ARSHAD HUSSAIN KHAN VS COLLECTOR OF CUSTOMS (APPEALS), LAHORE

2018 P T D (Trib.) 541

[Customs Appellate Tribunal]

Before Omar Arshad Hakeem, Member (Judicial) and Khawaja Umar Mehdi, Member (Technical)

ARSHAD HUSSAIN KHAN

Versus

COLLECTOR OF CUSTOMS (APPEALS), LAHORE and 5 others

C.A. No.203/LB of 2014, decided on 19/02/2016.

Customs Act (IV of 1969)---

----Ss. 2(s), 16, 156(1)(89) & 168---"Smuggling"---Seizure and confiscation of alleged smuggled vehicle---Vehicle---Driver of the vehicle on interception failed to produce any documentary evidence regarding legal import of the vehicle---No Registration Book was produced by the driver---Vehicle in question was detained and during detention period neither the driver/owner, nor any other person approached the Seizing Agency to join the investigation or to submit any documentary evidence regarding payment of customs duty and other taxes---Ample reasons were available to believe that the detained vehicle had been brought into the country without payment of leviable duty and taxes---Vehicle was seized in terms of S.168 of the Customs Act, 1969, after adopting all the legal and procedural formalities for violation of S.16 of the Customs Act, 1969 punishable under Cl.89(1) of S.156(1) of the Customs Act, 1969---Deputy Collector of Customs (Adjudication), found that seized vehicle was smuggled---Appeal filed against order of Adjudicating Authority was dismissed by appellate authority---Validity---Appellant had claimed that vehicle in question was impounded by Police under S.550, Cr.P.C., and was sold in open auction; that the appellant was an auction purchaser of said vehicle---Vehicle in question was a "smuggled" one bearing a cut and weld chassis number which could not be auctioned under the provisions of Cr.P.C., due to overriding effect of Customs Act, 1969---Auction by Police, was illegal and non-existent---Orders passed by the forums below were well founded---No illegality or infirmity was found therein---Appeals were dismissed by Appellate Tribunal in circumstances.

PTCL 2003 CL 716 ref.

Syed Mohib-ul-Hassan for Appellant.

Nemo for Respondents.

JUDGMENT

OMAR ARSHAD HAKEEM, MEMBER (JUDICIAL).---This judgment shall decide the above mentioned Customs Appeal filed against an Order-in-Appeal No. 194/2014 dated 13.06.2014 passed by the learned Collector of Customs (Appeals), Lahore.

2.Precise facts for deciding the core controversy involved in the instant appeal are that the staff of Customs Anti-Smuggling Organization intercepted a vehicle Toyota Land Cruiser Prado (TX-Limited) bearing Registration No.MN-10-4500. The driver of the said vehicle failed to produce any documentary evidence regarding legal import of the vehicle, he even failed to produce registration book. The vehicle was, therefore, detained. However, during the detention period neither the driver/owner of the vehicle nor any other person approached the seizing agency to join the investigation or to submit any documentary evidence regarding payment of customs duty and other taxes.

3.In order to ascertain the factual position about the genuineness of chassis number/frame of the vehicle, the seizing agency referred the matter to the Forensic Science Laboratory for chemical examination of the vehicle. In response thereto the FSL examined the vehicle and forwarded its report which reads as under:--

Vehicle No.MN-10-4500

Type of vehicle:Toyota Prado

Chassis No. before chemical treatment:KZJ95-0050038

Chassis No. after chemical treatment:KZJ95-0050038

Chassis number frame has been found cut and welded.

Formation, alignment of the digits is abnormal.

The chemical treatment of the chassis number of Toyota Prado, Registration No. MN-10-4500 in the case as subject has revealed that its chassis number frame has been cut and another iron piece bearing No.KZJ95-0050038 has been welded on its chassis number place."

4.In the light of the facts narrated above as well as findings of Forensic Expert there were ample reasons to believe that the detained vehicle has been brought into the country through an unauthorized route without payment of leviable duty and taxes, which was accordingly seized in terms of section 168 of the Customs Act, 1969 after adopting all the legal and procedural formalities for violation of section 16 of the Act punishable under clause 89(1) of section 156(1) of the Customs Act, 1969.

5.Accordingly a show-cause notice was issued and the Deputy Collector of Customs (Adjudication), Multan thereafter held the adjudication proceedings and passed an order against the appellant wherein he precisely ruled as follows;

"I examined the case record thoroughly and heard/perused the contentions and arguments put forth by both the sides. I have also examined the Forensic Science Laboratory Report placed by the seizing agency on record, in support of its stance. During entire adjudication proceedings the legal counsel for the respondent except insisting upon the acquisition of impugned vehicle through an open auction miserably jailed to say even a single word in the defence of basic change regarding manipulation of chassis number/frame of the vehicle. This situation abundantly proves the case of seizing agency.

