MUHAMMAD YOUSAF VS COLLECTOR OF CUSTOMS (PREVENTIVE), KARACHI
2010 P T D 922
[Karachi High Court]
Before Gulzar Ahmed and Irfan Saadat Khan, JJ
MUHAMMAD YOUSAF
Versus
COLLECTOR OF CUSTOMS (PREVENTIVE), KARACHI and 3 others
C.P. No.D-1409 and C.M.A. No. 7640 of 2009, decided on 25/01/2010.
Customs Act (IV of 1969)---
----Ss. 82 & 169(4)---Imports and Exports Control Act (XXIX of 1950), S.3(1)---Constitution of Pakistan (1973), Art. 199---Constitutional petition---Seizure and confiscation of Jewellery (gold and silver) brought under passenger baggage---Sending of gold jewellery to Mint and depositing of silver jewellery with State Bank by authority---Order -in-Original directing refund of sale proceeds of such goods to petitioner in terms of provisions of S.82 of Customs Act, 1969---Issuance of notice under S.169(4) of Customs Act, 1969 by authority for disposal of such goods---Validity---Term "entire sale proceeds" as used in S.82 of Customs Act, 1969 would denote amount received by authority in case goods were sold during pendency of an appeal etc. and authority was legally bound to refund sale proceeds to its owner after deducting necessary charges---Unchallenged order-in-original did not show as to whether such goods had been sold or not, and if gold had been sent to Mint for melting purposes, what happened afterward---If authority had sent melted gold to State Bank, then petitioner would be entitled to its return for re-export pending his departure abroad---If authority had disposed of gold, then petitioner would be entitled to receive its sale proceeds after deduction of necessary charges---Price of gold would be price fetched on date of actual disposal of such gold---Authority had agreed to return silver to petitioner pending his departure abroad---High Court quashed such notice in circumstances with such observations.
Nadeem Qureshi for Petitioner.
Khalil Dogar for Respondents Nos. 1 to 3.
Mian Khan Malik, D.A.G. for Respondent No.4.
ORDER
This petition has been filed challenging the act of respondent No.3 for issuing notice dated 19 June, 2009 under section 169(4) of Customs Act, 1969 ("the Act") and for, directions to the respondents to return the gold weighing 965 grams and silver weighing 4044 grams seized in Case No.P-579/2003-ITC or equivalent amount of price of gold and silver as prevailing in the market at present.
2. Mr. Nadeem Qureshi Advocate appeared on behalf of the petitioner and submitted that the Deputy Collector of Customs (Preventive) HQ/SWH was not justified in issuing notice dated June 19, 2009 under section 169(4) of the Act through which the petitioner was informed that his confiscated goods will be disposed of in accordance with the law. As per the learned counsel this notice is not only mala fide but the same has been issued in derogation of the order passed by this Court in C.P. No.D-640 of 2009. The learned counsel further submitted that the respondents may be directed to either return the gold and silver confiscated by them or an equal amount of the gold and silver as per prevalent market rate may be paid to him. In this regard he has relied upon a decision dated 27-5-1998 given by a Division Bench of this Court in C.P. D-1275 of 1986.
3. On the other hand, the learned counsel appearing on behalf of the department opposed this constitutional petition by specifically submitting that the petitioner has brought gold into the country as passenger baggage which is a restricted item under the provisions of section 3(1) of the Import and Export Control Act, 1950. As per the learned counsel, the said goods are only importable if the person possesses a proper Import authorization, which the present petitioner admittedly does not have. According to him, the gold was rightly sent to the Mint Lahore and silver to the State Bank of Pakistan in accordance with the applicable provisions of the law. According to them, the department is ready to pay the price of the gold amounting to Rs.4,51,602 after deducting necessary taxes/charges/dues etc. So far as silver is concerned it will be released to the petitioner for re-export pending departure. They further submitted that they are ready to implement the order passed by the Additional Collector in letter and spirit wherein it has been held to refund the entire sale proceeds of the seized goods to the petitioner in accordance with the provisions of section 82 of the Act. In the end they submitted that as the petitioner has not challenged the order in original the same has attained finality and hence the petitioner may be instructed to follow the parameters as laid down in the said order.
4. We have heard all the learned counsel at length and have also perused the record.
5. Briefly stated on 9-4-2003 the petitioner arrived at Karachi from Dubai by Flight Number PK-214 and on examination of his baggage following goods were recovered:-
(i) Jewelry (gold) weighing 965 grams.
(ii) Jewelry (silver) weighing 4044 grams.
As the import of said goods was restricted under section 3(1) of the Imports and Exports (Control) Act 1950, therefore the same were confiscated vide Seizure Report dated 9-4-2003. A show-cause notice thereafter was issued on 9-5-2003, which the petitioner replied. Thereafter order in original was passed on 31-12-2003, which was challenged by the petitioner before the Tribunal, which also dismissed the appeal filed by the petitioner.
6. A reference application was thereafter filed before this Court which, vide order dated 25-3-2008, remanded the matter back to the adjudicating officer with the directions to decide the case afresh after notice to the petitioner. Thereafter order in original was passed by the Additional Collector on 11-2-2009 by specifically observing as under:
"However, in case the seized goods have been lawfully disposed under section 82 of the Act, the entire sale. proceeds, after necessary deductions as provided in section 82 shall be refunded to the passenger."
