Haji SAEED AHMED VS ANTI-SMUGGLING ORGANIZATION, 2016 PTD-CUSTOMS-APPELLATE-TRIBUNAL-LAHORE 659 (2014)

July 21, 2014 CUSTOMS APPELLATE TRIBUNAL LAHORE 2016 PTD 659

2016 PTD-CUSTOMS-APPELLATE-TRIBUNAL-LAHORE 659

Haji SAEED AHMED VS ANTI-SMUGGLING ORGANIZATION

2016 P T D (Trib.) 659

[Customs Appellate Tribunal]

Before Adnan Ahmed, Member Judicial-II

Haji SAEED AHMED and another

Versus

ANTI-SMUGGLING ORGANIZATION and another

Customs Appeals Nos.K-123 and K-122 of 2014, decided on 21/07/2014.

(a) Customs Act (IV of 1969)---

----S. 177---S.R.O. No. 188(I)/83, dated 12-2-1983---S.R.O. No.581(I)/83, dated 18-6-2013---Registration on the possession of goods in certain areas---Seizure of goods/consignment from the possession of carrier---No provision in Customs Act, 1969 or any notification existed in field empowering department to either intercept or detain any goods transported by any person or through public carrier within territory of Pakistan with exclusion of area expressed in S. 177 of Customs Act, 1969 read with S.R.O. No. 188(I)/83 dated 12-2-1983 nor in regards to demand of import or purchase documents either from driver of carrier or from owner of transported goods through public carrier---Stretching of powers by department beyond provision of Customs Act, 1969 and S.R.O. No. 581(I)/83, dated 18-6-2013 which was not permitted under law.

Case-law referred.

(b) Customs Act (IV of 1969)---

----Ss. 26, 215 & 215(b)---Department sought verification under S. 26 of Customs Act, 1969 of purchase bills submitted by importer against transported goods---Importer confirmed genuineness of bills through a proper reply with an exception that reply had not been received as per expression of S. 215 of Customs Act, 1969 as it was not dispatched through a registered post or through corrier service but was hand delivered in office---Delivery by hand fell within the ambit of "any manner" expressed in S. 215(b) of Customs Act, 1969, department's plea therefore, was without any substance.

(c) Customs Act (IV of 1969)---

----Ss.26(d) & 187---Qanun-e-Shahadat (10 of 1984), Arts.117 & 121---Importer was never questioned with regards to goods and bills in accordance with S. 26(d) of Customs Act, 1969 by department which confirmed that transported goods were lawfully purchased through valid bills---Held, that Importer had discharged burden of proof laid upon him under S. 187 of Customs Act, 1969 and department had failed to prove charge of smuggling or transportation or smuggled goods---Department despite mandated under Arts. 117 & 121 of Qanun-e-Shahadat, 1984 failed to discharge burden of proof as same stood shifted on its shoulders---Person levelling allegation was supposed to prove the charge---With submission of valid purchase bill and verification sought by department from importer after serving notice under S. 26 of Customs Act, 1969, burden laid upon importer stood discharged and there was no cause or reason for Department to only release half of the lot instead of whole lot.

(d) Sales Tax Act (VII of 1990)---

----S.3---Income Tax Ordinance (XLIX of 2001), S.4---Customs Act (IV of 1969), S.18---Demanding duty---Goods dutiable/taxable taxes for second time i.e. from buyer/seller was in derogation of proposition of law and amounted to double taxation which was prohibited under Customs Act, 1969, Sales Tax Act, 1990 and Income Tax Ordinance, 2001.

Case-law referred.

(e) Customs Act (IV of 1969)---

----S.180---Issuance of show-cause notice---Additional Collector of Customs was duty bound to determine fact of case and applicable provision of law upon receipt of contravention report, independently without any influence and fairly---Additional Collector of Customs, in the present case, had entirely relied upon version of his subordinate and mechanically signed show-cause notice on basis of contravention report---Show-cause notice issued was nullity in law and without any substance---Adjudicating authority was supposed to apply its mind while issuing show-cause notice.

Case-law referred.

Obaid Ahmed Mirza and Nadeem Ahmed Mirza (Consultant) for Appellants.

Malik Safdar (P.O.) for Respondent.

Date of hearing: 16th April, 2014.

CORRIGENDUM

ADNAN AHMED, MEMBER (JUDICIAL-II).---Due to typographical mistake the word "194-B(2)" has been typed instead of "194-A (1)" in the order dated 03-07-2014. Therefore in partial modification in aforesaid order the word "194-B(2)" shall be substituted by word "194-A(1)" after the word "under section" appearing at line No.3 of para 1 of the aforesaid order.

2.Brief, facts of the case as stated in the impugned order are that a credible information was received on 04.09.2013 that smuggled/non duty paid LED/LCD TV are brought at inter City Bus Terminal, Yousuf Goth, Karachi from Quetta for onward supply to the other cities of Sindh using a modus oprendi that the smuggled/non duty paid LED/LCD TV's are firstly taken to Saddar Market and then refrigerators are loaded in the back of the vehicle to cover the LED/LCD TV's and also a receipt of a wholesale shop is made and kept in the vehicle to show lawful possession. It was further informed that LED/LCD TV's were being loaded on a Mazda Vehicle bearing registration No. JY-0080. Pursuant to the said information ASO Team posted at Mobile Squad Check Post super Highway near Tool Plaza was alerted to foil the attempt. Reportedly the said loaded vehicle was taken from Yousuf Goth to Hashoo Centre, Sadder, Karachi from where 3 refrigerators were loaded on the vehicle to disguise the law Enforcement Agencies. At about 2:00 pm the said vehicle was squaded near Toll Plaza heading towards Hyderabad. Accordingly, the said vehicle Mazda bearing Regn No.JY-0080 loaded with cartons of foreign origin/assorted LCD/LED TV's and refrigerators duly covered with "Tarpal" was intercepted. The occupant/driver/owner of the vehicle identified as Noor Muhammad S/o Muhammad Bux was asked about the goods loaded on the vehicle to which he replied that refrigerators were loaded on the vehicle being dissatisfied with his statement and having specific information a search was made in the presence of Mushirs namely Farhan Khan and Muhammad Danish which revealed that the foreign origin assorted LED/LCD TV's and refrigerators were loaded/kept on the vehicle. The 03 refrigerators were kept in the back of the vehicle to cover LED/LCD TV's so as to camouflage the Law Enforcement Agencies, therefore the driver/owner of the vehicle was asked about the legal import documents or any other documents to substantiate lawful possession/purchase/ importation of the said goods to which he produced one receipt of M/s. Whole Sale Point A/5, Hashoo Centre, A.Haroon Road, Saddar, Karachi in the name of SS. Hyderabad dated 04.09.2013 and told that one Haji Saeed was the owner of the goods and he has loaded the goods on his vehicle against hire. However, as there existed specific information and being dis-satisfied with the receipt produced the goods so recovered were taken into possession to ship the same ASO, HQ NMB- wharf Karachi along with the said occupant/driver/owner of the vehicle to complete further legal formalities. The seizing officer examined the LED/LCD TV's and refrigerators off loaded from Mazda bearing Registration No. JY-0080 which resulted in recovery of 107 numbers of foreign Origin LED/LCD TV's and 03 Refrigerators . The occupant/driver/owner of the vehicle was asked to call the owner of the goods but no body came forward to claim the goods. As there existed and specified information that the goods were loaded from intercity bus terminal Yousuf Goth RCD, Highway, Karachi and the fact that non duty paid goods were brought into country through unauthorized routes other then the routes as declared under Sections 9 and 10 of the Customs Act, 1969, therefore aforesaid goods valuing to Rs. 2,967,069.00 involving duty and taxes CD Rs. 42,998.00 Sales Tax 31675.00 AST - 6540.00 and Income Tax 11227.00 totaling Rs. 1,913, 645.00 were seized along with conveyance/vehicle under section 168 of the Customs Act, 1969 for violation of Sections 2(s) 16 and 156 (2) and 157(2) of the Customs Act, 1969 punishable under clauses (8) (89) and (90) of Section 156(1) ibid read with Section 3(1) of Imports and Exports Control Act, 1950. Notice under Section 177 of the Customs Act, 1969 was served upon the owner of the goods care of occupant driver/owner of the vehicle and the occupant driver/owner of the vehicle accordingly.

3.The respondents Nos. 2 and 3 submitted the reply to the show cause notice issued by respondent No. 3 substantiated with purchase receipt and verified by the seller upon receipt of notice under section 26 of the Customs Act, 1969 from the subordinate of appellant. The respondent No. 3 after conducting multiple hearing passed order-in-original dated 26.12.2013. Para 12 of the order is relevant, same is reproduced here-in-under:---

"I have gone through the case record and heard the arguments of both sides in detail. The emerging facts of the case are that the department have seized LED/LCD/Plasma TV's 107 Nos. and Refrigerators 03 Nos. along with conveyance/vehicle. It has been mainly contended on behalf of the respondent/owner of the goods that all these goods were purchased from local market in Karachi City for his sale point/retail shop which he owns in the name of S.S. Electronics, Hyderabad. He also produced various cash memos in this behalf. It has been further stated that these cash memos were produced also before the Seizing Agency on which they carried out verification as well. However, the department did not own such verification during adjudication proceeding, therefore the department was asked to verify the memos. The department issued notices under Section 26 to the shop keepers in reply the shop keepers acknowledged that all these goods were sold by them. The department as such does not deny that the goods were bought from the local market. However, stand of the department is this that these are foreign origin imported goods and are to be dealt under section 156(2) of the Act. According to which the onus of discharging the burden of proof rest on the respondent. It is important to observe that these goods have not been seized on the border. The department has reported the seizure at Toll Plaza, and has stated that the goods were en-route to Hyderabad having been loaded from Karachi. It is therefore clear that these were being transported from Karachi city. Keeping the seized TV's and the fridges in view it is also clear that in order these should be taken to be smuggled, prima facie these should be of foreign origin. In this context the seize goods appears to be in 02 categories. Part of the goods shows the foreign origin as Thailand, Malaysia etc. Whereas, the remaining parts only shows the name of the company as "Samsung" without any indication of foreign country where it was made. It is well known that many locally made goods bearing name of foreign brands/logos are found selling openly in the market without indicating the origin. The people buy these for these brands on much cheaper price although it is also known that such goods are manufactured locally. In this case the department has initiated contravention/seizure proceeding on the charges of 2(s) i.e. of smuggling, whereas the impugned/seized goods i.e. LED/LCD TV's etc partly show only the name of the company and do not show the manufacturing origin as such. It is also the fact that the Samsung LED/LCD TV's are being manufactured in Pakistan by M/s. Orient, Lahore. Beside this LG and Haier range of product including air conditioners and refrigerators are being also manufactured in Pakistan. Where only the name of the companies are indicated without showing manufacturing origin. The impugned TV's LED/LCD are the same as the Make and Models. Being manufactured by M/s. Orient, Lahore in the name of Samsung Co. in Pakistan. Given this position I cannot agree with the smuggling charges with respect to the items which are being made by the local manufacturer in the name of Samsung and Haier bearing the same appearance with regards to Design, Model and Logo etc. How can the section 156(2) ibid be invoked for the goods which are being manufactured locally? How would any buyer know that these can be smuggled when the manufacturing of these goods and the market sale is well established? In the specific circumstances/fact of this case in order to invoke Section 156(2) ibid there must be some prima facie foreign origin indication with respect to foreign manufacturing country on the goods only then the goods can be differentiated from the those locally made. I therefore hold that the seized goods i.e. TV's and Fridges which do not show foreign manufacturing origins and the likes of which are already been manufactured in Pakistan, can not be brought in the fold of Section 156(2). All such tv's, fridges were therefore identified immediately and relief. However, the other parts of the seized goods where foreign origin is indicated on the goods such as "Made in Thailand, Malaysia etc." the burden of proof lies on the respondent to bring forth the evidence that these were duty paid and brought legally in Pakistan. The respondent hold the cash memo which were verified by the department from which it can be gathered that the respondent has bought these from the market in good faith, however, these goods clearly bear the foreign manufacturing origin. Therefore, the evidence for legal imports of these goods is required which he has not able to do so. Therefore, the charges raised in the Show Cause notice in respect of these goods stand established. These goods are accordingly confiscated along-with conveyance Mazda Truck Reg. No: JY-0080's since TV's are notified items under Section 2(s) therefore these cannot be redeem on fine in terms of S.R.O. 499(I)/2009 dated 13.06.2009. The confiscation is therefore outright. A penalty of Rs.25000.00 (twenty five thousand) is also imposed on the respondent. As for the seized conveyance it is allowed to be redeemed on payment of fine equal to 20% of its assessed value in terms of S.R.O. 466(I)/2009. Dated 13.06.2009 a penalty of Rs.10,000.00 (Ten thousand) is also imposed on the owner/claimant of the vehicle.

