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Petitioner: Collector Of Customs, Model Customs Collectorate, Peshawar VS Respondent: 1. Minhaj- Ud-Din S/O Hashim Khan, Peshawar.2. Collector Of Customs, Sales Tax & Federal Excise(Appeals), Peshawar
Court Name: Customs, Excise and Sales Tax Appellate Tribunal Judge(s): Muhammad Ibrahim Khan, Humayun Khan Sikandari Title:Collector Of Customs, Model Customs Collectorate, Peshawar vs 1. Minhaj-
Ud-Din S/O Hashim Khan, Peshawar.2. Collector Of Customs, Sales Tax & Federal Excise(Appeals), Peshawar Case No.: Appeal No. Cus.141/PB/2007 Date of Judgment:2009-03-25 Reported As: PTCL 2009 CL. 533 Result: Appeal accepted Judgment JUDGEMENT MR. HUMAYUN KHAN SIKANDARI, MEMBER (TECHNICAL).--(1). The Collector of Customs, Model Custom Collectorate, Peshawar (hereinafter called as the appellant) has filed this appeal under Section 194-A of the Customs Act, 1969 (hereinafter referred to as the Act) against Order-in-Appeal No. 24 of 2007, dated 17.01.2007, passed by the Collector of Customs, Sales Tax & Federal Excise (Appeals), Peshawar (hereinafter called as the respondent No. 2). 2. Precisely, the facts of the case are that on 15.08.2006, the Customs staff at Peshawar Airport intercepted a passenger going abroad on Flight PK-283 to Dubai. Search of his accompanied baggage comprising two suit cases revealed the presence of huge quantity of foreign currency (details as per Recovery Memo). The passenger, who was later on identified as Minhaj-ud-Din s/o Hashim Khan, was accordingly asked to produce any documentary proof showing its legal possession and lawful authority for exportation of the same which he failed to do so. Thereupon, the passenger alongwith his accompanied baggage was brought to the office of Superintendent of Customs, Peshawar . Airport, where further thorough search of his baggage was conducted in the presence of the said passenger and witnesses. This resulted in the recovery of foreign currency notes and coins from one of his suitcases, details as per record available, summary of which is given as under: (a) Saudi Riyal: 1,87,100/- (b) UAE Dirham: 3,64,800/- (c) Pounds Sterling: 8,015/-
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(d) Euro: 1,00,000/- (e) Qatar Riyal: 39,992/- (f) U.S. Dollars: 200/- (g) Dubai Dirham (Coins): 4,800/-. 3. Accordingly, the foreign currency so recovered alongwith the two suit-cases and other non- offending goods were seized under proper documentation. Mandatory notices under Sections 158/159 and 171 of the Customs Act, 1969 was also served upon the said passenger. He was arrested for the offence of smuggling of foreign currency and FIR No. 24, dated 15.08.2006 was lodged against him with the Investigation and Prosecution Branch, Customs House, Peshawar, under the relevant provisions of law. 4. During the course of interrogation in custody, the. Accused in his statement recorded under Section 165 of the Customs Act, 1969 admitted as under:- (a) That since long, he besides working as a habitual carrier of currency for others, has also been carrying on his own business of currency without any legal authority as well as smuggling of goods from Dubai to Pakistan. (b) That on the guarantee of one Adil s/o Haji Abdullah Khan no H. No. 48, Gulbahar No. 2, Peshawar, he was employed by (i) Aamir (ii) Rizwan and (i.e) Ihtisham. Currency business -men, shop situated at Japan Currency Market. Opposite Old Duty Free Shop. Lahore as carrier for smuggling of their currency from Pakistan to Dubai and that later on he was entrusted the task of collecting and custodian of their currency so smuggled to Dubai through different carriers from different countries. (c) That he with the consent of the above named employees had invested four million Iraqi Dinars out of their money in his own business of currency transport and smuggling of foreign origin goods from Dubai to Pakistan. (d) That he has been carrying out business alone without any partner but he has to share the profit of business with the above named persons who provided him the money for investment in his business. (e) That the seized consignment of currency is his property and that the same was being smuggled to Dubai for disposal over there in the open market at profitable price. 