Ch. MAQBOOL AHMED VS CUSTOMS, FEDERAL EXCISE AND SALES TAX APPELLATE TRIBUNAL, 2008 PTD-LAHORE-HIGH-COURT-LAHORE 1239 (2008)

Customs Act (IV of 1969)---

----S.196---Notifications S.R.O. No.1374(I)/98, dated 17-12-1998 & S.R.O. No.179(I)/2006, dated 2-3-2006---Reference to High Court---Smuggled vehicle---Non-tampered chassis---Mixed question of fact and law---Effect--Vehicles in question were confiscated on the ground that those were smuggled vehicles--Plea raised by applicants was that chassis of the vehicles were not tampered with, therefore, instead of confiscation, vehicles should have been released after payment of duties and taxes---Validity---Questions involved were mixed questions of fact and law, which could not be determined in proceedings under S.196 of Customs Act, 1969---Applicants had been plying the vehicles illegally and had manoeuvred to change their chassis number---Applicants had either done the same by themselves or by the person from whom they purchased the vehicles; in the former case applicants were guilty of tax fraud while in the latter case they were guilty of negligence as they did not take due care at the time of purchase of vehicles---Option of fine in lieu of confiscation was not available to applicants, therefore, the same could not be extended---Vehicles which were smuggled with tampered chassis frame were not only source of loss to national exchequer but were security threat as well---High Court declined to validate the acts which were immoral, detrimental to security and resulted into loss to national exchequer---Reference was dismissed in circumstances.

Abu Bakar Siddique and others v. Collector of Customs, Lahore and another 2004 PTD 2187 and Messrs Imtiaz Ahmad v. Collector Customs, Peshawar 2007 PTD 789 distinguished.

Malik Muhammad Tariq Rajwana for Petitioner.

Syed Khalid Javede Bokhari, Advocate.

Ahmad Raza, for Respondent No.7.

ORDER

Questions framed and proposed for consideration of this Court, arising out of judgment of the Tribunal, in Customs Reference Applications No.4 of 2007 and No.7 of 2007, are same, therefore, the same are disposed of through a common judgment.

2. The vehicle of the petitioner (in C.R.A. No.7 of 2007) is Mitsubishi Pajero Intercooler Turbo, Low Roof Jeep Model 1991 and particulars entered in the registration book related to Mitsubishi Pajero Jeep. Customs Staff of Anti-Smuggling intercepted the vehicle and on physical examination found its frame as cut and welded. Matter was referred to the Laboratory for examination. Forensic Science Laboratory, Islamabad, after test, reported as under:

"(i) The chassis number is neither grinded nor tampered.

(ii) The chassis number is not self-punched. Formation and alignment of the digits is normal.

(iii) The chassis frame is found cut and welded."

3. Another Laboratory Test from Forensic Science Laboratory, Islamabad was carried where again it was affirmed that chassis frame has been cut and welded abnormally. The applicant in response to the show-cause notice submitted his reply and Additional Collector vide Order-in-Original No.5 of 2006, dated 19-1-2006 ordered for outright confiscation. The applicant's appeal failed and thereafter the applicant approached the Tribunal, against the order of the Collector of Appeals, dated 6-6-2005. Learned Tribunal dismissed the appeal vide order, dated 22-3-2006, hence this C.R.A.

4. The applicant in C.R.A. No.4 of 2007 owns Hino Truck having registration No.0441 (Sukkar). The vehicle was intercepted and on physical examination, it was found that its chassis number has been tampered and self punched. The vehicle was seized. The examination of Forensic Science Laboratory Islamabad reveals that chassis number, before chemical treatment of the vehicle was FF 173 KA-158447 while after the chemical treatment it was changed to FF 175K-127914. Deputy Collector (Adjudication), Multan vide Order-in-Original No.913 of 2002, dated 21-10-2002 found the vehicle as smuggled and ordered for its outright confiscation. Collector Appeals affirmed the Order-in-Original and the appeal before the learned Tribunal also met the fate of dismissal. These C.R.A. have been filed on various questions including questions Nos.l and 2, which are reproduced below for ready reference:

"(i) Whether the learned Appellate Tribunal erred in law by holding that applicant's vehicle may not be released against duty and taxes?

(ii) Whether the learned Appellate Tribunal has fallen in error that he cannot release tampered vehicles against duty and taxes under section 181 of the Customs Act, 1969?"

5. It is contended by learned counsel for the applicants that the applicants are bona fide purchasers of the vehicles in questions and vehicles were not smuggled or imported by them. The respondents have released, with frequent intervals, various vehicles in identical and similar circumstances, on payment of duties and taxes. It has been argued that even the Appellate Tribunal has passed order for the release of the vehicles against customs duty and referred to order, dated 16-5-2002 of the Appellate Tribunal where 48 appeals were decided, allowing the applicants to get their vehicles released on the basis of S.R.O. No.1374(I)/98, dated 17-12-1998 on payment of duties. Learned counsel has emphasized that according to S.R.O. No.179(I)/2006, dated 2-3-2006 smuggled vehicles with non-tampered chassis frame are subject to release on payment of 30% of the duties and taxes. Case of "Abu Bakar Siddique and others v. Collector of Customs,, Lahore and another" (2004 PTD 2187) and "Messrs Imtiaz Ahmad v. Collector Customs, Peshawar" (2007 PTD 789) were referred in support of the contentions made on behalf of the petitioners.

6. Learned counsel for the respondents, on the other hand, has fully supported the impugned judgment and submitted that the cases of import of smuggled vehicles or vehicles imported in violation of the trade policy can be released on payment of taxes but the cases where owner of vehicle has committed fraud and forgery and tampered the chassis number or has removed the chassis number through cut and welding is not entitled to such relief. Learned counsel has relied upon S.R.O. No.574(I)/2005, dated 6-6-2005 where release of vehicle on payment- of fine, in lieu of confiscation, is not available under various clauses of this notification. Vehicles imported in violation of import, trade and procedure order and in violation of import of vehicle are mentioned at serial No.(vii) of Clause-(a) of the said notification.

7. Heard learned counsel for the parties and perused the record.

8. Forensic Science Laboratory, where the vehicles were examined, it was found that chassis frame of vehicle in CRA 702 of 2007 is cut and welded while tampering of chassis number through chemical treatment was reported regarding vehicle in C.R.A. No.4 of 2007. The applicants herein have emphasized that their vehicles are required to be released on the basis of principle of equality, on payment of customs duties and fines. As other vehicles have been released on the basis of payment of duties and fine. In these reference applications, the questions involved are mixed questions of facts and law, which cannot be determined in these proceedings. The fact remains that the applicants have been plying the vehicles illegally and have manoeuvred to change their chassis number. They have either done the same by themselves or by a person from whom they have purchased these vehicles. In the former case they are guilty of tax fraud while in the later case they are guilty of negligence as they have not taken due care at the time of purchase of these vehicles.

9. Option of fine in lieu of confiscation, is not available to the applicants, therefore, the same cannot be extended. The cases referred to by learned counsel for the applicants are on different facts and circumstances. Thus they are not applicable to the controversy in hand. The vehicles, which are smuggled with tampered chassis frame, are not only source of loss to the National Exchequer but are security threat as well. We, therefore, are inclined to validate the acts, which are immoral, detrimental to the security and result into loss to the National Exchequer.

10. In view of our above discussion, we answer to the proposed question No.1 in negative while the other questions do not require consideration. This reference application is, therefore, dismissed.

M.H./S-18/LReference dismissed.