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Petitioner: AFTAB HUSSAIN VS Respondent: COLLECTOR OF CENTRAL EXCISE AND LAND CUSTOMS, JUDGMENT
Court Name: Balochistan High Court Judge(s): Ajmal Mian, Munawar Ahmed Mirza Title:AFTAB HUSSAIN vs COLLECTOR OF CENTRAL EXCISE AND LAND CUSTOMS,
JUDGMENT
Reported As: 1987 P Cr. L J 1413 Result: Petition dismissed Judgment JUDGMENT AJMAL MIAN, ACTG.C.J.-- This petition is directed against the orders, dated 27th March, 1975, 18th April, 1977 and 15th July, 1984 passed by respondents Nos. 1, 2 and 3 respectively. The brief facts leading to the fling of the above petition are that two trucks/trailers entered into Pakistani border from Nokundi side with the goods loaded in West Germany. The Superintendent, Land Customs, Nokundi Station sent two bills of lading/manifest of the two trucks filed at the border to the Land Customs Office, Quetta. The details of the Truck Nos. And the bills of lading/manifest are as follows:- "(1) Truck/Trailer No. 34-PV-204/34-LP-404 (a) Bill of Lading/Manifest No. 161.M.0970, dated 26-7-1974. (b) Number of packages = 361. (2) Truck/Trailer No. 34-PV-205/34-LP-405. (a) Bill of Lading/Manifest No. 166.M.5024, dated 26-7-1974. (b) Number of packages = 485. Total number of packages = 846." On 28th August, 1974, the petitioner filed three bills of entries through their Clearing Agent, which was also signed by the petitioner, i.e. (i) bill of entry bearing No. 105 covering 168 cases, (ii) bill of entry bearing No. 106 covering 269 cases; as per declaration of the petitioner both above consignments i.e.; 437 cases contained pharmaceutical glass ampoules and (iii) bill of entry bearing No. 107 covering 11 cases, as per declaration contained chemicals. The total value of the contents of the above cases covered by the above three bill of entries was declared as
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Rs.6,17,530.40. The above first two bill of entries were assessed by the Customs Office at Quetta on 29th August, 1974 at the rate of 10% sales tax, but the aforesaid third bill of entry was not assessed, as the petitioner claimed exemption from payment of sales tax. In pursuance of the above assessm ent, the petitioner deposited Rs.25,291 and Rs.27,310 as sales tax amounts against the above bill of entries bearing Nos. 105 and 106 covering 168 and 269 cases respectively on 29th August, 1974 and got clearance. While the above trailers were proceeding towards Lahore, they were intercepted by the Customs staff at Sariab Road, Quetta on 29th August, 1974 and were brought back to the Customs Office at the Railway Station, Quetta. They were un-loaded and it was found that instead of 448 cases as declared, the trailers contained 843 cases. Upon opening of the cases, it was found that the contents of the cases comprised of cosmetics, perfumes, soaps, toilet preparations, empty lipstick containers, air-conditioners and automobile parts etc. Their value was assessed at Rs.1,53,41,018. The petitioner was arrested and proceeded with before the Customs Tribunal for the Criminal Offence, which culminated in acquittal order. He and the other two persons, named Abdul Rashid and Shahid Hussain, in addition to the firm, were issued with a show- cause notice, dated 25-10-1974 by the Collector Central Excise and Land Customs, Hyderabad. They submitted a reply, dated nil denying the allegations contained in the above show-cause notice and stating therein, that they were issued five import licences i.e.; three for chemicals (for a sum of Rs. 1 lac, Rs. 1 lac and Rs.57,000; one for hardware covering metallic containers for Rs.1 lac, and one for pharmaceutical glass ampoules for Rs.10 lacs. It was also stated by them that they had opened L.Cs. With the three German firms for the items mentioned, the details of which were given as follows:-
S. No.Name of the Suppliers. Goods imported from the Suppliers. 1. Messrs Margaret Astor A.G. West Germany.1. Glass Ampoules. 2. Chemicals. 3. Metallic containers. 2.Messrs Degussa, West Germany.1. Chemicals. 3. Messrs Hankel International GmbH, West Germany.1. Chemicals.
