Abdul Jabbar Qureshi, Member (JUDICIAL-I). By, this Judgment. We dispose of two Customs Appeal bearing Nos. H-7896/2021 and H-7897/2021 flied by the appellant against Order-in-Original No. 19/2021, dated 26.10.2021 passed by the Collector of Customs, (Adjudication), Camp at Hyderabad. These appeals have identical issue of law and facts, therefore, being heard, dealt with and disposed of simultaneously though this common order in the light of the judgment of the Honorable High Court of Sindh in Customs Reference No. 157 of 2008, S.M. Naqi son of Syed Muhammad Hussain, Karachi v. Collector of Customs (Adj-I) and others.
2. It is needless to reproduce facts of each case separately. Hence, for reference the facts of Appeal No. K-7896/2021 are taken into consideration for decision are that Brief facts of the case as reported by the Directorate of Intelligence and Investigation (Customs Regional Office), Hyderabad are that a credible information was that smuggled "Foreign origin Goods" i.e. Bags would be transported from Karachi to Rawalpindi via National Highway loaded on a Hino Trailer bearing Registration No-JV-8887 mounted with 40ft Container. Pursuant to the received information, on 24.06.2021 at about 12 noon, the Customs team intercepted the said Trailer bearing Registration No. JV-8887 mounted with 40ft Container at National Highway near New Shaheen Petrol Pump, Hala Road, Hyderabad coining from Karachi to Rawalpindi. On cursory checking, the trailer/container was found fully loaded with foreign origin bags i.e. hand carry suitcases, school bags, drawstring bags, laptop bags etc. On demand, driver of the trailer neither produced any legal import / lawful documents nor any transportation bilty on the spot. Since the information was authentic, therefore, the possession of the said trailer/container loaded with foreign origin abovementioned goods was taken into custody and were detained to ascertain its legal status/lawful possession into the country. Musheernama was prepared on the spot duly signed by the musheers. The same was escorted to the office of the Directorate of Intelligence and Investigation (Customs), Regional Office, Hyderabad for further legal proceedings. In the premises of the Directorate, thorough examination was conducted in presence of the driver. No any legal relevant document was produced in support of detained foreign origin goods. It became clear beyond any iota of doubt that the detained foreign origin bags were smuggled one and brought into the Country through unauthorized routes without payment of legitimate duty and taxes leviable thereon. Therefore, the same were seized along with the said Trailer/Container No.JV-8887 under section 168 of the Custom Act, 1969 for violation of the provisions of sections 2(s) and 16 of the Customs Act, 1969 read with section 3(1) of the Imports and Exports Control Act, 1950 punishable under clauses 8 and 89 of section 156(1) and section 157(2) of the Customs Act, 1969. The notice under section 171 of the Customs Act, 1969 was issued against the driver namely, Ghulam Murtaza son of Muhammad Ameer (CNIC No.38203-0354435-9) resident of P.O Khas, Bandial, Tehsil Qaidabad District Khushab and a copy of the same notice was also pasted on the Notice Board of the office of Directorate of Intelligence and Investigation (Customs), Regional Office A/49, SITE Area, Customs House, Hyderabad.
3. Being aggrieved and dissatisfied with the impugned Order-in-Original passed by the Collector of Customs (Adjudication) Camp at Hyderabad the Appellant filed instant appeal before this Appellate Tribunal. Mr. Irfan Ghani, I.O. came to represent the department, appeal grounds are under consideration. That this case is badly infested with the bar of limitation provided under section 179(3) of the Customs Act, 1969, which is reproduced as under: Provided that in cases wherein the provisions of clause (s) of section 2 have been invoked such cases shall be decided within a period of thirty days of the issuance of show cause notice: " in this particular case the show-cause notice issued on 20-08-2021 and as such the case should have been decided within 30 days i.e. before 18-09-2021 whereas the Order-in-Original No. 19 of 2021 has been issued on 26-10-2021 and as such the order-in-original is badly time barred for 67 days and required to be set aside on this ground.
