QUTBUDDIN VS COLLECTOR OF CUSTOMS, MCC, ISLAMABAD, 2018 PTD-CUSTOMS-APPELLATE-TRIBUNAL-LAHORE 326 (2016)

Customs Act (IV of 1969)---

----Ss. 2(s), 16, 139, 156(1)(8)(70)(89) & 194-A---Smuggling of foreign currency---Seizure and confiscation of foreign currency and imposition of penalty---Appellant who was going abroad, was searched by Airport Security Force and allegedly recovered foreign currency amount from him and appellant was handed over along with recovered amount to Customs Official for initiation of further legal proceedings---Appellant was arrested and FIR was lodged against him---Collector Customs (Adjudication) vide order-in-original ordered outright confiscation of said amount and penalty of Rs.100,000 was also imposed on the appellant---Validity---Recovery, in the present case, had been effected by the Staff of Airport Security Force, who handed over the appellant with currency to the Customs Officials---Such action totally negated the fact that appellant failed to declare the said currency before the Customs Officials---Investigating Officer as well as the Seizing Officer, had admitted that no chance of declaration of said currency was provided to the appellant---Appellant had already been acquitted by the Special Judge Customs with the findings that no chance was given to the appellant for written or verbal declaration within the meaning of S.139 of the Customs Act, 1969---Admitted position being that no concealment of currency or facts, were made by the appellant, case against appellant/accused attempting to export currency, could not be said to have been proved---Investigating Officer had admitted that appellant did not belong to any money laundering group nor he was previous convict or remained involved in such cases---Findings of the Trial Court, were totally based on the evidence produced by the Customs Authorities regarding the involvement and violation of law by the appellant, which had not been proved---Appellate Tribunal being last fact finding forum, could overlook the judgment passed by Trial Court in the case, but could not ignore the evidence and facts available on record in the shape of statements of the Investigating Authorities---Appellant could not be said to have violated the law---Impugned order-in-original passed by the Trial Court/Adjudicating Authority, was set aside and appeal was accepted with the direction to the concerned authorities to return the foreign currency to the appellant---Order accordingly.

1984 PCr.LJ 1133; 1991 PCr.LJ 644; 1989 MLD 4051 and PLD 1986 SC 1992 ref.

Irshad Ahmad Durrani for Appellants.

Alhaj Gul, Superintendent Customs for Respondents.

Date of hearing: 18th October, 2016.

JUDGMENT

CH. MUHAMMAD SHAHBBIR GUJJAR, MEMBER (JUDICIAL).---This appeal filed by Qutbuddin son of Ameen ud Din etc (Appellants herein) is against the Order-in-Original No.80/2014 dated 24.07.2014 passed by the Collector . (Adjudications) Customs, MCC, Islamabad.

2.Brief facts of the case as recapitulated in the Order-in-Original No.80 of 2014 dated 24.07.2014 are that as reported by the Superintendent Customs I&P Branch, Peshawar vide C. No. FIR-73/2013/1296 dated 28.08.2013 (Seizure Case FIR No.73/2013 dated 10.07.2013), that on 10.07.2013, the ASF staff on duty at the International Departure Hall, Airport Peshawar subjected one Mr. Qutbud Din son of Aminud Din resident of Dagi Jaded Village and PO Hassan Khel Nowshera, to personal search. The above said passenger was going abroad on Flight No.G9-9556 bound for Sharjah. Search of the above named passenger resulted in the recovery of foreign currency amounting to PK Rupees 52,12,725/-(Detail given in the Recovery Memo). The ASF staff subsequently handed-over the passenger along with the recovered amount of foreign currency to Customs officials for initiation of further legal proceedings.

