2005 PLP (Trib (PTD)

MIAN MUHAMMAD JAHANGIER MEMBER (JUDICIAL).

This appeal is directed against Order-in-Original No.892 of 2004 passed by Collector Customs, Central Excise and Sales Tax (Adjudication) Multan, dated 30-12-1994.whereby he ordered for confiscation of vehicle Hino Prime Mover bearing .Registration No.LSA-1523 under Clause 89 of section 156(1) of Customs Act, 1969 read with S.R.O. 374(I)/2002, dated 15-6-2002.

2. Some relevant facts of the case are that as a result of an information received by Anti-Smuggling Squad Multan, the vehicle as mentioned above was intercepted on 11-9-2004 in the area of Chowk Nag Shah Multan. Zahoor Khan driver of the vehicle produced duplicate copy of the Registration Book. On physical examination of the vehicle it transpired that chassis number 10031 was self-punched. This fact of tampering of the chassis number was admitted by Zahoor Khan and informed that the vehicle in question is owned by Lal Khan, the present appellant. While coming into the picture Lal Khan requested for examination of the vehicle in the Forensic Science Laboratory Islamambad. His request was accepted and the vehicle was examined by Forensic Science Laboratory, which observed that the chassis number i.e. 10031 is manually punched. After further examination it was observed that the vehicle in question is smuggled one with the result the matter was referred for adjudication. Show-cause notices were sent to appellant and to Zahoor Khan. Meanwhile the litigation between the parties went up to Lahore High Court Lahore. Report from Messrs Hino Pak Ltd. was already obtained which vide letter, dated 2-11-2004 certified that as per their record one unit Hino SG-221 bearing Chassis No. 10031 Engine No. 17065 was sold through Messrs Azmat Motor Karachi vide Invoice No.1537, dated 8-5-1988 and further confirmed that the said unit imported in CKD Kit (complete knock down kit) from Japan was locally assembled by than. Last of all after hearing the learned counsel for the appellant and representative of the Customs Department the Adjudication Officer arrived to the conclusion which is as under:-- "The contention of the prosecution that, "the respondent punched the chassis number according to documents of a legally acquired vehicle on the smuggled vehicle and the present chassis number is not according to company standard", is convincing. During hearing proceedings the photographs of chassis number punched on the seized vehicle, specimen of chassis number (FL 176-13210) manually punched by Messrs, Hino Pak. Ltd., and chassis number format provided by the Company were produced by the prosecution. Comparison and perusal of these photographs and specimen of Company's punching revealed that the font and shape of digits punched on the seized vehicle did not tally with the specimen provided by the prosecution. Regarding certificate of Messrs Hino Pak Ltd. confirming that they sold a Hino bearing Chassis No. 10031 and manually punching of chassis number are not disputed and have not been contested by the prosecution. This fact proves that the respondent had arranged chassis frame and punched the chassis number according to documents of a legally acquired vehicle. Thus the charges enumerated in the show-cause notice stand established."

3. Being aggrieved from the impugned order, dated 30-12-2004 the appellant has come up in appeal before us. 3A. We have heard the learned counsel for the appellant and learned D.R. for the respondent.

4. The learned counsel for the appellant argued that in accordance with the report of Forensic Science Laboratory, dated 24-9-2004 the chassis number before the after chemical treatment was found same and so far as punching the number on the chassis is concerned, it was being punched by the Company manually, some times with code and some times without code; that the Hino Pak Company in connection with this vehicle verified that this vehicle was assembled in Pakistan and sold vide Invoice No.1537, dated 8-5-1988 therefore, there was no justification for its confiscation; that the officers of the seizing agency were not expert therefore, the allegation levelled by the agency is based upon presumption and they deliberately ignored the documentary evidence; that it was absolutely false that the driver of the bus admitted any fact regarding the tampering of chassis number; that the vehicle in question was locally assembled and sold to Messrs Azmat Motors where from it was purchased by the appellant and duly registered in his name; that the provisions of the Customs Act are not applicable to locally assembled vehicle therefore, the seizure of the vehicle in question was totally illegal; that at the time of registration of the vehicle in question by Motor Registration Authority no objection with regard to tampering of the chassis number was raised as such like objection could be raised by Motor Registration Authority; that no other vehicle having Chassis No.10031 was ever imported and registered any where in Pakistan nor there is any claimant of this vehicle except the appellant therefore, the confiscation of this vehicle is totally illegal.

5. On the other hand the learned D.R. argued that there is sufficient evidence on the record which force to believe that the vehicle in question is smuggled one therefore, Order-in-Original, dated 30-12-2004 passed by the Collector (Adjudication) is in accordance with law and facts on the record.

