MUHAMMAD ASLAM VS SPS, ASO, NMB WHARF, KARACHI
2018 P T D (Trib.) 2324
[Customs Appellate Tribunal]
Before Ghulam Mustafa Memon, Member (Judicial-III)
MUHAMMAD ASLAM
Versus
SPS, ASO, NMB WHARF, KARACHI and another
Customs Appeal No. K-432 of 2017, decided on 22/09/2017.
Customs Act (IV of 1969)---
----Ss.2(s), 16, 17, 156 & 157---SRO No.499(I)/2009, dated 13-6-2009---Smuggling---Confiscation of seized goods along with the vehicle---Customs Anti-Smuggling Organization team, chased and intercepted vehicle containing foreign origin 'Gutka', which was a restricted/ prohibited item---Vehicle was confiscated and no option was given to pay fine in lieu of confiscated vehicle to appellant who claimed to be owner of the vehicle---Driver of the vehicle disclosed that he ran the vehicle on hire basis and that recovered 'Gutka' belonged to a lady, who hired the services of vehicle for its transportation---No document of whatsoever nature in respect of legal import or purchase of subject consignment was produced by the driver---Appellant/owner of the vehicle asserted that he had no concern with the subject "Gutka"; whereas no one came forward to claim ownership of the seized "Gutka"; which manifested that foreign origin "Gutka" was smuggled/ non-duty paid---Additional Collector of Customs (Adjudication) vide order-in-original, held that charge of smuggling was established and directed outright confiscation of the seized goods along with vehicle---At the time of the seizure of offending goods from the vehicle, present at the time of seizure of goods and vehicle---Appellant/owner of the vehicle was not---No inquiry/investigation was made to ascertain clue of the alleged lady being owner of the offending goods---Appellant/owner of the vehicle and driver thereof, in no way could be held responsible without establishing guilty knowledge of the offence---For proving knowledge of owner not present in the vehicle would require inquiry, which was totally lacking in the case; even Investigating Officer could not register crime against the driver of the vehicle---Involvement of appellant in the act was not proved by the department---No indication existed that appellant was involved in smuggling of offending goods which were lying in the vehicle openly and were neither hidden in any false or secret cavity nor false cavity was noticed in the vehicle---Department, admitted that vehicle in question was never used before for transportation of smuggled goods---Vehicle was registered in the name of appellant and was being used on hiring basis for transportation of passengers and goods---Adjudicating authority, had passed impugned order merely on presumption without any cogent reasons; whereas the circumstances of the case were of the nature which could only lead a prudent mind to conclusion that the appellant/the owner of the vehicle had no connivance with the owner of offending goods or for that matter guilty knowledge of the fact---Impugned order-in-original was modified to the extent of outright confiscation of vehicle, having no history of previous use in smuggling of goods, with direction to release the same to its lawful owner (appellant) on payment of 20% redemption fine of customs value of the subject vehicle---Order-in-original in respect of confiscation of foreign "Gutka", was maintained as same did not suffer from any illegality or irregularity.
PLD 1988 Lah. 177; Messrs Shew Pujan Rai Indrasen Rai Ltd. v. Collector of Customs AIR 1962 Cal. 789; 1952 Cr.LJ 1951; Hafeez Rehman v. State PLD 1970 SC 82; 1971 SCMR 404 and Haji Abdul Razzaq v. Pakistan through Secretary, Ministry of Finance, Islamabad and others PLD 1974 SC 5 ref.
Barkat Ali Awan for Appellant.
Malik Safdar, I.O. for Respondent.
Date of hearing: 18th September, 2017.
