SHAHZAD AHMED CORPORATION VS FEDERATION OF PAKISTAN, 2005 PTD-KARACHI-HIGH-COURT-SINDH 23 (2004)

Sept. 7, 2004 KARACHI HIGH COURT SINDH 2005 PTD 23

2005 PTD-KARACHI-HIGH-COURT-SINDH 23

SHAHZAD AHMED CORPORATION VS FEDERATION OF PAKISTAN

2005 P T D 23

[Karachi High Court]

Before Shabbir Ahmed and Muhammad Mujeebullah Siddiqui, JJ

SHAHZAD AHMED CORPORATION through Shahzad Ahmed

Versus

FEDERATION OF PAKISTAN through Secretary, Ministry of Finance, Government of Pakistan, Islamabad and 2 others

Constitution Petition No.D-817 of 2004, decided on 07/09/2004.

(a) Customs Act (IV of 1969)---

----Ss. 168(2) & 171---Period of two months as specified in S. 168(2) of Customs Act, 1969---Extension of---Scope---Customs Officer had no jurisdiction to extend such period by delaying service of notice under S.171 of Act, 1969.

(b) Customs Act (IV of 1969)---

----Ss. 4, 32, 168, 171 & 186---S.R.O. No.388(I)/82, dated 22-4-1982-- Constitution of Pakistan (1973), Art. 199---Constitutional petition-- Goods already out of charge detained by Appraising Officer (Intelligence, and Investigation) without complying with mandatory provisions of Ss. 168 & 171 of Customs Act, 1969---Validity---Neither imposition of fine/penalty had been alleged against petitioner nor same had been alleged to be under consideration nor case was covered by S.186(2) of the Customs Act, 1969---Such act of Appraising Officer would amount to seizure of goods under S.168(1) of Customs Act, 1969---Appraisin~ Officer had not recorded grounds for seizure and reasons as to on what basis he had formed opinion that goods already cleared by appraisement staff (being appropriate officers) were liable to confiscation---Appraising Officer not being an appropriate officer for purposes of Ss.32 & 168 of Customs Act, 1969) by his such act had stepped, over jurisdiction vested in appropriate officer- --Petitioner acquired a vested right for clearance of goods after same having been assessed to duty and taxes under S.80 of Customs Act, 1969 and passing of order by appropriate officer for its clearance---Any act depriving petitioner of such vested right must have been backed with sufficient reasons and grounds, failing which same would be liable to be struck off---Information, if any, 'available with Director or Appraising Officer of Customs Intelligence and Investigation,, could be provided to officials of Appraisement Department---Information as to appraisement officials being in collusion with petitioner could be provided to senior officials in hierarchy of appraisement, who could exercise all powers and discharge all duties conferred or imposed upon their subordinate officers---No officer of Directorate General of Intelligence and Investigation had power to detain or seize or re-examine goods already examined and assessed by appropriate officers of Appraisement Department---High Court accepted Constitutional petition and quashed impugned action and subsequent acts done in pursuance thereof to be unlawful and void ab initio.

Syed Muhammad Razi v. Collector of Customs (Appraisement) 2003 PTD 2821 fol.

(c) Customs Act (IV of 1969)---

----Ss. 80, 83, 168 & 171---Seizure of goods liable to confiscation-- Conditions precedent---Goods duly imported, if once examined and assessed to duty and taxes by appropriate officer, then owner thereof would acquire a vested right for its clearance and same would not be liable to confiscation---Any act of Custom, officials depriving owner of goods of such vested right acquired in due course of law must be backed with sufficient reasons and grounds, failing which same would be liable to be struck off---Grounds forming basis of opinion of appropriate officer must contain specific reasons in writing as to why goods were liable to confiscation and must be Communicated to person concerned as soon as possible and should not be deferred for indefinite period---Such opinion should not be generalized and vague---Grounds for seizure of goods should precede or at leased coincide with seizure but should not be result of a fishing and roving inquiry after seizure---Confiscation proceedings initiated without reasonable grounds in writing and communication thereof to person concerned would be liable to be struck off---Principles.

(d) Customs Act (IV of 1969)---

----Ss. 3 & 4---S.R.O. No. 388(I)/82, dated 22-4-1982---Charter of functions for Directorate General of Intelligence and Investigation (Customs and Excise)---Validity-- Jurisdiction was conferred on officers of such Directorate under S.R.O. No. 388(I)/82---Such charter was in the nature of guidelines and had no binding force conferring any specific jurisdiction.

(e) Customs Act (IV of 1969)---

----Ss. 3, 4, 168 & 186---S.R.O. No. 388(I)/82, dated 22-4-1982-- Jurisdiction of officers of Directorate of Intelligence and Investigation (Customs and Excise) to detain or seize or re-examine goods already examined and assessed by appropriate officers of Appraisement Department---Scope---Such Directorate had been established for prevention of smuggling and performance of preventive operations relating to smuggling and evasion of dutiable goods, misdeclaration, frauds, fraudulent claims of refund and rebate etc.---Such powers conferred on officers of the said Directorate would have no overriding effect on powers conferred on other officers of Customs Department-- Officers of each category under Customs Department were required to act within specified sphere and parameters without encroaching upon powers of officers of other department---No officer of the said Directorate had power to detain or seize or re-examine .goods already examined and assessed by appropriate officers of Appraisement Department---Appraising Officer of the said Directorate could at the most require production of order under S.83 as provided under S.174 of Customs Act, 1969.

Ismat Mehdi for Petitioner.

Syed Tariq Ali, Federal Counsel for Respondent Nos. 1 & 2.

Respondent No.3 in person.

Dates of hearing: 17th and 18th, August 2004.

JUDGMENT

MUHAMMAD MUJEEBULLAH SIDDIQUI, J.---The petitioner a proprietary concern, engaged in the business of import of Auto-Parts has sought the following relief:--

"This Honourable Court may graciously be pleased to:

(i) declare that detention of the duty paid consignment of the Petitioner is illegal, mala fide, arbitrary, unlawful and void ab initio and also direct that, such detention being illegal, the consignment be released forthwith;

(ii) restrain the Respondents Nos.2 and 3, its subordinate staff or anyone claiming through Respondents Nos.2 and 3 from interfering in any manner with the consignment ,of the Petitioner;

(iii) direct/order the Respondents Nos.2 and 3 to pay the demurrage period for. which the consignment has been detained after payment of duty and taxes or give the delay detention certificate to the Petitioner so that the Petitioner may not unnecessarily and unlawfully be burdened with demurrage, which has accumulated for no fault of the Petitioner. "

2. According to the facts narrated in the Memo- of Petition, the petitioner placed order for import of consignment of Auto-parts from Korea. The consignment of 245 packages packed in a container arrived at the Karachi Port on 26-5-2004. Bill of Entry for clearance of the 'consignment was filed on 28-5-2004. The value of the consignment was declared as U.S. Dollars 3130 as per commercial invoice. The Bill, of Entry was processed and first examination was endorsed by the Principal Appraiser of the group at the back of the Bill of Entry. After thorough examination, the concerned Customs staff noted the description of the consignment on the back of Bill of Entry as under:

"Auto Parts for HTV Buses and Hyundai, KIA and AAA Brand."

