KAMRAN AYUB CHUGHTAI VS SUPERINTENDENT CUSTOMS, 2015 PTD-LAHORE-HIGH-COURT-LAHORE 981 (2014)

Customs Act (IV of 1969)---

----Ss. 156, 187 & 196---Reference to High Court---Registration of vehicle---Lawful import---Proof---Onus---Vehicle in question was detained by authorities on the plea that same was not legally imported---Plea raised by applicant was that vehicle in question was lawfully registered, which was sufficient proof of lawful import---Validity---Valid registration book could be a strong corroborative piece of evidence to support weak documentary evidence of lawful import in absence of any import document primary or secondary whatsoever and lack of any attempt on the part of applicant to secure those import documents from relevant quarters---Registration book alone, could not be treated as prima facie evidence of import and payment of customs duty and taxes to discharge evidentiary burden of proof under Ss.156(2) & 187 of Customs Act, 1969---High Court answered question pertaining to registration book as proof of lawful import of vehicle, in affirmative, while remaining questions did not involve warranting interference of High Court---Reference was disposed of accordingly.

Collector of Customs v. Ghulam Muhammad (Preventive), Karachi 2008 PTD 525; Collector, Customs, Sales Tax and Central Excise, Custom House, Quetta v. Naimtullah 2003 PTD 2118; Kamran Industries v. Collector of Customs (Exports) PLD 1996 Kar. 68; Akbar Ali and 4 others v. Ehsan Ellahi PLD 1980 Lah. 145; Government of Pakistan and others v. Maulvi Ahmad Saeed 1983 CLC 414; Sardar Ghulam Nabi Khan v. Azad Government of State of Jammu and Kashmir through Chief Secretary 1984 CLC 325; Barkat Ali and another v. The State and others PLD 1973 Kar. 659; S.M Anwar Sathi v. South British Insurance Co. Limited Karachi PLD 1975 Kar. 458 and Abdur Rauf Khan v. Collector, Central Excise and Land Customs, Peshawar and 3 others 1980 SCMR 114 distinguished.

Muhammad Aijaz v. Director Customs and others 2007 YLR 1071; Hakeen-u-Din and another v. Director General of Intelligence and Investigation (Customs and Excise) and 4 others 2010 PTD 1060; Collector of Customs v. Muhammad Tasleem, Multan 2002 MLD 296 and Agha Masihuddin v. Additional Collector of Customs, Preventive Collectorate, Karachi and 2 others 2009 PTD 523 rel.

Arslan Akhtar for Applicant.

Sarfraz Ahmad Cheema for Respondents.

Date of hearing: 1st December, 2014.

JUDGMENT

ABID AZIZ SHEIKH, J.---This Reference Application under section 196 of the Customs Act, 1969 (Act) has been directed against order dated 27-2-2012 passed by Customs Appellate Tribunal Bench-I, Lahore (Tribunal) in Customs Appeal No.341-LB/11, whereby appeal filed against order dated 14-12-2011 passed by Collector of Customs, Appeal, Lahore has been dismissed.

2.Brief facts are that secret information was received that non-duty paid smuggled Nissan Safari Jeep (vehicle) bearing registration No.JAA-799 (Quetta) is plying in the city. The staff of Anti-Smuggling Organization intercepted the said vehicle on 12-2-2011. The person on the driving seat identified himself as Kamran Ayub Chughtai son of M.A. Chughtai resident of 221/2-X, Defence Housing Authority, Lahore. The vehicle was examined in his presence and two independent witnesses, the detail of which are as under:--

NISSAN SAFARI JEEP MODEL 1988

Registered No.JAA-779 (Quetta)

Chassis No.VRY60-500935

Engine No.Not visible

Upon demand the said person failed to produce any document in support of legal import of the said vehicle. Accordingly, vehicle was detained and seized vide detention memo. dated 12-2-2011 under section 2(KK) read with Section 186(1) of the Act. Vide letter dated 14-2-2011 Motor Registration Authority, Quetta was asked to provide import documents on the basis of which the said vehicle was registered. In response, the Motor Registration Authority, Quetta vide letters dated 15-2-2011 and 14-4-2011 informed the respondent department that vehicle in question was registered in the name of applicant, however, original file of the vehicle in question was misplaced from the office during shifting of office. The respondent department issued show-cause notice dated 3-5-2011 for penal action under clause 89 of the section 156(1) of the Act. The applicant contested the show-cause notice. However, Adjudi-cating Officer vide Order-in-Original No.341 of 2011 dated 13-8-2011 confiscated the vehicle in question under clause 89 of section 156(1) of the Act. Being aggrieved, the applicant filed an appeal before the Collectors Appeal which was dismissed on 14-12-2011. Against said order, the appeal before the learned Tribunal was also dismissed vide impugned order dated 27-2-2012, hence this reference application.

