2017 PLP 1244 (PTD)

(Against the judgment dated 17.2.2009 of the Peshawar High Court, Peshawar passed in Customs Reference No. 24 of 2007)

S. 2(s)

S.R.O. No.566(I)/2005 dated 6-6-2005

Smuggled goods

Scope

'Black tea'

Consignment of "black tea" was confiscated on 06-01-2007

Item No.35 of S.R.O. No.566(I)/2005 dated 6-6-2005 stated "Black Tea (except Op-Pekoe)", thus black tea was a restricted/prohibited item and fell within the meaning of smuggled goods in terms of S. 2(s) of the Customs Act, 1969.

S. 2(s)

S.R.O. No.566(I)/2005 dated 6-6-2005 ("the SRO.")

Smuggled goods

Scope

'Artificial silk cloth'

Item No.28 of S.R.O. No.566(I)/2005 dated 6-6-2005 pertained to man-made or synthetic fibers/fabric

Cloth, in the present case, was described as artificial silk cloth and was undoubtedly a man-made fabric as it comprises of synthetic fiber and thus was squarely covered by Item No.28 of the SRO

Cloth in question was of a foreign origin and was a restricted/prohibited item as per Item No.28 of the SRO, therefore, it fell within the meaning of smuggled goods in terms of S. 2(s) of the Customs Act, 1969.

S. 156(1), Cl. 89

"Smuggled goods"

Salient features of Cl. 89 of table provided under S. 156(1) of the Customs Act, 1969

Clause 89(i) dealt with smuggled goods as well as those goods regarding which there was reasonable suspicion that they were smuggled

Person was permitted to acquire possession etc. of such goods only with lawful excuse, the burden of proof of which laid on such person, and in case he failed to do so, it would be presumed that the goods were smuggled entailing the consequences provided in Column 2 of Cl. 89(i).

S. 156(1), Cl. 90

"Smuggled goods"

Salient features of Cl. 90 of table provided under S. 156(1) of the Customs Act, 1969

Clause 90 of S. 156(1) dealt with goods that were not smuggled and regarding which there was "fraudulent evasion or attempt at evasion of any duty chargeable thereon"

Burden laid on the person involved in such activities to prove the contrary, in the absence of which it would be presumed that the goods were non-duty paid in terms of Cl. 90

In this regard, first the department had to show that the goods which were of a foreign origin could only be imported on payment of duty or under a licence or their import was prohibited or restricted; it would then be for the possessor of such goods to show that they were lawfully imported either before any restrictions/prohibitions were imposed or in accordance with such restrictions/prohibitions. Messrs S.A. Haroon and others v. The Collector of Customs, Karachi and the Federation of Pakistan PLD 1959 SC 177 and Sikandar A. Karim v. The State 1995 SCMR 387 ref.

Ss.2(s) & 181

S.R.O. No.574(I)/2005 dated 6.6.2005 ("SRO 574")--Smuggled goods, confiscation of

Option to pay a fine in lieu of confiscation of goods

Section 181 of the Customs Act, 1969 allowed an officer passing an order for confiscation of goods to give the owner of the goods an option to pay a fine in lieu of such confiscation

First proviso to S. 181, however, provided that the Federal Board of Revenue may by an order specify the goods or class of goods where such option shall not be given

Board had issued SRO 574 which provided, inter alia, that "no option shall be given to pay fine in lieu of confiscation in respect of (i) smuggled goods falling under Cl. (s) of S. 2 of the Customs Act, 1969 or (ii) conveyance including packages and containers found carrying offending goods of S.2(s) of the Customs Act, 1969

Since the smuggled goods in the present case were covered under SRO 574, therefore, the imposition of redemption fine at 30% by the Collector Customs (Appeals) and 15% by the Appellate Tribunal was in violation of S. 181 of the Customs Act, 1969 and S.R.O. 574

Appeal was allowed accordingly.