JUDGMENT: MR. HAFIZ ANSAR UL HAQ, MEMBER JUDICIAL/CHAIRMAN. (1). This appeal has been filed by Muhammad Anfal and others (appellants herein) against the Order-in-Original No. 331/2024 dated 20.11.2024, passed by the Additional Collector of Customs (Adjudication), Islamabad.
2. Brief facts of the case as per record are that on 12.10.2024, an intelligence information was jointly conceived by the Station Dera Town. D.I. Khan, of imminent attempt of smuggled Goods in a Hino Truck bearing Registration No. P-4755-Peshawar. Resultantly, the staff of Field Intelligence Unit, D.I.
Khan, with the active support of local Police the impugned vehicle Hino Truck bearing Registration No. P-4755/Peshawar, at Daraban Road, D.I.Khan. Apparently, the vehicle was loaded with the smuggled goods covered by Wheat Husk (Bhusa) which was shifted to FIU, D.I. Khan for further proceedings under the law. On demand, the driver/owner of the vehicle/goods namely (i)
Muhammad Anfal Khan S/o Ghulam Khalil Khan R/o Muhallah Dewan Khail, P/o Tatar Khail, Gali Jan, Tehsil & District Lakki Marwat (driver) and (ii) Gohar Ayub Khan S/o Mammad Ayub Khan R/o Muhallah Dewan Khail, P/o Tatar Khail, Gali Jan, Tehsil & District Lakki Marwat (owner) could not produce any legal documents to prove the legitimate import of the said goods.
As there were reasons to believe that the aforesaid foreign origin tyres were non-duty paid/smuggled and have been brought into the country through un-authorized routes, avoiding payment of duties/taxes, therefore, were seized under section 168(1) of the Customs Act, 1969 for violation of the provisions of the Customs Act, 1969.
3. After issuing the show cause notice and completion of the requisite formalities, the Additional Collector of Customs (Adjudication), Islamabad, vide the impugned Order-in-Original No. 331/2024 dated 20.11.2024, outrightly confiscated the seized goods alongwith the vehicle.
4. Aggrieved of the above order, the appellants have filed the instant appeal on legal and factual grounds mentioned therein.
5. During the arguments of the case, learned counsel for the appellants, reiterated the grounds of appeal and contended that the order of the lower forum is against law, facts and circumstances of the case; that the case of the appellants does not come under section 2(s) of the Customs Act 1969; that the seizure is illegal and not maintainable in the eyes of law; that goods and the vehicle have been seized by un authorized police authorities who under the law cannot seized the goods and vehicle and have been violated the mandatory provisions of the Customs Act 1969; that the goods were seized by the police authorities which were later on handed over to the seizing agency who is not entrusted with functions of Customs officer under section 6 of the Act and in terms of section 7 read with section 170 of the Act, no request by the seizing agency to the police for rendering assistance, for effecting seizure by the seizing agency is available on record; that no notice under Section 171 have been issued to the appellants that no Show Cause Notice have been issued to the appellant No. 4' and have been violated the mandatory provision of the Customs Act 1969; that the goods have been seized far away from the International Border; that the seized tires are not from banned Countries and release of the seized goods against payment of redemption fine and taxes as per the SRO in field are more beneficial to the Government than other type of disposal; that the release of the seized goods against payment of duty and taxes will also save expenditure of auction process; that the Appellant are ready to pay the taxes if released. Learned counsel for the appellants prayed that the seized confiscated goods may be released on duty and taxes only and the vehicle unconditionally.
6. On the other hand, representative of the respondent-department opposed the contention of appellant and submitted that huge quantity of foreign origin goods has been seized from the appellants for which they could not produce any valid import documents; that the vehicle was seized and confiscated for loading and transportation of said foreign origin smuggled goods and was exclusively used for transportation of the offending goods. He supported the impugned order and prayed that the appeal may be dismissed.
7. Arguments of both the parties heard and record perused.
8. The instant appeal has been filed by the appellants/owners of the goods mentioned in the Recovery Memo of Seizure Case No. 92/2024 dated 12.10.2024 and also for release of the goods i.e., the tyres (fully described in the assessment sheet) and also for release of the vehicle i.e., Hino truck bearing Registration No. P-4755/Peshawar which is a public transport vehicle, being outrightly confiscated by the learned lower forum.
9. Perusal of the record reveals that initially the goods alongwith the vehicle were seized by the local Police of Police Station, Dera Town, D.I. Khan, which were subsequently handed over to the Customs authorities on 10.10.2024. According to the Customs Act, 1969, the police are not empowered to make such seizure. However, according to Section 6 and 7, read with section 170 of the Customs Act, 1969, the police have the following jurisdiction:-- "6. Entrustment of function of customs officers to certain other officers.-- (1) The Board may, by notification in the official Gazette, entrust, either conditionally or unconditionally, any functions of any officer of customs under this Act to any officer of the Federal Government, Provincial Government, State Bank of Pakistan and Scheduled Banks Provided that where any officer in performance of his functions under this section commits any offence under this Act, such officer shall, in addition to any other penalty which may be imposed under any other law for the time being in force, be liable to such punishment as is specified in sub-section (1) of section 156 for the offence committed by him.] 9[(2) No officer entrusted with any functions of any officer of customs under sub-section (1) shall interfere in any manner in the performance or discharge of any duty by an officer of customs in places notified under section 9.]
7. Assistance to the officers of customs. All officers of Central Excise Police, and the Civil Armed Forces, and all officers engaged in the collection of land-revenue are hereby empowered and required to assist officers of customs in the discharge of their functions under this Act."
