MUHAMMAD YOUNAS VS SUPERINTENDENT, CUSTOMS INTELLIGENT AND INVESTIGATION, FAISALABAD, 2018 PTD-CUSTOMS-APPELLATE-TRIBUNAL-LAHORE 1056 (2016)

Customs Act (IV of 1969)---

----Ss. 2(s), 16, 18, 156(1)(89), 157, 168 & 178---S.R.O. No.499(I)/ 2009, dated 13-7-2009---Smuggling---Seizure and confiscation of truck loaded with container of smuggled goods---Truck was intercepted and on checking, foreign origin cloth was found loaded in the container---Driver of the truck could not produce documentary evidence showing legal import or lawful possession/purchase of the cloth---Recovered cloth was seized under S.168 of the Customs Act, 1969---Truck along with container allegedly used for transportation of smuggled cloth, was also seized under S.157 of the Customs Act, 1969---Adjudicating proceedings culminated into passing of impugned order-in-original, whereby cloth along with truck was seized and confiscated outrightly---Validity---Under the criminal law, confiscation was generally used as a means of depriving certain criminals of the fruits of their crimes---Under Customs Act, 1969 confiscation of transport vehicles seized, while transporting smuggled goods fell within the ambit of criminal law---Purpose of S.157 of the Customs Act, 1969 was to penalize and discourage clandestine involvement of owners of conveyance used in assistance of commission of an offence under Customs Act, 1969---Object of confiscation, was mainly to penalize perpetrators of the offence of smuggling impliedly, it was not the purpose of legislature to penalize the owner of vehicle unless any connivance was proved---Case of the department was not that truck in question was apprehended while trying to smuggle goods into Pakistan or caught in the act while pilfering goods from a customs area; or that same was detained while removing goods from a customs bonded wherehouse; or a private bond; or that the impugned merchandise was found surreptitiously hidden inside the truck---Fact was that cargo carrier was apprehended while transporting freely tradable cloth under normal course of intercity haulage---Owner of truck in question had not been charged with assistance or connivance in the impugned offence---Adjudicating Officer, in absence of any incriminating charge or evidence, had mechanically confiscated impugned vehicle as a consequence of transportation of smuggled goods---Customs Authorities, did not posses unbridled powers to confiscate a property---Section 157 of the Customs Act, 1969 could not be applied in strict and absolute terms as a consequence of smuggled goods---Owner of the truck could not be penalized unless adequate proof of his involvement was proved---No prima facie direct/adequate evidence was available to prove that the owner of the truck was involved in the heinous offence of smuggling---Impugned order was modified to the extent that truck in question was ordered to be unconditionally released to its lawful owner.

Malik Shakeel for Appellant.

Ms. Amna Parveen for Respondents.

JUDGMENT

OMAR ARSHAD HAKEEM, MEMBER (JUDICIAL).--(1). This judgment shall dispose of an appeal filed against Order-in-Original No.22/2015 dated 17.11.2015 passed by the learned Collector Customs (Adjudication), Lahore.

2.Precise facts for deciding the core controversy involved in the instant appeal are that the staff of Customs Intelligence and Investigation-FBR, Range Office, Faisalabad intercepted a truck No. TLQ-588 loaded with container CYKU-698358-0. The driver introduced himself as Muhammad Younas. On cursory checking foreign origin cloth was found loaded in the container. The driver informed that he loaded the said cloth from a godown situated at TPX Area Karachi and the same was to be unloaded at M/s. Leopard Courier Service, Faisalabad. He further informed that the owner of the said cloth was Irfan Machhera. Thorough search of the container led to the recovery of foreign origin cloth weighing 8877 Kgs. On demand the driver of the truck could not produce documentary evidence showing legal import or lawful possession/ purchase of the said cloth. Therefore the recovered cloth being smuggled one was seized under section 168 of the Customs Act, 1969. The vehicle along with container used for transportation of smuggled cloth was also seized under section 157 of the Customs Act, 1969.

