Customs Act (IV of 1969)---

----Ss. 2(s), 16, 32, 156(1)(8)(77), 157(2), 171 & 179---Customs General Order No. 15 of 1989 and Customs General Order No. l of 1994-- Constitution of Pakistan (1973), Art. 185(3)---Goods in transshipment-- Unauthorized desealing and unloading of goods---Goods imported in Pakistan were in transshipment to dry port when on spy, information raids were conducted and the goods were recovered from unauthorized places and the same were taken into custody by Customs Authorities-- Leave to appeal was granted by Supreme Court to examine the question of jurisdiction of Customs Authorities at the port of entry to detain the goods imported for transshipment.

Famous Corporation v. Collector of Customs 1989 MLD 2342 M. Hameedullah Khan v. Director of Customs Intelligence 1992 CLC 57; Shaffi Shahid v. Director, Intelligence and Investigation C.P. No. 1016 of 1999 and Messrs Baba Khan v. Collector of Customs, Quetta 2000 SCMR 678 ref.

Akhtar Hussain, Advocate Supreme Court for Petitioner (in C. P.$ Nos. 1046 to 1049 of 2002).

Khalid Anwar, Senior Advocate Supreme Court and M.S. Khattak, Advocate-on-Record for Petitioner (in C.P. No.2014 of 2002).

Khalid Anwar, Senior Advocate Supreme Court and M. S. Khattak, Advocate-on-Record for Respondent No. l (in C.Ps. Nos. 1046 to 1048 of 2002).

Muhammad Shamim, Advocate Supreme Court and M.S. Khattak, Advocate-on-Record for Respondent No. l (in C.P. No. 1049 of 2002).

Akhtar Hussain, Advocate Supreme Court for Respondent (in C.P. No.2044 of 2002).

Date of bearing: 23rd January, 2003.

ORDER

RANA BHAGWANDAS, J.---Through this order we propose to dispose of the aforesaid petitions for leave to appeal as these are directed against Sindh High Court short orders, dated 18-9-2002 and 1-10-2002 followed by detailed reasoned judgment, dated 5-10-2002 disposing of four Constitutional petitions filed by respondent-Apex International Business, Messrs Al-Tajjir and Co. (Pvt.) Ltd. and Messrs N.B. Trading Company and Abdullah driver of Trawler against Collector of Customs (Appraisement) and others.

2. Respondent-Apex International Business imported two consignments of waste paper of all sorts, which arrived at the Port of Karachi in two 40 feet long containers from UAE vide separate invoices both, dated 19-10-2001, and Bill of Landing, dated 23-10-2001 for transshipment to Faisalabad Dry Port. On arrival at Karachi Port importer, through its Bonded Cargo Carrier-Messrs Al-Tajjir and Co. filed declaration of transshipment of consignment to Faisalabad Dry Port. Accordingly, in terms of section 12.1 of the Customs Act, 1969 and in accordance with Licencing Rules, 1971 transshipment was allowed and the consignments were permitted to be carried to Dry Port Faisalabad under Transshipment Permit No.674/30 and 675/31, dated 30-10-2001 through the Bonded Cargo Carrier Messrs Al-Tajjir and Company (Pvt.) Limited. Both the containers were taken out of Karachi Port on 1-11-2001 when officials of the Intelligence and Investigation Wing of the Customs and Excise Karachi received information on 2-11-2001' that container No.HDMU-6177206 on Trawler No.LS-3543 was dumped with broken seals in a godown at Plot No: F. 407, Zia Morr Site, Kararchi. Intelligence staff reached the said place and noticed three persons entering the gate of the abovesaid godown namely Chaudhary Abid Saeed, occupant of the said godown, Malik Ali Asghar, Manager and Abid Raza representative of Messrs Tajjir and Company (Pvt.) Limited. They were intercepted and, on cursory examination of the container, it was found that, instead of waste paper, various contraband goods containing 'cigarette papers, aluminum tiles, refrigerators, foreign cloth, raw silk, ball bearing T.V. sets etc. were stuffed therein. Abovesaid persons were interrogated as to why the container was not transported to the destination of Dry Port but they could not furnish any satisfactory reply. They were, therefore, alongwith container, escorted to the Directorate of Intelligence and Investigation Wing where detailed examination was made. The goods were seized and abovesaid persons were arrested, after observing all legal requirement.

