ALAMGIR FAROOQ VS COLLECTOR OF CUSTOMS (APPEALS), CUSTOMS HOUSE, LAHORE, 2014 PTD-CUSTOMS-APPELLATE-TRIBUNAL-LAHORE 818 (2013)

Customs Act (IV of 1969)---

----S.156(1)---Imports and Exports (Control) Act (XXXIX of 1950),S.3---Confiscation of imported goods on the ground of "Goods Declaration" being old---Validity---No time limit for disposal of imported goods was prescribed under Customs Act, 1969 or rules made thereunder or Import Policy Order---Impugned order was set aside in circumstances.

Abdul Salam Sajid for Appellants.

Saleem-Ullah, S.I.O. for Respondents.

Date of hearing: 29th May, 2013.

JUDGMENT

CH. MUHAMMAD ASGHAR PASWAL (MEMBER JUDICIAL).---This appeal is directed against Order-in-Original No.6 of 2013 passed by the learned Collector Customs (Adjudication) Customs House, Lahore.

1.Brief facts of the case are that in pursuance of information, the staff of Int. & Inv.-FBR, Lahore intercepted a trailer bearing Registration No.GLT-2348 loaded with (1x20') container bearing No.BASXU-260175-0 bearing Seal No.001096 stuffed with foreign origin cloth near Thokar Niaz Baig, Multan coming from Karachi. On query the driver of the Trailer introduced himself as Dhanai Khan. R/o Mianwali On demand he produced Bilty No.0561 dated 12-6-2012, Karachi to Lahore in which sender's name is Zahid Sab and consignee is Abdul Raheem, Lahore. He also produced GD No.CRN: I-HC-1980628-251011 regarding clearance of Textile Fabric (Coated) in which importer is Rafat Jabeen, Juna Market, Karachi and GD CRN; 1-HC-2028707-030112 regarding clearance of EVA Sheet in which importer is also Rafat Jabeen and weighment Slip No.20736 dated 12-5-2012 issued by Site Public Weight Bridge, D-67 Estate Avenue Site, Karachi. The recover cloth is lining material which is totally different. The GD was also old. The sales tax issued by Messrs Muhammad Farooq and Sons, Karachi in the name of Abdul Rahim. During the preliminary investigation, the statement of driver was recorded wherein he stated that he had loaded the empty container from Ex-Terminal Karachi and goods were loaded from a godown situated at Mill Area, Karachi. He also stated that before loading the goods bilty was handed over by the Adda Munshi and the other documents were handed over to him by the representative of the owner of goods. On 15-6-2012 Abdul Rahim R/o Lahore who is also the consignee as per bilty attended the office and said that he would get the container searched tomorrow. He also said that the GDs produced by the driver were related to the goods stuffed in the container. He was asked to provide the commercial invoice, packing list sales tax invoice if any issued by the importer and other documents. On 16-6-2012 he against attended the office and presented photo copies of sales tax invoice dated 28-5-2012 issued by Messrs Muhammad Farooq and Sons R/o Karachi in the name of Abdul Rahim, Lahore regarding coated Textile Fabric and Serial No.001459 dated 29-5-2012 issued by Messrs Hi-tech Impex, Karachi. In addition to foregoing the bilty reflected of sender of the goods as Zahid. Thus, the produced documents do not link with each other and also do not cover the recovered goods. On query, the aforesaid consignee namely Abdul Rahim could not justify regarding variation between documents and recovered foreign origin goods. The goods declaration sent by the sender and sales tax invoice presented by the receiver/claimant of goods was just to hoodwink the detecting agency.

2.Under the circumstance, it became clear that the recovered foreign origin goods were being transported from Karachi to Lahore under the garb of irrelevant documents, therefore, there were sufficient reasons to believe that the recovered foreign origin interlining cloth in rolls, polyester cloth in rolls and rubber sheet in rolls are non-duty paid/ smuggled one, and not supported by the produced documents, therefore, the same were seized on 16-6-2012 along with trailer and container used for transportation of smuggled/non-duty paid goods under Section 168 of the Customs Act, 1969 liable to confiscation under sections 156(I), 89, 90 and section 157 ibid. Notice under section 171 of the Customs Act, 1969 was served upon the driver and claimant of the goods.

