' MHER MUHAMMAD ARIF SARGANA, MEMBER (JUDICIAL):---This appeal has been filed against Order- in-Appeal No,7 of 2010, dated 20-1-2010 passed by the Collector Customs (Appeals) Multan whereby he rejected the appeal and up-held the Order-in-Original No,112 of 2009 passed by the learned Additional Collector (Adjudication), Multan.
2. Brief facts of the case are that an information was received that Messrs Yasir Enterprises, Messrs Global Traders and Messrs Ata Chemical Multan Imported a huge quantity of petroleum liquid under the garb of residue of petroleum by misdeclaring its description, classification and weight etc. It was further reported that these goods were dispatched from Karachi to Multan Dry Port under TP Nos. 14506, 14593 and 14495 all dated 28-3-2009. Acting upon the said information Collector Model Customs Collectorate Multan was requested to detain these consignments for joint examination vide Directorate of Intelligence and Investigation F.B.R. Multan letter dated 1-4- 2009. Joint examination of one available container of Messrs Yasir Enterprises and 5 containers of Messrs Ata Chemicals (Pvt.) Ltd., Mullah was carried at Multan Dry Port, which revealed that Messrs Yasir Enterprises imported yellow colour liquid petroleum, while Messrs Ata Chemical imported black colour liquid petroleum and as such samples were drawn from the container and sent to Messrs Hydrocarbon Development Institute of Pakistan Multan and Lahore for chemical analysis.
Test report dated 2-4-2009 relating to Messrs Yasir Enterprises Multan states as under:- "To the extent of tests carried out in this laboratory samples analysis results except flash point meet the standard test limits of diesel (HSD) grade as approved by the DG (Oil), Ministry of Petroleum and NR."
3. Similarly, the test report dated 3-4-2009 with regard to Messrs Yasir Enterprises Multan received from Messrs Hydrocarbon Development Institute of Pakistan Lahore states as under:-- "Test result of the sample is comparable to HSD but contains water sediment and is not suitable for use in diesel engine."
4. On 3-4-2009, the staff of respondent No, 1 and the staff of Model Customs Collectorate Multan again conducted joint examination of 10 x 40 feet containers of Messrs Yasir Enterprises Multan and 2 x 20 feet containers of Messrs Global Traders Multan, which revealed in the case of Messrs Yasir Enterprises that most of the containers contained iron drums of 205 litter size containing yellow colour liquid petroleum and in the case of Messrs Global Traders Multan that there were approximately 30% drums were containing yellow colour liquid petroleum and 70% drums were of black colour liquid petroleum. Samples were also drawn from these containers, which were duly signed by the officers of the Directorate and the Collectorate and sent to Messrs Hydrocarbon Development Institute of Pakistan Lahore for chemical analysis, who vide its report dated 2-4-2009 confirmed that the samples so provided to them on chemical analysis found HSD diesel. Thus, it was clear that Messrs Yasir Enterprises Multan misdeclared its consignment as residue of petroleum instead of HSD contained in eleven containers (277000 litters) and as such after sealing these eleven containers the same along with trailers were seized under section 168(1) of the Customs Act, 1969. Notices were served upon the accused and criminal proceedings were also initiated against them vide F.I.R. No, 1 of 2009 dated 3-4-2009 Police Station I & P Branch Customs Intelligence Multan. Model Customs Collectorate Multan a so lodged F.I.R. No, 1 of 2009 dated 3-4- 2009 in respect of same consignment. During the course of investigation, the drivers whose vehicles brought the goods to Dry Port Multan in the subject case were questioned, who stated that they had earlier un-loaded similar consignment at the premises of Messrs Ahmed Traders (Appellant) and Messrs Kamran Lubricating Multan. Thus, search warrant in terms of section 162 of the Customs Act, 1969 was obtained from the Judicial Magistrate for recovery of the illegally imported goods of Messrs Yasir Enterprises Multan. Accordingly, the search of the aforesaid premises was carried out after adopting legal formalities, which resulted in recovery of 1040 drums of diesel and mixed black oil in diesel, 120 drums suspected of being gear oil etc. 50 tins of RHMN- DTU101 and 20 Cartons of packing material of gear oil.
