SYED MUHAMMAD ATTIQUE SHAH, J.---- This Custom Reference has been placed before this Court, by the petitioners in terms of Section 196 of the Customs Act, 1969 for .determination of the following questions of law:- "Questions of law .
I. Whether as per facts and in the circumstances of the case, according to sections 164 and 168 of the Customs Act, 1969, hereinafter referred to as "Act", and section 3(1) of Imports and Exports (Control) Act, 1950, the Customs Officer has rightly stopped and searched Toyota Car Registration No.AGZ-214- Islamabad having reasons to believe that such vehicle is being used for smuggling of huge quantity of Gold and Foreign currency?
II. Whether as per facts and in the circumstances of the case, questioned gold and currency are notified items in term of SRO 566(1)/2005 dated 6.6.2005 and the act of respondents is smuggling in term of sub-clauses (ii) and
(iii) of clause (s) of section 2 with clarification thereof punishable under clauses (89) and (90) of section 156(1) of "Act"?'
III. Whether as per facts and in the circumstances of the case, the learned "The Tribunal" while rendering its judgment has taken into consideration, subsection (2) of section 156 and section 187 of "ACT" while dealing with case under section 2(s) ibid read with section 3(1) of Imports and Export (Control) Act, 1950 that the onus to prove the lawful import of questioned goods/items is on respondents?
IV. Whether as per facts and in the circumstances of the case, the Tribunal has taken into consideration, the clean breast admission of respondents relating to the recovery of huge quantity of "Gold" and foreign currency of different countries?
V. Whether as per facts and in the circumstances of the case, section 167 of "Act" empowers the Customs Officer to arrest any escaping person and to be dealt according to section 161 and other enabling provisions?
VI. Whether as per facts and in the circumstances of the case, mere possession of huge quantity of foreign currency and gold can be construed as attempt to smuggling in term of section 2(s) of "Act" read with SRO 566(1)/2005 dated 6-6-2005 when such possession was made at the airport ?
VII. Whether as per facts and in the circumstances of the case, the factum of escaping of three respondents from the car and recovery of foreign origin gold and huge currency attracts section 2(s) of "Act"?
VIII. Whether as per facts and in the circumstances of the case, the respondents have violated sections 2(s), 16, 157, 167 and 168 of "Act" having been found in possession of 16577 grams foreig n origin Gold and huge quantity of foreign currency of various countries and liable to be confiscated ?
02. Brief facts of the case are that a Motorcar bearing registration No.AGZ-214/Islamabad was intercepted near the parking area of Bacha Khan International Airport, Peshawar by the Anti-Smuggling Unit, Peshawar Customs.
Search of the said vehicle led to the recovery of the following items - S.No. Description Quantity 1 F/O Gold 16577 Grams 2 KSA Riyal 49,300/- 3 Qatri Riyal 12,303/- 4 Kuwait Dinar 110/- 5 Bahrain Dinar 30/- 6 UAE Dirham 1875/- 7 Euro 160/- 8 Lera Turkey 8000/-
03. Purportedly , the aforementioned Gold and currencies were recovered from the secret cavities of the vehicle in question. Two persons were arrested on the spot and, on query and demand from the said persons, they failed to produce any proof regarding legal import/lawful possession of the recovered gold and currencies thus, the same were seized and case FIR No.30/2018 dated 31.05.2018 was registered in I&P Branch, Custom House, Peshawar against the respondents.
04. Adjudication proceedings were initiated against the respondents which were finally culminated through an Order-in-Original No.171 of 2018 dated 22.1 1.2018, wherein, goods and the vehicle were confiscated to the State.
05. On appeal, the order-in-original dated 22.11.2018 was set aside and appeal was accepted by the learned Member (Technical), Customs Appellate Tribunal, Peshawar Branch vide its judgment dated 30.04.2019. Hence, the instant Reference before this Court.
06. Learned counsel representing the petitioner vehemently contended that impu gned judgment is illegal being, passed in clear violation of the law applicable thereto; that the seized goods were liable to outright confiscation in terms of sub-clauses (ii) and (iii) of Clause (s) of Section 2 read with Clause (89) of Section 156 (1) of the Customs Act, 1969 being notified items in terms of SRO 566(1)/2005 dated 6.6.2005; That once the respondents admitted ownership, possession and seizer of the goods in question from their possession, then, under the law burden of proof was heavily upon them to have proved its legal import and lawful possession, which they miserably failed to discharge and thus, its release is violative of the law dealing with the matter in question; that the worthy Tribunal has not properly applied its judicial mind to the facts, circumstances and law applicable to the case in hand at the time of rendering the impugned judgment therefore, grave injustice has been caused to the petitioner; that the purported acquittal of the respondents by the Court of learned Special Judge Customs could in no way affect and influence the Adjudication Proceedings before the Adjudicating Authority for having being, independent from one another .
