' SHER NAWAZ, MEMBER (TECHNICAL).---This appeal has been filed by Ahmad Khan son of Dost Muhammad (hereinafter called as the appellant) against the Order-in-Appeal No, 459 of 2010, dated 25-8-2010, passed by the Collector of Customs (Appeals), Peshawar.
2. Precisely, the stated facts as recapitulated from the available case record are that the staff of Customs Anti-Smuggling Unit, Kohat, on specific information that a non-duty paid/smuggled Toyota Hilux Surf (SSR-X, SUN ROOF) bearing Registration No,CK-1610 (Sindh), having Chassis No, LN61-0004069, and Engine No,2L-3214286 of Model 1992 (as per physical examination) and as per Registration Book the Engine No,2L-1182224 of Model 1986, would be smuggled from Miranshah to Peshawar, the same was intercepted on 3-12-2009, at about 1200 hours near Toll Plaza, 'Lachi (District Kohat). On demand the occupant of the vehicle produced photocopies of an assessment sheet, auction letter, judgment sheet and treasury challan issued in respect of a Toyota Double Cabin Pick-up of Model 1986. Since, these documents did not match with the impugned vehicle therefore, the vehicle was detained under section 17 of the Customs Act, 1969, for further verification. Thereafter, upon request the ETO/MRA Civic Center Karachi 8, provided a computer printout pertaining to the same registration number, which also showed that the vehicle registered against the said registration number was a Toyota Hilux Pick-up, bearing Engine No,2L-1182224 of Model 1986.
3. Furthermore, the documents produced by the driver were sent to the Deputy Collector, MCC, Quetta, for verification/authentication, whose response vide dated 28-10-2009, again showed that the particulars pertained to a Toyota Double Cabin Pick-up having Chassis No,LN61- 0004069, Engine No,2L-1182224 of Model 196. The impugned vehicle however had the body of a "SURF" along with all other accessories, i,e,, the owner had changed the whole structure of the vehicle except its chassis. Later on the FSL test of the vehicle was also conducted through the Forensic Science Laboratory, Peshawar, who reported that the chassis number of the vehicle to be genuine. Hence in view of the above investigations, the detained vehicle was seized under section 168 of the Customs Act, 1969, for violation of sections 2(s) and 16 Ibid, read with section 3(1) of the Imports and Exports (Control) Act, 1950, and the case papers were submitted for adjudication. Consequently, on adjudication of the matter, the Additional Collector-II of Customs, MCC, Peshawar vide his Order- in-Original No,143 of 2010, dated 13-4-2010, released the vehicle on payment of leviable duty/taxes plus redemption fine @30 of the customs value of the replaced body/parts and other accessories (except the chassis frame).
4. Being aggrieved of the impugned Order-in-Original, the appellant filed an appeal before the Collector of Customs (Appeals), Peshawar, who vide his Order-in-Appeal No,459 of 2010, dated 25- 8-2010, upheld the impugned Order-in-Original No,143 of 2010, dated 13-4-2010. Hence the present appeal filed by the appellant to this Tribunal on the following grounds:
(a) that the impugned orders passed by the learned respondents are against the law and facts, so the same has got no legal value to effect;
(b) that there is nothing available on record as single piece of evidence to connect the appellant with the alleged charges of smuggling;
(c) that regarding lawful possession of the said vehicle, all the relevant documents have been produced and the same have been verified as correct. Beside this chassis number of the said vehicle has been found as genuine by the concerned FSL authority. In spite of these evidences, the order for payment of duty and taxes on body-parts of the said vehicle is illegal and liable to be set aside;
(d) that the seizing agency has badly failed to establish that the said vehicle or its body-parts are smuggled one, but same has not been considered by the adjudicating authority;
(e) that it is on record during investigation the treasury challan, auction-sheet issued in respect of the said vehicle properly been verified as correct, besides this its Registration Book was also been verified from the concerned MRA, which was also found as correct but all these evidences have been ignored by the learned Collector (Appeals), as well;
(f) that it is also an admitted fact that engine number and chassis number of the said is found as genuine, so if chassis is genuine then how could a new frame of new vehicle could be affixed in the said vehicle, which otherwise means that conclusion drawn by the respondent is not according to the actual fact and evidences available on record;
(g) that it is an admitted fact that the said vehicle has been purchased through auction pertaining to Mode 1986, but due to banned on import of second hand used and old auto-parts, some parts of new model have been affixed in the said vehicle to give a upgraded look and to make the said vehicle more comfortable; and
(h) that there is no provision available in the Customs Act, 1969, to charge any duty/taxes on the replaced body parts of a vehicle, as leveled charges of show-cause notice are not established against the appellant, therefore, the appellant is legally not bound to pay duty/taxes on the body- parts of the said vehicle.
