MUHAMMAD RAFIQUE VS SUPERINTENDENT INTELLIGENCE AND INVESTIGATION-FBR, LAHORE, 2018 PTD-CUSTOMS-APPELLATE-TRIBUNAL-LAHORE 756 (2016)

Customs Act (IV of 1969)---

----Ss. 2(s), 16, 157 & 168---Seizure and confiscation of vehicle allegedly used in smuggling---Validity---Confiscation, was generally used as a means of depriving certain criminals of the fruit 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 the Customs Act, 1969---Object of confiscation under the Customs Act, 1969, was mainly to penalize perpetrators of the offence of smuggling; impliedly it was not the purpose of legislators to penalize the owner of vehicle, unless any connivance was proved---Transportation of freely traded items like Ceramic Floor Tiles, could not mechanically be construed as assistance to violation of the provisions of customs law---Case of the department was not that truck in question was apprehended while pilfering goods from a customs area or that truck was detained while removing goods from a customs bonded warehouse or a private bond or; that impugned merchandise was found hidden inside the truck, or that the impugned cargo vehicle was apprehended while hauling the contraband goods across the Frontier of Pakistan---Fact of the matter was that the cargo carrier was apprehended while transporting freely tradable Floor Tiles, under normal course of intercity haulage---Adjudicating Officer was let loose, 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---Customs authorities, did not possess unbridled powers to confiscate property of subjects---Confiscating 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 the breach of law was definitely illegal and void and should be discouraged---Vehicle could not be penalized unless adequate proof of involvement of the owner of the vehicle was proved---No prima facie direct/adequate evidence was available to prove that the owner of the vehicle was involved in the impugned offence---Impugned order was modified to the extent that truck in question, was ordered to be unconditionally released to its lawful owner.

PLD 1974 SC 5 ref.

Ahsan Baqer Ali for Appellant.

Ms. Anila Jamil for Respondents.

Date of hearing: 28th April, 2016.

JUDGMENT

OMAR ARSHAD HAKEEM, MEMBER (JUDICIAL).---This judgment shall dispose of an appeal filed against Order-in-Appeal No.85/2015 dated 29.04.2015 passed by the learned Collector of Customs, (Appeals) Lahore.

2.Precise facts of the core controversy involved in the instant appeal are that the staff of Customs Intelligence and Investigation-FBR, Range Office, Lahore intercepted a Mazda Mini Truck bearing registration No. LES-11-1187 loaded with Iranian origin tiles. On query driver of the truck introduced himself as Muhammad Rafique son of Riaz Ahmad and produced bilty No. 336 dated 11.11.2014, but failed to produce any document regarding legal import or lawful possession of the impugned goods. The impugned goods were therefore seized under section 168(1) of the Customs Act. 1969 for confiscation under section 156(1)9 and 90 and section 157 ibid.

3.During the course of investigation, statement of driver Muhammad Rafique was recorded. He stated that the seized Iranian origin tiles were loaded in the truck from Messrs Azad Frontier Punjab Goods Transport Company, Gujranwala against bilty No. 336 dated 11.11.2014 which were booked by one Zikria. He further stated that the seized filed were to be off loaded at Al-Makka Tiles, Township Lahore. The owner of the goods did not provide any document regarding legal import or lawful possession to him.

4.Accordingly a show-cause notice was issued to the appellant for contravention of the provisions of law. The adjudicating proceedings culminated into passing of an order-in-original, which reads as under:--

"In view of the confession made by the respondents, the charge to the extent that the goods have been brought into the country without payment of duties and taxes stands established. Therefore the seized goods mentioned in para-1 of this order are confiscated under clause (90) of section 156(1) of the Customs Act, 1969. However, an option under section 181 of the Customs Act, 1969 is allowed and confiscated goods are redeemed to its lawful owners on payment of redemption fine equal to 20% (twenty percent) of the assessed value of the same in addition to payment of duty/taxes leviable thereon. The seized Mazda Mini Truck bearing registration No. LES-11-1187 used for transportation of impugned goods is confiscated under section 157 of the Customs Act, 1969. However, an option under section 181 of the Customs Act, 1969 is allowed and confiscated Mazda Mini Truck bearing registration No. LES -11-1187 provisionally released earlier against bank guarantee Rs.40,000/- (pak rupees forty thousand only) issued vide order C. No. V-Cus/DC/ADJ/ 274/2014/483 dated 24.11.2014 is redeemed to its lawful owner on payment of redemption fine of Rs.40,000/- (pak rupees forty thousand only)."

