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Petitioner: Collector of Customs, MCC, Islamabad, etc VS Respondent: Israr and others
Court Name: Islamabad High Court Judge(s): Athar Minallah, Babar Sattar Title: Collector of Customs, MCC, Islamabad, etc vs Israr and others Case No.: Customs Reference No. 48 of 2018 Date of Judgment:2021-01-12 Reported As:2021 IHC 8, KLR 2021 Civil Cases 402, 2021 PCTLR 1369, 2021 [M] CLR 1428, 2021
PTD 501 Result: Order accordingly Judgment JUDGEMENT BABAR SATTAR, J. Through this judgment, we intend to adjudicate instant Customs Reference and Customs Reference 56/2018 titled "Israr and others vs. Customs Appellate Tribunal, etc" filed under section 196 of the Customs Act, 1969 ("Customs Act") and the questions of law proposed for our consideration in the two references arising from the same judgment of the learned Customs Appellate Tribunal dated 05.07.2018 and the facts recorded in the said judgment. 2. The facts in brief are that applicants in Customs Reference No. 56/2018 (to be referred to as "applicants" for purposes of this judgment) excluding applicant no. 2 intended to travel from Benazir Bhutto International Airport to Dubai via flight no. PA-210 on 02.06.2016. After they reached the departure lounge and had their luggage scanned through Airport Security Force (ASF) scanners, Customs Officials examined their bags and asked about their contents. Applicant no. 1 (Israr s/o Muhammad Amin) disclosed the presence of foreign currency in his baggage. Customs Officials found foreign currency (Saudi Riyals 330,000/- and UAE Dirhams 42,500/-) in his bag, seized the foreign currency alleging violation of sections 156(1), 157 and 178 of the Customs Act, 1969 and also registered a criminal case against the appellants vide FIR No. 33/2016 dated 02.06.2016. 3. The Customs Officials submitted Seizure Case No.33/2016 dated 02.06.2016 for adjudication before the Adjudicating Officer seeking action under sections 156(1) and (8), 157 and 178 of the Customs Act, read with section 3(3) of the Import & Export (Control) Act, 1950 for violation of sections 2(s) and 16 of the Customs Act, section 3(1) of the Import & Export (Control) Act, 1950 and the Foreign Exchang e Regulations Act, 1947. At the time of seizure of foreign currency , Israr, applicant in Customs Reference No. 56/2018 and respondent no.1 in Customs Reference No. 48/2018 (to be referred to as "applicant no.1" for purposes of this judgment) did not possess documentary evidence establishing procurement of the foreign currency from an authorized dealer .
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Customs Officials arrested applicant no. 2/Peerzada (to be referred to as "applicant no.2" for purposes of this judgment) on identification by applicant no. 1 as his relative who had handed him the foreign currency . Applicant no. 2 was not traveling outside Pakistan and was present outside the departure lounge in order to see off his family members i.e. applicants no.1 and 3 to 6. 4. Applicants no.1 and 2 were issued a show cause notice (SCN) by Collector of Customs (Adjudication) under section 180 of the Customs Act dated 05.08.2016 to "show cause as to why the recovered/seized foreign currency should not be confiscated and why penal action should not be taken against you under section 156(1)(8), 157 and 178 of Customs Act, 1969 for violation of above mentioned provisions of law ." 5. Applicants no. 3 to 6 moved an application before the Collector of Customs (Adjudication) to be impleaded as necessary and proper parties for being joint owners of the foreign currency seized from applicant no. 1. All applicants also filed a statement in response to the SCN stating, inter alia, that they were joint owners of the foreign currency seized from applicant no.1, which was lawfully procured and owned by them, and the foreign currency was seized by Customs Officials on the basis that it was in excess of the quantum allowed by the State Bank of Pakistan (SBP) even though its presence was correctly declared by applicant no.1 for purposes of sections 139 and 142 of the Customs Act. 6. Collector of Customs (Adjudication) passed Order-in-Original No. 38 of 2017 dated 09.03.2017 ("Order-in- Original") wherein it was noted that "the single issue in the case is whether the recovered and seized currency is liable to confiscation under law?" The Order-in-Original held, inter alia, that the seized foreign currency could not be attributed to the applicants as at the time of seizure applicant no.1 was alone, according to the seizing officer, and the names and particulars of persons claiming to be family members did not fall within the definition of family members as per CNIC details, and held that the seized foreign currency was liable to confiscation under sections 156(1) and (8), 157 and 178 of the Customs Act.s 7. The applicants in Customs Referen ce 56/2018 then challenged the Order -in-Original before the learned Customs Appellate Tribunal and asserted, inter alia, that they were lawful and joint owners of