7. It is informed that no appeal against this order was filed either by the petitioner or by the department. Thereafter the petitioner approached the respondents with the request dated 8-4-2009 that as he is travelling back to Dubai his subject consignment may be returned to him at the time of his departure. However, the respondents informed him vide their letter dated 17th April, 2009 that the said gold has already been sent to Mint Lahore on 9-7-2005 and the silver has been deposited with the State Bank of Pakistan. It was further informed to the petitioner that as the gold has been sent to Mint Lahore it cannot be returned however his case for refund of amount has been sent to the Law Branch/Audit and so far as silver is concerned the same is being withdrawn from State Bank of Pakistan and the petitioner will be informed accordingly after completing the legal formalities in this regard. However, in the meantime the petitioner once again filed a Constitutional Petition bearing No. D-640/2009 before this Court which disposed of the same on 21-4-2009 by observing as under:--
"He further submits that he will be satisfied, if the direction is given to the said respondents to inform him that under what law the gold was shifted to the Mint Lahore without 'giving any notice to the petitioner and what amount will be payable to him.
Learned counsel further submits that the respondents may be further directed to furnish the above information to the petitioner and if the petitioner is satisfied with the reply of the respondents, he may be permitted to seek remedy including filing of the fresh petition before this Court and will not press this petition. The proposal is reasonable and accepted. The petition and listed applications are accordingly dismissed as not pressed with directions to the respondents that they will furnish their reply in the above terms within 15 days and if the petitioner is not satisfied by the reply of respondents, he may seek appropriate remedy including filing of fresh petition before this Court."
Thereafter the petitioner once again made a representation vide his letter dated 28-4-2009 before the respondents for implementation of the above order, however the Deputy Collector of Customs issued the petitioner a letter dated 19-6-2009 informing that the goods are proposed to be disposed of under section 169(4) of the Act. Thereafter the petitioner has filed the present petition.
8. Before dilating upon the issue, we first would like to point out that in the instant case admittedly the order-in-original passed by the Additional Collector on 11-2-2009 has neither been challenged by the petitioner nor by the department which, in our opinion, has attained finality. In that order the learned Additional Collector while disposing of the case of the petitioner made a categorical observation to refund the entire sale proceeds to the petitioner after making necessary deductions as provided under section 82 of the Act. It would be advantageous to reproduce the said section which states as under:--
"[82. Procedure in case of goods not cleared or warehoused or transshipped or exported or removed from the port within [twenty days] after unloading or filing of declaration.---If any goods are not cleared for home-consumption or warehoused or transshipped or are not loaded on the conveyance for export or removed from the port area within [twenty days] of their arrival at a customs station or within such extended period not exceeding [ten] days, an officer not below the rank of Assistant Collector may allow, and such goods may, after the due notice given to the owner if his address could be ascertained, or after due notice to the carrier, shipping or customs agent, custodian of the goods, as the case may be, if his address could not be ascertained, may be sold in auction or taken into custody by Customs and removed from the port to a Customs warehouse for auction under the order of the Assistant Collector notwithstanding the fact that adjudication of the case under section 179, or an appeal under section 193, or 196, or a proceeding in any Court is pending:
Provided that-
(a) animals and perishable and hazardous goods may, with the permission of the appropriate officer, be sold or destroyed at any time;
(b) arms, ammunition or military stores may be sold or otherwise disposed of at such time and place and in such manner as the Board may, with the approval of the Federal Government, direct;
(c) in cases where goods are sold pending adjudication, appeal or decision of the Court, the proceeds of sale shall be kept in deposit and if on such adjudication, or as the case may be, in such appeal or the decision of the Court, the goods sold are found not to have been liable to confiscation, the entire sale proceeds, after necessary deduction of duties, taxes transportation and other charges or duties as provided in section 201, shall be handed over to the owner:
Provided further that where Customs removes such goods from the premises of the custodian for disposal, the charges due to the custodian shall be paid subsequently from the sale proceeds of the goods in the manner as provided under section 201:
Provided also that nothing in this section shall authorize removal for home consumption of any dutiable goods without payment of customs duties thereon.]"
Reading of the above section would reveal that in cases where goods are sold during pendency of an appeal etc. the department will keep the sale proceeds in a deposit and in case the said goods sold are found not to have been liable for confiscation the entire sale proceeds after necessary dedictions shall be handed over to the owner. The term `entire sale proceeds' used in the above section denotes the amount received by the Customs Authorities in the case the goods are sold pending any adjudication appeal or decision of the court and the customs authorities are under the legal obligation to hand over the said `entire sale proceeds' to the owner of the confiscated goods after making necessary deductions etc. The learned Additional Collector also has made the above observation that if the goods have been disposed of under the provisions of section 82 then the sale proceeds of the disposed of goods has to be refunded to the petitioner after necessary deductions. However, it is not clear either from the record or from the arguments advanced by the learned counsel of both the parties that whether the confiscated gold has been sold or not. In the comments filed by the department it has been asserted that the gold was sent to the Mint Lahore on 9-7-2005 but no finding with regard to the proceedings thereafter taken by the department has been mentioned. If the gold jewelry was sent to the Mint Lahore for melting purposes what happened afterward? We are of the view that if the department has sent the melted gold to the State Bank of Pakistan the petitioner is entitled to return of the same for re-export pending departure. If however the department has disposed of the same then in our view as per the provisions of section 82 of the Act the passenger is entitled to receive from the department the entire sale proceeds after deduction of necessary charges. However, we do not agree with the contention raised by the department that the price of the confiscated gold would be that prevailing on the date of its seizure. In our view the price of the gold would be the price fetched on the date of the actual disposal of the said gold as specifically mentioned in section 82 of the Act. So far as silver is concerned there is no dispute as the department has conceded in its comments that they are ready to return the same to the passenger pending departure.
9. This Constitutional Petition is therefore disposed of in the above terms along with the listed application and the notice issued by the Customs Authorities dated 19-6-2009 under the provisions of section 169(4) of the Customs Act is hereby quashed. However, there shall be no order as to cost.
S.A.K./M-23/KOrder accordingly.