(a) Protection of Economic Reforms Act (XII of 1992)‑‑‑

‑‑‑‑S.4(2) [as amended by Protection of Economics Reforms (Amendment) Ordinance (XXI of 1999)]‑‑‑Customs Act (IV of 1969), S.196‑‑‑Freedom to bring, hold, sell and take out foreign currency‑‑ Scope‑‑‑No bar existed against the possession of currency which may have been purchased from sources other than prescribed under S.4(2), Protection of Economic Reforms Act, 1992 [as amended]‑‑‑Onus to establish any infringement of law was fully on the department and even if the person infringing the law failed to indicate the sources, the best evidence to whittle away his case was through production of some evidence to establish that foreign currency was purchased from one of the sources referred to in S.4(2), Protection of Economic Reforms Act, 1992 (as amended), otherwise the benefit had to be given to the said person by presuming that the currency might have been purchased from the open market, if not from an authorized money changer; such a purchase too would have not attracted the penal clause of Protection of Economic Reform Act, 1992.

Irshad Ahmad Shaikh v. The State 2000 SCMR 814 fol.

(b) Protection of Economic Reforms Act (XII of 1992)‑‑‑

‑‑‑‑S.4(2) [as amended by Protection of Economic Reform Act (Amendment) Ordinance (XXI of 1999)]‑‑‑Customs Act (IV of 1969), Ss.194‑A, 194‑B, 194‑C & 196‑‑‑Appeal to Appellate Tribunal‑‑‑Scope‑ Appellate Tribunal had failed to appraise evidence as was required of it as it had to give its own opinion on the factual side, which was not done at the stage of second appeal‑‑‑Tribunal, who had also to give its views with respect to the fact that in case the appellant failed to establish having purchased the foreign currency from an authorized money changer or dealer, what effect would this have on the case of appellants‑-Validity‑‑‑Findings of the Tribunal, in circumstances, being infirm High Court accepted appeal and remitted the case to the Tribunal for decision afresh on the basis of the observations made by the High Court and the relevant law and parties were also ordered to be heard afresh and if any new point was raised, same was also to be allowed.

Athar Minallah for Appellant.

Majeeb‑ur‑Rehman Warraich for Respondents.

Date of hearing: 28th October, 2004.

JUDGMENT

ALI NAWAZ CHOWHAN, J.‑‑‑This judgment shall dispose of the following Custom Appeals, as these deal with the same subject-matter and have akin facts:‑‑

(i) Custom Appeal No. 12 of 2004;

(ii) Custom Appeal No. 13 of 2004;

(iii) Custom Appeal No. 14 of 2004;

(iv) Custom Appeal No. 15 of 2004;

(v) Custom Appeal No. 16 of 2004;

(vi) Custom Appeal No. 17 of 2004;

(vii) Custom Appeal No. 18 of 2004;

(viii) Custom Appeal No. 19 of 2004; and

(ix) Custom Appeal No.20 of 2004;

2. These appeals have been filed under the provisions of section 196 of the Customs Act, 1969 calling in question a consolidated judgment dated 11‑5‑2004, passed by the learned Customs Central Excise and Sales Tax Appellate Tribunal, Islamabad:

3. Precisely the facts are that the appellants are Traders and running their trade mainly with the Main Land China. They visit China off and on and it is said that they carry with them foreign exchange for purposes of purchasing Chinese goods to be imported into Pakistan.

4. On 11‑4‑2001, while they were proceeding to China they were apprehended at the Airport because they possessed a large amount of foreign exchange, the details of which are given in the corpus of the impugned order. This currency was confiscated and ultimately resulted in the present litigation.

5. In the first round, when the matter went to the Collector (Adjudication), he vide his order dated 5‑7‑2001 confiscated the currency. The matter went to the learned Customs Tribunal who in its order reflected in its last paragraphs said:‑‑

"The upshot of the above discussions is that the appeals are accepted and we order release of the entire currency to the appellants. The penalties imposed on the appellants are also remitted. These orders are, however, subject to the condition that the Collector of Customs will confirm that the currency was issued by an authorized money changer in foreign exchange to the appellants, before the seizure. The appellants may produce documentary evidence to the Collector of Customs, Rawalpindi, to this effect within 15 days of the receipt of these orders to proceed further, as ordered above."

6. The matter, therefore, was remitted to the Collector, for holding an Administrative Inquiry for ascertaining the source of the foreign currency procured by the appellants, before whom the appellants produced a Money Changer to establish that this foreign currency was, obtained from him and also to establish that it was not obtained from any authorized dealer. However, the Collector did not rely on the evidence produced.