3.Accordingly a show-cause notice was issued to the appellants for contravention of sections 2(s), 16 and 18 of the Customs Act, 1969 and 3(1) and 3(3) of the Imports and Exports (Control) Act, 1950 punishable under sections 156(1)89, 157 and 178 of the Customs Act, 1969 and were called upon as to why the seized goods along with vehicle should not be confiscated under the aforementioned provisions of law besides penal action as warranted in law. The adjudication proceedings culminated into passing of an impugned order-in-original which reads as under:--

"In the light of above findings it is found that the documents produced by the respondents do not correspond or match with the seized cloth at all. This proves that the seized cloth is smuggled one and all the documents and the sales tax is voices have been managed/manipulated just to give cover to the seized smuggled cloth. Thus the cloth measuring 144926 yards claimed by M/s. Imran Enterprises and Success International Karachi as well as unclaimed measuring 174646 yards for being smuggled one/non duty paid is ordered to be confiscated outrightly under clause 89(i) of section 156(1) of the Customs Act, 1969 read with S.R.O. 499(I)/2009 dated 13.06.2009.

As regards the seized Trailer No. TLQ-588 along with container since has been used wholly/exclusively for transportation of the smuggled cloth therefore the same is also ordered to be confiscated outrightly under section 157(2) of the Customs Act, 1969 read with clause (b) of preamble of S.R.O. 499(I)/2009 dated 13.06.2009."

4.Being aggrieved by the said order the appellant has filed the instant appeal before this Tribunal on the following grounds:--

(a)That impugned order is illegal, bad in law null and void defective in nature and not meets ends of justice being goods were booked by Leopard, Courier Services (Pvt.) Limited from Shipper.

(b)That appellant was bona fide either the goods being loaded handed aver by Leopard Courier Services (Pvt.) Limited for deliver from Karachi to Faisalabad were smuggled one or imported lawfully.

(c)That confiscation of carrier absolutely illegal being there was not any collusion rest/proved by the agency through documentary evidence or through detailed deliberation.

(d)That all relevant documents were produced to carrier by a well reputed Courier Services (Pvt.) Limited which was well versed about lawful possession of goods had been received and subsequently being delivered from Karachi to Faisalabad.

(e)That it is evident from immediate query conducted by agency at the interception of truck the appellant replied that goods were loaded from TPX Area Karachi and was to be unloaded at M/s. Leopard Courier Services (Pvt.) Limited Faisalabad. The appellant further replied that consignor of goods was Irfan Machhera Karachi.

(f)That Leopard Courier Services (Pvt.) Limited itself admitted that shipment was booked front Irfan Machhera Karachi which clearly indicates that appellant was bona fide transporter being goods were booked by Courier Company and possession of lawful documents rest with company and not with appellant.

(g)That there was not anywhere agency taken plea about collusion of appellant in show-cause notice neither in written reply to show-cause notice hence impugned order passed by respondent No.2 absolutely beyond the scope of show-cause notice.

(h)That written reply of appellant had also not entertained while passing impugned order and infringed basic rights provided by constitution of Islamic Republic of Pakistan to every citizen.

5.Heard. Record examined.

6.Suffice to say that under the criminal law confiscation is generally used as a means of depriving certain criminal of the fruits of their crimes. That under the Customs Act, 1969 confiscation of transport vehicle seized, while transporting smuggled goods falls within the ambit of criminal law and the evident purpose of section 157 of the Customs Act, 1969 is to penalize and discourage clandestine involvement of owners of conveyance used in assistance of commission of an offense under the Act.

7.We further note that the object of confiscation under the Customs Act, 1969 is mainly to penalize perpetrators of the offence of smuggling impliedly it is not the purpose of legislators to penalize the owner of vehicle unless any connivance is proved. Conclusively speaking, transportation of freely traded items like the impugned merchandise cannot mechanically be construed as assistance in violation of the provisions of Customs Law. It is not the case of the respondent department that the Truck bearing registration No. TLQ-588 was apprehended while trying to smuggle goods into Pakistan or caught in the act while pilfering goods from a customs area or that the conveyance was detained while clandestinely removing goods from a customs bonded warehouse or a private bond or that the impugned merchandise was found surreptitiously hidden inside the Truck. Fact of the matter is that cargo carrier was apprehended while transporting freely tradable cloth under normal course of intercity haulage.