5. It was further reported that in the case of Messrs Yasir Enterprises two F.I.Rs were lodged one by the Collectorate and other by the Directorate on the same issue and as such the Federal Board of Revenue vide letter dated 15-4-2009 directed as under:- "The matter has been examined and Board is pleased to order that F.I.R. Lodged by the MCC, Multan will take precedence over F.I.R. Lodged by DG (I&I)'s office as the former have primary jurisdiction over the port and powers are vested in the appropriate officer of Customs Collectorate under the relevant provisions of law."
6. As the Board vide its above referred letter ordered that F.I.R. Lodged by MCC Multan will take precedence over F.I.R. Lodged by the Directorate as the former have primary jurisdiction and powers are vested in the appropriate officer of customs under the relevant provision of law and as such the staff of respondent No, 1 did not proceed further with regard to seizure of goods at Dry Port Multan. During the course of investigation, no one came forward to claim the ownership 1040 drums of diesel and mixed black oil in diesel, 120 drums suspected of being gear oil etc. 50 tins of RHMN-DTU101 and 20 Cartons of packing material of gear oil, which were recovered from the premises of the appellant. Notices under the provisions of the Customs Act, 1969 were issued to the concerned persons, but no one claimed the ownership of the goods nor furnished any documentary evidence regarding its legal import or lawful possession, thus, in the light of aforesaid facts it was clear that 1040 drums of diesel and mixed black oil in diesel, 120 drums suspected of being gear oil etc. 50 tins of RHMN-DTU101 and 20 Cartons of packing material of gear oil recovered from the premises of the appellant were smuggled one and procured illegally in connivance with other persons, therefore, the same were seized under section 168(1) of the Customs Act, 1969 being liable to confiscation under section 156(1)(89) read with sections 157(2) and 178 of the Customs Act 1969 read with sections 2(s) and 16 further read with section 3(1)(3) of the Import and Export (Control) Act, 1950 and paragraph-16-B (i) Part-II of Appendix-B of the Import Policy Order 2008- 2009 and section 25(a) of the OGRA Ordinance, 2002 further read with sections 3, 34 and 36 of the Sales Tax Act, 1990 punishable under section 33 ibid and subsections (2) and (3) of section 3A of the Petroleum Products (Development Surcharge) Ordinance, 1961 and, thus, a seizure report was prepared and sent to respondent No, 2 who issued show-cause notice dated 2-6-2009. The Adjudicating Officer (respondent No, 2) vide order dated 15-10-2009 out rightly confiscated the seized goods under Clause (89) of section 156(1) of the Customs Act 1969 and imposed penalty equivalent to three times the customs value of the confiscated goods upon the appellant and others. Aggrieved by the said order the appellant filed appeal before the learned Collector of Customs (Appeals) Multan, but the same was dismissed vide impugned order dated 20-1-2010.
Hence, this appeal.
7. The main grounds as urged in the memo of appeal by the appellant are:--
(a) That respondent No, 3 rejected the appeal of the appellant without taking into account legal as well as factual issues raised by the appellant. He failed to give finding on legal issues mentioned in the memo of appeal so much so he did not bother to verify that the item seized in the case was procured locally or otherwise. Hence, the impugned order cannot be termed a speaking judicial order.
(b) That the main plea of the appellant was that the whole quantity consisting of 1040 drums were not of diesel oil as alleged by the respondent No,
1. The 915 drums were of used lubricating oil etc. And only 125 drums of diesel oil. This factual controversy could easily be resolved only after perusal of record of respondent No, 1 where it specifically clarified that only 125 drums were of diesel oil but respondent No, 3 rejected the appeal of the appellant without calling comments from the respondent No, 1 and without confronting the legal as well as factual issues raised by the appellant to him. Hence, the impugned order is not sustainable in the eyes of law.