3.On 19-6-2012, Alamgir Farooq, Karachi brother of Zahid Farooq on behalf of Messrs Hitec Impex, Messrs Gold Star Corporation and M. Farooq attended the office of the seizing agency and submitted an application along with photo copies of another GD No.KAPR-HC-124523 dated 8-5-2012 regarding clearance of Lining material in which importer isMessrsHitecImpex,Karachi,SalesTaxinvoicesdated31-5-2012 , issued by Messrs Hitec Impex in the name of buyer namely Abdul Rahim, Lahore regarding sales of lining material. He also attached sales tax invoice dated 29-5-2012 issued by Messrs Gold Star Corporation, Karachi in the name of Abdul Rahim, Lahore regarding sale of EVA Sheet. He was asked to provide packing list and commercial invoice. But on demand, he could not produce any documents regarding seized polyester cloth georgette type. In this regard, he said that it was also the lining material whereas the seized polyester cloth was not so.

The documents provided by Alamgir Farooq were scrutinized and the PRAL data of GD No.KAPR-HC-124523 dated 8-5-2012 was also obtained which revealed that lining material having width 60" was imported/cleared whereas the seized lining cloth was of 50" width meaning thereby that this GD also does not correspond with the seized lining cloth. This GD was also produced just to hoodwink the detecting agency. Regarding polyester cloth georgette type no documentary evidence has been provided. Regarding seized foreign origin Rubber Sheetatthetimeofinterceptionthe driver produced GD No.CRN:1-HC-2028709-030112 in which importer was Rafat Jabeen, Karachi and Abdul Rahim provided sales tax invoice dated 29-5-2012 regarding sale of 544 Kgs issued by Messrs Hitec Impex. Later on Alamgir Farooq submitted another sales tax invoice dated 29-5-2012 regarding same weight i.e. 544 K.Gs Eva Sheet. The documents created doubts. The seized foreign origin rubber sheet in rolls having no brand and origin, therefore, the same are not supported by produced documents. In view of the above position, it is clear that the seized goods do not correspond with the produced documents as the same were produced just to hoodwink the detecting agency. Therefore, the seized goods are liable to confiscation under provision.

On the basis of the above reported facts the appellants were charged with the contravention of the provisions of sections 2(s) and 16, 18 and 178 of the Customs Act, 1969 and were called upon to explain as to why the aforementioned seized goods confiscated under clauses (89) and (90) of section 156(1) of the Customs Act, 1969 read with section 3(1)(3) of the Imports and Exports (Control) Act, 1950 and the trailer bearing Registration No.GLT2384 along with container bearing No.BAXU-260175-0 used in the transportation of smuggled goods confiscated under section 156(1) of the Customs Act, 1969. The adjudicating proceeding initiated and the Collector of Customs (Adjudication) Lahore decided the case against the appellants. As consequence of adjudication, the seized goods were confiscated out rightly. Against the said order-in-original, the appellant had filed the appeal before this Tribunal on the following grounds:--

(a)That the goods in question were duly import on payment of leviable duties and taxes and sold to appellant No.3 against proper sales tax invoices duly reflected in sales tax returns and summaries. Thus, there was no justification on the part of respondents to disbelieve the said sales tax invoices. Moreover, these invoices were duly supported with GDs where-under these goods were imported.

(b)That admittedly the trailer was intercepted by the staff of respondent No.1 near Lahore and as such seizure and confiscation of the goods were not justified because the driver of the vehicle was carrying the copies of GDs and tax invoices. It is submitted that the sale tax invoice is sufficient and cogent proof for transportation of the goods within the country. The staff of respondent No.1 had no authority to seize the goods in question in respect of which the sales tax invoice was properly issued. Had there been any reservation on the part of said staff, they would have first of all verify the sale tax invoices and if it was found false then they could have taken any action and not otherwise.

(c)That other ground for confiscation of the goods stated by the staff of respondent No.1 and believed by respondent No.2 isalso misconceivingandfrivolousthattheGDs were old.Itishumblypointedoutthatthereisnolawfordisposalandsale of goods immediatelyon importation thereof and it is sweet will of the importer to sell his imported goods at any time of keeping in view the trend of the market. Thus, confiscation of the goods on the aforesaid flimsy grounds is unjustified and illegal.