It was also stated that upon enquiry from their supplier, they had come to know that cosmetics and certain other goods were loaded in the said trailers by their supplier by reason of inadvertance and misdirection by the labourers and their Export Manager. Respondent No. 1 i.e., the Collector, Central Excise and Land Customs, Hyderabad after getting the value of the items re-assessed by the Principal Appraiser, Customs House, Karachi at the petitioner's request and after hearing him, by his above impugned order, dated 27th March, 1975 ordered outright confiscation of the seized goods under section 156(9) and section 156(14) of the Customs Act, 1969 (hereinafter referred to as the 'Act') and also imposed a penalty of Rs.50 lacs under each of the above two provisions of the Act. The petitioner being aggrieved by the above order filed an appeal before the Central Board of Revenue, Islamabad which by its order, dated 18th April, 1977 dismissed the same. After that, the petitioner went in revision before the Federal Government, Ministry of Finance, but the same was also dismissed by the aforesaid impugned order, dated 15th July, 1984. The petitioner being aggrieved by the above orders has filed the present petition. 2. In support of the above petition Mr. Zaheer Ahmed, learned counsel for the petitioner has urged as follows:-
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(i) That since no notice under section 171 of the Act was served upon the petitioner at the time of seizure of the goods, the entire proceedings and the orders passed, stand vitiated; (ii) That since the Customs Officer concerned had assessed the above bills of entries, the Collector of Customs or any other Officer was not competent to re-open the case except that the Central Board of Revenue at the relevant time was competent to re-open the case under section 195 of the Act; (iii) That Mr. S.T.R. Zaidi, Collector, Central Excise and Land Customs, Hyderabad, was not validly appointed as the Collector of Customs and, therefore, the proceedings taken by him and the order passed in pursuance thereof, are void; (iv) That section 181 of the Act is ultra vires as it confers un-fettered discretion without providing any guideline to the Officer to give option to pay in lieu of confiscation of the seized goods or to confiscate outright. (v) That the goods which were covered by the import licences and the bill of entry could not have been forfeited with the goods, which were not covered; (vi) That the valuation of the goods has not been determined as provided under section 25 of the Act; (vii) That in order to invoke section 33 read with section 156(14) of the Act, it was incumbent upon the Customs authorities to have proved that the petitioner had deliberately made the false statement, which they failed to discharge and, therefore, the invoking of the above provisions, was not warranted by law; (viii) That the Appellate Order was no order in the eye of law, as it did not contain any reason for dismissal of the appeal; (ix) That since the Customs authorities found that lipstick containers were partly made of metal and partly of plastic, they were covered by the import licence pertaining to hardware, as per Rule 3(c) of the interpretation contained in the Customs Tariff Manual, 7th Edition by Najib A. Choudhry, Advocate, and (x) That the imposition of the penalty in the sum of Rs.50 lacs under section 156(9) of the Act was not justified, as the goods were not imported by the petitioner without the import licences, but were sent by the supplier by mistake. On the other hand, Mr. Raja M. Afsar, learned counsel appearing for the official respondents has contended as under:- (i) That the scope of Constitutional jurisdiction of this Court is limited to jurisdictional defects and this Court cannot interfere in exercise of the above jurisdiction merely because of the fact that the competent forum has taken an erroneous view in the matter; (ii) That the instant case involves complicated disputed questions of facts and, therefore, it is not a fit case, in which, this Court should press into service its constitutional jurisdiction; (iii) That admittedly, the petitioner was smuggling the items without any import licence valuing lacs of rupees and this Court would not exercise its discretionary relief in favour of the petitioner, whose conduct was questionable; (iv) That the petitioner cannot be allowed to agitate the question that no notice under section 171 of the Act was served, as the same was not raised either before the Collector or before the Central Board of Revenue in appeal, nor in the memo. Of revision before the Federal Government, but first time was raised through the supplementary submission made by the petitioner's counsel through his letter, dated 17th July, 1983 (Annexure P.10 to the petition); (v) That there is a distinction between an irregularity committed at the investigation stage and at the stage of trial and any irregularity at the former stage, would not vitiate the subsequent proceedings; and
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(vi) That the confiscation of the seized goods and imposition of penalty of Rs.50 lacs on each count under section 156(9) and 156(14) of the Act, were justified and were in accordance with the law. 3. Adverting to the first submission of Mr. Zaheer Ahmed, learned counsel for the petitioner that since no notice under section 171 of the Act was served upon the petitioner at the time of seizure of the goods, the entire proceedings and the orders passed, stand vitiated, it may be observed that he has referred to section 171 of the Act, which provides that "when anything is seized, or any person is arrested under this Act, the officer or other person making such seizure or arrest shall, as soon as may be, inform in writing the person so arrested or the person from whose possession the things are seized of the grounds of such seizure or arrest". He has also referred to the following cases:- (i) S.M. Yousuf and others v. Collector of Customs and others, reported in PLD 