AMJAD KHAN VS SUPERINTENDENT OF CUSTOMS (ASO), CUSTOMS HOUSE, LAHORE, 2017 PTD-CUSTOMS-APPELLATE-TRIBUNAL-LAHORE 2463 (2016)

Customs Act (IV of 1969)---

----Ss. 2(KK)(S), 16, 156(1)(89), 168(1), 181 & 194-A---"Smuggling"---Seizure of goods---Option to pay fine in lieu of confiscated goods---Customs authorities found foreign origin tyres outside the stand of Goods Transport Company, which were booked by different persons---Persons, who claimed ownership of said tyres, could not produce any documentary evidence in support of lawful possession or legal import of said foreign origin tyres---Tyres in question were detained under S.2(KK) of the Customs Act, 1969---Alleged claimants expressed their willingness to pay duty and taxes leviable thereon---Sufficient reasons existed to believe that the detained tyres had been brought into the country in breach of the restrictions and prohibitions---Said tyres were seized under S.168(1) of the Customs Act, 1969 for the contravention of Ss.2(S) & 16 of said Act, punishable under S.156(1)(89) of the Customs Act, 1969---Confiscated tyres were redeemed to its lawful owners by the Adjudicating Authority on payment of redeeming fine equal to 20% of the assessed value of the same in addition to payment of duty/taxes leviable thereon; and personal penalty of Rs.10,000 each was imposed upon the claimants/owners of confiscated/redeemed tyres and the vehicle---Validity---Importation or goods having entered into the country without payment of proper duties and taxes---Appellant had failed to produce evidence of lawful duty paid and establish the factum of lawful importation or possession of tyres in question---Appeal being devoid of merits, was dismissed, in circumstances.

Ehsan Baqir for Appellant.

Mansoor Akhtar with M. Adnan Khalid, D.C. for Respondents.

Date of hearing: 31st March, 2016.

JUDGMENT

IMRAN TARIQ, MEMBER (TECHNICAL).---This judgment shall decide the above mentioned Customs Appeal filed against an Order-in-Original No.73/2014 dated 29.12.2014 passed by the Learned Additional Collector of Customs (Adjudication), Lahore.

2.Precise facts for deciding the core controversy involved in the instant appeal are that Superintendent of Customs (ASO) Customs House, Lahore vide seizure report in case Number 182/2014 issued under endorsement C.No. 01/ASO-198/2014/272 dated 28.08.2014 that pursuant to an information, the staff of Customs (ASO), Lahore on 14.07.2014 visited the premises of M/s. New Muhammadi Karwan Goods Transport Company, Sagian Bypass Road, Taj Company Chowk, Bund Road, Lahore and found foreign origin tyres lying outside the said adda. On query, the representative of adda New Muhammadi Karwan Goods Transport Company, Sagian Bypass Road, Taj Company Chowk, Bund Road, Lahore disclosed that the said tyres were booked by different persons. The examination of the said tyres was conducted in the presence of the said person and other witnesses which reveals as under:-

3.On demand, the aforesaid person or any other could not produce any documentary evidence or otherwise, in support of lawful possession or legal import of the above said foreign origin tyres. Therefore, the said tyres were detained under section 2(kk) of the Customs Act, 1969, on the request of the said adda representative, for want of further investigations.

4.On 13.08.2014, fourteen persons appeared in the office of the Superintendent Customs ASO, Lahore along with Luqman Khan (Representative adda) and claimed the ownership of the above-said foreign origin tyres on stamp papers and produced bilties in support of their claim as detailed below:-

the above said claimant/owner of goods could not produce any documentary evidence showing legal import of the said foreign origin Tyres, however they expressed their willingness to pay duty and taxes leviable thereon.

5.In view of the above facts, there were sufficient reasons to believe that the detained foreign origin tyres have been brought into the country in breach of the restrictions and prohibitions for the time being in force by evading duty and taxes leviable thereon. Therefore, on 25.08.2014, the detained foreign origin tyres were seized under section 168(1) of the Customs Act, 1969 for the contravention of the provisions of sections 2(s) and 16 of the Customs Act, 1969 read with section 3(1) of the Imports and Exports (Control) Act, 1950 punishable under section 156(1) (89) of the Customs Act, 1969 read with section 3(3) of the Imports and Exports (Control) Act, 1950.

6.Accordingly, a show cause notice was issued for contravention of sections 2(S) 156(I)/89 of the Customs Act, 1969 read with S.R.O. 499(I)/2009 dated 13.06.2009. The adjudicating proceedings culminated into passing of an Order-in-Original, which reads as under:-

"I have examined the case record, and heard the arguments put forth by the both side. Since the respondents have consented to pay the duties/taxes leviable on the seized goods, therefore, the allegations, as mentioned in the show cause notice, are established against the respondents. Accordingly, the seized tyres involving value of Rs.20,70,773/- claimed by the 15 respondents come as to less than monetary limits of Rs.1,50,000/- in case for one person 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 as the monetary limit does not fall within the ambit of Section 2(s) of the Customs Act, 1969 and the confiscated goods are redeemed to its lawful owners on payment of redemption fine equal to 20% (twenty percent) of the assessed value of the same in addition to payment of duty/taxes leviable thereon.

