SHAKIL AHMED ABBASI, MEMBER JUDICIAL-III. By this order, I intend to dispose of above mentioned Customs Appeal filed Order-in-Original No.114 of 2023-24 dated 03.08.2023 passed by the learned Collector of Customs (Adjudication-I), Karachi.
2. Brief facts. of the case are that on 24th May, 2023 an information was received to the effect that foreign origin Diesel Oil concealed under cover/load of Liquefied Petroleum Gas loaded on Hino Truck bearing Registration No. TMN-353 is arriving from Balochistan and would pass from RCD Highway, for Karachi. Pursuant to the said information, ASO staff of Collectorate of Customs Enforcement, Karachi deployed at Customs Moachko Choke Point, Karachi was directed to mount strict surveillance on RCD Highway to foil the said attempt. At about 05:20 pm, the said Hino Truck bearing Registration No. TMN-353 was spotted and intercepted at Customs Moachko Choke Point.
Two persons were sitting in the said Truck who identified themselves as Amanullah son of Muhammad Hassan (Driver), and Imran Dahwar son of Yar Muhammad (Cleaner). They were asked about any concealment in the said truck to which they showed their ignorance and stated that they were carrying Liquefied Petroleum Gas (LPG). The driver of the said truck was asked about the documents of Hino truck and loaded Liquefied Petroleum Gas (LPG). He produced documents viz GD bearing Nos. GWGI-HC-5080-21-05-2023 and GWGI-HC-5072-2005-2023. The documents
(GDs) were forwarded to Messrs PRAL for verification via email. M/s PRAL replied via email, that "No data, found under given GDs bearing Nos. GWGE-HC-5080-2 21-05-2023 and GWGI-HC-5072- 20- 05-2023". Hence, after verification from M/s PRAL and due to existences of discreet information about the concealment of Diesel Oil under the cover load of the Liquefied Petroleum Gas (LPG), therefore, cursory search of the said truck was carried out in presence of musheers namely PO Ubedullah and Sepoy Liaquat Ali which revealed diesel Oil was concealed under the cover/load of Liquefied Petroleum Gas (LPG) to hoodwink the law enforcement agencies. Upon recovery, of foreign origin diesel oil, the occupants were asked to explain the reasons for the concealment of diesel oil under the load of Liquefied Petroleum Gas (LPG), but they failed to respond in this regard.
Therefore, the Hino Truck Bearing Registration No.TMN-353 along with concealed diesel oil under load of Liquefied Petroleum Gas(LPG) was taken into possession in presence of above named musheers under the cover of mushimama prepared on the spot. Thereafter, the loaded truck was escorted to State Warehouse-III, Keamari, Karachi for detail examination and legal formalities in presence of above named musheers. At State Warehouse-III, Keamari, Karachi, detailed examination of bowser (Tank) loaded on Hino Truck bearing Registration No. TMN-353, was conducted in presence of aforesaid musheers and it transpired that the bowser Tank was unusual and altered especially designed to conceal huge quantity of diesel oil in order to hoodwink LEAs.
Measurement of diesel oil was carried out with the assistance of representative of M/s. Caspian Oils in presence of above named musheers which resulted into the recovery of total 49770 Liters of Diesel Oil. Three (03) representative samples were drawn from the recovered diesel oil said to be foreign origin/smuggled which were sealed under signatures of aforesaid musheers for chemical analysis. The goods so recovered being smuggled/non-duty paid along with conveyance Hino Truck bearing Registration No. TMN-353 were Seized in terms of Section 168 for violation of Sections 2(s), 16, 17, 156(2) 157(2), 178 and 187 of Customs Act, 1969, punishable under sub-clause (e)(i) of clause 8, and clause (89) of Section 156(1) ibid read with Section 3(1) of imports and Exports Control Act, 1950. The accused persons were arrested and notice issued under Section 171 of Customs Act, 1969 was served to accused persons and also displayed on the notice board at Customs House and ASO/HQ, NMB Wharf, Karachi. Value of the seized goods was calculated as Rs.7,005,094 and that of seized Vehicle as Rs. 12,500,000/-.
3. Adjudicating proceedings were culminated into passing of Order-in-Original No.114/2023-24 dated 03.08.2023 passed by learned Collector of Customs (Adjudication-I) Karachi as under:- "Having heard the arguments of both sides and perused the case record including Para-wise comments and rejoinders submitted by both sides, I order as under: a) Since no one appeared to claim ownership of the seized foreign origin diesel oil and no documents of legal import of seized goods were produced before this forum, it is concluded that charges levelled in the show-cause notice that the seized 49,770 liters of diesel oil had been smuggled into the country without payment of leviable duty and taxes thereon stand established.