1968 Kar. 599, in which, a Full Bench comprising of three learned Judges of the erstwhile High Court of West Pakistan while construing section 172-A(i)(ii) and (iii) of the Sea Customs Act, 1878 and Article 2 of the late Constitution of Pakistan, 1962, held that the requirement of the above section 172-A of the Sea Customs Act, 1878 provided safeguard and failure to prepare statement in writing of his belief that the premises to be searched had smuggled goods, amounts to breach of statutory provision and violation of Article 2 of the Constitution. (ii) Abdul Rauf and another v. The State and another, reported in 1983 P Cr. L J 19. In the above case, the then Acting Chief Justice of this Court allowed a Constitutional Petition against the conviction under the Act on the ground that the mandatory notice under section 171 of the Act was not served before initiating criminal prosecution under the Act. (iii) Hizbullah v. The State and another, reported in PLD 1984 Quetta 1, in which, another the then Acting Chief Justice of this Court while acting as the Special Appellate Court (Customs) took the view that non---compliance of section 171 of the Act would not vitiate the trial. It was urged by Mr. Zaheer Ahmed, learned counsel for the petitioner that the latter case does not lay down the correct law apart from the fact that the earlier judgment of this Court mentioned hereinabove at S. No. (ii), was a judgment of the High Court, which was binding on the learned Special Appellate Court (Customs) and, therefore, the latter judgment is void in fact. It may be observed that it is not ascertainable as to how the learned Acting Chief Justice could have disposed off a writ petition while sitting S.B. Be that as it may, the view taken in the above subsequent case of this Court reported in PLD, 1984 Quetta 1, seems to have been impliedly approved by the Honourable Supreme Court of Pakistan while dismissing a petition for leave i.e.; Criminal Petition No. Q-2 of 1984 in the case of Momeen Khan v. The State decided on 8th May, 1984 against the judgment of the learned Special Appellate Court (Customs), dated 14th April, 1984, in which inter alia it was also held that non-service of notice under section 171 of the Act does not vitiate the criminal trial resulting into conviction. 4. In our view, it is not necessary for us to examine the question, whether one view is correct or the other. It will suffice to observe that in the present case, the departmental proceedings under the Act were taken against the petitioner in October 1974. He did not raise any objection either before the Collector or before the Appellate authority i.e.; the Central Board of Revenue, or even in his memo. Of his revision to the effect that he was not served with any notice under section 171 of the Act. As pointed out hereinabove, first time the petitioner had come out with the above contention in July 1983 through his Advocate's letter, dated 17th July, 1983 (Annexure P.10 to the petition). The question, whether a notice', was served or not, is a question of fact, which should have been raised at the earliest opportunity. The view taken by the revisional authority in the instant case that the petitioner could not be allowed to agitate the above question after about 10 years, seems to be in consonance with law. Even otherwise, the mere fact that this Court might have taken a different view, would not justify the interference by this Court. It was further submitted by the learned counsel for the petitioner that it was for the Customs authorities to have alleged the factum of
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service of the above notice under section 171 of the Act and to have proved the same even in the absence of any objection from the side of the petitioner. In our view, there is a marked distinction between a criminal prosecution under the Act or under any other Penal Law and a departmental proceeding under the Act. One may urge that in a criminal prosecution the entire burden squarely lies on the prosecution, but in a departmental proceeding, the burden on the department to prove, may not be so heavy, as the latter proceedings are for condemnation of the goods smuggled and not to punish corporally the person involved. In our view, the petitioner should have raised this point before the Collector in response to the show-cause notice and in the absence of any such objection, he could not have been allowed to agitate the above question after expiry of nearly 9 years before the revisional authority. 5. Reverting to Mr. Zaheer Ahmed, learned counsel for the petitioners' second submission that since the Customs Officer concerned had assessed the above bills of entries, the Collector of Customs or any other Officer was not competent to re-open the case except that the Central Board of Revenue at the relevant time was competent to re-open the case under section 195 of the Act, it may be observed that he has invited our attention to section 195 of the Act, as stood prior to the Finance Act, 1975, which provided that `the Board may of its own motion call for and examine the records of any proceedings under this Act for the purpose of satisfying itself, as to the legality or propriety of any decision or order passed therein by an officer subordinate to it and may pass such order as it may thinks fit ....' It may be observed that by the Finance Act. 1975, the words `or the Collector of Customs' were added to, but since the instant case is of 1974, the above amendment is not relevant as rightly pointed out by Mr. Zaheer Ahmed, learned counsel for the petitioner. In this regard, it may be stated that this point was also first time raised by the petitioner through his Advocate's above letter, dated 17th July, 1983 and not either before the Collector or before the Appellate authority i.e.; the Central Board of Revenue. Be that as it may, we are inclined to hold that the above section 195 of the Act has no application to the instant case, as rightly held by the Federal Government in the revisional order. It is not