Shahid Jamil Khan, J. This Appeal under Section 196(1) of the Customs Act, 1969 ("Act of 1969") is against judgment dated 08.05.2003 passed by the erstwhile Customs, Excise and Sales Tax Appellate Tribunal, Lahore ("Appellate T ribunal").
A mis-declaration of the value of imported goods was detected and established through adjudication. The goods were liable to be confiscated, however , were redeemed on payment of fine equal to 100% of the value. Admittedly , mis-declaration was more than 30% of the declared value. While imposing redemption fine, SRO No.1374(I)/98 dated 17.12.1998 ("SRO 1374") was referred. The Appellate Tribunal upheld the order as well as imposition of fine @ 100% by referring to the same SRO.
2. Learned counsel for the appellant submitted that SRO 1374 was not applicable in appellant' s case, as the contravention was under Section 156(1)14 of the Act of 1969, which is not mentioned in second proviso to Section 181 of the Act of 1969; also submitted that words "or in violation of any other provisions of this Act" were inserted through Finance Act, 2019, therefore, could not be applied retrospectively , as show cause notice for the contravention was issued on 05.07.2001.
3. Learned counsel for the respondent department opposed the arguments and supported the reasons given in the impugned judgment.
4. Heard. Record perused
5. The Section 156(1)14 of the Act of 1969, defining the contravention in question, is reproduced hereunder:-
156. Punishment of offences.--(1) Whoever commits any offence described in column 1 of the Table below shall, in addition to and not in derogation of any punishment to which he may be liable under any other law, be liable to the punishment mentioned against that of fence in column 2 thereof:-- --------- ---------- 14:-- If any person commits an of fence under
(i) sub-section (1) or sub-section (2) of section 32;such person shall be liable to a penalty not exceeding one hundred thousand rupees or three times the value of the goods in respect of which such offence is committed, whichever be greater; and such goods shall also be liable to confiscation; and upon conviction by a Special Judge he shall further be liable to imprisonment for a term not exceeding three years, or to fine, or to both; [Emphasis Supplied] The underlined portion of the reproduced provision shows that besides imposing penalty under this provision, the goods are also liable to confiscation and the person is liable to imprisonment after trial by the Special Court. The legal position that the contravention called for confiscation is not denied, howev er, the fine imposed, in lieu of confiscation under Section 181 of the Act of 1969, is questioned.
6. Bare perusal of principle clause of Section 181 shows that the Officer passing the order of confiscation can give the owner of the goods an option to pay fine in lieu of confiscation and the quantum of fine is left on his discretion.
Two provisos are added in the section; the First for specifying goods, for which option of redemption shall not be given and Second; for goods imported in violation of prohibitory provisions under Sections 15 & 16 of the Act of 1969 and under which the amount of redemption fine is to be fixed by the Board through notification. The SRO 1374 was issued under both provisos to Section 181, applicability of which is in question. Section 181 is reproduced hereunder:- "181. Option to pay fine in lieu of confiscated goods.- Whenever an order for the confiscation of goods is passed under this Act, the officer passing the order may give the owner of the goods an option to pay in lieu of the confiscation of the goods such fine as the of ficer thinks fit; [Provided that the Board may, by an order , specify the goods or class of goods where such option shall not be given: Provided further that the Board may, by an order , fix the amount of fine which, in lieu of confiscation, shall be imposed on any goods or class of goods imported in violation of the provisions of section 15 or of a notification issued under section 16 'or in violation of any other provisions of this Act', or any other law for the time being in force.] Explanation.- Any fine in lieu of confiscation of goods imposed under this section shall be in addition to any duty and charges payable in respect of such goods , and of any penalty that might have been imposed in addition to the confiscation of goods."