5. On the date of hearing fixed for 22-2-2011, the learned counsel for the appellant contended that the show-cause notice is defective as it has termed the seized vehicle as smuggled despite the fact that the verification made by the department from MCC, Quetta, declared the chassis number of the vehicle as LN61-0004069, which was as per registration book and as per physical verification by the department. The engine Number 2L-1182224 of Model 1986 (as per Registration Book) was not smuggled as alleged by the learned adjudicating officer, but was a part of the vehicle purchased in the open auction and also verified by the Deputy Collector of Customs, MCC, Quetta.
Engine No,2L-3214286 of Model 1992 (as per physical examination) was subsequently, replaced which is a normal practice that whenever engine of a particular vehicle become out of order a new engine is fitted to make the vehicle in working condition. He further referred to the show-cause notice and contended that the show-cause notice does not say anything about the parts of the body and only refers to chassis number, which has duly been proved to be genuine as per report of the Deputy Collector of Customs, MCC, Quetta. Even at the original stage and even at the appeal stage they have not been confronted with these questions as to whether the parts have been purchased locally and from where these have been purchased. Since nothing has been asked at any stage, therefore, they were not supposed to produce any evidence with regard to the purchase of parts and body of the vehicle. He further added that there is no such provision in the Customs Act, 1969, or Rules made therein under which someone could be asked to pay duty and taxes on the parts of the vehicle or anybody could be questioned about the replacement of the parts as it is a normal practice that parts/bodies are replaced frequently whenever there is a need for replacement. He keeping in view the stated position prayed that the vehicle may be released without any duty/taxes and fine/penalty.
6. On the other hand, the D.R. Contended that the vehicle seized is totally different from the vehicle auctioned by the Customs, as the vehicle disposed of by the MCC, Quetta, was Toyota Double Cabin Pick-up of Model 1986, while the impugned vehicle is having a body of SURF of 1992 Model with replaced engine and other accessories. At the time of adjudication and appeal they were given sufficient opportunities to explain their point of view which however they could not. He referred to para-5 of the show-cause notice, wherein they were directed to produce any documentary evidence to prove the legal import and lawful possession of the seized vehicle along with their replies/statements within the specified time. He, therefore, prayed that they were very much aware of the facts and nothing was hidden from them, which was not in their knowledge.
With reference to the contention of the learned D.R., the learned counsel for the appellant contended that para-5 of the show-cause notice is pertaining only to the import of the vehicle and not to body-parts by producing the documents pertaining to its purchase lawful possession. It is proved that the vehicle was duty paid and genuinely in the possession of the appellant. Keeping in view that the appellant was only asked about the import documents pertaining to the vehicle, therefore, he was not duty bound to produce any other documents pertaining to the purchase of the parts and body of the vehicle.
7. From perusal of the record and hearing both the sides it transpires that Toyota Hilux Surf (SSR-X, SUN ROOF) bearing Registration No,CK-1610 (Sindh), having Chassis No,LN61-0004069, and Engine No,2L-3214286 of 1992 Model (as per physical examination and as per Registration Book the Engine No,2L-1182224 of Model 1986), was intercepted by the customs staff near Toll Plaza, Lachi, District Kohat and detained the same section 17 of the Customs Act, 1969, for further verification. The verifications were made from MRA, Karachi, who reported, the vehicle registered against the said registration number to be a Toyota Hilux Pick-up, having Chassis No, LN61- 0004069 and Engine No,2L-1182224 of 1986 Model. The Deputy Collector, MCC, Kohat reported that the vehicle auctioned was a Toyota Double Cabin Pick-up having Chassis No,LN61-0004069, Engine No,2L-1182224 of Model 1986. The vehicle having body of a SURF along with other accessories was finally seized and a case was registered against the owner of the vehicle. Accordingly, a show-cause notice was issued vide C.No,Cus/Adj/Add:C-11/218/2009/1049, dated 3-2-2010, and the case was adjudicated vide Order-in-Original No,143 of 2010, dated 13-4-2010, wherein the Adjudicating Officer allowed the parts to be redeemed against payment of fine @30% of the customs value of the body parts and other accessories of the vehicle (minus the value of the chassis frame) in addition to duty and taxes leviable thereon. Against the said order the party filed appeal with the learned Collector (Appeals), who vide his Order-in-Appeal No,459 of 2010, dated 25-8-2010, rejected the appeal and maintained the order-in-original.