(c) That the search warrant was obtained on 3-4-2009 while raid was conducted and search was carried out on 2-6-2009 without there being any explanation for such an inordinate delay. The reasons behind this were that since F.B.R. Had suspended the operation of the F.I.R. Registered by respondent No, 1 in connection of which the search warrant was obtained, thus, this false and fabricated case was registered only because the person who looks after the business of the appellant is the same who was running Messrs Yasir Enterprises Multan.
(d) That the show-cause notice as well as the impugned order are self-contradictory because at the one hand it was alleged that the seized goods were the same which were imported by Messrs Yasir Enterprises under the garb of residue of petroleum while at the other hand the goods in question have been confiscated on the allegation that the same were smuggled one which shows that the department as well as respondent No, 2 were not confident as to whether the goods we awfully imported or as the case may be smuggled. This discrepancy alone goes to the root of the case.
(e) That as regards the objection of the appellant that the adjudication be entrusted to some other impartial officer, respondent No, 2 has totally failed to justify as to why he was so keen the proceed with this case. The observation of respondent No, 2 that the appellant may, however, agitate their view point before the appellate authority, if they desired so, is suffice to draw inference that respondent No, 2 was biased with the appellant. More particularly when the appellant while submitting reply to show-cause notice had taken specific objection which is re-produced below:-- ' At the outset the jurisdiction of this august forum for adjudication of this matter is assailed on the ground that at the one side Presiding Officer of this Hon'ble forum namely (Mr. Ghulam Sarwar Shah) in his capacity as Additional Collector Customs, MCC, Multan has issued show-cause notice and adjudicating this matter while at the same time the aforesaid Presiding Officer of this August forum in his capacity as Deputy Collector Customs (Investigation and Prosecution) is conducting and supervising the investigation of this case at criminal side. It is pointed out that the notices under section 166 of the Customs Act, 1969 have also been issued to the respondents as accused persons for joining the investigation in cases registered in this behalf. It is humbly pointed out that the Presiding Officer of this august forum cannot adjudicate this matter being the Investigating Officer of this case because it is by now a settled principle of law as well as natural justice "that no one can be a judge of his own cause". Hence, it would be more appropriate, fair and legal to entrust the adjudication of this case to any other impartial officer who had no role in the investigation of this case to meet the ends of justice.
(f) That the seized drums of used lubricating oil were locally purchased by the appellant. Such oil is commonly available in the open market. It is collected by the dealers from generating sets, petrol pumps, work shops etc. Etc., and thereafter sold to the plants/units engaged in refining the same.
The seized used lubricating oil was lawfully purchased by the appellant while few drums of HSD were also purchased locally for using the same in operation of generating sets.
(g) That the seized 1040 drums were not of diesel oil. Only few drums were of diesel oil and that too containing water and sediment therein. The other drums were of used oil (black oil) and certain other locally purchased item. These goods were neither imported by the appellant nor brought into the country in un-lawful manner nor the appellant was engaged in the business of importation.
(h) That the allegation contained in the search warrant, seizure report, show-cause notice and also in the impugned order were false and fabricated because it was mentioned that respondent No, 1 raided the premises of the appellant as according to his information there had been lying 1040 drums of diesel oil. The F.I.R. Was also lodged on the said false and fabricated allegation which could not be proved on receipt of lab report from H.E.J. Research Institute Karachi.