4.The appellant Messrs Haji Saeed Ahmed has challenged the order of the respondent No. 2 by way of Appeal No. K-123/2014. Mr. Obayd Mirza/Nadeem Ahmed Mirza (Advocates/Consultants) on behalf of the appellant and reiterated the arguments incorporated in the memo. of the appeal and emphasized that:--

(i)The respondent No. 2 in order dated 26.12.2013 failed to distinguish or discuss the law, instead made academic discussion of personal nature in regards to fiscal statute, which is not sustainable in comparison to the Law and the judgment of Hon'ble Superior Courts of Pakistan. Hence erred in passing the order and the same is not sustainable in law as the same is clearly contrary to the Law/Rules, being erroneous and not in consonance of law, equity and natural justice.

(ii)That upon receipt of the contravention report, it was mandated upon the respondent No. 2 to look into the actual facts of the case and the applicable provision of the Act, Rules and Regulation independently and fairly. Instead he completely relied upon the version of the officials of respondent No. 1 and mechanically signed the show cause notice on the basis of the contravention report forwarded to him by the official of the respondent No. 1, rendering it nullity to the law laid down by the Superior Courts of Pakistan. Reliance is placed on the reported judgment 2004 PTD 369 Messrs Zeb Traders, v. Federation of Pakistan. Wherein their lordship of the High Court held in unambiguous terms that:

"The proceeding before Adjudicating Officer, under the Customs Act, 1969 are in the nature of quasi judicial proceedings and issuance of notice under section 180 of the Customs Act, is very important documents. The decision to issue show cause notice is to be taken by the Collector, Adjudication, by application of independent mind and not merely signing the draft show cause notice submitted by the investigation agency separate from the Adjudication Department and each category of officers are required to perform their respective functions/duties under the law. The practice to submit draft show cause notice by the Director General of Intelligence and Investigation to the Collector Adjudication is depreciated."

(iii)That the respondent No. 2 instead of determination of the fact that as to whether the goods were lawfully purchased or smuggled by the appellant ventured into determination of the origin of the goods, which was not warranted in the given circumstances of the case. Therefore, while doing so the case in question stood ousted from his power/jurisdiction as in terms of Notification S.R.O No. 886(I)/2012 dated 18.07.2012, in the cases involving technical violation of import export restrictions without any involvement of any evasion of duty and taxes as evident from Sub-Para (d) of Para 3 of the Notification. In the instant case there deems to be no revenue loss as evident from the charter of Order-in-Original, wherein respondent deliberated on the origin of the goods as against the charge of smuggling, which was not the subject matter of show cause notice. While laying hand on the instant case the respondent has transgressed the authority vested with the Officer of the Executive Collectorate. Beside ventured outside the scope of show cause notice, rendering the issuance of show cause notice and Order-in-Original being in-flagrant violation of law and as such coram non judice, hence void and ab-initio as held in reported judgments 2002 PTD 2457, PLD 1971 Supreme Court 61, PLD 1973 Supreme Court 236, PLD 1964 SC 536, 2001 SCMR 838 and 2003 SCMR 1505, In PLD 1996 Karachi 68, 2006 PTD 978 and PLD 1971 Supreme Court 184, 1987 SCMR 1840 and 2004 PTD 1449.

(iv)That it is pre-requisite to serve notice prior to seizure of the goods under Section 171 of the Customs Act, 1969. No notice under section 171 of Customs Act, 1969 has been served either on the appellant or the Truck driver. This is in complete derogation of Article 4 of the Constitution of Islamic Republic of Pakistan and the expression of section 171 ibid rendering the seizure and subsequent proceeding illegal as held in reported judgment 1983 PCr.LJ 19; 1983 CLC 786; 1985 PCr.LJ 286, 2004 PCr.LJ 1958, 1983 PCr.LJ 620 and 1983 PCr.LJ 623.

(v)That intercepting goods transported with in the territory of Pakistan, by the respondent No. 1 is tantamount to abuse of power as no interception can be made unless a provision exist in the Act or any notification is in field directing the appellant to provide documents of import or purchase prior to booking of the goods meant for transportation within the territory of Pakistan and the driver of the carrier should contains those documents during the journey. No such section is available in the Act and nor any notification is in field. Resultant interception of the transported goods at Truck Stand near Custom House by the officer of respondent No. 1 is patently illegal rather confirms without any ambiguity abuse of power and high handedness.

(vi)That irrespective of the referred in above illegality it is appropriate for the appellant to state that it was mandated upon the respondent No. 1 to act within the frame work of the definition of the word "smuggle" given in subsection 2(s) of the Customs Act, 1969. For ease verbatim of the same is reproduced here-in-under:

(a)"smuggle" means to bring into or take out of Pakistan in breech of any prohibition or restriction for the time being in force, or evading payment of customs duties or taxes leviable thereon,

(i)Gold bullion, silver bullion, platinum, palladium, radium, precious stones, antiques, currency, narcotics and narcotic and pyschotropic substances; or

(ii)Manufactures of gold or silver or platinum or palladium or radium or precious stones, and 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.

(b)That customs ports etc. as expressed in clause (iii) of Section 2(s) are notified through various notifications in terms of Section 9 of Customs Act, 1969. Whereas, the border area of Pakistan Territory, whereas restriction on the possession of goods in certain areas (borders) as expressed in Section 177 ibid is also notified vide Notification No. S.R.O. 118(I)/83 dated 12.02.1983, ear marking the area of 5 miles adjacent to the Frontier of Pakistan with India and Iran to be the area to which Section 177 of the Customs Act, 1969 shall apply.

(vii)That the goods purchased and transported by the appellant were within the territory of Pakistan and those were not brought into Pakistan in breach of any prohibition or restriction for the time being in force under the Import Policy Order, 2013 or while evading payment of customs duties leviable thereon as expressed in clause (a) of Section 2(s). Nor were brought into Pakistan by any other route then the routes expressed in section 9 or 10 of the Customs Act, 1969 or from any other place then a customs station as per clause (a)(iii) of Section 2(s) instead were transported from Karachi to Hyderabad and those cannot be considered as smuggled by any stretch of imagination. Hence interruption of carrier loaded with the goods, their detention and seizure subsequently for the purpose of adjudication is nullity to the definition of the word "Smuggle" rendering the entire act of the respondent No. 1 and the respondent No. 2 right from interruption till issuance of show cause notice and subsequently passing order-in-original as ab-inito, null and void.

(viii) That it is also imperative for the appellant to add that in the light of expressed provision of Section 2(s) and Section 177 of the Customs Act, 1969 and S.R.O. 118(I)/83 (Exhibit "J") confirms that the transportation of goods within the territorial limit of Pakistan do not constitute an offence, meaning thereby that transportation of goods from Karachi to Hyderabad through Super High Way supported by valid bilties and interruption of those at Truck Stand near Custom House by the respondent No. 1 cannot be termed as smuggling. It would also not be out of place to state that after clearance of the goods from Customs, either from Area of Sea Port or Dry Port, they are out of the ambit of Customs Department including the respondent No. 1 and any subsequent checking during transportation of those goods within the territory of Pakistan is beyond their jurisdiction as none of the provision of the Customs Act, 1969 authorizes any designated official of Customs to interrupt the local transportation of goods on sham pleas of smuggling. Reference is placed on the order of the Tribunal in Customs Appeal No.K-719/02, H-720/02, H-686/03, Q-776/04, 2005 PTD (Trib.) 135 and PLD 1991 Supreme Court 630.

(ix)That the respondents have also look into the 2nd aspect for confirmation of smuggling i.e. whether the goods so transported are retrieved from the hidden/false cavities made for time being or artificially made as defined in clause (b) of Notification No. 499(I)/2009 dated 13.06.2009, (Exhibit "K") meaning thereby the space behind a truck for loading goods would not fall within the definition of false cavity. Resultant, goods transported within the territory of Pakistan with the exclusion of area given in Notification No. 118(I)/83 dated 12.02.1983, cannot be presumed even through a figment of imagination as smuggled. The appellant purchased/transported the goods at the back of the carrier openly. Resultant, the goods loaded on the carrier cannot be intercepted, detained, seized as has been done by the respondent No. 1. The said act amounts to exercise of powers based on forced construction of law, rendering the same nullity to law. Reliance is placed on the order of Customs Appellate Tribunal in Customs Appeal H-185/2009 Noor Muhammad S/o Muhammad Gul, Imtiaz Ali S/O Pir Buksh v. Deputy Collector of Customs, (Adjudication) Hyderabad and Lahore High Court reported judgment 2010 PTD 2015 Collector of Customs v Rehmat Afridi.

(x)That the 3rd aspect to be looked into, for determination of the goods purchased/transported by the appellant or any other person is that whether those are freely available in the local market without any curb or restriction, if available then such goods does not fall within the degree of smuggled as defined in Section 2(s) of the Customs Act, 1969 and are presumed to have been tax and duty paid. The said opinion stood validated from the reported judgment of Apex Court 1995 SCMR 387 Sikandar A. Karim v. The State. The Double Bench of the Hon'ble Supreme Court comprised of Justice Saeed-uz-Zaman Siddiqui and Justice Mukhtiar Ahmed Junejo held in unambiguous term that "If the item alleged to be smuggled by the prosecution were freely available in the open market and the import of such goods were not banned in the country, presumption could arrive that the goods in question were lawfully brought in the country unless contrary was shown". As per dictum laid down by the Hon'ble Supreme Court the Appellate Tribunal in Customs Appeal No.339/2000 Mr. Muhammad Hanif v. The State and 301/2003 Nasser Ahmed v. Collector of Customs, Sales Tax and Excise, Quetta that held that "to produce legal import documents is nothing but to put undue pressure on the business community inspite of the fact that it has been observed number of time by the Supreme Court of Pakistan that the goods which are freely available in the market are presumed to be have been legally imported and duty paid. Even otherwise no reasonable ground has been given in the order-in-original that even for the sake of arguments, it is taken that the receipt produced by the appellant and issued by Saifullah Khan have no legal status then also it cannot be concluded that the said transaction was illegal, making way to call upon appellant to produce import documents.

