2025 PLP (Trib (PTD)

HAFIZ ANSAR UL HAQ, MEMBER (JUDICIAL) / CHAIRMAN.

This appeal has been remanded by the Hon'ble Peshawar High Court, Peshawar vide judgment in Customs Reference No.24-P/2022 dated 22.02.2024 to this Tribunal to decide the fate of the appeal, after discussing the provisions of section 181 of the Customs Act, 1969 read with relevant SROs. Through this appeal, the appellant Muhammad Iqbal son of Speena Khel and others have challenged the Order-in-Original No.305/2021 dated 14.10.2021, passed by the Additional Collector (Adjudication) Customs, MCC, Islamabad, Camp Office, Customs House, Peshawar.

2. Brief facts of the case as per record are that the staff of Customs (Enforcement), Mobile Squad, D.I. Khan intercepted two Toyota Hilux Pikckups bearing Registration No.C-6005/Bunnu and C-4546/Bannu on 11.09.2021 near S.MA. Police Station, Tank and recovered smuggled Dried SMA Fruits (Details as per seizure report/Recovery Memo No. 76/2021 dated 11.09.2021) from Muhammad Iqbal Speena Khel and Muhammad Sahakeel Khan, who, on demand, failed to produce any documentary proof regarding lawful Import/possession of the goods. Therefore, the Customs staff seized the same goods alongwith vehicles in terms of Section 168 of Customs Act, 1969 for violation of Sections 2(s), 16 and 157 of the Customs Act, 1969 read with Section 3(1) of the Imports and Exports (Control) Act, 1950 punishable under Section 156(1) Clauses (8) (89) (90) and 157 of the Customs Act, 1969 read with Section 3(3) of the Imports and Exports (Control) Act, 1969.

3. Subsequently, after completion of the requisite formalities, the Additional Collector (Adjudication) Custom House, Islamabad, Camp Office, Peshawar issued show-cause notice and after reply thereto, decided the matter vide the impugned Order-in-Original No.305/2021 dated 14.10.2021 and outrightly confiscated the seized goods. The vehicles were released against on payment of redemption fine @20% besides imposition of penalty of Rs.25000/- upon driver of each vehicle.

4. Aggrieved of the above order, the appellants filed appeal before this Tribunal on legal and factual grounds, which was heard and decided by my learned predecessor vide judgment dated 23.02.2022 as under:-

6. The appeal of the appellant is for release of the goods i.e. Psylium Husk (Ispaghol), Almond without shell and Apricot Seeds without shell mentioned at serial Nos.1 to 3 of the assessment sheet of Seizure Case No. 76/2021 dated 01.09.2021 and willing to pay duty and taxes on the seized goods, as such, taking into consideration the submissions of both sides and the spirit of Law and Rules in such like cases, that release of the goods against payment of duty and taxes/fine will be more beneficial to the exchequer instead of dumping the same in the state warehouse for un-determined period at public cost and for further litigation. The collection of a handsome revenue in the shape of payment of customs duty/taxes/redemption fine in the present case is deemed to be more appropriate as compared to the disposal of goods i.e., Husk (Ispaghol), Almond without Shell and Apricot Seeds without Shell through auction to avoid its deterioration/damage due to whether etc.

7. In these circumstances, and keeping in view the above, I accept this appeal, set aside the impugned Order-in-Original No. 305/2021 dated 14.10.2021 to the extent of release of goods Husk (Ispaghol), Almond without shell and Apricot Seeds without shell mentioned at serial Nos.1 to 3 of the assessment sheet of Seizure Case No. 76/2021 dated 01.09.2021 on payment of all leviable custom duty/taxes plus 30% redemption fine of the customs value of the said goods. The appeal is disposed of accordingly.

5. The above judgment of this Tribunal, was however, challenged by the Collector of Customs (Enforcement). Peshawar (Respondents herein) before the Hon'ble Peshawar High Court, Peshawar, which has been remanded back to this Tribunal for decision afresh in light of the observation of the Hon'ble High Court as stated in para-1 above.

6. During the course of arguments, learned counsel for the appellants reiterated the grounds of appeal and stated that the goods are easily available in the open markets being importable items. He further submitted that the goods are perishable and are non notified items, which can be released against the payment of duty/taxes plus redemption fine. He prayed for release of the goods on payment of duty/taxes plus redemption fine.