ORDER
GHULAM MUSTAFA MEMON, MEMBER (JUDICIAL-III).---This appeal calls in question the propriety of Order-in-Original No.521/2016-17 dated 21.02.2017, recorded by the learned Additional Collector of Customs (Adjudication-I), Karachi whereby established the charge, set-forth in the show-cause notice dated 01.12.2016 and directed outright confiscation of seized goods (foreign origin Gutka) along with Suzuki APV Van bearing Reg. No. 6068, details of its parts (chassis and engine number etc.) were referred in the order, on the score that the said vehicle was wholly / exclusively used for the purpose of transportation of smuggled goods under clauses (8) and (89) of Section 156(1) and Section 157(2) of the Customs Act, 1969 (in short Act, 1969) read with Section 3(3) of the Import and Export Control Act, 1950 (in short Act, 1950) and SRO 499(I)/2009 dated 13.06.2009. No option for release of the vehicle on redemption fine was given to the appellant, who is registered owner of the vehicle.
2.Resume of the department case is that on spy tip to the effect that, a consignment of smuggled non-duty paid Gutka would be transported from Karachi to Hyderabad in Suzuki AP Van bearing Registration No.CR-6068, Customs Anti Smuggling Organization team on 03.11.2016 cordon off the area near Al-Karam Square, Liaquatabad No.10, Karachi, noticed the said vehicle, driven by Shahid Khan (name revealed subsequently), chased and intercepted the subject vehicle. On bird's eye view search at the spot, 16 PP bags containing foreign origin Gutka were recovered. The driver Shahid Khan on query, disclosed that he run the vehicle on hiring basis, the recovered Gutka belongs to a lady, who hired services of vehicle of Shahid Khan for its transportation to Hyderabad from Bolton Market. At the same time, driver Shahid Khan disclosed name of owner of the vehicle as Muhammad Aslam (appellant), resident of Hyderabad. No document of whatsoever nature in respect of legal import or purchase of the subject consignment was produced by driver therefore, the Gutka along with APV Van was brought to ASO Office, where discreet search of 16 PP bags was carried out in presence of mushirs, resulted recovery of 40,000 pouches of Zafrani Gutka made in Nepal and 40,000 pouches of Z-2I Gutka made in India. Thus total 80,000 pouches of assorted Gutka were recovered. The goods so recovered along with APV Van (conveyance) were detained for appearance of the claimant and production of legal documents of its import in the country. Meanwhile the appellant Muhammad Aslam appeared in the ASO Office and claimed ownership of the detained vehicle with the assertion that the subject vehicle was being run on hiring basis thought driver Shahid Khan, the latter without his knowledge uplifted the Gutka in the vehicle belongs to a lady for its transportation from Karachi to Hyderabad and he (the appellant) has no concern with the subject Gutka. Whereas no one came forward to claim ownership of the seized Gutka, which scenario manifest that the subject foreign origin Gutka was smuggled / non duty paid. Notice under section 171 of the Act, 1969 was issued. On basis of the seizure report show-cause notice was issued to the driver and owner of the vehicle namely the appellant, the letter in urdu language, replied the show-cause notice wherein reiterated the caption statement. In turn, department submitted comments against the reply of the appellant. After providing chance of audience to the appellant and departmental representative, the learned Additional Collector of Customs (Adjudication-I) recorded the order in the manner as described in the opening para of this judgment.
3.After admission of the instant appeal, same was contested by the respondent (department) by filing opposition to the memo of appeal in shape of memorandum of cross objections.
4.I have heard Mr. Barkat Ali Awan, Advocate for the appellant and Mr. Malik Safdar, I.O. on behalf of the respondent.