(xi)That irrespective of the referred in above proposition of law, if it is considered for a while that the stance taken by the respondents is correct, even then the onus to prove the allegation of smuggling rest on their shoulders under Articles 117 and 121 of Qanun-e-Shahadat (10 of 1984) as per laid down law by the Superior Courts of Pakistan namely S.M. Anwar Sethi v. South British Insurance Company Ltd. PLD 1975 Kar. 458; Barkat Ali v. The State PLD 1973 Kar. 659; Cross on evidence 1967, 3rd Edn., London Butterworth; A Practical Approach to Evidence by Peter Murphy 1988 3rd Edn. London, Black Stone Press Ltd; The Modern Law of evidence by Adrian Kean 1985, 1st Den. Oxford, Professional Books Ltd; Mst Safia Begum v. Mst. Malkani and another PLD 1965 Lah. 576; Akber Ali v. Ehsan Ellahi PLD 1980 Lah. 145; Government of Pakistan v. Moulvi Ahmed Saeed 1983 CLC 414; Muhammad Sarwar v.. Fazal Rehman 1982 CLC 1286 Sardar Ghulam Nabi Khan v. Azad Government of State of Jammu and Kashmir 1984 CLC 325; Eastern Rice Syndicates v. CBR PLD 1959 SC (Pak) 364; The Collector Central Excise and Land Customs v. Imdad Ali 1969 SCMR 708 and Messrs Latif Brothers v. Deputy Collector of Customs, Lahore 1992 SCMR 1083.

(xii)That the said proposition of law was explained with clarity by their Lordship of High Court of Sindh in reported judgment PLD 1996 Karachi 68 Kamran Industries v. Collector of Customs (Exports) and Order of the Custom Tribunal in Customs Appeal No. K-391/04 Mr. Muhammad Mir v Collector of Customs (Adjudication), Karachi. While holding that:

"For every offence for which the accused is charged under the Customs Act he shall have to disprove the allegation of the Customs Authorities is entirely without any obligation upon the Customs Department to adduce evidence, it would amount to affording unfettered, naked and arbitrary discretion to the authorities who may at their sweet will make out false cases against importers without the need of proving the sanctity of their actions. Such cannot be the intention of Parliament while the Courts are under an obligation to place such construction on statutes which would be beneficial to the widest extent and which would make the legislation operate fairly, justly and equitably and not unreasonably (see Mst. Zainab v. Kamal Khan (PLD 1990 SC 1051). This Court is also of the view that a construction is to be placed upon statutes which would minimize the discretion vested upon the executive authorities. As absolute power corrupts an interpretation fettering the discretion of the executive authority would be more in line with the principles of equity and justice. The issue regarding the applicability of section 187 is to be looked from another angle i.e. in case we were to hold that due to Section 187 the entire burden to dispute the entire case rest upon the accused alone. The executive authorities would be let loose and given a wide, naked and arbitrary discretion to operate without any guidelines which would then leave section 187 susceptible to a Constitutional challenge upon its vires on this score alone. By the interpretation as proposed above any redundancy or illegality would also be avoided.

(xiii) That despite of the fact that the respondents failed to discharge the onus of proof in regards to leveled allegation, the appellant despite not warranted under law voluntarily supplied the copies of the corresponding documents of the goods transported from Karachi to Hyderabad for resolving the non-issue created by the respondent No. 1 and which stood verified from the seller as evident from the reply to the notices served on them under Section 26 of the Customs Act, 1969. Confirmation in regards to 45 TV's and 3 Refrigerators were completely discarded and ignored without any basis and lawful excuse beside in absence of availability of power of detaining/seizing of the goods.

(xiv) That with the submission of the corresponding documents against each bilty the appellant discharged burden of proof and there was no cause or reason for the respondent No. 1 to detain, seize the goods purchased/transported by the appellant for the purpose of adjudication and nor for the respondent No. 2 for ordering of release of 62 TV's and confiscation of the rest, rendering his act in derogation to the judgment of High Court of Lahore in C.A. No. 68/2002 Collector of Customs, Lahore v. S.M. Saleem. The Division Bench of the Lahore High Court, Lahore dismissed the appeal and maintain the order of the Tribunal while holding in Paras 6 and 7 that:

"6 it is not denied before this Court that the goods subject matter of this appeal were importable. It is further not denied that the respondent had produced receipts before the Adjudicating Officer but he did not give any enable reason whatsoever as to why this piece of documentary evidence was not relied upon. The operative part of the judgment of the Deputy Collector Customs (Adjudicating) is to the effect that "since no documentary evidence indicating the proper import thereof has been furnished. It is hereby concluded that watches and watches part seized in this case have been brought into country without payment of duty and taxes."

7. the afore-referred view is not in consonance with the law laid down by the August Supreme Court in Pakistan v. Ziauddin (PLD 1962 Supreme Court 440). Wherein the receipt of purchase and payment of money produce by the person from whom smuggled items were recovered was accredited with truth and the court held that he has discharged the burden of proof mandated in section 177-A of the Sea Customs Act, 1978 at page 446 it was observed as under:

The Section requires reasonable belief on the part of the person seizing the goods that an act to defraud the govern-ment of duty has been committed. If a person purchases goods as in an ordinary market then in the absence of any suspicious circumstances of some definite fact leading to that inference the custom officer is not entitled to a reasonable belief that the Government has been defrauded of the duty payable on the goods. The ordinary method of the import of goods from outside into Pakistan is that they come through the customs barrier and the duty payable is infact paid. The presumption therefore, with respect to any goods which may be sold in the open market in the absence of an indication to the contrary would be that duty has been paid on them.

(xv)That irrespective of the referred in above factual aspect and discharge of burden of proof by the appellant despite not laid upon him, the appellant felt appropriate to rely upon judgment of the Hon'ble Supreme Court of Pakistan reported 2007 SCMR 10 Collector of Customs, Sales Tax and Central Excise v. Prof. Muhammad Khan and 6 other. Wherein their lordship of the Supreme Court examined the aspect that whether Directorate General-FBR can demand import documents of any goods or item within the city or during their transport within the territory of Pakistan or not and held that:

"law certainly provided protection to a public servant for doing lawful act in discharge of his duty but no such immunity was to be claimed by a person for committing illegal act in his official capacity as a public servant in the absence of proof that the goods in possession of a person were brought into Pakistan in violation of any law, customs authorities and such other public functionaries had no authority to detain such goods merely on suspicion---petitioner had showed documents of registration in his name to customs official who, having detained the car, insisted the production of import documents for release of car---- Detention of car was an act of highhandedness which was committed through misuse of official authority and it might constitute misconduct in terms of Civil Servants (Efficiency and Discipline) Rules, 1973 read with Removal from Service (Special Powers) Ordinance, 2000---- Exercise of official authority in a manner in which a person was made victim of misuse of process of law was violative of constitutional guarantees of rights of citizens and a person responsible for violation of such rights of citizens and a person responsible for violation of such rights was to face legal consequences--- Act of customs officials might also constitute misconduct, therefore, concerned authorities were under legal obligation to initiate appropriate proceedings against officials involved in the matter."

(xvi) The appellant carves his right to add any fresh grounds at the time of hearing beside placing any valid incriminating evidence/ documents

5.For the appeal of Noor Muhammad K-122/2014 the counsel argued and stress on the following grounds taken in the memo. of appeal:--

The respondent in order dated 26.12.2013 failed to distinguish the act and commission of the appellant in relation to the provision of the act and rules and regulation framed there under as evident from the following:--

(a)That the impugned order-in-original was not dispatched/served on appellant as evident from the fact that the order should had been dispatched to the appellant on his address immediately upon passing date i.e. 26.12.2013. To the contrary, the same was not dispatched the appellant obtained the copy of the order from Mr. Haji Saeed Ahmed.

(b)That it is appropriate for the appellant to state further that on plain reading of impugned order-in-original issued by the respondent shows that it is not a speaking orders in which the role of appellant has been distinguished. Such orders have been deemed to be without jurisdiction in which the competent authorities have not discussed questions of fact and questions of law addressed by the taxpayer. This position has been discussed at length in the case of National Bottlers decided by the Hon'ble Lahore High Court reported as 1994 CLC 2181 wherein it has been ruled that orders passed by the authorities were not only laconic and sketchy but there was no application of mind. It was further observed that it is now a well settled law that authority exercising statutory powers of adjudication appeal and revision affecting valuable rights of the parties act in quasi judicial if not judicial capacity and it must pass a speaking order duly supported by reasoning showing due application to facts and law applicable while disposing off the case before it. Orders lacking this criteria have been declared to be without lawful authority and of no legal effect and hence beyond jurisdiction and corem non judice. The operational portion of the subject order-in-original contains inherent legal infirmities, deficiencies and substantive illegalities, which are in direct contradiction with the provision of the Customs Act, 1969, rules and regulation framed there-under and judgments of the Superior Judicial fora. The said position is also fortified by the judgments of Superior Courts reported as 2005 YLR 1019, 2007 PTD 2500, 2004 PTD 1973, 2005 YLR 1719, 2003 PTD 777, 2003 PTD (Trib) 2369, 2002 MLD 357, 1983 CLC 2882, 2005 PTD 2519, 2005 PTD 1189, 2003 PTD 2369. As regards non-speaking orders the Hon'ble Supreme Court of Pakistan has time and again disapproved the passing of such perfunctory orders in the cases invoking valuable rights of the parties. It is settled law that the judicial order must be a speaking order manifesting by itself that the Court has applied its judicial mind to the issues and the points of controversy invoked in the case. Furthermore, when the reasons would not be forthcoming, obviously the Appellate Court would be deprived of the views of the subordinate Court. In any way the impugned orders which are not speaking orders and devoid of reasons are not sustainable in law instead mala fide and based on intellectual dishonesty and as such are in contravention of law declared by the Hon'ble Supreme Court of Pakistan in various cases reported as PLD 1995 SC (Pak) 272, PLD 1970 SC 158, PLD 1970 SC 173 and 1984 SCMR 1014.