07. Contrary , learned counsel representing the respondents strongly controverted the submissions of the petitioners made at the bar and, contended that the seized gold is locally processed and procured and, no prohibition is in field on its free movement throughout the country and, the respondent No 1, being a Gold Smith could not be held responsible either to prove its nature/kind or its purchase from open market; that likewise, the free movement of foreign currency is not prohibited, therefore, its very seizer was also illegal and result of mala fide and ulterior motive and, its release through impugned judgment by Appellate Tribunal is the result of proper appreciation of facts and law applicable thereto, which needs no interference through instant reference.
08. Arguments heard and record gone through.
09. Perusal of record and arguments advanced at the bar shows that ownership, possession and seizer of goods in question has not been denied by the respondents, however , they controverted the place of seizer by alleging that goods have purportedly been seized on Bara road instead, from the parking area of Bacha Khan International Airport Peshawar and therefore, the same does not fall under the provisions of Clause "s" of Section 2 of the Act, 1969. Assuming for the sake of arguments that, the purported seizer has been effected from Bara road Peshawar and, not from the parking area of Bacha Khan International Airport, still burden of proof under the provisions of Section 187 of Customs Act, 1969 was upon the respondents to have proved the legal import and lawful possession of the seized goods. For the sake of convenience provisions of Section 187 are reproduced below .
"187. Burden of proof as to lawful authority etc.- When any person is alleged to have committed an offence under this Act and any question arises whether he did any act or was in poss ession of anything with lawful authority or under a permit, licence or other document prescribed by or under any law for the time being in force, the burden of proving that he had such authority , permit, licence or other document shall lie on him".
10. The ibid provision has clearly placed the burden of proof upon the respondents to establish the legal import and lawful possession of the seized goods. We minutely scanned the entire case record, but could not lay our hands upon any evidence/material which could show the legal import and lawful possession of the seized goods. In the given circumstances, this Court has no hesitation in holding that the respondents could not discharge the burden of proof as provided by the law .
11. So far as, the stance of the respondents that definition of smuggled goods is only confined to bring into and take out of Pakistan goods in violation of the provisions of Custom Act, 1969 is concerned. For ready reference the provisions of Section 2(s) of the Custom Act, 1969 is reproduced below .
"2(s)- "smuggle" means to bring into or take out of Pakistan, in breach of any prohibition or restriction for the time being in force, or evading payment of customs-duties or taxes leviable thereon,
(a) gold bullion, silver bullion, precious stones, currency ,-manufactures of gold or silver , or precious stones or any other goods notified by the Central Government in the official Gazette, in each case exceeding one thousand rupees' in value; or
(b) any other goods by any route other than a route declared under section 9 or 10 or from any place other than a custom-station, and includes an attempt, abetment or connivance of so bringing in or taking out of such goods; and all cognate words and expressions shall be construed accordingly".
12. It is abundantly clear from the ibid definition that term smuggling does not only confined to the goods bring into and take out of Pakistan in breach of any prohibition or restriction for the time being in force but, evasion of payment of Customs duties or taxes leviable thereupon have also been covered by the ibid definition. Therefore, the above stance of the respondents is misconceived.
13. A somewhat identical question came up for hearing before the august apex Court in the case of Collector of Customs, Peshawar v. Wali Khan and others reported in 2017 SCMR 585 wherein the provisions of Sections 2(s), 156 Clauses 89, 90 and Section 187 were discussed in length and were dealt with in the following manner .
