MUHAMMAD FAROOQ VS COLLECTOR OF CUSTOMS (APFEAt PESHAWAR
2011 P T D (Trib.) 2033
[Customs Appellate Tribunal, Peshawar Bench]
Before Sher Nawaz, Member (Technical)
MUHAMMAD FAROOQ
Versus
COLLECTOR OF CUSTOMS (APFEAt PESHAWAR and 3 others
Appeal No. Cus.362/PB of 2010, decided on 31/03/2011.
Customs Act (IV of 1969)---
---Ss. 2(s), 16, 32, 139, 16(1)(8)(89), 167, 168, 171 & 194-A---Imports and Exports (Control) Act (XXXIX of 1950), S.3---Smuggling---Confiscation of goods---Additional Collector of Customs vide his order-in-original ordered outright confiscation of the seized goods---Said order was upheld by Collector of Customs (Appeals)--Goods in question were left unattended in the arrival Hall of the Airport and were taken into custody by the Staff posted there---Violation of S.2(s) of Customs Act, 1969 relating to smuggling would have been made only if the owner of the goods had made an attempt to cross the customs control by misusing the facility under green channel operation while leaving the customs area; and was apprehended by the Customs Staff; or the goods were seized beyond the Customs Control---Nothing as such having been reported, attempt to evade the duty and taxes on part of the appellant could be substantiated---Goods were brought through the notified route; and till such time that the owner had not attempted to breach the Customs Control, he could not be charged for violation of S.2(s) of Customs Act, 1969-7-Goods were in the control of customs and it would have only been possible, if the Customs Staff had connived with appellant in removal of the goods and violation of the relevant provisions of law---No such thing was available on the record showing that the Customs Staff was in connivance with the owner of the goods---Notice under S.171 of Customs Act, 1969 was not served upon the owner---No declaration was made by the appellant in terms of S.139 of the Customs Act, 1969 and no opportunity was provided to him to make a declaration---Violation of Ss.32(1), 16 & 2(s) of Customs Act, 1969 could not be substantiated by the authorities---Order-in-appeal and order-in-original were set aside by the tribunal and appellant/owner of goods was allowed to get release the same on payment of fine equivalent to 30% of the assessable value. of the seized goods.?
Irshad Ahmad Durrani for Appellant.
Aziz-ur-Rehman, D.S., Sher Ahmad Khan, Inspector and Syed Asifullah, Inspector for Respondents.
Date of hearing: 30th March, 2011.
JUDGMENT
SHER NAWAZ, MEMBER (TECHNICAL):---This appeal has been filed by Muhammad Farooq son of Hafiz Faqir Muhammad (hereinafter called as the appellant) against the Order-in-Appeal No.412 of 2010, dated 28-7-2010, passed by the Collector of Customs, (Appeals), Peshawar.
2. Precisely, the stated facts as recapitulated from the available case record are that the Customs Staff at Peshawar Airport received an information to the effect that an attempt would be made to smuggle foreign origin mobile phones and packing material of mobile phones from abroad through Flight No.PK-284. Accordingly, a raiding party was constituted to foil the attempt of smuggling, who kept strict vigilance on the arriving passengers and 100% scanning of their accompanied baggage was carried out. Due to strict vigilance of the customs staff the owners abandoned the seven packages on the conveyer belt, which were scanned in presence of PIA staff on duty, which indicated presence of mobile phone sets. Subsequently, the said packages were opened in presence of witnesses which led to the recovery of 2601 numbers of foreign origin smuggled mobile phone stets and 05-numbers of packing materials of mobile phone sets and were seized under section 168 of the Customs Act, 1969 (hereinafter called as the Act) for violation of sections 2(s), 16, 32 and 139 ibid, read with section 3(1) of the Imports and Exports (Control) Act, 1950. On examination of the tags numbers affixed on the packages, the names, passport numbers and CNIC number of the accused were ascertained with the help of PIA and immigration staff. All the recovered packages were found bearing the words "MF" which reflect that these belonged to accused Muhammad Farooq.
