AMANULLAH VS COLLECTOR OF CUSTOMS (APPEALS), 2015 PTD-CUSTOMS-APPELLATE-TRIBUNAL-LAHORE 1524 (2014)

Customs Act (IV of 1969)---

----Ss. 2(s), 17, 26, 156(1)(89)(90), 171, 194-A & 211---Detention and confiscation of vehicle---Directorate of Intelligence and Investigation F.B.R. intercepted the vehicle and possession holder of said vehicle, failed to produce any documents showing its legal import, or any evidence of payment of duty/taxes on its import, and vehicle was placed under detention, but subsequently was handed over to appellant/who claimed to be owner of said vehicle against surety---Appellant claimed that he had purchased impugned vehicle through an auction, and appellant had obtained its new registration---Forensic examination of impugned vehicle, conducted at the Forensic Science Laboratory, established that chassis of said vehicle had been tampered with, and original chassis number of the same had been completely defaced---Appellant's plea of legal import and lawful possession of impugned vehicle, did not find favour with the Adjudicating Authority, and vehicle was confiscated---Enough evidence was on record to the effect that vehicle in question had been unlawfully brought (smuggled) into the country---Directorate, in circumstances, had acted in accordance with law by seizing impugned vehicle---Notice under S.26 of the Customs Act, 1969, issued by the Directorate was perfectly lawful, as the provisions of S.211 of the Customs Act, 1969 were not relevant, because the vehicle, had not been lawfully imported into the country; and the import documents produced were irrelevant---Vehicle could not be released to the appellant, despite the fact he purchased the same in good faith on payment of reasonable amount---Orders passed by forums below being correct in law and on facts, did not warrant any interference---Vehicle in question was ordered to be taken into possession by the Directorate General and disposed of as per the Government Policy---Appellant, had the option of getting back the money that he paid to the Auctioning Authority for purchase of the vehicle in question.

Ms. Dil Khurram Shaheen for Appellant.

Ghulam Muhammad Shar, I.O. for Respondents.

Date of hearing: 14th October, 2014.

ORDER

SHAUKAT ALI, MEMBER (TECHNICAL-II).---This order shall dispose of Customs Appeal No.K-129 of 2012 filed by Messrs Amanullah against Order-in-Appeal No.5779 of 2012 dated 1-2-2012 passed by the Collector of Customs (Appeals) Karachi in relation to Order-in-Original No.115 of 2011 dated 21-4-2011 of Additional Collector, Model Customs Collectorate of Preventive, Customs House, Karachi.

2.Briefly stated, facts of the case, as reported, are that the officials of the Directorate of Intelligence and Investigation-FBR (hereinafter the Directorate General) intercepted a Mitsubishi Pajero Jeep bearing registration No.JAA-088 (hereinafter the impugned vehicle) near Hawksbay, Hub River Road, Karachi. On being questioned about the legal status of the impugned vehicle, the possession holder (Abdul Hameed) produced one page of Registration Book No. NC0010480, showing registration of a Mitsubishi Pajero Jeep bearing Chasis No. CONV140PJ00163, Engine No. 4D56-EY2947, Model 1993, against Registration No. JAA-088 with Motor Registration Authority (hereinafter MRA), Lasbella, in the name of the appellant. However, he failed to produce any documents showing legal import of the impugned vehicle into the country or any evidence of payment of duty/taxes on its import. Therefore, the impugned vehicle was placed under detention, though subsequently the same was handed over to the appellant against surety in compliance with order dated 7-12-2010 of the Hon'ble High Court of Sindh, Karachi in Writ Petition No. 2927/2010. Subsequently, the following documents were brought on record in support of the appellant's claim of lawful import of the impugned vehicle:--

(i)Photocopy of Bill of Entry IGM No. 2060/1992, dated

20-10-1992, Index No. 31, regarding import of Mitsubishi Pajero Jeep, bearing Registration No. JAA-088. Chassis No. CONV140PJ00163, Engine No. 4D56-EY2947, Model 1993, by Ghulam Fatima Road, Lahore, cleared by Messrs Sahara Agencies. CHAL No. 1077. Karachi.

(ii)Photocopy of Bill of Lading No. KKLUNAKC51216, regarding import of aforesaid Mitsubishi Pajero Jeep, 0020 from Japan.

(iii)Sale receipt No. MYG-2A00031021, dated 29-9-1992 issued by Mitsubishi Japan, dated 30-9-1992.

