SAADAT KHAN VS FEDERATION OF PAKISTAN through Secretary Revenue Division, Islamabad, 2014 PTD-KARACHI-HIGH-COURT-SINDH 1615 (2014)

Customs Act (IV of 1969)---

----Ss. 17, 25, 168 & 171---Notification S.R.O. 486(I)/2007, dated 9-6-2007---Constitution of Pakistan, Art.199---Constitutional petition---Misdeclaration---Seizure of goods---Additional demand of duty and taxes---Procedure---Authorities did not accept goods declaration submitted by importer and demanded additional duty and taxes---Plea raised by importer was that under Notification S.R.O. 486(I)/2007, dated 9-6-2007, goods could only be detained under S. 17 of Customs Act, 1969---Validity---Interpretation of notification as well as classification of goods did not fall within definition of "mis-declaration"---When goods were intercepted and seized, officials had credible information and prima facie evidence to the effect that there was some mis-declaration involved in description and or of quantity of goods, hence goods became liable for confiscation and powers under S.168 of Customs Act, 1969, could be lawfully exercised by authorities---After detention and seizure of goods a show-cause notice under S.171 of Customs Act, 1969, was issued to importer and matter was pending before competent authority, before whom importer had not chosen to proceed with---Officials did not act without jurisdiction and detention/ seizure of goods was with lawful authority and subsequent to such detention/seizure proper show-cause notice was issued to importer---Petition was dismissed in circumstances.

Syed Muhammad Razi v. Collector of Customs (Appraisement), Custom House, Karachi and 2 others 2003 PTD 2821; Shahzad Ahmed Corporation through Shahzad Ahmed v. Federation of Pakistan through Secretary, Ministry of Finance, Government of Pakistan, Islamabad and 2 others 2005 PTD 23; Muhammad Sarwar v. Federation of Pakistan through Secretary Revenue Division and others 2005 PTD 2554; Mazhar Iqbal v. Collector of Customs (Preventive) Karachi and 2 others 2004 PTD 2994; Messrs Zaib Traders through Proprietor v. Federation of Pakistan through Secretary, Ministry of Finance, Islamabad and 3 others 2004 PTD 369; Messrs Sunny Traders through Proprietor v. Federation of Pakistan through Secretary, Revenue Division (FBR), Islamabad and 4 others 2009 PTD 281; Messrs Safe Way through Proprietor v. Deputy Collector Customs, (Appraisement Group-I), Lahore and others 2009 PTD 201; Muhammad Ali v. Federation of Pakistan through Secretary, Revenue Division and another 2013 PTD 628; Baba Khan v. Collector of Customs Quetta and 2 others 2000 CLC 688, C.Ps. Nos. D-1751 and 1751 of 1992 Arif Javed and another v. Mumtaz Hussain Butta and others and dated 29-11-2005 in C.Ps. Nos. D-1374 to 1378 of 2005 ref.

Mrs. Ismat Mehdi, for Petitioner.

S. Mohsim Imam Wasti D.A.G. for Respondent No. 1.

Kashif Nazeer for Respondent No. 2.

Date of hearing: 29th January, 2014.

JUDGMENT

MUHAMMAD JUNAID GHAFFAR, J.---Through instant petition the petitioner has prayed for the following relief(s):--

"(a)that denial to accept transaction value in terms of section 25(1) and demand of additional duty and taxes without following the procedure laid down in section 25 and application of said prices to the goods of the petitioner is illegal, void and of no legal effect;

(b)that the respondents are liable to release the consignment of the petitioner on the value assessed, duty demanded and paid, pending hearing of the main petition;

(c)direct the respondents to grant delay detention certificate for wavier of wharfage and detention charges;

(d)declare that the act of respondents in withholding the consignment of the petitioner is illegal, mala fide, void, unjust and tainted with ulterior motive and of no legal effect;

(e)any other relief, which this Hon'ble Court may deem fit keeping in view the facts and circumstances of the case may also be granted to the petitioner."