3. Summons under section 166 of the Act, were accordingly issued to the accused persons to appear before the 1.0. The accused Muhammad Farooq son of Hafiz Faqir Muhammad appeared before the I.O. on 28-1-2010, after getting his Bail Before Arrest (BBA) from the Court of Special Judge Customs, Peshawar, where his statement was recorded. In his written statement he stated that presently he was doing his business as carrier and the recovered foreign origin mobile phones sets were his property. On 3-2-2010, his B.B.A. was confirmed by the Hon'ble Special Judge, Customs, Taxation and Anti Smuggling, Peshawar. Accused Mazhar Abbas son of Nisar Ali, also appeared before the investigation team for the purpose of recording his statement on 28-1-2010, wherein he was accordingly arrested and after fulfilling the required legal formalities he was produced before the Hon'ble Special Judge, Customs, Taxation and Anti Smuggling, Peshawar, on 29-1-2010, and three days physical custody was obtained. During the interrogation the said accused stated that he had no concern with the recovered mobile phone sets, and that he had just provided weight facility to accused Muhammad Farooq, provided to him by the Airline concerned against payment of 150 Dirham. The accused Muhammad Ishaq Khan and Muhammad Hayat had not joined the investigation nor arrested due to non availability of their addresses.
4. Accordingly, show-cause notice was issued to the parties and after hearing rival parties the learned Additional Collector-I of Customs, MCC, Custom House, Peshawar vide his Order-in-Original No.82 of 2010, dated 30-3-2010, ordered outright confiscation of the seized mobile sets along with covering material under section 156(1)(8) and (89) of the Act, read with section 3(3) of the Imports and Exports (Control) Act, 1950, for violation of sections 2(s), 16, 52, 139 and 167 of the Act, read with section 3(1) of the Imports and Exports (Control) Act, 1950.
5. Being aggrieved of the impugned Order-in-Original, the appellant Muhammad Farooq filed an appeal before the Collector of Customs (Appeals), Peshawar, who vide his Order-in-Appeal No.412 of 2010, dated 28-7-2010, upheld the impugned Order-in-Original No.82 of 2010, dated 30-3-2009. Hence the present appeal, filed by the appellant to this Tribunal on the following grounds:--
(a)?? that the impugned Order-in-Original and Order-in-Appeal are illegal, against the law and facts, so the same has got no legal value to effect the valuable rights of the appellant;
(b)?? that there is nothing available on record, even any single evidence to prove any act of smuggling at the part of the appellant;
(c)?? that the act of seizure done by the customs authorities is a serious violation of sections 139 and 142 of the Act, because no chance of declaration has been provided to the appellant and that on the arrival at Peshawar Airport the appellant was not feeling well, therefore, he firstly rushed to the doctor where after taking the rest and medicine, on the next day he visited the Customs Office, where he was informed that the packages were seized;
(d)?? that levelled section of law has wrongly been considered as established by the adjudicating authority in spite of the that the appellant has brought the certification goods on proper declared route, with intention to pay the customs duty;
(e)?? that the appellant is diabetic patient for the fast 2/3 years and is under treatment;
(f)??? that as the said goods have been brought through authorized route, because Peshawar Airport is a notified custom station for the purpose of clearance of goods, so no violation of section 2(s) of the Act, can be established against the appellant but the same has not been considered and the same is importable item under the Import Policy Order of 2010;
(g)?? that orders of both the lower fora is harsh one, against the law, facts and material available on the record and also against the basic rights of the appellant; and
(h)?? that the auction proceedings initiated for the disposal of the seized goods in the absence of the notice under section 201 of the Act, is illegal..