(c)That upon receipt of the contravention report, it was mandated upon the respondent No. 2 to look into the actual facts of the case and the applicable provision of the Act, Rules and Regulation independently and fairly. Instead he completely relied upon the version of the officials of respondent No. 1 and mechanically signed the show cause notice on the basis of the draft of the show cause notice forwarded by them along with the contravention report, rendering it nullity to the law laid down by the Superior Courts of Pakistan. Reliance is placed on the reported judgment 2004 PTD 369 Messrs Zeb Traders v. Federation of Pakistan. Wherein their lordship of the High Court held in unambiguous terms that:--

(d)That for intercepting goods transported with in the territory of Pakistan, by the official of respondent No. 1 is tantamount to abuse of power as no interception can be made unless a provision exists in the Act or any notification is in field directing the transporter to obtain documents of import or purchase prior to booking of the goods meant for transportation within the territory of Pakistan and the driver of the trailer/carrier should contains those documents during the journey. No such section is available in the Act and nor any notification is in field. Resultant interception of the transported goods at Multan by the officer of DG (I&I)-FBR, Multan Range is patently illegal rather confirmed without any ambiguity abuse of power and high handedness.

(e)That irrespective of the referred in above illegality it is appropriate for the appellant to state that it was mandated upon the Directorate General-FBR to act within the frame work of the definition of the word "smuggle" given in subsection 2(s) of the Customs Act, 1969. For ease verbatim of the same is reproduced here-in-under:

"smuggle" means to bring into or take out of Pakistan in breech of any prohibition or restriction for the time being in force, or evading payment of customs duties or taxes leviable thereon, Gold bullion, silver bullion, platinum, palladium, radium, precious stones, antiques, currency, narcotics and narcotic and pyschotropic substances; or

Manufactures of gold or silver or platinum or palladium or radium or precious stones, and 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

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.]

That customs ports etc. as expressed in clause (iii) of Section 2(s) are notified through various notifications in terms of Section 9 of Customs Act, 1969. Whereas, the border area of Pakistan Territory, whereas restriction on the possession of goods in certain areas (borders) as expressed in Section 177 ibid is also notified vide Notification No. SRO 118(I)/83 dated 12.02.1983, ear marking the area of 5 miles adjacent to the Frontier of Pakistan with India and Iran to be the area to which Section 177 of the Customs Act, 1969 shall apply.

(f)That the goods transported by the appellant were from Karachi to Hyderabad and those were not brought into Pakistan in breach of any prohibition or restriction for the time being inforce or while evading payment of customs duties leviable thereon as expressed in clause (a) of Section 2(s). Nor were brought into Pakistan by any other route expressed in section 9 or 10 of the Customs Act, 1969 or from any other place than a customs station as per clause (a)(iii) of Section 2(s) instead were transported through proper agreement and those cannot be considered as smuggled by any stretch of imagination. Hence interruption of carrier loaded with the goods, their detention and seizure subsequently for the purpose of adjudication is nullity to the definition of the word "Smuggle" rendering the entire act of the Directorate General -FBR and respondent right from interruption till issuance of show cause notice as ab-initio, null and void.

(g)That it is also imperative for the appellant to add that in the light of expressed provision of Section 2(s) and Section 177 of the Customs Act, 1969 and S.R.O. 118(I)/83 confirms that the transportation of goods within the territorial limit of Pakistan do not constitute an offence, meaning thereby that transportation of goods from Karachi to Hyderabad through Super High Way and interruption of those at Truck Stand near Customs House by the official of respondent No. 1 cannot be termed as smuggling. It would also not be out of place to state that after clearance of the goods from Customs, either from Area of Sea Port or Dry Port, they are out of the ambit of Customs Department including the Directorate of Intelligence and Investigations and any subsequent checking during transportation of those goods within the territory of Pakistan is beyond their jurisdiction as none of the provision of the Customs Act, 1969 authorizes any designated official of Customs to interrupt the local transportation of goods on sham pleas of smuggling. Reference is placed on the order of the Tribunal in Customs Appeals Nos. K-719/02, H-720/02, H-686/03, Q-776/04, 2005 PTD (Trib.) 135 and PLD 1991 Supreme Court 630.

(h)That the respondents Nos. 1 and 2 have also to look into the 2nd aspect for confirmation of smuggling i.e. whether the goods so transported are retrieved from the hidden/false cavities made for time being or artificially or the vehicle was exclusively used for the smuggled goods as defined in clause (b) of preamble Notification No. 499(I)/2009 dated 13.06.2009, meaning thereby open space at the hind of a truck for loading goods would not fall within the definition of false cavity and neither transported by him within the territory of Pakistan with the exclusion of area given in Notification No. 118(I)/83 dated 12.02.1983, cannot be presumed even through a figment of imagination as smuggled. The appellant intended to transport the goods at the hind of the carrier openly. Resultant, the carrier can be intercepted, detained, seized as has been done by the official of respondent No. 1 and neither the vehicle can be ordered to be confiscated and release of it on redemption fine and penalty by respondent No. 2. The said act amounts to exercise of powers based on forced construction of law, rendering the same nullity to law. Reliance is placed on the order of Customs Appellate Tribunal in Customs Appeal H-185/2009 Noor Muhammad son of Muhammad Gul, Imtiaz Ali son of Pir Buksh v. Deputy Collector of Customs, (Adjudication) Hyderabad and Lahore High Court reported judgment 2010 PTD 2015 Collector of Customs v. Rehmat Afridi.

(i)That irrespective of the referred in above proposition of law, if it is considered for a while that the stance taken by the official of respondent No. 1 is correct that the goods transported by the appellant are smuggled and his vehicle is used exclusively for the transport of the smuggled goods, the ultimate burden to prove the said fact rest on the shoulders of the officials of respondent No. 1 under Articles 117 and 121 of Qanun-e-Shahadat (10 of 1984) as per laid down law by the Superior Courts of Pakistan namely S.M. Anwar Sethi v South British Insurance Company Ltd PLD 1975 Kar. 458; Barkat Ali v. the State PLD 1973 Kar. 659; Cross on evidence 1967, 3rd Edn., London Butterworth; A Practical Approach to Evidence by Peter Murphy 1988 3rd Edn. London, Black Stone Press Ltd; The Modern Law of evidence by Adrian Kean 1985, 1st Den. Oxford, Professional Books Ltd; Mst Safia Begum v. Mst Malkani and anothers PLD 1965 Lah. 576; Akber Ali v. Ehsan Ellahi PLD 1980 Lah. 145; Government of Pakistan v. Moulvi Ahmed Saeed 1983 CLC 414; Muhammad Sarwar v. Fazal Rehman 1982 CLC 1286 Sardar Ghulam Nabi Khan v. Azad Government of State of Jammu and Kashmir 1984 CLC 325; Eastern Rice Syndicates v. CBR PLD 1959 SC (Pak) 364; the Collector Central Excise and Land Customs v Imdad Ali 1969 SCMR 708 and Messrs Latif Brothers v. Deputy Collector of Customs, Lahore 1992 SCMR 1083.

(j)That the said proposition of law was explained with clarity by their Lordship of High Court of Sindh in reported judgment PLD 1996 Karachi 68 Kamran Industries v. Colllctor of Customs (Exports) and Order of the Custom Tribunal in Customs Appeal No. K-391/04 Mr. Muhammad Mir v. Collector of Customs (Adjudication), Karachi. While holding that:

"For every offence for which the accused is charged under the Customs Act he shall have to disprove the allegation of the Customs Authorities is entirely without any obligation upon the Customs Department to adduce evidence, it would amount to affording unfettered, naked and arbitrary discretion to the authorities who may at their sweet will make out false cases against importers without the need of proving the sanctity of their actions. Such cannot be the intention of Parliament while the Courts are under an obligation to place such construction on statues which would be beneficial to the widest extent and which would make the legislation operate fairly, justly and equitably and not unreasonably (see Mst. Zainab v. Kamal Khan (PLD 1990 SC 1051). This Court is also of the view that a construction is to be placed upon statutes which would minimize the discretion vested upon the executive authorities. As absolute power corrupts an interpretation fettering the discretion of the executive authority would be more in line with the principles of equity and justice. The issue regarding the applicability of section 187 is to be looked from another angle i.e. in case we were to hold that due to Section 187 the entire burden to dispute the entire case rest upon the accused alone. The executive authorities would be let loose and given a wide, naked and arbitrary discretion to operate without any guidelines which would then leave section 187 susceptible to a Constitutional challenge upon its vires on this score alone. By the interpretation as proposed above any redundancy or illegality would also be avoided.

(k)The appellant carves his right to add any fresh grounds at the time of hearing beside placing any valid incriminating evidence/documents

6.The Assistant Collector of Customs, MCC of Preventive filed cross objection on the Memo. of Appeal on behalf of the respondent which read as follows:--

(i)That 107 sets of foreign origin LED/LCD TV's and three (03) Refrigerators were intercepted and subsequently seized on 04.09.2013 by the staff of Anti -smuggling organization, NMB Wharf, Karachi during transportation, at Super Highway near Toll Plaza, Karachi, the aforementioned LED/LCD TV's were smuggled/non duty paid and brought at intercity Bus Terminal Yousuf Goth, Karachi from there the same were loaded on Mazda Mini Truck bearing registration No. JY0080 for transportation to onward destination.

(ii)That the above mentioned smuggled and non duty paid LED/LCD TV's were firstly taken to Saddar market and 03 refrigerators were loaded on the back of the vehicle to camouflage the smuggle goods and receipt of entire goods was made to substantiate the legal importation/possession of the smuggled goods to disguise the Law Enforcement Agencies.

(iii)That as per facts and circumstances of the case a receipt in the name of S.S. electronics, Hyderabad was being produced by the respondent No. 2 (occupant/driver/owner of the vehicle) on behalf of the respondent No. 1, issued by whole sale point A/5, Hashoo Centre, Abdullah Haroon Road, Saddar, Karachi having no NTN No.

(iv)That during the adjudication proceeding the respondent No. 1 had submitted 05 more sale receipt viz (1) Messrs Surmawala, A-4, Hashoo Centre, A.Haroon Road, Saddar, Karachi (ii) Abdullah Nawaz Electronic, Shop No. A-3 and L-36, Hashoo Centre, Saddar, Karachi (iii) Messrs Wholesale point Hashoo Centre, Saddar, Karachi. (iv) Messrs Crown Electronic, Hashoo Centre, Saddar, Karachi and (v) Messrs Fahad Electronics, Hashoo Centre, Saddar, Karachi which is contrary to the respondent previous act as at the time of interception only 1 receipt was issued by M/s Wholesale point was produced, where under the whole goods were sold out by the said shop. This dissimilar action of the respondents shows an after thought and clear cut involvement of possession/transportation of smuggled/non duty paid goods in terms of subsection (s) of Section 2 of the Customs Act, 1969.

(v)The sale receipts were further investigated and notice under section 26 of the Customs Act, 1969 were issued to the above mentioned seller through courier service (TCS) where under the valid legal documents pertaining to the import of seized LED/LCD/TV's and Refrigerators were sought.

(vi)The replies from the shop keeper were deposited by hand in the office of Assistant Collector, Headquarter-I through the respondents and the same were not furnished in terms of Section 215 of the Customs Act, 1969 no import documents pertaining to seized goods were provided by the purported seller of the smuggled goods. The operative parts of the replies of the above mentioned seller are reproduced as under:

M/s. Surmawala:

(i)It is submitted that we are dealing the business of LED/LCD TV's as retailer, not as an importer.

(ii)We sale purchase LED/LCD TV's locally manufactured or assembled in open market.