2.Briefly, the facts as stated in the memo. of petition are that the petitioner imported a consignment of Eu-d-Toilet Air Fresheners, Bath Soap, Body Spray and other allied items valuing US$ 12000 and filed goods declaration ("GD") which was assessed by the officers of respondent No. 3 and accordingly the GD was out of charged and the consignment was released to the petitioner on 11-11-2013. It is stated that when this consignment was being brought to Karachi, the same was stopped and intercepted by the Officers of respondent No. 2 and was driven back to Hyderabad. The said consignment is thereafter stated to be seized by the respondent No. 2 and such seizure/detention has been challenged by the petitioner on the ground that the assessment of the said consignment was made by respondent No. 3 on the basis of Valuation Ruling No. 588/2013 dated 30-9-2013 and therefore such detention/ seizure or any allegation of mis-declaration as alleged by the Officers of respondent No. 2 is unlawful, without jurisdiction and hence liable to be set aside and the goods be ordered to be released to the petitioner.

3.Mrs. Ismat Mehdi, learned counsel appearing on behalf of petitioner contended that the respondent No. 2 has no jurisdiction in the matter as there exists no appropriate notification for exercising jurisdiction by respondent No.2 and therefore the impugned action of seizure/detention of the goods is without any lawful authority. Learned Counsel further contended that presently S.R.O. 486(I)/2007 dated 9-6-2007 ("S.R.O. 486") is in field and in view of this S.R.O., the respondent No. 2 has the jurisdiction only in terms of section 17 of the Customs Act, 1969 ("the Act") which merely allows detention, seizure and confiscation of goods imported in violation of sections 15 and 16 of the Act. Per learned counsel in the instant matter, there has been no violation either of section 15 or of section 16, as such the authority conferred upon respondent No. 2 by virtue of section 17 cannot be invoked, therefore the detention and or seizure of the instant goods is without any lawful authority. It was further contended by the learned counsel that once the goods are cleared and released by the respective Customs Authorities, the respondent No. 2 has no jurisdiction in the matter to reassess or re-examine the goods. Learned counsel also contended that the Officers of respondent No. 2 are not officers of Customs under section 3 of the Act and therefore neither do they have the powers of section 25 nor of section 32 of the Act to either reassess the goods or to allege any mis-declaration in the matter. Learned counsel contended that FBR has already established a Post Clearance Audit department and has assigned jurisdiction to them in terms of S.R.Os. 500(I)/2009 and 501(I)/2009 both dated 13-6-2009, therefore, the instant consignment after its release by the respondent No. 3, can only be subjected to audit by the respective post clearance department having jurisdiction in the matter. In support of her contention the learned Counsel has relied upon the cases reported as Syed Muhammad Razi v. Collector of Customs (Appraisement), Custom House, Karachi and 2 others (2003 PTD 2821), Shahzad Ahmed Corporation through Shahzad Ahmed v. Federation of Pakistan through Secretary, Ministry of Finance, Government of Pakistan, Islamabad and 2 others (2005 PTD 23), Muhammad Sarwar v. Federation of Pakistan through Secretary Revenue Division and others (2005 PTD 2554), Mazhar Iqbal v. Collector of Customs (Preventive) Karachi and 2 others (2004 PTD 2994), Messrs Zaib Traders through Proprietor v. Federation of Pakistan through Secretary, Ministry of Finance, Islamabad and 3 others (2004 PTD 369), Messrs Sunny Traders through Proprietor v. Federation of Pakistan through Secretary, Revenue Division (FBR), Islamabad and 4 others (2009 PTD 281), Messrs Safe Way through Proprietor v. Deputy Collector Customs, (Appraisement Group-I), Lahore and others (2009 PTD 201), and Muhammad Ali v. Federation of Pakistan through Secretary, Revenue Division and another (2013 PTD 628).