Based on what has been stated above, it is proved beyond any shadow of doubt that the seized vehicle is indeed smuggled as defined under section 2(s) of the Customs Act, 1969 which was brought into the country in a clandestine manner through an unauthorized route without payment of duty and taxes. Further the vehicle being smuggled was plying by manipulating its chassis number (by way of cutting and welding) under the garb of certain auction documents to hoodwink the law enforcement agencies. Thus the charges as levelled in the show-cause notice are correct and stand established. The seized vehicle i.e. Toyota Land Cruiser Prado (TX-Limited) displaying registration No. MN-10-4500 having chassis No. KZJ96-0050038 (cut and welded) Engine No. 1KZ-0612429, Model 1998 (as per seat belt) is therefore ordered to be confiscated in terms of clause 89(1) of section 156(1) of the Customs Act, 1969 readwith clause (a) of the preamble of S.R.O. 499(I)/2009 dated 13.06.2009."

6.Being aggrieved from the above said order passed by the Deputy Collector of Customs (Adjudication), Multan the appellant filed an appeal before the learned Collector of Customs (Appeals), Multan, who vide impugned order in appeal dismissed it and held:--

"I have examined the case record, considered the grounds of appeal and parawise comments advanced by the departmental representative during hearing and have found that since the vehicle has been found as per Forensic Lab. Report, cut and weld and tampered chassis number. The appellant has failed to produce any proof regarding its legal import and payment of duties and taxes thereof. In the absence of the same the vehicle should not have been auctioned at all. Since it has been done hence it is an illegal sale as the National Exchequer has been deprived of its legitimate revenues. The Excise Department has also refused to register the same on these grounds. Therefore under these circumstances the appeal for the release of such non duty paid vehicle with a cut and weld chassis number car cannot be accepted and is dismissed. The Order-in-Original No. 271/2013 dated 28.10.2013 is upheld as legally correct. However the appellant is directed to approach the auction committee at Okara which held an illegal auction of a non duty paid vehicle with a cut and weld chassis number. They should have contacted the customs authorities for examination and payment of duty and taxes. The auction of the cut/weld tampered chassis number vehicle held on 4.6.10 is held illegal. The appellant is directed to contact the auction authorities for refund the amount paid against auction of the said tampered vehicle.

In view of the same the instant appeal is dismissed accordingly."

6.Being further aggrieved from the above said order passed by the learned Collector of Customs (Appeals), Multan the appellant approached this Tribunal on the following grounds:--

(a)That the impugned Order-in-Appeal No. 194/2014 dated, 13.06.2014 passed by the respondent No. 1 is contrary to the hard and pivotal facts and evidence on record by defense and thus the same is liable to be set aside by releasing the impugned confiscated vehicle of the appellant.

(b)That the order passed by the respondent No. 1 is illegal, unlawful and without justification in which the respondent No.1 has refused to release the confiscated vehicle and directed the appellant to approach the. auction authorities for refund of the amount paid against auction of said vehicle, whereas on 02.12.2013 the Hon'ble Lahore High Court Lahore passed the judgment by dismissing the C.R. No. 1486/13 titled as ETO v. Arshad Hussain Khan and hold therein that another aspect of the matter is that the respondent has purchased the disputed vehicle in auction proceedings which were admittedly conducted by the Government through a committee duly constituted for the purpose. There is no denial that the auction proceedings were held and the respondent paid the auction money being successful bidder. Being the auction proceedings in the circumstances void or otherwise does not hurt to the rights of the respondent as it was the matter within the government and the respondent has no concern with it. When he is successful bidder and paid the auction money as desired by the auction committee, he is entitled to be issued registration certificate. Therefore, the impugned Order-in-Appeal passed by the respondent No. 1 is liable to be set aside.

(c)That by passing the impugned order-in-appeal the respondent No. 1 admitted that the appellant has purchased the confiscated vehicle in auction proceedings conducted by Senior Civil Judge, Okara along with two other members duly constituted for the purpose on 04.06.2010 after payment of Rs. 13,65,000/- being successful bidder and the possession of the vehicle was handed over to the appellant.

(d)That appellant has replied in response to show-cause notice more than sufficient and replied all the allegations leveled in the impugned show-cause notice and the judgment dated 02.12.2013 passed by the Hon'ble Lahore High Court, Lahore which was not appreciated by the respondent No. 1 is quite unjust against fact and the evidence put along with the reply to show-cause notice and passed the impugned judgment in a hastily manner by upholding the Order-in-Original No. 23/2014.