(iii)We also confirm that we had sold forty (40) pieces Samsung 32E-4003 Samsung LED TV's are 3 pieces Refrigerators Heir to Messrs S.S. Electronics Hyderabad vide bills Nos. 085 and 102 dated 03.Sep., 2013 which are locally manufactured/assembled in Lahore.

(iv)The information listed at "A" to "K" called from us by the Model Customs Collectorate of Preventive, Custom House, Karachi is not warranted as the goods sold to our customers are locally manufactured assembled by the companies in Lahore.

(v)As our business turn-over does not come under the threshold required for Sales Tax Registration under Sale Tax Act, 1990 therefore we do not file Sales Tax monthly Return.

M/s. Abdullah Nawaz Electronics:

(vi)It is submitted that we are dealing the business of LED/LCD TV's as retailer, not as an importer.

(vii)We sale purchase LED/LCD TV's locally manufactured or assembled in open market.

(viii) We also confirm that we had sold twentyfive (25) pieces Samsung 32E-4000 Samsung LED TV's to Messrs S.S. Electronics Hyderabad vide bill No. 0463 dated 03.Sep., 2013 which are locally manufactured/assembled in Lahore.

(ix)The information listed at "A" to "K" called from us by the Model Customs Collectorate of Preventive, Custom House, Karachi is not warranted as the goods sold to our customers are locally manufactured assembled by the companies in Lahore.

(x)As our business turn-over does not come under the threshold required for Sales Tax Registration under Sale Tax Act, 1990 therefore we do not file Sales Tax monthly Return.

M/s. Whole Sale Point:

(xi)It is submitted that we are dealing the business of LED/LCD TV's as retailer, not as an importer.

(xii)We sale purchase LED/LCD TV's locally manufactured or assembled in open market.

(xiii) We also confirm that we had sold ten (10) pieces Samsung 32E-420 Samsung LED TV's & 05 Pieces Sony 32 EX 330 to M/s. S.S. Electronics Hyderabad vide bill No.1949 dated 04.Sep., 2013 which are locally manufactured/assembled in Lahore.

(xiv) The information listed at "A" to "K" called from us by the Model Customs Collectorate of Preventive, Custom House, Karachi is not warranted as the goods sold to our customers are locally manufactured assembled by the companies in Lahore.

(xv)As our business turn-over does not come under the threshold required for Sales Tax Registration under Sales Tax Act, 1990 therefore we do not file Sales Tax monthly Return.

M/s. Crown Electronics:

(xvi) It is submitted that we are dealing the business of LED/LCD TV's as retailer, not as an importer.

(xvii) We sale purchase LED/LCD TV's locally manufactured or assembled in open market.

(xviii) We also confirm that we had sold twenty (20) pieces Samsung 23 F -4003 Samsung LED TV's & 5 Pieces Sony 32 EX 330 to M/s. S.S. Electronics Hyderabad vide bill No. 197 dated 02.Sep., 2013 which are locally manufactured/assembled in Lahore.

(xix) The information listed at "A" to "K" called from us by the Model Customs Collectorate of Preventive, Custom House, Karachi is not warranted as the goods sold to our customers are locally manufactured assembled by the companies in Lahore.

(xx)As our business turn-over does not come under the threshold required for Sales Tax Registration under Sales Tax Act, 1990 therefore we do not file Sales Tax monthly Return.

M/s. Fahad Electronics:

(xxi) It is submitted that we are dealing the business of LED/LCD TV's as retailer, not as an importer.

(xxii) We sale purchase LED/LCD TV's locally manufactured or assembled in open market.

(xxiii) We also confirm that we had sold five (5) pieces Samsung 40F-5000 Samsung LED TV's and two (02) 43F Samsung LED TV's to M/s. S.S. Electronics Hyderabad vide bill No. 164 04.Sep., 2013 which are locally manufactured/assembled in Lahore.

(xxiv) The information listed at "A" to "K" called from us by the Model Customs Collectorate of Preventive, Custom House, Karachi is not warranted as the goods sold to our customers are locally manufactured assembled by the companies in Lahore.

(xxv) As our business turn-over does not come under the threshold required for Sales Tax Registration under Sales Tax Act, 1990 therefore we do not file Sales Tax monthly Return.

7.The representative of respondent No. 1 on behalf of the respondent No. 2 argued and emphasized on the ground taken in the memorandum of cross objection submitted under subsection (4) of Section 194A of the Custom Act, 1969 in both appeals which read as follows:--

(i)That the contents of para are denied being incorrect, baseless and mis-leading facts of the case are that the contents of this para are irrelevant to the case as the case was originated by the respondent No. 1 on 04.09.2013, how the order was passed by the respondent No. 2 on 22.04.2011 and by respondent No. 3 on 30.12.2012 whereas, in the instant case there is no respondent No.3. However, it is quite true that the above named appellant is a habitual offender and always involved in criminal activities reportedly he has been sent to the prison vide FIR No.P-02/2014 dated 06.01.2014 when he tried to smuggled Foreign Origin Counter feed currency viz UAE Dirham 86900.00 and 31000/- Saudi Riyal to Dubai.

(ii)The contents of this para are denied as the same are based on assumption and surmising. The respondent No. 1 seized the true smuggled/non duty paid goods which were being transported to Hyderabad. The appellant failed to substantiate its legal possession/importation/transportation. Before issuance of Show Cause Notice by the respondent No. 2 or legal aspect were checked and found according to law. The precedent quoted by the appellant is irrelevant to the case.

(iii)That he contents of sub-para are denied being incorrect, baseless and mis-leading. Fact of the case are that the seized goods brought into the country through unauthorized routes other then the routes mentioned in Sections 9 and 10 of the Customs Act, 1969. The appellant and his accomplices failed to prove legal import and payment of duty and taxes of the seized goods in terms of Section 156(2) ibid. The said goods are liable to confiscation for violation of Sections 2(s), 16, 156(2) and 178 of the Customs Act, 1969 punishable under clauses 89, 90 and Section 166(1) ibid. Sub-para (d) of para 3 of S.R.O. 886(I)/ 2002 says that the cases of the following categories shall not be adjudicated by the adjudicating officer of the Collectorate of Customs (Adjudication) namely, (d) cases involving technical violation of import or export restrictions without involvement of any evasion of duty and taxes. But in the instant case the appellant did not provide single evidence regarding payment of duty and taxes of the impugned goods. The appellant caused loss of Government Revenue amounting to Rs.19,13,645.00. No violation of law has been made in Show Cause Notice and Order-in-Original in terms coram non judice because the Adjudicating Officer is empowered to adjudicate the case in terms of Section 179 of the Customs Act, 1969 and the precedent incorporated by the appellant are irrelevant to the instant case.

(iv)The contents of sub-para are denied being incorrect and misleading. Fact of the case are that the before making seizure the notice in terms of Section 171 of the Customs Act, 1969 were served upon the appellant which is available on record.

(v)The contents of sub-para are denied being incorrect and misleading. Fact of the case are that the respondent No. 1 is duly empowered under section 164 of the Customs Act, 1969 to stop and search the conveyance and also duly empowered to seek the smuggled goods in terms of Section 168 ibid. The respondent No. 1 did not misused the power conferred upon him. The respondent No. 1 is also authorized to perform the Anti-smuggling activities vide S.R.O. 581(I)/2013 dated 18.06.2013.

(vi)That the contents of sub-para are denied being incorrect, concocted, based on surmising and conjectures. The powers exercise by respondent No.1 were according to law. To know the essence of word "smuggling" it is appropriate to understand the concerned section which is incorporated 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 thereon.

(a)Gold bullion, silver bullion, platinum, palladium, radium, precious stones, antiques, currency, narcotics and narcotic and pyschotropic substances; or

(b)Manufactures of gold or silver or platinum or palladium or radium or precious stones, and 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

(c)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.]

As per above definition it is submitted that the appellant did not provide any evidence that the goods were imported legally and duty and taxes have been paid leviable thereon, secondly, as per (ii) of the above definition the seized goods have been notified by the FBR vide Notification S.R.O. 566(I)/2005 dated 06.06.2005 for the purpose of Section 2(s), thirdly the appellant did not provide any evidence regarding legal import through the routes declared under sections 9 and 10 of the Customs Act, 1969. In the light of aforementioned facts the seized goods can be construed as smuggled and non duty paid and brought into the country through un-authorized routes.

(vii)That the sub-para are denied being un-correct, baseless and mis-leading. Facts of the case are that the appellant failed to provide the legal imported documents of the impugned goods. It has already been submitted the only one sale receipt issued by the Messrs Whole Sale Point in the name of Messrs S.S. Electronics, Hyderabad was provided by the appellant (owner of the vehicle) at the time of interception where under the entire goods were sold out by that shop. Further it is submitted that the appellant did not claim the ownership before respondent No. 1 directly at the time of adjudication proceeding the appellant furnished 5 more sale receipt of various shops in support of his legal possession, contrary to his previous act. The notices under section 26 of the Customs Act, 1969 was issued to the concerned shops for acquiring the legal import documents of the seized goods, to ascertain the legality or illegality of the same, which were not provided by the concerned shop keeper as mentioned vide para 6 here-in-above. Thereafter the appellant took the plea that the goods purchased by him were locally manufactured by Messrs Orient Electronics (Pvt.) Ltd. at Lahore. Which were approached by the respondent No. 1 to confirm whether the same were made by them or otherwise. Messrs Orient Electronics (Pvt.) Ltd., Lahore vide letter dated 08.11.2013 that the seized goods were not manufactured/assembled by them (copy of letter is annexed). In the light of aforementioned facts and circumstances, it is crystal clear that the impugned goods were smuggled which were rightly seized under section 168 of the Customs Act, 1969 for violation of Sections 2(s), 16, 156(2), 178 and 157(2) of the Customs Act, 1969 punishable under clauses 89 and 90 of Section 156(1) ibid the contents of sub-para are repeated and the reply of the same has already been submitted here-in-above, hence needs no comments.

(viii) The contents of sub-para are denied being fabricated, concocted and based on classification. Fact of the case are that no import documents i.e. GD was provided by the appellant to determine that the goods were legally imported and the leviable duty and taxes have been paid. It has already been mentioned in the seizure report that the impugned goods were brought from Quetta to inter-city bus terminal, Yousuf Goth, Karachi thereafter were taken to Saddar Market from their refrigerators were loaded and bogus receipt of whole goods was manipulated to disguise the Law Enforcement Agency. It is the modus operandi which is being used for movement of smuggled goods. Question arises here that the goods cannot be smuggled without cavities; it was smuggled exclusively through inter city buses and was being transported to Hyderabad without legal import documents in terms of Section 2(s).

(ix)That the contents of sub-para are denied. The appellant neither provided any proof regarding legally importation of such goods nor provided any documents for payment of duty and taxes leviable thereon. The contrary had been shown at the part of the appellant as firstly he provided only one receipt of M/s. Whole Sale Point but at belated stage i.e. during adjudication proceeding he furnished further 5 sales receipt of various shop.

