IRFAN SAADAT KHAN, J. This Special Customs Reference Application (SCRA) has been filed against the order passed by the Customs Appellate Tribunal (CAT) in Customs Appeal No.K-1231/2018 dated 16.01.2019. The following questions of law were admitted for regular hearing vide order dated 22.09.2022:
1. Whether on the fact and the circumstances of the case, iron tank fabricated within the passenger bus containing smuggled diesel does not fall under the ambit of false cavity or concealment as defined in the expressed provision of SRO 499(I)/2009 dated 13.06.2009?
II. Whether SRO 499(I)/2009 dated 13.06.2009 puts the barrier on release of lawfully registered conveyance against payment of fine in lieu of confiscation which was used wholly or exclusively in transporting of offending goods fall under section 2(s) of the Customs Act,1969?
2. Briefly stated the facts of the case are that on 23.09.2019 an information was received by the Anti-Smuggling Organization Collectorate of Customs that huge quantity of diesel oil, which is concealed in built-in cavities of a passenger bus bearing registration No.SGM-851, was arriving from Turbat carrying Iranian smuggled diesel oil. A team was then constituted to check the same and thereafter at about 10:00 p.m. the said bus was spotted on the road and was stopped for checking purposes. The driver of the bus, who was identified as Mehraj son of Barkat (the respondent) and who also was the owner of the bus, was asked about the presence of non-duty paid diesel oil. In response to which he denied carrying any smuggled diesel oil. However, when the staff thoroughly checked the bus they found out built-in secret cavities and presence of some 6080 liters diesel oil in those secret cavities of the said bus. The bus thereafter was brought to the warehouse and then legal formalities with regard to issuance of Show-Cause Notice (SCN) and other legal formalities were carried out. When the owner of the said bits was confronted with regard to presence of non-duty paid diesel oil, this time he immediately showed his willingness to pay the due duty and taxes in respect of the said diesel oil.
3. The departmental official then carried out necessary legal procedures as required under Section 168 of the Customs Act, 1969 (the Act) for violation of Sections 2(s), 156(2) and 157(2) punishable under clauses 8 and 89 of Section 156(1) of the Act read with Section 3(1) of Imports and Export Control Act, 1959. The SCN dated 16.10.2017 was then given to the owner of the bus with regard to transport of smuggled diesel in the bus. Other necessary legal procedures were also carried out by the Customs Authorities and then Order-in-Original No.323/2017- 2018 dated 26.10.2017 was passed by the Deputy Collector of Customs (DC), whereby the diesel was ordered to be confiscated but an option was given to the owner of the bus, under Section 181 of the Act read with SRO 499W/2009 dated 13.06.2009, to redeem the seized bus on payment of redemption fine equivalent to 20%.
Personal penalty of Rs.25000'- was also imposed on the owner of the vehicle. The DC also directed that the vehicle may be handed over to the owner after payment of redemption fine and personal penalty.
4. An appeal thereafter was filed by the Customs Authorities before the Collector of Customs (Appeals) [Collector Appeals], who vide Order-in-Appeal No.1499/2018 dated 19.09.2018 observed that the option to redeem the vehicle on payment of fine/penalty was incorrectly given by the said DC as the said vehicle was used in smuggling by the owner himself, hence modified the order of the DC to the extent that the option to redeem the vehicle was set aside. An appeal against the Order-in-Appeal was filed by the present respondent before the CAT, who set aside the order of the Collector Appeals and uphold the order of the DC with regard to release of the bus on payment of 20% redemption fine. It is against this order of the CAT that the present SCRA has been filed, wherein the above referred questions of law were admitted for hearing.
5. Mr. Pervez Ahmed Memon Advocate has appeared on behalf of the applicant and submitted that the order of the CAT is not in accordance with law, as the CAT while Passing the order has neither considered the provisions of Sections 181 and 157 of the Act nor the real intent of SRO 499(I)/2009 dated 13.06.2009. He stated the bus was apprehended red handed containing smuggled diesel oil, which has not been denied by the respondent rather when the said vehicle was confiscated, the owner/respondent offered to pay fine/penalty in respect of the smuggled goods. He stated that it is by now a well settled proposition of law that only in the cases where the owner of the said vehicle is not in the knowledge of the fact that his vehicle is carrying smuggled goods and being operated and driven by some other person only in that circumstances the relaxation/benefit as provided under SRO 499(I)/2009 could be granted. He, however, stated that in the cases where secret cavities are available in the vehicle and the owner of the vehicle is in full knowledge of those secret cavities and also in the knowledge that his vehicle is being used in dealing with smuggled items in such case the benefit as provided under SRO 499(I)/2009 dated 13.06.2009 is not available and no option to redeem the vehicle used in smuggling of the items could be granted/given to the said owner.
