2010 PLP (Trib (PTD)

DR. RIAZ MEHMOOD, MEMBER (JUDICIAL).

The appellant has assailed, in this appeal, the Customer Order in Original No.1045 of 2005, dated 30-6-2005, vide which sequent to seizure, the vehicle of the appellant had been confiscated outright.

2. The relevant portion of the show cause notice is as below:- "Whereas, it has been reported by the Superintendent Customs, Anti Smuggling Organization, Multan has an information was received that a Toyota Land Cruiser, 5-Door Jeep, bearing registration number plate BC-9725/Karachi was smuggled one and duty taxes leviable were not paid and the chassis serial number of the vehicle was tampered accordingly to camouflage it under the cover of documents of an already registered vehicle. Acting upon the above mentioned information the staff of Customs Anti-Smuggling Organization, Collectorate of Customs, Sales Tax and Central Excise, Multan, intercepted the said Toyota Land Cruiser bearing registration No.BC-9725/Karachi at Auto Plaza near Income Tax House, Multan on 28-10-2004. The driver/owner introduced himself as Syed Muhammad Raza Gillani S/o Syed Hamid Raza Gillani r/o Al-Raza, 60-Sher Shah Road, Multan Cantt. He was asked to produce documents showing the legal import and lawful possession of the vehicle, but he failed to do so even he was not in possession of registration book. He stated that he has purchased this vehicle against payment of Rs.16,00,000/- from Karachi. As he has yet to pay the balance amount of Rs.3,50,000/- so the registration book of the vehicle was not given to him by the previous owner. The physical examination/inspection of vehicle was conducted at the spot in the presence of the owner of the vehicle which led to following observations:--. (i) The chassis serial number HDJ81-0002951 available on the chassis frame was tampered/manipulated. The digits Z and 0 were visible beneath the second and fifth figure i.e. D and 1 of chassis alphabetic code and figures 7742 were visible beneath fourth, fifth, sixth and seventh digits i.e. 2951 of numerical portion of the chassis number. (ii) The chassis serial number HDJ81-0002951 punched on the chassis frame of the vehicle under reference was compared with the photographs showing chassis number HDJ81-001280 of model code HDJ81 and it was noticed that the chassis number punched on the vehicle in question was self punched and not according to the standards of company's punching. (iii) The identification plate/silver plate affixed on the body of the vehicle also seems to be non genuine one. The identification plate affixed on the body of the vehicle reflects the particulars as under:- "HDJ81R-GCMNS 1HJ HDJ81-0002951" (iv) The Toyota Land Cruiser vehicle type HDJ81 are fitted with 1HD engine, whereas the engine fitted in the vehicle and as mentioned on identification plate is of type 1HZ which are fitted by the company in-Toyota Land Cruiser vehicles type HZJ80. (v) The particulars mentioned on the identification plate were taken as of the vehicle type/model HZJ8OR-GCMNS, which was physically in the possession of the owner except the figures HDJ81R and chassis number HDJ81-0002951 was manipulated according to the particulars of the registered vehicle under the cover of which the vehicle in, question was camouflaged. (vi) The vehicle in the possession of the owner was physically GX model Toyota Land Cruiser right hand driver Station Wagon with manual transmission, F-5, Swing out back door which is according to the specifications of model type HZJ80R GCMNS (the chassis alphabetic code which is visible beneath the present, chassis alphabetic code punched on the chassis frame). It also gives strong belief that the owner of the vehicle or any of his agent has tried to camouflage a smuggled vehicle of above mentioned description by manipulating its chassis serial number to match the same with that of an already registered Toyota Land Cruiser right hand drive, automatic transmission, lift up back door. (vii) The labels/tags on the seat belts where the manufacturing year was mentioned was torn/cut intentionally just to hoodwink the law enforcing agencies. The owner of the vehicle also witnesses all these observations and admitted the facts regarding manipulation of the chassis serial number of the vehicle but he failed to give any cogent reason. He also refused to give any written statement in this regard and requested that he may be provided some time so that he may consult his legal advisor before recording any statement by the department concerning the vehicle under reference. In the light of the foregoing facts and non submission of any documentary evidence regarding the legal status of the vehicle Toyota Land Cruiser GX Station Wagon registration No.BC-9725/ Karachi, chassis No. HDJ81-0002951 tampered/manipulated (chassis number XZXXO-XXX7742 slightly visible beneath the present chassis serial number) being smuggled one as defined under section 2(s) of the Customs Act, 1969 was seized under section 168 ibid after adopting all legal formalities, for contravening the provisions of section 16 of the said Act punishable under clause 89 of section 156(1) of the Customs Act, 1969. The Incharge Forensic Science Laboratory, Islamabad was requested by the seizing agency for chemical examination of the chassis serial number/chassis frame of the vehicle in question. Mr. Muhammad Raza Gillani owner of the vehicle was also associated and the vehicle was examined by the expert of Forensic Science Laboratory, Islamabad in his presence. The request received from the Incharge Forensic Science Laboratory, Islamabad is reproduced as under:- FINDING: The technical examination of the above cited vehicle has revealed the following:- Vehicle number: BC-9725/Karachi Type of vehicle: Toyota Land Cruiser Chassis No. before chemical treatment HDJ81-0002951 Chassis No. after chemical treatment: HZJ80-0007742 The chassis number of the above cited vehicle has been found tampered after chemical treatment. The Motor Registering Authority, Karachi was requested by the seizing agency to provide the particulars and the attested copies of documents on the basis of which the vehicle was got registered from their office. The Motor Registering Authority Karachi vide letter No.ETO/MR-II(QR-B)/3276/04 dated 11-12-2004 informed that the original file of the vehicle BC-9725/Karachi was not traceable, however, he provided the computer printout showing the particulars of a Toyota Land Cruiser Jeep chassis number HDJ81-0002951 engine number 0006894 model 1990 registered in the name of Abdul Samad son of Abdul Ghani against the said registration mark. It was alleged that the Toyota Land Cruiser having displayed registration number Plate BC-9725/Karachi, bearing chassis number HDJ81-0002951 tampered/manipulated (chassis number XZXXO-XXX7742 slightly visible beneath the present chassis serial number) was smuggled one and was brought into the country through unauthorized route without payment of duty/taxes, which was camouflaged under the cover of already registered vehicle by the Motor Registering Authority, Karachi which is liable to confiscation under section 156(1)80 of the Customs Act, 1969, contravening the provisions of section 16 ibid, read with section 3(1) of the Imports and Exports (Control) Act, 1950. The seizure report was prepared and submitted to this office for adjudication. Now, on the basis of above mentioned facts the respondent namely Syed Muhammad Raza Gillani s/o Syed Hamid Raza Gillani r/o Al-Raza, 60-Sher Shah Road, Multan Cantt. is charged with violation of provisions of sections 2(s) and 16 of the Customs Act, 1969 (IV of 1969) read with section 3(1) of the imports and Exports (Control) Act, 1950 and is called upon to show cause as to why the seized vehicle may not be confiscated under clause (89) of section 156(1) of the Customs Act, 1969 (IV of 1969) read with section 3(1) of the Imports and Exports (Control) Act, 1950 and penal action under the above law as well as section 3(3) of the Imports and Export (Control) Act, 1950 may not be taken against him."