the seized foreign currency , that the presence of the foreign currency was disclosed to the Customs Officials and not concealed thus no offence could be made out, and that the Order-in-Original was time barred as it was passed beyond the mandatory period prescribed in section 179 of the Customs Act. 8. The learned Customs Appellate Tribun al in its judgment has reproduced the grounds for challenge taken up by the applicants and held the following: "Perusal of case file has transpired that appellants have annexed copies of their E-Tickets and passports with the memo of appeal which supports the version of the applicants and makes the prosecution story doubtful. The applicant no. 1 also produced the receipt of purchase of foreign currency along with affidavit, whereas no counter affidavit was filed by the department. Therefore, we are inclined to partly accept the appeal. The foreign currency is ordered to be released to the applicants, except appellant no.2 as according to appellants' version Mr. Peerzada son of Hazrat Gull only visited the airport to see off his relatives and was not traveling to Dubai, in terms of permission given by the State Bank of Pakistan vide notification No.F.E.1/2015-SB dated 1st June, 2015 i.e. a major person is allowed to carry maximum US$ 10,000/- and a minor from 5-18 years is allowed to carry maximum US$ 5000/-. The remaining foreign currency shall remain confiscated in favor of the state. The impugned Order -in- Original No. 38/2017 dated 09.03.2017 is modified to the above extent only ." 9. The questions framed in References No. 48/2018 and 56/2018 are as follows: Customs Reference No. 48/2018: 1. Whether after confession/admission of crime in subject case by accused namely "ISRAR" (presently respondent No. 1) in his confessional statement dated 19.11.2016 before judicial forum i.e. Judge Special Court (Customs, Taxation & Anti-Smuggling) Rawalpindi can change his entire plea and bring four more respondents as his co- travelers for the want of releasing the confiscated money before both departme ntal forums i.e. Collectorate of Customs (Adjudication) and Customs Appellate T ribunal Bench-II, Islamabad, if so under what law? 2. Whether the impugned judgment, dated 31.07.2018 of Customs Appellate Tribunal Bench-II, Islamabad is result of negligent and conscious overlooking of prevailing laws specially when confession has been made before a
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competent judicial forum i.e. Judge Spec ial Court (Customs, Taxation & Anti-Smu ggling) Rawalpindi, by accused, mentioning himself as "single carrier" in subject criminal case i.e. No. 33/2016 dated 02.06.2016 under criminal procedure code of Pakistan and is also derogatory and against the law under section 2(s), section 156(1),(8) of Customs Act, 1969. Customs Reference No. 56/2018: 1. Whether the learned Customs Appellate Tribunal was correct in partially allowing appeal under section 194 where it stands proven that the show cause notice is a result of mala fide intentions and ulterior motives and the case was false and fabricated? 2. Whether in case of non-filing of counter affidavits by the respondent department before the learned Appellate Tribunal, the contents of the affidavit filed by the appellants should be taken to be true in terms of Order 19 Rule 1 of the Code of Civil Procedure, 1908? 3. Whether the confiscation can be affected under section 2(s) of the Customs Act, 1969 read with sub-section 8 of section 156 where it is not a case of smug gling and the goods have been correctly declared in terms of section 139 of the Customs Act, 1969? 4. Whether the Order -in-Original No. 38 of 2017 is miserably time barred in terms of section 179 of the Customs Act, 1969? 5. Whether the seized goods are liable to be released as the issuance of show cause notice under section 180 was barred in terms of sub-section 2 of section 168 of the Customs Act, 1969? 10. We note that the learned Customs Appellate Tribunal neither adjudicated the question (i) whether confiscation could be affected under section 2(s) read with section 156(8) of the Customs Act, given that presence of foreign currency was disclosed to Customs Officials and consequently this was not a case of attempt to smuggle, and (ii) whether the Order-in-Original was issued beyond the mandatory period prescribed under section 179(3) and (4) of the Customs Act and therefore of no legal ef fect. 11. The learned counsel for the applicants in Reference No. 56/2018 stated that the SCN was issued on 05.08.2016 and the Order-in-Original was issued on 09.03.2017, which was beyon d the 120-day mandatory period prescribed for issuance of such order under section 179(3) of the Customs Act, and that neither the said period was extended by the Collector after recording reasons in writing as required by the Customs Act nor the Federal Board of Revenue exercised its power to grant an extension under Section 179(4) of the Customs Act. He has placed reliance on "Javed Iqbal vs. Director General of Intelligence and Investigation, FBR, Karachi" [2017 PTD (Trib) 2357] wherein the learned Customs Appellate Tribunal held that orders passed by the adjudicating authority beyond the mandatory period prescribed in section 179(3) of the Customs Act suffered from grave legal infirmity and were ab initio illegal and of no legal effect. The learned counsel for the department has not controverted the factual or legal submissions made by the learned counsel for the applicants in this regard. 