COLLECTOR OF CUSTOMS, LAHORE VS FARHAN MAHMOOD and others
2005 P T D 1493
[Supreme Court of Pakistan]
Present: Iftikhar Muhammad Chaudhry, Khalil-ur-Rehman Ramday and M. Javed Buttar, JJ
COLLECTOR OF CUSTOMS, LAHORE and others
versus
FARHAN MAHMOOD and others
Civil Appeals Nos.690 to 693 of 2002, decided on 14/03/2005.
(On appeal against the judgment dated 15-3-2002 passed by the Lahore High Court, Lahore in Writ Petitions Nos. 22252 to 22255 of 2001)
(a) Customs Act (IV of 1969)---
----S. 16---Imports and Exports (Control) Act (XXXIX of 1950),S.3(1)---Passenger Baggage (Import) Rules, 1998, R.2(C)---Import Trade and Procedure Order, 2000---Constitution of Pakistan (1973), Art.185(3)---Contention of authorities was that import of used motorcycles was neither allowed through Passenger Baggage (Import) Rules, 1998, nor the Import Trade and Procedure Order 2000 but High Court, without appreciating the true import of the laws, had allowed the import of used motorcycles in the country---Leave to appeal was granted bySupremeCourttoconsiderthecontentionoftheauthorities.
(b) Customs Act (IV of 1969)---
----S. 16---Imports and Exports (Control) Act (XXXIX of 1950),S.3(1)---Passenger Baggage (Import) Rules, 1998, R.2(C)---C.B.R. Instruction No. C.No.10(5) L&P/91, dated 2-2-2001---Import of motorcycles in personal baggage---Scope---Motorcycles imported in personal baggage were confiscated by Customs Authorities---High Court in exercise of Constitutional jurisdiction directed the Authorities to release the motorcycles as they were covered under personal baggage scheme---Plea raised by the Authorities was that motorcycles were not covered under personal baggage scheme---Validity---To claim the benefit of C.B.R. Instruction No. C.No.10(5) L&P/91, dated 2-2-2001, burden was upon passengers to prove that they were bringing motorcycles in Pakistan in their baggage as they were using the same---No such evidence had been produced on record, therefore, the C.B.R. Instructions had not advanced the case of passengers in any manner---Available record indicated that passengers left country, a few days before bringing into Pakistan the motorcycles and came back with the motorcycles on the pretext to bring them into country under the Passenger Baggage (Import) Rules, 1998, and for such reason the Customs Authorities were right in seizing the same---Supreme Court, afterexaminingtheS.R.Os.andprecedentlaw,hadnotedthat withoutundertakingexerciseinthelightofrelevantS.R.Os. declaringcertainitemsofgiftstobesmuggledone,itwouldnot be fair to hold that Adjudicating Authority had rightly declined redemption of motorcycles to passengers---Supreme Court remanded the matter to the Authorities to decide the cases afresh after following the observations made by Supreme Court---Case was remanded for decision afresh.
Muhammad Arif and others v. Collector of Central Excise and Land Customs, Quetta and others 1998 CLC 1664 and Collector of Customs and another v. Muhammad Ashraf and another 2003 PTD 1879 ref.
A. Karim Malik, Senior Advocate Supreme Court and Mehmood-ul-Islam, Advocate-on-Record (absent) for Appellants (in all cases).
Ch. Naseer Ahmed Bhutta, Advocate Supreme Court and M.A. Qureshi, Advocate-on-Record (absent) for Respondents (in all cases).
Date of hearing: 14th March, 2005.
ORDER
IFTIKHAR MUHAMMAD CHAUDHRY, J.---Appellants being aggrieved from the impugned judgment, dated 15th March, 2002 passed by the Lahore High Court, Lahore, in Writ Petitions filed by the respondents have filed instantappeals by leave of the Court. Leave granting order reads as under thus:--
"Leavetoappealissoughtagainstthejudgmentsdated15-2-2002 of a learned Single Judge of the Lahore High Court, Lahore, whereby he allowed the respective respondents by accepting their writ petitions to import used motorcycles without payment of fine.
It is inter alia argued that the import of used motorcycles is neither allowed through Passenger Baggage (Import) Rules, 1998 nor the Import and Trade Procedure Order, 2000 (S.R.O.489(I)/2000) but the learned Single Judge of the Lahore High Court, without appreciating the true import of the aforesaid Laws, has allowedthe import of used motorcycles in the country.
Leave to appeal is granted to consider inter alia the above contention. The operation of the impugned judgments shall remain stayed during the pendency of the Appeals emanating out of these petitions."
2.Precisely stating facts of the case are that each of the respondents brought Motorcycles into Pakistan under S.R.O. No.1374(I)/98, dated 17th December, 1998. The Superintendent Customs Baggage Section, Lahore Airport, while examining the declaration made by them found that the gifts have been brought into Pakistan in contravention of section 16 of the Customs Act, 1969 read with section 3(1) of Import and Exports (Control) Act, 1950 punishable under section 156(1)(9) of Customs Act, 1969 read with section 3(3) of the Imports and Exports (Control) Act, 1950, therefore, the Motorcycles were confiscated and started proceedings of adjudication and ultimately confiscated the Motorcycles. Against said order WritPetitions were filed which have been allowed vide impugned judgment as such instant appeals by leave of the Court have been filed.