5. Accordingly, the case was decided by the Additional Collector of Customs, Peshawar vide his Order-in-Original No. 683 of 2006, dated 13.12.2006, relevant paras whereof are reproduced below in verbatim:- "9. On examination of the case record & listening to the legal counsel of the accused, it has been noted that the plea of the learned legal counsel to the effect that his client himself declared the seized currency before the staff of Anti Narcotics Force (ANF) in Departure Hall, does not carry any weight. The Customs Staff as well as ANF Staff posted at Peshawar Airport are conducing checking of out-going passengers in close proximity in the same area. The contention that the declaration was made to the ANF Staff is totally incorrect. The statement recorded before the Investigating Officer indicates that he is a habitual carrier/smuggler of foreign currency abroad and the recovery of above mentioned foreign currency from one of his suit cases gives rise to the reasonable belief that he wanted to smuggle the seized foreign currency out of the country. 10. The contention of the learned counsel that foreign currency is not an item of Clause(s) of Section 2 of the Customs Act, 1969 read with SRO. 566(I)/2005, dated 06.06.2005 carries no legal base as the word "currency" as mentioned in the aforesaid quoted section covers both local as well as foreign currency. 11. The contention of the learned counsel that the seized currency does not come within the ambit of the Customs Act is also not tenable as currency has been mentioned in the list of items notified under Section 2(s) and violation of the said Section attracts penal action under Sections 156(1), (8)
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and (89) ibid read with the relevant Sections of Foreign Exchange Regulation Act. 1947 and Imports & Exports (Control) Act. 1950. 12. Consequent upon what has been discussed above, I am led to the conclusion that the accused carrier i.e.. Minhaj-ud-Din has been regularly involved in currency business including illegal transportation of the same out of the country and must have been mindful of the consequences of the offence. His offence could not be viewed leniently as drainage of foreign exchange through such illegal way certainly brings negative impact on the economy of the country. It is. Therefore, ordered that all the seized foreign currency is confiscated out rightly in favour of the State under Section 156(1), (8) and (89) of the Customs Act. 1969 read with Foreign Exchange Regulation Act. 1947 and Imports & Exports (Control) Act. 1950 for violation of Sections 2(s) and 16 of the Customs Act. 1969. 13. As regard the other accused persons, the prosecution could not bring any substantial evidence showing their involvement in the offence and hence, does not warrant any action against them by this forum." 6. Being aggrieved by the above Order-in-Original No. 683 of 2006, the respondent Minhaj-ud-Din filed the first appeal before the Collector of Customs, Sales Tax & Federal Excise (Appeals), Peshawar who vide his Order-in-Appeal No. 24 of 2007, dated 17.01.2007, decided the case; relevant' paras whereof are reproduced in verbatim as herein under:- "10. I have examined the case record and considered the written as well as verbal submissions of both the parties. The request of the departmental representative to adjourn the case on the ground that the seizing officer is on training upto to 28.01.2006 and the case-file is in his custody is found incorrect because in the FIR, the name of Mr. Muhayy-ud-Din, Inspector has clearly been mentioned with other staff which was performing the routine duty and in all the seizure documents, the name of the said Inspector has been shown as a witness which were also found duly signed by him. Seizure case file is an official document and no one could suppose to keep it as his personal documents. Moreover, the departmental representative was found having the letter regarding date of hearing issued by this office, duly enclosed with a copy of appeal memo, sent to the department for submission of-parawise comments. It is worth-mentioning that with the appeal memo, all copies of relevant documents i.e., Bail Application of the Appellant, Bail Order, Inventory Memo, Recovery Memo, Notices under Sections 158/159 and 171, Murasala, FIR, Remand Application, Letter regarding verification & issuance of Certificate, Show Cause Notice and Order-in-Original, so what is left to departmental representative who requested for adjournment on the above mentioned ground and what is the need of seizure file in the presence of the above documents in hand? On perusal of the case record, I have observed as under:- (I) In the brief facts of the case, it has been reported that Ihs Customs staff at Peshawar Airport had intercepted a passenger going abroad on Flight PK-283 to Dubai. Search of hia accompanied baggage comprising two suit cases revealed the presence of Foreign Currency whereas FIR shows that no pointation and with the help of ANF staff revealed the presence of foreign currency. This fact was concealed and was not incorporated in the show cause notice or Order-in- Original meaning thereby that the contention of the appellant is correct that he first approached the ANF counter and inquired regarding the limit which he could take with him, but, without any justification, the appellant alongwith the currency was handed over to the Custom Staff, which also confirms that before making any declaration bv the appellant, the search was made by the Customs Staff. (II) It was further reported that the passenger, who was later on identified as Minhaj-ud-Din s/o Hashim Khan no Kenal Road, Garhi Sikandar Khan p/o G.P.O., Peshawar Cantt, was accordingly asked to produce any documentary proof showing its legal possession & lawful authority for exportation of the same which he failed. This also shows that the appellant was not given a chance to declare the currency and directly asked to produce documents regarding the possession of
