DIRECTOR, DIRECTORATE OF INTELLIGENCE AND INVESTIGATION FBR, LAHORE VS GUL ALAM, 2018 PTD-CUSTOMS-APPELLATE-TRIBUNAL-LAHORE 1938 (2017)

Customs Act (IV of 1969)---

----Ss. 2(s), 16, 156(1)(89), 157, 168 & 181---SRO No.499(I)/2009, dated 13-6-2009---Smuggling---Seizure and confiscation of vehicle loaded with smuggled goods---Huge quantity of goods of foreign origin were found in the Vehicle (Bus) in question---Adjudication Collectorate after hearing the parties passed order, released the goods on payment of duty/taxes leviable thereon along with redemption fine equal to 20% of the assessed value---Vehicle in question was released on payment of redemption fine of Rs.100,000---Validity---Plea of the department was that under special circumstances of the case, the only order would have been that of confiscation, and option of redemption fine under S.181 of the Customs Act, 1969 was not available to the claimants of seized goods under SRO No.499(I)/2009, dated 13-6-2009---Claimants of seized goods, had admitted the fact that the goods seized were smuggled items---Goods seized were restricted/prohibited goods, thus were "smuggled" goods as defined in S.2(s)(ii) of the Customs Act, 1969, and provisions of cl.89 of S.156 of the Customs Act, 1969 was applicable thereto---Once it was established that the goods confiscated were notified one, it would squarely fell within purview of S.2(s) of the Customs Act, 1969---Federal Board of Revenue, as per SRO No.499(I)/2009, dated 13-6-2009 had notified that no option would be given to pay fine in lieu of confiscation in respect of smuggled goods---In the said SRO, the vehicle found carrying smuggled goods and being used repeatedly for transportation of offending goods, could not be released on payment of redemption fine---Vehicle in question was previously involved in smuggling and was released on payment of redemption fine and warning---Appeal filed by the department, was allowed and orders passed by the fora below, set aside and appeal filed by claimants of the seized goods, was dismissed, in circumstances.

Collector of Customs, Peshawar v. Wali Khan and others Civil Appeal No.1050 of 2009 and Collector of Customs, Multan v. Mohammad Saleem PTCL 2002 CL 80 rel.

Nadeem Mehmood Mian for Appellant.

Hassan Shakir for Respondent.

JUDGMENT

MALIK MANZOOR HUSSAIN, CHAIRMAN/MEMBER JUDICIAL.---Through this single judgment, we intend to dispose of Appeals bearing Customs Appeal No.271/LB/2015 filed by the Department and Custom Appeal No.359/LB/2015 filed by Nawab Gul owner of Bus against single Order-in-Original No.25/2015, dated 21.5.2015 passed by the learned Additional Collector of Customs (Adjudication), Lahore.

2.Briefly stated facts of the case are that an information was received to the effect that a huge quantity of smuggled goods will be brought from Peshawar to Lahore in a bus No. P-2686 (Hyderabad). On the said information, the staff of Intelligence and Investigation FBR, Lahore held picket and at about 4.00 AM, the aforesaid Bus was seen coming from Sheikhupura side and the Customs staff signaled driver of the bus to stop but the driver disobeyed the signal and accelerated the bus towards Lahore. After a chase of about 1 kilometer, the said driver was made to stop the bus and on inspection of the same a huge quantity of foreign origin goods were found available. After completing all the legal formalities, the case was referred to the Adjudication Collectorate and the said Collectorate after hearing the parties passed the impugned order, whereby goods were released on payment of duty/taxes leviable thereon along with redemption fine equal to 20% of the assessed value. The bus was released on payment of redemption fine of Rs.1,00,000/-. Feeling dissatisfied, the Department has filed Appeal No.271/LB/2015 against release of goods on payment of fine and penalty and also against release of vehicle against payment of redemption fine of Rs. 1,00,000/- whereas Appeal No. 359/LB/2015 has been filed by alleged owner of Bus against the imposition of redemption fine on the vehicle.

