MR. MUHAMMAD SADIQ MEMBER (TECHNICAL).--(1). This judgment shall dispose of the above mentioned appeal filed by Mr. Farhad Ali son of Muhammad Siddique against the Order-in-Original No. 322/2015 dated 13.11.2015, passed by the learned Additional Collector of Customs (Adjudication), Faisalabad.
2. Brief facts of the case are that on receipt of a credible information that a huge quantity of smuggled/non-duty paid goods had been dumped/stored in three godowns in Multan, belonging to Farhad Ali S/o Muhammad Ali R/o Gali No. 3 Koh-e-Noor Colony Chowk Shah Abbas Multan. The godowns near Multan were searched and goods were seized under section 168 of the Act for violation of section 2(s) and 16 of the Customs Act (the Act) on 08.04.2015. The said person was charged with violation of Section 2(s) of the Act read with 3(1)(3) of the Imports & Exports (Control) Act, 1950 punishable under clause 89(i) of Section 156(1) of the said Act, read with SRO. 499(I)/2009 dated 13.06.2009 & relevant provisions of the Petroleum Act, 1934 & Rules made there under and was called upon to show cause under section 180 of the Customs Act, 1969 as to why the seized goods be not confiscated under clause 89(i) of Section 156(1) of the Customs Act, 1969 read with SRO. 499(1)/2009 dated 13.06.2009 and penal action under the aforementioned provisions of law be not taken against him. The case was referred for adjudication.
3. The Additional Collector of Customs (Adjudication), Faisalabad vide order-in-original No. 322 of 2015 dated 13.11.2015 ordered outright confiscation of the goods under section 156(1)89 of the Customs Act, 1969.
4. The Appellant has assailed the impugned order on the grounds mainly the following:
(i) That the respondent No. 2 erred in fact by declaring the description of the goods of the appellant as lubricating oil, gear oil and industrial oil, as compared to the seized goods being mineral base oil. The mineral base oil itself is a lubricating oil as per the information on the worldwide encyclopedia websites such as wikipedia etc., thus, on the basis of above absurd justification, respondent No. 2 outrightly confiscated the goods of appellant which is nothing but the lack of information on his part.
(ii) That the raid was conducted under Section 162 of the Customs Act, 1969 without calling for any record/information required under Section 26 of the Act 1969. The extra ordinary powers of storming the business house under Sections 162 and 163 of the Act 1969 should have been only be exercised when there was no other alternative course of action with the respondent No. 1. The respondent No. 1 straight away adopted the action under Section 162 of the Customs Act which is against the norms of natural justice.
(iii) That while conducting the raid, the locks were broken and no private witnesses were associated by the respondent No. 1/raiding party which is illegal as any act done under the law. It is mandatory to follow the procedural steps while conducting the raid as contemplated in Code of Criminal Procedure, 1898.
(iv) That appellant thereafter filed an application dated 24.04.2015 wherein the appellant submitted the documentary evidence including sales tax invoices, payment proofs, sales tax returns alongwith acknowledgement slips regarding local purchase of the seized goods to the respondent No. 1. It was also mentioned in the said letter that all the 471 drums of lubricating oil having different quality were purchased from the local market of Multan. The appellant submitted the purchase invoice (14 in numbers) showing purchase from M/s. Roshan Lubricants (Regd.) Ada Alahad 11 K.M. By pass chowk, Bahawalpur Road, Multan and (4 in numbers) invoices issued by M/s. Kamran Lubricants (Private) Limited 16-KM Sher Singh, Vehari Road, Multan.
He also produced the copies of sale tax invoices issued of M/s. Golden Lubricants (6 in number) opposite Solvex Ghee Mills Suraj Kund Road, Multan.
(v) That there was no mark/description regarding origin or as the case may be quality of the goods which makes it clear that the seized lubricating oil is not an imported item because the goods can only be imported with certain description or label affixed on the container. Hence the assertion/plea of the respondent No. 1 regarding the smuggling of the goods is not tenable.
(vi) That the goods i.e. lubricating oil of different grades/quality, had been packed in used drums. The drums were unsealed and the words like "Shell Pakistan", "Total Pakistan" and "PSO" were written on the drums.
There are some drums as well of pesticides which were reused by the manufacturers/blenders of lubricating oil for packing and selling the lubricating oil. The used pesticide drums are available in the local market of the country and it not possible to smuggle/import the lubricating/base oil in the used pesticide drums. Hence, it is clear that the local manufacturer(s) of lubricating oil sold their products in the used drums and there is no mark/description on the drums except that of "Shell Pakistan", "PSO" etc. regarding the goods in them and so the same can only be examined in connection with the invoices issued by the manufacturing/blending units.
(vii) That all lubricate oil whether industrial grade, low grade or that of high grade contains particular quality of lubricating oil are subject to the ratio given by the manufacture/blenders which are definitely in conformity with the standards set by Ministry of Petroleum Pakistan. In the light of above, it is very clear that the seized goods are the same for which the invoices have been provided to the respondent No. 1. The plea regarding non providing of the import document and the payment against the purchase is also against the facts and circumstances of the case.
(viii) That so far as the objection of the respondent No. 1 that the respondent failed to provide the import documents or payments of duties of leviable that the appellant purchased the goods from manufacturers of lubricating oil, legally authorized under the license issued by 'the Ministry of Petroleum Government of Pakistan and all the suppliers are registered with the Federal Board of Revenue as manufacturing of lubricating oil thus the demand of import documents regarding local business transaction is out of the scope of Customs Act, 1969.
5. On the other side, Mrs. Amna Parveen Advocate, appeared on behalf of the respondent department and contended that the impugned order was passed lawfully.
6. We have given anxious consideration to the stances of both the parties. The issue relates to proximity of smuggling attributed to the instant case of the impugned goods. The diverse aspects of the controversy are evaluated as follows;
(a) Firstly, the learned adjudicating authority failed to consider the material documents relevant to the impugned goods recovered and seized from the warehouses (or the godowns). In ordinary course of business the goods were kept for storage/sale in the buildings raided by the respondents.
(h) Secondly the purchase invoices issued under Sales tax Act, 1990 were also produced/submitted before the learned Adjudication Officer. The said invoices were not discredited.
(c) Thirdly, the packing of the goods did not bear marks/description indicating foreign origin.
Balance of probability shifts in favour of the Appellant, as the respondent department failed to discredit the veracity of the Sales Tax Invoices and other documents (Sales Tax Returns etc.) besides failure to establish foreign origin of the goods, on the basis of solid evidence description like marks on packaging.
6. In view of the foregoing position, the instant appeal is accepted and the impugned order is set-aside and unconditional release of the goods to the lawful owner/appellant is allowed.
7. The parties be informed though registered post A.D or by U M S.
8. The File be consigned to record after completion.