4.Conversely, Mr. Kashif Nazeer learned Counsel appearing for respondent No. 2 contended that this is a case of gross mis-declaration, wherein undeclared and excess quantity of goods have been found on which no duties and taxes were paid by the petitioner, whereas various duty paid goods shown in the GD have been found to be missing from the said consignment. Learned counsel further contended that the respondent No. 2 has already made out a contravention report which has been submitted to the respective Adjudication Collectorate, whereafter a show-cause notice dated 19-12-2013 has been issued to the petitioner which is pending adjudication but proceedings have not been finalized due to the pendency of the instant petition. Learned Counsel contended that in terms of S.R.O. 486 the respondent No. 2 and its subordinate officers have been conferred with various powers of the Act, specifically mentioned in Column 4 of the said Notification and in addition thereto, in the preamble they have been further authorized to invoke all the relevant provisions of the said Act and the rules made thereunder, if so warranted. Therefore, the respondent No 2 and its subordinate officers have ample powers and jurisdiction to detain and or seize goods which are found to have been cleared in violation of any of the provisions of the Act. Learned counsel further contended that after detention and or seizure of the goods the offence committed in that respect, are reported either to the Special Judge Customs and Taxation for taking cognizance in the matter, and or to the respective Adjudication Collector, for adjudicating the matter for the alleged violation of the various provisions of the Act. Learned counsel further contended that the respondent No. 2 has not carried out any Re-assessment as alleged, nor has issued any show-cause notice by itself, therefore it is not necessary that they should be conferred with powers under section 25 or for that matter of section 32 of the Act. Learned counsel next contended that the judgments relied upon by the learned Counsel for petitioner are in respect of a previous Notification i.e. S.R.O. 388(I)/82 dated 22-4-1982 ("S.R.O. 388") (since rescinded) issued prior to S.R.O. 486 in which various changes have been incorporated as compared to the earlier notifications, therefore, the precedents settled in those judgments are of no help to the case of the petitioner. Learned Counsel further contended that through this Notification the respondent No. 2 has been conferred with the powers under sections 17, 111, 186, 193, 194A, 196, 197 and 209 of the Act, which prior to this Notification were not available. Learned counsel contended that in terms of section 168 of the Act, the respondent No. 2 has the authority and power to seize goods which are liable to confiscation and thereafter to proceed further. Per learned counsel, in the instant matter, allegedly excess goods have been found on re-examination which are liable to be confiscated in terms of Clause 14 of section 156 of the Act, therefore, they have been lawfully seized by the Officers of respondent No. 2 and thereafter a proper show-cause notice has been issued to the petitioner and the petitioner may be directed to approach the relevant adjudicating authority for expeditious disposal of the case. Learned Counsel referred to the cases of Baba Khan v. Collector of Customs Quetta and 2 others reported in 2000 SCMR 678, Judgments dated 5-8-1992 passed by a Division Bench of this Court in C.Ps. Nos. D-1751 and 1751 of 1992 (Arif Javed and another v. Mumtaz Hussain Butta and others) and dated 29-11-2005 in C.Ps. Nos. D-1374 to 1378 of 2005 and order/judgment dated 23-8-2007 passed in Special Customs Reference Application No. 154 of 2005. Learned Counsel also referred to order dated 25-4-2006 passed in Civil Petitions Nos. 2069 and 2550/ 2004 by the Hon'ble Supreme Court against judgment dated 7-9-2004 passed in Constitutional Petition No. D-817 /2004 (Shehzad Corporation Supra) and dated 6-10-2004 passed in Constitutional Petition No 284 of 2004 (Mazhar Iqbal Supra).

5.Mr. S. Mohsim Imam Wasti learned D.A.G. has supported the arguments of learned Counsel for respondent No. 2 and prayed for the dismissal of the instant petition.

6.We have heard all the learned counsel and perused the record and the case-law relied upon by the parties with their assistance. Since a short controversy is involved, by consent the instant petition is being decided at Katcha peshi stage.