That the vehicle was carrying the goods openly and not in any hidden place or in false cavity, therefore, the adjudication authority did not bother or read the legislation introduce vide Finance Act, 2021 (VIII of 2021) in the third proviso of section 157 of Customs Act, 1969, which provides confiscation of a vehicle only in case of an offense committed for the transportation of offending goods under the second proviso of this Act, it can be inferred and deduced from perusal of the above mentioned provision that a habitual offender who has committed the offense for the third time, only then no option to pay fine in lieu of confiscation shall be given in the instant case there are no such allegation levelled against the owner / driver or vehicle involved in the case. Therefore, the impugned order is required to be set aside. That in respect of applicability of SRO 499(I)/2009, the Appellant respectfully submits that it has the impact of commanding the Adjudication Officer not to exercise the statutory power vested in him under Section 181 of the Customs Act, 1969 which is protected by the proviso under Section 223, needless to impress that if the forums below, tasked with the duty to perform quasi judicial function to follow the rules framed by the Board not only the statutory provision of section 181 of the Act but also the proviso under section 223 of it would be set naught, rendering the scheme of Adjudication meaningless. That the owner of the goods met with Director Intelligence and Investigation and showed import documents but he refused to accept due to issuance of seizure report. This shows that the owner of the goods is an importer and not smuggler also his appearance confirm that Appellant is not involved in any commission of offence.
That the charge of smuggling under section 2(s) of Custom Act, 1969 is not maintainable as the goods were intercepted and taken into possession from Hyderabad which is situated within the country Pakistan. The goods were not seized at any Custom Station or at any port. The Appellant purchased the truck in question on installment from Messrs HBL and he has no knowledge of the goods about duty paid or un paid as lie loaded the goods from shop / Godown which is in main place of the city and not from any port or border. That the learned collector (Adjudication) has rejected the request of appellant on the grounds that the goods were seized at Hyderabad. That the goods seized by the Directorate were imported at Peshawar and cleared from the Collectorate of (MCC Peshawar) against payment of duties and taxes. The said goods were supplied to retailers on credit for sell in open market. That the Appellant repeats his request already that he purchased the truck in question recently against running installments from Messrs Habib Bank Ltd. and notwithstanding the fact that he has no knowledge of any foul play.
4. Mr. Irfan Ghani, I.O., came to represent the department and para-wise comments submitted through Superintendent Law, copy supplied to the Counsel for the Appellant to go through the same. Parawise comments as are under:-- I. That contents of pare 1 of ground are misleading, misconceived and are based on non-reading of record. Bare reading of pare 19 of impugned original order made it abundantly clear that time limit for completion of adjudication proceedings within the periodicity prescribed under Section 179(3) of the Customs Act, 1969, had been extended by the competent authority. For ease of the matter para 19 is reproduced as under:- "Extension in completion of adjudication proceedings has been duly given by the competent authority in this case."
2. That contents of para 2 of ground are misleading, misconception and misinterpretation of law by the appellant. The vehicle was exclusively and wholly used for the carriage of smuggled goods, which could not have been loaded without the consent of the driver/ possession holder and its registered owner. Therefore, the vehicle has been ordered outright confiscation in terms of clauses
(8) and (89) Sections 156(1) and 157(2) of the Customs Act, 1969, read with clauses (a) and (b) of preamble of SRO 499(I)/2009 dated 13.06.2009, strictly in accordance with law. As far as the matter of third proviso of Section 157 of the Customs Act, 1969, introduced vide Finance Act, 2021, is concerned, it is pointed out that the instant case was intercepted on 24.06.2021 and the act was approved/ assented on 30.06.2021 and has prospective effect and cannot be applied retrospectively.
3. That contents of para 3 of grounds are misleading and contrary to law. The vehicle has been ordered outright confiscation in terms of clauses (a) and (b) of preamble of SRO 499(I)/2009 dated 13.06.2009. In terms of Section 223 of Customs Act, 1969, FBR has the jurisdicticn to issue orders, instructions and directions which are required to be followed by officers of Customs.
However, no such instructions shall be given to interfere with the discretion of officers in exercise of their quasi-judicial functions under Section 179 read with Section 180 of the Customs Act, 1969.
