2008 PLP (Trib (PTD)

CH. FARRUKH MAHMUD, MEMBER (JUDICIAL)

This appeal has been directed against Order-in-Original No.225 of 2000 whereby the learned Deputy Collector (Adjudication) had ordered confiscation of the Gold Bars and VCRs.

2. Briefly stated facts are that that on 17-1-1992, Police Staff of Police. Station, Sarwar Road, Lahore Cantt., intercepted a Vehicle bearing registration plate "Lahore Airport". The search made by Inspector Arif Hayat resulted in recovery of 20 VCRs and 8 Bars of Gold (80 tolas), Swiss Bank Corporation. The said Inspector served notice under section 171 and 156(1)(8) and 157(2) of the Customs Act, 1969. The Police Officer, thereafter lodged an F.I.R. No.4 of 1992 on 17-1-1992 and also referred the matter to the competent Customs Authority for adjudication of the goods as no documentary evidence was produced regarding legal import and clearance from the Customs Authorities. The case was decided by the learned Additional Collector vide Order-in-Original No. 52 of 1992 against which an appeal was filed by the appellant before the learned Collector (Appeals), who modified the orders to the extent of redemption fine imposed against vehicle and reduced the same from Rs.50,000 to Rs.20,

000. Subsequently, revision filed before the learned Member (Judicial) C.B.R, was rejected vide order, dated 9-12-1992. Thereafter a Writ Petition No.6476 of 1994 was filed in the Hon'ble Lahore High Court, Lahore where the impugned orders were set aside and the Hon'ble Judge remanded the case with the following observations:-- "Primarily contending non-adherence to the statutory provisions perceived by sections 171 and 159 of the Customs Act, 1969 and failure of the revisional authority to apply independent mind opting to mechanically endorse the views of the forum below. Consequently, granting the petitions, the impugned orders are declared to be nullity in the eye of law and are accordingly hereby set aside, and the matter would be deemed to be pending before the Deputy Collector concerned for afresh adjudication thereof in accordance with law."

3. The case, after remand, was fixed for rehearing by the learned Deputy Collector who however, passed tile impugned order vide Order- in-Original No.225 of 2000, which has been assailed in the instant appeal.

4. The main contention of the learned counsel is that the learned Deputy Collector had failed to look at the aspect of non-observance of the provisions contained in section 159 of the Customs Act, 1969. It is contended that provisions of section 159 have not been adhered to as the accused were not produced before the Gazetted Officer of the Customs or the Magistrate for such purpose. It is further submitted that the learned Adjudicating Officer had also admitted this position in para. 4 of the impugned judgment as well as during findings, the learned Adjudicating Officer had observed as under:-- "As regards the question of non-adherence of the provisions of sections 159 or 171 of the Customs Act, 1969, it has been observed that the provisions of section 159 ibid had not been adhered to, however this lapse would not affect the flow of show-cause notice and adjudication proceedings under section 180 of the Customs Act, 1969, because the respondents have failed to substantiate their claim through documentary evidence with respect to gold, the import of the same (except brought in accordance with the procedure prescribed under. Notification 1116(1)/89, dated 14-11-1989) is mandatorily prohibited in terms of the provisions of section 8 of the Foreign Exchange Regulation Act, 1947 read with section 16 of the Customs Act, 1969 and as such illegal status remain intact."

5. It is, therefore, submitted that the learned Adjudicating Officer had admitted non-observance of the provisions of section 159 of the Customs Act, 1969. Further states that the accused has been acquitted by the Customs Court vide order, dated 24-1-1998 by the learned Special Judge Customs, Lahore. The learned counsel for the appellant has also relied upon 1983 PCr.LJ 1351 and PLD 1988 Lahore 146 regarding non-observance of provisions contained in section 159 of the Customs Act, 1969. It is, therefore, prayed by the appellant that the impugned order may be set aside.

6. On the other hand the representative of the respondent submits that non-observance of provisions of section 159 of the Customs Act, 1969 is not fatal, it is just a procedural lapse. It is further submitted that since the appellant has failed to provide any documentary evidence with respect to import of the gold, hence impugned order may be upheld.

7. Both the parties have been heard. Admittedly, the provisions of section 159 of the Customs Act, 1969 have not been adhered to. This aspect has even been admitted by the learned Adjudicating Officer in the impugned order. However, the observation of the learned Adjudicating Officer that this being a procedural lapse is not fatal, is not correct in my view. When the law provides procedure, the same must be observed as provided under the law. The non-observance is always deemed fatal. In this case, admittedly there is non-observance of the provisions contained in section 159 of the Customs Act, 1969 which consequently would entail the search and seizure illegal, hence no further proceedings can be validated. In view of above discussion, the appeal is accepted and the impugned order is set aside. H.B.T./139/Tax (Trib.) Appeal accepted.