6. It is obvious that the point for examination before us is as to whether the vehicle in question should have been seized and was liable to confiscation. Seize means to take in to custody, physically or otherwise the goods in respect of' which some offence has been committed under the Customs Act, 1969. Offence is committed when its any provision is violated. Basically the Customs Act, 1969 deals with the goods which are smuggled and as defined in section 2(s) smuggle means to bring into or take out of Pakistan in breach of any prohibition of restriction for the time being inforce or to evade payment of customs duties or taxes leviable thereon. Now if both these words "seize", and "smuggle" are read together, it would mean that those goods are seized which are smuggled otherwise not. In order to perform the functions of seizing, the appropriate officers are deputed who should seize. the goods strictly in the light of the relevant provision of Customs Act, 1969 or in other words the things which are smuggled items. Meaning thereby an appropriate officer has to collect such grounds on the basis of which it appears that the goods are liable to be confiscated and when the goods are seized, the appropriate officer is bound to proceed strictly in accordance with the provision of Act ibid. For example, as required by section 168 of the Act the show-cause notice under section 180 of the Act within two months is to be given. Further section 169 of the Act makes it clear that the things seized on the grounds that those are liable to confiscation shall be delivered into the care of the officer to receive the things and section 171 of the Customs Act makes it clear that when anything is seized the officer concerned has to inform in writing the person concerned about the grounds of such seizure or arrest. Meaning- A thereby the word seize and "liable to confiscation", are deeply connected with each other in the sense that at very initial stage the appropriate officer has to collect the grounds which show prima facie that the goods should be seized as same are liable to be confiscated.

7. So far as the Adjudicating Officer is concerned, it means any authority competent to pass any order or decision under this Act, section 180 of Customs Act, 1969 deals with the issuance of show-cause notice before confiscation of goods and it also makes it clear that the grounds of confiscation must be conveyed to the person concerned. If there is violation of either section 171 or section 180 of the Customs Act which provisions are mandatory, then all the proceedings, shall be illegal.

8. As far as the instant case is concerned, para. 8 of the impugned order, dated 29-12-2004 shows as if notice under section 171 of the Customs Act, 1969 was not served upon the appellant, which had to reflect on the grounds on the basis of which the vehicle in question was being seized and further liable to be confiscation.

9. Anyhow despite this it may be examined as to which evidence was collected by the prosecution to arrive at this conclusion that the vehicle should be sized as it is smuggled one and being so liable to be confiscated. It appears that appellant (Lal Khan) himself came forward and requested for Forensic examination of the vehicle consequently, the vehicle was got chemically examined from Forensic Science Laboratory Islamabad. The report was as under:

"The technical examination of the above cited 'vehicle has revealed the following: Vehicle No. Type of Vehicle Chassis No. before Chassis No. Chemical after Chemical Treatment treatment LSA-1523 Hino Prime Mover 10031 10031 "The chemical treatment of the chassis number of the Hino Prime Mover Reg. No.LSA-1523 in the case cited as subject has revealed that its present chassis number i.e. 10031 is manually punched"

10. It looks that after receipt of the said report when efforts were made by the appellant for release of the vehicle, the Seizing Department vide letter, dated 8-10-2004 asked the Company to confirm as to whether Hino Prime Mover SG-221 was assembled locally and sold vide invoice, dated 8-5-1988 and whether it was punched without model code manually or otherwise and in response to the said letter Messrs Hino Pak Ltd. vide letter, dated 4-11-2004 submitted further clarification which is as under: - "We hereby certify that as per record one unit Hino SG 221 bearing Chassis No.10031 and Engine No.17065 was sold through Messrs Azmat Motors, Karachi vide Invoice No.1537, dated 8-5-1988. We also certify that the above unit was imported in CKD kit from Japan and was locally assembled by Hino Pak Motors Limited. With reference to your observation that the punching of chassis number on the vehicle does not match with specimen provided by Hinopak as per annexure of your above referred letter, please note that annex "A" refers to vehicle model series produced by Hinopak and does not give exact font shape/size of punching format used by Hinopak. With reference to your clarification for date/year of punching of alphabetic code on chassis number, we regret to inform you that we do not have this record for the period in question. Therefore, in this case we cannot confirm whether chassis number was punched with or without alphabetic code on the vehicle in question. Hinopak is, however, maintaining impression of chassis number punched on Hino Vehicle assembled in our plant since June, 2001 for record."

11. In the light of this evidence on the record the contention of the prosecution was that the present chassis number is not according to the standard of company punching and the font and shape of digit do not tally with the specimen Hino Pak Limited and the chassis number is without alphabetic code and it does not tally with the specimen photo-graph of Chassis number (FL-176-13210) manually punched by M/Hino Pak Limited. The Adjudication Officer arrived to this conclusion that this contention is convincing. It is obvious from the evidence as discussed above that due to difference in manually punching the chassis number the seizing agency presumed about this fact to be convincing ground for seizing and further the vehicle to be liable for confiscation and when the matter was referred to the Adjudication Officer, he also gave much importance to this presumption and ordered for confiscation of the vehicle, whereas the correct position is that the above mentioned evidence was not sufficient to believe that the vehicle in question is smuggled one as the clarification given by the company made it clear that Hino SG-221 having Chassis number 10031 and Engine No.17065 was sold through Messrs Azmat Motors Karachi vide Invoice No.15237, dated 8-5-1988 and this unit was imported in CKD kit from Japan and was locally assembled by the Hino Pak Motors Limited. Even otherwise this aspect of the case was not contested by the prosecution as it reflects E from para. No.17 of the impugned order. After all this analysis of the evidence on record we see that the prosecution failed to establish that the vehicle in question was foreign made and brought into the country without payment of lawful duties and taxes and that their entire version is full of doubts.

12. As a consequence of it, impugned order, dated 29-12-2004 is set aside and we order that the vehicle in question be handed over to the appellant immediately.

13. Appeal is hereby accepted. S.A.K./437/Tax (Trib.) Appeal accepted.