1. ' MRS. MAJIDA RAZVI, J.---The petitioner has filed the present petition praying therein to:--
(1) Declare that the whole consignment being old and used broken autoparts fall under P.C.T.
2. Heading 7204 and 4700.
(2) Declare that the Respondents are not entitled to claim custom duty on goods being broken/damaged pieces of motor parts, after classifying them under their respective P.C.T.
3. Headings meant for new items as the same is without lawful authority and is illegal.
(3) Declare that the order of the Respondent No,2 for confiscation of the goods without examining them personally and without issuing notice for such confiscation as provided by Customs General Orders and the relevant provisions of law is illegal and without jurisdiction.
(4) Direct the Respondents Nos. 2 and 3 to allow the clearance of the confiscated goods as.Required by section 168 (2) of the Customs Act as no notice was served within specified period of time.
(5) Direct the Respondent No, 3 to release the confiscated goods without charging any demurrage, to refund the amount taken by them for the demurrage of the consignment illegally, as these were kept detained by the Respondent without any fault on the part of the petitioner.
(6) Grant Cost of the petition.
(7) Grant such other relief which this Hon'ble Court deems fit and proper in the circumstances of the Petition.
4. ' The brief facts as per petition are that the petitioner is a proprietorship concern carrying on business of imports and exports particularly dealing in import of iron and steel scrap. The petitioner obtained import licence issued by the Muslim Commercial Bank for the import of 100 metric tons Ferros waste and Scrap remelting scrap ingots of iron and steel, and other waste and scrap, falling under the P.C.T. Heading No, 7204. The said consignment of the petitioners reached Karachi Port and a Bill of Entry dated 25-4-1993 was filed vide I.G.M. No, 827/93. The said consignment was examined by the staff of Collector of Customs (Appraisement), who declared that part of the said consignment consisted of serviceable autoparts and as such confiscated the same. The petitioners requested for a show-cause notice as well as re-examination of the goods by the experts for the determination if the said goods were serviceable items or not but the same was not acceded to by the respondent No,2. The remaining consignment to the extent of iron and steel scrap was released.
5. ' On 30-9-1993 when this Petition came up for Katcha Peshi before a D.B. Of this Court it admitted the petition and ordered that the goods in question be shifted to the customs bond after the charges .Of K.P.T. Are deposited by the petitioners. On our query the learned counsel for the petitioners has informed us that the same could not be complied with because of heavy demurrage charges being demanded by the K.P.T.
6. ' We have heard Mrs. Navin S. Merchant, learned counsel appearing for the petitioners, and Mr. S. Tariq Ali, the learned standing counsel appearing for the respondents Nos.1 and 2 and Mr. Salman Hamid, the learned counsel for respondent No, 3.
7. ' Mrs. Navin S. Merchant, the learned counsel for the petitioners, contended that the goods were waste and scrap and the goods confiscated were nothing but broken and damaged autoparts and there was no justification for the confiscation of the same. In support of her contention, she has relied on the cases of M/s. Waseem Traders v. Government of Pakistan (1985 CLC 2796) and M/s. Khyber Traders Proprietorship v. CBR, Islamabad and others (1994 MLD 1473).
8. ' In the case of Waseem Brothers, the goods were imported as 'iron steel scrap' but on examination, the Customs Authorities found the consignment as serviceable autoparts as such it was held that there was a misdeclaration in the Bill of Entry in regard to the nature of goods. The petitioners filed a Constitutional petition wherein it was held that the parts though were still be useable, nevertheless, still be called scrap.
9. ' In the case of Khyber Traders Proprietorship, it was held that in case of autoparts, any element of serviceability still retained by them, would be of no consequence unless they are found to be capable of use other than as scrap.
10. ' As regards to the K.P.T. Demurrage charges, the learned counsel for the petitioners relied on the case of Aftab Ahmed Saeed v. Federation of Pakistan and others (1993 CLC (Kar) 2022) wherein it has been held by a Division Bench of this Court that the K.P.T's demurrage charges during the period when the goods are confiscated by the Customs Authorities wrongly, are liable to be paid by the Federal Government.
11. ' On the other hand, Mr. S. Tariq Ali, learned counsel for the respondents 1 and 2, has vehemently denied the contentions of the petitioners. According to him, the petitioners opted for summary adjudication without the issuance of the show-cause notice as per section 180 of the Customs Act and, as such, the petitioners is now estopped from agitating the plea that no show-cause notice was served on him. The learned counsel has further submitted that the serviceable autoparts were confiscated according to the policy notified in Public Notice No,32/92. He has also submitted that the provisions of section 168 (2) of the Customs Act are not applicable in this case. He also submitted that the goods, other than the serviceable autoparts, were released to the petitioners and only the serviceable autoparts were confiscated. He emphatically denied that the Federal Government was liable to pay the demurrage charges for the confiscated consignment.
12. ' We have perused the record and the order of confiscation, which is merely one word "confiscated" written on the Bill of Entry. To appreciate and decide the point involved, we will first deal with the section which authorises Customs officials to seize the goo& imported by the parties. Section 168 of the Customs Act which assignees such powers is as follows: "168. Seizure of things liable to confiscation.-
(1) 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 any person holding them in his possession or charge 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 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.
(3) The appropriate officer may seize any documents or things which in his opinion will be useful as evidence in any proceedings under this Act.
(4) The person from whose custody any documents are seized under subsection (3) shall be entitled to make copies thereof or take extracts therefrom in the presence of any officer of customs."
13. Thus, the bare reading of the section indicates that while section 168 (1) deals with the power of seizure, subsection (2) clearly spells out that in cases where no show-cause notice under section 180 of the Act is given within two months of the seizure of the goods, the same are liable to be returned to the party/person from whom the goods were seized. In the present case, admittedly, no show-cause notice under section 180 was given to the petitioner, nor the goods were returned as envisaged under section 168(2) which is mandatory. The Legislature has used the words "shall be returned" and this mandatory provisions which gives the right to the party/person to receive back the goods has clearly been defied by the Customs Authorities in the present case.
14. ' Since section 168 of the Act gives wide powers to the adjudicating authority, section 180 was introduced in the Customs Act to restrict the exercise of such powers.
15. ' The petitioner's counsel denied that the petitioners had opted for summary adjudication but even if it is accepted that the petitioners had opted for such procedure, they should have been afforded the opportunity of being heard and further that the grounds of order of confiscation should have been supplied to them, which in this case were admittedly not done.
16. ' In the present case the customs authorities decided the case merely on the criteria that the broken and damaged autoparts were still serviceable. They have not considered the fact that broken parts of damaged automobiles, though cannot be used in their original form but the parts of the same when separated and recovered, still retain their servicing capability in them. It is a question of fact which the respondents should have referred to experts to satisfy the claim of the petitioner.
17. ' In view of the above, we allow this petition, set aside the impugned order of confiscation, and remand the case to the Customs Authorities to decide it within 2 months of the receipt of this judgment with the help of experts' opinion in regard to serviceability of the scrap autoparts. As far as the, question of payment of damurrange is concerned, since under section 182 of the Customs Act, the confiscated goods become the property of the Federal Government, the petitioner will not be liable for payment of demurrage charges from the date of confiscation of the goods till the date the Customs Authorities decide and dispose of the case finally.
18. ' Before we part with this case, we hope that in further the custom authorities will be considerate to the citizens and decide such cases at an early date to avoid unnecessary accumulation of demurrage or other charges. The Federal Government will be free to take such action as is available under law against those officers due to whose conduct the Federal Government has become liable for the payment of demurrage charges.
19. ' There will, however, be no order as to costs.