2004 PLP (Trib (PTD)

2. Brief facts of the case are that the staff of Customs Intelligence and Investigation (Custom and Excise), D.I. Khan on 21‑8‑2003 at 0900 hours intercepted. Truck No. KT‑1886 when it arrived at Kotla Jam, District Bhakkar on its way from Bannu and or, its search, found in it foreign origin soaps (1234 dozens) of different types and old‑and used but serviceable (21‑Tyres) of different brands all valuing Rs.1,09960 covered by stone crush in the body of the truck. Since Sabir Khan, driver of the truck, and Muhammad Saleem, owner of the goods, failed to produce any legal document to show lawful possession or legal import of the foreign origin goods, the same alongwith truck and the non‑offending crush used as covered material, were seized for violation of the provisions of sections 2(s), 16 of the "Customs Act, 1969 read with section 3(1) of the Imports and Exports (Control) Act, 1950, punishable under sections 156(1), (89) and 157 of the Customs Act, 1969 (hereinafter referred to as the Act). Subsequently, on adjudication of the matter, the Deputy Collector, Customs (Adjudication), Peshawar vide his Order‑in‑Original No.975 of 2003, dated 18‑9‑2003, after hearing the parties and perusal of their written and verbal submissions, came to the conclusion that the accused respondents had failed to produce any document for payment of duty and taxes on the seized goods. He accordingly, ordered outright confiscation of same alongwith covering material in terms of section 156(1), (8) and (89) of the Act read with section 3(3) of the Imports and Exports (Control) Act, 1950. The vehicle was also confiscated under section 157(2) of the Act but taking a lenient view in the matter, an option was given to its rightful owner/driver to redeem the same on payment of fine of Rs.28,000.

3. Aggrieved of the Order‑in‑Original, the appellant went in appeal to the Collector of Customs (Appeals), who vide consolidated Order‑in‑Appeal No.444‑451/2003 passed in Appeal No.Cus.802/2003 titled Ghulam Nabi v. Deputy Collector, Customs (Adjudication), Peshawar, on 18‑11‑2003, by applying the same order mutates mutandis to the appeal of the appellants bearing No. Cus. 790 of 2003 as well, dismissed the same also. Hence this second appeal to this Tribunal.

4. It is pleaded by the appellants, inter alia, that the appellant Muhammad Saleem is bona fide vendee of the seized goods having purchased the same from Messrs‑Muhammad Hussain and Sons, Whole Sale Dealers and Commission Agents, Lukky Gate, Bannu under the impression that these were already duty paid. The said goods were being carried to Multan in the truck under proper bilty issued by Messrs New Zaman Cargo Goods ((Regd.), Lukky Road, Bannu. The goods were 'stated to be illegal and. the charge did not lie against the appellant under section 156(89) and (90) of the Act. It was prayed that on acceptance of this appeal, the impugned Order‑in‑Appeal may be set aside and the seized goods may be released to the appellant Muhammad Saleem unconditionally.

5. I have heard learned counsel for the appellant and D.R. for the respondents and have gone through record of the case:

6. It may be stated here that this appeal is in fact preferred only by Muhammad Saleem, appellant. Since Sabir Khan; although mentioned its the memo of the appeal but. is not signatory 'to the power. of attorney of the counsel. For that reason, the prayer does not include, remission or reduction of the redemption fine, imposed against the vehicle. One of ‑the contentions of, the respondents in this case is, as is evident from their comments reproduced in Paca.

5. Sub Para. 5 of the Order‑in -Original, that the seized soap falling under the Head "Perfumery, Cosmetics and Toilet preparations" stated at serial, 12, of the list of notified item given under section 2(s) of the Act cannot be released on payment of duty and taxes and fine, under S.R.O. 1374(I)/98, dated 17‑12‑1998.

7. It is evident from the record ‑that the impugned Order‑in‑Appeal has been passed basically in Appeal No. Cus. 802/2003 in, which 216 pieces of foreign origin falanger for heavy vehicles were involved which were notified item under section 2(s) (ii) of the Act read with S.R.O. 491(I)/85, dated 23‑4‑1985 and so, were liable to outright confiscation in terms of section 1560), (8), (89) and (90) of the Act and section 3(3) of the Imports and Exports (Control) Act, 1950, further read with S.R.O 374(I)/2002, dated 15‑6‑2002 in the present case, however, the soaps are not notified item. It is for the reason that the Heading Perfumery, Cosmetic or toilet preparations falling under Chapter 33 of the Customs Import Tariff, are specifically excluded from the said Chapter as is evident from Note 1(b) therein. Soap is rather covered by Chapter 34, providing for soap, organic surface‑active agents, etc. "Toilet Soap" is specifically provided for under Heading 3401.1120 in Chapter 34 of the Customs Import Tariff for which customs duty is provided as 55 % ad velorem. Thus it is evident that toilet soaps do not fall within the Heading "Perfumery, cosmetic or toilet preparations" under Chapter 33 ibid. Moreover the nomenclature of soap is not provided in the list o articles notified under section 2(s) (ii) of the Act read with S.R.O. 1374(1)/98, dated 17‑12‑1998 substituted by S.R.O. 374(I)/2002, dated 15‑6‑2002. The remaining goods i.e., tyres are admittedly notified item.

8. The contention of the appellant Muhammad Saleem to have purchased. the seized goods from. one Messrs Muhammad Hussain and Sons. Wholesale Dealers and Commission Agents, Luky Gate, Bannu is supported by Cash Memo in the shape of Bill, dated 19‑8‑2003 issued by the said Dealers, copy of which is paged 19 on Appeal file. The same was got verified through the respondent‑Collectorate and verification report in this respect, dated 22‑3‑2004 is placed on the file. The Deputy Superintendent of Customs Mobile Squad, Bannu has recorded the statement of Mr. Muhammad Musa, Proprietor of the said supplier firm who has admitted to have issued the Cash Memo to the appellant. In hiss statement, the dealer has further explained that they usually purchase; goods from Karachi either through Commission agents or sometimes from Customs Auctioneers. The said Proprietor has also produced cash memo and bilty showing purchase and transport of toilet soap from Karachi to Bannu alongwith copies from Customs State Warehouse. D.I. Khan. In view of this verification report, there is, left no doubt to believe the contention of the appellant to have. purchased the seized goods locally. Even otherwise, since. the goods including non‑notified ones were seized far away from the international border and it is not denied by the respondents that such goods are generally available in the local markets whereform the appellant has claimed to have purchased the same, the Adjudication Officer was required to have and given an option under section 181 of the Act, to the appellant to pay fine in lieu of confiscation of the seized soaps, being non‑notified item, and the old and used tyres of payment of duty and taxes since it had value less than Rs.50,000.

9. It has been observed that the Collector (Appeals) has applied an Order‑in‑Appeal which pertained to notified goods only and has not considered the facts and circumstances of the appeal of the appellant independently in its proper perspective.

10. In view of what has been stated above, I accept the instant appeal, set aside both Order‑in‑Original as well as Order‑in‑Appeal to the extent of the case of the appellant Muhammad Saleem and order that the seized goods shall be released to the appellant unconditionally if not required in any other case.

11. Announced. C.M.A/86/Tax (Trib.) Appeal accepted.