3. After endorsement of description and certifying the quantity and quality of imported consignment, the Bill of Entry was marked to the concerned Appraiser, for valuation. The concerned Appraiser assessed the value of consignment at U. S. Dollars 5902 against the declared value of U. S. Dollars 3130, for, the purpose of taxation. The duty and taxes calculated on the assessed value were paid on 8-6-2004 and the Bill of Entry was made out of 'charge. After payment of duty and taxes, the petitioner approached Karachi International Container Terminal, where the consignment was stored and requested for release of consignment on production of duty paid Bill of Entry. The consignment was not released and petitioner was informed that the Bill of Entry has been withheld in the Computer upon the verbal instructions of officials of Directorate of Intelligence and Investigation. On the next day the petitioner contacted Deputy Director, Intelligence and Investigation, Mr. Junejo who referred him to Respondent No.3; Ashfaq Ali Khan, in the Directorate of Intelligence and Investigation, who insisted for re-examination of the consignment.

4. The petitioner has contended that the officials in the Directorate of Intelligence and Investigation had no authority to re-examine the consignment, when it was duly examined, evaluated and assessed by the Customs officials competent in law to examine the same. According to the petitioner, the authority for examination, valuation and assessment has not been conferred on the officials of Directorate of Intelligence and Investigation and the action taken by Mr. Ashfaq Ali Khan, the Respondent No.3, with the blessings of his seniors is in excess of jurisdiction and violative of the law. However, the Respondent No.3, re-examined the consignment on 11-6-2004, in presence of the representative of petitioner, drew samples and directed the petitioner's representative to bring the same to his office. The samples were delivered in the office of Respondent No.3, on the next day but according to the petitioner, the. Respondent No.3, refused to proceed further with the matter on the pretext of being occupied elsewhere. The consignment of the petitioner remained detained at Karachi International Container Terminal (KICT) and huge demurrage and container charges accumulated on day to day basis. On 17-6-2004, the petitioner requested Director of Intelligence and Investigation (Respondent No.2), to save him from unwarranted charges which were being accumulated. The letter written by the petitioner was marked to Additional Director, who instructed Respondent No.3, Ashfaq Ali Khan, to expedite the matter but to no avail. On 30th June, 2004, a notice, dated 28-6-2004 was faxed to the petitioner's representative purported to have been issued under section 26 of the Customs Act, 1969, which according to petitioner is not a notice under section 26, but is in the nature of a Charge-Sheet. The notice reads as follows:-

"GOVERNMENT OF PAKISTAN DIRECTORATE GENERAL OF INTELLIGENCE AND INVESTIGATION (CUSTOMS AND EXCISE) 70,-B, K.D.A. SCHEME NO.1, KARSAZ`ROAD, KARACHI

C. No. Appg-23/DCI/2004 Dated: 28-6-2004.

Notice under section 26 of the Customs Act, 1969

This Directorate General of Intelligence and Investigation (Customs and Excise) Karachi has detained one. Container No. CHLU-3330609-4 imported vide IGM No.748, dated 26-5-2004 Index No.241 Cash No.2514, dated 8-6-2004. In connection with investigation conducted by this Directorate regarding Misdeclared the value and Brand of Auto Parts as a non-genuine parts whereas Hyundai. and KIA .genuine parts were, packed in the-container other than.0il and Fuel Filter imported by Messrs Shahzad Ahmed Corporation Lahore, who has attempt to clear Hyundai and KIA genuine parts under the cover of non-genuine parts. You Messrs S.K. Enterprises Clearing Agent are required to provide the Catalogue of the imported parts which have been misdeclared in the import document within two days of the receipt of this letter to finalize the investigation, failing which legal action will be initiated against you under the relevant provision of law.

(Sd.)

(Ashfaq Ali Khan)

Appraising Officer"

5. The petitioner replied the notice vide letter, dated 3-7-2004 which was endorsed by the Director Intelligence and Investigation to Additional Director. The letter and the endorsement thereon are as follows:--

"The Director

Directorate of Intelligence and Investigation,

Karachi

Dated 3-7-2004

Dear Sir

SUBJECT:1 X 20 CONTAINER DETAINED BY YOUR DEPARTMENT CONTAINING AUTO SPARES ARRD PER S.S. APL JAKARTA IGM No.748 DATED 26-5-2004 INDEX NO. 513.

Reference to our previous letter dated 17-6-2004, I would like to bring to your kind notice the following facts:

We had imported the consignment from Korea and on invoice/packing list and the GD it was declared "auto parts". Neither genuine nor ungenuine.

Under routine practice the Custom group VII, ordered for 1st, examination and the examination staff noted that these are auto parts for "HTV buses of Hyundai-KIA-AAA Brand, and they forwarded the, samples to group along with the goods declaration to group VII, Custom House.

The group after inspecting` the report samples assessed the GD to the value of US$ 5902 (Loading US $ 2772 to our declared value of US$ 3.130).

The value on which the group assessed the GD are approximate the same as compared to genuine parts value.

Our consignment is in heavy demurrage plus container detention since 8-6-2004 as such your good-self is requested to please release the consignment.

An immediate action in this regard will be appreciated.

Thanking you

Shahzad Ahmed Corporation

Proprietor".

"ENDORSEMENT

ADDITIONAL DIRECTOR

Please have this issue resolved. See if `A' below is correct and take appropriate decision regarding the valuation aspect.

(Sd.) dated 5/7"

6. It is stated by the petitioner that the comparative chart was submitted along with reply and the concerned official who approved the value of genuine parts then posted in the Customs House, as Deputy Director Appraisement, is presently working as Deputy Director, Intelligence and Investigation.

7. On the same date i.e. 3-7-2004, the reply of notice under section 26 was addressed by Mrs. Ismat Mehdi, Advocate for petitioner to the Respondent No.3, which reads as follows:--

"Mr. Ashfaq Ali KhanJuly 3, 2004

Appraising Officer,

Director General of Intelligence

& Investigation, (Customs & Excise),

70-B, KDA Scheme No. 1,

Karsaz Road, Karachi

Ref: Letter No. Appg-23/DCI/2004, dated 28th June, 2004

Subject: Notice under section 26 of the Customs Act, 1969

Dear Sir,

Our client Messrs Shahzad A. Corporation have placed the letter under reference in our hands with the instructions to address you as under:

(1) Our Clients are respectable citizens and notable businessmen of this country. They are regular' importers of Auto Spare Parts since last about 4 to 5 years.

(2) Our client imported a consignment of Auto Spare Parts, which arrived on 26-5-2004. The goods Declaration Form/Bill of Entry was processed and first examination order was given by the Principal Appraiser of the Group.

(3) The consignment was thoroughly examined by the concerned examination staff. The description of the consignment noted at the back of Bill of Entry by the Examination Staff is Auto Parts for HTV Buses and Hydundai and various other parts of KIA and A A A Brand.

(4) After examination the Bill of Entry was marked to the concerned Appraiser for valuation. The value was assessed as US$ 5902 as against the declared value of US$ 3130. Duty and taxes were accordingly paid on the assessed value. The Bill of Entry was made out of charge on 7-6-2004.

(5) Our client was taken by surprise when after payment of customs duty and taxes the goods were not delivered to them on the pretext that under the instructions of the official of Directorate, Bill of Entry has been blocked in the Computer.