In addition to above, personal penalty of Rs.10,000/- each is imposed upon the claimant owners of the confiscated/redeemed goods and the vehicle."

7.Being aggrieved from the aforesaid order of the learned Additional Collector of Customs (Adjudication), Lahore the appellant has filed appeal before the Tribunal on the following grounds:-

a)That instant appeal is directed against the Order-in-Original No.73/2014 dated 29.12.2014 passed by respondent No.2 so far to the extent of imposition of redemption fine equal to 20% of the assessed value of tyres and Rs.10,000/- personal penalty imposed each on the appellant.

b)That the staff of respondent No.1 raided the premises of M/s. New Muhammadi Carvan Goods Transport Company Sagian Bypass Road Bund Road, Lahore. On search of the premises 697 tyres of different size and brand were detained under section 2KK of the Customs Act, 1969. The appellants appeared before respondent No. 1 and submitted bilties where-under the tyres were booked by appellants for transportation thereof and claimed their ownership as mentioned in para-3 of the impugned order. On 25.08.2014, the detained foreign origin tyres were seized under section 168(1) of the Customs Act, 1969 on the allegation that the same were non-duty paid and smuggled one and the appellants violated the provision of sections 2(s) and 16 punishable under section 156(1)(89) of the Customs Act, 1969 read with Section 3 (3) of the Imports and Exports (Control) Act, 1950.

c)That on receipt of seizure report dated 28.08.2014, respondent No. 2 issued show cause notice dated 23.10.2014 suggesting there-in as to why the tyres belonging to the appellants my not be confiscated for violation of sections 2 (s), 16 and 178 of the Customs Act, 1969 which was duly replied by the appellants and requested for re-determination of value of the seized tyres claimed by each of the appellant and consequently the value of the tyres were re-assessed at Rs.20,70,773/against the earlier assessed value of Rs.24,00,019/- mentioned in the seizure report.

d)That appellants also requested for release of tyres against payment of duty and taxes claimed by each of them as the value thereof has become less than Rs.1,50,000/ - on each case. The respondent No. 2 adjudicated the matter and released the tyres by giving option under Section 181 of the Customs Act, 1969 on payment of duty and taxes leviable under the law in addition of 20 redemption fine and also imposed penalty of Rs.10,000/- each of the appellant vide impugned order dated 29.12.2014.

e)That the appellants purchased the tyres seized in the case from open market where the same available in bulk without having knowledge that the tyres were lawfully imported and duty paid or otherwise. The appellants were bona fide purchaser of the tyres and this fact was brought to the knowledge of respondent No. 2 but while passing the impugned order the tyres were released on payment of duty and taxes in addition to redemption fine equal to 20% and also imposed penalty of Rs. 10,000/- on each of the appellant which is unjustified and un-reasonable.

f)That admittedly the value of tyres belonging to each of the appellant was found less than Rs.1,50,000/- - and not covered under the definition of smuggling and the same were released under clause 90 of Section 156 (1) of the Customs Act, 1969 with the option to pay duty and taxes and redemption fine by respondent No.2 but once it has been held that the goods being not falling within the definition of smuggling then imposition of redemption fine and penalty is totally unjustified.

g)That it is an admitted fact and never controverted by the department that the tyres were purchased by the appellants from open market and they were bona fide purchaser, therefore, the respondent No. 2 was under legal obligation to take lenient view but she imposed having redemption fine and personal penalty on the appellants which is too harsh and the appellants would not be able to pay the same.

8.Mr. Mansoor Akhtar Advocate, has appeared on behalf of respondent department and defended the impugned order.

9.We have considered the arguments advanced by both the parties. The Honourable High Court Peshawar passed a judgment in Customs Reference No.147/2010 titled Nawab Khan and 33 others v. The Collector of Customs, Peshawar and others wherein it has been held that:-

"The plea of the petitioners based on an admission, that though the goods were smuggled one but these were purchased by them, therefore, being of less value could not be confiscated or divided amongst them, is absolutely untenable rather it was a dextrosed methodology and was designed with the assistance of some legal brain to avoid penal consequences provided under the law and to lay hand on the confiscated goods moreso, when, this claim through an attorney was made at a very belated stage and that too without cogent proof hence, this crude attempt was just aimed at to frustrate and defeat the provision of law through third degree tactics and when all the tribunals have given concurrent findings both on question of law and facts then, nothing is left for this Court to decide when no serious question of law has been raised in this petition. Accordingly, the same is dismissed."

10.In view of what has been discussed above and in light of the dicta settled by the superior court, we are of the considered opinion that there is unlawful importation or smuggling if goods are entered into the country without the proper duties and taxes having been paid, considering that appellant failed to present evidence of lawful duty paid ownership of the impugned goods, it follows that the appellant failed to established the factum of its lawful importation or possession.

11.Upshot of the above discussion is that the instant customs appeal being devoid of merit is dismissed with no orders as to cost.

12.Parties be informed through registered post A.D. or by UMS.

13.File be consigned to record after completion.

HBT/146/Tax(Trib.) Appeal dismissed.