7.It appears that the petitioner had imported its consignment at Hyderabad and filed its GD for clearance of the same which was assessed to duty and taxes by the officers of respondent No. 3 after examination of the same whereafter the petitioner had paid duty and taxes without raising any objection as to the assessment of the goods on the basis of Valuation Ruling No. 588/2013. The said consignment was then being transported from Hyderabad to Karachi and on an information was intercepted by the Officers of respondent No. 2 and was re-examined, on the allegation that the petitioner had mis-declared the goods so as to evade duty and taxes amounting to Rs. 878,000 and subsequently the goods have been seized under section 168 of the Act and a contravention report has been submitted to the adjudicating authority who has issued show-cause notice dated 19-12-2013. Through instant petition the petitioner has prayed that the duty and taxes should have been assessed in terms of transaction value under section 25(1) of the Act and has also sought further consequential reliefs. The learned Counsel for the petitioner has confined its arguments on the jurisdiction and the authority of the respondent No. 2 to seize and or detain the goods in question which have been assessed to duty and taxes and have been out of charged by the respective Customs Collectorate. It must be noted that no arguments have been addressed on the merits of the case, especially with regard to the alleged mis-declaration of quantity of goods by the respondent No. 2. The learned counsel appearing on behalf of the petitioner has vehemently relied upon the judgment in the case of Shahzad Corporation supra in which a learned Division Bench of this Court had examined in detail the provisions of sections 168, 171 and so also of section 80 of the Act. In that case the authority and jurisdiction of the officers of respondent No. 2 was challenged by the petitioner and it was contended on behalf of the petitioner that in terms of S.R.O. 388 read with section 80 of the Act, the officers of respondent No. 2 had no lawful authority to detain or seize any goods which have been cleared by the Customs Authorities after payment of duty and taxes. Though the said judgment has discussed the law in detail but we would like to refer to the relevant portion of the said judgment which is para 28 at page 47 and is as under:--

"The condition precedent for seizure of the goods under section 168(I) is that it should be liable to confiscation. At least there should be some prima facie material available with the appropriate Customs officer to the effect that the goods were liable to confiscation. Once the goods duly imported have been examined by the appropriate Customs officers under the first appraisement system, evaluated and assessed to duty and taxes then prima facie the goods are not liable to confiscation. However, if there are sufficient reasons and grounds available with an appropriate Customs officer that the goods are still liable to confiscation then the reasons should be recorded in writing and communicated to the owner or person from whose possession the goods are seized as soon as may, meaning thereby within a reasonable period which may differ from case to case but it cannot be deferred for indefinite period. The reason being that once the goods have been assessed to duty and taxes under section 80 of the Customs Act, and the appropriate officer makes an order for clearance of the goods under section 83, the owner acquires a vested right for clearance of the goods. Any act depriving owner of goods of the vested right acquired by him in due course of law must be backed with sufficient reason and grounds, failing which any such action shall always be liable to be struck off.

8.The said judgment of this Court was assailed by the Department before the Hon'ble Supreme Court in Civil Petitions Nos. 2069 and 2550 of 2004 in which the Department had pressed its case with regard to adverse remarks against the officers of the Department as observed by the learned Division Bench of this Court. It was brought to the knowledge of the Hon'ble Supreme Court by the department that subsequent to passing of the said judgment a new Notification bearing S.R.O. 05(I)/2005 dated 6-1-2005 ("S.R.O. 05") was issued in the matter and the powers of the officers of respondent No. 2 had already been redefined. The Hon'ble Supreme Court vide its order dated 25-4-2006 disposed of the matter in the following terms:--

"In view of the statement we are of the opinion that there is no alive issue requiring determination by this Court particularly in view of the fact that, in the meantime, by way of S.R.O. No.05(I)/05 dated 6th January 2005, powers of the Customs Intelligence Department have also been re-defined.

In view of this fact it is held that there was no necessity to make adverse remarks against the Customs Intelligence Department, as such the same are expunged with the observation that it may not be used in future against the Department in any manner. Since the goods have been released and powers of the Customs Intelligence Department have been re-defined therefore no further action is called for."

9.Though the Hon'ble Supreme Court did not gave any finding on the merits of the case due to issuance of a new Notification, but even otherwise the ratio of the said judgment in the case of Shahzad Corporation supra is no more applicable to the case of the petitioner as subsequently the provisions of section 80 of the Act have also been amended. For ease of reference the un-amended provisions of section 80 of the Act is reproduced as under:--

"80 Checking of goods declaration by the Custom.---(1) On the receipt of goods declaration under section 79, an officer of Customs shall satisfy himself regarding the correctness of the particulars of import, including declaration, assessment, and in case of the Customs Computerized System, payment of duty, taxes and other charges thereon.