(i) That the said raid and search were illegal. The staff of Directorate of Intelligence and Investigation intentionally mentioned such a huge quantity of diesel in the notice for justifying their raid and to make out a false case. It was reported in the notice that there had been huge quantity of 1040 drums of diesel lying in the premises of Ahmed Traders, Multan whereas no such huge quantity of diesel was lying in the said premises. This all was done just to harass and threaten the appellant. The acts and action carried on by the department are illegal without lawful justification and with mala fide intention and ulterior motive. The firm Messrs Ahmed Traders is registered in the name of Muhammad Hanif who is involved in the local business and has no concern with import of any item neither the said firm is as importer registered as importer. j) That according to the report of the laboratory, only few drums were found of HSD with many impurities and as it cannot be used in diesel Engines, which makes it clear that even few drums in question cannot wholly or partly be termed as HSD. It is the basic rule of nomenclature that a thing is ascribed a certain name due to its use. For instance, if there are some broken pieces of wood and it is said that these broken pieces of wood are of some chair but the same cannot be used for sitting, then the same will not be termed as chair but the same can be called the remnants of chair. Any petroleum product will be termed as diesel only when it can be used as diesel and if any petroleum, product cannot be used in any machinery which is run by diesel, then such petroleum product cannot be named as diesel but it can be given any other name like residue of petroleum etc.
(k) That as the appellant firm do not involve in the business of import rather is engaged in the local business so the appellant can't be charged under the provisions relating to import of the goods as contained in the customs law. As the appellant firm has no relation with import or as the case may be exports of goods so charging the appellant under the provisions of Import & Export (Control)
Act, 1950 and Import Policy Order 2008-2009 is not tenable and would be against the natural justice. It is also submitted that the appellant neither imported nor brought into the country any banned or restricted item and as such the provision of sections 2(s) and 16 of the Customs Act, 1969 would not be attracted in case of appellant.
8. The respondent filed parawise comments. They submitted:---
(i) Denied. It was the appellant who was required to justify his claim regarding local purchases with supporting documents i,e, proof of payment of goods purchased, proof of physical movement of goods, party ledgers and inventory record etc., which he failed to furnish the same as yet. It is added that at the time of verification of sales invoices, the so-called supplier of goods also failed to furnish the aforesaid record for verification. The learned respondent No,3 after careful consideration of written as well as oral submissions of both the parties decided the appeal of the appellant which is based on facts and in accordance with the provisions of law while the plea of the appellant in this regard is based on presumption, assumption without any supporting documents.
(ii) Denied. The claim of the staff of respondent No,1 is that the major quantity of seized petroleum liquid i,e, 1040 drums pertains to high speed diesel while the appellants contended that out of 1040 drums, 915 drums pertains to used lubricating oil. It is submitted that the test report received from Messrs HEJ, Research Institute of Chemistry; University of Karachi clearly confirmed that out of 1040 drums, 125 drums found pure high speed diesel while 915 drums found petroleum distillate containing 10 to 20% waste/used oil meaning that these 915 drums are also pertains to substandard high speed diesel, hence the appeal of the appellant in this regard is absolutely incorrect.
(iii) Denied. The search warrant was obtained on 6-4-2009 and the raid was conducted on the same day. Recovery memo in this regard negates the plea taken by the appellant. It is submitted that further proceedings in case F.I.R. Of the Directorate was restrained by the Federal Board of Revenue vide its order dated 15-4-2009. It is stated that the case was registered on 6-4-2009 while the restraining order of the Board in F.I.R. No,01.09 was issued on 15-4-2009, hence it is clearly shows that these orders were after the effecting of seizure. However, the Directorate has not conducting further proceedings in the above referred F.I.R. In the instant case, the goods seized were not same as reported in the above referred F.I.R. Hence, the subject case was different in nature as well as facts. The appellant in the instant case failed to furnish any documentary evidence regarding seized/confiscated goods.
(iv) Denied. It was not alleged that the seized goods were same which were imported by Messrs Yasir Enterprises Multan while the show-cause notice indicated that the staff of respondent No,1 raided the premises of the petitioner on the grounds that the misdeclared goods of Messrs Yasir Enterprises, Multan in terms of section 162 of the Customs Act, 1969 are stored but the same were not found therein. However, huge quantity of foreign origin high speed diesel and cooking oil was lying therein which were seized in terms of section 168 of the Customs Act, 1969 as at the time of raid no evidence with regard to lawful possession of the above said goods were provided to the detecting staff.