The department approached MRA, Lasbella vide letter dated 20-8-2010 for confirmation of the above-referred documents as well as the Registration Book. The letter dated 27-8-2010 placed on record shows that the Excise and Taxation Officer/MRA, Lasbella District, Hub confirmed registration of the impugned vehicle with it, though the afore-stated position has not been acknowledged in the order-in-original dated 21-4-2011. However, at a later stage, a copy of letter 26-8-2010 issued by the Tehsil Municipal Administration, Hub (hereinafter the Auctioning Authority) was placed on record which stated that the impugned vehicle had been purchased by the appellant through an auction dated 2-8-2008. In addition the above, the aforementioned letter confirmed that the appellant had also obtained new Registration No.JAA-088 from MRA, Quetta, which replaced the old Registration No. LSA-8800. Forensic examination of the impugned vehicle, conducted at the Forensic Laboratory of Sindh Police, established that chassis of the same had been tampered with. The aforementioned forensic examination report (hereinafter the FSL report) is reproduced here for ease of reference:--

"Sub: VERIFICATION OF CHASSIS NUMBER OE MITSUBISHI PAJERO JEEP BEARING REGD NO. JAA-088.

BEFORE CHEMICAL TREATMENTAFTER CHEMICAL TREATMENT

1. Chassis No. (CONV140PJ00163) 1. Chassis No. (Tampered)

Opinion:The chemical examination of vehicle has revealed as under

Chassis:The present chassis number (CONV140PJ00163) is tampered. Alter erasing the original digits which could not be deciphered under the present chassis number due to surface metallic filling."

According to the above reproduced FSL report the original chassis number of the impugned vehicle had been completely defaced and, at the relevant place, chassis No. CONV140PJ00163 had been engraved so as to give an impression that the impugned vehicle had been lawfully imported into the country vide Bill of Entry IGM No.2060/1992, dated 20-10-1992, Index No.3 (hereinafter the presented import documents). On receipt of the FSL report, the Directorate General converted the detention into seizure, as the FSL report provided "reasonable suspicion" to the effect that the impugned vehicle had been smuggled into the country. The appellant's plea of legal import and lawful possession thereof did not find favour with the adjudicating officer and the impugned vehicle was confiscation outright. The appeal filed before the Collector (Appeals) against the order of confiscation dated 21-4-2011 passed by the Additional Collector also failed. Hence the instant proceedings.

3.On the hearing of 14-10-2014, Ms. Dil Khurram Shaheen, Advocate, appeared on behalf of the appellant and, principally, reiterated the facts and grounds contained in the memo of appeal. She stated that the appellant had purchased the impugned vehicle (old Registration No.LSA-8800 and new Registration No-JAA-088), in auction on 2-8-2008 as was evident from the Certificate of Auction dated 2-8-2008 issued by the Auctioning Authority. Subsequently, on 21-10-2008, the impugned vehicle was transferred in the name of the appellant by MRA, Quetta and, later on, the new Registration No. JAA088 was allotted to the same vehicle on 10-10-2009. She contended that demand of the original import documents by the Directorate General was not only misplaced but also unlawful because, firstly, the possession holder of the impugned vehicle had produced a copy of the relevant page of the Registration Book which constituted "lawful excuse" of possession of the impugned vehicle by the appellant in terms of clause (89) of subsection (1) of Section 156 of the Customs Act, 1969 (hereinafter the Act) and, secondly, the provisions of section 211 of the Act place the limitation of six (06) years for maintenance of record, after which Customs authorities cannot demand production of record for any reason whatsoever whereas the impugned vehicle had been imported in the year 1992. She argued that the section 26 notice issued by the Directorate General was illegal ab initio because entitlement to issue such a notice on its part had extinguished long ago due to presence of section 211 in the Act. She emphatically contended that the impugned vehicle was plying on the roads since the year 1992 but no law enforcing agency including Customs had raised any objection to it. Regarding the FSL report, she contended that the same, though apparently the outcome of some manipulation by Customs, was non-specific in any case and of no legal effect as such. She further contended that mandatory provisions of law contained in section 103 of the Criminal Procedure Code had been violated inasmuch as the mushirnama had not been prepared in the presence of two independent witnesses. She argued that such technical flaws were incurable as had been held by the Hon'ble Supreme Court in its judgment in Civil Petition No. 603-JK of 2004. She further contended that the subject case neither fell under the purview of sections 2(s) and 16 of the Act nor clauses (8), (89) and (90) of section 156 (1) of the Act were attracted. Moreover, simultaneous charging of all the above-stated provisions of law in the show-cause notice dated 11-10-2010 had vitiated the whole proceedings. She referred to the judgment passed by the Hon'ble High Court of Sindh, Karachi in Special Customs Reference No. 245 of 2008. In view of the above-stated submissions, she pleaded that the order appealed against may be set aside and the impugned vehicle be released to the appellant unconditionally.