12. The learned counsel for the applicants has further submitted that a case of attempt to smuggle cannot be brought home to the applicants as in the instant case there was no concealment of foreign currency and the said currency was recovered and seized after disclosure by applicant no.1 to Customs Officials that he possessed foreign currency which formed part of the content of his baggage, and there existed no "intent" to smuggle foreign currency outside Pakistan. The learned counsel for the applicants further submit s that the foreign currency was seized from applicant no.1 at the entry of the departure lounge of the airport immediately after his luggage was scanned by FIA scanners and he had neither been issued a boarding pass for an international flight nor had he passed the immigration post and received an exit stamp on his passport and thus it could not be said in any event that he had taken steps pursuant to an intent to smuggle foreign currency that could be termed as an "attempt" and has relied on Central Board of Revenue vs. Khan Muhammad [ PLD 1986 SC 192 ]. 13. Learned counsel for the Department has opposed the contentions of the applicants regarding "intent" and "attempt" and submits that presence of the foreign currency in the baggage of the applicants in excess of the limit prescribed by the State Bank of Pakistan at the time they entered the departure lounge and had their baggage pass through the ASF scanners reflected the required intent to smuggle prohibited amounts of foreign currency
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outside Pakistan and constituted sufficient steps in pursuance of such intent to qualify as attempt. Learned counsel for the Department has placed reliance on Collector of Customs vs. Khud-e-Noor [ 2006 SCMR 1609 ]. 14. The learned counsels have been heard and we have perused the record with their assistance. 15. The case against the applicants is that of "attempt" to "smuggle" currency outside Pakistan within the meaning of section 2(s) of the Customs Act, beyon d the limit prescribed by the State Bank of Pakistan, which is a breach of the restriction under section 16 rendering such currency liable to confiscation under section 17 of the Customs Act. The relevant provisions of the Customs Act are as follows: 2(s) "smuggle" means to bring into or take out of Pakistan, in breach of any prohibition or restriction for the time being in force, or evading payment of customs-duties or taxes leviable thereon, (i) gold bullion, silver bullion, platinum, palladium, radium, precious stones, antiques, currency , narcotics and narcotic and psychotropic substances; or (ii) manufactures of gold or silver or platinum or palladium or radium or precious stones, and any other goods notified by the Federal Government in the official Gazette, which, in each case, exceed one hundred and fifty thousand rupees in value; or (iii) any goods by any route other than a route declared under section 9 or 10 or from any place other than a customs-station and includes an attempt , abetment or connivance of so bringing in or taking out of such goods; and all cognate words and expressions shall be construed accordingly; 16. Power to prohibit or restrict importation and exportation of goods.- The Federal Government may, from time to time, by notification in the official Gazette, prohibit or restrict the bringing into or taking out of Pakistan of any goods of specified description by air , sea or land. 17. Detention, seizure and confiscation of goods imported in violation of section 15 or section 16.- Where any goods are imported into, or attempted to be exported out of, Pakistan in violation of the provisions of section 15 or of a notification under section 16, such goods shall, without prejudice to any other penalty to which the offender may be liable under this Act or the rules made there under or any other law, be liable to detention, for seizure or confiscation subject to approval of an officer not below the rank of an Assistant Collector of Customs, and seizure for confiscation through adjudication, if required. 139. Declaration by passenger or crew of baggage.- The owner of any baggage whether a passenger or a member of the crew shall, for the purposes of clearing it, make a verbal or written declaration of its contents in such manner as may be prescribed by rules to the appropriate officer and shall answer such questions as the said officer may put to him with respect to his baggage and any article contained therein or carried with him and shall produce such baggage and any such articles for examination 1 [:] 2[Provided that where the Customs Computerized System is operational, all declarations and communications shall be electronic.] 