6. On the date of hearing i.e., 30-3-2011, Mr. Irshad Ahmad Durrani, the learned counsel' for the appellant in addition to the arguments in the memo. of appeal, contended that in the first instance an illegality has been made by disposing off the goods through auction without serving the notice upon' the owner of the goods as required under the auction rules. The goods were brought through authorized route i.e. airport, which is a notified customs station, therefore, the charges of smuggling cannot be invoked. Since the goods were brought through an authorized route, therefore, implication of section 2(s) of the Act, is not warranted. However, to the extent of notified items it can be invoked, but not to the extent of smuggling. He added that the goods were picked up from the convener belt without giving the owner any chance of declaration, therefore, there can be no case of any violation of section 139 of the Act, read with section 149 ibid. The learned counsel for the appellant contended that in fact the goods should not have been picked up from the conveyer belt even if the owner was not present but should have been kept aside till such time that the owner had come and made a declaration with regard to the contents of the goods. He maintained that the charges against of mis-declaration in terms of section 32 of the Act, are also not attracted, as he had not made any declaration and not misstated the facts similarly in terms of S:R.O. 499(I)/2009, dated 13-6-2009, a passenger can bring goods in commercial quantity against payment of prescribed pitch of fine of 20% and under S.R.O. 666(I)/2006, dated 28-6-2006, it has been prescribed that in case the goods are in commercial quantity then the same shall be released against redemption fine of 30%. In such a situation when: goods were not declared before the customs and were brought by the passenger as a baggage, outright confiscation of the same was unwarranted. He added that the passenger, Muhammad Farooq is a heart, patient and he was not feeling well on the date of arrival, therefore, he could not manage to pickup the cargo and to present it to customs staff for assessment. Had the customs staff kept the cargo aside and subsequently, asked him to come and make a declaration with the customs, then he would have definitely contacted the customs staff at the airport and would have cleared the consignment. On asking Muhammad Farooq, who was present in-person, as to why did he come to Peshawar, instead of his home town Faisalabad and other airport closer to his home town. He prayed that he deals in various commodities and was informed by someone that the goods brought by him will fetch higher value in Peshawar, therefore, he selected Peshawar, while coming to Pakistan. He further added that he kept waiting outside the port premises till late hours, but he could not contact the customs staff because he was not feeling well. He was also warned by the people over there that he would be arrested if he contacts the customs staff, so he managed to have a bail before arrest from the Special Judge, Customs, Peshawar and then appeared before the I & P Branch, Customs House, Peshawar, wherein he owned the goods and requested for release of the same on payment of duty/taxes plus fine. At the time of hearing before the learned adjudicating officer again he requested for release of the goods against payment of redemption fine and duty/taxes as provided under Baggage Rules, 2006, issued vide S.R.O.666(I)/2006, dated 28-6-2006, read with S.R.O.499(I)/2009, dated 13-6-2009. The learned counsel for the appellant also produced a copy of similar case wherein the Additional Collector of Customs, Karachi, has released the goods against payment of duty/taxes plus fine and penalty. The learned counsel contended with reference to "attempt" that it has three portions, one is preparation, second is intention and the last one is action. Till such time that someone acts in a way to remove the goods clandestinely or to declare the goods falsely, attempt to evade cannot be determined. Keeping aside all aspects of the case, the option under section 181 of the Act, in terms of S.R.O.499(I)/2009, dated 13-6-2009, has wrongly been refused to him, as the said S.R.O. provides for giving such option as a right to the passengers. He, therefore, keeping in view the backgrounds of the case requested for release of the goods against payment of duty and taxes in terms of S.R.0.666(I)/2006, dated 28-6-2006, read with S.R.0.499(I)/2009, dated 13-6-2009.
7. On the other hand, the D.R. contended that the appellant had brought the goods with mala fide intention in order to hoodwink the government revenue, therefore, he did not give any declaration on his arrival to customs staff. His attempt to bring the goods in commercial quantity without giving proper declaration to the customs staff at the airport surely comes within the scope of section 2(s) of the Act, which says as under:--
"Smuggling" means to bring into or take out of Pakistan, in breach of any prohibition or restriction for the time being in force, or evading payment of customs-duties or taxes leviable thereon."
