JUDGMENT: MR. JUSTICE NASIM SIKANDAR.--(l). Section 181 of the Customs Act, 1969 provides for "Option to pay fine in lieu of confiscated goods". It goes to state that whenever an order for the confiscation of goods is passed under this Act, the officer passing the order may give the owner of the goods an option to pay, in lieu of the confiscation of the goods, such fine as the Officer thinks fit. Through Finance Act, 1992 two provisos were added to the explanation to section 181. The first proviso empowers the Board to specify the goods or class of goods where such option shall not he given.
The second proviso further empowers.the Board to fix the amount of fine which in lieu of confiscation, shall be imposed on any goods or class of goods. imported in violation of the provisions of section 15 or of a notification issued under section 16 or any other law for the time being in force.
2.The Customs Department took into custody a number of vehicles 'which were suspected to be smuggled. On usual proceedings, the Adjudicating Officers through various orders in original directed their confiscation but invariably allowed .their redemption on payment of fine to the tune of 100% of the ascertained value of the vehicle. Of course normal duties and taxes leviable there upon were also directed to be paid to avail the concession.
3.The appellants approached the first appellate authority (Collector of Appeals) without any success. The orders in original were maintained after finding that the appellants/owners of the vehicles had failed to demonstrate their import into the country through lawful means or the prescribed routes.` 4.On further appeal a larger Bench of the Customs Excise & Sales Tax Appellate Tribunal. on 17.12.1997 partly allowed the appeals of as many as 89 appellants/owners of vehicle before them.
The part relief allowed being in the form of reduction of 100% redemption fine to 30% after holding the same to be excessive. These cross appeals nave. been filed by the revenue against the reduction in the estimation of redemption fine while the individual-appellants/owners of the vehicles either allege the imposition of customs duties etc., and the redemption fine to be illegal or also pray, that remaining amount of 30% of redemption fine should also be cancelled.
5.It is the case of the revenue that through letter No, 4(34) SSCC/91, dated 2.6.1996 the Central Board of Revenue in exercise of powers under section 181 directed that in case of smuggled vehicles in addition to leviable customs duties and other taxes a redemption fine of 100% of the value shall be imposed in' lieu of confiscation. It is claimed that the order/direction so issued under the provisions of the Act had assumed the status of a provision of the Act and, therefore, it could not, be disregarded by the Tribunal by assigning an irrelevant interpretation to the provisions of section 223. The Tribunal had earlier rejected a similar objection by the revenue on the premises that section 223 (Officers of Customs to follow Board's Orders, etc.) placed latter in the scheme of the Act, had a precedence over the earlier provisions of section 181. Further, the Tribunal was of the view that proviso to section 223 protected the discretion of the appropriate officers of Customs in the exercise of their quasi-judicial functions. In the view of the Tribunal the instructions issued by the Board of Revenue in matters of adjudication did not hind them.
6.On the other hand, the owners of the vehicles/individual appellants claimed that they were bona ,fide purchasers of the vehicles without any notice of their having been smuggled inasmuch as in all cases these vehicles' were duly registered with the Provisional Registration Authorities. Such registration, according to the appellants, provided the strongest possible presumption of observance of all legal and codal formalities with regard to the import of such vehicle. The appellants before the Tribunal also complained that the number of impounded vehicles itself bare witness to the in-competency of the customs authorities who failed in their duty to put a stop to illegal import/entry of the vehicles into the country. The Tribunal as observed above rejected all factual submissions but reduced the redemption fine.
7.From the findings of the Tribunal two short but important issues arise. The first issue pertains to the legal status of the notifications issued by CBR under the two provisions to section 181. The second issue being if these notifications in any manner are hit by the mischief of the proviso to section 223 which prohibits interference with the discretion of appropriate officers in exercise of their quasi-judicial functions.
8. After hearing the learned counsel for the parties, we are absolutely clear in our mind that the learned Tribunal mis-interpreted the provisions of section 181 as also those of section 223 of the Customs Act. In the first place an order issued by the C.B.R. in exercise of the powers conferred by the two provisos of section 181 added by Finance Act, 1992 is not an instruction nor an order to the Officer which he is obliged to observe under section 223. An order issued in accordance with law by the CBR under any one of the two provisos, can be read as part of section 181 and has the force accordingly. The proviso to section 223 on the other hand is attracted only when a direction or instruction given by the C.B.R. interferes with the discretion of the appropriate officer of customs in the exercise of his quasi-judicial function. After the judgment of the Hon'ble Supreme Court of Pakistan in re: Central Insurance Company v. C.B.R. (1993) 68 Tax 86 1993 PTD 766 it is settled that where the Central Board of Revenue does not figure in the hierarchy of the forums provided for adjudication of assessees liabilities to tax, any interpretation of law by CBR cannot be treated as a A pronouncement by a forum competent to adjudicate upon. Also that the instructions issued by the Central Board of Revenue are binding as long these are confined to administrative matters.