3. On the same day, another container bearing No.HDMU-6228561 loaded on Trawler No.LS-3543 was found at West Wharf in front of Gate No.18 with broken seals. On enquiry, driver of the trawler purportedly disclosed that he was taking the trawler to SITE. Driver Abdullah, alongwith the container and trawler was escorted to the Directorate of Intelligence and Investigation. On examination, instead of waste paper, contraband goods namely foreign cloth, raw silk, split air -conditioners etc., were found in the container. According to the petitioner declared value of both the consignments is US $ 2000 each whereas the goods seized from both the containers are valued at US $ 2,35,000 and duty involved is about 8.00 million. F.I.R under sections 2(s), 16, 157(2) and 178, punishable under clauses (8) and (77) of section 1560) of the Customs Act, 1969 was registered the next day. Learned Special Judge (Customs and Taxation) Karachi has taken cognizance of the case. Show-cause notices under section 171, of the Customs Act were served on the parties concerned. It is said that respondent. Messrs Apex International Business and other accused persons filed C.P. Nos.D-2352 of 2001 and 2449 of 2001 before the Sindh High Court, which were later withdrawn and dismissed as not pressed vide order, dated 9-1-2002. Special criminal bail application were also filed by accused-Abid Saeed, Malik Ali Asghar and Abid Raza respectively. Inter alia, legal plea with regard to the contravention of Customs General Order 15 of 1989 was raised but learned Single Judge in the High Court, rejected the prayer for bail taking the view that this was not a case of mere misdeclaration or violation of law at customs port or en route checking of conveyance under paragraph 14 of the Public Notice No.2 of 1996, dated 26-3-1996 but an ugly attempt at smuggling contraband goods into Pakistan. Accused-Chaudhary Abid Saeed and Abid Raza filed Criminal Petitions for Leave to Appeal No. 19-K of 2002 before a Bench of this Court at Karachi Registry, which were dismissed vide order, dated 25-2-2002.

4. In C.P. No.1049-K of 2002, Messrs N.B. Trading Company imported a consignment of waste paper as per I.G.M. and the consignment arrived at Port of Karachi from. UAE under 1GM No.1833 of 2001, dated 5-11-2001. Petitioner, on receipt of secret information that importer was involved in smuggling of contraband goods under the garb of transshipment of waste paper, deputed a team of officers alongwith staff of the Appraisement Collectorate, who, after observing legal requirements, opened Container No.HDMU-6237440 in presence of two witnesses and found cigarette papers, silk yarn, nylon net, fabrics, cigarettes, Hina Powder etc. The goods were seized alongwith the container and the case was referred to Adjudication Collectorate Requisite show-cause notice was served on the importer and the proceedings were pending. According to the petitioner, importer did not approach the Collector concerned for transshipment of the consignment to Samberial Dry Port. District Sialkot but mala fide, he filed Constitutional Petition No.2559 of 2001 before the High Court with a fabricated invoice, claiming to have imported miscellaneous items like rejected cigarette papers, computer parts, China silk thread, axles, scrap, plastic rolls etc.

5. Messrs Apex International, Messrs Al-Tajjir Company and Messrs N.B. Trading Company instead of facing adjudication proceedings before the Adjudicating authorities, filed .four Constitutional petitions before the Sindh High Court, seeking declarations as to the competence of the Customs Authorities to seize and withhold the consignments at Karachi instead of transshipment to the Dry Ports of destination as well as adjudication proceedings C.P. No.596 of 2002 was filed by Abdullah driver of the trawler, claiming similar declaration in addition to' injunctive order against the Adjudicating Authorities as well as Special Judge Customs from proceedings with the adjudication proceedings or the criminal case against the accused persons. A Division bench of the Sindh High Court allowed three petitions by two short orders, dated 18-9-2002 and 1-10-2002. Consolidated judgment, with reasons, therefore, was however handed down on 5-10-2002 declaring that the action of the Customs Authorities at Karachi was illegal and without lawful authority High Court directed the petitioner Director Intelligence and Investigation to re-seal the containers and to allow transshipment thereof to the respective Dry Ports alongwith entire record of investigation and enquiry to the concerned Customs officials at the relevant Ports of destinations. As regards the criminal case pending before the Special Judge (Customs and Taxation), High Court clarified that the impugned judgment shall not affect the criminal proceedings giving rise to criminal bail applications and Criminal Petitions for Leave to Appeal No.19-K and 21-K of 2002 before this Court. It may be observed that C.Ps. Nos. 1046 to 1049 of 2002 have been filed by the Director Intelligence and Investigation Karachi, calling into question the vires of the judgment to the extent of declaring the act of