3.The learned counsel for the appellant/department argued that under special circumstances of this case, the only order would have been that of confiscation and option of redemption fine under section 181 of the Customs Act, 1969 was not available to the respondent under SRO 499(I)/2009 dated 13.06.2009. He further contended that the owners/respondents have admitted that the cloth and other goods recovered were smuggled one and they are ready to pay the customs duty/taxes leviable thereon, there left no option but to confiscate the same or redeem the same on the basis of redemption fine not less than 30% as provided under the law. Lastly it was argued with force that in similar circumstances and with the similar facts the Hon'ble Supreme Court of Pakistan in a recent judgment passed in the case of "Collector of Customs, Peshawar v. Wali Khan and others (Civil Appeal No. 1050 of 2009) dated 19.1.2017", have declared imposition of fine in violation of section 181 of the Customs Act, 1969 as ultra vires and also declared that no option shall be given to pay fine in lieu of confiscation in respect of smuggled goods. He further relied on a judgment passed by the Hon'ble Lahore High Court, Lahore (PTCL 2002 CL 80) "Collector of Customs, Multan v. Mohammad Saleem". With regard to the bus it was argued that the same was repeatedly involved in smuggling and so many cases in the past were registered against the bus.

4.Conversely, the learned counsel for respondent of Customs Appeal No.271 and appellant of Appeal No. 359/LB/2015 contended that all the goods impounded were freely available in the open market, therefore, did not fall within the purview of smuggling. He further contended that the duty/taxes leviable were duly paid, therefore, appeal filed by the Department was not maintainable. Lastly he contended that the imposition of redemption fine of Rs.100,000/- was very harsh and under the circumstances of the case, it was not required to be imposed, as there is no criminal involvement of the vehicle and no secret cavities were found in the bus.

5.Arguments of both the sides were heard on 14.3.2017. However, while concluding arguments from department side, time was sought for furnishing previous record of bus about its previous involvement of smuggling. The case was adjourned twice. However, on 15.5.2017, required record was provided and placed on the file.

6.Perusal of the record reveals that at the initial stage, a request was made by the respondents (claimants of the seized goods) for summary adjudication of the case, without issuance of show-cause notice on the basis of their willingness to pay duty and taxes leviable on the seized goods and on willingness option under section 181 was availed and order for payment of duty/taxes leviable was made. The respondents thereby admitted the facts that the goods seized were smuggled one and comes within the definition of "smuggled" provided in section 2(s) of the Customs Act, 1969 read with SRO 499(I)/2009. SRO 499(I)/2009 was in field when the goods were recovered on 19.3.2015. Since the goods seized were restricted/prohibited goods, therefore, fall within the ambit of smuggled goods, as defined in section 2(s)(ii) of the Customs Act, 1969 and provisions of clause 89 of section 156 of the Act was applicable thereto. The confiscated goods were admittedly of foreign origin duly conceded by the respondents, thus no further probe was required. Once it was established that the goods confiscated were notified one then it would squarely fall within the purview of section 2(s) of the Customs Act, 1969. As per provisions of S.R.O. 499(I)/2009, the Federal Board of Revenue notified that no option shall be given to pay fine in lieu of confiscation in respect of smuggled goods falling under clause (s) of section 2 of the Customs Act, 1969.

7.Similarly, in the said SRO, the vehicle found carrying smuggled goods and being used repeatedly for transportation of offending goods cannot be released on payment of redemption fine. The bus in question bearing registration No. P-2686 was previously involved in smuggling and released on payment of redemption fine and warning. Earlier this Bus was seized vide Order-in-Original No. 465/2008 dated 18.6.2008, whereby it was confiscated and was released on payment of redemption fine of Rs. 70,000/- thereafter again vide Order-in-Original No. 120/14 dated 22.10.2014 it was released on payment of fine @ 20% of the Customs value of the vehicle. Similarly, the driver of bus Ikramuddin was earlier convicted by the Special Judge (Customs), Lahore, in case FIR No.4/2013 dated 9.2.2013, on the charge of smuggling. There is another FIR bearing No.114/2014 dated 5.9.14 against the same offender. Since the bus has repeatedly been used for the purpose of smuggling, therefore, option of redemption fine cannot be extended except for outright confiscation of the same.

8.The Federal Board of Revenue is empowered under section 181 of the Customs Act, 1969 to issue SROs from time to time. This controversy has been resolved by an elaborated judgment passed by the Hon'ble Supreme Court of Pakistan in the case of "Collector of Customs, Peshawar v. Wali Khan and others (Civil Appeal No. 1050 of 2009) dated 19.1.2017" wherein under similar circumstances and with the same facts, imposition of redemption fine by the Collector (Appeals) and reduction of same by the Tribunal was declared in violation of section 181 of the Customs Act, 1969 read with SRO applicable thereto and all the orders passed were set aside.

9.In view of what has been observed above, the appeal filed by the department bearing No.271/LB/2015. is allowed and order passed by the fora below are set aside and the appeal filed by the claimant of the bus bearing No.359/LB/2015, is dismissed.

HBT/70/Trib (Trib.) Order accordingly.