(v) Denied. The plea of the appellant in this regard is absolutely incorrect as the adjudicating officer namely Ghulam Sarwar Shah never conducting any criminal proceedings against the appellants. Hence, the plea of the appellant was rightly turned down by the adjudicating officer.
(vi) Denied. The seized drums pertains to high speed diesel, petroleum distillate and cooking oil while the claim of locally purchases of used lubricating oil is absolutely incorrect. The test reports received from Messrs HEJ, Karachi indicated that the seized petroleum-liquids pertains to high speed diesel, petroleum distillate and cooking oil, hence, arguments of the appellant in this regard are fabricated and concocted.
(vii). Denied. As already explained in para vi above even otherwise the appellant failed to justify his claim with supporting evidence.
(viii) Denied. The allegations contained in the search warrants; seizure report, show-cause notice and order in original are proved beyond any shadow of doubts that the seized/confiscated goods were of foreign origin that were procured by the appellants through un-verifiable sources. The appellants till to-date failed to furnish any such record, which shows that goods in question were locally purchased. The test report received from Messrs HEJ, Karachi negates the plea taken by the appellants.
(ix) Denied. The raid and search conducted by the staff of the Directorate was in accordance with the provisions of law. As regards claim of making a false case, it is submitted that the recovery of 1040 drums of petroleum liquid from the appellant's premises chemicals analysis found high speed diesel and petroleum distillate which was nearby the high speed diesel. Test report received from Messrs HEJ, Karachi clearly confirmed the point of the Directorate. It is added that the appellants were registered with the Sales Tax Department as a wholesaler but sales tax profile of the appellants shows nil taxable activities meaning that the appellants neither purchased any taxable goods nor sold the same. It is further added that investigation in the matter revealed the declared owner of the appellants firm was dummy one while one Ch. Bashir Ahmad proprietor Messrs Aamir Oil Regted. Multan was running the business affairs of the said firm. If the appellants claims that he purchased the goods in question from the local market than he may require to furnish any documentary evidence in terms of section 22 of the Sales Tax Act, 1990 along with proof of payments as required under section 73 ibid but the appellants till to-date failed to furnish any such record which shows that goods in question were locally purchased.
' Denied. As per the test report, the major quantity of seized/ confiscated drums found petroleum distillate having waste/used oil of 10 to 20% meaning that if the contents of the said waste may be extracted through chemical process from the said petroleum distillate the seized/confiscated petroleum liquid may be used in diesel engine as high speed diesel. The arguments of the appellant in this regard are absolutely incorrect, baseless and without any supporting evidence.
(xi) Denied. The recovery of huge quantity of petroleum liquid from the appellant's premises and non-production of record regarding its purchases negating the arguments of the appellant. If the appellant claims that he purchased the goods in question from the local market than he may require to furnish documentary evidence in terms of section 22 of the Sales Tax Act, 1990 along with proof of payments as required under section 73 ibid as the appellant is a registered person but the appellants till to-date failed to furnish any such record which shows that goods in question were locally purchased hence the claim of noninvolvement of respondent in smuggling of diesel and other petroleum liquid is absolutely incorrect, therefore, the referred provisions of Customs Act, 1969 are very much attracted on the appellant.
9. Arguments were heard. The learned counsel for the appellant besides re-iterating the grounds mentioned in the memo of appeal aforementioned has contended that according to para-5 of the show-cause notice the seized goods were the same which were imported by Messrs Yasir Enterprises and un-loaded at the premises of the appellant by the drivers on the same vehicles, which brought the goods to Dry Port Multan whereas at the same time the goods have been out rightly confiscated on the charge that the same were smuggled and this contradiction alone made the case of the prosecution highly doubtful. According to learned counsel the entire show- cause notice as well as order in original narrated the story of import made by Messrs Yasir Enterprises, Messrs Global Traders and Messrs Ata Chemical Multan. The chemical analysis reports in respect of imported consignments have also been referred in the show-cause notice and the orders passed by the lower forums. Had the goods been smuggled, there would have been no need to narrate such story in the show-cause notice as well as orders passed by the forums below.