the Customs Authorities as illegal and without lawful jurisdiction. C.P. No.2044 of 2002 has been filed by Messrs Apex International Business, challenging a part of the judgment declining to issue injunctive directions with regard to criminal prosecution.

6. We have heard Messrs Akhtar Hussain, learned Advocate Supreme Court, Khalid Anwar, learned Sr. Advocate Supreme Court and Rana Muhammad Shamim, learned Advocate Supreme Court for the parties and gone through the available record. Main thrust of the argument of the learned counsel for the petitioner-Director Intelligence and Investigation appears to be that while heavily relying upon judgments of the Sindh High Court in Famous Corporation v. Collector of Customs 1989 MLD 2322, M. Hameedullah Khan v. Director of Custom Intelligence 1992 CLC 57 and unreported judgment of Division Bench of Sindh High Court in C. P. No. 1016 of 1999 re: Shaffi Shahid v. Director Intelligence and Investigation as well as Customs General Order No. 15 of 1989, learned Judge in the High Court ignored to notice that in the reported cases information as to mis-declaration of goods was detected, within the territorial limits of port of entry whereas in the instant cases contraband goods were recovered from two trawlers out of port area when, after breaking the seals, goods actually brought into Pakistan were attempted to be destuffed and substituted by waste paper. Mr. Akhtar Hussain further contended that C.G.O. No. 15 of 1989, as modified by C.G.O. 1 of 1994, dated 8-1-1996 and further supplemented by Public Notice No.2 of 1996, dated 25-3-1996 issued by the Collector of Customs, with the approval of the Central Board of Revenue, would not have overriding effect on the provisions contained in sections 32, 171, 179 and 156 of the Customs Act, 1969. Learned counsel urged that statutory provisions would prevail and override the instructions and policy decision made by the Central Board of Revenue. He also brought to our notice judgment of this Court in Messrs Baba Khan v. Collector of Customs, Quetta 2002 SCMR 678. Conversely, Mr. Khalid Anwar, learned Sr. A.S.C. heavily relied upon the instructions and policy decisions issued by the C.B.R. vide C.G.O. No.15 of 1989 as supplemented by Public Notice No.2 of 1996, laying down the procedure for transshipment of goods to Customs Dry Ports. Learned counsel canvassed the view that there was no misdeclaration on the part of the importers and assuming that the Customs authorities had detected misdeclaration in respect of the consignments, they were not authorized to withhold the goods at Karachi and were under a legal duty to re-seal the trawlers and arrange transshipment to the ports of destinations alongwith relevant material for action by Customs authorities at the relevant destinations as ordained by C.B.R. Both the learned counsel relied upon the judgment in Messrs Baba Khan case (supra) in support of their submissions. In the case, pertaining in consignment imported by Messrs N.B. Trading Company, it was stated at the Bar that no declaration or application for issuance of transshipment permit was filed by the importer and pursuant to the receipt of a spy information, the consignment was rightly opened and found to contain contraband goods in gross violation of the provisions of the Customs Act hence the Customs authorities were justified in detaining the goods and commencing adjudication proceedings. In fact it was for the first time on 30-11-2002 that the importer approached the Customs authorities for transshipment of the goods on the basis of forged invoice.

7. Be that as it may; since the questions raised on behalf of all the parties involve substantial questions of vital public importance, we are inclined to grant leave to consider and examine, inter alia, the question of jurisdiction of Customs authorities at the port of entry to detain the goods imported for transshipment in the peculiar facts and circumstances of the case. Leave to appeal is accordingly granted in all the petitions. By way of interim relief, further proceedings relating to adjudication as well as criminal trial shall remain suspended till further orders. Appeals shall be made ready and fixed for hearing within three months subject to approval by the Honourable Chief Justice.

M.H./D-36/S Leave granted.