(e)That the detention and seizure of the said confiscated vehicle was based upon conjectures and surmises. The act of the respondent No.4 is bad in the eye of law because it is an admitted fact that respondent No.4 has given a time period of 5 days to driver/owner of the vehicle to produce all the legal documents before him but very astonishingly opted the FSL report from Islamabad on the same day i.e. 02.12.2013. The superior courts strongly negate this kind of act accordingly reported as PTCL 2003 CL 716 wherein it was held that clause 2(kk) "detain" in relation to goods means to prohibit the disposal or use of the goods pending finalization of any proceedings under this Act in relation to the goods or the owner thereof and on the other side the seizure falls in S. 2(rr) as "(rr) "seize" means to take into custody, physically or otherwise goods in respect of which some offence has been committed or is believed to have committed under this Act or the rules and all cognate words and expression shall construed accordingly". In the light of above respondent No. 4 is trying to mislead this Hon'ble Forum because the core issue to seize the vehicle in question was not any information of non duty paid vehicle plying on the road under the coverage of bogus registration book but only to fulfill the sweet wishes of the customs authorize. If we presume that the information received then the seizure of the vehicle was in violation of the provisions of sections 162 and 163 of the Customs Act, 1969 because the respondent No.4 has mentioned in his seizure report that the seized confiscated vehicle on specific information and it is note-worthy that the vehicle in question has been seized from the settled area i.e. Multan City which is neither 5 miles of land frontier of Pakistan nor 5 miles belt running along with sea coast of Pakistan.

(a)It is noticeable thing that if he has information about the vehicle in question and deputed the staff at Multan then why he had not acted upon the provisions of the Customs Act, 1969 in which he must got the warrant from the Judicial Magistrate as mentioned in section 162 of the Customs Act, 1969.

(b)The respondent No. 4 also violated the section 163 of the Customs Act, 1969 because the search or seizure was not done within 5 miles of the land frontier of Pakistan or not within the 5 miles belt running along the sea coast of Pakistan so the search conduct without any warrant is illegal.

(f)It is astonishing to note that the respondents Nos.3 to 5 must do their duties in consonance with the above mentioned provisions of Customs Act, 1969 in spite of that the appellant along with Excise and Taxation Officer/MRA, Okara were being informed by the respondent No.3 in his office that the chassis number of said vehicle is cut and welded.

(g)That there is no evidence on record by the customs authorities that the vehicle in question was smuggled in/imported into Pakistan without payment of leviable duties and where to the contrary bill of entry was confirmed mere fact that chassis number was refitted and in absence of any evidence that with such chassis number some other vehicle is plying the seizure/ forfeiture/confiscation of the said vehicle would thus be beyond the jurisdiction of customs authorities (reported as (sic) PTD-1333). In the light of above mentioned verdict of the forum supra, it is crystal clear that the confiscated Toyota Prado Jeep may not be impound in case that no other vehicle having the same chassis number is plying on the roads of Pakistan.

7.Leveling a variety of allegations and narrating the sequence of events, in all, the Superintendent, ASO Multan submitted parawise comments through learned counsel for the respondent wherein inter alia he contended that:-

(i)Not admitted. The impugned Order-in-Appeal No. 194/2014 dated 13.06.2014 passed by the Hon'ble Collector. Customs (Appeals) is quite in accordance with statutory provision of law and on the basis of pivotal facts and coregent evidences and as such the same is requested to be upheld. The order passed by the respondent No. 1 is lawful and fully justified and meets the ends of justice.

(ii)At the time of interception/detention of the vehicle in question the appellant was not in possession of said auction documents. He failed even to produce the registration book. On the other hand as per preliminary investigation this fact had also come into light that the registration mark i.e. MN-10-4500 displayed on the vehicle was actually lying vacant with the concerned MRA. Hence the vehicle was detained for further investigation in the matter. At the time of detention the vehicle was physically inspected in the presence of the appellant. This physical inspection even with the naked eye created a reasonable suspicion about the manipulation of the chassis number. The appellant was enquired about the manipulation of the chassis number frame but he completely failed to give any plausible reply and simply stated that the vehicle was legally acquired through auction conducted by a government department. The vehicle was referred to FAL which reported the vehicle as tampered.