Therefore, the entire quantity of seized diesel oil as mentioned above is outrightly, confiscated under Clause (89) of Section 156(1) of the Customs Act, 1969 read with subsections (2) of Section 156 of the Act ibid for violation of Sections 2(s), 16, 17, 156(2), 178 and 187 of the Customs Act, 1969 of the Customs Act, 1969 further read with Section 301 of Imports and Exports Control Act, 1950. b) As regards the impugned seized vehicle (Hino Truck bearing Registration No. TMN-353), the department has claimed that the same was used for transportation of smuggled diesel oil under cover load of LPG and that the hawser Tank was unusual and altered and especially designed to conceal huge quantity of diesel oil in order to hoodwink LEAs. However, Photographs of the vehicle furnished by the departmental representative do not show any unusual and altered design, false cavity or chamber to conceal huge quantity of oil. Moreover, since huge quantity of diesel oil comprising of almost entire load of conveyance was seized from the said vehicle, it is not possible to hide this huge quantity in a cavity or chamber which usually comprise of small hollow places in the body of vehicle to hide goods in lesser quantities. Thus the allegation of concealment of this huge quantity of diesel oil in hidden cavities is doubtful and could not be substantiated/proved.
Moreover, the Hon'ble Lahore High Court in Customs Act, 1969 Reference No.52 of 2015 in case of Nazis Ahmed v. Chairman Customs Appellate Tribunal has interpreted the word wholly or exclusively synonymously to repeated use of any vehicle for transportation of smuggled goods. It was also held in the same case that the object of confiscation under the Customs Act. 1969 is mainly to penalize perpetrators of the offence of smuggling, impliedly it is not the purpose of legislator to penalize the owner of vehicle unless any convenience is proved. Fact of the matter is that vehicle was apprehended during transportation of smuggled goods for the first time and entitled for relief as provided in the provisions of Section 157 of the Customs Act, 1969. In the current case, contrivance of the owner of the seized vehicle has not been substantiated and there is no evidence that the impugned seized vehicle was previously also involved in any act of smuggling. In view of aforementioned discussion on facts and circumstances of the case and by getting strength from legal proposition given by the Honorable Lahore Court in above-mentioned cited case, I have reached to the conclusion that charge of carriage of smuggled diesel oil in the seized vehicle is established and accordingly. Hino Truck bearing Registration No. TMN-353 is confiscated under section 157(2) of the Customs Act 1969. However, keeping in view the submissions of the respondent/owner of the seized vehicle and considering the fact that this vehicle is a lawfully registered transport vehicle having no hidden or false cavities, and not covered under clause (b) of preamble SRO 499(I)/2009, dated 13.06.2009, an option is given to owner of the vehicle under Section 181 of the Customs Act, 1969 read with Clause (f) of Serial Number 1 of Table of SRO 449(I)/2009, dated 13.06.2009, to redeem the same in lieu of confiscation on payment of redemption fine equal to 20% of the customs value of the vehicle to be re- assessed and re-ascertained by the appropriate officer. A personal penalty of Rs.25,000/- (twenty five thousands rupees Only) is also imposed on owner of the vehicle. The claimant/owner of vehicle is strongly cautioned that in case the impugned vehicle is found carrying smuggled/contraband goods again, it will be outrighthy confiscated without fail."
4. Appellant Collectorate being aggrieved with the aforesaid impugned order passed by the Adjudication Officer filed the instant appeal before this Tribunal and has assailed the impugned order inter alia on the following grounds:-
1. That the learned Collector of Customs (Adjudication-II) did not consider the ground realities and passed the judgment by offering an option to owner of vehicle to redeem the same upon payment of 20% of redemption fine of the assessed Customs value, neglecting the factor that said vehicle was involved in transportation of Smuggled HSD that was being carried under cover load of LPG in an especially design/altered/fabricated tank (Photographs of vehicle showing outlet valves and especially engineered tank are attached as Annex-C). Where, as per law and other provisions, such type of conveyances cannot be released against redemption fine etc. therefore, the said order is illegitimate, which renders the release of vehicle null, void and liable to be unsustainable under the law.