3. The appellant contested the show cause notice in the following terms:- That Toyota Land Cruiser 5 Door Jeep bearing registration No.BC-9725/Karachi lawfully purchased by the respondent was seized by Anti-Smuggling staff of Collectorate of Customs Multan on 28-10-2004. Respondent purchased the said vehicle in lawful manner after verification of its documents from MRA Civic Centre, Karachi. In this behalf it is respectfully submitted as under:- (a) That the vehicle in question was imported initially by Mr. Amanullah Khan having Passport No. B-218456 from Dubai against IP-879948 issued by the Chief Controller of Import and. Export. On arrival of vehicle at Karachi Port, the said Mr. Amanullah Khan filed bill of entry vide IGM No.2219/91. The vehicle was properly examined, assessed and thereafter cleared on payment of duties and other taxes leviable thereon vide Cash No.1174 dated 18-12-1991, the copies of Passport of said Mr. Amanulah Khan, sale invoices, temporarily registration, bill of lading, IP, bill of entry and KPT receipts are enclosed as Annex.A/1 to A/7. (b) That on importation of aforesaid vehicle said Mr. Amanullah Khan sold it prior to its registration to Mr. Pervaiz Ahmad s/o Muhammad Yaqoob r/o 9/55 Commercial Area, Liaqatabad, Karachi vide transfer letter dated 7-3-2000. On purchase of aforesaid vehicle Mr. Pervaiz Ahmad applied for registration of the vehicle in his name. He has deposited CVT amounting to Rs.63,

