Collector Customs MCC, Peshawar Vs Painda Noor & another

v JUDG.},IENT SHEPT

PESHAWAR HIGH COURT. PESHAWAR

JUDICIAL DEPARTMENT

Cust Ref No. l2-P12022

Collector Customs MCC, Peshawar Vs. Painda Noor and another.

Date of hearing 31.03.2022.

Mr. Rahat Ali Khan Nahqi, Advocate, for the petitioner. Mr. Waqas-ur-Rehman, Advocate, for the respondent No.1.

JUDGMENT

SYED ARSHAD ALI. J. This is a Custom Reference filed by the Collector Customs under Section 196 of the Customs Act, 1969 ('Act'), against the judgment/order passed by the learned Custom Appellate Tribunal ("Tribunat') dated 14.12.2021, for adjudication of questions of law framed in the memo of petition, purportedly arising out of the impugned judgment ofthe Customs Appellate Tribunal.

2.It is the case of the petitioner departrnent that a vehicle Hino Truck l0 Wheeler bearing registration No.NGR- 1,327, loaded with fresh apples weighing gross weight of 33.950 Kgs and net weight of apples 18,553 Kgs; while on its way from Afghanistan entered physically NLC Import ,a) Terminal Area customs Station Torkham on 11.12.2019 4 through entry pass No.86 of Book No.421 and NLC weight slip No.94085 dated 11.11.2019, but no GD was fited in respect of the apples loaded on the said vehicle and the driver of the vehicle was able to make good the escape of vehicle

\./ from the terminal against fake and forged documents. On 28.12.2019, the same vehicle while on its way from Afghanistan arrived at NLC Terminal, it was detained vide Detention Memo Nc.03/2019 dated 28.12.2019 in terms of Section 17 of the Customs Act, 1969 for furttrer investigation/verification and subsequently seized for being involved in evasion of taxes and duties. No proof regarding the payment of leviable duty and taxes in respect of the apples loaded on the said vehicle during the period from 28.01.2019 to 23.0t.2019 was produced. It was also confirmed on the part of Incharge PRAL Torkham that no GD was filed in respect of the foreign fresh apples loaded on the said vehicle on ll.l2.2}l9, therefore, it was seized in terms of Section 157(2) of the Customs Act, 1969 for violation of Sections 2(s), 16, !8, 79 and 178 of the Customs Act, 1969 read with Section 3(10) of the Imports and Exports (Control) Act, 1950 punishable under Section 156(1XSX9X47X89) and (90) of the Customs Act, 1969 read with Section 3(3) of the Imports and Exports (Conrol) Act, 1950.

completion of the requisite formalities, the matter was placed before the Deputy collector of customs (Adjudication), peshawar who vide order-in-original No.6251202A dated 05.05.2020 has passed the following order: - o "1, therefore, order for outright conrtscation of the seized fresh apples along with carrier vehicle in terms of Secttons I s6(1) (8) (e) (47) (89) and (90) of the Customs Act, 1969 read wtth Section 3(3) of the Imports and Exports

(Control) Act, 1950. As the * consignment of fresh apples is not available physically with the Customs authorities, therefore, the dutyhaxes of the aforesatd consignment amounting to Rs.747,540/- may recovered from the respondent alongwith penalty of Rs. 100,000/- imposed upon under the aforesaid provisions of law. "

4.Feeling aggrieved of the above impugned Order-in- Original, the respondent filed appeal before the Collector of Customs (Appeals) camp office, Customs House, Peshawar for release of vehicle and vide the impugned Order-in-Appeal No.14212020 dated 15.07.2020, the Collector Customs (Appeals), Peshawar dismissed appeal of the appellant. The respondents had filed a second appeal under Section 194-B of the Act before the Worthy Customs Appellate Tribunal ("Tribunal'). The said appeal was partly allowed vide order dated 14.12.2021in the following manner: - "As far as the matter of evasion of customs duty/taxes etc, it was legal duty of importer to pay the same and duty of fficers/fficials of customs department to collect the same before its release from the customs terminal or even thereafter. Similarly, the driver of vehicle wos also duty bound not to drive awoy the same without getting clearance from the customs department. However, since the appeal before this forum is agains:t the impugned orders through which vehicle wos conliscated and personal penalty upon driver/owner thereof irnposed, therefore, I am of the considered opinion that impugned order regording award of penalty upon driver a is biosed on just{ication but not on 4 owner. The impugned order is thus, modified accordingly. Resultantly, the vehicle is ordered to be released on payment of redemption line @20% of the value of the vehicle. The driver of vehicle ls imposed personal penalty of .Rs. 100,000/- (rupees one lac) for his act of violation of lan of the country where he entered and before release of the vehicle, the .fine be deposited in the

government exchequer. The appeal ls v disposed of accordingly. "