(6) Our client visited your august offices and apprised your superior as well as your good-self about the factual situation. You were also apprised about the fact that enormous amount of demurrage is being accrued day by day on account of illegal detention of the goods. However, for the reasons best known, the consignment still remains undelivered to the rightful owner of

(7) In an attempt to further create systematic harassment and in continuity of the above stated illegal action our client is in receipt of a notice under section 26 of the Customs Act alleging therein that the value and brand of auto parts are misdeclared, which allegation is absolutely false and frivolous. The Provisions of section 26 of the Customs Act do not in any way provide a mechanism for levelling charges. The notice is misdirected, misconceived and beyond the purview of section 26 of the Customs Act.

(8) At the very outset the notice is misconceived and unwarranted. Our client declared the goods in accordance with the description, quantity and quality mentioned in the invoice and packing list merely enhancing value by the Appraiser cannot be termed as misdeclaration. In any case, the officials of this Agency are not vested with the powers of valuation as yet and are restrained from functioning as Valuation Offices by posing themselves to be the Tax Collectors.

(9) Our client is facing hardship by illegal detention and unwarranted actions on the part of this Directorate. The hardship is further multiplied by the accrual of daily demurrage, which has rendered the goods absolutely unfeasible for marketing.

(10) We may like to point out that HTV Hyundai and KIA Busses and Coaches are not imported in Pakistan, therefore, the import of Hyundai and KIA Buses Auto Parts is neither advisable nor required.

(11) In the recent past the same type of goods as that of our client imported from the same Supplier have been assessed to the duty and taxes as assessed and paid by our client, the action by the Agency is also discriminatory so far as our client is concerned.

In view of the above you are requested to please deliver the consignment to our client, failing which we have positive instructions to institute legal proceedings for redress of grievance of our client.

Yours sincerely,'

Ismat Mehdi, Advocate"

8: However, the petitioner's representative was asked to provide recent evidence of import in respect of the imported Auto-parts. The petitioner's representative was referred to one Mr: Sadiq, who was provided with the recent evidence of import of same parts by different importers vide Bill of Entry No. KAPR/HC/120222, dated 12-3-2004 which was assessed at U.S. Dollars 22:85 per set, as was assessed in the case of the petitioner According to petitioner, the concerned examination staff verified that the parts 1 to 3 were genuine and the value assessed in the Bill of Entry was .the same as in the case of Petitioner. Even after the verification by the concerned staff in second examination, the goods were not released and on 7-7-2004 the Respondent No.3. Mr. Ashfaq Ali Khan, caused harassment to the representative of the petitioner, who was allegedly kept in confinement and was threatened by the Respondent No.3 with dire consequences. On the same date the representative of the petitioner was served with a notice under section 171 of the Customs Act, after 8-30 p.m. The notice under section 171 is reproduced below:--

GOVERNMENT OF PAKISTAN DIRECTORATE GENERAL OF INTELLIGENCE AND INVESTIGATION (CUSTOMS AND EXCISE) 70-B, KDA SCHEME NO. 1, KARSAZ ROAD, KARACHI

C. No. Appg-23/DCI/2002 Dated 7-7-2004

Notice under section 171 of the Customs Act, 1969

The Directorate General of Intelligence and Investigation, (Customs and Excise), Karachi received a credible information to the effect that there was a gross misdeclaration in description and brand of a consignment imported by Messrs Shahzad Ahmed Corporation Lahore, vide IGM No. 748, dated 26-5-2004 and Index No.241, and the same was cleared out of charged vide Cash No.2514 dated 8-6-2004 after payment of duty an taxes with the active connivance of Customs Clearing Agent Messrs S.K. Enterprises, Chal No.1750 and the Customs staff of Appraisement Collectorate. The consignment contained in a Container No. CHLU-0333060-4 was detained vide detention notice, dated 8-6-2004 for re-examination. The consignment was re-examined in the presence of Clearing Agent Messrs S.K. Enterprises which resulted into the recovery of Genuine parts of Hyundai and KIA instead of cleared against the price of non -genuine parts declared by the party. The G.D. 155147, dated 29-5-2004 filed for clearance of goods was carefully examined and it was found that the value and part Nos. of the goods have been misdeclared and assessment was made of the value of single piece where as party was going to clear-Right hand and Left hand parts by showing the sets, whereas single piece of.' Hand Lamp which is of one side itself is in the form of set in which corner lamp and grill of the head lamp is including which is not declared in the invoice and packing list which resulted into loss of legitimate Govt. Revenue.

Thus, you have committed an offence of misdeclaration of value under section 16.32(a)(b) and 178 of the Customs Act, 1969. Therefore, the goods so recovered along with Container No. CHLU-0333060-4 have been seized under section 168 of the Customs Act, 1969 for violation of aforesaid provisions of Customs Act, 1969. "

9. Finding no other way out, the petitioner invoked Constitutional jurisdiction of this Court through this petition on 13-7-2004. Pre admission notice was issued to the Respondents Nos.2 and 3 as well as D.A.G. with the directions to file para-wise comments within two weeks. On 27-7-2004 the learned Federal Counsel sought. time to file the para wise comments. The learned counsel for petitioner submitted that the questions of law were required to be considered and therefore, there was no need of para-wise comments. However, on the request of learned Federal Counsel, the hearing was adjourned to 4-8-2004. On 4-8-2004, the learned Federal counsel was present along with the Respondent No.3, Ashfaq Ali Khan. Further time was sought for filing the comments. A Division Bench of this Court observed that a short legal point is involved, "whether the Respondents Nos.2 and 3 were legally competent to detain the petitioners goods which were assessed by the Customs authorities and the duty was paid". With the consent of learned Advocates, the matter was posted for final disposal at Katcha-Peshi stage. The comments were not filed and the final arguments were heard.

10. Mrs. Ismat Mehdi, learned counsel for the petitioner submitted that after the examination of consignment and assessment of duty and taxes and payment thereof, the Bill of Entry was made out of charge on 7-6-2004. However, the goods were not released on the verbal orders of the respondents. The purported notice under section 26 of the Customs Act. 1969, was received on 30-6-2004 which contained admission that the Directorate General of Intelligence and' Investigation (Customs and Excise) Karachi detained the container. No authority was cited in the notice empowering the Respondent No.3, Mr. Ashfaq Ali Khan, Appraising Officer to detain the goods which were already- 'out of charge. She has submitted that although the Respondent No. 3, had no authority to detain consignment which was already out of charge, however, the petitioner vide letter, dated 3-7-2004 informed that they imported the consignment from Korea declaring on the invoice/packing list and the GD as "Auto-Parts". There was no declaration in the terms if the parts were genuine or non-genuine. The Customs group ordered for first examination and on examination the appropriate Customs staff noted that the goods imported were Auto-Parts for HTV Buses for Hyundai KIA and AAA brand and forwarded the samples to Group VII along with the goods declaration. The concerned group after inspection of the report/samples assessed the value at U.S. Dollars 5902 against the declared value of U.S. Dollars 3130. It was also informed that the value of goods were assessed, GD were approximately the same as of genuine parts. The Director Intelligence and Investigation, directed the Additional Director to have the issue resolved and to see if the statement that the concerned Customs group assessed the Auto-Parts at approximately the same value which was of genuine parts and to take appropriate decision regarding the valuation aspect. She has vehemently argued that notwithstanding, the clear directions of the Director Intelligence and Investigation to Additional Director, no steps were taken for resolving the issue raised by -the Respondent No.3, without jurisdiction and without any authority in law. According to her, the Respondent No.3 a junior officer in the hierarchy was running the entire show in arbitrary manner without any respect or regard for the direction made by the Director Intelligence and Investigation, on 5-7-2004. She has proceeded on to argue that the notice issued under section 26 by the Respondent No.3 is without jurisdiction as it empowers an "Appropriate Officer" by a requisition in writing, requiring any person concerned with the importation, exportation, purchase, sale, transport, storage or handling of any goods which are being or have been imported or exported to furnish such information relating to the goods as may be necessary for determining the legality or illegality of the importation or exportation of such goods, the value of such goods, the nature, amount and source of the funds or assets with which the goods were acquired and the customs duty chargeable thereon, or for deciding anything incidental thereto and to produce, and allow the officer to inspect and take extracts from or make copies of any invoice, bill of lading, book of account or other book or document of whatever nature relating to the goods. She has maintained that the powers under section 26 can be exercised by an appropriate officer" and the expression "appropriate officer" has been defined in section 2(b) as follows:--