3The seizure report further alleges that the above said accused did not declare the currency to the Customs staff at the counter at the time of checking his baggage's as required under section 139 of the Customs Act, 1969. Since the accused failed to produce any legal proof for carrying huge quantity of foreign currency out of Pakistan, the same was, therefore, seized by the Customs staff for violation of sections 2(s), 16, 139 of the Customs Act, 1969, read with Foreign Exchange Regulation Act, 1947 and Import/ Export (Control) Act, 1950, punishable under section 156(1)(8)(70)(89) of the Customs Act, 1969. The passenger was arrested and FIR was lodged against him under the provisions of the relevant laws.

4.Subsequently, after completion of the requisite formalities, the matter was placed before the Collector Customs (Adjudication), Islamabad, who vide Order-in-Original No.80 of 2014 dated 24.07.2014 ordered outright confiscation of the Pakistani currency in terms of Section 156(1) (8)(70) and (89) of the Customs Act, 1969 read with Foreign Exchange Regulation Act, 1947 and Imports/Exports (Control) Act, 1950. He also imposed a penalty of Rs.100,000/- on the appellant. Hence, the instant appeal on the following grounds:--

1.That impugned ONO 80/2014 dated 24.07.2014 illegal against the law and facts so the same has got no legal value to effect the valuable rights of the appellant.

2.That there is nothing available as single evidence to connect the appellant with the alleged charges of show-cause notice so conclusion drawn by the respondent No.1 is not according to law.

3.That none of the leveled section of law has been violated so the impugned order is against the law.

4.That no chance of fear declaration has been provided to the appellant because recovery of currency has not been done by the custom official which is evident from FIR that recovery has been effected by the ASF staff.

5.That it is evident from traveling history of the appellant that he has worked hard and earned foreign exchange in shape of currency from different countries and the same was brought to Pakistan for safe investment but due to law and order situation the appellant had no other option but just to take the same back to abroad whereas on Peshawar Airport a fake and bogus case was registered against him in spite the fact that regarding limits for taking abroad of the foreign currency the ASF staff was legally bound to educate the appellant.

6.That from recovery memo. it is evident that foreign currency is still in the same denomination as was earned and brought from different countries of Europe so allegation of any link with money laundering groups for ill legal trafficking of currency is incorrect baseless.

7.That no violation of sections 2(s) and 139 has been done, as no mis-declaration concealment of currency or avoiding of any search has been recorded, so no action under section 156 (1) (8) (70) and (89) of Customs Act, 1969 can be taken and, the allegation leveled in the show-cause notice are liable to be dropped.

8.That it has been admitted in para 9 of the impugned order that no declaration at the part of appellant has been recorded under 139 of the Custom Act, 1969, but surprisingly instead of providing the benefit of said violation at the part of seizing Agency has not been extended to the appellant and without any justification that the said currency was outrightly confiscated.

9.That no violation of sections 2(s), 16, 139 of Custom Act, 1969 has been done, so action taken for confiscation of the said currency under section 156(1) (8) (70) (89) of the Customs Act, 1969 is against the law and is liable to be set aside.

10.That imposition of fine of Rs.100,000/- is also not according to law and the same is also liable to be set aside as remitted.

11.That impugned order has not been passed with in the stipulated period given under section 179 of the Customs Act, 1969 and being badly time barred, hence liable to be set aside.

5.In the contrast, the respondent-department submitted their parawise comments as follows:--

1.Incorrect. The competent authority passed the O-IN-O No. 80/2014 dated 24.07.2014 according to law and facts.

2.Incorrect. The state bank in its notification issued vide CNO 1017(1)/998 dated 21.07.1998 has notified a proper procedure for transfer of foreign currency, exceeding the permissible limit i.e. US $ 10,000/- offence of smuggling stands fully established against him on the grounds that the foreign currency recovered from the possession is in excess of the permissible limit and it was being taken out of the country in violation of the existing law. Hence the show-cause notice served upon the accused is in conformity with law as the charges levelled against him stand fully established beyond any shadow of doubt.

3.Incorrect. The offence committed by the accused stands fully established against him on the grounds that the foreign currency recovered from the possession is in excess of the permissible limit and secondly as explained in Para (2) above it was being taken out of the country in violation of the existing law regulating transfer of foreign currency out of the country.