"5. In order to resolve the controversy , we first have to ascertain the meaning of the phrase "smuggled goods" as provided in the Customs Act. The definition of "smuggle" provided in section 2(s) of the Customs Act can be broken down as follows:- (a) to bring into or take out of Pakistan, in breach of any prohibition or restriction for the time being in force; OR (b) en route pilferage of transit goods; OR (c) evading payment of customs-duties or taxes leviable thereon; OR (i) gold bullion, silver bullion, platinum, palladium, radium, precious stones, antiques, currency , narcotics and narcotic and psychotropic substances; OR (ii) manufactures of gold or silver or platinum or palladium or radium or precious stones, and any other goods notified by the Federal Government in the official Gazette, which, in each case, exceed one hundred and fifty thousand rupees in value; OR (iii) any goods by any route other than a route declared under section 9 or 10 or from any place other than a customs-station and includes an attempt, abetment or connivance of so bringing in or taking out of such goods. Some restricted goods are mentioned in section 2(s) of the Customs Act [see Clauses (i) and (ii) thereof]. However , the Federal Government is empowered under section 16 of the Customs Act to prohibit or restrict, by notification, the bringing into or taking out of Pakistan of any goods of specified description by air, sea or land. Section 3 of the Imports and Exports Act also authorizes the Government to "prohibit, restrict or otherwise control the import and export of goods of any specified description." In this context, the Federal Government, in exercise of the powers conferred by sections 2(s)(ii) and 156(2) of the Customs Act vide SRO No.566, notified certain goods to be prohibited / restricted for the purpose of the said sections. This notification held the field when the goods in question i.e. cloth and black tea, were recovered from the respondents on 06.01.2007. Item No.35 of SRO No.566 is "Black Tea (except Op-Pekoe)", thus black tea is a restricted/prohibited item and falls within the meaning of smuggled goods in terms of section 2(s) of the Customs Act. With regard to cloth, Item No.28 of SRO No.566 is "man-made fiber , manmade yarn and fabric". According to the learned counsel for the appellant, the cloth recovered from the respondents squarely falls within this item, whereas the learned counsel for the respond ents contended that the same applies only to man-made cloth and not to the cloth confiscated in this case . It would be expedient at this juncture to interpret the scope of the item ibid in conjunction with the other items. The other relevant items are that of Nos.27, 29 and 42 of SRO No.566 provide for "Cotton, cotton yarn and fabric", "Wool, woolen yarn and fabric" and "Natural silk, natural silk yarn and fabric" respectively . Thus, cotton, wool, natural silk and their yarn and fabric on one hand and man-made fiber , yarn and fabric on the other have been dealt with separately . It is important to note that while both categories of yarn and fabric involve some mechanical process for its making, the distinction between both the categories lies in the fact that Items Nos.27, 29 and 42 refer to naturally occurring materials including cotton, wool and silk, whereas Item No.28 pertains to man-made or synthetic fibers/fabric. By way of example, the latter category can include polyester , acrylic, nylon etc. The cloth in question has been referred to A/S cloth in the orders of the forums below , which stands for artificial silk cloth and is undoubtedly a man-made fabric as it comprises of synthetic fiber and thus is squarely covered by Item No.28 of SRO No.566 . Hence the cloth from foreign origin is a restricted/prohibited item as per Item No.28 of SRO No.566 and falls within the meaning of smuggled goods in terms of section 2(s) of the Customs Act.
6. Adverting now to the applicability of Clause 89 or 90 of the table in section 156 of the Customs Act, it is to be noted that section 156 ibid provides for the punishment against any contravention of the Customs Act. Clause 89(i) of the table in section 156 ibid provides that any person who, without any lawful excuse, acquires possession of, or is in any way concerned in carrying, removing, depositing, harboring, keeping or concealing, or in any manner dealing with smuggled goods or any goods in respect to which there may be reasonable suspicion that they are smuggled goods, he shall be liable for the punishment detailed in Column 2 thereof. A few salient features need to be pointed out. First, Clause 89(i) deals with smuggled goods as well as those goods regarding which there is reasonable suspicion that they are smuggled.
Secondly , a person is permitted to acquire possession etc. of such goods only with lawful excuse, the burden of proof of which lies on such person, and in case he fails to do so, it would be presumed that the goods were smuggled entailing the consequences provided in Column 2 of Clause 89 ibid. On the other hand, Clause 90 contained in the table under section 156 of the Customs Act deals with "any goods, not being goods referred to in clause 89." This makes it abundantly clear that the said clause deals with goods that are not smuggled and regarding which there is "fraudulent evasion or attempt at evasion of any duty chargeable thereon." In this eventuality too, the burden lies on the person involved in such activities to prove the contrary , in the absence of which it will be presumed that the goods were non-duty paid in terms of Clause 90 ibid. In this regard, first the department has to show that the goods which are of a foreign origin could only be imported on payment of duty or under a license or their import is prohibit or restricted. It will then be for the posse ssor of such goods to show that they were lawfully imported either before any restrictions/prohibitions were imposed or in accordance with such restrictions/prohibitions. As held above in paragraph 5, the foreign cloth and black tea are notified items in terms of SRO No.566, therefore, they are restricted/prohibite d goods and therefore fall within the ambit of smuggled goods as defined in section 2(s)(ii) of the Customs Act. Resultantly , it is Clause 89 of section 156 of the Act that deals with smuggled goods which is applicable to the instant case and not Clause 90 thereof.
