Confiscation

2024 PTD 1205 KARACHI-HIGH-COURT-SINDH Judicial Precedent

Ss. 2(s), 181, 194 & 196SRO 499(I)/2009 dated 13.06.2009SRO 566(I)/2005 dated 6.6.2005SmugglingConfiscationRelease of the goods on payment of duty and taxes without any redemptionScope and effect

40,500 kgs of assorted brands and foreign origin cloth were seized from a godown and an order for outright confiscation of the seized goods was passed by the Adjudicating Authority

Appellate Tribunal Inland Revenue ('the Tribunal') permitted release of the goods on payment of duty and taxes, against which judgment the Department filed Reference Application

Plea of applicant / Department was that goods-in-question were smuggled goods as the respondent had failed to provide any lawful defence as to the charge of smuggling in respect of the seized goods

Validity

Tribunal after coming to the conclusion that 60% of the quantity of the seized goods consisted foreign origin cloth, and once there is an admission that no substantial documents were produced as to the ownership and payment of duty and taxes on the seized goods, then there is no occasion for the Tribunal to permit or allow release of the said goods on payment of duty and taxes

Goods were either smuggled or lawfully imported; and once a conclusion has been drawn that the goods were not lawfully imported, otherwise duty and taxes were not to be paid, then 60% of the seized goods were nothing but smuggled goods

The release of smuggled goods (which stood confiscated) on payment of duty and taxes, and that too without any redemption of the said goods did not appear to be correct and supported by any provisions of law

Confiscation and redemption of seized goods is covered by S. 181 of the Act, read with SRO 499(I)/2009 dated 13.06.2009

Moreover FBR had also notified the goods in question as goods falling within the contemplation of S. 2(s)(i) of the Act, vide SRO 566(I)/2005 dated 6.6.2005

Requirement to give option to pay fine in lieu of confiscation in respect of confiscated goods is not absolute and is subject to the Notification issued by FBR under S. 181, and the order of the Tribunal for imposition of redemption fine in lieu of outright confiscation of smuggled goods was unlawful and in violation of S. 181 of the Customs Act, 1969

Tribunal, in the present case, had failed to appreciate the law and passed the impugned judgment in a very slipshod manner

Such conduct on the part of the Tribunal cannot be appreciated which is in fact a special Tribunal created under the Act

Extra care ought to have been taken by the Tribunal in passing such orders which on the face of it appeared to be in violation of the Customs Act, 1969

Impugned judgment could not sustain to the extent of 60% of the goods in question i.e. foreign origin goods which were admittedly smuggled goods warranting an outright confiscation

High Court set-aside/modified the impugned Judgment passed by the Tribunal to the extent of 60% foreign origin goods and the order of the Adjudicating authority is restored to that extent

Reference Application, filed by the Department, was allowed, in circumstances.

2023 PTD 750 PESHAWAR-HIGH-COURT Judicial Precedent

Ss.2(s), 16, 18, 79, 178 & 196Imports and Exports (Control) Act (XXXIX of 1950), S.3(3) &(10)Notification SRO No.499(I)/2009, dated 13-06-2009, Clause (b)ReferenceVehicle used in smugglingConfiscationBarring clauseConfiscation of vehicle by authorities on the plea that it had been used in smugglingValidity

In order to attract baring clause i.e. clause "b" of Notification SRO No.499(I)/2009, dated 13-06-2009, authorities had to establish that smuggled goods which a vehicle was carrying were concealed in false cavities or the vehicle was wholly and exclusively used in smuggling of goods

Word wholly and exclusively used in Notification SRO No.499(I)/2009, dated 13-06-2009, were used in adjective form which meant "in its entirety" and was being used for no purpose other than smuggling as the word exclusively denoted

In the present case neither the smuggled goods were concealed in false cavities of vehicle in question nor it was the normal course of business of the owner of vehicle to use the same for the purpose of smuggling

When the vehicle in question had no history of being repeatedly involved in smuggling of goods then under Cl. 2(f) of Notification SRO No.499(I)/2009, dated 13-06-2009, it could be released against payment of redemption fine and vehicle would not be liable to outright confiscation under clause (b) of Notification SRO No.499(I)/2009, dated 13-06-2009

High Court declined to interfere in the order passed by Customs Appellate Tribunal

Reference was dismissed, in circumstances.

2013 PTD 1636 CUSTOMS APPELLATE TRIBUNAL BENCH-III KARACHI Judicial Precedent

Ss. 2(s), 16, 162, 163, 168, 156(1) Cls.(8), (9), (89), (90), 157(2), 171 & 215Criminal Procedure Coed (V of 1898), S.103General Clauses Act (X of 1897), S.24-ASmugglingForeign Origin contraband Whisky and other goodsConfiscation

Appellant contended that locally manufactured goods were seized and detained without any legal reason; that there was no law to seize or confiscate locally manufactured goods; that goods loaded on truck were seized within the country as such these goods could not be treated as smuggled goods; that the notice was not issued in the names of Miscellaneous Goods owners although the names of the owners of Miscellaneous Goods were provided in shape of bilties to the seizing agency but even then no notice was served upon the owners of such goods which was mandatory; that seizure of local goods was not discussed in the order and discussed only smuggled and non-duty paid goods whereas more than 50% consignments consisted of local goods; that fine and penalty had been imposed on the owner of Truck but there was nothing about the existence of Liquor in the truck; that the liquor found from the truck was not loaded on the Truck by the transport company; and that person arrested and produced before the Court were outsiders and they had accepted their guilt before the Special Customs Court and Transport Company was not found involved in the transport of liquor as the same was not booked and no billty Number was assigned

Validity

Department was unable to show acknowledgement receipts of service of Show Cause Notice

Name of appellant was mentioned in the Show Cause Notice as well as in the order-in-original

Locus standi of the appellant stood established inasmuch as the fact that the case had been adjudicated without giving them the opportunity of being heard

Admittedly and evidently Show Cause Notice were not served on the transport company as well as the owners of Miscellaneous goods and Adjudicating Officer had not provided the opportunity of hearing to the Transport company and all the owners of Miscellaneous goods, the whole proceedings were not covered under the law

Further, the adjudicating authority had not discussed about the liquor which had been the core point in the Show Cause Notice whereas the goods which as per inventory had been manufactured locally being part of the offending goods had been confiscated without giving any reason

Adjudicating Officer did not impose fine and penalty on driver of the Truck for liquor who had pleaded guilty before Special Judge Customs and was punished

Order-in-original was patently not a speaking order and was not properly worded

Locally manufactured goods and imported goods purchased from the local markets were allowed to be released and their confiscation was unlawful and without any valid reason

Value of conveyance and container was reduced

Redemption fine equivalent to 20% of the value of trailer/truck with a penalty imposed by the Adjudicating Officer on the owner of vehicle was upheld

Order was modified accordingly.

1970 PLD 289 DHAKA-HIGH-COURT Judicial Precedent

Confiscation -Not meant as punishment for crime-Order of confiscation of goods-Matter affecting collection of revenue though it be in nature of penalty-Sea Customs Act (VIII of 1878), Ss. 183 & 167(8).