8. Bringing of goods in commercial quantity and not giving any declaration shows that he was trying to evade the leviable duty and taxes. He further contended that he had not even made a request for detention under section 142 of the Act. The mobile phones have been declared as notified item by amending S.R.0.566(I)/2005, dated 6-6-2005, vide notification S.R.0.651(I)/2009, dated 8-7-2009. He maintained that besides Muhammad Farooq some other persons were also carriers, as admitted by him before the Investigating Officer. He further contended that the goods were brought through PK-284 from Dubai on 3-1-2010, and were not picked from the convener belt as contended by the learned counsel for the appellant, but were left in the Customs Arrival Hall, unclaimed on convener belt by the passenger. The packages were then taken into custody by the customs staff in the presence of PIA staff and the same were scanned, which indicated the presence of mobile phones. On the tags affixed to the packages, the words "FM" and the addresses of the passengers were written. Accordingly, notices were issued on the given addresses and from the words FM (code), it was revealed that these mobile phones belongs to one Muhammad Farooq, who came in the same flight but had not claimed the ownership of the goods.
9. From perusal of record and hearing the learned counsel for the appellants and D.R. for the respondent-department, it reveals that seven packages brought through Flight No.PK-284, were abandoned by the owner of the goods on the conveyer belt. The owner of the goods, as stated in the preceding paras did not declare the goods, but for one reason or the other he left the arrival hall and according to his statement, he was not feeling well and was waiting outside the port premises. The packages were taken into custody by the customs staff and after scanning the same it revealed the presence of mobile phones and some packing material brought by the passenger(s). The owner of the goods namely Muhammad Farooq son of Hafiz Faqir Muhammad, appeared before the Investigating Officer (I.O.) after getting his bail before arrest (BBA) from the Court of Special Judge Customs, Peshawar, where his statement was recorded. During the course of his investigation he claimed the ownership of the seized goods and admitted that he presently works as a tripper.
10. Accordingly, show cause notice was issued and the appellant was charged with the violation of sections 2(s), 16, 32, 139 and 167 of the Act, read with section 3(1) of the Imports and Exports (Control) Act, 1950. The record also shows that some other people were also engaged in the transportation of these goods, as according to them they were paid by Muhammad Farooq (the Present appellant) in order to balance the weight of the goods being carried. From the record it transpires that the goods were left unattended and at that time nobody had claimed the ownership of the goods and neither any declaration in terms of section 139 of the Act, was made. Section 139 of the Act, requires the owner of any baggage to make a declaration for the purposes of clearing it, whether verbal or in writing about the contents of the baggage. In the instant case no such declaration was made by the owner(s) as according to him he had left the arrival hall due to some illness and being not feeling well. In such circumstances the customs-department should have issued a detention memo. in terms of section 17 read with section 142 of the Act, but here no such action was taken and the goods were seized immediately without informing the owner of the goods and the action to be taken against him. The recovery memo. gives the details of the goods, but does not bear any notice in terms of section 171 of the Act, intimating the owner of the goods about the seizure. Even the record does not show as to whether any notice was given to the owner of the goods in terms of section 171 of the Act. The Original Adjudication File No.Cus/Adj/Add-C-I/48/2010, and file pertaining to Seizure Case No.7/10, dated 3-1-2010, contain copies of notice under section 171 of the Act, but they do not bear signature of the owner(s) upon whom the same were Served or any proof that these were sent on the available postal addresses but were returned undelivered. Section 171 of the Act; prescribes as under:--
"When anything is seized, or any person is arrested under this Act, the officer or other person making such seizure or arrest shall, as soon a may be, inform in writing the person so arrested or the person from whose possession the things are seized of the grounds of such seizure or arrest."
11. Non-issuance of notice in terms of section 171 of the" Act, is a serious lapse on the part of the seizing agency. In Criminal Appeal No.20-P/1987, and Civil Appeal No.291 of 1987, the Division Bench of the Hon'ble Supreme Court of Pakistan, has observed as under: --
"..11. In the absence of such a notice having been served; it is not possible to hold that compliance had taken place with the provisions of section 171 of the Act. Such an omission cannot be lightly executed either. There must come some reason for the failure to do so. The recovery Memo. cannot be a substitute for the notice under section 171 of the Act for the requirements of the two are in law very different...."