According to him perusal of the show-cause notice and the orders passed by the forum below clearly alleged that the goods were imported by mis-declaring description thereof whereas the confiscation has been made on the charge of smuggling, which has not been established by the prosecution. It has further been contended by the learned counsel for the appellant that raid was conducted on the basis of search warrant obtained from the Judicial Magistrate for search of the premises of Messrs Yasir Enterprises, Messrs Global Traders, Messrs Ahmed Traders (appellant) and Messrs Kamran Lubricant. Raid and search of the above premises were conducted on the basis of same search warrant. Certain similar goods were also seized from the premises of Messrs Kamran Lubricant (Pvt.) Ltd. Who was also served with a show-cause notice dated 2-6-2009 issued by respondent No,
2. Aggrieved by the said show-cause notice, Messrs Kamran Lubricant, Multan filed Writ Petition No,5684 of 2009 before the Hon'ble Lahore High Court Multan Bench Multan, which was allowed. The raid, seizure and subsequent issuance of show-cause notice were declared illegal and the seized goods were directed to be released vide judgment dated 3-2-2010. According to the learned counsel if, the goods seized, on the basis of same warrant from the premises of Messrs Kamran Lubricant Multan were released by the Hon'ble High Court, how the goods seized from the premises of the appellant on the basis of same search warrant could be confiscated by respondent No,
2. It has further been contended that from the day one the case of the appellant was that neither the appellant was importer nor he imported the goods in question, which were procured by him locally. According to him only few drums were of HSD, while all the remaining drums were of used lubricating oil (black oil) purchased by the appellant locally from different dealers who collected the same from various sources like petrol pumps, factories, workshops etc. Etc. According to him there is nothing on record to show that these goods were smuggled nor there was any such charge against the appellant. According to the learned counsel the forum below did not bother eyen to differentiate the seized goods, whereas from the day one, they were informed by the appellant that only few drums were HSD, that too, containing water and sediment while more than 900 drums were of used black oil. So much so the forums below throughout in the proceedings. Had mentioned 120 drums "suspected of being gear oil". They did not bother to check as to whether the same were of gear oil or otherwise. According to him the impugned order is otherwise liable to be set aside because neither the department has rebutted the contention of the appellant nor any body appeared to oppose his defence and the learned Collector (Appeals) at para-15 of the impugned judgment after recording the contention of the learned counsel rejected the appeal only by mentioning that the appellant failed to substantiate the cogent reason and valid evidence regarding their claim of local purchase of the seized goods, whereas the claim of the appellant was never rebutted by the prosecution before him, as is evident from the perusal of paras. 14 and 15 of the impugned order. The learned counsel further submits that the order in original was passed by Mr. Ghulam Sarwar Shah who was also Investigating Officer of the cases referred in the show-cause notice. Specific objection in writing was taken by the appellant that he should not adjudicate this matter by becoming. Judge of his own cause and in response thereto he stated in the order in original that "as far as request of the respondent concerning transfer of file to other adjudicating forum is concerned, it is observed that it is baseless as instant case was framed by the Directorate of Intelligence and Investigation, Range Office Multan which is an independent agency and has no concern with the administrative set-up of the Model Customs Collectorate Multan. The respondents may, however, agitate their view point before the appellate authority if they desired so". According to the learned counsel these remarks, on the part of the adjudicating officer, are suffice to show his mala fide and biasness towards the appellant. According to him the case of the appellant from the day one was that the seized goods were procured locally from different sources, which is commonly available in the open market. According to him black oil is collected by the dealers from generating sets, petrol pumps, workshop and other mechanical units and thereafter, sold to the plants/units engaged in re-fining the same. According to him, the seized lubricating oil was lawfully purchased by the appellant from the local market. Few drums of HSD were also purchased locally for using the same in operation of the generating sets. According to learned counsel the case of the appellant is at par with the cases of Messrs Kamran Lubricant (Pvt.) Ltd. Multan, whose goods seized by the same staff and on the basis, of same warrant were ordered to be released by the Honble Lahore High Court Multan Bench Multan. The learned counsel further submits that both the forums below have miserably failed to prove that the seized goods were smuggled. Rather the show-cause notice and impugned orders passed by the forums below clearly shows that these goods were not smuggled. He prays to accept the appeal and release the goods unconditionally being of local origin.