3.The following questions of law have been asserted through this reference application:--

(i)In view of the fact that the petitioner is the owner in possession of vehicle under a valid registration book duly issued under the relevant law by the Motor Registration Authority and the validity of which is not challenged by the Customs Department, whether the burden cast upon the petitioner under S.187 or 156(2), as the case may be, of the Customs Act, 1969 to show that the vehicle is duly duty-paid does not stand discharged and the ultimate burden to prove the case against the petitioner beyond reasonable doubt is not shifted on the Customs Authorities?

(ii)That in the absence of any evidence of material becoming available on record against the petitioner after conducting inquiry by the Customs Authorities, whether the imposition of penalty of confiscation of vehicle is valid, lawful and justified under the law?

(iii)Whether the sole reason relied upon by the learned Tribunal in the impugned judgment/order dated 27-2-2012 for the dismissal of the petitioner's appeal that the registration book of vehicle is only a proof of ownership and no import of the vehicle is tenable under the law, especially in view of S.28 of the Motor Vehicles Ordinance, 1965?

(iv)Whether confiscation of vehicle by the Customs Authorities after 15 years of its lawful and genuine registration with Motor Registration Authority, due to non-production of its import documents is valid under the law, particularly when the petitioner is not the importer of the vehicle in question, but on the other hand he is lawful and bona fide owner of the said vehicle having purchased the same against lawful consideration from its last registered owner as being third or fourth transferee/purchaser since the year 2003 and paying all the relevant taxes as well as observing all the relevant laws, rules and regulations?

(v)Whether the failure of the Customs Authorities in complying with the mandatory provisions of Ss.168 and 171, etc. of the Customs Act, 1969 do not make the whole proceedings regarding the seizure of vehicle as illegal and void rendering the vehicle in question to be released?

(vi)Whether the impugned judgment/order dated 27-2-2012 of the learned Tribunal is a result of misinterpretation and mis-construing of the relevant provisions of law and as such it is not sustainable in the eyes of law?

4.Learned counsel for the applicant argued that once it was established that applicant was in possession of the vehicle under the valid registration book issued by the concerned Motor Registration Authority, burden to proof that vehicle in question was non-duty paid was shifted on the respondent department. Submits that in absence of any evidence or material available on record that the vehicle was non duty paid smuggled, the confiscation of vehicle was illegal and unlawful. Adds that learned forums below failed to attend this aspect of the matter, therefore, the impugned orders and proceedings for confiscation are liable to be set aside. In support of his arguments, reliance is placed on Collector of Customs v. Ghulam Muhammad (Preventive), Karachi (2008 PTD 525) and Collector, Customs, Sales Tax and Central Excise, Custom House, Quetta v. Naimtullah (2003 PTD 2118).

5.Conversely, learned counsel for the respondent argued that registration book was only a proof of ownership and under provision of sections 156(2) and 187 of the Customs Act, 1969 (Act) onus was upon the applicant to show that vehicle was properly and legally imported. Adds that learned forum, below have properly appreciated the available record and provisions of law which does not require interference by this Court.

6.We have considered the arguments of learned counsel for the parties and perused the record with their able assistance. There is no dispute that vehicle in question was detained and ceased vide detention memo. dated 12-2-2011 under section 2(KK) read with section 186(1) of the Act, being suspected to be non-duty paid/contraband smuggled vehicle. Under the aforesaid detention memo, the applicant was given time to produce requisite import documents including attested copies of customs documents, bill of entry/goods declaration, bill of lading, sales/purchase receipt, sale tax invoice etc. However, despite sufficient time, no primary or secondary evidence including any of the aforesaid documents were produced by the applicant to prove legal import of vehicle in question. Record shows that no effort whatsoever was made by the applicant to secure the aforesaid import documents from the original owner or from the relevant quarters including the Customs Department. Admittedly, on failure to produce these documents by the applicant, it was the respondent department, who in order to verify import of vehicle in question, written letter to the registration authority Quetta for providing attested copies of Customs Documents. However, the Motor Registration Authorities, Quetta only confirmed the ownership of the applicant but failed to provide any import document on the plea that original file of the vehicle in question misplaced from the office during shifting.