4.The owner of the foreign currency failed to make any verbal or written declaration of its contents to the appropriate officer within the meaning of Section 139. The accused was bound to declare the foreign currency at the Customs Counter at the International Departure Hall in terms of Section 139 of the Customs Act, 1969, but he had not made any such declaration with regard to the foreign currency recovered in his possession. The recovery of the foreign currency was made by the ASF Staff at ASF counter location across the Customs counter inside the Hall.

5.Incorrect. The accused himself has admitted in his statement recorded with the Investigating Officer in terms of Section 165 of the Customs Act, 1969 at L&P Branch Custom House that the said foreign currency was being taken out of the country for the purpose of business.

6.Incorrect. As above Paras 2 and 3.

7.Incorrect. As above Paras 2 and 3.

8.The Customs staff has displayed a chart, just at the back of Customs Counter which carries instruction in Urdu language for information and guidance of passengers regarding transfer of Pak/foreign currency out of the country. The accused was bound to declare the foreign currency at the customs counter at the International Departure Hall in terms of Section 139 of the Customs Act, 1969 bust he had not made any such declaration with regard to foreign currency in his possession.

9.The accused was charged in the case registered vide FIR No.73/2013 because he was caught red handed while attempting to smuggle currency in excess of the permissible limit and that too in violation of law regulation the flow of foreign currency into and out of the country.

10.Incorrect. The imposition of penalty amounting to Rs. 100000/- is according to law.

11.The time period provided under Section 179 of the Customs Act, 1969 tantamount to regulatory nature instructions, therefore, in of case exceeding the time other provisions of flaw provided in the statue cannot be scraped. The offence committed by the appellant for violation of the provisions of the Custom Act, can't exonerate him from due liabilities. In this regard the August Supreme Court of Pakistan in Civil Appeal No. 2036 of 2004 A.C. AFU, Lahore v. Tripple-M (Pvt.) Lahore supported the Dept: point of view which Inter Alia Says "No order can be scraped or annualled or set aside, only on the ground that the same has been passed with un-reasonable delay".

12.In view of the above, it is requested that the appeal filed by the appellant in the instant case, kindly be set aside and maintained the O-IN-O passed by the adjudicating authority.

6.During the course of arguments learned counsel for the appellant contended that no chance of fear declaration has been provided to the appellant because recovery of currency has not been done by the custom official which is evident from FIR that recovery has been effected by the ASF staff. He further contended that no violation of sections 2(s) and 139 has been done, as no mis-declaration concealment of currency or avoiding of any search has been recorded, so no action under section 156(1) (8) (70) and (89) of Customs Act, 1969 can be taken and, the allegation leveled in the show-cause notice are liable to be dropped. He stated that it has been admitted in para 9 of the impugned order that no declaration at the part of appellant has been recorded under section 139 of the Custom Act, 1969, but surprisingly instead of providing the benefit of said violation at the part of seizing Agency has not been extended to the appellant and without any justification that the said currency was outrightly confiscated. The learned counsel for the appellant produced an attested copy of the judgment dated 16.06.2015 passed by the Special Judge Customs, Peshawar in which the present appellant was acquitted. He also produced the attested copies of the evidence and investigation done by the Seizing Officer as well as by the Investigating Officer of this case and stated that the accused/appellant was intercepted by the A.S.F. staff and the recovery of foreign currency was also effected by the same staff prior to reaching the customs counter by the appellant. The learned counsel further stated that as statement of the I.O. and the Seizing Officer, it has been confirmed that no chance of declaration was provided to the appellant, which cannot be ignored. The learned counsel also produced copies of the judgments passed by the superior courts in similar nature cases reported as 1984 PCr.LJ page 1133, 1991, PCr.LJ page 644, 1989, MLD page 4051 and PLD 1986 SC 1992. Besides this, he also produced judgments of the Customs Appellate Tribunal, Islamabad Bench-II in a similar nature cases. He prayed for acceptance of the appeal and return of the Pakistani currency. The learned counsel submitted that imposition of fine of Rs.100,000/- has got no Justification, which may also be remitted.