(2)An officer of Customs may examine any goods that he may deem necessary at any time after the import of the goods into the country and may requisition relevant documents, as and when and in the manner deemed appropriate, during or after release of the goods by Customs;

(3)If during the checking of goods declaration, it is found that any statement in such declaration or document or any information so furnished is not correct in respect of any matter relating to the assessment, the goods shall, without prejudice to any other action which may be taken under this Act, be reassessed to duty.

(4)In case of the Customs Computerized System, goods may be examined only on the basis of computerized selectivity criteria.

(5)The Collector may, however, either condone the examination or defer the examination of imported goods or class of goods and cause it to be performed at a designated place as he deems fit and proper either on the request of the importer or otherwise."

10.Subsequently through Finance Act, 2005 (w.e.f 1-7-2005) the said provision has been amended in the following terms:-

"80 Assessment of duty.---(1) On the delivery of such bill, the goods or such part thereof as may be necessary may, without undue delay, be examined or tested, and thereafter the goods shall be assessed to duty, if any, and the owner of such goods may then proceed to clear the same for home-consumption or warehouse them, subject to the provisions hereinafter contained 1a [:]

1b[Provided that the Collector for reason to be recorded in writing may defer the examination of goods or any class of goods or goods belonging to a particular importer or class of importers and cause it to be performed at a designated place he deems fit and proper.]

(2)Notwithstanding anything contained in subsection (1), imported goods prior to examination or testing thereof may be permitted by the appropriate officer to be assessed to duty on the basis of the statements made in the bill relating thereto and the information furnished under the rules and the documents produced under section 26; but if it is found subsequently on examination or testing of the goods or otherwise that any statement in such bill or document or any information so furnished is not correct in respect of any matter relating to the assessment, the goods shall, without prejudice to any other section which may be taken under this Act, be re-assessed to duty.

(3)The classification determined for the purpose of assessment of goods under subsections (1) and (2) may include classification given in an advance ruling in such manner as the Federal Government may by rule prescribe.]"

11.From the perusal of the above changes brought under section 80 of the Act it could be seen that previously there was no provision under section 80 of the Act for any reassessment whereas subsequent to the amendment it has been provided under subsection (2) that if it is found that any statement in a goods declaration or document or any information furnished is not correct in respect of any matter relating to the assessment, the goods shall, without prejudice to any other action which may be taken under the Act can be reassessed to duty. Therefore any reliance placed on the case of Shahzad Corporation supra after the amendment carried out in section 80 of the Act in the year 2005 is misconceived and is hereby repelled. In addition to this another Division Bench of this Court vide judgment dated 29-11-2005 in C.Ps. Nos.D-1374 to 1378 of 2005 has dealt with the amended provision of sections 80 of the Act wherein the judgment of Shahzad Corporation was also relied upon by the petitioner. This order was incidentally also authored by the same learned Judge (namely Justice Muhammad Mujeebullah Siddiqui, as his Lordship then was) who had authored the judgment in the case of Shahzad Corporation supra. The relevant observations of the learned Division Bench in the aforesaid case are reproduced hereunder:--

"The grievance of the learned counsel for the petitioner is that the petitioner imported the vehicles which were assessed to taxes and duties and thereafter they have been seized and the adjudicating officer is re-examining the goods for which he has no jurisdiction. Learned Counsel has been pointed out the provisions contained in subsections (2) and (3) of section 80 as amended by Finance Act, 2005 wherein it is provided that an officer of Customs may examine any goods that he may deem necessary at any time after the import of the goods into the country and may requisition relevant documents, as and when and in the manner deemed appropriate, during or after release of the goods by Customs. It is provided in subsection (3) that, if it is found that any statement in such declaration or document or any information so furnished is not correct in respect of any matter relating to the assessment, the goods shall, without prejudice to any other action which may be taken under this Act, be reassessed to duty.

The learned counsel for the petitioner initially placed reliance on a DB judgment of this court in which it has been held that once the goods have been examined and assessed to duty and taxes and said assessed duties and taxes have been paid and goods are out of charge of the customs officials shall have no jurisdiction to detain the goods for re-examination and re-assessment and the only course open to them is to issue a notice under section 32 and initiate proceedings, accordingly.