"`appropriate officer' in relation to any functions to be performed under this Act, means the officer of Customs to whom such functions have been assigned by or under this Act. "

11. She has pointed out that under the Notification No. S.R.O. 371(I)/2002, dated 15th June, 2002, the C.B.R. in exercise of powers conferred by clause (b) of section 2 of the Customs Act, has assigned the functions to appropriate officer, referred to in various sections of the Customs Act, 1969. The powers under sections 79 and 80 have been conferred on the following officers:--

"29.	Section 79(1)	Ministerial Clerk/Inspector/Preventive Officer/Examiner.
	Section 79(1)	Superintendent/Principal Appraiser.
	Section 79(2)	Assistant Collector.
30.	Section 80	Superintendent/Principal Appraiser"

12. She has submitted that the Bill of Entry is delivered to the appropriate officer under section 79 and the goods are examined and assessed for duty under section 80. She has further pointed out that under section 80 the owner of the goods so examined and assessed may proceed to clear the same for home-consumption or warehouse subject to the provisions contained in Act. Under section 83 of the Customs Act, it is provided that when the owner of any goods entered for home -consumption and assessed under sections 79-A, 80, 80-A or 81 has paid the import duty and other charges, if any, in respect of the same, the appropriate officer, if he is satisfied that the import of the goods is not prohibited or in breach of any restrictions or conditions applying to the import of such goods may make an order for the clearance of the same. She has pointed out that under S.R.O. No.371(I)/2002, dated 15th June 2002, appropriate officer for the purpose of section 83 is the Superintendent/Principal Appraiser. She has submitted that it is an Admitted fact that the appropriate officers, as explained above, exercised heir jurisdiction conferred by the C.B.R. and passed necessary orders for the clearance of the goods. She has maintained that the Respondent No.3, who detained the consignment which was duly examined, assessed, duty paid, cleared for release, was out of charge, is not the appropriate officer, for the purpose of any short levy of duty or charge or commission of any offence, because such matters are dealt with under section 32 of the Customs Act, 1969 and for the purpose of section 32, the appropriate officer under S.R.O. No. 371(I)/2002, dated 15th June, 2002, is officer of Customs competent to adjudicate the case under section 179 of the Customs Act, 1969.

13. She has proceeded to argue that under the scheme of the law contained in the Customs Act, 1969, every officer of the Customs Department is not empowered to exercise all or any of the powers under the Customs Act. She has pointed out that the Legislature has used the expression "appropriate officer" in almost all the provisions empowering the Customs officials to exercise jurisdiction and as already pointed out the appropriate officer is defined in section 2(b) of the Customs Act, meaning thereby the officer who is assigned such functions by or under this Act. She has further pointed out that the officer of the customs are appointed under section 3 of the Customs Act, and it is specifically provided in section 4 that, "an officer of Customs appointed under section 3 shall exercise such powers and discharge such duties as are conferred or imposed on him by or under this Act, and he shall also be competent to exercise all powers and discharge all duties conferred or imposed upon any officer subordinate to him".

Thus, according to Mrs. Ismat Mehdi, the officers of the Customs can exercise such powers only which are assigned or conferred by the C.B.R. She has pointed out that under Notification S.R.O. 388(I)/82, dated 22nd April, 1982, the Respondent No.3 who is Appraising Officer, Directorate of Intelligence and Investigation; has been authorized to exercise the powers and discharge the duties of the officers of Customs under the provisions of the Customs Act, under following sections:--

"Sections 26, 48, 60, 62, 91, 92, 193, 158, 159, 160, 161, 162, 164, 165, 166, 167, 168 (1), (3) and (4), 171, 174, 175, 198 and 199."

14. She has vehemently argued that the admitted facts are that the petitioner imported certain goods, filed the Bill of Entry for home consumption under section 79, declared the description and value of the goods, the appropriate officer examined the same and duly assessed the clue, determined the Customs duty and taxes payable which were paid and the consignment was made out of charge. According to her, if there was any case of misdeclaration or short levy of duty, the appropriate officer under section 32 could initiate proceeding for any such misdeclaration and short levy of duty. She has forcefully argued that the Respondent No.3, the Apprising Officer, Customs and Intelligence or any other officer of the Customs in Intelligence and Investigation Directorate, has not been assigned the duty of examination and assessment of the goods duly imported and for which the Bill of Entry is filed. She has submitted that in the absence of any assignment or conferment of duty pertaining to the issues relating to examination and assessment of the imported goods, misdeclaration if any in this regard and retrieval of the revenue loss, the Respondent No.3 has no jurisdiction to detain the goods already made out of charge. She has submitted that the entire proceedings undertaken by Respondent No.3 and the subsequent proceedings if any are without jurisdiction and are liable to be quashed. She has urged that all the actions taken by the Respondent No. 3 being without jurisdiction the respondents be directed to release the consignment forthwith as the petitioner is suffering heavy losses and the demurrage is accumulating from day to day. She has further submitted that delay and detention certificate may be directed to be issued to the petitioner or the Respondents Nos.2 and 3 may be directed to pay the demurrage which has accumulated because of their illegal and arbitrary actions not warranted in law.