12. As regard the invocation of section 32(1) of the Act is concerned, the record of the case does not show that after getting the bail before arrest (BBA) and appearance of the owner of the goods before the Investigating Officer (I/O) Investigation and Prosecution (I&P) Branch, Custom House, Peshawar, the owner was required or asked to give a declaration about the contents of the packages. Since the owner of the goods had not given any declaration about the contents, therefore, no mis-declaration could be attributed to him in terms of section 32(1) of the Act, as alleged by the respondent-department. Section 32(1) of the Act, states as under:--
"False statement, error, etc.---(1) If any person, in connection with any matter of customs:--
(a)? makes or signs or causes to be made or signed, or delivers or causes to be delivered to an officer, of customs any declaration, notice, certificate or other document whatsoever, or
(b)? makes any statement in answer to any question put to him by an officer of customs which he is required by or under this Act to answer,
(c)? submits any false statement or document electronically through automated clearance system regarding any matter of Customs (knowing or having reason to believe that such document or statement is false) in any material particular, he shall be guilty of an offence under this section.
13. In the case under reference, since no declaration was made or required to be made under section 32(1) of the Act, therefore, the violaation of section 32(1) of the Act, also could not be attributed. Similarly, the attraction of section 16 is doubtful, because no such notification in terms of section 16 of Act, has been brought to my knowledge by the respondents about the prohibition, imposed under the said section by the government. In line with this the provisions of section 2(s) of the Act, are also not attracted because the owner of goods had neither made a declaration nor his attempt to evade the duty and taxes was foiled by the customs staff at the exit gate of the port. The goods as reported by the respondents were left unattended in the arrival hall and were taken into custody by the staff posted over there Violation of section 2(s) of the Act, would have been made only if the owner(s) had made an attempt to cross the customs control by misusing the facility under green channel operation while leaving the customs area and was apprehended by the customs staff or the goods were seized beyond the customs control. In the instant case, nothing as such is reported, therefore, the attempt to evade the duty and taxes on his part could not be substantiated. Moreover, the goods were brought through notified route and till such time that the owner had not attempted to breach the customs control, he cannot be charged for violation of section 2(s) of the Act. The goods were in the control of customs and it would have only been possible, if the customs staff had connived with him in removal of the goods and violation of the relevant provisions of law. No such thing as available on the record, which shows that the customs staff was in connivance with the owner(s) of the goods.
14. In the light of aforesaid discussion and keeping this thing in view that notice in terms of section 171 of the Act, was not served upon the owner(s) of the goods and that no declaration was made by the owner(s) in terms of section 139 of the Act, and no such opportunity was provided to make a declaration and that violation of sections 32(1) 16 and 2(s) of the Act, could not be substantiated by the respondents. I take a lenient view, set aside the Order-in-Appeal No.412 of 2001, dated 28-7-2010 as well as Order-in-Original No.82 of 20.10, dated 30-3-2010 and allow the owner(s) of the goods to release the same on payment of fine equivalent to 30% of the assessable value of the seized goods in terms of section 181 of the Act read with Rule No.17 of the Customs Baggage Rules 2006 issued vide S.R.O. 666(I)/2006, dated 28-6-2006, in addition to duty and taxes leviable thereon. (Reliance in this case is placed on Hon'ble Supreme Court of Pakistan Division Bench's decision in Criminal Appeal No.20-P/1987 (titled The State through Secretary C.B.R. and Ex-Officio Deputy Secretary to the Govt. of Pakistan v. Shahzada) and Civil Appeal No.291 of 1987 (titled The Deputy Collector Central Excise and Land Customs, Peshawar and 2 others v. Fazale Akbar (deceased) through L.Rs. and another).
15. This judgment consists of eight (8) pages and each page bears my official seal and signature.
16. Announced.
H.B.T./150/Tax(Trib.)????????????????????????????????????????????????????????????????????????? Order accordingly.