referred to above, a learned Judge of this Court held that there is no rigid or inflexible rule that the finding of the Special Judge Customs, acquitting an accused, is conclusive in all respects upon the adjudicating authority performing adjudicatory functions under the Customs Act. The competent adjudicating authority, according to the learned

Judge, wag empowered to initiate and decide adjudication proceedings regardless of the fact that the person against whom such proceedings had been initiated, had been acquitted in a criminal trial.

11. It has, however, been observed in the cited precedent that if the adjudication proceedings are initiated or come up for decision after the criminal trial has concluded resulting in the acquittal of the accused, some circumspection and care would have to be observed by the adjudicating functionary. Certain guidelines have also been given to the adjudicating authorities in such circumstances. The learned Judge observed that if the acquittal of the accused by the Special Judge Customs is based on technical consideration, the adjudicating authority may, if so warranted, decide the adjudication against the accused, However, where the judgment of acquittal is substantially on the merits in which intricate questions of law and fact have been answered, it would, according to the precedent case, be highly improper for the adjudicating authority on identical facts and charges to record any finding leading to the confiscation of goods or imposition of any penalty without distinguishing the findings of the Special Judge on solid and incontrovertible grounds.

12. The aforesaid observations taken from the case of Muhammad Sarwar supra, at the very outset, distinguish the precedent case from the present matter in important particulars. It is firstly to be noted that even according to the cited case no rigid or inflexible rule has been laid down. Furthermore, the adjudicating authority has only been advised to proceed with circumspection and care and that too, in cases where the adjudication proceedings are initiated or come up for decision after the criminal trial is concluded.

13. I have noted above that in the present case the adjudication proceedings were initiated much before the conclusion of the criminal trial resulting in the acquittal of the petitioners In fact the said proceedings were dropped on 12.11.1988, which is a date more than-four years prior to the date of the acquittal of the petitioners by the learned Special Judge Customs.

14. Secondly, it is important to note that jar the cited precedent, the Court has merely held that confiscation of goods and imposition of penalty in adjudication proceedings, in spite of an acquittal recorded by the Special Judge Customs, would be improper, if such confiscation or penalty proceeds on facts before the adjudicating authority which are identical to the facts at the trial before the Special Judge Customs.

15. In the present case, it will be noted the adjudicating authority has not confiscated the imported vans and nor has it imposed any penalty on the petitioners. Only the amount of differential in duty, which according to the determination of the Customs Department had been evaded, has been paid by the petitioners. The payment itself has been made voluntarily as is apparent from the handwritten statement signed by the attorney of the petitioners referred to above.

16. In the. circumstances, I do not see how learned counsel for the petitioners can benefit from the case of Muhammad Sarwar cited by him: There is not even a remote suggestion in the said precedent which would indicate that acquittal in criminal proceedings should be taken by "the adjudicating authority under the Customs Act as absolving the acquitted person from paying the actual amount of short-paid customs duty determined by a competent adjudicating functionary of the Customs Department as opposed to a penalty or confiscation.

17. There is yet another reason why I find that in the present case the judgment acquitting the petitioners in a criminal trial should not be binding on the Customs Authorities. I refer to the high standard of proof which is required in a criminal trial to obtain the conviction of an accused person, as opposed to the standard of proof required in a departmental adjudication resulting in the imposition of civil penalties.

18. In a criminal trial it is always for the prosecution to establish its case against the accused beyond reasonable doubt. The onus of proving the guilt of the accused at all times remains on the prosecution. As such the accused in a criminal trial is not obliged to appear as a witness or to testify or even to lead evidence in his defence. On the other hand, in adjudication proceedings under the Customs Act, after a contravention case has been made out by the Customs Authorities, an adjudicating functionary is required to issue a notice to the person against whom such case is made out to show cause why he should not be proceeded against in the manner set out in such notice. It is thereafter for the aforesaid person to lead evidence and to show to the adjudicating functionary that he is not liable for the contravention of the Customs Act as alleged in the show-cause notice addressed to him.

19. It follows, therefore, that even where a person has been acquitted by the Special Judge Customs in a criminal trial, such acquittal may be a consequence of the failure of the prosecution to prove its case beyond a reasonable doubt. On the very same fact's, as have been brought before the Special Judge Customs, the adjudicating functionary under the Customs Act may conclude that although the strict standard of proof required of the prosecution for obtaining a conviction in the criminal case, has not been met, the evidence before him is nevertheless sufficient to result in a decision against the acquitted person in adjudication proceedings.

20. The case of Muhammad Tahir and others v. Deputy Collectorate was also cited by learned counsel for the petitioners. Since the said precedent follows the ratio in Muhammad Sarwar's case supra, I do not find it necessary to discuss the same.

21. Moreover, as I propose to dismiss this petition on merits, I also need not discuss the preliminary objection raised by learned counsel for the Customs Department that this petition was liable to be dismissed on the ground that the three petitioners who had been proceeded against separately and had separate causes of action, could not have filed a single petition.

22. There is one final matter, which I need to deal with before parting with this judgment, although it was not adverted to by either counsel. There is an interim order in the present petition dated 19-10-1993 directing the Customs Authorities to release the disputed differential amount to the petitioners against a bank guarantee to the satisfaction of the Collector of Customs respondent No.4. If the aforesaid amount has in fact been released to the petitioners, the respondent-Department shall recover the same forthwith. It shall. also be entitled to recover a return on the said amount at the rate of 10% per annum from the date of the release of the amount till the date of the recovery of the same.

23. For the reasons, which have been recorded above, I find this petition to be without merit. It is, therefore, dismissed with costs.

Q. M. H. /M. A. K./M-1196/LPetition dismissed.