SHAKIL AHMED ABBASI, MEMBER JUDICIAL-III. By this order, I intend to dispose of above mentioned Customs Appeal filed against Order-in-Appeal No.402/2023 dated 11.08.2023 passed by the learned Collector of Customs (Appeals), Karachi.
2. Brief facts of the case as reported by Pakistan Coast Guards, Karachi are that on 06 March 2022, at about 1310 hours, troop of 3 Pakistan Coast Guard Banalion observed suspicious movement of a bus, Al Naseeb Daewoo Coach, Registration No.BSA-507 coming from Gawadar to Karachi on dirt track in general area Hub Bypass, thus avoiding Pakistan Coast Guard road check. Troops of 3 Battalion Pakistan Coast Guard got held the bus and brought it to the Hub bypass road check for checking purpose. The Investigation Officer, CG10-1463 Naib Subedar Muhammad Arshad as road check Commander tried to incorporate some civilians as mushirs but no one are agreed. The Investigation Officer asked Coast Guards Number 13929 Sepoy Murad Au and Coast Guards Number 16971 Sepoy Muhammad Kamran to act as mushirs for which they willingly agreed. A notice under section 164 of the Customs Act, 1969 was served to the driver Muhammad Alani son of Dill Murad in the presence of above mentioned mushirs. Detailed checking of said Al Naseeb Daewoo Coach Registration No.BSA-507, was carried out. Resultantly foreign origin smuggled Cooking oil Irani and Ghee Irani were recovered. The Investigation Officer asked to the driver to produce legal documents of recovered Cooking Oil Irani Ghee Irani which he failed to produce.
Recovery memo. and mushirnama were prepared in presence of the above mentioned mushirs on the spot. Contents of mushirnama and inventory of seized goods were read over to the mushirs which they found correct and signed accordingly. After serving a notice under section 171 of the Customs Act, 1969. Detention certificate has been issue accordingly. I seized the recovered Cooking Oil Irani and Ghee Irani, for violation of section 2(s) and 16, punishable under section 156(1)(8)(89) of the Customs Act, 1969. Passenger coach Al Naseeb Daewoo Registration No. BSA-507 was allowed to go being public carrier. Seized goods were brought to Battalion Headquarter where seizure report was made accordingly. Accordingly, the Adjudicating Officer vide Order-in-Original No.760/2022-23 dated 19.01.2023 held that the charges against the appellant had been proved.
3. The appellant being aggrieved with the order dated 19.01.2023 preferred an appeal under section 193 of Customs Act, 1969 before Collector of Customs (Appeals), Karachi who vide Order-in-Appeal No.402/2023 dated 11.08.2023 held as under:- "6. I have examined the case record and the arguments of the appellants and have given careful consideration to the facts of the case. Admittedly, the appellant is not in possession of any evidence regarding lawful import of the impugned goods seized in this case. Therefore, I endorse the adjudicating officer's finding that the impugned goods had been smuggled into the country and under the law for the time being in force the same need to be subjected to outright confiscation, being an item notified under section 2(s) of the Customs Act, 1969 through Notification SRO 566(I)/2005 dated 06.06.2005. For the foregoing reasons, it is held that the arguments advanced by the learned counsel, have no weight and the case laws quoted by him are not relevant to the facts and circumstances of the instant case. Hence, I found no reason to interfere with the impugned Order-in-Original. The appeal is therefore dismissed."
4. Appellant again being aggrieved with the aforesaid impugned order passed by the Collector of Customs (Appeals), Karachi filed the instant appeal before this Tribunal and has assailed the impugned order inter alia on the following grounds:-
1. That the Appellant is a law abiding citizen of Islamic Republic of Pakistan and has never been indulged in such kind of activities as alleged by the Respondent.
2. That the impugned orders of the Respondents Nos.1 and 2 have been passed due to misreading, non-reading and ignorance of facts and law which are liable to be set-a-side copy of the said order in appeals and Order-in-Original attached as Annexure 'A & B'.
3. That it is further submitted that in the impugned orders the Respondents did not disclose the reason of independent private witness were associated with this incident; creating doubt to conceal the real facts.
4. That the seizing Agency has failed to prove that the goods were smuggled and had been brought in to the Country by evading legitimate duty and taxes, Naib Subedar (Seizing officer) on behalf of the seizing agency has falsely testified on basis of concocted and fabricated seizure report.
5. That after the perusal of seizure report it conveys that the contents are capricious and without any reasonable and cogent evidence.
6. That it is pertinent to mentioned here that the Respondents failed to established the charge of section 2(s) of Custom Act, 1969 in light of prescribed manners, therefore, the show and Order-in- original issued is null and void and unlawful and against the provision of Customs Act, 1969 and liable to set aside.