However, after going through the amended section 80 of the Customs Act, 1969, as narrated above, the learned counsel for the petitioner has conceded that under the amended provisions the customs officials have been conferred jurisdiction to examine the goods even after their release by customs officials and have further been conferred with the jurisdiction to re-assess the same to duty.

After conceding that the customs official have the jurisdiction to re-examine and re-assess the goods and duties under the amended provisions, the learned counsel attempted to raise other points on merits.

We are of the opinion that once it is conceded that the customs officials have the jurisdiction to re-examine and re-assess the goods and a show-cause notice has been issued under section 180 of the Customs Act by adjudicating officer and as informed by Mr. S. Tariq Ali, the petitioner is attending the adjudicating proceedings, decision on merits is to be given by Adjudicating officer and if the petitioner is dis-satisfied with the finding, he may prefer appeal before Customs, Excise and Sales Tax Appellate Tribunal and thereafter an appeal before this court as provided under sections 194 and 196 of the Customs Act.

Since the Customs Officials have jurisdiction to proceed with the re-examination and re-assessment, therefore the petition stands dismissed in limine along with listed application."

12.Similarly, another learned Division Bench of this Court vide judgment dated 23-8-2007 in Special Customs Reference Application No.154 of 2005 has also dealt with the same issue wherein the following question of law was raised on behalf of the applicant:---

"Whether in the facts and circumstance of the case, the Customs, Excise and Sales Tax Appellate Tribunal has committed error in not considering the fact that after the imported goods were assessed and were out of charge, the Customs Intelligence and Investigation officials has no jurisdiction to reassess the goods and seize the same?"

12.The relevant finding is in the following terms:--

"In the context of the above question of law we have heard Mr. Amir Malik learned counsel for the appellant. He has vehemently contended that the Customs Intelligence and Investigation Officials had no jurisdiction to seize the imported goods of the applicant and re-examine the same after the customs duty etc. was paid and the goods was out of charge, therefore, the whole subsequent proceedings conducted by the adjudicating authority were also unwarranted by law. In support of his submissions he has placed reliance on the two judgments in the case of Shahzad Ahmed Corporation v. Federation of Pakistan and 2 others (2005 PTD 23) and Mazhar Iqbal v. Collector of Customs (Preventive) Karachi and 2 others (2004 PTD 2994) wherein, precisely it was held that once the imported consignment of goods was out of charge after payment of customs duties the Collector of Customs Intelligence and Investigation had no jurisdiction to detain, seize or re-examine such consignment. For this proposition of law there can be no cavil. However, ratio of these cases is of no help to the case of the assesse, as the record shows that respondent No. 1 had only provided information about the mis-declaration of consignment in question, whereafter goods were detained at Shed No. 22, West Wharf, Karachi, and further action/proceedings emanating from the show-cause notice dated 19-11-2003, which resulted in the passing of Order-in-Original No. 61/2004 dated 31-3-2004 by Collector of Customs Adjudication-I, Customs House, Karachi and culminated in the form of other order dated 4-6-2005, passed by Customs, Excise and Sales Tax Appellate Tribunal, Karachi Bench II, were taken in accordance with law.

As discussed above, the respondent No. 1 had only provided information to the concerned officer of the customs about the mis-declaration of goods by the applicant, whereafter all proceedings were initialed and action was undertaken by the concerned officials of Customs department. Therefore, issuance of show-cause notice, inter alia, under section 32 of Customs Act 1969, due to gross mis-declaration of the nature of consignment, resulting in incorrect valuation, was fully justified and warranted by law."

13.The main thrust and the line of argument as addressed by the learned Counsel for petitioner is entirely and or exclusively based and dependent on the judgment in the case of Shahzad Corporation supra as the learned Counsel has contended that the ratio of the said judgment is fully applicable to the case of the petitioner in the instant matter. However, with respect, we are not in agreement with such contention as firstly, as narrated above, the provisions of section 80 of the Act have been amended in the year 2005 and such amendment has a material effect vis-a-vis. the findings in Shahzad Corporation's case supra. Subsequently, even otherwise, the Notification which was in challenge in said case i.e. S.R.O. 388 has also been rescinded and subsequently S.R.O. 05(I)/2005 dated 6-1-2005 was issued which has now been replaced by S.R.O. 486. In S.R.O. 486 there are various sections, powers of which were not available to the officers of respondent No. 2 in the previous S.R.O. 388. Therefore, in so far as the ratio of the said judgment is concerned, we are of the view that the same is no more relevant at this point of time and so also for the reasons to be discussed in the later part of this judgment.