10. As per the spirit of section 6 reproduced above, no special powers have been entrusted to Police to take cognizance for making seizure of the goods, falls under the domain of the customs authorities, who definitely perform their duties at every station and route throughout the country under the said Act.
11. Section 7 though gives a slight indication regarding use of power by the Police when there is need to assist the Customs authorities for a specific action under the Customs Act but there is nothing on record to show any correspondence or written information regarding the action look by the Police officials in this case.
12. Moreover, the record is also silent about any notice under section 170 (that too in case the goods were seized on suspicion by the police), which speaks that:-- "In every such case the police-officer seizing the things shall send written notice of their seizure and detention to the nearest custom-house and immediately after the dismissal of the complaint or the conclusion of the inquiry or trial, he shall cause such things to be conveyed to and deposited at, the nearest custom-house, to be there proceeded against according to law" but no procedure has been adopted either by the police (the initial seizing agency) or the Customs intelligence/authorities party), No written request seeking (sic) assistance by the Customs officials from the said police authorities to make this specific seizure is available on record. All the action taken in the instant case resulted into derailing the procedure, which vitiate the whole achievement under the law. Because when the original jurisdiction is not followed, certain illegalities take place and in this case, no notice under section 171 of the Customs Act, 1969 has been served upon the possessors/occupants of the smuggled goods and also no signatures have been obtained from the said smugglers on the Recovery Memo as well as Inventory Memo, which is against the spirit of law and procedure thereto.
13. No doubt the appellants have produced purchase receipt in respect of the seized tyres but the same does not exonerate them from the liability of payment of customs duty/taxes, however, except the present appellants, no other claimants/owners came forward to claim the goods in question. Moreover, the goods i.e., the tyres are perishable in nature, therefore, instead of dumping the same being perishable in nature, therefore, release of the against the payment of duty/taxes plus redemption fine will be more beneficial to the government exchequer and by that way the further proposed litigation will also be curtailed.
14. The record further reveals that though the appellants have failed to produce any import documents in respect of the seized goods but it is also fact that the same are not from banned countries and is importable items. The case of the appellants is that the same are importable item and available in all local markets of the country. Therefore, to avoid further litigation and loss, the appellants are ready to pay duty and taxes etc. It is further submitted by the learned counsel that the appellants are not involved previously in bringing such type of goods and that they are not habitual and were unaware of the circumstances they faced.
15. In view of the above, only the new tyres mentioned in the Recovery Memo of Seizure Case No. 92/2024 dated 12.10.2024, are released against payment of all leviable customs duty/taxes etc., upon the assessed value of the said tyres plus 20% redemption fine.
16. As far as outright confiscation of the vehicle i.e., Hino truck is concerned, the record reveals that the learned Adjudicating Officer did not consider the fact that the said vehicle is a passenger/public transport and no previous involvement of the vehicle in any case of smuggling has been reported, therefore, outright confiscation of the same is against the law and administration of justice. No previous involvement of the driver or owner of the vehicle for loading or transporting such goods has been brought on record. The vehicle in question is a registered one and no secret cavities have been reported in the same.
17. According to clause (b) of the amended SRO. 499(I)/2009 dated 13.06.2009, no option shall be given to pay fine in lieu of confiscation in respect of the goods or classes of goods and the 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 section 2 of the Customs Act, 1969, while the amending SRO. 1619(I)/2024 dated 03.10.2024 after insertion of clause (ba) says that no option shall be given to pay fine in lieu of confiscation to the lawfully registered conveyance including packages and containers, other than in clause (b), if seized and found carrying smuggled goods.
18. No doubt on the date of occurrence i.e., 12.10.2024, the above referred amended SRO.
1619(I)/2024 dated 03.10.2024 was in field but concurrently the provisions of SRO. 1280(I)/2024 dated 20.08.2024 were also in the field, which is reproduced hereunder: "S.R.O. 1280(I)/2024.--In exercise of the powers conferred by section 181 of the Customs Act, 1969 (IV of 1969), the Federal Board of Revenue is pleased to direct that the following further amendment shall be made in its Notification No. S.R.O. 499(I)/2009 dated the 13th June, 2009, namely.--
(1) In the aforesaid Notification.--(1) after clause (b), the following new clause shall be inserted, namely: "(ba) lawfully registered conveyance including package and containers other than in clause (b), found carrying smuggled goods if seized for the third time; or"
"(2) in TABLE, under S. No. 2,-- (a) in clause (F), in column (2), after the expression "(b)", the expression ", (ba)" shall be inserted;
(b) against clause (F), in column (3), for the expression "20%", the expression "40%" shall be substituted; and
(3) after the TABLE, the following new "Explanation" shall be added, namely:-- "Explanation:--For the purposes of sub clause (f, of S. No. 2 of the Table, the value of the seized vehicle for payment of fine in lieu of confiscation, shall be determined by allowing a maximum of 50% of depreciation @ of 2% per month upto 24 months. Any further depreciation in value for the purposes of this sub-clause shall be in accordance with the provision of sub-rule (2A) of rule 58 of Customs Rules, 2001, after written approval of the relevant Collector of Customs. ".
19. Therefore, the vehicle in question was not previously involved in the act of smuggling and is a commercial one, is thus liable to release against payment of redemption fine @40% as per the above referred SRO.
20. In view what has been discussed above, the impugned Order-in-Original No. 331/2024 dated 20.11.2024, passed by the Additional Collector of Customs (Adjudication), Islamabad is modified to the extent of release of goods against payment of all leviable customs duty/taxes etc., upon the assessed value of the said goods plus 20% redemption fine and the vehicle Hino truck bearing Registration No. P-4755/Peshawar against 40% (forty percent) redemption fine of the appraised value of the vehicle, as per the above SRO.
21. Copies of the judgment be sent to the parties.