2004 PLP (Trib (PTD)

RAJ MUHAMMAD KHAN (MEMBER JUDICIAL).

This is appeal against the Order-in-Original No. 156 of 2003, passed by the Additional Collector of Customs Sales. Tax and Central Excise (Adjudication), Regional Office, Peshawar on 14-10-2003, whereby he ordered outright confiscation of the seized goods in terms of clauses (8) (89) of subsection 1 of section 156 of the Customs Act, 1969 read with section 3(3) of the Imports and Exports (Control) Act, 1950 and S.R.O. 374(I)/2002, dated 15-6-2002. The vehicle used as conveyance for transportation of, the smuggled goods was also confiscated, but however, taking lenient view in matter an option was given to its. rightful owner to, redeem the same on payment of fine of 110,

000. A personal penalty of Rs.5,000 was also imposed against the owner of the seized goods under clause 89 of subsection I of section 156 of the Customs Act, 1969.

2. Brief facts of the case are that the C.I.A. Police during the course of routine checking on 7-10-2003 on Mardan-Nowshera Road near Sugar Mills Mardan, intercepted a Flying Coach bearing Registration No.B-3165-Kohat and on its checking, they recovered cloth measuring 1201 yards of foreign origin, valuing Rs.31226 from the occupant of the said Coach, who identified himself Jan Muhammad appellant. Since on demand, he failed to produce any document to prove legal import or lawful possession of the cloth, the same was seized by the Seizing Agency for violation of the provisions of sections 2(s) and 16 of the Customs Act, 1969 read with section 3(1) of the Imports and Exports (Control) Act, 1950. The vehicle used for transportation of the contraband goods was also seized under section 157(2) of the Customs Act, 1969. Subsequently, on adjudication of the matter, the impugned Order-in-Original followed. Hence this appeal to this Tribunal.

3. It is pleaded by the appellant, inter alia, that the seized goods were legally imported and having value less than Rs.50,000 section 2(s) of the Customs Act, 1969 could not be attracted to the seizure in question. He was willing to pay duty and taxes if the goods are released to him. He produced Cash Memo showing purchase of the seized cloth from Messrs Haji Daud Cloth House, Shop No.37, Shaheen Market, Mardan. He also challenged the legality of the personal penalty imposed on him and requested for its remission.

4. I have heard learned counsel for the appellant and D.R. for the respondents and have gone through the record of the case.

5. The perusal of the record would reveal that the Cash Memo produced by the appellant does not mention that the cloth sold to him was, of foreign origin. He did neither produce the same Cash Memo before the Adjudicating Officer during Adjudication proceedings, although, he had joined these proceedings, nor it finds mention in the Memo. of present appeal. He had simply requested the Adjudicating Officer for the release of the goods on payment of duly and taxes as well as fine.

6. So far the imposition of personal penalty of Rs.5000 imposed by the Adjudicating Officer is concerned, it is stated in para. 2 of the impugned Order-in-Original that the appellant had requested in writing for summary adjudication of the case waiving the right of Show-Cause Notice and so. the request for summary adjudication was acceded to.

7. It is not understood as to under what law such right, which is primarily the duty of the Adjudicating Officer under section 180 of the Customs Act, 1969 to issue Show-Cause Notice before confiscation of goods or imposition of penalty, could, be waived of by the owner of the goods or person, for imposition of penalty on him. The section reads as under:-- "(180) Issue of show-cause notice before confiscation of goods or imposition of penalty.

No order tinder this Act shall be passed for the confiscation of any goods or for imposition of any penalty on any person, unless the owner of the goods, if any, or such person

(a) is informed in writing (or if the person concerned consents in writing, orally) of the grounds on which it is proposed to confiscate the goods or to impose the penalty; (b) is given an opportunity of making a representation in writing (or if the person concerned indicates in writing his preference for it orally), within such reasonable time as the appropriate officer may specify, against the proposed action; and (c) is given a reasonable opportunity of being heard personally or through a counsel or duly authorized agent."

8. Now a fair reading of the aforesaid section would reveal that there are three mandatory conditions to be fulfilled by the Adjudicating Officer before confiscation of goods or imposition of penalty. These can be summarized as follows:

(a) That the owner of the goods or the person against whom the penalty is to be imposed, must be informed in writing of the grounds on which it is proposed to confiscate the goods or to impose the penalty. Instead of informing him in writing, he is to be informed verbally provided he gives his consent to the Adjudicating Officer in writing. (b) After conveying him the grounds for confiscation of goods or imposition of penalty in the manner stated in para. (a), he is then to be given a chance for making representation against the proposed action in writing. He may verbally make the representation against the proposed action provided he indicates his such choice in writing. Such representation is to be made within' a reasonable time, which is to be specified by tae Adjudicating Officer. (c) And he is given a reasonable opportunity of being heard.

9. It may be seen from the above three conditions that these are to be followed step by step in chronological order and not simultaneously.

10. The provisions of section 180 ibid does nowhere provide for its waiver on the part of any person who has limited choice under it. These provisions do not absolve the Adjudicating Officer of discharging his responsibility to comply with the given charter. It is yet to be seen whether the Adjudicating Officer is empowered under the law to adjudicate such cases summarily.

11. Now in the instant case, admittedly show-cause notice has not been issued to the appellant accused by the Adjudicating Officer in any form provided for under section 180 ibid and he has not been treated in accordance with the mandatory requirement of the section. Consequently, the Adjudicating Officer could not pass order either for confiscation of the goods or for imposition of penalty on the appellant accused. Thus on this ground alone, the impugned Order-in-Original is not legally sustainable. Resultantly, by accepting the, instant appeal, the impugned Order-in-Original is set aside. The Seized goods shall be released to its owner on payment of leviable duty and taxes as prayed for, if these are not required in any other case. The fine imposed against the vehicle and penalty imposed against the owner of the goods, stand remitted.

12. Announced. C.M.A./37/Tax (Trib.) Appeal accepted.