15. She has further argued that although, the Respondent No.3 has no jurisdiction to detain the goods which were already out of charge but even if an officer is empowered to detain the goods, the petitioner is entitled for the release of goods. In support of her contention she has submitted that it is provided in section 171 of the Customs Act, that when anything is seized, or any person is arrested under the Customs Act, the officer or other person making such seizure or arrest shall as soon as may be inform in writing the person so arrested or the persons from whose possession the things are seized of the grounds of such seizure or arrest. According to the learned counsel, the provisions contained in section 171 are mandatory and any departure shall render the action of the officer illegal. She has pointed out that the admitted fact is that the consignment was detained/seized by the Respondent No.3, on 8-6-2004, who did not record any grounds of the seizure of goods and did trot communicate to the petitioner, who after the clearance of the goods was in constructive possession as the owner or to any other person. He served a notice under section 26 on the. Clearing Agent on 30-6-2004 i.e. after 22 days of the seizure of the goods. Even after furnishing of explanation by the petitioner on 3-7-2004, and the order of Director Intelligence and Investigation, dated 5-7-2004 on the explanation, no grounds for seizure of goods were recorded. The notice under section 171 containing reasons for seizure was served on 7-7-2004, after service of legal notice on the Respondent No.3 by the Advocate for the petitioner. She has taken us through the notice, dated 7-7-2004 and has pointed out that the Respondent No.3, has stated that the consignment was cleared/out of charge on 8-6-2004 after payment of duty and taxes. According to Respondent No.3, it was done with the active connivance of Customs Clearing Agent and the Customs staff of Appraisement Collectorate. It is further stated in the notice that the consignment was detained vide detention notice, dated 8-6-2004 for re examination. She has further pointed out that this notice which has been issued after about one month of the seizure of the goods states that the goods have been, seized under section 168 of the Customs Act, 1969. She has pointed out that according to this notice a detention notice was issued on 8-6-2004 but no copy of such notice has been produced and averment made in the petition that the consignment was detained/seized under verbal instructions of the officials of Directorate Intelligence and Investigation, has gone un-challenged. She has drawn our attention to section 168(1) of the Customs Act, which provides that the appropriate officer may seize any goods liable to confiscation under this Act, and where it is not practicable to seize any such goods, he may serve on the owner of the goods or any person holding them in his possession or charge an order that he shall not remove, part with, or otherwise deal with the goods except with the previous permission of such officer: The condition precedent for the seizure of the goods is that it should be liable to confiscation under the Customs Act, and that the seizing officer shall serve on the owner of the goods or any person holding them in his possession or charge an order that the goods shall not be removed. This clearly indicates that an order should be served in writing and seizure/ detention of goods on verbal orders has no validity in law. She has contended that although the Respondent No.3, is not the appropriate officer in the facts and circumstances of the case even if the action is taken by an appropriate officer it is liable to be quashed if the mandatory requirements of section 168(1) read with section 171 are not complied with.

16. She has further argued that in this case the entries proceeding are without juri'9diction but even if an appropriate officer seizes any goods under subsection (1) of section 168 and makes compliance with the provisions contained in section 171, the goods shall be returned to the person from whose possession they were seized if no show-cause notice .in respect thereof is given under section 180 within two months of the seizure of the goods, and the period of two months is not extended by the Collector of Customs under proviso to subsection (2) of section 168 before the expiry of the period of two months. The petition was argued on 18-8-2004 and the learned counsel for the petitioner stated that the consignment was seized on 8-6-2004 and the period of two months expired on 7-8-2004, but no notice under section 180 was served on the petitioner till 18-8-2004 and on this count alone, the petitioner is entitled to the return of goods illegally seized by the Respondent No.3.

17. On the other hand, Mr. Tariq Ali learned Federal Counsel, supported the detention/seizure of the goods by the Respondent No.3 and contended that under S.R.O. 388(I)/82, the Respondent No.3 an Appraising Officer of the Directorate of Intelligence and Investigation is empowered to issue notice under section 26 and therefore, the action taken by the Respondent No. 3 is in consonance with the law. He further submitted that the officers of the Directorate of Intelligence and Investigation are the Customs officials and they are fully empowered to intercept any consignment at any time, any where and seize the goods and initiate action under section 168 of the Customs Act. However, he was not able to deny that in the present case, the consignment was duly imported and there was no prohibition on the import of the goods in the consignment. The Bill of Entry for home-consumption was duly filed under section 79 and the goods were examined and assessed by the appropriate officers and after payment of duties and taxes the consignment was made out of charge. He had no option but to concede that for the purpose of sections 79, 80 and 83 of the Customs Act, the appropriate officers are the officers of the Custom Appraisement Department. He had further to concede that as a natural consequence the appropriate officer referred to in section 168 for the purpose of seizure of the goods and the recovery of the short levied duty/taxes on account of misdeclaration if any are also the officers of the Customs Appraisement Department and the Respondent No.3, and the officers of the Customs Intelligence and Investigation, are not the appropriate officers. In spite of having conceded on the above points, the learned Federal Counsel argued that being officer of Customs Department, Officials of the Directorate of Intelligence and Investigation are empowered to take the action impugned in this petition.

18. Respondent No.3, Mr. Ashfaq Ali Khan, requested that he- has, been joined as a, respondent by name and he has taken all the actions impugned in this petition therefore, he may be allowed to address the Court in his defence. The Respondent No.3, was granted permission to address the arguments. He stated that the, consignment imported by the petitioner was assessed and cleared by the officers of the Appraisement Department but the proceedings were collusive and therefore, he had to intervene. He has stated that when the consignment was about to be taken out of Customs area having been cleared by the Customs Appraisement Officials, he took the duplicate copy of Bill of Entry from the Clearing Agent with the result that the consignment was not cleared. He was specifically asked whether his act of taking the duplicate copy of Bill of Entry from the Clearing Agent resulted in the non-clearance of the goods, to which he was all along evasive. He was asked to show the law empowering him to detain the goods, which were out of charge by verbal directions and snatching the Bill of Entry from Clearing Agent. He was not able to show any such law. He was not able to point out any law or rule authorising him to adopt the procedure, which, he has narrated. He was pointed out that in the notice under section 26, dated 28-6-2004, he stated that the goods were detained by him on 8-6-2004 and to show the authority under which he detained the goods which were already out of charge. In spite of repeated queries made by the Court he was all-along evasive demonstrating that he was not straightforward officer. He was further pointed out that his act amounted to seizure of the go6ds on 8-6-2004 but no notice under section 171 was served on seizure of the goods and no grounds for such seizure were recorded in writing and that no notice under section 180 has been served on the petitioner within a period of two months from the seizure of goods, to which he replied, that, although no notice under section 180 was served till 18-8-2004 but according to him the goods were not seized on 8-6-2004, but on the said date the clearance of the goods was merely stopped by him and that the goods were seized on 7-7-2004 when he served notice under section, 171 on the representative of the petitioner. He took plea that the goods shall be deemed to have been seized under section 168 from 7-7-2004 when the notice under section 171 of the Customs Act was served and not from the date of detention of the goods, therefore, the period of two months specified in section 168 commenced from 7-7-2004 and consequently, the statutory period of two months entitling the petitioner for the return of goods seized has not expired. He was asked whether Customs officer is empowered to extend the period of two months specified in subsection (2) of section 168 by delaying service of notice under section 171, which is itself and illegality, to which he had no reply.

19. He was not able to show that he was an appropriate officer for the purpose of examination and assessment of imported goods under sections 79, 80 and 83 of the Customs Act or for the purpose of initiation of proceedings under section 32 in case of any misdeclaration. He however, insisted that since the officials of the Customs Appraisement Department acted dishonestly and were in collusion with the petitioner therefore, in order to prevent the loss of revenue he had to intervene anti was empowered to stop the goods from being released which were cleared by the appropriate officers under the law. Although such purported power, is not assigned to the Respondent No. 3 or conferred on him under S.R.O. 388(I)/82 issued by the C.B.R. under sections 3 and 4 of the Customs Act, 1969, but in view of the claim of the Respondent No.3 that he was empowered to override the action taken by the appropriate officer under sections 79, 80 and 83 of the Customs Act, he was asked to show if any power of supervision or control over the officers of the Customs Appraisement Department has been conferred on him or he has been assigned the duties of Ombudsman in relation to the alleged maladministration of the Customs Appraisement Department, to which he replied in negative. He submitted that his powers are all pervasive and comprehensive enough to cover every thing empowered under the Customs Act and requested that he may be allowed to file a write-up in support of his contention and the permission was granted. He has filed copies of certain documents in support of his contention, which we will presently examine.