5.Being aggrieved from the aforesaid order of the Deputy Collector of Customs (Adjudication), Lahore the appellant filed an appeal (to the extent of Mazda Mini Truck) before the learned Collector of Customs (Appeals), Lahore who vide impugned order-in-appeal rejected the same and passed the following order:--

"I have examined the case record, considered the grounds of appeal, verbal arguments advanced by the learned counsel of the appellant as well as departmental representative during hearing proceedings and found that the appellant has failed to put forward any further evidence to defend his case. The Deputy Collector (Adjudication) has rightly passed the order-in-original in which all the aspects of the case have been thrashed out in detail. I find no reason to interfere with the order. The Order-in-Original No. 62/2015 dated 09.03.2015 is upheld and the instant appeal being devoid of merit is dismissed."

6.Being further aggrieved from the aforesaid order of the learned Collector of Customs (Appeals), Lahore the appellant has filed the instant appeal (to the extent of Mazda Mini Truck) before the Tribunal on the following grounds:--

a)That the impugned order-in-appeal to the extent of the appellant has been passed in a mechanical fashion and without proper appreciation of law points involved in the case. As such the same is liable to be set aside on this score alone.

b)That the confiscation and imposition of redemption fine on the vehicle in question is illegal because the appellant loaded tiles from the registered Goods Transport Company name Messrs Azad Frontier Punjab Goods Transport Company, Gujranwala against bilty No. 336 dated 11.11.2014. It is pertinent to mention here that the owner of the tiles claimed the ownership before the respondents.

c)That while deciding the case the respondents Nos. 2 and 3 misconceived the legal provisions of Customs Act, 1969 because the confiscation of the truck and imposition of redemption fine is unwarranted specially in the circumstances when there is no knowledge and criminal involvement of the owner of the vehicle as well as vehicle was found and established therefore the impugned order-in-appeal to the extent of the appellant is liable to be declared illegal.

d)That the appellant loaded the tiles from the truck adda and owner of the tiles is also available therefore the appellant cannot be held responsible for the production of import documents and lawful possession of the goods in question.

e)That the appellant did not violate any provisions of the Customs. Act, 1969.

f)That the impugned order in appeal has been passed in clear violation of the provisions of Customs Act, 1969. It is submitted that there is no evidence on record which shows any mala fide on the part of the appellant therefore the allegation is based on presumption. Hence the impugned order-in-appeal is illegal.

7.Heard. Record examined.

8.Suffice to say that under the criminal law confiscation is generally used as a means of depriving certain criminals of the fruits of their crimes. That under the Customs Act, 1969 confiscation of transport vehicles seized, while transporting smuggled goods falls within 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.

9.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 Ceramic Floor Tiles 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 Mazda Truck bearing registration No.LES-11-1187 was apprehended while pilfering goods from a customs area or that the conveyance was detained while clandestinely removing goods from a customs bonded ware house or a private bond or that the impugned merchandise was found surreptitiously hidden inside the Truck or that the impugned cargo vehicle was apprehended while hauling the contraband goods across the Frontier of Pakistan, fact of the matter is that the cargo carrier was apprehended while transporting freely tradable Floor Tiles under normal course of intercity haulage.

10.In order to arrive at a correct interpretation of section 157 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 67 [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 scheduled bank for the due production of the conveyance at any time and place it is required by the 67 [appropriate officer] to be produced.

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

11.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.

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

"If the words "liable to confiscation" give a 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"

13.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 penalised the impugned vehicle as a consequence of transportation of smuggled goods. If the inter-pretation 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.

14.A question then arises whether the customs Authorities possess 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.

15.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. 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 impugned offense; In these circumstances, the impugned order is modified to the extent that the Mazda Truck bearing registration No.LES-11- 1187 is ordered to be unconditionally released to its lawful owner.

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

17.File be consigned to record after completion.

HBT/143/Tax(Trib.) Order accordingly.