4.No cross objections in terms of subsection (4) of Section 194-A of the Act were filed by the department/respondent. However, on behalf of the respondents, Mr. Ghulam Muhammad Shar, Intelligence Officer, appeared on the hearing date of 14-10-2014 and reiterated the case of the department as contained in the orders passed by the authorities below. He particularly contended (i) that the FSL report dated 27-8-2010 clearly established that the chassis of the impugned vehicle had been tampered with, with a view to giving a false impression that the impugned (though actually smuggled) vehicle had been lawfully imported, (ii) that since the impugned vehicle was smuggled one, the provisions of section 2(s) read with clause (89) of section (1) of section 156 of the Act were squarely attracted in this case, (iii) that the auction papers submitted by the appellant were irrelevant, (iv) that as per Government policy a vehicle whose chassis is established to be tampered with cannot be released or registered with any MRA in any case and (v) that all legal requirements including issuance of notice under section 171 of the Act had been meticulously met and the learned counsel's plea to the contrary did not find any support from the evidence on record. He accordingly pleaded that the appeal be dismissed.

5.Available case record has been examined and the rival arguments heard. Clearly, the case of the department is anchored in the premise that actual chassis number of the impugned vehicle (which is actually a smuggled vehicle) is not available because the same has been completely wiped out through metallic filling and in its place another chassis number (CONV140-PJ00163) has been engraved which belonged to a different vehicle imported through the presented import documents, though broad description and model numbers of both the vehicles were identical. In any case, the impugned vehicle, having a tampered chassis number, cannot be either acquired or used by anyone except a government department in the manner prescribed in terms of Federal Board of Revenue (hereinafter the Board)'s letter C No.10(1)AS/2004 dated 11-4-2014 and if a seized vehicle with tampered chassis number is not roadworthy it has to be scraped in the manner prescribed under Board's letter C No.10(1)AS/2004 dated 3-7-2006. Both the aforementioned letters of the Board communicated decisions of the Economic Coordination Committee (ECC) of the Cabinet. The position taken by the appellant's counsel is diametrically opposed to the department's position stated above. She has contended that the impugned vehicle is the same which had been imported vide the produced import documents and subsequently auctioned by the Auctioning Authority on 2-8-2008: not only that the impugned vehicle had been legally imported into the country but also the appellant had "lawful excuse" for its possession in the shape of the auction certificate as well as the Registration Book. This dispute sets us few questions of fact and law. Of course, the first of these questions is whether the impugned vehicle had been legally imported or smuggled into the country. In other words, whether it is the same vehicle which had been imported by one Ms. Ghulam Fatima vide the presented import documents and subsequently sold by the Auctioning Authority on 2-8-2008 to the appellant. For exploring answer to the aforementioned question, we start with the premise that there is no chance of tampering of the chassis of a vehicle which is imported new. Therefore, it can be safely presumed that chassis of the vehicle imported vide the presented import documents was non-tampered whereas the chassis of the impugned vehicle has been found to be tampered with, as is evident from the FSL report. The objection that the appellant's counsel has raised with respect to the FSL report is that it is non-specific, though she has not even pleaded for calling of a second report. On the other hand, the FSL report, reproduced at para 2 above, is quite detailed and categorically states that the original chassis of the impugned vehicle had been completely defaced and the relevant place had been filled with some metallic substance and that in place thereof another chassis number (CONV140PJ00163, mentioned on the presented import documents) had been engraved, meaning thereby that both the vehicles (i.e. the impugned vehicle and the vehicle imported vide the presented import documents) had different chassis numbers. This leads us to the inevitable conclusion that chassis number of the vehicle imported vide the presented import documents had been engraved on the impugned vehicle to give the latter vehicle a legal cover. Thus, there is enough evidence on record to the effect that the impugned vehicle had been unlawfully brought (smuggled) into the country. The above stated conclusion opens up the next question whether the Directorate General had acted lawfully in treating the impugned vehicle as a smuggled vehicle within the meaning of section 2(s) of the Act in light of the evidence available on record. The evidence on record in the form of the FSL certainly generated the "reasonable suspicion" within the meaning of section 2(s) read with clause (89) of subsection (1) of section 156 of the Act and the Directorate General correctly treated the impugned vehicle as smuggled vehicle. We, therefore, hold that the Directorate General had acted in accordance with law by seizing the impugned vehicle. Under the circumstances, the section 26 notice issued by the Directorate was perfectly lawful, as the provisions of section 211 were not relevant in this case for the simple reason that the impugned vehicle had not been lawfully imported into the country and the presented import documents were irrelevant. However, it is difficult to determine the time at which tampering on the chassis of the impugned vehicle took place. It is equally