Applicants Muhammad Khalil and Hussain Sharif have moved this application under section 561-A of the Code of Criminal Procedure for quashment of a Criminal Case (Case No.88 of 1987), pending in the Court of Special Judge, Customs and Taxation.
2. Said case was outcome of F.I.R. No.6/86 lodged by the Deputy Superintendent, Customs (Directorate General of Vigilance Inspection Southern Region, Karachi). According to the F.I.R. On 28-8-1986 the staff of the Directorate General of Vigilance Inspection Southern Region, Karachi headed by Deputy Superintendent S. Fazil Hussain, secured 24,031 yards of A/S Cloth of Korean origin, which was, lying in Truck No.FDG-7175, parking within the premises of Messrs Torray Mills (Pvt.) Limited. During investigation of the case, the Customs Authorities came to know that a racket of industrialists was involved in importing cloth free of duty for the purpose of being used in their factories in Export Proceedings Zone (EPZ) and subsequently selling such cloth in the local market on huge profits. Applicants Muhammad Khalil and Hussain Sharif were also said to be involved in such illegal acts in complicity with Messrs Siddique Umer, Hussain Umer, Haji,, Umer Ahmed (Directors of Messrs Torray Mills (Pvt.) Limited). Applicant Hussain Sharif was Assistant Director of Messrs Cyma Enterprises Ltd. And Applicant Muhammad Khalil was Cashier of Messrs Torray Mills (Pvt.) Limited. All of them including the applicants were alleged to have contravened the provisions contained by section 2(s), section 16, section 32 and section 57(2) of the Customs Act punishable under section 156(8), (14) and (89) of the Customs Act. They were also alleged to have contravened the provisions contained by section 3(1) of Import and Export Control Acc, 1950 punishable under section 3(3) of the same Act.
3. After due investigation the Customs Authorities submitted charge-sheet in Court of the Special Judge (Customs and Taxation) Karachi against applicants Muhammad Khalil and Hussain Sharif only. Rest of the persons shown as accused in the F.I.R. Were not challaned.
4. The applicants moved the trial Court for their acquittal under section 265-K of Cr.P.C. But their application was rejected under an order dated, 9-12-1989. Hence,, this application.
5. Mr. Makhdoom Ali Khan, learned counsel for the applicants argued that no doubt the cloth secured by the Customs Authorities was imported from Korea by Messrs Cyma Enterprises but the goods were sent for processing at Messrs Torray Mills after having obtained a proper gate pass and that after processing the goods were again to be returned from Messrs Torray Mills to Messrs Cyma Enterprises. It was added that the gate pass was issued under authority of the Export Processing Zone against bank guarantee of 35,000 Dollars and as such there was no contravention of any provision of Customs Act. It was further argued that the present applicants were simply employees of a Company in the Export Processing Zone and that they were not beneficiaries, as they were not doing anything for their own benefit. It was further argued that under an Order No.SIB-167/86, the Deputy Collector of Customs (Preventive) Head Quarters had taken view that the cloth secured by the customs authorities was lawfully imported into Karachi Export Processing Zone by Messrs Cyma Enterprises and was taken out of the said zone to Messrs Torray Mills in the Tariff area for processing. The Deputy Collector of Customs Preventive/Head Quarters has expressed his view in the following words: "However, it is established that this cloth was lawfully imported into K.E.P.Z. By Messrs Cyma Enterprises and was taken out of E.P.Z. To Messrs Torray Mills in the Tariff Area for processing. These goods passed through the E.P.Z. Gate jointly manned by K.E.P.Z.A. And Customs and an Export Gate Pass was issued by K.E.P.Z. For this consignment. Messrs Cyma have committed certain procedural irregularities which prompted this seizure. However, since the gate pass was prepared and the goods were recovered from a premises which is a recognized processing unit, the intention of smuggling is not proved."