5.Mr. Barkat Ali Awan sought much capital to the point that the learned Additional Collector (Adjudication-I) without realizing league of the appellant in commission of crime with the owner of offending items or for that matter the guilty knowledge of the fact, on hypothetical substance coupled with presumption outrightly confiscated vehicle of the appellant without providing option to release the same on redemption fine in terms of Section 157(2) of the Act, 1969 as well clause (b) of SRO 499(I)/2009; that the learned Adjudicating Officer had erred in taking the view that any vehicle used in the transportation of any goods liable to confiscation under the Act, 1969 was liable to be confiscated automatically; According to the learned counsel, the word "shall also be liable to confiscation", merely give a discretion to the authorities to confiscate but this discretion has to be exercised like every other judicial or qasi-judicial discretion upon sound principles. One of the accepted principle for the imposition of a penalty is that there must be some culpability or negligence in the person sought to be made liable, therefore, according to learned Advocate for the appellant, if the property of a wholly innocent person has been used without his consent, connivance or even knowledge, it would be grossly unjust to confiscate his property. The learned Advocate for the appellant went on to state further that, since caption stand taken by the appellant is that the subject vehicle APV Van was being played on hiring basis through driver Shahid Khan and appellant is running business of rent a car in the name and style of Qadri 2-OD Service, having office at Karachi and Quetta; that the documents of the subject business were supplied to the I.O.; that the foreign origin Gutka alleged to be recovered from vehicle of the appellant belongs to a lady, who hired service of the vehicle driven by Shahid Khan for its transportation to Hyderabad from Bolton market; that no iota of material has been collected to prove knowledge of the appellant not in person present in the vehicle at the time of seizure of offending goods and vehicle; that neither any secret cavity noticed in the vehicle nor the subject conveyance being used exclusively or wholly for transportation of offending goods, therefore, non extending option to pay fine in lieu of confiscation of vehicle is contrary to very scheme of law, more particularly of clause 2(f) of the Table under S.R.O. 499(I)/2009; that time and again different benches of Tribunals all over in Pakistan as well as Honourable Superior Courts directed release of confiscated vehicles on redemption fine @ 20% of the value of the vehicle. Similar treatment ought to have been given to the appellant by the Adjudicating Authority but no option was extended hence, the instant appeal may be accepted and vehicle of the appellant, which is only source of his butter and bread may be directed to release on redemption fine. In support of his contention, the learned Advocate for the appellant relied upon precedent of Hon'ble Superior Courts reported as PLD 1974 SC P-5 and PLD 1988 Lahore Page 177.
6.Conversally, Mr. Malik Safdar, departmental representative while supporting verdict of the learned Additional Collector of Customs (Adjudication-I) impugned herein, contended that, the contraband items were found lying in the APV Van of the appellant, whereas import of same is banned in terms of import policy order in vogue; that the offence of removal of smuggled goods in terms of clause 89 of Section 156(1) of the Act, 1969 has been committed through the vehicle in question, therefore S.R.O. 499(I)/2009 dated 13.06.2009 put barrier for release of vehicle in lieu of confiscation in terms of Section 181 of the Act, 1969. However, the learned representative of the respondent concedes that the words "shall also be liable to confiscation" referred in subsection (2) of Section 157 of the Act, 1969 do not mean automatic confiscation and that they do vest the authorities with a judicial discretion which must be exercised upon correct principles. He fenced that, the liability of owner of the vehicle is co-extensive with liability for confiscation of goods themselves. Thus, if the goods are liable to be confiscated, the vehicle in which they are being conveyed is also liable to be confiscated in the same manner and to the same extent. He went on to state further that, proof of knowledge of smuggled goods in the vehicle is not necessary with the simple reason that if his knowledge is established, then the appellant would even be liable to prosecution under relevant law therefore, a reasonable suspicion is enough and that it is not necessary to prove that the appellant being owner of vehicle either connived in the use of vehicle for the purpose of smuggling of goods or that he had knowledge that his vehicle would be used for such purpose. However, the learned representative of the respondent admitted that the subject vehicle was not earlier used for transportation of smuggled goods and this was first time involved in the subject transaction. He also admitted that no further enquiry was conducted to ascertain original owner of the foreign origin Gutka, as well no crime was registered against the appellant or driver of the vehicle in respect of their league / connivance with the smugglers or having in possession of offending goods. It was next argued by the learned representative of the respondent that as no valid document for import of foreign origin Gutka has been produced by the appellant therefore, the learned Adjudicating Authority has rightly confiscated the offending goods as well vehicle of the appellant; that the subject order does not suffer from any illegality or irregularity, therefore not requires any sort of interference from this forum, hence appeal may be dismissed.
7.I have given due consideration to the arguments advanced by the party counsel and representative of the respondent respectively and have gone through the relevant documents namely show-cause notice as well as order-in-original with consonance to the particular provisions of law.