7. That the respondents under section 168 of Customs Act, 1969 could not further detained the goods of appellant and must liable to returned the same goods, the subsection (2) of section 168 of Customs Act, 1969 clearly states; "Where any goods are seized under subsection (1) and no show-cause notice in respect thereof is given under Section 180 within two months of the seizure of the goods, the goods shall be returned to the person from whose possession they were seized"
"Provided that the aforesaid period of two months may, for reasons to be recorded in writing, be extended by the Collector of Customs by a period not exceeding two months.
Under section 168 of Customs Act, 1969 the respondents is bound to return the same goods of appellant.
8. That it is well principal of justice that "Justice delayed is justice denied" the respondents could not provide any single opportunity of hearing of appellant within stipulated period of time, which is violation of principal of justice as well as violation of section 179 of Customs Act, 1969. As section 179 of Customs clearly declare; "The case shall be decided within ninety days of the issuance of show-cause notice or within such period extended by the collector for which reasons shall be recorded in writing, but such extended period shall in no case exceed sixty days"
"Provided that in cases, wherein the provision of clause (s) of section 2 have been invoked, such case shall be decided within a period of thirty days of the issuance of show cause notice."
9. That the order passed by the Respondents Nos.1 and 2 are arbitrary in nature and liable to be set asides, as the PCG staff has assumed by his won that the goods were smuggled and confiscated.
10. That Sections 2(s), 16 and 157 of Custom Act, 1969 not applicable under the circumstances of the case, because place of seizure is not border area and the same seized within country and as per law detained cooking oil and Ghee is not liable for confiscation because same was not seized from border area nor smuggled one present accused are also not involved in smuggled previously.
11. That the mandatory provision of section 103, Cr.P.C has not been complied properly both the mushirs were belonging to department and members of seizing party which can also be confirmed form the record of the case and the separate mushirnama of the recovery was not prepared at the time of seizure.
12. That the Sections of 2(s) and 16 of Custom Act, 1969 is not applicable as per circumstances of the cases and in the presence of credible information a seizing agency mandatory provision of sections 162 and 163 of the Custom Act, 1969 and in numbers of cases reported as PLD 1974 SC (sic)
PLD 1988 Lahore 177, 1991 SCMR Page 1753 as its clearly stated that penal section against the conveyance should not taken unless there is clear evidence of involvement of owner in transportation of smuggled goods and the alleged sections 2(s), 156(2), 57(2) and 178 of the Custom Act, 1969 are not applicable under the circumstances of the case, because the place of seizure is not border nor and the goods and vehicle was seized during the transportation within the country without given notice.
13. That the issues came up for judicial scrutiny before the supreme Court of Pakistan in the case of Assistant Director Intelligence and Investigation v. M/s B.R Herman PLD 1992 SC 485. Wherein their lordships had observed as under: "the object of section of the Customs Act, 1969 is to empower the authority to ask for information or require the production of documents or inspect the same in order to determine the legality or illegality of importation or exportation of Vehicle which have been imported or exported, the value of such Vehicle, the nature, amount and source of the funds or the assets with which Vehicle were acquired and the customs duty chargeable therein or for deciding anything incidental thereto.
The authority can only for specific purposes of determining the legality or illegality call for information as required by section 26. The authorized officer can call upon any importer or exporter to furnish information in a case where such determination is required. It cannot make a roving inquiry or issue a notice by merely shooting in the 'dark in the hope that it will be able to find out some material out of those documents and then charge the party of irregularity or illegality. The authority has to state and disclose in, the notice, the purpose of which the party is required to produce those documents or supply information. Unless such purpose is specified in the notice, it will be a matter of any body's guess and the accused party will be put to inquiry without any specific allegations or facts disclosed to him. It does not permit any to employ the provisions of Section 26 to make indiscrimination, roving and fishing inquiry irrespective of the fact whether any determination of legality or illegality in import, export of fund with which the Vehicle were acquired is to be determined. Even in cases of suspicion of commission of illegality, details should be provided to the party to enable him to have an opportunity to produce all the relevant documents and disclose information. Depending on the facts and circumstances of the case, any notice without disclosing any fact or particulars for which information or documents are required will be in violation of the principles of natural justice and may be struck down as illegal and without jurisdiction."