7.The crux of legal questions raised require determination is whether in these circumstances, the burden of proof on applicant to show that vehicle in question was not smuggled item but legally imported vehicle against payment of leviable duty and taxes will shift on the department under sections 156(2) and 187 of the Act. To examine this question, it is convenient to reproduce sections 2(s), 156(2) and 187 of the Act as under:--

"Section 2(s) "smuggle" 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 thereof;

[(i)gold bullion, silver bullion, platinum, palladium, radium, precious stones, antiques, currency, narcotics and narcotic and psychotropic substances; or

(ii)manufactures of gold or silver or platinum or palladium or radium or precious stones, any other goods notified by the Federal Government in the official Gazette, which, in each case, exceed [one hundred and] [fifty thousand rupees] in value; or

(iii)any goods by any route other than a route declared under section 9 or 10 or from any place other than a customs-station.]

and includes an attempt, abetment or connivance of so bringing in or taking out of such goods; and all cognate words and expressions shall be construed accordingly;

"Section 156(2).---Where [any goods specified in clause (s) of section 2 or in notification issued thereunder], are seized under this Act in the reasonable belief that an act to defraud the Government of any duty payable thereon or to evade any prohibition or restriction for the time being in force by or under this Act has been committed in respect of such goods, or that there is intent to commit such act, the burden of proving that no such act has been committed or there was no such intent shall be on the person from whose possession the goods were seized"

"Section 187 Burden of proof as to lawful authority, etc.---When any person is alleged to have committed an offence under this Act and any question arises whether he did any act or was in possession of anything with lawful authority or under a permit, license or other document prescribed by or under any law for the time being in force the burden of proving that he had such authority, permit, license or other document shall lie on him"

Combine reading of sections 2(s), 156(2) and 187 ibid clearly contemplates that the person who is in possession of vehicle has to show his proper entitlement having lawfully imported the vehicle after payment of its Custom duties and taxes. Section 187 (supra) further postulates two situations, which are as under:--

(a)when a person is charged with an offence under the Customs Act, the burden of proof is cast upon him to show that he has lawful authority to commit that act,

(b)when a person is found in possession of any goods the burden of proof is cast upon him to show that he was holding such goods under some lawful authority, permission or licence or other document prescribed by or under any law from the time being in force.

The facts of the present case fall under the above described situation (b) which provides for an eventuality where a person is found in possession of certain goods falling under the prohibitory category or which has been found in possession of accused unlawfully. In such case the burden is upon the person to show that he was in possession of such goods under a lawful authority, permit or licence etc. The question is as to what extent such burden lies upon the person found in possession of certain goods under the prohibitory category, and as to whether same at any stage shifts to Custom Authorities or not. To answer this question it is necessary to examine various type of "Burden of Proof" and its onus on the parties. "The Modern law of evidence" by Adrian Keane 1985 Ist Edition Oxford professional books limited also referred in Kamran Industries v. Collector of Customs (Exports) (PLD 1996 Karachi 68) talk about two kind of burden of proof i.e. legal or persuasive burden and the evidential or tactical burden, which are defined as under:--

(i)the legal or persuasive burden.---the burden of proof or the probative burden and the ultimate burden. The same has also been defined as "the burden of persuading the tribunal or fact, to the required standard of proof and on the whole of the evidence, of the truth or sufficient probability of every essential fact in issue".;

(ii)the evidential or tactical burden; the quantum of evidence which would establish a prima facie case or adducing evidence.

8.The legal burden is the ultimate and final burden whereas the evidential burden requires establishment of a prima facie case. On general principles, both these burdens are cast upon the prosecution or asserter of a proposition, however, in certain statutes such as Customs Act and under Article 121 of the Qanun-e-Shahadat Order, 1984, the evidential burden has been laid on the accused or person found in possession of prohibitory goods to prove the existence of certain conditions, exception or exemption under which he claims his case falls but at the same time, the said person is entitled to a benefit of doubt where he offers reasonable explanation which is either acceptable or raised a doubt. In such case the burden under Section 187 of the Act will shifted upon the prosecution to establish the case. In this context, we may refer to case-law reported as Akbar Ali and 4 others v. Ehsan Ellahi (PLD 1980 Lahore 145), Government of Pakistan and others v. Maulvi Ahmad Saeed (1983 CLC 414), Sardar Ghulam Nabi Khan v. Azad Government of State of Jammu and Kashmir through Chief Secretary (1984 CLC 325), Barkat Ali and another v. The State and others (PLD 1973 Karachi 659), Kamran Industries v. Collector of Customs (Exports) (PLD 1996 Karachi 68), S.M Anwar Sathi v. South British Insurance Co. Limited Karachi (PLD 1975 Karachi 458).