7.On the other hand, representative of the respondent-department strongly opposed the contentions of the learned counsel for the appellant and stated that as no declaration was done by the appellant at the time of his checking, which amounts to violation of section 139 of the Customs Act, 1969 read with section 156(1) (8) and (89) which demands the outright confiscation of the currency being a notified item. He also contended that findings of the Special Judge Customs passed in this case are not applicable on the adjudication proceedings. He prayed for dismissal of the appeal.

8.Both the parties heard. Record perused. During hearing on 25.04.2016 produced a copy of the judgment dated 16.06.2015 passed by the Special Judge Customs, Peshawar whereby the present appellant Qutbuddin was acquitted of the said case. On the other hand, the representative of the respondent-department stated that against said order, the department has filed Reference before the Hon'ble Peshawar High Court, Peshawar and copy of the said reference will be produced on the next date of hearing but till date of passing this judgment no such copy of reference was produced by the respondents.

9.According to the FIR available on file, it has been admitted that recovery in this case has been effected by the staff of Airport Security Force (ASF) and later on the appellant along with the currency was handed over to the Customs officials posted at the Peshawar Airport, which totally negates this fact that the appellant failed to declare the said currency before the customs officials for the reason that if the appellant has been apprehended and searched by the ASF staff then how could he failed to declare the said currency before reaching to the customs checking counter. Further, it is also evident from the record that Investigating Officer as well as the Seizing Officer while recording their statements have admitted that no chance of declaration was provided to the appellant for the reason that the recovery of the currency was effected by the ASF staff, which further confirms that the appellant was searched and the foreign currency was recovered from him prior to his arrival on the customs search counter. The said statements are reproduced as under:-

"PW-1 Statement of lnayat lqbal Sepoy Customs Presently Posted at D.I. Khan on oath:-

On 10.07.2013 when I was posted at Air Port Peshawar, at about 4 am the A.S.F staff Air Port Peshawar brought the accused namely Qutab-ud-Din s/o Amin-ud-Din r/o Daggi Jadeed (Village and P.O Hassan Khel), Nowshera, and produced a written receipt that accused was traveling to Sharja vide ticket No.E-5142355600904/I flight No G-9556. Where in recovery of Pak. Rs 52, 12725/- was shown. Accordingly the said currency was taken into possession by the seizing officer Alam Zeb Khan vide recovery memo. which is Ex. P.W 1/1, I signed it accordingly as marginal witness. After the arrest of the accused notice under sections 171 and 158, 159 Ex. P.W. 1/2, 1/3 respectively were served on the accused which I have signed as token of their correctness, similarly I also signed the personal search memo. which is Ex. P.W.1/4. My statement was also recorded by Abdul Qayum inspector/Investigating Officer.

Xx... I am 7th class pass. It is correct that currency was seized by A.S.F staff prior to reaching the Customs counter from the accused Qutab-ud-Din. It is correct that statement and signature on all the documents have been received by my officers in their office and not on the spot. I do not know what is notice under section 171. I also have no knowledge that what is notice under sections 158, 159 and how is requirement. I do not know what is seizure report and how it is being prepared.

RO&AC

06.05.2015.

PW-2 Statement of Abdul Qayum Inspector presently posted at Torkham on oath:-

I have conducted the investigation of this case. In this respect I have recorded statement of accused and PWs. I have also placed on file statement of Imtiaz All Deputy Assistant Director. Therefore, I submitted complete challan against the accused.