14.It is also to be seen that S.R.O. 388 was issued in exercise of powers conferred under sections 3 and 4 of the Act and at that point of time the officers of respondent No. 2 were not defined as officers of Customs or of any other designation under the Act. However, through Finance Act, 2005 by insertion of section 3A the establishment of the Director General Intelligence and Investigation Customs and Central Excise became part of the Customs Act. Subsequently, S.R.O. 486 has been issued in exercise of the powers conferred under section 3E and section 4 of the Act whereby the powers and authority of the Directorate has been notified; therefore, on this point also there is a material change in the Act under which the officers of respondent No. 2 are now working. We have also noted that even the facts in the case of Shahzad Corporation supra were materially different as compared to the facts of the instant matter. In that case the goods after payment of duty and taxes were detained at the time of delivery of the same from the port area by the officers of respondent No. 2, and thereafter neither any notice was issued under section 171 of the Act nor a proper seizure was effected in terms of section 168 and neither a show-cause notice was issued within the time period as provided under subsection (2) of section 168 of the Act. On such illegalities and violation of the mandatory provisions of the Act, this Court was left with no other choice but to hold that the impugned action of the Directorate of Intelligence was without any lawful authority. Whereas, in the instant matter, the goods have been cleared by respondent No. 2 and had been detained and seized in transit while coming to Karachi on an information that the goods being transported have been grossly mis-declared and such mis-declaration entails confiscation of the goods, therefore officers of respondent No. 2 had invoked the provisions of section 168 of the Act for which they have the authority under S.R.O. 486. It must also be appreciated that the primary job assigned to the officers of respondent No. 2 is in fact of an Intelligence Agency which works on credible information. The respondent No. 2 has been mainly established for prevention of smuggling and performance of preventive operations relating to smuggling and in addition to this also to see and prevent evasion of duty and taxes through clandestine removal of dutiable goods, of mis-declaration of description and value. All these situations are the one which may lead to confiscation of goods in question and therefore if there is any prima facie material available with the officers of respondent No. 2, then the provisions of section 168 can be rightly invoked by the officers of respondent No. 2 and further action can be initiated for preparation of a contravention report for its onward submissions to the respective Adjudication authority, and further, if required, also report the matter to the Special Judge Customs and Taxation for imitating criminal proceedings in terms of section 185A of the Act.

15.The learned counsel for the petitioner had vehemently argued that the respondent No.2 and its officers have very restricted powers in view of S.R.O. 486 and since only section 17 is the relevant section under which they can seize or detain the goods, as such if the case does not fall within section 17, as is in the instant matter, then respondent No.2 has no jurisdiction to act any further. We are not impressed with this line of argument, as in our view it is not necessary or mandatory to notify and mention all the sections of the Act in S.R.O. 486. What S.R.O. 486 provides is merely to declare certain officers as mentioned in column 2 by designation to exercise powers of certain provisions of the Act. Since the powers to seize goods (S. 168) and to arrest (S.161) have been admittedly conferred upon such officers, any further deliberation on the issue is meaningless. The goods are which are seized in terms of section 168 are required to be adjudicated through proper show-cause notice within a specified period and for such adjudication the officers of respondent No.2 have neither any powers nor are they exercising any such powers and authority. Similarly if a person is arrested in terms of section 161 for an offence committed under the Act, the matter is to be reported to the Special Judge Customs and Taxation. Therefore, neither it is not required that powers under section 32 or for that matter under section 156 of the Act are to be conferred upon the officers specifically for exercising such authority. The process of adjudication and or criminal proceedings start after seizure of goods and arrest of a person respectively, and for such purposes the officers of respondent No.2 are duly authorized in view of the provisions of sections 161 and 168. Therefore the officers of respondent No.2 are authorized, subject to limitations, as discussed in this judgment, to either seize goods or arrest a person, as the case may be.