5.Moving on to the fact and the question of law raised by the petitioner department through the present reference. It is evident from record that at the time of detention of the vehicle, it was not involved in any illegal or unlawful activities albeit smuggling of any goods. Needless to mention that the vehicle;

as evident from record entered into land of Pakistan on permit in view of mufual trade arrangements between the two neighboring countries i.e. Islamic Republic of Pakistan and Afghanistan.

6.It is the case of the present department that previously at one occasion, the vehicle in question while carrying fresh apples from Afghanistan to Pakistan, it left the terminal without payment and duties. However, for the same incident it is the clarification of the driver of the vehicle exited from terminal was supervised by a clearing agent. Therefore, the question arises that in view of clause "B" of notification/SRO No.499(I)2009 dated 13.06.2009 read with Section 2(s) of the Customs Act, the vehicle in question was liabte to outright confiscation or else it was rightly released by the Appellate Tribunal under clause 2(f) of the ibid notification against payment of redemption fine. In order to understand the issue, let us refer to the relevant provisions of the Customs Act and 4 the notification SRO No.499(I)2009 dated 13.06.2009 on the subjec!

"2(s) "smuggle" means to bring into or talre out of Pakistan, in breoch of any prohibition or restriction for the time

being in force, 45 [, or in any way being concerned in carrying, transporting, removing, depositing, harbouring, lreeping, concealing " [, or en route pilferage of transit goodsJ or evading payment of customs-duties or taxes leviable therein, -

" Kt) gold bullion, silver bullion, platinufri, palladtutrt, radium, precious stones, antiques, currency, narcotics and narcotic and psychotropic substances; or (ii) manufactures of gold or silver or platinunt or palladium or radium or precious stones, and any other goods notified by the Federal Government in the fficial Gazette, which, in each case, exceed sr'45 ffive hundred thousandJ rupees in value; or

(iii)any goods by any route other than a route declared under section 9 or l0 or from any place other than o customs- station.J and includes an attempt, abetment or connivance of so bringing tn or taking out of such goods; and all cognate words and expressions shall be construe d accordingly ; J

16.Power to prohibtt or restrict importation and exportation of goods.- The 2lFederal GovernmentJ ffie, from time lo time, by notification in the fficial Gozette, prohibit or restrict the bringing into or taking out of Pakistan of any goods of specified descriptton by Air, seo or land.

181.Option to pay line in liea of conliscated goods.- Whenever an order for the confiscation of goods is passed under this Act, the fficer passing the order may give the owner of the goods an option to poy in lieu of the confiscation of the goods such fine as the fficer thintrs.fit '' [tJ

lProvided that the Board may, by an order, spectfy the goods or class of goods where such option shall not be given:

Provided further that the Board moy, by an order, fix the omount of fine which, in lieu of confiscation, shall be a imposed on any goods or class of goods imported in violation of the provisions of 4 section 15 or of a notification issued under section 16, " [o, in violation of ony other provisions of this ActJ, or any other law for the time being in force.J Explanotion.- Any fine in lieu of confiscation of goods imposed under this

section shall be in addition to any duty \./ and charges payable in respect of such goods , and of any penalty that might have been imposed in addition to the confiscation of goods.

Government of Pakistan (Revenue Division) Federal Board of Revenue

Islamabad, the I3th June, 2009.

NOTIFICATION

(cusroMS)

,S..trL 0.499(I)/2009.- In exercise of the powers conferued by section l8I of the Customs Act, 1969 (IV of 1969), and in supersession of its Notification No. ,S.R O. 487(I)/2007 dated gth June, 2007, the Federal Board of Revenue is pleased to direct that no option shall be given to pay .fine in lteu of confiscation in respect of the followtng goods or classes of goods, namely:-

(a)

(b)

(c)

(d)

(e)

o

Provided that in respect of the following goods or classes of goods where an option is given to pay "fin, in lieu of confiscation, the quantum of fine in lieu of confiscation in respect of offences specified in column (2) of the Table below shall be at a rate specified in column (3) of that Table and shall be over and above the customs-duties and other taxes and penalties imposed under the relevant law, namely: -

4 S.No. Description

TABLE

Redemption /ine on customs value.