"Reliance is placed in another "M/s. Skindar A. Kharim v. The State vide 1995 SCMR 387 "if the items alleged to be smuggled by the Prosecution was freely available in the open market and imports of such goods were not banned in the country presumption could arise that the goods in question were lawfully brought in the country unless contrary was shown while holding that the action of the customs authority is only lawful at the barriers/borders area outside the city to check the contraband /smuggled articles and not in city",
14. That the appellant crave leave of to urge the other grounds at the time of arguments of this instant appeal.
5. Respondent exercised his right of rebuttal and filed parawise comments which are reproduced as under:- a) The seized Cooking Oil 700-canes (12600 litters), Cooking Oil 550 bottles (1650 litters) and Ghee Irani 800 Tins (4000 kilograms) which were smuggled illegally and in commercial quantity. The duty/taxes leviable as per the prevailing law were also evaded. The seized goods were smuggled for commercial purposes. According to the provision of section 2(s) of the Customs Act, 1969. b) Owner of Cooking Oil 700 canes (12600 litters), Cooking Oil 550 bottles (1650 litters) and Ghee Irani 800 Tins (4000 kilograms) did not appear before the seizing officer and not produced any legal documents at the time of seizure. They also failed to produce any proof of payment of duty and taxes relating to recovered foreign goods. c) At the time of seizure all legal formalities were completed. Notice under sections 164 and 171 of the Customs Act, 1969 were served to driver of Vehicle. Mushirnama and inventory of seized goods were prepared and completed at the spot in the presence of mushirs. It is pertinent to highlight that the goods are foreign origin and no documents of bill of entry and duty taxes paid were presented at the time of seizure. d) It is stated that place of seizure comes in jurisdiction of Pakistan Coast Guards. Territorial jurisdiction i.e. Coastal Area as specified in First Schedule of Pakistan Coast Guards Act, 1973 which is reproduced below: "Southern strip of the Province of Baluchistan along and astride the existing road emanating from the Pak-Iran border connecting the towns of man-turb-hoshab-bazdar bela-uthal to hub river (bundat-murad) and also the southern area of the province of sindh along and astride the line and road from hub river (bundmurad)-gadap-sari sing-thano bulakhan-bano-mirpur bataro- jatti to the Arabian Sea but excluding the limits of and port in those areas", e) The Deputy Collector of Customs (Adjudication-I) Customs House Karachi passed the Order-in- Original No. 760/2022-23 dated 19-01-2023 and confiscated goods in favour of state. f) The Collector of Customs (Appeal) Karachi passed the Order-in-Appeal No. 402/2023 dated 11- 08-2023 and dismissed the appeal. g) The notice under sections 164 and 171 of Customs Act, 1969 was served to Mr. Muhammad Alam son of Dil Murad driver of Al Naseeb Coach Registration No. BSA-507 an spot. h) The advocate of claimant stated in grounds para 2 that Deputy Collector of Customs (Adjudication-I) Customs House Karachi and The Collector of Customs (Appeals) Karachi passed their judgement due to misreading, non-reading and ignorance of facts and law which are liable to be set-a-side. i) In para 4 of Order-in-Original passed by Deputy Collector of Customs (Adjudication-I) Customs House Karachi, the respondent advocate has failed to show the legal import documents showing payment of duty and taxes leviable on the seized goods during the course of hearing. However, departmental comments highlighted the issue during the hearing. j) In para 6 of Order-in-Appeal passed by Collector of Customs (Appeal) Karachi, 4 the authority concerned examined the case record, arguments of the appellant and also gave careful consideration of the facts of the case. Admittedly, the appellant is not in possession of any evidence regarding impugned goods seized in this case. Hence para 2 is totally denied.
6. I have perused the case record and heard both parties. During hearing the learned counsel for the appellant at the very outset raised preliminary legal question and argued that the goods had been seized on 06-03-2022 and the Show-Cause Notice was served on the appellant on 12.01.2023, and thus were barred by time prescribed under section 168 of the Customs Act, 1969. He contended that the entire structure built thereon was illegal and had to fall.
7. In order to resolve this question of law, raised by the learned counsel for the appellant, it would be pertinent to refer to the provision of section 168 of the Customs Act, 1969. The said section reads as: "Seizure of things liable to confiscation (I) The appropriate officer may seize any goods liable to confiscation under this Act, and where it is not practicable to seize any such goods, he may serve on the owner of the goods, or party person holding them in his possession .or pass an order that he shall not remove, part with or otherwise deal with the goods except with the previous permission of such officer.
(2) Where any goods are seized under subsection (1) and no show-cause notice is in respect thereof is given under section 180 within two months of the seizure of the goods, the goods shall be returned to the person from whose possession they were seized: Provided the aforesaid period of two months may, for reasons to be recorded in writing, be extended by the Collector Customs by a period not exceeding two months".
8. The aforementioned section in clear terms provides two months period for the revenue authorities to serve a Show-Cause Notice on the person from whom goods liable to confiscation have been seized. This period of two months can be further extended by two months in case the competent authority, for reasons to be recorded in writing, extends the same. In the present case, assuming that even if competent authority could have extended the time period for further two months, still it would also have been time barred. Therefore, the show-cause notice and the entire proceedings, which follow thereafter are held to be void ab-initio illegal and are hereby quashed.
9. In view of the above legal position, the instant appeal is allowed and the impugned order is set aside.
10. The appeal stands disposed of in above terms with no order as to cost.