16.This however, does not mean that the officers of respondent No.2 are authorized to act as a supervisory body over and above the officers of respective Collectorates of Customs. As we have already discussed that the facts of the instant case are entirely different to the facts of the earlier reported case of Shahzad Corporation supra and others, in as much as in those cases the consignments after processing of the documents and goods declaration were detained within the Port area and were not allowed to be cleared despite fulfillment of all requisite and codal formalities, whereas in the instant matter the goods have been assessed by the officers of respondent No. 3 and had been allowed to be cleared from the Customs area and were being transported from Hyderabad to Karachi, and thereafter they were intercepted by the officers of respondent No. 3. We are in respectful agreement, despite their being change in law, with the observations of the learned Division Bench in the case of Shahzad Corporation supra that in so far as the detention of goods within the port area before or after the processing of goods declaration is concerned, the officers of respondent No. 3 do not have any lawful authority to detain such goods and then to act as a supervisory body of the respective Collectorate of clearance. They can only intercept goods upon any credible information in respect of such goods outside the port area and within the domain of their respective jurisdiction. It must be appreciated that they have to act as in intelligence agency, supposed to be fully equipped with the related machinery, intelligence network and know how required for such a specialized agency. They cannot enter into a roving or fishing expedition. In fact this is what they had attempted to do in Shehzad Corporation Supra and was accordingly disapproved by this Court. It should also be noted that such interception could only be done once there is a prima facie material available with the officers of respondent No. 2 that the goods which are being intercepted, are such, that they are liable to confiscation and not otherwise. This is so, because the officers of respondent No. 2 have been conferred with powers under section 168 of the Act and therefore there is a clear intention that they can seize any such goods which are liable to confiscation and liable to confiscation would only mean, that either there is an apparent mis-declaration of description of goods or a mis-declaration in respect of quality and quantity of the goods, resulting in a definite loss of revenue. It would not mean and include any alternate or contrary interpretation of an exemption notification or an interpretation regarding classification of goods and or nor application or wrong application of a Valuation Ruling, as firstly this is not within their domain and jurisdiction, and for which specialized departments and or bodies have been established by FBR, and secondly, it is a settled proposition of law that an interpretation of a notification as well as the classification of goods does not fall within the definition of mis-declaration. Now if the facts of the instant matter are looked into, it appears that when the goods were intercepted and seized, the officers of respondent No. 2 had a credible information and prima facie evidence to the effect that there was some mis-declaration involved in the description and or of quantity of the goods, hence the goods became liable for confiscation and the powers under section 168 of the Act could be lawfully exercised by the officers of respondent No. 2. We have been informed that after such detention and seizure of goods, a show-cause notice has been issued after a proper issuance of notice under section 171 of the Act and now the matter is pending before the concerned Adjudicating authority before whom the petitioner has not chosen to proceed with. We are of the view that in the given facts and circumstances of the instant case prima facie, the officers of respondent No. 2 did not act without jurisdiction and the detention/seizure of the instant goods was with lawful authority and subsequent to such detention/ seizure a proper show-cause notice has been issued to the petitioner. Therefore, we are unable to agree with the contention of the learned counsel for petitioner that such authority and jurisdiction was without any lawful authority. We have consciously not given any finding on the merits of the case as firstly the learned counsel for the petitioner had confined its arguments only on legal issues, and secondly, lest it may prejudice the case of the petitioner. However, if the petitioner makes out a case before the Adjudicating authority that no such mis-declaration as alleged was made in the instant matter, the adjudicating authority is fully authorized and vested with powers to order for release of the goods after vacating the show-cause notice.

17.In view of hereinabove, the instant petition to the extent of seizure of goods by respondent No.2 does not merit any consideration and is accordingly dismissed, with directions to the Adjudicating authority to adjudicate the show-cause notice within a maximum period of 30 days from the date of receipt of this order after affording proper opportunity of hearing to the petitioner. It is further clarified that the observations made hereinabove shall not prejudice case of any of the parties pending before the adjudicating authority who shall be at liberty to decide the matter strictly in accordance with law.

MH/S-37/SindhOrder accordingly.