ABDUL MALIK VS ADDITIONAL COLLECTOR OF CUSTOMS, 2015 PTD-CUSTOMS-APPELLATE-TRIBUNAL-LAHORE 1351 (2014)

Customs Act (IV of 1969)---

----Ss. 2(s), 15, 16, 156, 168 & 194-A---Imports and Exports (Control) Act (XXXIX of 1950), S.3---Seizure and confiscation of smuggled goods---Release against redemption fine---Huge quantity of foreign origin smuggled goods, were seized under S.168 of the Customs Act, 1969, and confiscated---Contention of appellant/smuggler, that order-in-original, could be modified/set aside, allowing release of said goods against redemption fine in terms of S.181 of the Customs Act, 1969---Validity---Goods in question were included in the list of goods notified as "smuggled goods" vide notification, which could not be allowed to be released against fine in lieu of confiscation under S.181 of the Customs Act, 1969---Adjudicating Authority, was to take serious view of the act of smuggling in a case which was characterized by a certain pattern through a particular route and was part of an un-abated trend---Such serious view would assume more alarming proportion in regard to goods, which by virtue of their rampant smuggling, would continue to deal a serious blow to the domestic tax-paying industry as well to the detriment of the national economy; and the overall good of the society---Order-in-original was upheld.

AIR 1959 Cal. 356 = 1959 Cri. L. Jour; 700 + AIR 1967 Cal. 116 and Collector of Customs v. Muhammad Tasleem 2002 MLD 296 ref.

Asim Muneer Bajwa for Appellants.

Shahid Rafiq, Inspector for Respondents.

Date of hearing: 27th August, 2014.

ORDER

KHALID MAHMOOD, MEMBER TECHNICAL-I.---This order will dispose of Customs Appeal No.K-447 of 2014 filed by the appellants against the Order-in-Original No.33/2014 dated 8-4-2014 passed by Additional Collector of Customs (Adjudication), Quetta.

2.Brief facts of the case are that in pursuance of an information, that a huge quantity of foreign origin smuggled goods would be transported from Quetta to Karachi, the staff of Customs Mobile Squad, Khurkhera on 18-3-2014, near Luck Badok, signalled a passenger coach (Registration No.BSA-987) to stop, which was coming from Quetta. On checking, smuggled goods were recovered from the roof of vehicle. The driver, when enquired, stated that he was not in possession of any documents regarding the legal ownership of the goods, nor he had any thing to do with the goods. The goods were off-loaded and after preparation of recovery memo, the same were brought to Gaddani. None including the driver claimed the ownership thereof on the spot. Therefore, the goods were seized under section 168 of the Customs Act, 1969 for violation of the provisions of subsection (1) of section 3 of Imports and Exports (Control) Act, 1950, Section 2(s) read with sections 15 and 16 of the Customs Act, 1969 read with S.R.O. 566(I)/05 dated 6-6-2005 and. S.R.O. 499(I)/2009 dated 13-6-2009, punishable under clauses (8), (9), (89) and (90) of section 156(1) of the Custom Act, 1969. Notice under section 171 of the Customs Act, 1969 was issued and placed on the notice board of the Custom House, Gaddani.

3.After hearing the case, the adjudicating officer vide impugned Order-in-Original No.33/2014 dated 8-4-2014 confiscated the goods outright under relevant provisions of the Customs Act, 1969. The goods included Art Cloth 29 bundles (2750 kgs) and Velvet Cloth 05 bundles (220 kgs), which are subject of this appeal.

4.The appellant's counsel restricted his arguments to the goods claimed by his client (art silk cloth and velvet cloth). The counsel pleaded that the impugned order in original may be modified / set aside to the extent of the said goods, allowing their release against redemption fine in terms of Section 181 of Customs Act, 1969. He also produced copies of some orders-in-original and orders-in-appeal, besides orders by this forum, where goods notified under Section 2(s) of the Customs Act, 1969 were allowed release against redemption fine. Department's representative opposed the request arguing that release of goods notified under Section 2(s) of the Customs Act, 1969 is expressly disallowed in terms of S.R.O. 499(I)/2009 dated 13-6-2009 issued by the Federal Board of Revenue.

5.I have heard the appellant's counsel and also listened to the department's point of view. The goods against which relief has been sought in terms of release against redemption fine are included in the list of goods notified as 'smuggled' goods vide S.R.O. 566(I)/2005 dated 6-6-2005 issued by the Federal Government for the purpose of clause (s) of Section 2 of the Customs Act, 1969. The cloth/ fabrics of cotton; man made fabrics; and wool/woollen fabrics appear against Sr. Nos. 27, 28, 29, respectively, of said Notification. Besides, S.R.O. 499(I)/2009 dated 13-6-2009 issued by the Federal Board of Revenue, Government of Pakistan further provides a list of the goods that can not be allowed to be released against fine in lieu of confiscation under section 181. The list includes goods falling under section 2(s) of the Customs Act, 1969.

6.As to the ambit of the option for release of goods in lieu of confiscation and its impact on the order if it is disallowed, it will be relevant to recall "The option under section 181 of the Act is discretionary. Failure, therefore, to give the option for redemption of goods in lieu of confiscation does not vitiate the decision or the order (AIR 1959 Cal. 356 = 1959 Cri. L. Jour, 700 + AIR 1967 Cal. 116)". In 2002 MLD 296 (Collector of Customs v. Muhammad Tasleem), discussing the issue at length and elucidating its purpose and intent, the Hon'ble Lahore High Court has observed:--

"The Tribunal cannot, in cases covered by the first proviso to section 181 give a relief against the order of the CBR merely for the reason that after confiscation, the goods, will be sold through auction and will therefore, find their way to the market. This approach is not correct in a number of cases where the imported consignment will invariably be destroyed being offensive to the human health; morality or tranquility. Also, such a reason cannot be seen with favour as it is likely to encourage unscrupulous enter-prenuers. For the purpose of giving relief against the express dictates of law it is equally immaterial that an auction mafia in the department is thriving. It is for the CBR as the executive branch of the state to muse at the effect of their order under the first proviso to refuse the option of fine in lieu of confiscation. The Tribunal as a judicial forum need not strain on it because in case of a faulty order it is the CBR which will bear the brunt of a wrong decision".

Their Lordships have further observed:--

"An order issued by the CBR under section 181 is binding upon the appropriate officer directing confiscation of goods. It is binding both when it specifies the goods where such option is not to be given as also when it fixes the amount of fine which in lieu of confiscation is to be imposed. The Tribunal could not directly or in-directly allow a relief which the appropriate officer could not give to an assessee. The provisos to section 181 allow discretion to the executive limb of state in order to regulate the system in the perspective of the financial or social requirements of the people of the country. The order so made betrays the policy of the State and therefore, neither the departmental officer nor the Tribunal could, deviate from it."

7.Summing up the above, I believe that it was important for the adjudicating authority to take a serious view of the act of smuggling in this case which was characterized by a certain pattern through a particular route and was part of an un-abated trend. This assumes more alarming proportion in regard to goods which by virtue of their rampant smuggling, as in the case, continue to deal a serious blow to the domestic tax-paying industry as well, to the detriment of the national economy and the overall good of the society.

8.In view of the above, I find the appeal devoid of any merit. The same is rejected and the Order-in-Appeal is upheld.

9.Order passed and announced accordingly.

HBT/131/Tax(Trib.)Appeal rejected.