(x)That the contents of sub-para are denied and incorrect, baseless and misleading. Fact of the case are that the case was originated by respondent No. 1 and the goods were seized under Section 168 of the Customs Act, 1969 instead of Pakistan Penal Code. The remedies penalties and the burden of proof are also available under the said Act. Section 156(2) which is reproduced;

"(2) Where [any goods specified in clause (s) of section 2 or in a 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 enforce by or under this Act has been committed in respect of such goods, or that there is intend to commit such act, the burden of proving that no such act has been committed and there was no such intent shall be on the person from whose the possession of the goods were seized." The Articles 117 and 121 of Qanun-e-Shahadat, 1984 is not applicable to the instant case.

(xi)That the precedent reproduced by the appellant has no relevancy to the case as the ratio decidendi and the principal of law are totally different. Hence need no comments.

(xii)That the contents of sub-para are denied being incorrect, baseless and mis-leading. Factual position of the case is that the burden of proof lies upon the appellant in terms of Section 156(2) of the Customs Act, 1969 which has been reproduced hereinabove. The appellant failed to discharge his burden as he did not provide the valid import documents.

(xiii) That the contents of sub-para are denied being incorrect baseless and misleading. Facts of the case are that the smuggled goods were not transported under the goods forwarding company and no bilty was made in this regard. The same was transported on Mazda Truck bearing registration No. JY-0080. The burden of proof lies still on the appellant and he did not discharge the same in terms of section 156(2) of the Customs Act, 1969.

(xiv) That the contents of sub-para are in replication and reply of the same has already been submitted hereinabove. Hence, needs no comments. That further arguments will be advanced before the Hon'ble Court at the time of hearing.

8.Whereas for appellant No. 2 the arguments advanced are same as of appellant No. 1 with the exception of following:

(i)The above named appellant did not comply with the law and committed the offence under Section 157(2) of the Customs Act, 1969 which is reproduced here as under:--

"(2) Every conveyance of what ever kind used in the removal of any good liable to confiscation under this Act shall also be liable to confiscation."

(ii)That the contents of this para are denied being incorrect as the order-in-original dated 26.12.2013 was communicated to the appellant through his consultant which can be confirmed from the concerned file from the Adjudication Officer.

(iii)That the contents of para are denied being incorrect, baseless and misleading. Facts of the case are that the order-in-original is quite clear regarding confiscation and redemption of the seized vehicle. The adjudicating officer has adequate jurisdiction in terms of section 179 of the Customs Act, 1969. Before issuance of said order dated 26.12.2013 all question of facts and question of law were discussed in detail.

(iv)That the contents of para are denied being incorrect and fabricated as it has already been submitted above that the respondent No. 1 has jurisdiction to curb the smuggling activities and seize the smuggled goods under the provisions of Customs Act, 1969. It is humbly submitted that the respondent No. 1 may stop the operation and not to exercise power conferred upon vide section 3 of the Customs Act, 1969 when smuggled goods are moving in the country.

(v)That the contents of para have no relevancy to the case hence need no comments.

(vi)That the contents of para are denied being fabricated, concocted and based on classification. Fact of the case are that it has already been mentioned in the seizure report that the smuggled goods were transported using the modus operandi to load the refrigerator on the vehicle and to issue the sale receipt of entire goods. Further the goods were camouflage with Tarpal at the time of importation. No import documents i.e. GD was provided by the appellant to determine that the goods were legally imported and leviable duty and taxes have been paid. It has already been mentioned in the seizure report that the goods were brought from Quetta to intercity Bus Terminal Yousuf Goth, Karachi thereafter were taken to Saddar Market from there refrigerators were loaded and bogus receipts of the whole goods were manipulated to disguise the Law Enforcement Agencies. It is modus oprendi which is being used for movement of smuggled goods.

(vii)That the contents of para are irrelevant to the case as the ratio decidendi are not same, hence needs no comments.

9.Rival parties heard on 19.12.2012 and case records perused and the following issues are framed for consideration by this forum:--

(i)Whether the respondent No.1 has the powers to intercept and detain the goods transported within the city or territory of Pakistan on suspicion of smuggled goods under Section 164 of the Customs Act, 1969 to be read with S.R.O.371(I)/2002 dated 15.06.2002 in the absence of any notification directing the transporter/driver of the goods to acquire and posses good declaration/bill/purchase receipt of the transported goods ?

(ii)Whether the respondent No. 2 was empowered to adjudicate the instant case in the presence of Notification No. 886(I)/2012 dated 18.07.2012 and to venture outside the scope of show cause notice?

(iii)Whether goods transported within the territory of Pakistan falls within the definition of smuggled goods in terms of Section 2(s) of the Customs Act, 1969 read with Notification Nos. S.R.O. 118(I)/83 dated 12.02.1983 and S.R.O. 499(I)/2009 dated 13.06.2009?

(iv)Whether the good intercepted and detained by the respondent No. 1 during the course of transportation within the territory of Pakistan are freely available in the local market without any restriction, hence ought to be duty paid as held by Superior Judicial Fora in umpteenth reported judgments?

(v)Whether the appellant discharged burden of proof laid upon him under Section 187 of the Customs Act, 1969?

(vi)Whether the respondent No. 1 can ask to pay the leviable duty and taxes on the/purchased goods in the absence of availability of any evidence of smuggling in material particular on which exchequer already received the leviable duty and taxes at the time of sale, in negation to the maxim of "double Taxation" and derogation of the provision of Customs Act, 1969, Sales Tax 1990 and Income Tax Ordinance 2001 and the law laid down by the Superior Judicial fora in umpteenth reported judgments?

(vii)Whether the respondent No. 2 issued the show cause notice after going through the facts of the case and applicable to provision of the Act, Rules and Regulations independently and fairly as held in reported judgment 2004 PTD 369 Messrs Zeb Traders, v. Federation of Pakistan?

10.That as regards issue No. (i), the officials of respondent No. 1 are appointed "Officer of Customs" under Section 3A of the Customs Act, 1969 and they drive powers for functioning under notification S.R.O. No. 581(I)/2013 dated 18.06.2013 within the territory of Karachi and its Ports and Airports, Fish Harbor, Karachi Ibrahim Hyderi. The Pakistan Customs Waters and from Gawadar to Thatta, as per serial No. 10(x), but its jurisdiction stood ousted from Pakistan Customs Water from Gawadar to Lasbella, which falls within the jurisdiction of MCC Gawadar in terms of Serial No. 13(viii) meaning thereby that territorial jurisdiction from Gawadar to Gadani is not within its jurisdiction. The jurisdiction conferred under serial 10 does not at all means that they have un-fattered powers to detain and seize any goods transported within city or country on the pretext that the goods so transported are notified as prone to smuggling under S.R.O. No. 566(I)/2005 dated 06.06.2005 and import of which is allowed freely and available for purchase in the local market for the general public without any conditionality or terming such goods as smuggled the initial burden of proof lies upon the respondent No. 1 to be discharged through incriminating documentary evidence and trail of the goods right from the point of smuggling to sale. No such documents are available in the instant case confirming that the goods were smuggled from where and who transported those to Karachi, how these landed in electronic market and purchased by the appellant No. 1, rendering the charge of smuggling based on surmises conjectures and fishing/rowing inquiry and as such of no legal effect as held by the Superior Judicial Fora in reported judgment PLD 1992 Supreme Court 485, The Assistant Director Intelligence and Investigation v. B.R Herman Mohattas (Pvt.) Ltd., Karachi that "it cannot make a rowing or fishing inquiry or issue a notice by merely shooting in the dark in the hope that it will be able to find out some material out of those documents and then charge the party of irregularity or illegality". The said principle was subsequently held by the Superior Judicial Fora in reported judgments (1957) 32 ITR 89, (1967) 64 ITR 516, I.T.As. 2400/2401/KB/91-92, 1995 PTD (Trib.) 580, 1995 PTD (Trib.) 1152, (1982) 1381 ITR 742, 1993 PTD 206,1997 PTD (Trib.) 2209, 2013 PTD (Trib.) 353 and 2013 PTD (Trib.) 1913.

Notwithstanding, the Notification No. 581(I)/2013 dated 18.06.2013 also no where delegate powers to the official of respondent No. 1 under Section 2(s) and Section 177 of the Customs Act, 1969, containing for the elaboration of the word "smuggle" and "restriction on possession of goods in certain areas", and these also does not includes the goods purchased locally and transported within the territory of Pakistan. Likewise, the Customs Act, 1969 contains no Section or any Notification is in field empowering the officials of respondent No. 1 to either intercept or detain any goods transported by any person himself or through public carrier within the territory of Pakistan with the exclusion of area expressed in Section 177 of the Customs Act, 1969 read with Notification No. 188(I)/83 dated 12.02.83 nor in regards to demand of import or purchase documents either from the driver of the carrier or from the owner of the transported goods through the public carrier. The officials of respondent No. 1 stretched their powers beyond the provision of the Customs Act, 1969 and Notification S.R.O. 581(I)/2013 dated 18.06.2013, which is not permitted under law. Rendering their act of intercepting the vehicle and detaining the loaded goods and demand of import/purchase documents of the transported goods from the driver or the shipper of the goods without power/jurisdiction, hence coram non judice as held by Superior Judicial Fora in reported judgments Major Syed Walayat Shah v. Muzaffar Khan and 2 others (PLD 1971 SC 184), Omer and Company v. Controller of Customs, (Valuation): (1992 ALD 449(1) Karachi AAA Steel Mills Ltd. v. Collector of Sales Tax and Central Excise Collectorate of Sales Tax (2004 PTD 624), PLD 1976 Supreme Court 514 Ali Muhammad v. Hussain Buksh and others and PLD 2001 Supreme Court 514 Land Acquisition Collector, Noshehra and others v. Sarfraz Khan and others, STA 444/03, STA 465/07, 2006 SCMR 129 Director, Directorate General of Intelligence and Investigations and others v. Messrs Al-Faiz Industries (Pvt.) Ltd. and others 2010 PTD (Trib) 1636 and 2010 PTD 465,2010 PTD (Trib.) 2158, 2011 PTD (Trib.) 1010, 2011 PTD (Trib) 1680, 2011 PTD (Trib.) 2086, The issue No. (i) is answered in negative.

11.That as regard the issue No. (ii), the respondent No. 2 while adjudicating the case has considered it a case of determination of origin of the goods transported from Karachi to Hyderabad. While putting reliance on Section 156(2) of the Customs Act, 1969, clauses (i), (ii) & (v) is relevant, hence reproduced for ease:--

"156(2)(i) if any goods imported by sea or air be unloaded or attempted to be unloaded at any place other than a customs ports or custom-airport declared under Section 9 for unloading of such goods; or (ii) if any goods be imported by land or inland water through any route other than a route declared under clause (c) of Section 9 for import of such goods; or (v) if any imported goods be brought into any bay, gulf, creek or river for the purpose of being landed at a customs port."