330. He has also sworn affidavit that the vehicle was purchased by him from Mr. Amanullah Khan. On submission of documents for registration of the vehicle MRA Karachi vide letter dated 13-11-1999 asked Principal Appraiser, Appraisement Group-VIII Customs House, Karachi for verification of the documents who vide letter dated 15-11-1999 confirmed that customs duties and other taxes were paid vide cash No.11/74 dated 18-12-1991. On receipt of reply from the customs authorities, MRA Karachi requested the Secretary/Director General, Excise and Taxation Department Punjab, Lahore N.-W.F.P. Peshawar, Balochistan, Quetta, Azad- Jammu and Kashmir, Excise and Taxation Officer/MRA Islamabad and Director Excise and Taxation Haiderabad (Sindh) vide letters dated 1-2-2000 to intimate whether any other vehicle having chassis No. HDJ81-0002951, Engine No. IHZ-0006894 make Toyota Land Cruiser, 5-Door Jeep, model 1990 was already registered or not. According to the report received from all the provinces, no vehicle having aforesaid particulars was registered. Thus, the vehicle in question was registered in the name of Mr. Pervaiz Ahmad under the registration No.BC-9725. On registration of the vehicle, original file was returned to its owner. The particulars of the vehicle were also entered in the computer by MRA Karachi. Copies of transfer letter, application for registration, application for transfer of ownership, tax payment receipt, affidavit, letters, dated 13-11-1999, 15-11-1999, letter dated 1-2-2000, registration book and computer print are enclosed as Annex B/1 to B/24. (c) That subsequently Mr. Pervaiz Ahmad sold this vehicle to Mr. Mohkam" Din s/o Jan Muhammad r/o Bungalow No.298-A Old Race Course Road, Karachi Cantt. Vide transfer letter dated 19-7-2001 who got the ownership transferred in his name. On transfer of ownership, he was issued fresh registration book and computer print. Copies of transfer letter, ID card of Mr. Mohkam Din, ID card of Mr. Pervaiz Ahmad, application for transfer of ownership, verification form, registration and computer print are enclosed as Annex.C/1 to C/7. (d) That Mr. Mohkam Din further sold this vehicle to Mr. Zahoor Ahmad son of Abdul Hakim r/o Bungalow No.59, Qasimabad, Haiderabad (Sindh). On purchase of said vehicle, Mr. Zahoor Ahmad got its ownership transferred in his name from MRA Karachi. On transfer of ownership to Mr. Zahoor Ahmad fresh registration book was issued to him, by MRA Karachi. Copies of application for transfer of ownership, ID card of Zahoor Ahmad, verification form, registration book and computer print are enclosed as Annex. D/1 to D/5. (e) That Mr. Zahoor Ahmad further sold this vehicle to Mr. Abdul Samad son of Abdul Gillani r/o House No. A/113-230 Jail Road, Hirabad, Haiderabad (Sindh) under proper transfer letter. On purchase of above vehicle, Mr. Abdul Samad requested MRA, Karachi vide application, dated 23-9-2003 for transfer of ownership which was transferred in his name and he was also issued a registration book and computer print. Copy of transfer letter, application dated 23-09-2003, ID card of Abdul Samad, registration book and computer print are enclosed as Annex. Ell to E/5. (f) That the aforesaid vehicle is still registered in the name of Mr. Abdul Samad. It was purchase by the respondent against open transfer letter. Its ownership is yet to be transferred in the name of the respondent who is neither import nor first buyer of the vehicle in question. Respondent purchased this vehicle after verification of its original documents on the basis of which it was initially registered. The said documents are in possession of the respondent and can be produced as and when desired by this august Forum. (g) That it is pointed out for the information of the august forum that the chassis number as well as engine number of the vehicle imported against the aforesaid documents was duly mentioned in the sale invoice, bill of lading, import permit, bill of entry, receipt issued by KPT. All these documents show that the vehicle having chassis number HDJ81-0002951 and engine number 0006894 was imported on payment of leviable duties and taxes. The perusal of the recovery memo prepared by the seizing officer as well as show-cause notice issued by this august forum indicate that the seized vehicle is also installed with the same engine number which proved that this vehicle is the same which was imported against payment of duties and taxes by Mr. Amanullah Khan and subsequently sold by him. In case the vehicle in question is not the same which was imported against bill of entry referred above, then how and under what circumstances, the engine of lawfully imported vehicle could be installed in a smuggled vehicle. (h) That besides above, if the vehicle in question is not the same which was imported against payment of duties and taxes by Mr. Amanullah Khan, then how the original documents are held by the respondent. Had this vehicle been smuggled one, it would have been registered either on the basis of attested documents or photocopies. The presence of the original documents shows that it is the same vehicle which was originally imported by Mr. Amanullah Khan vide bill of entry having IGM No.2219/91 dated 7-12-1991 cash No.1174 dated 18-12-1991.