(t)(3)

v L Olfences reloted to mis- decloration of,-

(a)

o) (c)

(d)

(e)

2.Other offences reloted to,-

(a)

(b)

(c)

(d)

(e)

(/) lawfully registered conveyance including packnges and containers, not covered under clause (b) of the preamble of this notification, found carrying offending goods under section 2(s) of the Customs Act, 1969 (U of 1969).

I

[Explanation: The provisions of serial number l, clause (e), (n and (g), in the TABLE, of this notification shall apply on the clearance from Model Customs Collectorate (PaCCS) only.J

[C.No. l0(17)L8:P/05J

(Khalid Hussain Jamalt) Second Secretary &aw & Procedure)

7.Section 2(s) of the Act defines and explains the phrase smuggled goods, whereas Section 16 empowers the Federal 2 Government to prohibit and restrict the import and export of 4 goods into Pakistan. Section 181 of the Customs Act empowers the adjudicating authority that in lieu of

v

H

confiscation of smuggled goods seized in Pakistan, he may give an option to the owrer of the smuggled goods to redeem/release the same on payment of fine. However, under proviso to Section 181, the Board now FBR has been clothed with the authority to regulate/restrict such discretion of the adjudicating authority by speci$ing the goods regarding which, no option shall be given to the owner of the smuggled goods. The FBR while exercising the said authority has issued guidelines for the said purpose through notificatior/SRo No.a99O2009. Para 'ob" of the said notification as stated abovq clearly bars releasing of any conveyance or vehicle against redemption fine when the smuggled goods are eittrer found in false cavities of the vehicle or the said vehicle is exclusively and wholly used for the transportation of offending of goodsismuggled goods. Exception to the said clause has been provided under Section 2 sub clause "f' of the said notification that a lawfully registered conveyance which is not covered under clause '6b" ibid if found; carrying offending goods under Section 2(s) of the Customs Act, 1969 may be released against 20o/o redemption fine. As stated above, admittedly at the time of detention of the vehicle in question, it was not carrying any smuggled goods rather it is the allegation of the department that previously at one time, it -7 while carrying/importing apples (permissible/importable item) 4 from Afghanistan had made its escape good without payment of til(es and duties.

v 8. The bare reading of Para "b" of SRO would show that any vehicle or conveyance which is exclusively or wholly meant for transportation of offending goods or the owner of the vehicle has created false cavities in the said vehicle for the purpose of smuggling then in such circumstances the vehicle is liable to confiscation and the owner will have no option to get the vehicle released against the redemption fine which is otherwise available to him under clause 2(0 of the said notification/SRo. In order to attract the baring clause i.e. "b" of the notification, the department has to establish that the smuggled goods which a vehicle is carrying are concealed in false cavities or the vehicle is wholly and exclusively used in smuggling of goods. The word wholly and exclusively used in the notification ibid has been used in adjective form which means "in its entirety" and is being used for no purpose other than smuggling as the word exclusively denotes.

9.In the present case, it is an admitted fact that the normal purpose of vehicle in question was to caffy imported goods from Afghanistan to Pakistan, however, at one time as evident from the statement of the driver of the vehicle on record reproduced in the order-in-original, it was the clearing agent who had provided to the driver of the vehicle fake documents in respect of the payment of duties against the apples and thus the vehicte exited from terminal without payment of to<es and duties. Neither the smuggled goods were concealed in false cavities of the vehicle nor it is the normal course of business

l0

of the owner of the vehicle to use the same for the purpose of smuggling.

70.By now the law is very clear and settled that a to<ing statute usually contains charging and machinery provisions.

The former fixed the liability to pay tar and has to be constructed strictly and where two reasonable interpretations are possible one which favours the subject should be accepted.

This principle was very aptly explained in Asbestos Cement's case (1992)66 Tax H0 (SC.Pak), ffid thereafter, followed in Trustee of Port Karachi's case (1989 PTD 1048).

11.In the present case, admiuedly when the vehicle in question has no history of being repeatedly involved in smuggling of goods, therefore, under clause 2(D of the notification/SRo, it could be released against payment of redemption fine and the said vehicle would not be liable to outright confiscation under Para b of the said notification/SRo.

12.In view of the above, this reference is answered in Nesative. Copy of this judgment be sent to the learned Tribunal in terms of Section 196(5) ofthe Act.

Announced /p

S

JUDGE

<JUDGE

Haider Shah (SSS) (DB) Hon'hle Mr. Justice Abdul Shat(oor &Hon'ble Mr. tustice Sled Arshad Ali