From the expression of above clauses, it is evident that the emphasis is on goods imported with the exception of their unloading other than declared port/airport under section 9, nothing is available on record that the transported goods were unloaded and cleared from the port/airport in contradiction to section 9 ibid. The respondent No. 1 has not indicated the place of unloading and subsequent transport, likewise the show cause is also silent in regards to the land route, bay, gulf, creek or river from where these were smuggled leading strong credence to the fact that no dispute in regards to the status of the goods, instead that these are not available in the local market for sale, to prove the said stance the respondent No. 1 has not placed a single piece of evidence leading strong credence that these goods are available in the market for purchase of general public. Resultant, the question of importability and determination of origin is out of context, determining the status of the transported/seized goods by the respondent No. 2 on the basis of origin is totally uncalled for. The said act of respondent No. 2 also ousted the subject case from his jurisdiction as it squarely falls within the ambit of import restriction under the Import Policy Order, 2013 and the question of origin falls within the ambit of technical violation of import and export restriction without the involvement of any evasion of duty and taxes, such type of cases has to be adjudicated by the Executive Collectorate in terms of para 3 of Notification No. 886(I)/2012 dated 18.07.2012. The said act of the respondent No. 2 is also outside the charter of show cause notice as nothing has been spelled out in regards to origin of the goods as determined by the respondent No. 2 in the show cause notice travelling beyond the scope of show cause notice is not permitted as held in reported judgments 1987 SCMR 1840 and 2004 PTD 1449, wherein it has been held by the Hon'ble Supreme/High Courts that " .... Order of adjudication being ultimately based on a ground which was not mentioned in the show cause notice was palpably illegal on the face of it." Rendering the order without power/jurisdiction as suffering from legal infirmity and fail the test of judicial scrutiny. The issue No (ii) is answered in negative.

12.That as regard to issue No. (iii), it is appropriate to reproduce the provision of Section 177 of the Customs Act, 1969 and notification SRO. 118(I)/83 dated 12.02.1983 for better understanding the word smuggle and for specified area for leveling the charge of smuggling with the exception of Section 2(s), which has been reproduced twice in paras 3(vi) and para 4 (e) supra:--

Section 177--Restriction on the possession of goods in certain areas:- (i) This section shall apply to such areas adjacent to the frontier of Pakistan as may, from time to time, be notified by the Board in the official Gazette.

(2)In any area to which this section for the time being applies, no person shall have in his possession or control any such goods or class of goods in excess of such quantity or value as may from time to time be notified by the (Federal Government) or, with the previous approval of the (Federal Government) by the Provincial Government, in the official Gazette, except under a permit granted by the Government which issued the notification in respect of the particular goods or class of goods or by an officer authorized by such Government.

Notification of the Frontier Border area under Section 177

Notification No. SRO 118(I)/83 dated 12th February, 1983---In exercise of the power conferred by subsection (1) of section 177 of the Customs Act, 1969 (VI of 1969) and in supersession of its notification No. S.R.O 309(I)/70 dated 22.12.1970 the Central Board of Revenue is pleased to notify the area 5 mile adjacent to the Frontier with India and Iran to be the area to which the said section shall apply.

That after examining the Section 2(s), it is observed that the definition of 2(s) can be applied only if both of two forms are fulfilled. Each of this form have two "limbs" and the form applies if either of its limbs is applicable. These position are narrated here-in-below:

(a)Form (A): The impugned goods should be brought into or taken out of Pakistan either (i) in breach of any prohibition or restriction for the time being in force, or (ii) by evading payment of customs duty and other taxes leviable thereon; and

(b)Form (B) : The impugned goods should be (i) either those specifically listed in the definition, i.e. gold bullion, platinum, radium, etc or be notified by the Federal Government in the official Gazette in case those are not freely available in the local market for purchase by the general public, or (ii) be brought into or taken out of Pakistan by a route other than one declared under section 9 or 10 or from a place other than a customs station.

I am of the view that unless both forms (A) & (B) applies the case does not fall within the definition of "smuggle" and there can be therefore neither any smuggling of the goods nor can they be held to be "smuggled goods". As far as first limb is concern none of the goods specifically mentioned in the definition are relevant present case, therefore for Form (B) to apply, it must be shown that either goods transported have been notified by the Federal Government for the purpose of Section 2(s) and those are not freely available in the local market for purchase by the general public ( the first limb), or (the second limb) the goods in question were brought into Pakistan via route other than one declared in Section 9 or 10 of the Customs Act, 1969 or from a place other than a Customs-Station each of the two limbs of course applied to its own footing i.e., the applicability of one is not dependent on the existence, continuance or occurrence of the other . Obviously, if there is no notification in relation to the goods transported, then the first limb did not apply and it was only the second limb of form "B" that could apply. The importance of this point can be appreciated by looking at it in reverse. If there is no notification in the field (no application of the first limb), and goods are brought into Pakistan by the route declared under Sections 9 and 10 and through a customs-station i.e., the second limb also does not apply) then form "B" would not apply in such a situation, even though there may be an evasion of customs duty and other taxes or breech of any restriction or prohibition (i.e., form (A) applies). The matter would not come within the ambit of 2(s) in other words, there would be no smuggling of goods, which could not therefore be regarded as "smuggled goods". Another aspect has to be look into in the light of Section 177 of the Customs Act, 1969 and Notification No. 118(I)/83 dated 12.02.1983, which is irrelevant and not applicable in the instant case by virtue of the fact that the goods intercepted and detained were not transported by the appellant within 5 miles of India and Iran Borders, instead from Tool Plaza Karachi Super Highway, while the goods were transportation from Karachi to Hyderabad. Resultant, the transporting of the goods by the appellants does not fall within the meaning of "smuggling" and not the goods as "smuggled" through any stretch of imagination.

In addition to the above discussed two forms, the Federal Government carved yet another form vide Notification No. 499(I)/2009 dated 13.06.2009 extending the definition of smuggling and smuggled goods, i.e. "if those were transported through lawfully registered conveyance and containers carrying " goods in false cavities or been used exclusively or wholly for transportation of offending goods under clause (s) of section 2 of the Customs Act, 1969 (IV of 1969)". The Mazda Truck through which the appellant were transporting goods instead at the hind of truck and covering it with tarpal is for safety purpose. i.e. from dust and rain etc., and covering with tarpal does not falls within the definition of false cavities. This is ample to prove that neither the appellant was involved in any type of smuggling nor the goods transported by him are "smuggled goods". Rendering the intercepting of the vehicle and detention and seizure of the goods nullity to law as held by the Tribunal in H-185/2009 Noor Muhammad son of Muhammad Gul, Imtiaz Ali S/O Pir Buksh v. Deputy Collector of Customs, (Adjudication) Hyderabad and Lahore High Court reported judgment 2010 PTD 2015 Collector of Customs v. Rehmat Afridi and Customs Appeal No. K-339/2012 Qaderi Hajveri Goods forwarding Agency v. the directorate General of Intelligence and Investigations-FBR. On the basis of foregoing the Tribunal answered issue No. (iii) in negative.

13.That as regard issue No. (iv), one has to look into the vital fact that as to whether the goods transported by the appellant were freely available in the open market without any restriction, in case those are available then such goods does not falls within the degree of smuggled as defined in Section 2(s) of the/Customs Act, 1969 notification No. 118(I)/83 dated 12.02.1983, S.R.O. 566(I)/2005 dated 06.06.2005 and S.R.O. 499(I)/2009 dated 13.06.2009 and are to be presumed to have been duty paid as held by Supreme Court of Pakistan in reported judgment 1995 SCMR 387 Sikandar A. Karim v. The State. The Double Bench of the Hon'ble Supreme Court comprised of Justice Saeed-uz-Zaman Siddiqui and Justice Mukhtiar Ahmed Junejo held in unambiguous term that "If the item alleged to be smuggled by the prosecution were freely available in the open market and the import of such goods were not banned in the country, presumption could arrive that the goods in question were lawfully brought in the country unless contrary was shown". As per dictum laid down by the Hon'ble Supreme Court the Appellate Tribunal in Customs Appeal No.339/2000 Mr. Muhammad Hanif v. The State and 301/2003 Nasser Ahemd v. Collector of Customs, Sales Tax and Excise, Quetta held that "to produce legal import documents is nothing but to put undue pressure on the business community inspite of the fact that it has been observed number of times by the Supreme Court of Pakistan that the goods which are freely available in the market are presumed to be have been legally imported and duty paid. Even otherwise no reasonable ground has been given in the order-in-original that even for the sake of arguments, it is taken that the receipt produced by the appellant and issued by Saifullah Khan have no legal status then also it cannot be concluded that the said transaction was illegal, making way to call upon appellant to produce import documents. The issue No. (iv) is answered in affirmative.

14.That as regard issue No. (v), that upon submission of purchase bills against the transported good by the appellant No. 1, the respondent No. 1 sought there verification through notice under section 26 of the Customs Act, 1969. Each seller confirmed the genuineness of the bills through a proper reply and this has been admitted by the respondent in their comments with the exception that the reply has not been received as per the expression of Section 215 of the Customs Act, 1969 as those were not dispatched through registered post or through courier instead hand delivered in the office of Assistant Collector of Customs, Head Quarter and reached in his hand thereafter. The delivery of by hand falls within the ambit of any manner as expressed in clause (b) of Section 215. Hence their said plea is without any substance. The respondent No. 1 is also of the view that the same are fake to substantiate his stance nothing has been placed on record with the exception of the submission that since the goods are not manufactured or purchased by M/s. Orient Electronics (Pvt.) Ltd., Lahore, already stood controverted from the fact that the appellant No. 1 neither at adjudication stage nor at appellate contended that he purchased the goods from M/s. Orient Electronic (Pvt.) Ltd, Lahore, instead categorically stated that he purchased from the local market and from the dealers to whom notices under section 26 of the Customs Act, 1969 were issued by the respondent No. 1. None of the seller was put to question in regards to the goods and the bills in accordance with clause (d) of Section 26 by the respondent No. 1, confirming that the transported goods were lawfully purchased through valid bills. Hence, the appellant discharged the burden of proof laid upon him under Section 187 of the Customs Act, 1969 and the respondents failed to prove the charge of "smuggling " or transportation of "smuggled goods". To the contrary, the respondent No.1 despite mandated under Articles 117 and 121 of Qanun-e-Shahadat (10 of 1984) and umpteenth reported judgment referred by the appellant at para 3(x) of the order, failed to discharge burden of proof as the same stood shifted on his shoulders, it is on the person leveling the allegation to proof the charges . The Tribunal feels appropriate to reproduce herein below the verbatim of reported judgment PLD 1996 Karachi 68 and 2012 PTD 428, wherein their lordship of the Hon'ble High Court of Sindh held that:--

23- the next objection raised by the learned Counsel of the respondent is that under section 187 of the Customs Act, 1969 the burden of proof was on the petitioner rather than upon the customs authorities to categorically disproof the allegation of mis-declaration and under declaration leveled by the Customs authorities. In this respect Mr. S.Tariq Ali has contended that ruling relied upon by the petitioner counsel became inapplicable as the law has itself clearly cast the burden upon the petitioner. In order to appreciate this objection it is pertinent to scrutinized the provision of Section 187, which read as follows:-

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 documents prescribed by or under any law for the time being enforce the burden of proving that he has such authority, permit, license or other documents shall lie upon him.