7. The matter again went to the learned Tribunal who thought that the evidence produced had been fabricated.

8. The learned counsel appearing on behalf of the appellants side has referred to the provisions of Protection of Economic Reforms Act, 1992 and to its section 4 which reads as follows:‑‑

"Freedom to bring, hold, sell and take out foreign currency. All citizens of Pakistan, resident in Pakistan or outside Pakistan and all other persons shall be entitled and free to bring, hold, sell, transfer and take out foreign exchange within or out of Pakistan in any form and shall not be required to make a foreign currency declaration at any stage nor shall any one be questioned in regard to the same."

9. Reference is also made to the amending law vide Ordinance No.XXI of 1999, whereby an‑addition was made in. section 4 through section 4(2) and which reads as follows:‑‑

(a) Any foreign exchange borrowed under any general permission given by the State Bank of Pakistan under subsection (1) of section 4 of the Foreign Exchange Regulations Act, 1947 (VII of 1947).

(b) Any payment from abroad for goods exported from Pakistan;

(c) Proceeds of securities issued or sold to non‑residents;

(d) Any payment received from abroad for services rendered in, or from, Pakistan;

(e) Earnings or profits of the overseas offices or branches of Pakistani firms and companies including banks; and

(f) Any foreign exchange purchased from an authorized dealer in Pakistan for any purpose."

10. Accordingto the learned counsel if we focused on the provisions of section 4 and section 4 as amended, there is no bar against possession of currency, which may have been purchased from sources other than prescribed under section 4(2) of the Act.

11. The learned counsel also relied upon "Irshad Ahmad Shaikh v. The State 2000 SCMR 814 and its relevant provision which reads as under:‑‑

"In other words, the declarations being exempted and the question being foregone, pertain specifically to the absolute rights and total freedom to bring, hold; sell, transfer and take out foreign exchange within or out of Pakistan in any form, no restriction or preclusion under the Foreign Exchange Regulation Act, 1947, the Customs Act, 1969 or the Income Tax Ordinance 1979, being attracted nor any taxes or duties being payable not any confiscation or other such recourse being available. Even so, if such money or part there of was utilized or acquired the status of being the subject‑matter of an offence then, while the foreign exchange would still remain beyond the realm of being taken over, an inquiry to bring home the guilt of an accused person e.g. of theft or embezzlement could surely be undertaken and pushed to its logical, conclusion. The questions asked, therefore, pursuant to section 4 of the enactment, would in no way result in deprivation of the foreign exchange in focus, as inclusive of the rights to own or possess the same, yet the use thereof for or in relation to a criminal or penal act could always be probed."

12. According to the learned counsel the Tribunal in its former judgment referred the case to the Collector on administrative side and not on the judicial side. That in fact it was not a case of remand. A bare inquiry had to be held on the question of procurement of the currency but where the provisions of Qanun‑e‑Shahadat were forced in. That the Collector was supposed to collect evidence or visit the source indicated by the appellants from where they purchased foreign exchange for purposes of satisfying whether the currency was purchased from an authorized dealer or from an authorized money changer.

13. Anyhow, the onus to establish any infringement of law sunder the circumstances of the case and the given law was fully on the shoulders of the Department and even if the appellants failed to indicate the sources, the best evidence to whittle away their case was to through productive of some evidence to establish that the foreign currency was purchased from one of the sources referred to in section 4(2) of Protection of Economic Reforms Act, 1992, as amended. Otherwise, the benefit had to be given to the appellants by presuming that the currency may have been purchased from the open market, if not from an authorized money changer that such a purchase too would have not attracted the penal clause of Protection of Economic Reforms Act, 1992. That as a matter of fact the appellants were definitely placed in difficulty for proving a negative issue.

14. The learned counsel went on to say that the concluding order of the first Tribunal remitting the case on the administrative side to the Collector was not required, after they had given the relief by declaring that the foreign exchange should be returned to the appellants.

15. We have also heard the learned counsel appearing on behalf, of the Revenue, who had vehemently opposed what has been stated above.

16. One of our questions which was addressed to the learned counsel for the Revenue was whether there has been an appraisement of the facts at the end of the Tribunal which were collected by the Collector, after remission of the case for purposes of appreciation whether what was said by the Collector was correct or perverse. We find that there is nothing to suggest that the Tribunal on such an issue had appraised the evidence as is required by an Appellate Tribunal, who had to give its own opinion on the factual side, which is not done at the stage of a second appeal.

17. The Tribunal had also to give its views with respect to the fact that in case the appellants failed to establish having purchased the currency from an authorized money changer and there being no proof that it was purchased from an authorized dealer, what effect will this had on the case of the appellants.

18. We, therefore, feel that the findings under reference and impugned are infirm and; therefore, while accepting these appeals, we remit the case to the tribunal for decision afresh, on the basis of the observation which we have made and the law, where parties are to be heard afresh. And if any new point is to be raised, it may also be raised there.

19. The parties are directed to appear before the Tribunal on 6th of November 2004, who shall try to resolve the issue involved in this case on the basis of the observations made above and within one month thereafter.

M.B.A./N‑133/LOrder accordingly.