(iii)That the impugned vehicle was detained and subsequently seized on the basis of reasonable suspicion that the same is smuggled one and its chassis number has been manipulated accordingly to give it coverage of auction documents which fact was confirmed by the FSL. Since the chassis number of the vehicle has been proved to be manipulated as such the auction documents produced by the appellant had no relevance with the vehicle under reference. The scrutiny of the auction documents reveals that it is nowhere mentioned that the appellant purchased a cut and welded vehicle. On the other hand the auction documents revealed that the vehicle was handed over to the successful bidder after getting the condition of engine number and chassis number duly observed by the bidder and matched with the auction documents. This observation of bidder was got carried out in the presence of specially deputed Police Officers and Officials. All of these has confirmed that at the time of auction the chassis number of the auctioned vehicle was genuine and intact, whereas the chassis frame of the vehicle seized by the department is cut and welded as confirmed by FSL.

(iv)The provision of sections 162 and 163 of the Customs Act, 1969 are not relevant as no issue of search of the premises is involved in this case. So the case of the appellant is clearly excluded from the purview of sections 162 and 163 of the Customs Act, 1969. However, in the instant case the vehicle was seized on the charge being smuggled one and the appellant was required to produce documents showing legal and lawful procurement of the vehicle as provided under section 156(2) read with section 187 of the Customs Act, 1969 but he failed to do so. The vehicle.

8.Heard. Record perused.

9.Suffice to say that the impugned Toyota Prado SUV bearing Chassis No. KZJ950050038 and Engine No. 1KZ-0612429 was impounded under section 550, Cr.P.C. 1898 by Depalpur Police Station; Subsequently, a committee was constituted and an open auction of the impugned vehicle was conducted on 4th of June 2010, the appellant being the successful bidder purchased the vehicle against a consideration of Rs. 1.365 Millions. Apparently the impugned SUV was denied registration by the Motor Registration Authority on the premise of absence of customs documents, Aggrieved, the appellant moved to the Learned Civil Court, Okara praying for a direction Excise and Taxation Officer, Okara for issuance of a registration certificate in his favour and on 18.01.2012 he was able to secure an ex parte decree; Aggrieved from orders of Learned Senior Civil Judge, Okara the ETO Okara moved to the Learned Additional District Judge, Okara but the appeal was dismissed; further aggrieved a Civil Revision was filed before the Hon'ble Lahore High Court, Lahore which was also dismissed, in the meanwhile on 02.12.2013 the impugned vehicle was intercepted and seized and later on confiscated on the charges of being smuggled and carrying a tampered/cut weld chassis number/frame.

10.The learned counsel for the appellant argues that the appellant is an auction purchaser of impugned vehicle and that the auction of the said Toyota Land Cruiser Prado Chassis No. KZJ -950050038, Engine No. 1KZ-0612429 had been ratified by the Hon'ble Lahore High Court, Lahore in Civil Revision No. 1486/2013 but still the respondent department was withholding his lawfully purchased vehicle.

11.Initially we consider it appropriate to examine the provisions with context to seizure and auction of property as embedded in Criminal Procedure Code, 1898 as well as the Customs Act, 1969; An overview of taxonomy of the Customs Act, 1969 with regard to contraband goods would reveal that it contains a comprehensive set of provisions with regards to "seizure, adjudication, confiscation and auction of contraband goods" i.e. Chapter XVII thereof contains provisions in the shape of sections 158 to 172 dealing with searches, seizure and arrest while sections 179 and 180 pertain to adjudication likewise Chapter XIX encompassing sections 193 to 196J deals with forums of Appeals and Revisions; Chapter XVII containing sections 156 and 157 deals with extent of confiscation of goods and conveyance and imposition of penalties; Chapter IV deals with prohibitions and restrictions and includes sections 15, 16 and 17; Chapter XX contains Section 201 pertaining to auction procedure. On the other hand Code of Criminal Procedure contains certain statutory provisions in the shape of sections 517, 518, 523, 524, 525 and 550 with context to seizure, disposal of stolen property at various stages of the proceedings.

12.A question then arises "whether law prescribed under Cr.P.C. 1898 for seizure, and auction of contraband goods can prevail over provisions contained in Customs Act, 1969?"

13.To answer this crucial question we have referred to Section 1 of Criminal Procedure Code of Pakistan which deals with savings clause and runs as follows:

"Short title and commencement. (1) This Act may be called the Code of Criminal Procedure, 1898, and It shall come into force on the first day of July, 1898.

(2) It extends to the whole of Pakistan but, in the absence of any specific provision to the contrary, nothing herein contained shall affect any special or local law now in force, or any special jurisdiction or power conferred or any special form of procedure prescribed, by any other law for the time being in force."