7. The confiscated goods were admitte dly of foreign origin and there was no proof that they were lawfully imported into Pakistan (by an authorized importer under a valid license and through an authorized route), the burden of which, according to Clause 89 as mentioned above, was on the respondents. When confronted, learned counsel for the respondents failed to provide any concrete evidence except contending that these goods are easily available in the market and can be purchased from anywhere. Thus, the respondent has failed to prove that the confiscated goods were not smuggled goods. Therefore the forums below have erred in holding that the confiscated goods were not notified and thus do not fall within the purview of section 2(s) of the Customs Act."
14. In the ibid case. Foreign Origin Cloth and Black Tea were seized by the Customs Authorities near Tarnab Farm, on main G.T Road, Peshawar and, it has clearly been held by august apex Court that the same is covered by provisions of Section 2(s) of the Act, 1969 as the accused in that case had failed to discharge the burden of its lawful import in terms of the provisions of Clause 89 of Section 156 of the Act, 1969 and the same was confiscated.
The ibid principle was earlier expressed, by the august Apex Court in the case of Abdur Rauf Khan (1980 SCMR 114) and the same view was subsequently confirmed in the case of Sikandar A. Karim (1995 SCMR 38).
15. In view of the settled principle of law, it was bounden duty of the respondents to have discharged the burden of proof regarding the legal import and lawful possession of the seized goods under Clause 89 of Sections 156, 187 Of Customs Act, 1969 and Section 3(3) Imports and Exports (Control) Act, 1950 read with Section 8(2) of the Foreign Exchange Regulation Act, 1947. However , as earlier discussed they miserably failed to discharge the said burden and, when learned counsel was confronted with the ibid situation, he failed to wriggle out from the same, however , forcefully contended at the bar that, the respondent No.1 being a Gold Smith was in lawful possession of the seized goods at the time of its seizer , howbeit, he could not refer to any evidence/material available on record of the case in support of his ibid contention. Therefore, the same is repelled being, ill-founded.
16. Now coming to the contention of respondents that, Appellate Tribunal has rightly released the goods in their favour as they had already been acquitted by Special Judge Customs in case FIR No.30/2018 dated 3-1.5.2018 arising out of the same subject-matter and, against that acquittal the appeal of the department has also been dismissed by this Court and, therefore, the Appellate Tribunal while releasing the seized goods has not committed any illegality , the ibid contention is ill-conceived, as Criminal Prosecution of an accused for .an offence committed under the Customs Act, 1969 before the Special Judge Customs is judicial proceedings and, proceedings conducted by the Adjudicating Authorities under Section 179 of the Act, 1969 are in nature of departmental proceedings, both the proceedings some time do originate from the same occurrence but, both are independent from one another , albeit, proceed side by side without affecting one another . 2002 SCMR 1527 Government of Pakistan through Secretary Customs v. Mahmood Ahmad Qureshi and another and case reported in PLD 1969 SC 446 Adam v. Collector of Customs Kara chi thus, under the circumstances mere acquittal of respondents by the Court of Special Judge Customs would not absolve them from their bounden duty to D discharge the burden of proof regarding the legal import and lawful possession of the seized goods, hence, their purported acquittal is of no help and support in the present case.
17. In view of what has been discussed above, we have no hesitation in holding that the seized goods are notified items in terms of SRO 566(1)/2005 dated 6.6.2005 and, the respondents could neither , prove its legal import nor, its lawful possession at the time of its seizer and, adjudication proceedings as well, therefore, the same were squarely covered by the provisions of Section 2(s) of Act, 1969 and, were liable to confiscation under the provisions of Clause 89 of Section 156 of the ibid Act and, the worthy Tribunal has committed grave illegality by releasing the same to the respondents.
18. Thus, for the reasons stated hereinabove, the instant reference is answered in positive in terms of the elaboration herein above and the impugned judgment of the worthy Appellate Tribunal is set aside, resultantly , the