SHAKIL AHMED ABBASI MEMBER JUDICIAL-III. By this order, I intend to dispose of abovementioned Customs Appeal filed against Order-in-Original No.311/2023 dated 19.06.2023 passed by the learned Collector of Customs (Adjudication) Quetta Camp Office at Hyderabad.
2. Brief facts of the case are that on 02.04.2023 during the routine checking, the Customs ASO team stopped a Truck (10 Wheelers) bearing Registration No. NAE-671, having Chassis No.FM/JNDD-14552 coming from Quetta towards Sindh under Bility No.2984 of M/s. Pak Godown out-going Goods Transport Company, Al-Saddat Market Hazar Ganji Link Road, Quetta. The vehicle was apparently found loaded with Iranian Petroleum Bitumen in Drums. On inquiry about legal import documents, the driver namely Mudasir produced a GD No. TAFT-HC-8983 dated 29.09.2022 showed the import of Petroleum Jelly (industrial Grade) having Quantity 322 Drums = 54910 Kgs along with Bilty No. 2984 dated 31.03.2023. On physical examination of goods reveals that produced GD was differ in description. (Hence the tanker along with goods was shifted to Customs Office Sukkur and detailed examination of documents and goods was carried out). The scrutiny of documents revealed that produced GD differ and do not relate to seized goods and smuggled goods were being transported under the garb of irrelevant GD. Therefore, detained goods along with vehicle detained for giving an opportunity, for producing customs import legal documents. Moreover, during the detention period claimant namely Muhammad Asif son of Sher Muhammad appeared and submitted an application with GD No.TAFT-13887 dated 26.10.2022 showed the import of Bitumen Grade 60/70 of Iranian Origin having, Quantity 217 Drums = 46290 Kgs, whereas on physical examination of detained goods and self-admitted by the claimant of goods in his application having quantity 110 Drums = 26165 Kgs, it proves that produced GD is of year 2022 and differ in quantity and weight and further trail between importer and purchaser under Rule 126 of Customs Rules, 2001. Notice under section 171 has been issued and a copy thereof has been pasted on the notice board of Customs Office, Sukkur under section 215(b) of Customs Act, 1969. The goods and vehicle were seized for violation of section 2(s) and 16 of Customs Act, 1969 and section 3(1) Imports and Exports (Control) Act, 1950 read with SRO 566(I)/2005 dated 06.06.2005 punishable under clauses (8) and
(89) of sections 156(1) and 157(1) and (2) of Customs Act, 1969.
3. Adjudicating proceedings were culminated into passing of Order-in-Original No.311/2023 dated 19.06.2023 passed by learned Collector of 'Customs (Adjudication) Quetta Camp Office @ Quetta as under:- "16. I have examined the case record, and heard the verbal arguments of both sides. Due consideration has been given to the written arguments of both sides. The Advocate of the claimant has contended that the seized goods were lawfully imported vide GD No. TAFT-HC-8983 dated 29.09.2022. These documents were handed over to the seizing agency for comments and verification. In response, the seizing agency submitted comments detailed at para 15 above. The claimed GD No. AIT-HC-13887 dated 26.10.2022 showed the import of Bitumen grade 60/70 of Iranian origin 217 drums, whereas on physical examination, It is proved that the goods differ in quantity. Moreover, no trail between importer and purchaser under Rule 126 of Customs Rules, 2001 has been given. Therefore, I do not find any reason to disagree with contention seizing agency that the seized goods were brought into the country through an unauthorized route without payment of duty and taxes. Consequently the seized goods mentioned at para 12 above are Confiscated Outright in terms of clauses (8) and (89) of Section 156(1) of the Customs Act, 1969 for violation of sections 2(s) and 16 of the Customs Act, 1969 read with SRO 566(I)/2005 dated 6.6.2005.
17. As far as the seized vehicle is concerned, the same has been used exclusively for carriage/removal of offending/contraband goods. Therefore, it is confiscated under Section 157(2) of the Customs Act, 1969. However, nothing has been placed on record by the seizing agency to the effect that the seized vehicle has been found carrying of smuggled goods in false cavity or being used exclusively or wholly for transportation of offending goods under clause (s) of section 2 of the Customs Act, 1969. Consequently, the seized vehicle is confiscated outright in terms of section 157(2) of the Customs Act, 1969. In view of the request of respondent/claimant of vehicle that it has bona fide status, an option under section 181 of the Customs Act, 1969 read with Section 157(2) of the Customs Act, 1969 and read with SRO 499(I)/2009 dated 13.06.2009 is given to the lawful claimant/owner of the seized Vehicle to redeem the same against payment of redemption fine equivalent to 20% of the Customs value subject to condition that the vehicle is already lawfully registered in the country with the relevant Motor Registration Authority and has not been repeatedly used in terms of Board's letter No. 10(17)L&P/05 dated 26-06-2006 and to verify that it does not attract clause (b) of preamble to SRO 499(I)/2009 dated 13.06.2009. The Seizing agency is also directed to get the vehicle lab tested (FSL) to ascertain as to whether its chassis number/frame is genuine or otherwise in terms of Board's letter No. 1(12)E&C/2019 dated 18-11-2019.
