2002 PLP 3083 (PTD)

ZAFAR IQBAL (MEMBER TECHNICAL). ‑‑‑This appeal has been filed against the order No. 175 of 1998 dated 17‑4‑1998 passed by the Collector of Customs (Appeals), Southern Zone, Karachi.

2. In this case, the seizing agency detained and seized a vehicle on the ground that registration book found in the vehicle was not genuine. The said book on verification was found to be true. However, .the vehicle was not released and the matter was referred to a Customs Adjudication Officer on the ground that the chassis number of the vehicle was found to be punctured, therefore, it was assumed that the seized goods "are smuggled.

3. The Customs Adjudication Officer without going into, the merits of the case issued a show‑cause notice, and later on confiscated the vehicle outright within the framework of clause (8) of subsection (1) of section 156 of the Customs Act, 1969. An appeal against the said order also failed.

4. The said orders have now been challenged before this forum, and it has been contended that assumption of the seizing agency and that of Adjudication Officer to the extent of treating the vehicle as "smuggled" within the framework of section 2 (s) was wrong. It was further contended by the appellant that since the vehicle was not smuggled, therefore, the seizing agency had no jurisdiction in the matter as within the framework of law their activities are restricted to the prevention of an act of smuggling. In this regard the learned counsel has placed reliance on the following dictums of the superior Courts: (1) PLD 1975 Kar. 482, (2) PLD 1978 Kar. 774, (3) PLD 1981 Quetta 1 and (4) PLD 1979 Kar. 68.

5. The question regarding determination of an act smuggling was settled in the case of Niaz Ahmed v. The State i.e., PLD 1978 Kar.

774. It would be relevant to reproduce their lordships' observations in this regard which are as under:‑‑ "The Additional Advocate‑General on behalf of the State argued that clause (s) of section 2 contemplates not two by three kinds 'of goods, namely:‑‑‑ (i) The goods exported or imported or restriction for the time being in force; (ii) gold bullion, silver bullion, precious stones currency, manufactures of gold or silver or precious stones; and lastly; (iii) goods notified by the Federal Government in the official Gazette under sib‑clause (a) of clause (s) of section 2." To my mind clause (s) refers only to goods specified therein and other goods notified by the Federal Government. It does not refer to goods the importation or exportation of which is prohibited elsewhere, which situation is governed by clause (9) of section

156. If the goods are one not specified in this clause or notified by the Federal Government under this clause, notwithstanding that its export or import may be prohibited or restricted by any law, there cannot be any offence of smuggling in respect thereof. This is clear from clause (9) of section 156 which makes an offence to import or export goods in violation of any prohibition or restriction on the importation or exportation of such goods imposed by or under this Act or any other law. Clause (9) makes it clear that it will not include goods which come within clause (8) of section 156 and, therefore, merely because importation or exportation of goods is prohibited by any law, it will not follow that its importation or exportation will amount to smuggling in the absence of its inclusion under a notification by the Federal Government under sub‑clause (a) of clause (s) of section 2 of the Act. Clauses (8) and (9) of section 156 must run parallel for the goods covered by the former are excluded from the latter. If these clauses are not so read they will be destructive of each other. To give an example, if an import policy prohibits import of furniture, such import will be in contravention of law and if it is, as was argued by the learned Additional Advocate‑General, punishable under clause (8) of section 156 it will make its clause (9) redundant. The law clearly contemplates two separate categories of goods, one clause (s) of section 2 and the other goods the import or export of which is prohibited under any other law or for that matter under any other section of the Customs Act, and the offence of smuggling is limited to the former category. I am further fortified in this view by the fact that the Federal Government, at a later date deemed it necessary to notify Charas an additional item under said clause (s) of section

2. Therefore, the fact that importation and exportation of Charas is prohibited under the Dangerous Drugs Act, 1930 which will be deemed to be prohibition or restriction notified under section 16 of Act, in the absence of inclusion of Charas as one of the items notified under clause (s) of section 2 there cannot be any smuggling of Charas though of course it is an offence under clause (9) of section 156'.

6. It tray, however, be added that first part of clause (s) of section 2 of the Customs Act, 1969, a controlling part, qualifies anti controls the categories of goods listed in sub‑clauses (a) and (b). That means that every goods which are brought into Pakistan, or are taken out of it, must either be prohibited' or restricted goods or should be so brought in or taken out for the purpose of evading customs duty or taxes. Either of these two conditions must be fulfilled by the categories of goods listed in sub‑clauses (a) and (b). Thus prohibited or restricted goods, if brought through unspecified routes become smuggled goods in term of this sub‑clause; and so also if they are brought through such routes to evade customs duties or taxes are.

7. For example Zam Zam Water's import or export is not prohibited or restricted. If such water is brought into Pakistan, through a route not specified under section 9 or 10 of the Customs Act, 1969, then though such import may be illegal, ' no smuggling would take place. Thus, it would be seen that if the conditions laid down in the controlling part of section 2 (s) of the Customs Act, 1969 are not fulfilled, the act or smuggling is, not committed, vice view is also true.

8. The perusal of the show‑cause notice in the present case indicates that the owner of the seized goods was called upon to show whether or not the seized goods have been validly imported. In response thereto he produced registration documents which are verified to be true. Accordingly, presumption as to whether goods. are illegally imported would not have been there.

9. The order confiscating the goods is based on the fact that chassis number has been punctured. The question would be is there any offence within the framework of Customs Act, 1969? And if any, what evidence is available to prove that offence? Another question would arise, that in the circumstances of the case, seizure was valid or not? These aspects have not been examined by the Adjudication Officer. We would like to observe that neither evidence was properly examined nor any serious application of law was made by the officers who adjudicated the matter and also those who heard the appeal.

10. In the circumstances as explained above, we are of the opinion that impugned orders suffer from procedural impropriety. These order are accordingly set aside and the case is remanded back to the appropriate Adjudication Officer to decide the case afresh in the light or observations made by the Tribunal. C.M.A./330/Tax(Trib.) Order accordingly.