8.The definition of smuggling did not exist in the old laws. For the first time the word "smuggle" has been defined by the legislature in the Act, 1969. Prior to the insertion of this definition it was judicially defined in the case of Messrs Shew Pujan Rai Indrasen Rai Ltd. v. Collector of Customs (AIR 1962 Ca1. 789 - 1952 Cr.LJ 1951) as under:--
"Smuggling is nothing but importation or exportation of goods secretly or clandestinely without payment of duty"
9.The clause (s) of Section 2 of the Act, 1969 define the smuggle as under:--
"2. Definition: - In this Act, unless there is anything repugnant in the subject or context: -
(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 en route pilferage of transit goods 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 psychotrophic substances; or
(ii)manufactures of gold or silver or platinum or palladium or radium or precious stones, 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;
10.The clause (s) of Section 2 of Act, 1969 notified some restricted goods, specified therein. However, the Federal Government is empowered under section 16 of the Act, 1969 to prohibit or restrict by notification, the bringing into or taking out of Pakistan of any goods of specified description by Air, Sea, or Land. Section 3 of the Import and Export Act, 1950 also authorizes the government to "prohibit, restrict or otherwise control the import and export of goods of any specified description". In this context, the Federal Government, in exercise of the powers conferred by Sections 2(s) (ii) and 156(2) of the Act, 1969 vide S.R.O. 566(I)/2005 dated 06.06.2005 notified certain goods to be prohibited / restricted for the purpose of the said sections. This notification hold the field when the offending goods i.e. foreign origin Gutka "40,000 pouches of Zafrani Gutka made of Nepal and 40,000 pouches of Z-21 made in India were recovered from the APV Van on 03.11.2016. The Gutka (All Brands and Origin) has been listed at Sr. No.55 of prohibited / restricted items list notified through SRO 566(I)/ 2005, thus said foreign origin Gutka is restricted/prohibited items and falls within the meaning of smuggled goods in terms of Section 2(s) of the Act, 1969. Admittedly, the confiscated goods were of foreign origin and there was no proof that the same were lawfully imported into Pakistan (by an authorized importer under a valid licence and through an authorized route). Indeed, no person came forward to claim ownership of the subject Gutka. Whereas appellant as well as Shahid Khan, driver of vehicle since caption advanced defence that same belongs to a lady, who hired the subject vehicle for its transportation to Hyderabad from Bolton market. Significant to mention that, value of offending Gutka has not been referred in order-in-original by the learned Additional Collector of Customs (Adjudication-I). Whereas in show-cause notice dated 01.12.2016 issued to Shahid Khan and M. Aslam (driver and owner of vehicle), value of confiscated goods (Gutka) has been shown Rs.600,000/- and value of vehicle also Rs.600,000/- the duty / taxes involved to the tune of Rs.1,282,016/-. The said value of Rs.6,00,000/- (six lakhs) of the offending goods i.e. foreign origin Gutka is not meager. If the subject Gutka imported into Pakistan by an authorized importer under a valid licence more particularly through an authorized route, its importer / owner ought to have been approached to the department for release of same on payment of duty and taxes and not to turn simple spectator.
11.Now, I would like to switch over to the part of the appellant in commission of offence or his connivance with the owner of offending items or for that matter the guilty knowledge of fact.
12.Where a person is or is not concerned in an offence falls under item 8 (a) of Section 156 of the Act, 1969, depend upon the facts and circumstance of each case. Direct evidence as to the actual unauthorized importation of contraband goods may be available in rare case. Where such direct evidence is available, no difficulty arises as to who are the persons concerned in the offence. Where, however, direct evidence is not available, the person concerned in the offence are to be ascertained having regard to the fact and the attending circumstance of the case. While saying so, I derived strength from the verdict of Honourable Apex Court reported in the case of Hafeez Rehman v. State (PLD 1970 SC 82).