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currency. Which is clear-cut violation of Section 139 of the Customs Act. 1969. Section 139 of the Customs Act clearly lavs down as under:- The owner of any baggage whether a passenger or a member of the crew shall, for the purpose 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 of his baggage and any article contained therein or carried with him and shall produce such baggage and any such article for examination: Provided that where the Customs Computerized System is operational, all declarations and communication shall be electronic.] There are many decisions of the Superior Courts on Sections 139, 142, 156(1 )(8) and Section 2(s) of the Customs Act, 1969, some citations are reproduced below:- [(a) 1980 P.Crl. J 663: "Goods of a passenger on a scheduled flight were taken possession of by the Customs Authorities immediately on their being unloaded and the passenger interrogated. Section 142 of the Customs Act makes provision for making true declaration under Section 139 to the appropriate officer and for detention of dutiable articles, at the request of the passenger, until he leaves the country. It is, therefore, clear that if such a declaration is made to the appropriate officer, the mere fact that certain goods are brought to the Airport which are subject to payment of duty will not constitute an offence punishable under Section 156(1), Clause (8) of the Customs Act. It was, therefore, suggested that an opportunity to make such a declaration is to be given to a passenger before he can be said to be clearly connected with the commission of the offence."] [(b) 1984 Crl. J. 1133: "In other words, the fact that passenger brought some banned items in his baggage upto customs point, would not constitute attempt to smuggle in the absence of evidence that he had given a false declaration or refused to make a declaration or had secreted goods in a manner as to avoid detection."] [(c) 1984 Crl. J. 1133 + NLR 1984 Crl. J. 576 (Lah): "The mere presence in the baggage of a passenger of an article, which is dutiable, or the import or export of which is prohibited or restricted, is not an offence as long as a true declaration has been made under Section 139. Therefore, where the Customs Authorities searched the baggage of a passenger and recovered silver from it. Which was a banned item, before he had an opportunity to make a declaration under Section 139. It was held that no offence of smuggling under Section 2(s) was committed. It was further held that the fact that a passenger has brought some banned items in his baggage unto the customs point, will not constitute the offence of attempt to smuggle in the absence of evidence that he had given a false declaration or refused to make a declaration or had secreted the goods in a manner so as to avoid detection."] From the above, it is proved that the seizing agency has failed to give an opportunity to the appellant to declare the currency in terms of Section 139 of the Customs Act, 1969 nor any documentary evidence or compliance of the said Section has been incorporated anywhere in the seizure documents, show cause notice and even in the Order-in-Original. The seizing agency has also failed to prove any concealment of currency/misdeclaration made by the appellant. (III) The report of the Investigating Officer indicates that the appellant is a habitual carrier/smuggler of foreign currency abroad and the recovery of aforementioned foreign currency from one of his suit cases gives rise to the reasonable belief that he wanted to smuggle the seized foreign currency out of the country and the adjudicating authority also concluded as under:-- [I am led to the conclusion that the accused carrier i.e., Minhaj-ud-Din has been regularly involved in currency business including illegal transportation of the same out of the country and must have been mindful of the consequences of the offence. His offence could not be viewed leniently as drainage of foreign exchange through such illegal way certainly brings negative impact on the economy of the country.]