9. On the other hand, the representative of the department supported the impugned orders.
According to him the seized goods were smuggled and had rightly been confiscated. He, however, admitted that the department never rebutted the contention of the appellant before the learned Collector (Appeals) Multan. On query that if the goods were smuggled then why, the long story regarding import of HSD and other petroleum products by mis-declaring the same as residue of petroleum has been narrated in the seizure report, show-cause notice and the impugned orders, he could not give any satisfactory reply. The learned representative of the department also admitted that according to the show-cause notice the charge against the appellant was that the seized goods were the same which were unloaded on the vehicles, which brought the consignment of Messrs Yasir Enterprises to Multan Dry Port. He was unable to satisfy this Tribunal as to how the goods were found smuggled. He, however, admitted that there was no marking of any foreign country on the drums or as the case may be packing material. He also admitted that all the seized drums were not of HSD and more than 900 drums were of used lubricant oil (black oil). He also confirmed that the goods seized from the Messrs Kamran Lubricant (Pvt.) Ltd., Multan were ordered to be released by the Hon'ble Lahore High Court Multan Bench Multan vide judgment dated 3-2- 2010 passed in Writ Petition No, 5684 of 2009. He also admitted that it was the same search warrant on the basis of which the goods were seized from Messrs Kamran Lubricant (Pvt.) Ltd., which was declared illegal by the Hon'ble Lahore High Court Multan Bench Multan, and in the show-cause notice the same story and charges were mentioned in the case in hand.
10. I have heard the learned counsel appearing on behalf of the appellant as well as the representative of the department and perused the record carefully. Perusal of the judgment dated 3-2-2010 passed by the Hon'ble Lahore High Court Multan Bench Multan in Writ Petition No,5684 of 2009 filed by Messrs Kamran Lubricant (Pvt.) Ltd., Multan revealed that the allegation in the show- cause notice dated 2-6-2009 issued in the said case and reproduced by his Lordships in the above order is the same, which is mentioned in the show-cause notice of same date issued by respondent No, 2 in this case. The case of the department in both the show-cause notices is that raid was conducted after having obtained search warrant from the Magistrate against Messrs Yasir Enterprises, Messrs Global Traders, Ata Chemicals and the appellant who were alleged to have imported huge quantity of petroleum liquid under the garb of residue of petroleum by misdeclaring its description, classification and weight etc. It was further alleged in both the cases that these goods were dispatched from Karachi to Multan Dry Port under various TPs and acting on the said information the Collector, MCC Multan was directed to detain the consignments vide letter dated 1-4-2009. Joint examination of one container of Messrs Yasir Enterprises and 5 containers of Messrs Ata Chemicals Multan was carried out at Multan Dry Port and it was revealed that Messrs Yasir Enterprises imported yellow colour liquid petroleum while Messrs Ata Chemicals Ltd. Imported black colou liquid petroleum. In para-5 of both the show-cause notices it has been mentioned that during the course of investigation the drivers who. Transported the goods from Dry Port Multan in subject cases were questioned, who stated that they had earlier un-loaded similar consignments at the premises of Messrs Kamran Lubricant (Pvt.) Ltd. Multan and Messrs Ahmed Traders Multan and on the basis of said information a raid was conducted at both the premises wherefrom HSD and used lubricating oil (black oil) and other items were recovered and seized. Perusal of the judgment of the Hon'ble Lahore High Court Multan Bench Multan further revealed that the allegation in the show-cause notice issued in case of Messrs Kamran Lubricant (Pvt.) Ltd., Multan and the appellant was that no documents showing the import of recovered goods were produced and as such the seized goods were thought to be smuggled one. The goods seized on the basis of same search warrant from the premises