13.Admittedly, since beginning stand of the appellant / owner of the subject APV Van is that he had no connection of whatsoever nature with alleged offence. There is no controversy to the fact that the appellant is doing the business of rent a car and the subject vehicle was being used for transportation of the passenger and goods on hiring basis. It has been brought on the surface that the subject vehicle driven by driver Shahid Khan hired by a lady for transportation of foreign origin Gutka from Bolton market to Hyderabad. At the time of seizure of offending goods from the vehicle, the appellant was not embarked in it. In short, he was not present there. Curious to note, despite knowledge of this fact no further inquiry/investigation was made to ascertain clue of the said lady being owner of the offending goods. Needless to mention, for the offence committed, by some passenger of vehicle, the owner / driver of vehicle in no way can be held responsible without first establishing his guilty knowledge of the offence committed as laid down by the honourable Supreme Court in case reported as 1971 SCMR 404. Similarly, to prove knowledge of owner not present in vehicle would require inquiry / investigation which was totally lacking in the appellant's case. It may not lost the sight that even Investigation Officer could not register crime against the driver of vehicle who was driven the same at the time of recovery of foreign origin gutka. Same act on part of the authority, without any second thought give impression that while accepting defence of appellant i.e. confiscated goods belongs to a lady, could not initiate any criminal proceedings against the driver or the appellant by the inquiry officer/investigation officer. The subject scenario is explicit on non-league/non-connivance of driver or owner of the vehicle with offending goods or for that matter of the guilty knowledge of the fact.
14.The discreet glance on the order impugned herein manifest that the vehicle of the appellant has been confiscated in terms of sub-section (2) of section 157 of the Act, 1969, whereas no option was given to pay fine in lieu of confiscated vehicle to the appellant inconsonance of clause (b) of S.R.O. 499(I)/2009. Before proceeding further with this point, I feel it my duty to quote subsection (2) of Section 157 of the Act, 1969.
Section 157, extent of confiscation:
(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" (under line applied).
The words "shall also be liable to confiscation" do not give premium to the authority for automatic confiscation of the conveyance. Indeed they do vest the authorities with a judicial discretion, which must be exercised upon correct principles. If the words "shall also be liable to confiscation" give a discretion to the confiscating authority to deprive a person of his property, then it follow that this discretion must be exercised upon the principle of natural justice. It is time honour principle of law that 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. In short, no innocent person should be unjustly punished or deprived of his property. On this principle guidance may be sought from the case of Haji Abdul Razzaq v. Pakistan through Secretary, Ministry of Finance, Islamabad and others (PLD 1974 SC P5).
15.I have already observed that involvement of appellant in the act was not proved by the department. Indeed there was no indication even that owner of vehicle was involved in smuggling of offending goods.
16.An inquisitive thing that is noticed that while pressing to service barrier of S.R.O. 499(I)/2009 dated 13.06.2009, no option was given to the appellant for release of vehicle on redemption fine.
17.The preamble of SRO 499(I)/2009 indicates that no option shall be given to pay fine in lieu of confiscation in respect of the goods or class of goods notified in the said SRO. Clause (b) of the subject notification is of vital importance, directly related to the controversy under discussion, therefore for ease of reference same is reproduced here:--
SRO 499(I)/2009
(b) "lawfully registered conveyance including packages and containers found carrying smuggled goods in false cavities or being used exclusively or wholly for transportation of offending goods under clause (s) of section 2 of the Customs Act, 1969 (IV of 1969); (emphasis has been applied)".
18.The said clause couched with the language, which authorize to authority for non-grace of option to pay fine in lieu of confiscation of vehicle, if same found carrying smuggled goods in false cavities or being used exclusively or wholly in transportation of offending goods.
Cavity:
Cavity in English on line dictionary defined as a hole or an empty space between two surface.
The false cavity having synonymous of secret cavity. Same assembled in clandestinely manner in the vehicle for hiding contraband items from nacked eye.