6. The learned counsel stated that not only the DC but the Customs Appellate Tribunal both erred in law in directing release of the confiscated bus which carried smuggled diesel oil and option given to the owner to redeem the vehicle on payment of duties and taxes was not in accordance with law. The counsel supported the order of the Collector (Appeals) by saying that the option to redeem the vehicle, which was used in smuggling of goods by the owner himself, cannot be given.
He, therefore, prayed that the answer to both questions may be given in favour of the department and against the respondent. The counsel in support of his arguments has also relied upon the decisions given by the Balochistan High Court Quetta in a number of cases wherein under identical circumstances it was observed that confiscation of seized vehicle used in smuggling cannot be given the benefit of SRO 499(I)/2009 and a vehicle used in smuggling could not be released. He stated that those decisions of the Balochistan High Court, given in SCRA No. 10 of 2020 dated 23.07.2020 and SCRA No.29 of 2020 also dated 23.07.2020, were challenged by the respondents before the Hon'ble Supreme Court of Pakistan in Civil Petitions Nos. 730-K to 760-K/2020 and the Hon'ble Apex Court also vide order dated 11.02.2021 dismissed those cases by observing that "No case is made out for interfering with the impugned judgment. The petitions are dismissed". The counsel also invited our attention to the judgments given by this Court in C.P. No.D-4188 of 2020, which was taken along with SCRAs Nos.469 and 955 of 2017 and 139 of 2018 and the decisions given in the cases of Director Intelligence and Investigation (Customs) v. Nasir ul Haq and another in SCRA No.443 of 2019 and C.P. No.4524 of 2020, dated 13.04.2021 (2022 PTD 1193) Director, Directorate General Intelligence and Investigation (Customs) and another v. Aurangzaib and others in SCRA No. 700 of 2019 and C.P. No.D-1853 of 2020 dated 24.03.2021 (2021 PTD 1026) and Collector of Customs Karachi v. Niaz Muhammad and another in 2022 PTD 1174, dated 07.04.2021.
7. None has appeared for the respondent despite proper service of notice.
8. We have heard the learned counsel at considerable length and have also perused the record as well as the decisions relied upon by him.
9. There is no cavil to the proposition that the bus when intercepted and confiscated was found containing non-duty paid 6080 liters diesel oil. There is also no cavil to the proposition that at the time when the bus was stopped and seized, the owner himself was driving the said vehicle. It is beyond comprehension that how the owner of the bus, who was driving the same, could be said to be not aware of the fact that the said bus was having secret inbuilt cavities in which smuggled non-duty paid diesel oil was present. It is also noted that when the customs officials intercepted and seized the bus, the said owner immediately offered that he was ready to pay the duty and taxes in respect of the smuggled diesel oil. The reading of the SRO 499(I)/2009 along with Sections 181 and 157 of the Act leaves no room for doubt that only in those cases option is available to the owner who is said to be not aware that smuggling is being carried out in his vehicle, however the facts of the instant case clearly reveal that it was the owner himself, who was driving the bus, and hence no leave could be given to the owner on the basis of the fact that he was not aware of the secret inbuilt cavities available in the bus.
10. In our view no doubt the SRO 499(I)/2009 provides release of the goods on payment of redemption fine and penalty to a registered owner but when it is found that the vehicle is carrying offending goods, the said vehicle is not liable to be released upon payment of fine. In the decisions given by the Balochistan High Court, mentioned supra, which were subsequently affirmed by the Hon'ble apex Court and by this Court through various judgments, noted supra, it has expressly been observed that any vehicle carrying smuggled items falls outside the relief granted under the said SRO and release of the vehicle could not be sanctioned in lieu of payment of redemption fine.
The decisions noted supra clearly caters to the situation prevailing in the instant matter that release of a confiscated vehicle carrying smuggled goods could not be sanctioned.
11. We, therefore, in view of what has been stated above and in view of the decisions noted supra, are of the view that under the given circumstances the CAT was not justified in directing release of the vehicle upon payment of redemption fine; hence the order passed by the CAT is set aside. The question proposed in the present SCRA is refrained as under: "Whether under the facts and circumstances of the case the CAT was justified in directing release of the bus after payment of redemption fine?"
12. In view of the facts and circumstances under discussion the answer to the above question is given in "Negative" i.e. in favour of the department and against the respondent. The SCRA stands allowed in the above manner.
Let a copy of this order be sent to the Registrar of the CAT for doing the needful in accordance with law.