1. ' IMAM ALI G. KAZI, J.---On 20th August, 1982 at about 3-00 a.m. Officers of the Pakistan Coast Guards raided Nadri Hotel at Karachi and searched Rooms Nos.14 and 39. Certain precious and semi-precious stones were found from the two rooms. The 14 petitioners herein who are Afghan nationals were found to be the persons in possession of the precious and semi precious stones. The Coast Guards Authorities after usual investigation sent all the 14 persons to stand trial in the Court of Special Judge (Customs and Taxation) at Karachi. Simultaneously the stones seized were referred to the Deputy Collector of Customs for adjudication.
2. ' The Deputy Collector of Customs on adjudication by his order passed on 3-3-1983 confiscated the stones. The petitioners did not succeed in their appeals and revisional applications before the Authorities under the Customs Act. They then filed present petition under Article 199 of the Constitution of the Islamic Republic of Pakistan, 1973 impugning all such orders.
3. ' The Special Judge (Customs and Taxation), Karachi in the meanwhile by his judgment, dated 21- 12-1989 acquitted all the 14 petitioners as according to him the precious and semi-precious stones secured from the petitioners were of Pakistani origin. The Advocate for the petitioners has filed certified copy of his judgment which is kept on record.
4. ' Mir Nawaz Khan Marwat, learned counsel for the petitioners, in this case contends that the Authorities under the Customs Act can only adjudicate and confiscate the goods if the same are smuggled or contraband goods. In the instant case the goods have been found to be of Pakistan origin by a competent Court of law and the decisions of the .Authorities under the Customs Act to the contrary cannot be permitted to hold the ground. He has placed his reliance on the case reported in 1989 Pakistan Criminal Law Journal 1190. He also relied on Letter No.9(32)/L&P/76 dated 22nd November, 1976 issued by the Board of Revenue, Government of Pakistan, whereby all the Collectors in the country were informed about the free movement of precious and non-precious stones without any check at various custom check points within the country. This letter had dispensed with the proof of local purchase at the time of export of such precious and semi- precious stones by exporters. He further pointed out that the Respondent in spite of this petition has wrongly relied on interpretation of this letter made by one II Secretary vide his letter, dated 2nd February, 1983 holding that Afghan Nationals were not covered by the above-mentioned instructions and have passed orders impugned in this petition. The II Secretary is not an authority competent to interpret the circular issued by Central Board of Revenue.
5. ' Mr. Akhlaq Ahmed Siddiqui, Advocate appearing for respondent No.4, was not present yesterday when Mir Nawaz Khan Marwat, Advocate for. the petitioner, had concluded his arguments and the matter was adjourned today. He now contends that the power of adjudication and confiscation of smuggled goods and imposition of certain penalties is the exclusive function of the officers of Customs Department. Such action is in addition to criminal prosecution in a Court of Law. He relied on the case reported in PLD 1969 SC 4:46 to support his contention.
6. ' The Board of Revenue, Government of Pakistan, decided to allow free movement of precious and non-precious stones without checking such goods at various custom check points within the country and even at the time of export of such stones no proof for local purchase was to be insisted upon by the Authorities. Such decision is contained in their letter bearing No.9(32)/L&P/76, dated 26th November, 1976 reproduced below:- ' No.9(32)/L&P/76, Islamabad, the 22nd November, 1976.
7. Mr. Riaz Ahmed Malik, Second Secretary, ' To: (1) The Collector of Customs (Prov)/(Appr), Customs House, Karachi.
(2) The Collector of C.D. & L.C., Lahore/Hyderabad/Peshawar.
8. ' Subject:- Import of Precious/Semi-precious Stones---Customs Difficulties Regarding.
9. ' I am directed to refer to the subject noted above and to say that the Ministry of Commerce has brought to the notice of the Central Board of Revenue certain procedural difficulties on the subject.
10. The trade had represented to that Ministry that although no legal restrictions exist on the movement of precious/semi-precious stones from N.-W.F.P. to any part of the country, harassment is caused by the officials of customs anti-smuggling squad at various points. The result is that the suppliers are reluctant to bring these stones from the tribal and N.-W.F.P. region to Karachi for sale to gem merchants, who have adequate facilities for procuring and exporting the same.
11. ' It has also been intimated that the exporters of precious/semi precious stones are called upon to submit documents to the Customs Authorities regarding domestic purchases of these items. In the absence of these documents the goods are assumed as smuggled. Since the stones are purchased by the authorised merchants from the tribesmen, it is difficult for exporters to submit proof of legal purchase from genuine businessmen.
12. ' The following decisions have been taken which may be strictly followed:-
(i) The free movement of precious/non-precious stones is not to be checked at various customs checking points within the country.
(ii) Proof of local purchase is not to be insisted upon at the time of export of precious/semi- precious stones by exporters. Sd/.
13. (Riaz Ahmad Malik) Second Secretary"
14. ' It is perhaps because of the directions contained in the letter reproduced hereinabove that the Investigating Officers were not able to produce any evidence to prove that the stones secured from the petitioners at Karachi were smuggled goods before the adjudicating officer. The decision contained in the above letter has been brushed aside by the respondents in this particular case as according to them the instructions do not cover the cases of Afghan nationals. The letter under reference does not clarify that such instructions will not apply to Afghan Nationals. In absence of any modification to that effect expressly made by a competent authority in the circular we are unable to agree with the interpretation of the adjudicating authority that such instructions are inapplicable to Afghan Nationals. Besides, in the present case on the basis of evidence produced by the same prosecution agency, the Special Judge (Customs and Taxation) Karachi by his judgment, dated 21st December, 1989 has confirmed the stand taken by the petitioners before him that the A stones are of Pakistan origin.
15. ' In view of above the respondents have clearly acted in excess of their lawful authority by arriving at conclusion that the stones secured from the petitioners are smuggled goods liable to confiscation and their orders impugned in this petition are declared to be of no legal effect. The case of the petitioners is raemanded to respondent No.2 who will treat the revision applications disposed of by him earlier to be pending before him and decide it afresh in the light of two factors mentioned above after hearing petitioners within a period of one month. The petitioners are directed to obtain a certified copy of this judgment and send it to respondent No.2 for implementation within one month from the date of its receipt.
16. ' For the foregoing reasons the petition is allowed with no order as to the costs.