After expressing such views the Deputy Collector of Customs (Preventive) released the seized cloth to be restored to Messrs Cyma Enterprises, who were warned to be careful in future and to observe the prescribed procedure. The seized truck was also released to its owner. Relying on the aforesaid order, learned counsel for the applicants argued that the Customs had not notified any procedure before February, 1987. Reference was made to said order of the Deputy Collector of Customs where it was mentioned that before issue of Standing Order No.2/86-(P) of February, 1987, no uniform practice existed about the procedure for removal of goods from Karachi Export Processing Zone area and that the procedure governing transfer of goods from Export Processing Zone to Tariff area for processing under sub-contract facility, was issued in February, 1987 under S.O. No.2/86(P). Said order further shows that Export Promotion Zone Gate Pass No.897 dated 21-7-1986 was prepared by Messrs Cyma Enterprises for sub-contracting of processing of 25,000 yards of fabrics in the Torray Mills and Messrs Cyma Enterprises also obtained a bank guarantee dated 2-7-1986 from Habib Bank Ltd. For U.S. 35,000 Dollars for their goods to be removed out of Export Processing Zone under sub-contracting. It was lastly argued that owners of Torray Mills were not challaned and their employees were prosecuted. In support, learned counsel for the applicants cited the cases of (i)
Nafis-ur-Rehman's Khan v. State 1990 P Cr. L J 1089, (ii) Atlas Khan and others v. Azam Khan and another 1980 P Cr. L J 1018 and (i.e) Israr Hussain v. State and others 1986 P Cr. L J 574.
6. Mr. Kazi Facz Issa, learned counsel appearing for the State did not oppose this application and conceded that no offence was made out against the applicants, who were not beneficiaries. He also referred to the order of Deputy Collector Customs Preventive and stated that the goods seized were returned to owners of Messrs Torray Mills.
7. The recourse to section 561-A of Cr.P.C. Can be made and the criminal proceedings can be quashed if continuance of such proceedings would amount to the abuse of the process of Court. I now proceed to discuss the authorities cited at the Bar. In (i) above, the criminal proceedings were ordered,, to be quashed as the case was consigned under section 249 of Cr.P.C. And the prosecution remained totally unmoved during another 18 months after consignment of the case. In
(ii) above criminal case was quashed on the grounds that innumerable adjournments were given to the prosecution for evidence and they produced only three witnesses during a period of 5 years and the F.I.R. Was lodged after unexplained delay of over 24 hours and the eye-witnesses were closely related inter se and inimical to the accused. In (i.e) above there was a delay in conclusion of the trial and the police took more than 3 years to complete the investigation and the case was pending for over 10 years in the trial Court after submission of the challan and there was no slight progress even after efflux of 13 years from the registration of the case and the proceedings were quashed. Present case is not covered by either of the cases cited at the Bar.
8. However, if the. Facts alleged do not constitute an offence which is to be tried by a Court of law the proceedings are to be quashed as held in the case of Haji Muhammad Sodho and another v.
State and another 1987 P Cr. L J 351.
9. In the instant case the main allegation in the F.I.R. Was against the owners of Messrs Torray Mills, who were alleged to be indulging in illegal activities of importing the goods to be used in their Mills situated in Export Processing Zone and then selling such goods in the local market. It was not prosecution case if goods in questions,, were imported by the applicants. The Order No.SIB-167/86 passed by the Deputy Collector of Customs (Preventive) shows that the Customs Procedure governing transfer of goods from Export Processing Zone to the Tariff area for processing under sub-contract facility was issued by the Customs House in February, 1987, whereas the present goods were secured on 28-8-1986. This shows that when the goods were secured there was no Customs Procedure governing transfer of goods from Export Processing Zone to tariff area. The Deputy Collector of Customs (Preventive) was convinced that the goods in question were imported by Cyma Enterprises into Export Processing Zone, from where the same were unlawfully shifted for processing of Torray Mills, through the Export Processing Zone gate, which was manned besides others by Customs authorities. The order further shows that Torray Mills from where the goods in question were recovered, is a recognized processing unit. In presence of such facts it cannot be said that there was an act of smuggling or there was any intention to evade taxes. Section 16 of the Customs Act empowers the Federal Government to prohibit or restrict the bringing into or taking out of Pakistan of any goods of specified description, under a Notification to be published in the Official Gazette. Even if the facts as alleged are correct, no offence under section 32 of Customs Act is made out, as there is no allegation about making of untrue statement by any one. No other offence appears to have been committed by the applicants, whose employers have not been challaned. Consequently continuance of the criminal case against the applicants would amount to abuse of the process of Court.
10. I, therefore, accept this application and quash the criminal case pending against the applicants in Court of Special Judge (Customs and taxation), Karachi.