IQBAL KHAN VS DEPUTY DIRECTOR INTELLIGENCE AND INVESTIGATION (CUSTOMS, EXCISE AND SALES TAX), GUJRANWALA and 2 others, 2007 PTD-LAHORE-HIGH-COURT-LAHORE 2228 (2006)

Customs Act (IV of 1969)---

----Ss.2(s), 168 & 196---S.R.O. No.566(I)/05 dated 6-6-2005---Reference to High Court--Confiscation of goods---Cloth of .foreign origin was seized by the officials of Customs Department---After issuing show-cause notice and hearing petitioners, Adjudicating Authority directed confiscation of cloth in question which. was 100288 yards---Appeal filed by petitioners against order of confiscation having been dismissed by Collector (Appeals), petitioners invoked jurisdiction of Appellate Tribunal by filing appeal, which also having been dismissed, petitioners had filed reference to High Court---Case of petitioners before Collector (Appeals) was that cloth, in question did not fall within the mischief of S.2(s) of Customs Act, 1969 and that foreign cloth had been excluded from :the definition of smuggled goods in the light of S.R.O. No.566(I)/05---Collector accepted contentions of petitioners, but upheld confiscation order in original on the ground that cloth seized was not of reasonable quantity---Tribunal also upheld order of confiscation on the sole ground that a large. quantity of cloth had been seized---Collector (Appeals), in another case, in similar circumstances, had not confiscated 2,80,000 sq. yards of foreign cloth, but was permitted to redeem against payment of duties, taxes and fine---Petitioners, in circumstances, were also entitled to the redemption and release of goods/cloth in question subject to payment of leviable duties and taxes in addition to a redemption fine to be determined by the department.

Mian Abdul Ghaffar for Petitioners.

Mrs. Tayyaba Zameer Qureshi for Respondents.

ORDER

The reference petition under section 196 of the Customs Act, 1969arises from the judgment dated 6-6-2006 passed by the Tribunal on an appeal filed by the present petitioners.

2. Brief facts leading to the filing of the present proceedings are that cloth of foreign origin was seized by the officials of the Customs Department on 23-11-2005. A show-cause notice was- issued and after hearing the petitioners the Adjudicating Authority directed the confiscation of the goods in question vide order in. original dated 27-12-2005. Aggrieved the petitioners filed an appeal before the Collector (Appeals), Lahore which was dismissed. Whereafter the petitioners invoked the jurisdiction of the Tribunal. However, the appeal filed in this behalf was also dismissed vide the order dated 6-6-2006.

3. The learned counsel for the parties have been heard and the record perused.

4. It was the case of the petitioners before the Collector (Appeals) that the cloth seized did not fall within the mischief of section 2(s) of the Customs Act, 1969 and foreign .origin cloth has been excluded from the definition of smuggled goods in the light of S.R.O. No.566(I)/05. The Collector (Appeals) accepted the contents of the petitioners, however, upheld .the order in original of confiscation on the ground that the cloth seized was not of reasonable quantity. The Tribunal vide its order dated 6-6-2006 also accepted the contentions of the learned counsel in this behalf but again upheld the order of confiscation on the sole and only ground that a large quantity of the cloth has been seized. In the instant case it is alleged that 100288 yards of foreign cloth was recovered. The learned counsel for the petitioners has drawn the attention of this Court to the order dated 18-10-2005 passed by Collector (Appeals) where in similar circumstances where 2,80,000 sq. yards of foreign cloth of the same type and origin was not confiscated but was permitted to be redeemed against payment of duties and taxes and a fine of 35 % of the ascertained value. Upon inquiry the counsel for the department as to whether the said .order of the Collector (Appeals) has been challenged by the department before the Tribunal or any other forum we were informed that no such appeal was filed and the order was accepted 'and subject-matter of the said appeal was redeemed and released. This strange dichotomy of stands on behalf of the department defies explanation and is obviously discriminatory. Consequently the petitioners in the instant case is also entitled to the redemption and release of the goods in question subject to payment of leviable duties and taxes in addition to a redemption fine to be determined by the department.

Disposed of in the above terms.

H.B.T./I-23/LOrder accordingly.