2. That said vehicle was used for transportation of impugned seized HSD concealed under the cover load of LPG in an especially designed/engineered tank cleverly built in the said vehicle for carrying smuggled HSD and LPG is being used as cover load, this act of respondent No. 2 hits SRO 499(I)/2009 dated 13-06-2009 which does not allow to redeem such conveyance, either wholly or exclusively used in transportation of smuggled goods or having false cavity in it. The relevant part of SRO is reproduced as under: "S.R.O.499(I)/2009.In exercise of the powers conferred by section 181 of the Customs Act, 1969 (IV of 1969), and in supersession of its Notification No. S.R.O. 487(I)/2007 dated 9th June, 2007, the Federal Board of Revenue is pleased to direct that no option shall be given to pay fine in lieu of confiscation in respect of the following goods or classes of goods, namely:(a) smuggled goods falling under clause (s) of section 2 of the Customs Act, 1969 OV of 1969);
(b) lawfully registered conveyance including packages and containers found carrying smuggled goods in false cavities or being used exclusively or wholly for transportation of offending goods under clause (s) of the Customs Act, 1969."
3. That it is an admitted fact that there is no concept of creating an especially designed/engineered outlet valves beneath the tank in a normal Truck/Trailer used for carrying LPG whereas in instant case owner of Truck/Trailer has willfully/Knowingly designed/fabricated a tank and used LPG as cover load in order to deceive the Law Enforcement 'agencies. Moreover, the documents of LPG, that too fake, were used to secure their attempt of smuggling. How can (smuggled) diesel be transported in LPG bowser using fake LPG documents? Hence it can easily be concluded that respondent is a habitual carrier/transporter of smuggled/non-duty paid diesel oil in surreptitious manner and evading payment of duty and taxes.
4. That the above mentioned points are clearly establishing the 'mensrea' involved on the part of the owner of the said truck/trailer, as no Physical changes including tanks cannot be built without the consent/knowledge of the owner, meaning thereby the absolute aim of the especially altered LPG tank was nothing but to transport the Smuggled HSD for lucrative purposes.
5. The learned counsel for the respondent exercised his right of rebuttal and filed parawise comments which are reproduced as under:-
1. Para No.1 is denied. The collector of customs Adjudication passed an order in accordance with law. The appellant did not prove secret cavities and failed to produce sufficient evidence in support thereon.
2. Para. No.2 is denied partially. The said vehicle is LPG but nor used for smuggling. The vehicle was given to driver for legal transportation and it is also truth that the respondent was not on board at the time of incident. Further it is stated that the respondent is not concern with the alleged recover.
Therefore, the vehicle is liable to release on payment of 20% redemption fine and ONO may kindly uphold.
3. Para No. 3 is denied. That the vehicle is LPG which is lawful registered. The respondent is not involved in any activity of smuggling. If it is assumed the carrying of diesel in such vehicle i.e. LPG does not mean reflect the secret cavities because the changed of mode of transport to carry of diesel.
4. Para No. 4 is also denied. That there is no mens rea of respondent in such case. The record can be checked and can be verified. Therefore is liable to release such vehicle which is in unlawful custody of seizing agency.
6. It is pertinent to mention here that no one appeared on behalf of the appellant despite service of several notices upon him by all means of service under the Rules. Even today nobody appeared.
Therefore, the matter cannot be kept pending any longer due to non-appearance of the appellant.
It appears from the conduct of the appellant that he is not interested to defend this appeal, therefore, this Tribunal is constrained to proceed ex-parte but decide it on merit and on the basis of available record.
7. I have heard the learned counsel for the respondent and perused the case record. Briefly stated, the Appellant Collectorate has filed the instant appeal before this Tribunal to modify the order of Collector Adjudication whereby an option has already been given to the owners under Section 181 of the Customs Act, 1969 to redeem the vehicle confiscated under Section 157(1) and (2) of the Customs Act, 1969 carrying smuggled goods on payment of redemption fine along with personal penalty.
8. The learned counsel for the respondent has placed reliance on judgment of Hon'ble Supreme Court of Pakistan passed in Civil Petition No.4580 of 2021 dated 25.01 2023 in the case of Faiz Muhammad v. FOP others. The relevant portion of the judgment is reproduced as under:- "5. It could not be assumed that the vehicle had false cavities merely because the inspector/seizing officer had said so, and did so without providing any particulars, diagrams or photographs of the same. Therefore, the Tribunal's judgment should not have been set aside, particularly when there was no evidence to bring the case of the respondent, without the exception stated in clause (b) of the SRO. Accordingly, the petition is converted into an appeal and allowed by setting aside the impugned judgment of the High Court and restoring the judgment of the Tribunal."
9. Keeping in view of the above reasoning of the Hon'ble apex Court which applies on all four to the facts of the case, the undersigned concurs with the order passed by the Adjudication Officer which is maintained. The learned DR for the appellant failed to produce any fresh evidence before this Bench necessitating interference with the impugned order. Resultantly, the instant appeal preferred by appellant Collectorate is dismissed.