Xx.... it is correct that I have recorded the statement of Qutb-ud-Din which is on file and contents of the same statement narrated by the Qutb-ud-Din is correct. It is correct that recovery of F/o currency has been affected by the ASF staff prior to reaching the said accused Qutb-ud-Din to the Customs Official. It is correct that I have not signed ASF staff as witness in this case. It is correct that issue regarding violation of 139 of the Customs Act, regarding issue of declaration has not been investigated by me because the recovery in this case has been affected by the ASF staff and it will be known to them whether any chance of declaration was offered to the preset accused. I have not recorded statement of Mr. Alam Zab Inspector seizing officer in this case. It is correct that Alam Zab is seizing officer in this case, but I have not investigated him. It is correct that according to my investigation the accused has got no relation or link with any money laundering group. It is also correct that according to my investigation the accused is not a habitual for causing smuggling of currency. It is also correct that according to my investigation the present accused is not previously charged in these like cases.

PW-3 Statement of Alamzeb Inspector presently posted at Torkham on oath:-

At the relevant time of occurrence I was posted at Peshawar Airport as Inspector, on 10.07.2013 at about 4 AM the ASF staff handed the accused Qutbuddin to me under a written receipt along with ticket No. E5142355600904/1 of Air Arabia Flight No. G 9556 bound for Sharja. The ASF staff during the personal search recovered Misc Foreign Currency vide their entrusted memo EXPW 3/1 for onward proceedings by customs authorities. The amount recovered was equal to Pak Rs. 5212725/-Accordingly I prepared recovery memo already exhibited as EXPW1/1 which correctly bears my signatures. The accused was also handed over to me and after his arrest I served him notice under sections 171 and 158 of the Customs Act already exhibited as EXPW1/2 7 1/3 respectively. Thereafter I prepared Mursila EXPA which was incorporated in to FIR EX PA 1. After completing the seizing proceedings I handed over the case file to I.O. for further investigation.

Xx...

I was not examined by the I.O. It is correct that proceedings under section 158/159 were not conducted before the Gazetted Officer. Self stated that I am a Gazetted Officer."

10.Moreover, as per judgment dated 16.06.2015, passed by the Special Judge Customs, Peshawar the present appellant has already been acquitted of the charges with the findings that "no chance was given to the accused for written or verbal declaration within the meaning of section 139 of the Customs Act, 1969 and it is also admitted position that no concealment of currency or facts were made by the accused. In such situation, when no concealment made by the accused and he was not provided a chance of written or verbal declaration and was intercepted by the A.S.F. staff prior to reach to the Customs Counter, the case against the accused attempting to export currency cannot be said to have been proved. Secondly the I.O. confirmed in his cross-examination that whatever the accused stated in his statement recorded before the I.O. is correct and it is also admitted by the I.O. that the accused does not belong to any money laundering group nor is previously convict or remained involved in such cases, consequently the accused is acquitted of the charges", which means that the findings of the trial court are totally based on the evidence produced by the Customs authorities regarding the involvement and violation of laws by the appellant, which has not been proved and the appellant being discharged of the alleged charges.

11.With regard to the point raised by the learned representative of the respondent-department, where they have contended that findings of the trial court are not applicable on the adjudicating proceedings is of no value because this Tribunal being last fact finding forum can overlook the judgment passed by a trial court in this case but cannot ignore the evidence and facts available on record in the shape of statements of the Investigating Authorities. Reliance is also placed on the judgments passed by the superior courts in similar nature cases reported as 1984 PCr.LJ page 1133, 1991 PCr.LJ page 644, 1989 MLD page 4051, PLD 1986 SC 1992 and judgments of Customs Appellate Tribunal, Islamabad Bench-II in Appeal No.1005 dated 26.01.2016 titled Adnan v. Collector Customs, Islamabad and Appeal No.1006 dated 26.01.2016 titled Jamil v. Collector Customs, Peshawar etc.

12.In view of the above, the appellant could not be said to have violated the laws and charges mentioned in the show-cause notice because the similar charges and sections of law mentioned in the FIR and the charge framed has already been disproved before the Trial Court, as such, the impugned Order-in-Original No.80/2014 dated 24.07.2014 is set aside and the instant appeal is accepted with direction to the concerned authorities to return the foreign currency to the present appellant accordingly.

HBT/132/Tax(Trib.) Appeal accepted.