In case of adverse findings, necessary action may be taken accordingly. A personal penalty of Rs.150,000/- (Rupees One Lac Fifty Thousand Only) is also imposed on lawful claimant/owner.
4. Appellants 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 appellants are Law abiding Citizen of the Islamic Republic of Pakistan and has never been indulged in any such illegal activity as has been alleged by the Respondents,
2. That the appellants are bona fide purchaser and owners of above mentioned seized goods i.e. Bitumen having quantity 110 drums. The appellant lawfully purchased from dealer.
3. That no notice under sections 26, 165 and 171 of the Customs Act, 1969 was served upon the applicant/claimants of the subject goods. This is' in sheer violation to the judgments of the Hon'ble Supreme Court of Pakistan and also superior courts including Hon'ble Customs Appellant Tribunal.
4. That the appellants purchased the goods from whole sale dealer being freely available in the open market. The appellants were provided with the relevant import documents of the above mentioned seized goods.
5. That the seized goods are not prohibited/banned goods, these are freely available in the open market considering the said principle enunciated by the Hon'ble Apex Court in its reported judgment 1995 SCMR Page 387 where it goods which are freely available in the open market and the import of such goods was not banned in the country. The reliance of the same was made by the Hon'ble Customs Appellate Tribunal while disposing of the Customs Appeal No.339/2000 Mr. Muhammad Hanif v. The State, 301/2003 Naseer Ahmed v. Collector of Customs, Sales Tax and Excise, Quetta and 2014 PTD (Trib.) 1566.
6. That it is pertinent to mentioned here the seized goods were neither seized within the five miles of the Indian or Iranian Border nor have been brought into the country via route other than one declared or from a place other than a "Custom Station" rather was intercepted at Sukkur area which was coming from Quetta to Sindh. The goods seized are far away from the border and freely available in the open market which cannot be out rightly confiscated owing to the principles laid down by Customs Appellate Tribunal in its judgment cited as 2005 PTD (Trib.) 1139 and 2014 PTD (Trib.) 1566,
7. That the seized of bitumen are owned by the applicant/claimants which were Purchased by him in the open market from a whole seller, on his assurance that the duty/taxes on the goods have already been paid at the time of he provided such GD and other relevant documents which reflects that the goods are already duty and taxes paid.
8. That the trading of seized goods, its availability and utilization in abundance by the general public is even not restricted under the law of the land Had there been intention of the Government to restrict their transaction within the Country, it might have included these commodities in negative list and have enacted legislation to impose restrictions on their use as well.
9. That the seizure of freely traded of seized goods from the settled area of the country and subsequently its outright detention is in conflict with the observation by the Hon'ble Supreme Court of Pakistan vide Its judgment reported as 1995 SCMR 387 wherein it was held by the division bench of Apex Court that: "if the items alleged to be smuggled by the prosecution were freely available in the open market and the import of such goods were not banned in the country, presumption could arrive that: the goods in. question were lawfully brought in the country unless contrary was shown".
10. That the Customs Appellate Tribunal Karachi while relying upon the dictum laid down by the Apex Court vides its judgment in Customs Appeal No.339/2000 titled "Muhammad Hanif v. State" and in Customs Appeal No.301/2003 titled "Naseer Ahmad v. Collector of Customs, Sales Tax and Excise Quetta" held that "to produce legal import documents is nothing but to put undue pressure on the business community in spite of the fact that it has been observed number of times by the Supreme Court of Pakistan that the goods which are freely available in the market are presumed to be have been legally imported and duty paid".
11. That the detention/seizure of Bitumen is not only damaging the repute of the applicant/Claimant but also causing hardship on account of blockage of considerable amount on detained/seized, goods in question. It is further added that since shoppers is a perishable commodity and there are likely chances of debilitation of its quality due to improper storage and climatic effects for indefinite period, therefore early decision of the subject case is solicited by the learned adjudicating authority, so as to save him from further irreparable financial losses and economic implications.
12. That there is nothing on the record to show that the route used by the appellant was a route other than notified, vide sections 9 and 10 of the Customs Act, 1969, and that public road (Highway) at Sukkur has been mentioned as a none notified or unauthorized route as no trade of transportation of the goods from the point that the goods alleged to have been brought into Pakistan through none notified route to avoid Custom duties and taxes have been recorded in the seizer report as well as in the subject show-cause notice.