9.After coming to the conclusion that the burden of proof as laid down under section 187 of the Act is evidential burden requiring the applicant to offer reasonable explanation which either acceptable or raise a doubt and ultimate burden or legal burden is on the Customs Authorities to prove case against the accused beyond reasonable doubt, we now come to the facts of the present case in order to see the initial burden or evidential burden have been discharged by the applicant. As already discussed above, the applicant was given sufficient time to produce requisite import documents of vehicle including bill of entry, goods declaration, bill of lading, sale purchase receipt, sales tax invoice etc but the applicant made no effort to discharge his evidential burden by producing any of the primary or secondary import/custom document to show that vehicle was lawfully imported after payment of custom duties and taxes. Further no effort whatsoever was made by the applicant to secure said documents from the Customs Department through any formal application, rather when no proof of import was provided by the applicant, the department itself tried to verify the import of vehicle from Motor Registration Authority but found even the original file missing. It is also not shown to us that any attempt was made by the applicant to locate the original file of the vehicle in question if at all the same was misplaced. The august Supreme Court in Abdur Rauf Khan v. Collector, Central Excise and Land Customs, Peshawar and 3 others (1980 SCMR 114) while dealing with similar situation held as under:--

"In these circumstances, and quite apart from the fact that according to clause 90 of section 156 of the Customs Act, it was the burden of the petitioner to prove that duty had been paid on the car seized from him, section 187 of the Customs Act would be attracted to the case which is to the following effect"

10.In the above circumstances, it cannot be said that burden of proof was shifted under sections 156 and 187 of the Act upon the department. The argument of the learned counsel for the applicant that being a valid registration book in name of applicant, the evidential burden of lawful import was discharged is also misconceived. The registration book is only a proof of ownership and not proof of import of vehicle and payment of its applicable custom duties and taxes. In our view valid registration book may be a strong corroborative piece of evidence to support weak documentary evidence of lawful import but in absence of any import document primary or secondary whatsoever and lack of any attempt on part of applicant to secure those import documents from relevant quarters, the registration book alone (the original file of which is also misplaced), cannot be treated as prima facie evidence of import and payment of customs duty and taxes to discharge the evidentiary burden of proof under sections 156(2) and 187 of the Act. In this context, reliance is placed on Muhammad Aijaz v. Director Customs and others (2007 YLR 1071) and Hakeen-u-Din and another v. Director General of Intelligence and Investigation (Customs and Excise) and 4 others (2010 PTD 1060).

11.The plea of the applicant that being a bona fide purchaser since 2003, it may be presumed that import was genuine has also not impressed us. The Division Bench of this Court in Collector of Customs v. Muhammad Tasleem, Multan (2002 MLD 296) held that plea of bona fide purchaser is not applicable to goods confiscated under Customs Act and the burden is on the person who found in possession of smuggled item to show not only licence for its import but also payment of duty and tax leviable thereon. No such proof has been produced by the applicant. In any case, if at all applicant was a bona fide purchase, before paying heavy consideration, he should have inquired into and verified the import documents of the vehicle in question registered at Sibbi and re-registered at Quetta, Balochistan. The Division Bench of Sindh High Court in Agha Masihuddin v. Additional Collector of Customs, Preventive Collectorate, Karachi and 2 others (2009 PTD 523) in similar situation held as under:--

"This is an open secret that in the Balochistan area such vehicles ply without any registration, are available at very cheap prices, and in many cases, even the Registration Authority simply took the ground that on the basis of documents supplied by the applicants they registered the vehicle. Another anomaly is that the Registration Authorities were not in possession of original files of such vehicles. The applicant is a resident of Shikarpur, which lies near the border areas of Balochistan, and therefore, such fact should be in the knowledge of all the citizens of the region. Therefore, when the applicant purchased the said costly vehicle he should also have inquired into and verified the documents of the vehicle"

12.We have gone through the case-law relied upon by the learned counsel for the applicant, which is not applicable to the facts and circumstances of this case.

13.In view of above discussion, question No.1 is answered in affirmative.

14.Perusal of remaining questions raised in this reference shows that same are argumentative and relates to questions of fact which have already been determined conclusively by the fora below through well-reasoned and speaking orders. The said findings of fact cannot be substituted by this Court in its advisory jurisdiction. Accordingly, remaining questions are declined.

15.Thus for the foregoing reason, except question No.1, which is answered in affirmative, no question of law is involved warranting interference by this Court. Reference application is therefore decided against the applicant.

16.Office shall send copy of this judgment under the seal of the Court to the learned Appellate Tribunal as required under law.

MH/K-4/LOrder accordingly.