20. The respondent No. 3, has produced, seizure report, dated 13-8-2004, which has been submitted to the Adjudicating Officer for initiation of proceedings. It appears that during the course of proceedings in this Court on 27-7-2004, 4-8-2004 and 13-8-2004, the Respondent No.3, realized that he has committed illegalities 'and has not acted in accordance with the law and that he has exercised jurisdiction not conferred on him and, therefore, he has not narrated full facts in the seizure report/contravention report submitted to the Adjudicating Officer. As already observed, the Respondent No.3, detained the .consignment which was out of charge on 8-6-2004, which fact is contained in the notice under section 26 of the Customs Act, dated 28-6-2004 and notice under section 171, dated 7-7-2004. However, he has not narrated this fact in the contravention report. In the contravention report, he has shown the date of seizure as 7-7-2004. While narrating the facts he has stated that credible information was received by Additional Director Intelligence and Investigation Karachi, that some importers were involved in misdeclaration of actual description and part numbers and that they were getting genuine parts cleared under the guise of branded goods, thereby evading customs duty and other taxes. He has not stated that he had any particular information specifically pertaining to the consignment under consideration. However, he intercepted the consignment at the exit gate when it was ready for delivery. He has further stated that the petitioner had declared in the Bill of Entry that Auto-parts were imported without mentioning whether they were genuine or not genuine. It would be appropriate to note that exactly the same is the contention of the petitioner. He has further stated in the contravention report that the goods which were out of charge were re-examined in the presence of Clearing Agent and the petitioner, which revealed that the imported goods were in fact Genuine Hyundai and KIA parts for heavy buses of Korean origin alongwith Filters of "AAA" Brand. He has further observed that there was misdeclaration in respect of part numbers. He has further observed that the report of Customs Examination Staff is not correct and that the Clearing Agent refused to provide catalogue and other information regarding imported goods. He has then referred to the notice under section 171 of the Customs Act, 1969, dated 7-7-2004.

21. In the concluding part of the, contravention report, he has observed that in the retail price list of Hyundai KIA part circulated by Messrs Dewan Farooq Motors, it is revealed that part number of twenty four thousand rupees was going to be cleared for Rs.900 only and that the petitioner had cleared hundreds of such consignments earlier by declaring vague/fake and self-created part numbers, thus, depriving the Government of millions of rupees. He has further observed that this was not possible without connivance of the Customs staff of the concerned group as well as staff posted at the port who cleared genuine parts as Branded parts which is completely incorrect.

22. Regarding the powers and jurisdiction of the Directorate of Intelligence and Investigation, he has produced an order, dated 10-3-1990 issued by the Central Board of Revenue. The order reads as under:--

"GOVERNMENT OF PAKISTAN CENTRAL BOARD OF REVENUE

C.No. 3(4)/86. ACE.III Islamabad the 10th March, 90.

O R D E R

SUBJECT:REDISTRIBUTION OF WORK BETWEEN THE DIRECTORATE GENERAL OF INTELLIGENCE AND INVESTIGATION AND DIRECTORATE OF VIGILANCE AND INSPECTION

The following administrative changes are ordered with immediate effect and until further orders.--

(i) The Directorate General of Vigilance and Inspection is re-designated as "Directorate General of Inspection and Training".

(ii) The Directorate General of Inspection and Training will be headed by a Director General.

(iii) The Directorate of Training will be under the administrative control of Directorate General Inspection and Training.

(iv) The Directorate General of, Inspection and Training will perform the functions assigned to it (Annex-A).

(v) The Directorate General of Intelligence and Investigation (Customs and Excise) will perform the functions assigned to it (Annex-B).

(vi) The staff of erstwhile Directorate General of Vigilance anti Inspection will remain on the strength of re-designated Directorate General of Inspection and Training except for the staff which stands transferred to the Directorate General of Intelligence and Investigation (Customs and Excise) as-indicated in Annex-C.

(vii) The strength of Directorate General of Intelligence and Investigation (Customs and Excise) will be the same in addition to the posts as mentioned in Annex-C, which stands transferred from the erstwhile Directorate General of Inspection and Vigilance, Karachi.

(viii) All equipment's placed at the disposal of erstwhile Directorate of Vigilance and Inspection for the purpose of anti-evasion and anti-smuggling including interdiction of Narcotics will be equitably distributed after mutual consultation of both the Director General.

(Muhammad Zafeer Abbasi)

Secretary (ACE)

23. Along with the order, the Charter of Function for the Director General Intelligence and Investigation (Customs and Excise), has also been produced. Which is reproduced below:--

"CHARTER OF FUNCTIONS FOR THE DIRECTORATE GENERAL OF INTELLIGENCE & INVESTIGATION (CUSTOMS AND EXCISE)

(1) To collect information and intelligence about evasion of Customs and Central Excise duties and Sales Tax and smuggling of contraband, including narcotics.

(2) To perform enforcement duties and to carry out preventive operations throughout the country related to smuggling, evasion of federal taxes through clandestine removal of dutiable goods, misdeclaration, valuation frauds, fraudulent claims of refund and rebate etc. and to detect and investigate cases cognizable under the Prevention of Smuggling Act, 1977.

(3) To sift coordinate and disseminate information collected through intelligence sources about the illicit production and trafficking of narcotics; evasion of federal taxes and smuggling of other contrabands to the law enforcement agencies in Pakistan and abroad.

(4) To examine and study the Monthly Reviews/Revenue Statements received from the Customs Houses and Collectorates of Customs and Excise and to propose and take measures considered necessary to check leakage of revenue.

(5) To collect and consolidate reports of significant seizures of contraband and smuggled goods, including narcotics, made by law enforcement agencies in Pakistan.

(6) To maintain on all Pakistan basis a computerized record and index of the known smugglers, their financiers and association.

(7) To prepare a Monthly Intelligence Report on the smuggling of contrabands and prohibited goods including narcotics on the basis of the information received from various sources both within the country and abroad including law-enforcing agencies and international organizations.

(8) To prepare periodical reports about trends of smuggling of goods of foreign origin with a view to suggest fiscal measures to prevent illicit trade of all kinds.

(9) To maintain liaison with Interpol, the provincial CID, DIB, 4SI, ANF, FIA, NAU, Rangers, Cost Guards, Frontier Constabulary, Baluch Levies land other intelligence/enforcement agencies operating with the country and with narcotics units of foreign missions in Pakistan for exchange of information on smuggling of narcotics.

(10) To coordinate with Pakistan Missions abroad, the counterpart organizations and narcotics agencies of the member countries of the Customs Cooperation Council and signatories to Nairobi Convention for collection and dissemination of information.

(11) To maintain liaison with and to attend the meetings of the Federal and Provincial Anti-Smuggling Boards and to assist the Central Board of Revenue and Federal Anti-Smuggling Board in matters relating to anti-smuggling.

(12) To maintain a library and a museum and to publish periodical reviews on smuggling.

(13) To look into and investigate cases of corruption and mal practices received by the Directorate from the public, press or through any other source against the officers and staff of the revenue collecting agencies under the Central Board of Revenue and propose appropriate action.