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But on perusal, it is observed that the department has failed to produce any documentary evidence against the appellant showing his previous involvement in the act of smuggling in any case. (IV) The Investigating Officer has further reported that during the course of interrogation in custody, the accused in his statement submitted that he has been carrying out business alone without any partner but he has to share the profit of business with the above named persons i.e., Adil, Aamir, Rizwan and Ihtisham, who provided the money for investment in Ms business whereas an original affidavit of Gulab Gul s/o Malik Ayub Gul father-in-law of the appellant i.e., Minhaj-ud-Din produced by the counsel clearly shows that Gulab Gul had sold out Ms property situated on Ring Road, Peshawar against the payment of rupees two and a half million and the same was given to Ms son-in-law i.e., the appellant for business of motor cars. In the affidavit, it has further been stated that on the day of occurrence, the recovered amount is one which was given to the appellant and that he is ready to record Ms statement in any Court. The statement recorded by the Investigating Officer seems to be fabricated one which strengthen from the conclusion of the adjudicating authority, the relevant portion is reproduced below:- [As regard the other accused persons, the prosecution could not bring any substantial evidence showing their involvement in the offence and hence does not warrant any action against them at this forum.] In the instant case, petition is granted by the Special Judge (Central) Customs, Taxation and Anti Smuggling NWFP, Peshawar announced on 06.09.2006, the relevant portion is reproduced below:- [Before 1988, there was no ban on possessing of foreign currency but during 1998 it was banned. The ban has later on been relaxed but neither counsel for petitioner nor the counsel representing the Customs deptt., was able to produce the latest law on the point, inspite of giving a chance. This coupled with the contention of the learned counsel for the petitioner that the petitioner was vet to declare his possession needs further inquiry, as there is no allegation contained in the FIR regarding non declaration or misdeclaration of items possessed by the accused-petitioner. In these circumstances, this petition is granted.] (VI) Lastly, the Appellate Tribunal in Appeal No. 52 of 1995 in the case of M/s. Haji Faiz Muhammad vs. Member (Judicial), CBR and Collector of Customs & Central Excise and Sales Tax, Peshawar, held as under:- [10. We have heard the arguments and perused the record. We have given out anxious consideration towards the submission of the learned counsel. It is evident from the record that during the days when the appellant was apprehended at the Peshawar Airport alongwith foreign currency, there were restrictions to take out of Pakistan the foreign currency so it was rightly confiscated bythe learned Collector. But when the learned Collector ordered to release the foreign currency in convertible Pakistan currency after the confiscation of the same and there was no duty or charges payable under the law on the seized currency so the redemption fine imposed by the learned Collector seems to be unreasonable. The up-shot of the above analysis is that we accept this appeal only to the extent of setting aside the imposition of fine which was imposed illegally. The appeal is accepted with this modification.] 11. Keeping the above discussions, facts, over all circumstances of the case and judgements of the Superior Courts in view, I have come to the conclusion that actually the appellant was not given a chance to declare his baggage in terms of Section 139 of the Customs Act 1969 and the seizing agency also failed to prove that they have obtained any declaration from the appellant but the appellant refused to do so and that the appellant has made any misdeclaration or the same was found secreted to avoid detection. Therefore, the seizure and confiscation of currency is in utter disregard of law, justice and equality and the appellant has been deprived of his own values for the offence, which the appellant has not committed. However, keeping in view the safeguard of foreign exchange of the country and that there is no duty or charges payable under the law on the seized
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currency as held by the Honourable Appellate Tribunal. I order that the foreign currency be converted into Pakistan currency and after conversion, the equal amount in Pakistan currency should be returned to the appellant if not required in any other case/court of law." 7. Being aggrieved by the above Order-In-Appeal No. 24 of 2007, the Deputy Collector of Customs(Hqrs), Model Customs Collectorate, Peshawar filed the instant appeal on behalf of the Collector of Customs, Peshawar to this Tribunal, inter alia, on the following grounds:- (a) that the order passed by the Collector(Appeals), Peshawar is against the law and facts of the case hence, liable to be set aside: (b) that the Collector(Appeals), Peshawar has shown extra ordinary leniency in favour of respondent, which is unjustified and against the law: (c) that the learned Collector(Appeals) has not appreciated