MUHAMMAD SHAHID VS SUPERINTENDENT OF INTELLIGENCE AND INVESTIGATION-FBR, LAHORE, 2017 PTD-CUSTOMS-APPELLATE-TRIBUNAL-LAHORE 1827 (2015)

Customs Act (IV of 1969)---

----Ss. 156(1)(90), 157, 168, 171 & 181---SRO No.499(I)/2009, dated 19-6-2009---Constitution of Pakistan, Art.25---Seizure and confiscation of goods---Redemption of goods on payment of fine---Principle of equality---Seized Generators had been confiscated under Cl.(90) of S.156(1) of the Customs Act, 1969---Adjudicating Officer had given the appellants an option to redeem the same on payment of fine equivalent to 35% of customs value---Counsel for the appellants, who had challenged the pitch of fine, had placed on record certain orders-in-original, wherein under the similar circumstances, Collector of Customs (Adjudication), had released numerous similar generating sets on payment of duties and taxes, plus a nominal penalty of 5% of value of goods under active consent from the Directorate of Intelligence and Investigation-(FBR)---Under Art.25 of Constitution, all persons equally placed, were to be treated alike both in privileges conferred and liabilities imposed; otherwise it would be violative of principle of equality before law---Equal treatment should be meted out with appellant's merchandise as had been done in case of a large number of generators apprehended in similar circumstances---Denial of lower pitch of redemption fine to the appellant would tantamount to discrimination, entailing violation of Fundamental Rights enshrined under the Constitution---Impugned order was modified to the extent that the redemption fine imposed by the Adjudication Officer on confiscated generating sets were scaled down to 5%.

2014 PTD 1883; 2013 PTD 1883; 2012 PTD 1279; 2005 SCMR 492; 2002 SCMR 312; PLD 1995 SC 396; 1990 SCMR 1072; 1990 SCMR 1059; 1975 SCMR 352; PLD 1997 SC 334 and 1997 SCMR 1874 ref.

Asad Goraya for Appellants.

Mubarik Ali Sherazi, I.O. for Respondents.

JUDGMENT

OMAR ARSHAD HAKEEM, MEMBER (JUDICIAL).---This Judgment shall dispose of the above mentioned appeal filed against Order-in-Original No. 36/2014 dated 06.05.2014 passed by the Additional Collector of Customs (Adjudication), Lahore.

2.A perusal of record shows that the subject appeal was the jurisdiction of Single Bench therefore the same was referred to the Hon'ble Chairman for assignment to any Member of this Bench. This appeal was entrusted to the undersigned for disposal. Arguments were heard and the case was reserved for orders.

3.The facts of the case, as reported by the Superintendent of Intelligence and Investigation-FBR, Lahore are that in pursuance of an information on 22.03.2014 the staff of the Directorate of Intelligence and Investigation-FBR, Lahore intercepted Mazda Mini Truck No. LHP-4601 loaded with three foreign origin generators. On query the driver of the truck introduced himself as Muhammad Sadaqat son of Muhammad Irshad. On demand, no document regarding legal import or lawful purchase of loaded foreign origin generators was provided by the driver at the spot. Therefore, Mazda Truck along with loaded generators was brought to the office and thorough checking was conducted in the presence of driver and other witnesses which led to the recovery of foreign origin generators. As no document regarding legal import or lawful purchase/possession of the recovered foreign origin generators was put-forth by the driver therefore the same along with Mazda Mini Truck was seized under section 168 of the Customs Act, 1969 being liable to confiscation under section 156(1) (90) and section 157 ibid. Notice under section 171 of the Act was also served upon the driver of the Truck.

4.During preliminary investigation, the driver Muhammad Sadaqat son of Muhammad Irshad that he is driving this Mazda Mini Truck for the last one month and the owner of the Truck is Malik Aamir. On 25.03.2014 a person namely Muhammad Shahid Rasool Khan son of Abdul Rasool Khan attended the office of Intelligence and Investigation-FBR, Lahore and submitted an affidavit on judicial stamp paper in which he claimed the ownership of the seized foreign origin three generators. His statement was also recorded in which he stated that he had purchased one big generator from Ahmadullah Pathan whose mobile number is 0306-7946074 against payment of Rs.4,15,000/- and the other two small generators from one Qasim Khan whose mobile number is 0314-3588097 against payment of Rs.4,80,000/-. He added that the generators were loaded from Saria Mill Ahata, Misri Shah, Lahore. He further stated that he is running a business of scrap at Raiwind and the generators were required for his own use. He also stated that it was not in his knowledge that the seized generators were non duty paid/smuggled one. However, he also could not produce any documentary evidence to establish lawful import/acquisition. It was clear that the claimant has no documentary evidence regarding legal import or lawful purchase of the offending goods. In the light of this position it is clear that the seized foreign origin generators are non duty paid/smuggled one and are liable to confiscation along with Mazda Mini Truck No. LHP-4601 used in the transportation of smuggled generators under the provisions of law as reported above.

5.Based on the above reported facts, while a show-cause notice was being prepared for issuance Mian Junaid Razzaq, Advocate appeared on behalf of the respondents and submitted an application for summary adjudication of the case without issuance of written show-cause notice and showed his willingness to pay duty and taxes leviable on the seized goods. As a consequence of adjudication proceedings, the learned adjudicating officer passed the impugned order in original as follows:--

(a)The seized goods mentioned in para-1 of this order are confiscated under clause (90) of section 156(1) of the Customs Act, 1969. However, an option under section 181 of the Customs Act, 1969 is allowed and confiscated goods are redeemed to its lawful owner on payment of redemption fine equal to 35% (thirty five percent) of the customs value of the seized goods in addition to payment of duty/taxes leviable thereon. However, value of the goods may be taken into consideration depending on their condition and evidential data.