4. The learned adjudicating authority did not find favour with the explanation offered to the show cause and confiscated the vehicle vide Order-in-Original No.1045/05. The operative portion of the order is as under: -- "The above stated facts reveal that the respondents have tried to manipulate the vehicle according to registration documents. They purchased a smuggled vehicle and after removing/grinding its chassis number they punched the chassis number accordingly on the chassis frame of the smuggled vehicle. But after chemical treatment, the Forensic Science Laboratory Islamabad had deciphered the original chassis number of the seized vehicle which is "HZJ80-0007742" for which the respondents have failed to justify. Thus, it is beyond any shadow of doubt that the vehicle is smuggled one and was brought into the country without payment of leviable duty and taxes. Thus, the charges as, enumerated in the show-cause notice stand established. I, therefore, order for outright confiscation of the seized vehicle under clause (89) of section 156(1) of the Customs Act, 1969 read with S.R.O. 374(1)/2002 dated 15-06-2002."

5. Hence, this appeal.

6. The reply to the show-cause notice has been urged as the grounds of appeal in the memo of appeal.

7. The department filed the comments. The grounds given in the show-cause notice have almost been re-iterated in the comments.

8. Arguments were heard. The learned counsel argued on the lines of the submission made in the memo of appeal. He further submitted that all the necessary documents like bill of entry, bill of lading, Karachi Port Trust documents, application for registration certificates, copies of registration books and copies of transfer letters had been filed along with the memo of appeal for perusal. He cited Salooka Steel Mills Limited v. Director General, Coast Guard Karachi Pakistan PLD 1981 Quetta 1, "that where the liability to confiscation was not determined, the seizure of goods was without lawful authority. He next cited Muhammad Farooq v. Muhammad Mubeen, Inspector Collectorate of Customs Multan 2004 PCr.LJ 1958, Lahore High Court, Bahawalpur Bench to the same effect.

9. The learned Inspector defended the impugned order.

10. I have gone through the record carefully in the light of arguments advanced at the bar and find that the appeal is quite sustainable. The/appellant has placed on record catena of documents that the vehicle had duly been imported and sold from hand to hand and the appellant was bona fide purchaser for value without notice. Copy of bill of entry had been placed on record at page-54 of the file. Mr. Amanullah had imported the vehicle bearing chassis No.HDJ81-0002951. All the documents issued by the Karachi Port Trust were also placed on record. Thereafter, the application for registration certificate was made by Mr. Pervaiz Ahmad. All the documents in connection with registration were produced. Thereafter, the vehicle was sold to different persons as explained in the reply to the show-cause notice. All documents were on record. The Motor Registration Authority, before registration got it confirmed from the Customs House, Karachi as to whether any vehicle of this description had earlier been registered. Thereafter, the letters were addressed to all the Motor Registration Authorities in all the four provinces and when the authorities got satisfied that the vehicle had not been registered anywhere else prior to it, the registration was made. It was sufficient safeguard to avoid machination. There was no suppression of facts all along. There was no evidence that there was any other vehicle plying in the country with the description HDJ81-0002951. The appellant had not been confronted with any laboratory report which had been obtained at his back. The appellant in the presence of plethora of record, regarding vehicle could not be non suited merely on the report of the FSL. It had been observed by the Hon'ble Lahore High Court, Lahore in the aforesaid case 2004 PCr.LJ 1958 among others as under: - "Moreover, the customs authorities have also not been able to show as to from which country these vehicles were imported by the petitioners. There was hardly any evidence to prove that the petitioners have smuggled these vehicles and these were found as smuggled items."

11. With this discussion, I find that the impugned order is liable to be set aside.

12. The learned counsel had also submitted during arguments that right on the admission of this appeal on 10-8-2005, an interim injunction had been granted that "meanwhile the vehicle in question shall not be disposed of in any manner". He submitted that despite of this order, the department had handed over the vehicle and documents to the other department. The learned Inspector, in this respect, referred to the following paragraph of the report of the Superintendent Customs, dated 23-6-2006: "That with reference to CBR's letter No.10(1)AS/2002/Pt dated 7-7-2005 and in pursuance of Pakistan Public Works Department letter No.416/297 dated 9-4-2005 received along with aforesaid Board's letter, the representative of Pak PWD visited Multan Collectorate and identified six vehicles with tampered chassis number for purchase at the reserve price assessed by the department. To avoid blockage of revenue and -further deterioration all the six vehicles including the one under reference were sold to the Pak PWD as per policy of the Board after obtaining the approval from the CBR, Islamabad.

13. The respondent had disposed of the vehicle in violation of the injunctive order. The vehicle was to be retrieved. Resultantly, the appeal is accepted, impugned order is set aside and it is directed that the vehicle be returned to its lawful owner, the appellant. The customs department may return the consideration obtained against this vehicle from the Pak PWD for retrieval of the vehicle for onward handing over to the appellant. C.M.A./158/Tax(Trib.) Appeal accepted.