the circumstances of the case properly and his judgement being non-judicious is liable to be set aside; (d) that the provisions of law have wrongly been interpreted while deciding the case against the appellant. Currency mentioned in the SRO. 566(D/2005. Dated 06.06.2005 covers all sorts of currency and the interpretation adopted by the respondent and accepted by Collector(Appeals) is against the law: (e) that the person was searched/intercepted in the international departure hall when he was about to leave the country. As such, the attempt by the respondent to take the seized currency out of the country without legal authority comes within the ambit of Section 2(s) of the Customs Act, 1969; (f) that as per investigation, the respondent has been found dealing in the currency business and well aware of the legal/illegal aspects of the currency business; (g) that the Collector(Appeals), Peshawar has not taken into consideration the guidelines given in SRO. 574(11/2005. Dated 06.06.2005 wherein it is clearly stated that the goods attracting provisions of Section 2(s) shall be confiscated and not to be released even on redemption fine: (h) that the contention that the seized currency does not come within the ambit of the Customs Act. 1969 is also not tenable as currency has been mentioned in the list of items notified under Section 2(s) of the Customs Act. 1969 ibid and violation of the said Section attracts penal action under Section 156(11(81 and (89) of the Act ibid read with relevant Sections of the Foreign Exchange Regulation Act, 1947 and Imports & Exports (Control) Act, 1950; and (i) that the appellant may kindly be allowed to agitate any other grounds at the time of hearing. 8. During the course of hearing on 19.11.2008, Mr. Yousaf Haider Aurakzai, Deputy Collector of Customs, Peshawar (Departmental Representative) of the appellant filed additional grounds of appeal on behalf of the Collector of Customs, Peshawar, which are recapitulated below; (a) that the learned Collector(Appeals) has erred in taking an impression that the passenger went to the ANF Counter to inquire about the limit of taking out foreign currency. The fact is that instead of presenting his suit-case for checking by Customs, he dashed to ANF Counter to safely smuggle the foreign currency. He made no declaration but only presented his suit-case for examination and currency was detected during search of the suit-case. Both Customs and ANF Staff are stationed at close location facing one another, lt has clearly been mentioned in the show cause notice that the passenger was asked to produce proof and declaration of currency, which he failed to do so: (b) that the passenger was given an opportunity to declare his baggage. The passenger was required to enquire about the limit of foreign currency to be carried out in his personal baggage before his departure but he failed to do so. During investigation, it was confirmed that the passenger was dealing in "foreign currency" business and was thus, supposed to be aware of the limit of taking foreign currency out of the country. The judgement cited i.e.. 1984 P.Crl. J 663. Has no relevance with the present case because the passenger had an opportunity to declare his baggage but he failed to do so and as such committed an offence which is punishable under
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Section 156(1), Clause (8) of the Customs Act, 1969. Again judgements cited i.e., 1984 CrlJ 1133, 1984 Crl. J. 1133 and NLR 1984 Crl. J 576 (Lah.) are not relevant to this case because the passenger was given ample opportunity but he refused to declare his baggage under Section 139 of the Customs Act,1969: (c) that the observation made by the Investigation Officer to the effect that had the accused passenger succeeded in smuggling of foreign currency, he would have caused great damage to the economy of the country is quite relevant; (d) that according to the statement of the accused passenger to the effect that he was carrying foreign currency illegally to Dubai, made it quite clear that the transaction of foreign currency was made without observing the proper procedure and law applicable thereto; (e) that both the adjudicating fora are independent and decide the cases on merit independently; (f) that the cited judgements are irrelevant because the accused passenger made an attempt to smuggle foreign currency from the country which otherwise was not allowed under SRO. 666(IV2006. Dated 28.06.2006: (g) that SRO. 574(I)/2005 has been mentioned for the purpose that goods falling under Section 2(s) are liable for confiscation and cannot be released on payment of duties/taxes and redemption fine under Section 181 of the Customs Act, 1969. As the passenger attempted to smuggle notified goods which comes in the ambit of Section 2(s) of the Customs Act, 1969 and hence warranted action under SRO. 574(I)/2005, dated 06.06.2005. The procedure in terms of Section 139 of the Customs Act, 1969 is reproduced as under:-- "Declaration by Passenger or Crew Baggage:-The owner of any baggage whether a passenger or a member of the crew shall, for the purpose 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 article for examination."; (h) that the passenger had…
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