2010 PLP (Trib (PTD)

DR. RIAZ MEHMOOD, (MEMBER (JUDICIAL).

(1) The appellant has assailed, in this appeal, the Order-in-Appeal No.19/08, dated 17-3-2008, which had upheld the Order-in-Original No.82/07, dated 20-9-2007, whereby 22389 yds. of cloth, apprehended from a truck stand, had been confiscated outright.

2. The brief facts, giving rise to this appeal, are that on 27-6-2007, upon getting a tip that some foreign origin cloth was being transported from Lahore to Karachi, the Customs Authorities took into possession 22389 yds. of cloth booked from Lahore to Karachi on a luggage van No.91023 through Bilty Nos. 345/2, 346/0, 8294/2, 8295/2 and 114/26, dated 27-6-2007. Shehzad Ahmad, Munshi of Messrs Sheikh Goods Forwarding Agency produced bilties. The description of the cloth has been given in the order-in-original. Briefly, it was assorted cloth, some of which was polyester fabric, some fancy sorce cloth, some embroidered source cloth, all in pieces and some plain cloth, some printed cloth and some embroidered cloth in thans/bundles. The consignees were shown as Abdul Jabbar and Khurshid Ahmad. As alleged Shehzad Ahmad could not produce any documentary evidence regarding legal import or lawful possession of the recovered foreign origin ladies cloth which was seized as such. A show cause notice was given to Shehzad Ahmad as to why the cloth be not confiscated. Khurshid Ahmad submitted' a reply on behalf of Messrs Sheikh Goods Forwarding Agency, which was duly signed by Muhammad Ashraf Gullu (Appellant) for the release of seized cloth against payment of duty and taxes. The learned Adjudicating Authority found that it was a smuggled cloth as defined in section 2(s) of the Custom Act, 1969 and could not be released against payment of redemption fine in terms of S.R.O.487/(I)/07; dated 9-6-2007, so ordered its outright confiscation.

3. Muhammad Ashraf Gullu filed an appeal before the learned Collector (Appeals). The department furnished the comments. They submitted that Muhammad Ashraf Gullu just wanted to grab the cloth and was not the owner. It was taken into possession from the truck stand from the custody of Khurshid Ahmad and Shehzad Ahmad. They further submitted that it was foreign origin smuggled cloth. The department further submitted that Muhammad Ashraf Gullu had taken the plea that he had purchased it from Messrs Bismillah Cloth House. The said documents could not be termed as import documents.

4. The learned Collector (Appeals) also did not find favour with the arguments of the appellant and upheld the order-in-original. Hence, this appeal.

5. The arguments were heard. The learned counsel argued that Munshi of the appellant had just shown his name as the consigner at Messrs Sheikh Goods Forwarding Agency, otherwise the cloth was owned by Muhammad Ashraf Gullu, a cloth merchant of Azam Cloth Market. Further argued that Sharafat Ali, Proprietor of Messrs Sheikh Goods Forwarding Agency had issued a certificate dated 24-1-2008 (copy Annexure-F) along with copy of his CNIC (Annexure-F-1), that the cloth being transshipped to Karachi vide aforesaid bilties was owned by Muhammad Ashraf Gullu who dealt in cloth in Azam Cloth Market, Lahore. The learned counsel further submitted that Khurshid Ahmad son of Abdul Rashid had also sworn an affidavit before the learned Collector (Appeals) (copy Annexure-B) with copy of his CNIC (Annexure-B-2), that he was an employee of Muhammad Ashraf Gullu and had booked the cloth of his master at Sheikh Goods Forwarding Agency. The learned counsel further submitted that it was locally manufactured cloth and the appellant had purchased it from Bismillah Cloth House vide copies of invoices (Annexure-A and A-1). He furthermore submitted that there was no stamp of any foreign country on the cloth that it could be said as foreign origin cloth. The learned counsel further submitted that in similar circumstances the learned Collector (Appeals) vide Order-in-Appeals Nos. 170-171/07 had released the cloth against redemption fine plus duty and taxes leviable thereon. The learned counsel also submitted that foreign origin cloth did not find mention in Annexure-A to the Import Policy Order, 2006-2007. In such like circumstances, he contended that the cloth was to be released against redemption fine plus leviable duty and taxes. He also contended that when there was no stamp of any foreign country on the cloth, the burden of proof shifted to the respondents that it was a smuggled cloth. The learned counsel submitted written arguments as well. The learned counsel placed reliance on Muhammad Iqbal v. The State 1983 PCr.LJ 1351, the decision of the Customs, Federal Excise and Sales Tax Appellate Tribunal, Lahore in CA No.270/LB/01 and upon another decision of the Customs, Federal Excise and Sales Tax Appellate Tribunal, Islamabad Bench-I reported as 2005 PTD (Trib.) 779, in support of his arguments. The learned counsel lastly submitted that the representative of the department had expressed before the learned Collector (Appeals) that the cloth may be released against redemption fine, but the learned Collector (Appeals) insisted that he should produce some letter of his senior officers and so the decision of the learned Collector(Appeals) was arbitrary and harsh.

6. The representative of the department defended the impugned orders:

7. I have considered the matter carefully in the light of arguments advanced at the bar. Anything smuggled may be apprehended at the border or even in the interior of the country provided it is smuggled. At the border it is very easy to say that anything was being smuggled within the purview of section 2(s) of the Customs Act, 1969. A heavy onus lay for the prosecution to prove that a thing was smuggled, if apprehended from the inland. For example, a Mitsubishi Engine, Rolls Rice Engine, any complicated X-Ray machine etc., if taken into custody from inland, could readily be said as smuggled, if no documentary evidence of its import is produced, because it is quite clear that these items are not manufactured in Pakistan. If a cloth bears some stamp of foreign country on it, then it can be said that it was a smuggled cloth. If, there was no stamp on any fancy or silk cloth then it could not be said that such cloth could not be made in Pakistan. Textile Industry is quite advanced in Pakistan. It was for the prosecution to prove that it was a smuggled cloth because there was no stamp on it of its make. The appellant had produced invoices of Bimsillah Cloth House dated 25-6-2007 (Annexure-A and A-1), that the cloth had been sold to Muhammad Ashraf Gullu for Rs.7,79,

980. There is a stamp of Bismillah Cloth House on the cash memos. The address is House No.12, Pakistan Cloth Market near Motorcycle Stand, Lahore and the proprietor was Shehzad Saleem with Telephone No.042-7658081. It was a fallacy on the part of the department to say that the cash memos were not' import documents and spurned them. Obviously, they were not import documents, but they were documents regarding local purchase. The learned adjudicating authority should have ascertained from Bismillah Cloth House regarding' authenticity of the cash memos. I have gone through the Import Policy Order, 2006-2007. The banned items (negative list) is shown in Appendix-A and restricted items are shown in Appendix-B. The cloth does nor, fall in them. Obviously, it can be released against redemption fine. In the afore-cited cases cloth had been released against payment of redemption fine plus leviable duty and taxes in similar circumstances. The appeal is, therefore, accepted and the impugned orders are set aside and the concerned authorities shall release the cloth against payment of redemption fine X30% of the value in addition to leviable duty and taxes and also upon getting surety bond to the extent of Rs.8,00,000 from the appellant that he would redeem if any other claimant of the cloth comes forward in the aforesaid circumstances. H.B.T./199/Tax(Trib.) Appeal accepted.