of Messrs Kamran Lubricant (Pvt.) Ltd. Multan were not found locally procured and not smuggled by his Lordships and the same were ordered to be released vide judgment dated 3-2-2010. It was held by his Lordships that the department has not been able to show that the goods seized from the premises of Messrs Kamran Lubricant (Pvt.) Ltd., Multan can be termed as smuggled item, which is readily available in the market. It was further observed that in the show-cause notice it was nowhere alleged that the said goods Were smuggled by any of the parties. In these circumstances it would be un-fair to maintain the out- right confiscation of the goods seized from the premises of the appellant when the goods seized from Messrs Kamran Lubricant (Pvt.) Ltd., Multan on the basis of same search warrant, on the same day and in the same raid were not found smuggled and ordered to be released by the Hon'ble Lahore High Court Multan Bench Multan vide judgment dated 3-2-2010. The contention of the learned counsel that according to para-5 of the show-cause notice dated 2-6-2009 in this case as well as in case of Messrs Kamran Lubricant (Pvt.) Ltd., Multan it was stated that the seized goods were the same which were imported by Messrs Yasir Enterprises and un-loaded at the premises of the appellant by the drivers on the same vehicles which brought the same to Dry Port Multan, whereas at the same time the goods were out rightly confiscated on the charge that the same were smuggled one made the entire case of the department highly doubtful carries weight. The argument of the learned counsel that had the goods been smuggled one, there would have been no need to narrate such long story in the show-cause notice as well as orders passed by the forums below regarding import made by Messrs Yasir Enterprises and other companies, joint examination and testing of their samples etc. Etc. Is also forceful. The learned counsel has rightly argued that the used lubricating oil (black, oil) was commonly available and the case of the appellant from the day one was that the same was procured locally by him. As regards few drums of I-ISD, according to him, the same were also procured locally for using the same in generating sets. Moreover, there is no incriminating material showing that these goods were smuggled one.
There is also no denial that neither the seized drums nor any other item contained marking of any foreign country and as such presuming the same as of foreign origin would not be correct. There is also no denial that the lab report was neither received nor placed on record of this case by the department. Both the orders of the forums below have been passed in haste as no one bothered even to ascertain the actual description of the goods as is evident from the perusal of the impugned order in which 120 drums "suspected of being gear oil" have been mentioned. The forums below should have been waited the result of the lab to ascertain the actual description of the said item. The contention of the learned counsel that neither the department has rebutted his contention nor any body appeared and opposed his defence. Before the learned Collector (Appeals) and as such maintaining confiscation of the goods by him was not justified also carries, weight. Similarly, the original adjudicating officer (respondent No 2) should have disposed of the objection of the appellant that he was not competent or otherwise to adjudicate the matter in which he was Investigating Officer of the cases mentioned in the show-cause notice and should have not left this objection for decision by the appellate forum. This alone makes the entire case of the department doubtful, benefit of which-would go to the appellant alone. The contention of the learned counsel that the case of the appellant is at par with the case of Messrs Kamran Lubricant.
(Pvt.) Ltd., Multan is also correct as against both the parties same allegations were levelled in the show-cause notices issued to them.
11. The upshot of above discussion is that the department has failed to establish that the, seized goods were smuggled one or that the same were not locally procured by the appellant.
Resultantly, the appeal is accepted, the impugned order in original as well as order in appeal are set aside.