8. From perusal of the record it reveals that the Customs staff had intercepted Toyota Hilux Surf with the above-mentioned particulars. As per registration book the vehicle was Toyota Hilux Pick- up with the sitting capacity of 7 persons, 4- Cylinders of 2400 Horse Power of 1986 model and as reported by the Excise and Taxation Officer and Motor Registration Wing, Civic Center, Karachi vide their letter dated 17-10-2009. The notice issued under section 171 of the Customs Act, 1969, by the seizing officer refers to the make/shape/engine and chassis number of the vehicle, but it does not indicate as to whether any other change has also been made with reference to its cylinder, horse power, unladed weight and other such particulars. The show-cause notice issued vide aforesaid orders is also not specifying the details of changes made in the said Pick-up. It also does not refer to the details of parts and other specification. The case has been based on the grounds that the vehicle is brought clandestinely in violation of sections 2(s) and 16 of the Customs Act, 1969, read with section 3(1) of the Imports and Exports (Control) Act, 1950. The Order-in-Original, however, refers to the replaced parts and, therefore, the adjudicating officer has allowed release of the vehicle against payment of redemption fine @30% on the body parts and other accessories of the vehicle.
9. From the above discussion it transpires that the vehicle was auctioned/disposed of by the Collectorate of Customs, MCC, Quetta, who had confirmed the disposal of vehicle having chassis as per Registration Book and was registered with the excise authority on the basis of same documents, who confirmed the registration number and other particulars of the vehicle. It is cleared that initially the vehicle was disposed of as Pick-up having Chassis No,LN61-0004069, and Engine No,2L-3214286, but subsequently, after registration the shape of body was changed and it was made as a SURF instead of Toyota Pick-up by making some changes in the shape of vehicle.
From the record, however, it is not cleared as apart from body what major changes have been made in the seized vehicle. Whether its sitting capacity has changed? Whether its cylinder capacity has increased or decreased? Whether its engine capacity has been enhanced. No answers to these queries are available in the record of the seizing agency. Moreover, it is also not clear whether technically there is any change in between the Double Cabin Pick-up and Surf apart from its shape. It is a fact as contended by the learned counsel for the appellant that after clearance of vehicles from Customs Authorities, the owners/keepers of the vehicles are at liberty to make changes in the body, shape and other such things, which are deemed appropriate.
10. For making some changes except of replacement of engine, which is required to be reported to Excise and Taxation Authority, and permission is given by the Excise Authority on payment of some fee, but there is no law available, which requires the owner of the vehicle to report either to customs or to the registration authority about any change. In the instant case once it is established and proved that the chassis of the vehicle is the same as was cleared from the customs and registered with MRA, Karachi, it is, therefore, proved that this 'vehicle was legally imported/cleared from customs and registered on the basis of customs documents. At the time of seizure or thereafter it was up to the seizing agency to have investigated the case in detail and to have inquired about the genuineness of the replaced parts and the sources of acquisition of such parts.
But neither the show-cause notice refers to parts nor these aspects have been investigated by the seizing agency. The other important aspect of this case is that FSL laboratory has also reported the genuineness of the chassis number of the vehicle. In a similar case the Hon'ble Member (Judicial) of this Bench while deciding the case in Customs Appeal No,Cus.293/PB/2008, dared 17-8-2009, vide para-8 of his judgment has observed as under:-- "8. After going through the said judgment of the honourable Peshawar High Court, Peshawar and the controversy for its resolution brought before this Tribunal with regard to the remounting of the 1992 model body on motorcar bearing Registration No,RIF-2917, model-1973, one is clear to hold that there is no specific provision of law to make liable the owner of the vehicle either for smuggling of the body or evasion of duty and taxes by recounting of the body of .a new model on a chassis/frame of an old model. Therefore, it is clear that the issue raised has already been settled by the honourable Peshawar High Court, Peshawar that the chassis number and frame of the vehicle is not replaced nor tampered with then the genuineness of a vehicle is to be seen through valid import documents and if the same stand verified as genuine and correct then simple modification or replacement of parts/new body parts, particularly, when old parts are not available does not per se constitute any offence 'under the provisions of the Customs Act, 1969."
11. Keeping in view the position as stated above and the decision of this Bench and other higher fora, I set aside the Order-in-Appeal No,459 of 2010, dated 25-8-2010, and allow the appeal of the appellant. The vehicle is ordered to be released unconditionally to its rightful owner, if not required in any other case.
12. This judgment consists of seven (7) pages and each page bears my official seal and signature
13. Announced.