3.Learned counsel appearing on behalf of the department contended that the Motorcycles are not covered under the Passengers Baggage (Import) Rules, 1998 read with the instructions of the Central BoardofRevenuecontainedinLetterNo.C.No.10(5) L&P/91,dated 2nd February, 2001, therefore, learned High Court without having taken into consideration and interpreting the relevant Rules in real perspective has concluded that the Motorcycles fall within the Personal Baggage.
4.On the other hand learned counsel for respondents contended that under the Rules of 1998 read with the instructions of C.B.R.'s letter, dated 2nd February, 2001 the respondents were authorized to bring Motorcycles into country being their Personal Baggage as such the High Court keeping in view the relevant provisions has rightly issued the writs in their favour.
5.We have considered the arguments put forwarded by the learned counsel and have also gone through the relevant provisions of Rules. According to Rule 2(c) of Passengers. Baggage (Import) Rules, 1989. 'Baggage' means personal wearing apparel and other personal, professional or household effect of a passenger, excluding motor vehicles,provided that such articles are imported within the allowances in reasonable quantity and not for sale and are imported by a passenger for his family or formaking gifts, whether such articles are exempt from customs duty or not. Essentially motorcycle is not covered by thisdefinition.
6.It may be noted that according to Import Trade and Procedure Order, dated 17th July, 2000 permission has been granted for Import of Vehicles under personal baggage and gift scheme as per Rules and procedure prescribed in appendix 'G'. A perusal whereof reveals thatimport of vehicle which means passenger Car, Bus, Van, Truck and Pick-up including 4x4 vehicle are authorized to be imported by those persons whofulfilstandardofeligibilitylaiddownunderRule 2(1) ofthePersonalBaggageandGiftSchemes(ImportofVehicles) Rules, 2000. A perusal ofthis provision demonstrate that Motorcycles cannot be brought into Pakistan under the Personal Baggage and Gift Schemes (Import of Vehicle)Rules, 2000, however, subsequently vide S.R.O. No.639(I)/2001, dated 12th September, 2001 motorcycle or scooter were allowed to be imported upon transfer of residence provided that there shall be no entitlement to import a vehicle and the same conditions shall apply mutatis mutandis, as are applicable to import of a vehicle. Admittedly the cases of the respondents are not covered under these provisions as well because they have not transferred their residence.
7.Thus having discussed this aspect of the case we considered it necessary to have a glance at the instructions of the C.B.R. contained in No.C. No.10(5) L&P/91, dated 2nd February, 2001 according to which the competent authority has instructed that the gifts by the actual users of such goods for their own use and not for commercial sale released on payment of normal duty and taxes. To claim the benefit of same, burden was uponthe respondents to prove that they were bringing the Motorcycles inPakistan in their Baggage as they were using the same. No such evidence has been produced on record, therefore, in our considered opinion these instructions have also not advanced their case in any manner. As availablerecord indicates that few days before bringing into Pakistan the Motorcycles, the respondents left the country and came back with theMotorcycles on the pretext to bring them into country under the Baggage Rules and for such reason the Customs Authorities were right in seizing the same.
8.Now turning towards the last contention raised by the learned counsel for the respondents that Adjudicating Authority on having not agreed with the respondents who were bringing Motorcycles into the Country, under the Baggage Rules, 1998 may have allowed them to redeem the same, subject to payment of customs duty admissible under the law and fine under section 181 of the Customs Act, 1961, therefore, according to him, outright confiscation was not warranted. Reliance in this behalf wasplaced on Muhammad Arif and others v. Collector of Central Excise and Land Customs, Quetta and others 1998 CLC 1664 and Collector of Customs and another v. Muhammad Ashraf and another 2003 PTD 1879.
9.Learned counsel appearing for the department contended that under section 181 of the Customs Act the Adjudicating Authority has discretionary powers to allow redemption of the goods subject to payment of customs duty and fine. According to him the competent authority to regulate exercise of discretionary powers has issued Notification No. S.R.O.1374(I)/98, dated 17th December, 1998 specifying therein conditions, rates of fine etc. for exercising discretionary powers by the AdjudicatingAuthority. As Motorcycles were smuggled into Pakistan by the respondents, therefore, Adjudicating Authority had no jurisdiction to allowredemption of Motorcycles to respondents subject to payment of customs duty and fine etc.
11.We have examined the S.R.O. in the light of the judgments reliance on which has been placed by the learned counsel for the respondents. It maybe noted that without undertaking an exercise in the light of relevant S.R.Os. declaring certain items of gifts to be smuggled one, it would not be fair to hold that Adjudicating Authority had rightly declined redemption ofMotorcycles to the respondents, therefore, to resolve this controversy cases are remandedto the concerned authority/Adjudicating Authority to decide the cases afresh to this extent keeping in view the following observations:--
(1)As to whether the Motorcycles brought into Pakistan fall within the definition of the smuggled goods in terms of section 2 of the Customs Act, if so, to what effect?
(2)As to whether Adjudicating Authority was not bound to give option under section 181 of Customs Act to the respondents to get Motorcycles released subject to payment of customs duty and fine?
In view of the above discussion appeals are disposed of in above terms, leaving the parties to bear their own costs.
M.H./C-26/SCase remanded.