(b)The seized Mazda Mini Truck bearing registration No. LHP-4601 is confiscated under section 157 of the Customs Act, 1969. However, an option under section 181 of the Customs Act, 1969 is allowed and confiscated Mazda Mini Truck bearing registration No. LHP-4601 provisionally released earlier against bank guarantee of Rs. 50,000/- (Pak rupees fifty thousand only) by the Additional Collector of Customs (Adjudication), Lahore vide order C. No. 19/ADC/ADJ/HQ/2014/178 dated 07.04.2014 is redeemed to its lawful owner on payment of redemption fine of Rs. 50,000/- (Pak rupees fifty thousand only). Ownership of the aforementioned vehicle should however be confirmed by the seizing agency before handing it over to its lawful owner.

(c)A penalty of Rs. 25,000/- (Pak rupees twenty five thousand only) each is imposed upon the respondents in terms of clause (90) of section 156(1) of the Customs Act, 1969.

6.Being aggrieved of the appellants have filed the instant appeal before the Tribunal.

7.Mr. Asad Goraya, Advocate learned counsel for the appellant argued that the impugned generators were purchased by the appellant from the local market of Lahore situated at Misri Shah, Lahore without having knowledge that the duty and other taxes have been paid or otherwise. Further stated that the generators are in used condition and are available in bulk in the open market of Lahore and it is presumed that if the goods are freely importable and available in the open market in bulk, the same would be duty paid. Further that in an identical case the learned Collector of Customs (Adjudication), Lahore released the generators against payment of redemption fine equal to 5% in addition to duty and taxes leviable under the law vide Order-in-Original Nos. 28/2014 and 29/2014 dated 05.06.2014, whereas the respondent No. 2 imposed a huge redemption fine which might be exceeded the duty and taxes leviable under the law and the appellant would not be able to get release of his generators. Further contended that redemption fine of Rs.50,000/- imposed on truck and penalty of Rs.25,000/-on the owner and driver of the truck is unjustified and illegal. That the truck is public carrier and the driver of the said truck has no authority under the law to inquire about the status of the goods from the owner. That the appellants Nos. 2 and 3 have not committed any offence under the Customs Act, 1969, because the goods were loaded from market of Lahore and charged normal fair.

8.Mr. Mubarik Ali Sherazi, I.O. rebutted the contentions as made by the learned counsel for the appellant and stated that the appellant No. 1 during investigation of the case did not produce any document regarding legal import or lawful purchases/possession of the seized foreign origin generators before the detecting agency as well as the adjudicating authority. Moreover the appellant showed his willingness to pay duty and taxes which proves that the appellant had full knowledge about the smuggled status of the seized goods. That the appellant committed an offence by violating the provisions of section 156(1)(90) and section 157 of the Customs Act, 1969 therefore the redemption fine and penalty imposed on the goods as well as truck is under the provision of Customs Act, 1969 read with S.R.O. 499(I)/2009 dated 19.06.2009 which is justified and is on lower side.

9.I have avidly considered the arguments put fourth by the opposing parties and perused the record. My findings are as follows.

10.As far as the imposition of redemption fine on the conveyance or personal penalties on appellants are concerned, I find that the adjudicating officer has already taken a lenient view therefore I will not interfere and the impugned order is upheld to this extent.

11.A perusal of Para (a) of impugned order reveals that the seized Generators have been confiscated under clause (90) of section 156(1) of the Customs Act, 1969 and the adjudicating officer has given the appellants an option to redeem the same on payment of fine equivalent to 35% of the customs value. The learned counsel for appellant challenges the pitch of fine and has placed on record, Order-in-Original No. 28/2014 dated 05.06.2014 and Order-in-Original No. 29/2014 dated 05.06.2014 wherein under similar circumstances the learned Collector of Customs (Adjudication), Lahore has released numerous similar generating sets on payment of duties and taxes plus a nominal penalty of 5% of value of goods under active consent from the Directorate of Intelligence and Investigations-FBR Lahore.

12.Under Article 25 of the Constitution of Islamic Republic of Pakistan all persons equally placed are to be treated alike both in privileges conferred and liabilities imposed, otherwise it would be violative of principle of equality before law; reference is drawn to 2014 PTD 1883, 2013 PTD 1883, 2012 PTD 1279, 2005 SCMR 492, 2002 SCMR 312, PLD 1995 SC 396, 1990 SCMR 1072, 1990 SCMR 1059, 1975 SCMR 352, PLD 1997 SC 334 and 1997 SCMR 1874.

13.I am of the considered opinion that equal treatment should be meted out with appellant's merchandise as has been done in case of a large number of generator apprehended in similar circumstances and denial of lower pitch of redemption fine would tantamount to discrimination, thus entail violation of fundamental rights enshrined under the Constitution of Islamic Republic of Pakistan.

14.In view of what has been stated above the impugned order is modified to the extent that the redemption fine imposed by the adjudicating officer on confiscated generating sets is scaled down to 5%.

HBT/135/Tax(Trib.) Order accordingly.