9. An order issued under section 181, as noted above, is neither an instruction of the CBR nor it is an order on the administrative side to interfere with the judicial discretion of an appropriate officer of the customs. Such an order though on administrative side is binding both on executive as well as on judicial sides of the functions performed by the Customs Officers. The legislature has expressly conceded a discretion to the executive which when exercised, would be as good a part of law as any other provision of the Act could be. The power vested in CBR under section 181 though apparently similar to one vested B in it under section 219 (Power to make rules) is nevertheless clearly distinctive. Firstly it is not subject to the conditionals of section 219. Secondly, under section 181 the Board exercises a power to make an order which by reason of its specific mention in the body of the provision, stands at a higher pedestal than a rule framed under section 219. Once an order is validly made, it partakes the colour and credibility of a statutory instrument. It represents the blend of a subordinate legislation with the superior legislation which is not separable. Lastly it will be noted that it has never been the case of any of the parties nor the Tribunal found the provisos to section 181 to be a case of excessive delegation. The Tribunal being a forum of limited jurisdiction otherwise could not have declared it so.
10. An order issued by the CBR under section 181 is binding upon the appropriate officer directing confiscation of goods. It is binding both when it specifies the goods where such option is not to be given as also when it fixes the amount of fine which in lieu of confiscation is to be imposed. The Tribunal could not directly or in-directly allow a relief which the appropriate officer could not give to an assessee. The provisos to section 181 allow discretion to the executive limb of state in order to regulate the system in the perspective of the financial or social requirements of the people of the country. The order so made betrays the policy of the State and therefore, neither the departmental officer nor the Tribunal could deviate from it. This Court in its appellate jurisdiction u/s 196 of the Customs Act, 1969 will also not allow a relief which the original officer could not grant in view of any provisions of the Act. Although the appellate jurisdiction of the Tribunal u/s 194-A has been couched in all embarrassing terms and words, nevertheless, being a creature of statute it cannot travel beyond the statute to declare, directly or in-directly, any of the provisions to be illegal or in- applicable where these are clearly attracted.
11. Further, the Tribunal cannot, in cases covered by the first proviso to section 181 give a relief against the order of the CBR merely for the reason that after confiscation the goods will be sold through auction and will therefore, find their way to the market. This approach is not correct in a number of cases where the imported consignment will invariably be destroyed being offensive to the human health; morality or tranquility. Also, such a reason cannot be seen with favour as it is likely to encourage unscruplous enter-prenuers. For the purpose of giving relief against the express dictates of law it is equally immaterial that an auction mafia in the department is thriving. It is for the CBR as the executive branch of the state to' muse at the effect of their order under the first proviso to refuse the option of fine in lieu of confiscation. The Tribunal as a judicial forum need not strain on it because in case of a faulty order it is the CBR which will bear the brunt of a wrong decision.
12.Lastly, we, are also not in agreement with the learned Tribunal that the provisions of section 181 and section 223 of the Act are in any manner in confident with each other. Section 181 allows a discretion to an appropriate officer while the provisos control that discretion. Since the law itself provides for a control on the discretion of an appropriate officer, any order issued by the Board under any of the two provisos cannot in any manner be said to be an interference with the discretion of an adjudication authority. Also if one has to grant the rule of precedence in provisions as expressed by the Tribunal, even then it will lean in favour of the Revenue. It will be noted that both two provisos to section 181 were added by the Finance Act, 1992 while the provisions of section 223 were added to the statute by Finance Act, 1975. The addition of the two provisos to section 181, therefore, can very well be accepted to have been made by the legislature with the conscious mind of the existence of the proviso to section 223.
13. A question may arise here if the provisos to section 181 make part of the jurisdiction of the Tribunal conferred u/s 194-B as redundant. The answer is no. The Tribunal will still have the jurisdiction to rule if the goods were liable to be confiscated for the. reasons given by the appropriate officer. However, once the Tribunal comes to the conclusion that the goods were liable to be confiscated, it cannot interfere well the impugned order of the appropriate officer made in the light of an order by the Board specifying the goods or class of goods where option of payment of fine is not to be given. In other words where the appropriate officer has refused to allow option in view of an order of the Board made under the provisos, the Tribunal cannot allow that option. In the same token where an appropriate officer imposes fine as fixed by the C.B.R. the Tribunal cannot reduce the same any further. It is so fore the reason that the order of the Board made in this regard has the force of the statute. As said above even this Court u/s 196 of the Act will not allow a relief which is opposed to the order of the Board though on Constitutional side that order may very well be struck down for any conceivable legal infirmity.
14. As for the appeals filed by the individuals-appellants/owners of the vehicles are concerned, we are in agreement with the findings recorded by the Tribunal. They had in them maintained the findings of fact that the owners had net been able to establish lawful import of the vehicles. We will also agree it with the Tribunal that principle of "bona fide purchaser in good faith and without notice" is not applicable to the goods confiscated under the provisions of Customs Act, 1969. The Tribunal rightly accepted the plea of burden of proof as convassed by Mr. Javed Ghani, Additional Collector representing the Department before it. That plea was based upon the ratio of the judgment of Hon'ble Supreme Court of Pakistan in re: Abdur' Rauf Khan v. Collector, Central Excise & Land Customs (1980 SCM R 114). In that case it was held that it was the bounden duty of a person found in possession of a smuggled item to show not only a licence for its import but also the payment of duty and tax leviable thereupon. Their Lordships were interpreting the provisions of section 156(2) of the Act.
15.In view of what has been said above, the Departmental appeals shall succeed while the appeals filed by the individuals/ owners of the vehicles shall be dismissed.