14.Subsection (2) of the above section manifestly lays down that; nothing contained in the Criminal Procedure Code (Cr.P.C.) shall, affect any special or local law in force, or any special jurisdiction or power conferred, or any special form of procedure prescribed, by any other law for the time being in force;

15.The legal impute of this subsection separates it into two distinct stipulations;

Firstly, Cr.P.C. generally governs matters covered by it;

Secondly, if a special or local law exists, covering the same area, this (special or local) law will be saved and will prevail;

16.The underlying principle behind subsection (2) of section 1 of the Code is based on the Maxim "Generalia Special bus no Derogant" i.e. the general Acts do not affect the Special Acts, in other words, Special Acts are not repealed by the General Acts. There is no dispute with regards to the fact that Customs Act, 1969 is a special law and thus it can safely be assimilated that its provisions cannot be repealed by the provisions of Cr.P.C., 1898.

17.To further emphasize the conclusion drawn in para supra we have also referred to section 170 of the Customs Act, 1969 which is transcribed below for ease of reference;

170. Procedure in respect of things seized on suspicion by the police.--(1) When anythings liable to confiscation under this Act are seized by any police-officer on suspicion that they had been stolen, he may carry them to any police-station or court at which a complaint connected with the stealing or receiving of such things has been made, or an inquiry connected with such stealing or receiving is in progress, and there detain such things until the dismissal of such complaint or the conclusion of such inquiry or of any trial thence resulting.

(2) In every such case the police-officer seizing the things shall send written notice of their seizure and detention to the nearest customhouse and immediately after the dismissal of the complaint or the conclusion of the inquiry or trial, he shall cause such things to be conveyed to and deposited at, the nearest custom-house, to be there proceeded against according to law.

18.A cursory perusal of the statutory provision, as referred to above, points out, in unmistakable terms, that subsequent to completion of inquiry or complaint the goods liable to confiscation under the Customs Act, 1969 are to be deposited at the nearest Customs House in order to be proceeded against under the provisions of Customs Act, 1969; It is an admitted fact that the said contraband imported vehicle was a smuggled one bearing a cut and weld chassis number and we are of the considered opinion that the same could not be auctioned under the provisions of Cr.P.C. due to the overriding effect of Customs Act, 1969 as discussed in paras. 13, 14 and 15 supra therefore, the impugned auction under the Police Act is definitely illegal and non existent as far as the Customs Act, 1969 is concerned. It would be note worthy to mention here, that taking guidance from the decisions of the Superior Courts, the Federal Government has introduced strict measures with regard to vehicles carrying tampered chassis numbers and auction of such vehicles has categorically been proscribed. The most prominent being Circular No. 10(1)AS/2004 dated 11.12.2007, which read as under:--

GOVERNMENT OF PAKISTAN

REVENUE DIVISION

FEDERAL BOARD OF REVENUE

C.No.10(I)AS/2004 Islamabad, the 11th December, 2007

To,

The Collector of Customs, (Preventive),

Custom House, Karachi

The Collector of Customs, Port Qasim, Karachi

The Collector of Customs, Custom House,

Rawalpindi/Peshawar/Hyderabad/Multan/Sambrial/Faisalabad/

Lahore/ Quetta.

SUBJECT: DISPOSAL OF TAMPERED CONFISCATED VEHICLES.

I am directed to enclose a copy of Cabinet Division's O.M. No. 36/P-11/2006 (ECC 44/3/2006), dated 29.11.2007 on the subject noted above and to state that steps taken towards the implementation of ECC decision in case No. ECC-44/3/2006, dated 03.03.2006 on disposal of confiscated tampered vehicles may be communicated to the Board. The decision is reproduced

Buses and vans may be utilized for pick and drop of officers and staff working in CBR headquarters and its field formations;

(ii) Other vehicles (cars, jeeps etc) may be sold to the Government/semi- Government departments on the highest prices offered by them; and

(iii) Any left over vehicles may be offered free of cost to the Government owned educational, medical and scientific institutions, as recommended by the respective Ministries, on first come first served basis.

2.It is requested to provide up-to-date data about disposal of confiscated tampered vehicles since the decision bearing No. 44/3/2006, dated 03.03 2007 was made by the ECC. All those vehicles which may have been sold at token/nominal price as consequence of Board's decisions may also be included

Sd/-

(Dr. Muhammad Adnan Akram)

Second Secretary (Anti Smuggling and Coord)"

(Emphasis Provided)

19.In the light of above discussion, we are of the firm opinion that the orders passed by the forums below are well founded, we do not find any illegality or infirmity emanating therefrom.

The appeal lacks merit and is therefore dismissed with no orders as to costs.

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

21.File be consigned to record after completion.

HBT/1/Tax(Trib.) Appeal dismissed.