4. That contents of para 4 of ground are misleading, misconceived hence denied. At the time of interception/ seizure of smuggled goods, the possession holder/ driver failed to produce any import documents including transport bilty to discharge burden of proof of lawful possession as envisaged under clause (89) of subsection (1) of Section 156 read with Section 187 of the Customs Act, 1969. The appellant subsequent to interception/seizure of impugned goods managed Goods Declaration to give legal cover and avoid consequential penal action. The Goods Declarations have no relevance with the seized confiscated good. It is evident on record that the impugned goods were tagged with cards containing detail and price in local currency i.e. Chinese Yuan, meaning thereby the goods were not meant for export to any of the foreign destination. The appellant has not placed on record any transport note and Sales Tax Invoice prescribed under Rule 126 of the Customs Rules, 2001 to substantiate his claim of legal import. The impugned smuggled goods has been confiscated in accordance with law.
5. That contents of para 5 of ground are misleading, misconceived and contrary to facts and law, whereby the appellant has taken the stance that impugned goods were intercepted with in the country and not at any customs station or court. Therefore, charge of smuggling under Section 2(s) of the Customs Act, 1969, is not maintainable. The provisions of Section 2(s) of the Customs Act, 1969, stipulates that: "smuggle" means to bring into or take out of Pakistan, in breach of any prohibition or restriction for the time being in force, 45[, or in any way being concerned in carrying, transporting, removing, depositing, harbouring, keeping concealing 48], relating] 38] or en route pilferage of transit goods] or evading payment of customs duties or taxes leviable thereon.
(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 an other goods notified by the Federal Government in the official Gazette, which, in each case exceed [five hundred 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 THE CUSTOMS ACT, 1969 in or taking out of such goods; and all cognate words and expressions shall be construed accordingly;] From the bare reading of above provisions, it is abundantly clear that smuggling does not only confined to the goods brining into or take out of Pakistan in breach of any prohibition or restriction for the time being enforce but, evasion of customs duties or taxes leviable thereon have also been covered by the aforesaid definition or smuggling. It is pertinent to point out here that identical question came up for hearing before the Honourable Supreme Court of Pakistan in case of Collector of Customs, Peshawar v. Wali Khan and others reported in 2017 SCMR 585 whereby the provisions of Sections 2(s), 156 and clauses (89) and (90) and Section 187 have been discussed at length and were dealt 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 bro en 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 " evading payment of customs-duties or taxes leviable thereon; OR (i) gold bullion, silver bullion, platinum, palladium, radium, precious stones, antiques, COR GD narcotics and narcotic and psychotropic substances. OR (ii) manufactures of gold or silver or platinum or palladium by radium or precious stones, and any other goods notified 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 (1) 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 respondents 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 manmade 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 possessor 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/prohibited 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 goody which is applicable to the instant case and not Clause 90 thereof.
7. The confiscated goods were admittedly 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 the respondents. When confronted, learned counsel of Son respondents failed to provide any concrete evidence exes 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."
6. That contents of para 6 of grounds are not maintainable hence denied. It is once again reiterated that the vehicle was exclusively and wholly used for the carriage of smuggled goods which could not have been loaded without the consent and knowledge of Appellants Nos. 1 and 2.
Therefore, the vehicle has been ordered outright confiscation in accordance with law.
5. Record of the case has been carefully examined and arguments put-forth by the counsel of the Appellant and the Respondent have been duly considered. The Respondent has been alleged by the Directorate of Intelligence and Investigation FBR, FIU, Hyderabad for smuggling of foreign origin goods i.e. bags transported Karachi to Rawalpindi loaded on trailer bearing registration JV-8887 in 40ft container. The goods were seized along with trailer/container under section 168 of the Customs Act, 1969 for violation of provisions of sections 2(s) and 16 of the Customs Act, 1969. The show-cause notice was issued for violation of 2(s), 15 and 16 of the Customs Act, 1969 punishable under clauses (8) and (89) of section 156(1) and section 157(2) of the Customs Act, 1969. The Collector (Adjudication) Hyderabad after providing opportunities to the Respondent issued Customs Order-in-Original No. 19 of 2021 dated 26.10.2021 the operative para reads as under; "18. 1 have examined the case record and considered the written/verbal arguments of both sides.