[Emphasis Supplied]
7. We have examined the operative part of the impugned judgment by the Appellate Tribunal, in light of relevant provision, which is reproduced for reference:- "7. We have heard contentions of both the sides and perused the appeal file availa ble before us. As far the appeal No.1619/LB/2001, the appellants have failed to prove incorrectness of the ascertained value of US$ 50000 as against the declared value of US$ 12008 . Whether the supplier i.e. Shinwari General Trading Company , Dubai, conspired against the appellant in conniv ance with Spencer Distributors Ltd., is not relevant to the merits of the case but this fact gets proved beyond any doubt that declared value of US$ 12008 was false and it was in the knowledge of the appellant that the correct value of the consignment was US$ 50000. Hence customs authorities were justified in ordering assessment at the value of US$ 50000. SRO 1374(I)/98 dated 17.12.1998, which was then in force prescribed that in case of the difference between the declared value and the ascertained value was more than 30%, the minimum redemption fine would be 100% of the duties/taxes attempted to be evaded. Hence the adjudicating officer was justified in imposing fine equal to the amount of duty/taxes to be evaded. Rather , as held by the Hon'ble Lahore High Court in its judgment dated 16.10.2001 in Custom s Appeal No.4 of 1998 (reported as PTCL 2002 CL 80) even this Tribunal is not competent to reduce the fine which has been imposed according to SRO 1374(I)/98 dated 17.12.1998. Accordingly , the appellants are ordered to pay the fine imposed by the adjudicating officer in the impugned order in original No.61/2001 dated 17.07.2001, and the appeal No.1619/LB/2001 is dismissed being devoid of any merits."
[Emphasis Supplied] We are not impressed by the argument of learned counsel for the appellant that second proviso to Section 181 of the Act of 1969 was not applicable, therefore, 100% fine in lieu of confiscation could not be charged.
It is not denied that the provisos have not taken away the power of the confiscating Officer to impose fine as per his discretion. Though Section 181, is subject to both the provisos, yet it could be invoked independently; where the transaction was not within the scope of the notification (the SRO 1374 in vogue) under these provisos. We agree with the interpretation offered by learned counsel for appellant, that the SRO 1374 could not be invoked, because the contravention fell under Section 156(1)14 and before insertion of the phrase at bottom of second proviso (through Finance Act, 2019), fine in lieu of confiscation was fixed for contraventions only under Sections 15 & 16.
But this interpretation would not serve the purpose against the impugned imposition of fine at 100% because it could be imposed under Section 181, in light of the facts and circumstances of this case. The Appellate Tribunal has held that undervaluation of the goods was intentional, which amounted to play fraud upon Customs Authorities and a willful attempt to cause loss to the National Exchequer .
8. The Hon'ble Supreme Court of Pakistan in Collector , Customs, Central Excise and Sales Tax, Quetta v.
Messrs haji Ahmedullah & Company , Quetta and another (PLD 2005 Supreme Court 461) took a strict view in cases, where forgery or fraud is committed, while holding that benefit of SRO No.374(I)/2002 dated 15.06.2002 could not be claimed. Relevant paragraph from the judgment (ibid) is reproduced hereunder:- "7. We have also examined carefully the provision as contained in SRO No.374(I)/2002 dated 15.06.2002 which cannot be made applicable in view of the chequered history of the case and naked fraud committed by the appellant as it mainly deals with a different situation and no where it has been mentioned that in case of forgery and fraud, option will be given to pay fine in lieu of confiscation for such consignments which were brought by playing fraud upon the Customs Authorities which has been proved and established to the hilt. As mentioned herein above in view of the fraud as committed by the respondent for the evasion of customs duty the question of any option under the garb of S.R.O. No.374(I)/2002 dated 15.06.2002 does not arise."
9. The arguments by learned counsel for the appellant are self-contradictory as well, because he did not challenge the redemption in lieu of confiscation under the Section 181 but opposed imposition of fine @ 100%. The concept of redemption under this section is subject to payment of redemption fine, quantum of which, under the facts and circumstances of this case, is justified under Section 181, even if it does not fall under second proviso or SRO 374.
10. This Appeal is dismissed.
11. Office shall send a copy of this order under seal of the Court to the Appellate Tribunal as per Section 196(5) of the Customs Act, 1969. revisions by the competent authorities. Therefore, it is advisable to consult the official sources or legal professionals for the most up-to-date and accurate information.