7. On the other hand, learned Departmental Representative opposed the contention of the appellants and submitted that the goods are smuggled one and brought into the country in violation of the provisions of the customs laws, that the appellants have been failed to bring on record any documentary evidence regarding the seized foreign origin goods. He supported the impugned Order-in-Original No.305/2021, dated 14.10.2021, passed by the Additional Collector of Customs (Adjudication), Peshawar and prayed for dismissal of the appeal.

8. Arguments heard Record perused.

9. To ascertain that as to whether an option under section 181 of the Customs Act, 1969 can be given to the appellants to redeem the goods against redemption fine in addition to payment of customs duty/taxes or not?, the record as well as relevant section coupled with the relevant SROs have been perused. For the sake of convenience, Section 181 of the Act is reproduced hereunder: "

181. Option to pay fine in lieu of confiscated goods. 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: Provided that the Board may, by an order, specify the goods or class of goods where such option shall not be given: Provided further that the Board may, by an order, 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." As per spirit of the above quoted section, an officer passing order under the Customs Act, can give option for release of the goods against redemption line as per the rates fixed in the SROs in field, in addition to payment of duty/taxes, however, in this case, the Adjudicating Officer did not exercise his discretionary powers and has outrightly confiscated the goods. However, when the matter came up to this Tribunal, the goods were released against redemption fine in addition to payment of duty/taxes leviable thereon by the then learned Member (Judicial), after hearing and considering the submissions of both sides and the fact that release of the said perishable goods will be more beneficial to the exchequer instead of dumping the same in the state warehouse for un-determined period at public cost and for further litigation.

10. No doubt this Tribunal has not been entrusted with such special powers as that entrusted to an Adjudicating Officer of the Customs but the under Section 194-B of the Customs Act, 1969, the Tribunal has the following powers: "the Appellate Tribunal may after giving the parties to the appeal an opportunity of being heard, pass such orders thereon as it thinks fit confirming, modifying or annulling the decision or order appealed against. The Appellate Tribunal may record additional evidence and decide the case......" Here the words "thinks fit" bestows discretion to a judge of the Tribunal as to what points are appropriate and fit while delivering a judgment and therefore, the learned the then Member has released the goods against the payment of duty/taxes plus redemption.

11. Besides the above certain more powers under subsections (7) and (8) of Section 194-C of the Customs Act, 1969 have been given to the Tribunal.

12. Moreover, the Customs Appellate Tribunal while exercising its powers as a Court within the meaning of the above referred law, releases the seized/confiscated goods in exceptional cases, against payment of redemption fine in addition to payment of duty/taxes and also bestows balance between the enforcing customs laws and mitigating the harshness of outright confiscation subject to the principles of natural justice.

13. The Tribunal being an independent judicial body, tasked with adjudicating disputes related to customs matters, including appeals against the decisions of customs adjudicating authorities. Its prime obligation is to espouse, interpret and apply the law, not to follow executive instructions uncritically.

14. It is settled law that when appeal is come to an appellate court, the appeal proceedings of the lower forum continues as of the original proceedings and the appellate forum, has all powers under his sleeves which the original forum has been vested under the law and after the judgment of appellate forum as principle of merger the judgments and proceedings of the lower forums merge into the judgment of the appellate court.

15. Therefore, in light of the above, the Tribunal, has full authority to confirm, modify and annul the decision or order appealed against, after hearing the parties to the appeal before it and as such, considering the contention of both sides, the spirit of law and rules in such like cases that release of the goods against payment of duty and taxes/fine will be more beneficial to the exchequer instead of dumping the same in the state warehouse for undetermined period at public cost and for further proposed litigation. The collection of handsome revenue in the shape of payment of customs duty/taxes/redemption fine is more appropriate as compared to disposal of the goods through lengthy auction procedure and also to avoid deterioration/damage of the goods.

16. In view what has been discussed above, the appeal is accepted and the impugned Order-in-Original is modified to the extent of release of goods i.e., Husk (Ispaghol), Almond without shell and Apricot Seeds without shell mentioned at serial Nos.1 to 3 of the assessment sheet of Seizure Case No.76/2021 dated 01.09.2021 against redemption fine @20% in addition to payment of all leviable custom duty/taxes.

17. Copies be sent to the parties and file be consigned to the record after completion. MQ/14/TAX(TRIB) Appeal Allowed.