(14) To suggest measures for improvement where necessary to revenue collecting Agencies.

(15) To give suggestions to the Government for improvement of departmental efficiency or for removing public grievances:

(16) Any other function assigned by the Board."

24. He has further produced a statement of C.B.R., filed in the Lahore High Court, in the Writ Petition No.27301 and others of 1997, Muhammad Arshad and others v. Collector of Customs and others. The Lahore High Court had directed C.B.R. to file statement on the point whether Directorate General, Intelligence and Investigation (Customs and Excise), has jurisdiction to intercept and seize baggage items before these are formally presented before customs. The C.B.R. filed the statement that vide S.R.O. 388(I)/82, dated 24-4-1982 the Directorate General Intelligence and Investigation (Customs and. Excise), have lawful jurisdiction to seize such goods. The Respondent No.3, has merely produced the statement of C.B.R. and has not produced anything to show as to what was ultimately decided by the Lahore High Court.

25. The Respondent No.3, has further produced copy of notification S.R.O. 388(I)/82, dated 22nd April, 1982, the relevant part whereof has already been reproduced in the earlier part of this judgment.

26. We have carefully considered entire material placed on record and the contentions raised on behalf of the parties. Mrs. Ismat Mehdi, learned counsel for the petitioner has submitted that the issue whether the act of Respondent No.3, whereby the release of consignment which was out of charge was stalled amounted to seizure of goods as contemplated under section 168(1) or not, already stands decided by a C Division Bench of this Court in the case of Syed Muhammad Razi v. Collector of Customs. (Appraisement), 2003 PTD 2821. A perusal of the above judgment shows that the contention of the learned counsel for the petitioner is correct. In the above judgment authored by one of us (Muhammad Mujeebullah Siddiqui), it has been held as follows:-

"A bare reading of the above definition shows that for the purpose of seizing the goods under the Customs Act, 1969, it is not necessary to take it physically into custody. A constructive possession of the goods shall also amount to seizure for the purpose of Customs Act, 1969. At this stage, it would be expedient to observe that the legislature has used two different expressions in the Customs Act, namely, "seized" and "detained" and different provisions have been enacted for seizure and detention of goods. The seizure has been dealt with in sections 168 and 171 of the Customs Act, while the detention has been dealt with under section 186 of the Customs Act. The two acts are distinct from each other and the provisions relating to the two acts are also distinct and separate. The difference in the two acts and the provisions governing them are always required to be kept in view. Under section 186, the goods can be detained pending payment of fine or penalty while under section 168, the goods can be seized if they, are liable to confiscation under the Customs Act. For the purpose of detention of goods no separate reasons are required to be recorded and communicated to the owner or person in possession of the goods except that the detention is for the purpose of payment of fine or penalty which has been imposed or the imposition whereof is under consideration. However, in the case of seizure of goods under section 168 the reasons are to be recorded under section 171 and communicated to the person from whose possession the things are seized and the notice under section 180 of the Customs Act, is also required to be issued within two months of the seizure of goods failing which the owner or the person from whose possession they were seized shall earn a right for return of the goods seized. A careful consideration of. section 168(1) and Section 2(rr) lead to the conclusion that the word 'possession' is not confined to the physical possession and is inclusive of constructive possession as well. We are further of the considered opinion that the seizure of goods cannot be confined to the cases where an order into writing in this behalf is made but is inclusive of notional seizure as well, meaning thereby, that if the Customs official has not passed any specific order in writing about the seizure of goods but has verbally given instructions or by his conduct has made the release or removal of goods under restraint thereby depriving the owner of the goods of exercising all the incidents of the right and title and interest in the goods, it would also amount to seizure of goods within contemplation of section 168(2) of the Customs Act. The restraint imposed on the goods other than a detention contemplated under section 186, by any nomenclature such as blockage, detention etc. falls within the contemplation of section 168(1) read with the definition contained in section 2(rr), and would amount to a seizure, brining the provisions contained in sections 171 and 168(2) into operation. Thus, whenever, any seizure of goods occurs in consequence of an order in writing or by verbal instructions or conduct having the consequences of depriving the owner of his rights of ownership of the goods in accordance with the law and the reasons as contemplated under section 171 are not communicated to the person from whose possession physical or constructive the goods are seized, the order/act of seizure becomes, illegal and invalid. Likewise, the non-issuance of notice under section 180 within two months of the seizure of looods as described above, would entitle the person from whose possession the goods were seized to the return thereof.

Applying the above principles to the facts of the present case, we find that the admitted position is that the goods imported by the petitioner were duly assessed to the duties and taxes on 15-4-2003. However, the petitioner was not allowed to get the goods imported to be released on payment of duties and taxes as assessed by the Custom officials. The show-cause notice under section 180 was also issued on 18-6-2003 which is beyond a period of two months specified in subsection (2) of section 168 of the Customs Act. Thus, in the facts and circumstances of this case, there was a notional seizure within contemplation of section 168(1) of the Customs Act with effect from 15-4-2003, the date from which the goods were practically seized and the petitioner was not allowed to remove/release the same. The provisions contained in sections 171 and 168(2) became operative from 15-4-2003 and the violation of mandatory provisions contained in these two sections is apparent on record."

27. Following the proposition of law laid down in the above judgment, it is held that on the basis of admissions made by the Respondent No.3, himself the entire proceedings initiated by him are replete with the illegalities. The goods which were out of charge were seized by the Respondent No.3, on 8-6-2004, without complying with the mandatory provisions/contained in section 168 read with section 171 of the Customs Act, 1969. It is specifically provided in section 168 that the appropriate officer may seize any goods liable to confiscation under the Customs Act and in section 171 there is a mandatory requirement that when anything is seized, the officer or any other person making such seizure, as soon as, may inform in writing the person from whose possession the things are seized of the grounds of such seizure. Admittedly when the consignment in the present case was seized it was out of charge after payment of assessed duty and taxes and it was in possession of the Clearing Agent of the petitioner. No notice under section 171 was served on the petitioner or his Clearing Agent and no `rounds for seizure and the reasons as to on what basis the Respondent No.3, formed opinion that the goods already cleared by the Appraisement Department were liable to confiscation were recorded. Even in' the notice under section 171 which was issued after about one month of the seizure of the goods it has not been stated as to what was the exact information forming the basis to arrive at a opinion that the goods already cleared by the Customs Appraisement were liable to confiscation. A bare perusal of sections 168 and 171 of the Customs Act, shows that the Legislature has provided a protection to the citizens against any high-handedness and arbitrary act on the part of tax officials. Thus, the condition precedent for seizure of goods under section 168 read with section 171 of the Customs Act, is that before seizure of goods the appropriate officer should record reasons in writing as to why the goods are liable to confiscation and the use of the expression that the officer or other person making such seizure is required to inform in writing the grounds of such seizure is indicative of the fact that the opinion should not be generalized and vague. There should be specified grounds forming basis of opinion that the goods are liable to confiscation, failing which the initiation of proceeding shall be violative of the statutory provisions and would be bound to be struck off. The law has not empowered the Customs officials to seize the goods without any reasonable grounds reduced in writing and without communication of the grounds to the person concerned and thereafter hold a roving and fishing inquiry for the purpose of creating grounds for the seizure of goods. The reasons/grounds for seizure of goods should precede or at least coincide with the seizure of goods and should not be result of a fishing and roving inquiry after the seizure. If the seizure is made under section 168, the grounds recorded in writing should contain the reasons as to why the goods are liable to confiscation. In the present case, the Respondent No.3, has acted in gross violation of the law and has in fact seized the goods which were out of charge after due examination by the Appraisement staff who are appropriate officers under the Customs Act, and has therefore, clearly over stepped the jurisdiction vested in an appropriate officer. We would hasten to add that in the present case, the Respondent No.3, is not an appropriate officer for the purpose of section 168 or section 32 of the Customs Act, as candidly conceded by the learned Federal counsel.