16. In this reference, which emanates from the exercise of adjudicatory authority by the Collector , we are concerned only with the confiscation of currency seized from the applicants and not the criminal case registered against the applicants, the proceedings in such case or the evidence adduced therein. The proceedings in the criminal case and those in the adjudicatory matter are independent of each other . We can therefore only take into account the SCN, the Order-in-Original, the judgment of the learned Appellate Customs Tribunal, the material considered in passing such adjudicatory orders and the reasoning of such orders. 17. We however note that as the actio ns of the applicants leading to the imposition of the civil sanction of confiscation under section 17 of the Customs Act must amount to "attempt" to "smuggle" for purposes of section 2(s), the ingredients of the offense must exist and be proved. Whether the Collector imposes the sanction under section 17 or pursues criminal penalties under section 156 or both, the difference really is that in the former case the Department would need to establish the infraction on a balance of probabilities and in the latter beyond reasonable doubt. 18. In this regard we are guided by dicta of the august Supreme Court in Asghar Ali vs State [PLD 2003 SC 250], where the accused were charged with attempt to smuggle currency and after exchange of gunfire Pakistani currency was recovered from them and also foreign currency from secret cavities of their vehicle. The august Supreme Court observed the following: "The petitioner has claimed the possession of Pak currency but denied the possession of foreign currency which was recovered from the secret cavities of the vehicle in which the petitioner and his companions were traveling.
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Thus the part of the transaction relating to recovery of foreign currency from the secret cavities of the vehicle would constitute an offence under section 156(1)(8) of the Customs Act, 1969 whereas the part relating to the recovery of Pak currency from the possession of the petitioner while traveling in the territory of Pakistan would not be an offence under the Customs Act, 1969, therefore, the seizure of Pak currency and registration of case under Customs Act, 1969 to the extent was illegal and consequently , the trial of the petitioner before the Special Judge Customs and also the adjudication proceedings before the departmental authorities would jurisdiction and illegal. It went on to hold that: "This is correct that the order of confisca tion of the property in the adjudication proceedings is independent to the verdict given by the Special Court in the criminal case but the seizure of Pak currency itself being illegal and without jurisdiction, the subsequent proceedings either on the criminal side of before the departmental authorities would be without legal authority . The order of confiscation of Pak currency passed by the adjudicating authority being a void order , was of no consequence and must be ignored. The facts on the basis of which the order was passed, would not make out a case for exercise of jurisdiction under Customs Act, 1969 and if is allowed to hold field, it would defeat the dictates of justice and law ." On what constituted attempt to smuggle the august Supreme Court observed the following: "The attempt, abetment or connivance to commit offence of smuggling would include in the expression "smuggle" which being an offence, is punishable under the provisions of the Customs Act, 1969, but the attempt to smuggle has not been specifically defined in the said Act. The intention, preparation, attempt and completion of an act are the essential components of an offence but an attempt to commit an offence in the criminal administration of justice, is a distinct offence which is comp leted if in consequence to the preparation, an overt act is taken to commit the crime. The preparation to commit an offence is devising or arranging the means and measures which are necessary to commit the crime but the decision of this mixed question of law and fact always depends upon the circumstances of each case. In short the attempt to commit an offence is taking of steps to do something which if done in a criminal offence and if the act in consequence of such steps does not amount to a criminal offence, it is not an attempt...In a case in which is a person is found in possession of smuggled goods it is for such person to explain the legal possession of the goods but in a case in which the possession of goods is legal and it is not at all required to be explained, the seizure of such goods would be illegal and further neither the burden of proof can be shifted to the person in whose possession the goods were seized not a presumptio n of guilt can be raised in such a case and thus the act of the taking of the Pak currency by the petitioner to the sea shore even if is presumed that he intended to smuggle it out of Pakistan would not constitute an offence of smuggling under Customs Act, 1969." 