It appears to us that section 187 covers 02 situations which we states as follows:-

(a)When a person is charged with an offence under the Customs Act, 1969 the burden of proof is cast upon him to show that he had the 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;

The situation (b) is not in issue in present case, however, we feel that it provides for an eventuality where a person is found to be in possession of certain goods which falls under a prohibited category or which, in an unlawful manner find place in the possession or custody of the accused. In such case the burden is upon the accused to show that he falls under some exemption or exception to hold such goods. This type of eventuality as envisaged and stated in situation (b) above is essentially a statement of the general principle of law of evidence contains in Article 121 of the Qanun-e-Shahadat that who ever claim to all under preferential or exempt or excepted category must show that he fulfills that condition to fall within that category. This obviously, should not be confused with the factum of possession for which no presumption or burden of proof has been spelt out, in view whereof the possession itself has to be proof independently by the prosecution beyond all reasonable doubts".

It has been further held as under:-

"we feel that it is due to operation of the principle of incidence of burden of proof viz a viz "legal" and "evidential" burdens as discussed above the process of shifting of burdens becomes possible. We have already sighted the opinion of Adrian-Keane and we hold that in order to determine as to which party based the legal or evidential burden would depend on the terms of statute, case-law on the subject as also common sense and equity. In this case we are of the view that in situation in issue i.e. (a) as discussed in para 23 above section 187 cast upon the petitioner-accused only the obligation to make out a prima facie case as it is only the evidential burden which is born upon it. Once the petitioner were to satisfy this evidential burden the legal burden to bring home the ultimate cases shifted upon the customs authorities."

24- it is situation (a) as stated above in para 23 which is directly in issue in this case i.e. whether the burden of proof solely lies on the petitioner to disproof allegation of mis-declaration - mis-description levelled by the customs authorities and whether the customs authorities are under no obligation to lead evidence and discharge any onus of proof. This part of section 187 of the Customs Act, perhaps appeared to be contrary to the general principle of law of evidence contains in Article 117 of Qanun-e-Shahadat that who ever alleges existence of a particular fact must prove the same. There is little doubt that a special law or a particular statute can provide for a distinct regime of rule of evidence then contained in general law. Infact the law goes on as far as providing that the laws of evidence can be altered even by mutual consent and contrast. See S.M. Anwar Sethi v South British Company Ltd, PLD (1975 Karachi 458). However, on a closure scrutiny of the provision of Section 187 and the case law settled by our court. On the subject it appears that in such a situation it is only the evidential and tactical burden of proof which is cast upon the accused while the legal burden to bring home the allegation remains with a prosecution. Before we dilate upon the concept of 02 type of burden of proof and explain the terms " tacticle", "evidential" "legal" burden of proof we shall first discuss the case decided by High Court of Sindh in Barkat Ali v. The State PLD 1973 Karachi 659. In this case the controversy resolved around section 177-A of the erstwhile sea Customs Act, 1878 which catered for a similar situation as has reason in the present case i.e. the same provided the burden of proof upon the accused to disproof the case of the prosecution that his intention was not to defraud the exchequer or evade any prohibition or restriction under the Act. Writing for quote Tufail Ali, Rehman C.J. was of the opinion that the said presumption of burden of proof could not be drawn until the expression of the accused was first taken into consideration. According to the learned judge the normal "principle" was applicable i.e. the accused was entitled to benefit of doubt where he offered a reasonable explanation which was either acceptable or raise the doubt. In such cases the burden then shifted upon the prosecution to establish the case.

The Hon'ble Court also further held in para 25:

"For every offence for which the accused is charged under the Customs Act he shall have to disprove the allegation of the Customs Authorities is entirely without any obligation upon the Customs Department to adduce evidence, it would amount to affording unfettered, naked and arbitrary discretion to the authorities who may at their sweet will make out false cases against importers without the need of proving the sanctity of their actions. Such cannot be the intention of Parliament while the Courts are under an obligation to place such construction on statues which would be beneficial to the widest extent and which would make the legislation operate fairly, justly and equitably and not unreasonably (see Mst. Zainab v. Kamal Khan (PLD 1990 SC 1051). This Court is also of the view that a construction is to be placed upon statutes which would minimize the discretion vested upon the executive authorities. As absolute power corrupts an interpretation fettering the discretion of the executive authority would be more in line with the principles of equity and justice. The issue regarding the applicability of section 187 is to be looked from another angle i.e. in case we were to hold that due to Section 187 the entire burden to dispute the entire case rest upon the accused alone. The executive authorities would be let loose and given a wide, naked and arbitrary discretion to operate without any guidelines which would then leave section 187 susceptible to a Constitutional challenge upon its vires on this score alone. By the interpretation as proposed above any redundancy or illegality would also be avoided.

That with the submission of valid purchase bill and sought verification by the respondent No. 1 from the seller after serving notice under section 26 of the Customs Act, 1969, the burden laid upon the appellant stood discharged and there was no cause or reason for respondent No. 2 to only release 62 TV's instead of the whole lot. Rendering his act unjust, arbitrary and in derogation to the judgment of High Court of Lahore in C.A. No. 68/2002 Collector of Customs, Lahore v. S.M. Saleem. Wherein appeal was dismissed and order of the Tribunal was maintained while observing in Paras 6 and 7 that:--

"6 It is not denied before this Court that the goods subject matter of this appeal were importable. It is further not denied that the respondent had produced receipts before the Adjudicating Officer but he did not give any enable reason whatsoever as to why this piece of documentary evidence was not relied upon. The operative part of the judgment of the Deputy Collector Customs (Adjudicating) is to the effect that "since no documentary evidence indicating the proper import thereof has been furnished. It is hereby concluded that watches and watches part seized in this case have been brought into country without payment of duty and taxes."

7. The afore-referred view is not in consonance with the law laid down by the August Supreme Court in Pakistan v. Ziauddin (PLD 1962 Supreme Court 440). Wherein the receipt of purchase and payment of money produce by the person from whom smuggled items were recovered was accredited with truth and the court held that he has discharged the burden of proof mandated in section 177-A of the Sea Customs Act, 1978 at page 446 it was observed as under:

The Section requires reasonable belief on the part of the person seizing the goods that an act to defraud the government of duty has been committed. If a person purchases goods as in an ordinary market then in the absence of any suspicious circumstances of some definite fact leading to that inference the custom officer is not entitled to a reasonable belief that the Government has been defrauded of the duty payable on the goods. The ordinary method of the import of goods from outside into Pakistan is that they come through the customs barrier and the duty payable is infact paid. The presumption therefore, with respect to any goods which may be sold in the open market in the absence of an indication to the contrary would be that duty has been paid on them.

In alike situation the Hon'ble Supreme Court of Pakistan reported 2007 SCMR 10 Collector of Customs, Sales Tax and Central Excise v. Prof. Muhammad Khan and 6 others. Their lordship examined the aspect that whether Directorate General-FBR can demand import documents of any goods or item within the city or during their transport within the territory of Pakistan or not and held that "law certainly provided protection to a public servant for doing lawful act in discharge of his duty but no such immunity was to be claimed by a person for committing illegal act in his official capacity as a public servant in the absence of proof that the goods in possession of a person were brought into Pakistan in violation of any law, customs authorities and such other public functionaries had no authority to detain such goods merely on suspicion---petitioner had showed documents of registration in his name to customs official who, having detained the car, insisted the production of import documents for release of car---- Detention of car was an act of highhandedness which was committed through misuse of official authority and it might constitute misconduct in terms of Civil Servants (Efficiency and Discipline) Rules, 1973 read with Removal from Service (Special Powers) Ordinance, 2000---- Exercise of official authority in a manner in which a person was made victim of misuse of process of law was violative of constitutional guarantees of rights of citizens and a person responsible for violation of such rights of citizens and a person responsible for violation of such rights was to face legal consequences--- Act of customs officials might also constitute misconduct, therefore, concerned authorities were under legal obligation to initiate appropriate proceedings against officials involved in the matter." That on the basis of Section 187 and Articles 117 and 121 of Qanun-e-Shahadat and the judgments referred in para supras I, answer the issue No. (v) in affirmative.

15.That as regards the issue No. (vi), I note with concern that how the respondent No. 1 determined the value of seized goods under the provision of Section 25 of the Customs Act, 1969 and how they can ask for the duty and taxes, reference is placed to the contravention report and the charter of show cause notice, when in case of smuggled goods no option is available for the respondent to release the goods in the presence of Notification No. 499(I)/2009 dated 13.06.2009. Confirming that the goods of instant case are not smuggled instead are lawfully locally purchased goods, sold after payment of leviable duty and taxes on the value of supply, hence these should had been allowed released unconditionally. Demanding duty and taxes for the second time i.e. from buyer in addition to seller is in derogation of the proposition of law and amounts to double taxation, which is prohibited under the provisions of Customs Act, 1969, Sales Tax Act, 1990 and Income Tax Ordinance, 2001 and the law laid down by the Superior Judicial fora in reported judgments 1992 PTD 593, 2003 PTD (Trib.) 928, 2010 PTD 1515, 2009 PTD (Trib.) 2025, 2011 PTD (Trib.) 1010 and 2014 PTD 752. The issue No. (vi) is answered in negative.

16.That as regards to the issue No. (vii), upon receipt of contravention report, the respondent No. 2 was duty bound to himself determined the fact of the case and the applicable provision of the Act, independently without any influence and fairly. To the contrary, he entirely relied upon the version of the official of respondent No. 1 and mechanically signed the show cause notice prepared by his subordinate on the basis of the said contravention report. Rendering the show cause notice nullity to the law and as such without any substance. The said opinion has been adopted time and again by the Superior Judicial Fora that the adjudicating authority himself has to apply his mind in issuing the show cause notice. Reference is place to one judgment being the most pr cis reported at 2004 PTD 369 Messrs Zeb Traders v. FOP, wherein it has been held in unambiguous terms that "The proceeding before Adjudicating Officer, under the Customs Act, 1969 are in the nature of quasi judicial proceedings and issuance of notice under section 180 of the Customs Act, is very important documents. The decision to issue show cause notice is to be taken by the Collector, Adjudication, by application of independent mind and not merely signing the draft show cause notice submitted by the investigation agency separate from the Adjudication Department and each category of officers are required to perform their respective functions/duties under the law. The practice to submit draft show cause notice by the Director General of Intelligence and Investigation to the Collector Adjudication is depreciated." The issue No. (vii) answered in negative.

17.In view of the what has been discussed above and particularly in the light of law, the whole proceeding are infested with inherent legal infirmities and substantive illegalities "tantamount" to patent violation of mandatory statutory provisions and that too, in utter disregard of the principles of law settled by the superior judicial fora as quoted "Supra", the impugned show cause notice and orders-in-original are set aside being illegal, unlawful and without jurisdiction. Be that as it may, the detention, seizure and contravention report prepared by respondent No.1 is also held to be illegal, unlawful and accordingly cancelled/vacated. The appeals are allowed in the manner and to the extent as dilated supra and respondent No. 1 is directed to deliver the goods to the appellant No. 1 and return the amount of Rs. 110,000.00 deposited by the respondent No.2 as security for interim release of his truck.

RR/94/Tax(Trib.)Order accordingly.

Haji SAEED AHMED VS ANTI-SMUGGLING ORGANIZATION, 2016 PTD-CUSTOMS-APPELLATE-TRIBUNAL-LAHORE 659 (2014)

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