28. The condition precedent for seizure of the goods under section 1680 is that it should be liable to confiscation. At least there should be some prima facie material available, with the appropriate Customs officer to the effect that the goods were liable to confiscation. Once the goods duly imported have been examined by the appropriate Customs officers under the first appraisement system, evaluated and assessed to duty and taxes then prima facie the goods are not liable to confiscation. However, if there are sufficient reasons and grounds available with an appropriate Customs officer that the goods are still liable to confiscation then the reasons should be recorded in writing and communicated to the owner or person front whose possession the goods are seized as soon as may, meaning thereby within a reasonable period which may differ from case to case but it cannot be deferred for indefinite period. The reason being that once the goods have been assessed to duty and taxes under section 80 of the Customs Act, and the appropriate officer makes an order for clearance of the goods under section 83, the owner acquires a vested right for clearance of the goods. Any act depriving owner of goods of the vested right acquired by him in due course of law must be backed with sufficient reasons and grounds, failing which any such action shall always be liable to be struck off.

29. In this case, we have already held that the act of Respondent No.3, whereby he stopped the release of goods amounts to seizure. However, in the notices under sections 26 and 171 of the Customs Act, the Respondent No.3, has stated that he has detained the goods on 8-6-2004. The only provision in the Customs Act, dealing with the detention of goods is contained in section. 186 subsection (1) of section 186 contains that when any fine or penalty has been imposed, or while imposition of any fine or penalty is under consideration, in respect .of any goods, such goods shall not be removed by the owner until such fine or penalty has been paid. It is provided in subsection (2) that when any fine or penalty has been imposed in respect of any goods, the appropriate officer may detain any other goods belonging to the same owner pending payment of such fine or penalty.

30. The Respondent No.3, has no where alleged that any fine or penalty has been imposed against the petitioner or imposition of any fine or penalty was under consideration on 8-6-2004 or the case is covered under subsection (2) of section 186. Thus, in the facts and circumstances of the present case, 'the goods which were already out of charge could not be detained under section 186 of the Customs Act The result is that the act of Respondent No.3, whereby he stalled the release of goods which were out of charge could not be detained and it amounted to seizure of the goods, which we have already shown was not in accordance with the law.

31. We may observe here that, if any information was available with, the Respondent No.2 or 3, they could pass on the same to the Customs Appraisement Department, the officials whereof are the appropriate officers for the purpose of initiation of proceedings under section 32 of the Customs Act. If the Respondent No.3, was of the view that the Appraisement officials were in collusion with the petitioner he could pass on the information to the senior officers in the hierarchy of Appraisement as the senior officers could exercise all the powers and discharge all the duties conferred or imposed upon any officer subordinate to him as provided in section 4 of the Customs Act.

32. This brings us to the documents produced by the Respondent No.3, in support of his contention that the officials posted in the Directorate of Intelligence and Investigation are empowered to exercise all the powers conferred on any Customs official under the Customs Act. He has mainly relied on the Charter of Functions for the Directorate General of Intelligence and Investigation (Customs and Excise) issued by the C.B.R. In the first instance, these are not shown to have been issued by any officer competent in law. Secondly, at the most they are in the nature of the guidelines and have no binding force, conferring any specific jurisdiction. Thirdly, a perusal of the Charter of Functions, shows that the Directorate General of Intelligence and Investigation, has been established mainly for prevention of smuggling and for preventive operations in this behalf. In fact the jurisdiction is conferred on the officers of the Directorate General of Intelligence and Investigation (Customs and Excise) under Notification No.388(I)/82, dated 22nd April, 1982. The relevant part of the S.R.O. has already been reproduced above and the learned Federal Counsel has taken us through each and every section specified in the notification conferring jurisdiction on the Respondent No.3 and has not been able to show that under any of the sections specified therein, the Respondent No.3, or any officer of the Directorate General of Intelligence and Investigation (Customs and Excise) is empowered to detain or seize or re-examine the goods already examined and assessed by the appropriate officers of the Appraisement Department. 'It appears that the Respondent No. 3, and probably his officers in the Directorate General of Intelligence and Investigation, have assumed that in addition to the powers conferred on them under Notification 388(I)82, they have been :appointed as ombudsman and have been conferred with the Supervisory duty and have been given a mandate to check and control the duties performed by the Appraisement Department. This assumption is totally unfounded. As already observed the Directorate of Intelligence and Investigation, has been established mainly or the prevention of smuggling arid performance of preventive operations relating to smuggling and evasion of Federal taxes though clandestine removal of dutiable goods, misdeclaration, valuation frauds, fraudulent claims of refund and rebate etc. However, such powers conferred on them have no overriding effect on the powers conferred on other officers/officials of the Customs Department. The officers in each category under the Customs Department are required to act within the specified sphere and parameters without encroaching upon the powers of the officers of the other departments such as Appraisement Department and to the detriment of the importers whose consignment are out of charge after due process specified in law. In this case the power of examination, evaluation and assessment has been assigned to Customs Appraisement official and the Respondent No.3, could at the most require the production of order under section 83 as provided in section 174. The Respondent No.3, has produced a statement filed on behalf of C.B.R. in the Lahore High Court in Writ Petition No.27301 of 1997 in reply to query if the Directorate of Intelligence and Investigation, has jurisdiction to intercept and, seize baggage items before these are formally presented to customs. The C.B.R. has opined that in pursuance of the jurisdiction conferred under Notification S.R.O. 388(I)/82, dated 22nd April, 1982, the Directorate of Intelligence and Investigation, have lawful jurisdiction to seize such goods. It will be seen that the query was in respect of baggage items and not in respect of goods imported for which Bill of Entry is filed. Secondly, it was in respect of the baggage which were not formally presented to the Customs. The C.B.R. has not opined that the Directorate of Intelligence and Investigation, is empowered to seize the goods which have been imported and have been duly examined and assessed by the Customs Appraisement officials after filing of Bill of Entry and the consignment is out of charge, after payment of assessed duty and taxes.

32. For the foregoing reasons, we hold that the Respondents Nos.2 and 3, had no jurisdiction to stop the release of goods owned by the petitioner and all subsequent acts in pursuance thereof are declared to be unlawful and void ab initio. All such proceedings are hereby quashed. The Respondents Nos. 2 and 3 are directed to release the consignment of the petitioner forthwith, which was already out of charge. They are restrained from interfering in any manner with the release of the consignment. They are further directed to issue the delay and detention certificate immediately as the petitioner cannot be saddled with the liability on account of illegal acts committed on behalf of the Respondents Nos. 2 and 3.

The petition is allowed accordingly.

S.A.K./S.55/K Petition accepted.