unclear as to under what circumstances and for commission of which offence the impugned vehicle landed into the care of the Auctioning Authority and why did that authority put the same to auction without determining, in the first place, whether or not its chassis had been tampered with. It is also not clear as to how much amount did the appellant pay for purchasing the impugned vehicle from auction on 2-8-2008. Be that what it may, evidence on record and circumstances of the case strongly suggest that the appellant had purchased the impugned vehicle from an auction dated 2-8-2008 conducted by the Auctioning Authority. The Directorate General's stance to the contrary is not substantiated by the evidence on record and is ignored accordingly. This takes us to the next question which constitutes heart of the controversy. That question is whether the appellant's possession of the impugned vehicle emanated from some "lawful excuse" in the sense mentioned in clause (89) of subsection (1) of section 156 of the Act. Clearly, the factum of auction gives rise to the appellant's claim of "lawful excuse" to possess the smuggled vehicle and this claim of the appellant needs to be examined in detail. The Auctioning Authority has categorically confirmed that the appellant had purchased the impugned vehicle from an open auction on 2-8-2008 and that MRA, Quetta had transferred the same to his name on 21-10-2008 and then, on 10-10-2009, it issued Registration No. JAA-088, replacing the previous Registration No.LSA-8800. However, Government's policy regarding acquisition, registration and disposal of tampered vehicles stands in the way of the appellant's claim of "lawful excuse" with regard to possession of the impugned (smuggled) vehicle. The Government policy on the issue is contained in Board's letter bearing C.No.10(1)AS/2004 dated 3-7-2006, communicating to all the Provincial Governments the decision dated 3-3-2006 of the ECC of the Cabinet. The aforementioned policy decision, inter alia, indicated (i) that registration of such vehicles with tampered chassis cannot be authorized by the provincial authorities, (ii) that no vehicle with tampered chassis would be auctioned and (iii) that such vehicles would henceforth be sold only to Federal and Provincial departments and authorities. Clearly, a similar course of action was required to be followed by all other government authorities, federal or provincial, for disposal of vehicles with tampered chassis. Such is the clarity and intensity in government's policy on vehicles with tampered chassis that even the ones which are not roadworthy cannot be auctioned: they have to be completely dismantled under direct supervision of the committees consisting of senior officers appointed in terms of Board's letter bearing C. No.10(1)AS/2004 dated 11-4-2014. The aforesaid policy of the Government had been duly notified and must (or should) have been in knowledge of both the Auctioning Authority which auctioned a vehicle with tampered chassis number as well as the appellant who purchased the same on 2-8-2008 that is, well after lapse of a period of two years from the circulation of above-outlined policy of the government. The act of auctioning a vehicle without ascertaining whether its chassis is tampered or not, is not lawful on the part of the Auctioning Authority. Similarly, as a responsible citizen the appellant was required to ensure that the vehicle being purchased by him did not have tampered chassis, even if the purchase had been made through an auction conducted by a government department like the Auctioning Authority. As a matter of fact, he should not have purchased the vehicle without satisfying himself regarding genuineness of the chassis thereof in light of the notified government policy mentioned above. Clearly, legitimacy of the appellant's claim of "lawful excuse" for possessing the impugned vehicle (which had tampered chassis and smuggled status) is dented to the aforesaid extent. The technical objections raised by the learned counsel have also been considered. We are of the view that the same are not grave enough to warrant scraping of the whole proceedings carried out by the department in this case. In any case, the issue raised in respect of the legality of the section 26 notice has been responded to at para 5 above. As far as the objection regarding non-issuance of section 171 notice is concerned the same is not established from the evidence on record: actually, proper notice under section 171 of the Act was issued when the impugned vehicle was seized under section 168 ibid. The case law quoted by the learned counsel, particularly order dated 15-2-2013 of the Hon'ble High Court of Sindh, Karachi in Spl. Customs Reference Application No. 245 of 2008 has been used as guidance for examining the legal issues involved in this case, though facts of the instant case are not exactly the same as that of the evidential case. As things stand now, the impugned vehicle cannot be released to the appellant despite the fact that he may have purchased the same in good faith on payment of a reasonable amount of money, for the simple reason, if nothing else, that its release to the appellant would be against the explicit and duly notified Government policy which the appellant was bound to keep in mind while purchasing, in auction, a vehicle whose chassis had been tampered with.

6.In view of the above discussion, we hold that orders passed by forums below are correct in law and on facts and do not warrant any interference. The impugned vehicle is ordered to be taken into possession by the Directorate General and disposed of as per the Government policy referred to above. However, the appellant has the option of getting back the money that he paid to the Auctioning Authority for purchase of the impugned vehicle.

7.Order passed accordingly.

HBT/132/Tax(Trib.)Appeal dismissed.