8.In order to arrive at a correct interpretation of section 57 of Customs Act, 1969, we have referred to a judgment of Hon'ble Supreme Court of Pakistan in case reported as PLD 1974 SC 5 wherein effect of Section 168 of the erstwhile Sea Customs Act, 1898 was duly considered and discussed, it would be pertinent to mention here that section 157 of Customs Act, 1969 and Section 168 of Sea Customs Act, 1898, with regard to confiscation of conveyance are in pari materia with each other. A comparison is therefore outlined below for ease of orientation;

Section 168 Sea Customs Act, 1898 thus reads;

Packages and contents included in confiscation of goods.--The confiscation of any goods under this act includes any package in which they are found, and all the other contents thereof.

Also conveyances and animals used in removal.---Every vessel, cart or other means of conveyance and every horse or other animal used in the removal of any goods liable to confiscation under this act shall in the like manner be liable to confiscation.

Tackle etc. included in confiscation of any vessel under this act includes her tackle, apparel and furniture.

That section 157 of Customs Act, 1969 reads thus;

157. Extent of confiscation.--(1) Confiscation of any goods under this Act includes any package in which they are found and all other contents thereof.

(2) Every conveyance of whatever kind used in the removal of any goods liable to confiscation under this Act shall also be liable to confiscation:

Provided that, where a conveyance liable to confiscation has been seized by an officer of customs, the appropriate officer may in such circumstances as may be prescribed by rules, order its release, pending the adjudication of the case involving its confiscation if the owner of the conveyance furnishes him with a sufficient guarantee from a schedule bank for the due production of the conveyance at any time and place it is required by the appropriate officer to be produced.

(3) Confiscation of any vessel under this Act includes her tackle, apparel and furniture.

9.A comparison of section 168 of Sea Customs Act, 1898 and section 157 of Customs Act, 1969 reveals that so far as confiscation of conveyances used in carriage of goods liable to confiscation are concerned both the provisions have the same effect i.e.;

Every vessel used in the removal of any goods liable to confiscation under this Act shall in the like manner be liable to confiscation.

10.Faced with a similar situation as has arisen in the instant case the Hon'ble Apex Court in judgment reported as PLD 1974 SC 5 laid down the following dictum;

"If the words" liable to confiscation give discretion to the confiscating authority to deprive a person of his property then it follows that this discretion must be exercised upon the principles of natural justice: that is to say, the persons sought to be deprived of the property must be given notice to show cause, they must be given adequate opportunity of putting forward their point of view and the same must receive due consideration. Furthermore, according to the principles now well accepted, no person should be deprived of his property by way of penalty unless it is clear that he is in some measure responsible for assisting or furthering the commission of the offence committed.

No innocent person should be unjustly punished or deprived of his property. This was the cardinal principle which was followed by the learned Judge of Calcutta High Court in the last mentioned case. We too think this was correct principle upon which the authorities should proceed".

11.A perusal of the charge of offences raised in the impugned show-cause notice reveals that the owner of the impugned Truck has not been charged with assistance or connivance in the impugned offence. The adjudicating officer in absence of any incriminating charge or evidence has mechanically confiscated the impugned vehicle as a consequence of transportation of smuggled goods. If the interpretation of law constructed by the learned adjudicating officer is let lose, the power of the executive to penalize an innocent person's property would create travesty of justice impinging upon fundamental rights guaranteed and enshrined under the Constitution of Islamic Republic of Pakistan.

12.A question then arises whether the customs authorities posses unbridled powers to confiscate a subject's property? We do not hesitate to answer that question in negative. There is no room for margin appreciation here. Confiscating a property as a sanction to some breach of law without there being a relationship between the behaviour of the owner or the person responsible for the goods and breach of law is definitely illegal and void and should be discouraged.

13.In view of what has been stated, we are convinced that section 157 of the Act of 1969 cannot be applied in strict and absolute terms as a consequence of smuggled goods. The owner of the vehicle cannot be penalized unless adequate proof of involvement of owner of the vehicle is proved. It is evident from record that no prima facie direct/adequate evidence is available to prove that the owner of the vehicle was involved in the heinous offense of smuggling; Under these circumstances, the impugned order is modified to the extent that Truck bearing registration No.TLO-588 is order to be unconditionally released to its lawful owner.

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

15.File be consigned to record after completion.

HBT/138/Tax(Trib.) Order accordingly.