19. The issue of attempt to smuggle came up before the learned Sindh High Court in "Ehsan Elahi Malik vs. State" [1980 PCr.LJ 186]. This was a case that included a false declaration by the accused. The learned Sindh High Court held: "It is in evidence that the appellant had purchased a ticket for going to Hong Kong, he checked-in at the Swiss Airline Counter , he was given the boarding card and the baggage tags and finally he was asked by the Customs Officer to make a declaration. In this declaration in writing, which is on record as Exh. 31, the appellant suppressed the information regarding the huge quantity of foreign currency in his possession and the precious stones carried by him. Having regard to all these facts it is clear that but for the interception by the Customs Officials the appellant had done everything in his power to take out of Pakistan the contraband articles. The Court is entitled to infer the existence of a fact regard being had to the common course of natural events and human conduct. There is nothing on record to indicate that the appellant could have retracted his steps from the commission of the offence. There is, therefore, no force in this submission that the evidence does not establish the case of attempt to smuggle." The learned Sindh High Court adopted the "but for" test i.e. but for the intervention of state authorities, the accused was near taking the penultimate step in commission of the offence and there was no possibility of him retracting his steps. 20. The meaning of attempt to smuggle was then considered by the august Supreme Court in Central Board of Revenue vs. Khan Mohammad [PLD 1986 SC 192]. This was the case of a citizen of Afghan istan who arrived in Pakistan, in transit to UK, through Torkham Land Customs Station. He travelled to Islamabad and the foreign
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currency in his possession was checked by Customs Officials at Islamabad. But he had left behind visa related documents in Peshawar and thus couldn't continue his onward journey from Islam abad. He returned to Peshawar and booked a flight from Peshawar to Karachi. Before embarkation on his flight in Peshawar , he was intercepted by Peshawar Customs Officials and foreign currency seized from him. The august Supreme Court held the following in paragraphs 8 and 9: "Attempt to smuggle has not been defined in the Act but clause (8) of section 156 makes the attempt to smuggle also punishable by virtue of the aforesaid definition of the word "smuggle" which is inclusive of an attempt to bring in or take out goods coming within the mischief of the main provisions. The classic analysis of the course of conduct of a culprit from the stage of conception to consummation of crime has laid down four distinct stages, namely , (i) intention, (ii) preparation, (iii) attempt, and (iv) completed act. As observed by Sir H. S. Gour in his commentary on the Penal Law of India, the first of the aforesaid four stages, the Criminal Codes of all countries exempt from punishment. The Penal Code of Pakistan punishes the second stage of certain offences, by constituting them separate and distinct offences. The third, namely , attempt, marks a distinct advance in the development of criminality , so that it is punishable everywhere. Ordinarily then, law allows locus poenitentia only up to the second stage after which it regards the development of the scheme as too far advanced to remain unpunished. But this has led, as the reports of cases indicate, to an important question as to when the preparation ends and an attempt begins..." "The case in which mere preparation to commit an offence has not been made punishable presents the problem to determine whether the act or omission committed by the culprit constitutes merely preparation or amounts to attempt. Often times in such cases the transition between what is preparation and an attempt is so gradual as to be imperceptible. The preparation to commit an offence consists in devising or arran ging the means and measures necessary for the commission of the offence. It implies the taking of previous measures necessary for the crime. But it is difficult to give an abstract definition of the term "attempt", in a juridical context, for it is largely a mixed question of law and fact depending upon the circumstances of each particular case. Lord Parker , C.J., in Devey v. Lee has pointed out that the term has been described variously in the authorities but he has preferred to adopt the definition given in Stephen' s Digest of the Criminal Law , 5th Edition (1894), which is as follows: "An attempt to commit a crime is an act done with the intent to commit that crime, and forming part of a series of acts which could constitute its actual commission if it were not interrupted." "Another definition referred to in…
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