Exclusively
The word exclusively has been defined in Oxford English Dictionary volume III, 1961 Edition as under:
i)In an exclusive sense, by an exclusive mode of computation, with exclusion of the extreme points of series.
ii)To the exclusion of without the participation of the persons or things designed.
iii)So as to exclude all except some particular object, subject etc, softly.
iv)In a spirit of exclusive
In Black's Law Dictionary, Fifth Edition, 1983, the word exclusively was used in the sense of Apart from all others. Only, Solely, Substantially all or for the.
The subject definition of word exclusively vindicated that vehicle being engaged in the business of transportation of smuggling goods only and not used for another purpose.
Wholly
Where wholly has been defined in Black's Law Dictionary, Fifth Edition, 1983, as:-
A term used for completely, entirely, exclusively, totally, fully, in ever respond and the opposite of partially.
19.In the instant case, to own showing of seizing authority, the offending goods were lying in the APV Van openly and same were neither hidden in any false or secret cavity nor false cavity noticed in the subject vehicle. Likewise, as per admission of the departmental representative this vehicle in past was never used for transportation of smuggled goods. Registration documents produced by the appellant indicate that vehicle was registered on 13.02.2007 in the name of the appellant. It has been brought on the record that same vehicle was being used on hiring basis for transportation of passenger and goods. Thus it was not being used exclusively or wholly for transportation of offending goods / smuggled goods. As such three basic ingredence contemplated in clause (b) of S.R.O. 499(I)/2009 for not giving option to pay fine in lieu of confiscation of vehicle is lacking in the instant case. Whereas, sub-clause (f) of clause (2) of table to S.R.O. 499(I)/2009 having applicability in the instant case which reads as under:--
SRO 499(I)/2009
Table
| Sr. No | Description | Redemption fine on customs value |
| 1. | 1. Offences related to misdeclaration of: | |
| | (f) lawfully registered conveyance including packages and containers, not covered under clause (b) of the preamble of this notification, found carrying offending goods under section 2(s) of the Customs Act, 1969 (IV of 1969) | 20% |
20.Federal Board of Revenue vide letter No.1(17)-L&P/05 dated 26.06.2006 (Sl.No.238/2008)Policy 04.07.2016, while noticing that sub-clause (2) of clause (a) of S.R.O. 574(I)/2005 dated 06.06.2005 is being mis-interpreted and vehicles which were used exclusively for carrying of offending goods were frequently being released on redemption fine, has directed that vehicles which are repeatedly and exclusively employed for carriage of contraband goods should not allowed on option of release on redemption fine for more than once.
21.The said letter authorize the authority to allow option of release of confiscated vehicle on redemption fine for one time only. Admittedly, the instant vehicle was neither previously confiscated nor it was employed for carriage of contraband goods nor released on redemption fine earlier. Indeed this is first time involvement, therefore, in my estimation, the subject vehicle requires to be released on 20% redemption fine as envisaged in sub-clause (f) of clause (2) of table to SRO 499(I)/2009; whereas order to the extent of out right confiscation of the conveyance without giving option of its release on redemption fine @ 20% recorded by the learned Adjudicating Authority is beyond legal footing and true substance rather contrary to the law indicated above.
22.In sequel to above discussion, it come on surface that the learned Adjudicating Authority has passed the impugned order merely on presumption without any cogent reasons. whereas the circumstances of the case were of such nature which could only lead a prudent mind to the conclusion that the owner of vehicle namely the appellant had no connivance with owner of offending goods or for that matter guilty knowledge of the fact.
23.The said scenario constrained me to modify order-in-original to the extent of outright confiscation of APV Van bearing Registration No.CR-6068 having no history of previous use in smuggling of goods with direction to be released to its lawful owner (the appellant) on payment of 20% redemption fine of customs value of the subject vehicle, ascertained by the Customs Department under sub-clause (f) of clause 2 of the table under S.R.O. 499(I)/2009 dated 13.06.2009. So for order-in-original in respect of confiscation of foreign origin Gutka, same is maintained as does not suffer from any illegality or irregularity. Order passed accordingly.
24.Announced in open court.
25.Inform all concern through registered post.
HBT/92/Tax(Trib.) Order accordingly.