(d)That appellant immediately on seizure of the goods provide all the import documents as well as tax invoice to respondent No.1 vide application dated 19-6-2012 but respondent No.2 while passing the impugned order did not utter a signal word that the appellants placed on record the documents showing lawful import and transportation of the goods in question. This shows the mala fide on the part of respondent.

(e)That the impugned order is otherwise illegal because it is ex parte order having been passed on the back of the appellants who engaged counsel to represent them. In case the counsel was not appearing, respondent No.2 was under legal obligation to issue notice to the appellant but no such communication was received by them and respondent No.2 in arbitrary and mechanical manner passed the impugned order which is patently void, illegal and ab-inilio void of no legal effect.

(f)That non application of independent judicial mind on the part of respondent No.2 is apparent on the face of record that he firstly released the trailer in term of the Customs Act, 1969 on furnishing bank guarantee in the sum of Rs.50,000 while passing the impugned order he imposed redemption fine upon the trailer amounting to Rs. 40,00,000 which actionon his part is neither justified not legal. Similarly there was no justification for imposition of redemption fine on the container which was hired by the appellants from the shipping company.

(g)Thattheimpugnedorderhavingbeenpassedinutterdisregardofthesettledprinciplesofnaturaljusticeandfairness cannot be termed as quasi-judicial order nor it can be saidthattheimpugnedorderhasbeenpassedfairly,reasonably, justly and for the purposed of advancement of the enactment in term of section 24-A of the General Clauses Act, 1897.

On the other hand learned Departmental Representative opposed the arguments advanced by the counsel for the appellant and supported the impugned order passed by the learned Collector of Customs (Adjudication ) Lahore.

I have heard learned counsel for the appellant as well as learned Departmental Representative for the respondent and perused the record available on file. I find that the appellant placed on record tax invoices Nos.001460 and 001461 both dated 31-5-2012 in respect of seized lining material. They also produced Gd No.KAPR-HC1245523 dated 8-5-2012 where under the lining material mentioned in lax invoices was imported by Messrs Hitec Impex Karachi. The appellants also brought on record sales tax invoice No.000920 dated 29-5-2012 in respect of seized Eva Sheets which were imported by Mrs. Riffat Jabeen VideGD No.I-HC-2028709 dated 3-1-2012. Neither the aforesaid invoices nor GDs were got verified by the detecting agency or the Collector of Customs (Adjudication) Lahore. There is nothing on record to doubt the aforesaid sales tax invoices and the GDs. Perusal of the impugned order revealed that no findings, Whatsoever, were given by the adjudicating authority in respect of these sales tax invoices and the GDs. The goods subject matter of instant appeal were outrightly confiscated merely saying "the allegations as narrated in the show-cause notice are established against the respondents" Admittedly such findings are not sustainable at law. The learned Departmental Representative when confronted with the aforesaid findings of the adjudicating authority was unable to controvert the contention of learned counsel for the appellants that the goods were duly covered by the sales tax invoices and the import documents. The contention of the learned Departmental Representative that GDs were old is immaterial because there is no time limit prescribed under the provisionsofCustomsAct,1969orrulesmadethereunderaswellas the importpolicyorderfordisposaloftheimportedgoods.Theperusalofrecordfurtherrevealedthatonseizureofthegoodsthe appellants immediately appeared before the seizing agency and provided documents vide letter dated 19-6-2012 but the said documents were never verified nor placed before the adjudicating authority. Moreover, the appellants on presentation of sales tax invoices and import documents have discharged onus in term of section 187 of the Customs Act, 1969 and it was for the department to dis-prove the said documents but they miserably failed in this behalf. Hence I feel no hesitation to hold that the seized goods were lawfully imported on payment of leviable duty and taxes and sold against proper sales tax invoices.

In view of the above discussion, there is no force in the arguments advanced by the respondent, so the appeal is hereby accepted and the impugned order-in-original as well as Order-in-Appeal No.6 of 2013 dated 8-2-2013 is set aside. Parties be informed through registration post A.D. or by UMS.

File be consigned to the record after completion.

SAK/119/Tax(Trib.)Appeal accepted.