13. That the seizing agency is unable to substantiate with any supporting documents to prove the act of smuggling within the meaning of section 2(s) of transporting goods unlawfully into Pakistan in violation of the Customs Act, 1969.
14. That in another judgment of the Hon'ble Supreme Court passed in case titled as The Assistant Collector, Central Exercise and Land v. Qazi Zia Ud Din (PLD 1962 SC 440), wherein it has been held that "If a person purchases goods in an ordinary market then in the absence of any suspicious circumstances or some definite facts leading to that inference the customs officer is not entitled to a reasonable belief that the Government has been defrauded of the duty payable on the goods.
The ordinary method of the import of goods from outside into Pakistan is that they come through the Customs barrier and the duty payable is in fact paid. The presumption, therefore, with respect to any goods which may be sold in the open market in the absence of an indication to the contrary would be that duty has been paid on them.
15. That it has been also alleged by the seizing agency that the applicants/claimants have failed to produce the import documents in respect of the seized goods. In this regard it is categorically stated that since, the applicant/claimant is not the importers but are local traders who have purchased the subject imported goods which are freely available in the local market, therefore, it was not possible for him to produce any import documents to the Seizing agency. The insistence to produce such import documents is nothing but undue pressure of the seizing agency on the applicant/claimant, which act is arbitrary and unjustified. Since, the seizing agency failed to discharge its onus to prove through evidence, the trail of transportation of the subject goods from entering into Pakistan through un- notified routes, under sections 9 and 10 of the Customs Act, 1969, without payment of custom duties and taxes, the subject goods in question namely Bitumen, therefore, cannot be categorized as smuggled goods within the meaning of section 2(s) of the Customs Act, 1969.
5. On hearing, the DR appeared and supported the order-in-original although he has not filed any parawise comments despite repeated notices. I have heard the arguments of learned counsel for the appellants and tend to dispose of this appeal on the basis of available record. The instant appeal has been filed by the appellants against the impugned Order-in-Original passed by the learned Adjudication Officer whereby he had ordered for outright confiscation of impugned goods and an option was given to the owner of vehicle to redeem the same on payment of 20% redemption fine and penalty of Rs. 150,000/- was also imposed on owner of vehicle. Hence, the instant appeal.
6. The appellants have challenged the order of Adjudication Officer on the grounds that the impugned goods were duly imported vide GD No.TAFT-HC-13887 dated 26.10.2022 on payment of leviable duty and taxes and were not smuggled into the country. The learned DR contended that the impugned seized goods were brought into the country through illegal routes without payment of duty and taxes, the claimed GD No.TAIT-HC-13887 dated 26.10.2022 showed the import of Bitumen grade 60/70 of Iranian origin 217 drums whereas on physical examination of goods, it is found that the impugned goods differ from quality. The learned counsel for the appellants contended that such examination of impugned goods is not available on record nor any particulars of the seized goods has been provided in writing during examination. Therefore, it cannot be assumed that goods differ in quality from the goods declared as per GD as the physical examination officer had wrongly said. Further, contended that no examination report establishing the alleged difference in quality is available on record.
7. On examination of record, it is found that GD dated 26.10.2022 possessed by appellants was produced before the department but the genuineness of the GD was not challenged by department. Their main contention is that upon physical examination it is found that goods differ from quality. However, to corroborate it such examination report has not been brought on record before this Tribunal. It has been argued by the counsel for the appellants that the goods, which were stated to be smuggled goods by the Customs Department, are easily and readily available in the local market and the same were purchased by appellant from a whole seller. The counsel produced commercial invoice 26.10.2022 and challan vide No.NGDP-3322-22082023 issued by MCC Hyderabad-Import showing bona fide import and purchase of impugned goods. Therefore, appellants have shifted initial burden of proof upon the shoulders of respondent. Hence, in my view, it could not be considered that seized goods are smuggled one. Moreover, it is found that the appellant is not an importer rather they have made the purchases from the local market, therefore, the department has miserably failed to justify any smuggling in this regard. Furthermore, it is also noted that the seized goods were recovered from an area which is more than 05 miles away from the border. In the instant matter, the appellant has proved its case to the hilt that the goods were neither smuggled nor there was any discrepancy in the GD furnished by them nor there was any violation of the Customs Act.
8. As a corollary and logical conclusion of this finding would lead to hold that in the wake of charge of smuggling having not been established upon the 'appellant carrier of goods (transporter/lawful owner) cannot be held liable to pay redemption fine and personal penalty. Therefore, the respondents action on this count is found and held to be illegal, unwarranted on the facts and circumstances of the case.
9. Resultantly, the impugned order is set aside as the charge of smuggling of goods is not established. Accordingly, respondent department is directed to release the impugned goods of appellants unconditionally and also refund the amount of fine and penalty imposed upon and paid by the owner of vehicle forthwith.
10. The appeal stands disposed of in above terms with no order as to cost.