The issue in the instant case is to decide the legal status of the seized goods. The Advocate in this written reply contended that the driver forgot to take the relevant papers of transportation billy which was given to an other driver of other vehicle for handing over the same to Ghulam Murtaza in Rawalpindi. While the Seizing agency holds that the advocate on behalf of claimant produced the transportation billy No.4517 dated 22-6-2021 in respect of seized goods, whereas the vehicle was intercepted and detained on 24.06.2021. The seizing agency also pointed out that the seized goods were not made for export to other country as evident from the detail and price printed on card tagged with seized goods i.e. hand carry suit case. School Bags, Drawn Staring Bags, Laptop Bags etc, where price of the seized goods were shown in local currency i.e. Chinese Yuan. The Seizing Agency further maintained that the GDs submitted by the Counsel pertained to MCC, Peshawar, are irrelevant to the seized goods. The GDs against the smuggled goods are baseless and have no relevance with the seized smuggled goods. The respondent failed to submit any documentary evidence to show any link between the seized goods and the goods imported under the GDs, Presented in support of the seized goods during adjudication proceedings. Furthermore, the respondent has not provided Transport Note and Sales Tax invoice prescribed under rule 126 of Customs Rules notified vide SRO 450(I)/2001 dated 18.06.2001 to substantiate his contentions with relevant documents and thus made a concocted story. Therefore, it is clearly provide that the respondent has tried to hoodwink Customs by submitting irrelevant Goods declaration. Therefore, I do not find any reason to disagree with the contention of the Seizing Agency that the seized goods were brought into the country through an un-authorized route without payment of duty and taxes.
The vehicle i.e. Nino Truck bearing Registration No. JV-8887 has been found used exclusively for transportation of smuggled goods. Consequently, the seized goods and vehicle mentioned at para. 12 supra of this order are Confiscated Outright in terms of clauses 8 and 89 of sections 156(1) and 157(2) of the Customs Act, 1969 for violation of sections 2(s) and 16 of the Customs Act, 1969 read with clauses (a) and (b) of preamble of SRO 499(I)/2009 dated 13.06.2009."
6. That being aggrieved with the above order the Appellant preferred appeal under section 194A of the Customs Act, 1969 before this Tribunal.
7. The legal issues involved in this case can be enumerated as follows:-
(i) Whether the Order-in-Original passed by the Adjudicating Authority was issued in violation of mandatory provision of time limit contained in section 179(3), of the Customs Act, 1969 and violated of the judgment the Honorable Supreme Court of Pakistan reported in 2019 SCMR 1735 as well as 2017 SCMR 1427?
(ii) Whether the documents submitted (i.e. Goods declaration and purchase invoices) by the Appellant can be considered authentic due to his failure to provide transport note and corresponding Sales Tax invoices prescribed Rules 126 of Customs Rules, 2001?
8. As regard issue (i) the Adjudicating officer deliberated the time limit issue in length in para 19 at page 10 of Order-in-Original reproduced hereunder: "19. Extension in completion of adjudication proceedings has been duly given by the competent authority in this case ...... .."
The above very clearly explains the issue of time barred issuance of Order-in-Original is not of any legal significance, hence, has no bearings on proceedings of this appeal as the time period was extended by the competent Authority.
9. As regard issue (ii) it is of Prime importance that the GDs furnished by the Appellant alone cannot discharge the burden of Proof under section 187 of the Customs Act, 1969 from the Appellant as the relevant GDs have to be correlated with transport note and sales tax invoices or sales tax return of the importer verifying that impugned goods imported vide the said GDs were supplied to local buyer registered or unregistered under the Sales Tax regime. The importer as well as the buyer are legally related under the Sales Tax regime as while the importer reflects the imports vide Annex "B" of Sales Tax Return as well as the local supplies vide Annex "C" thereof.
Whereas these supplies are also reflected in the buyers Sales Tax Return vide Annex "A" thereof.
That the Appellant tailed to provide the Sales Tax record to confirm that imported goods were supplied to certain buyers, hence he failed to discharge his burden of proof under section 187 of the Customs Act, 1969 and under Rule 126 of the Customs Rules, 2001 therefore the case of Respondents stands proved.
10. The appeals are rejected. No order to cost.
11. This judgment consists of (11) pages and each page bear our initial and office seal.