a question of re-opening of a disposed off or adjudicated case. Admittedly, the petitioner had filed declarations through the above three bills of entries to the effect that 437 cases contained pharmaceutical glass ampoules and 11 cases contained chemicals. Contrary to the above declarations, upon re-examination, 843 cases were found, which contained different items that what was declared. It was not a case of re--opening of an adjudicated or assessed case, but it was a case of detection of an attempt to smuggle goods. Mr. Zaheer Ahmed, learned counsel for the petitioner has referred to the cases of secretary of State v. Mask & Company, reported in AIR 1940 P C 105 and William Lawrence v. Government of Pakistan and others, reported in 1986 SCMR 1077. In the former case, the Privy Council while construing section 188 of the Sea Customs Act, 1878 held that the words `decisions or orders' used in the above section are wider words and of a more general nature than adjudications referred to in section 182 and are not confined to adjudications under section 182, but include decision by an Officer of Customs as to the rate of duty applicable to particular goods, which necessarily involve the determination of the particular category in the tariff classification into which the goods fall. Whereas, in the latter case, a petition for leave was declined against the judgment of the Sind High Court, whereby the writ petition was dismissed on the ground that the alternate remedy provided under the Act was not availed of by the party in respect of proceedings initiated by, the Collector under section 195 of the Act. 6. In our view, the above cases have no application to the instant case for the reasons already recorded hereinabove. 7. As regards Mr. Zaheer Ahmed's contention that Mr. S.T.R.. Zaidi, Collector, Central Excise and Land Customs, Hyderabad was not validly appointed as the Collector of Customs and, therefore, the proceedings taken by him and the order passed in pursuance thereof, are void., it may be
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observed that he has referred to section 2(e)(f) and (g) and section 3 of the Land Customs Act, 1924 in furtherance of his above submission. It may also be observed that section 3 of the Land Customs Act, 1924 provides that the Chief Customs Authority may, by notification in the official gazette, appoint, for any area adjoining a foreign frontier and specified in the notification, a person to be the Collector of Land Customs and such other person as it thinks fit to be Land Customs Officers. Whereas, section 2(e) gives the definition of the expression `foreign frontier' by providing 'it means the frontier separating any foreign territory from any part of Pakistan'. It may also further be observed that sub-clause (f) of section 2 defines the expression `foreign territory' as means `any territory which has been declared under section 5 of the Indian Tariff Act, 1894 to be foreign territory for the purposes of that Act', whereas, clause (g) of section 2 provides the definition of the expression `land customs area' as means `any area adjoining a foreign frontier for which a Collector of Land Customs has been appointed under section 3'. It was, therefore, contended by the learned counsel for the petitioner that the Notification, dated 13th April, 1967 issued under section 3 of the land Customs Act, 1924 (Annexure `P.13' to the petition) appointing, inter alia, the Collector of Central Excise, Hyderabad for the areas, namely, Commissioner's Divisions of 'Hyderabad, Khairpur, Quetta and Kalat, Bahawalpur and the Districts of Muzaffargarh, Dera Ghazi Khan and Multan of Multan Division, is not in consonance with the above provisions of the Land Customs Act, 1924. It was also urged by him that there is a marked distinction between a revenue Division and the land customs area. He has also submitted a few subsequent notifications, which were according to him, in accordance with the above provisions of the above Act. It may again be pointed out that this objection was also first time raised by the petitioner through his Advocate's letter, dated 17th July, 1983 i.e.; after expiry of nearly 9 years. Be that as it may, in our view, there is no requirement under the Land Customs Act to couch a notification of appointment in particular words or manner. Section 3 empowers the Chief Custom Authority to appoint, inter alia, the Collector of Land Customs for any area adjoining a foreign frontier and specified in the notification. The factum that some of the District like Dera Ghazi Khan might have no foreign frontier, as was urged by the learned counsel for the petitioner, would not nullify the appointment of the Collector of Central Excise under the land Customs Act, 1924, as admittedly, the appointment has been made by the competent authority and most of the areas mentioned in the notification have foreign territory adjacent to them. 8. As regards Mr. Zaheer Ahmed's contention that section 181 of the Act is ultra vires as it confers unfettered discretion without providing any guideline to the officer to give option to pay in lieu of confiscation of the seized goods or to confiscate outright, it may be observed that in furtherance of his above contention, he has referred to section 183 of the Sea Customs Act, which provides that whenever confiscation is authorised by this Act, the officer adjudging it shall give the owner of the goods an option to pay in lieu of confiscation such fine as the officer thinks fit. He has also referred to above section 181 of the Act, which gives discretion to the officer concerned to give the owner of the goods an option to pay in lieu of confiscation of the goods such fine as the officer thinks fit. It has been, therefore, contended that whereas in the former section, there was no discretion given to the officer, but he was obliged to give option to the owner of the goods to pay fine in lieu of the confiscation, whereas in the latter Act, the officer is not under any such obligation. But has been given unfetterd discretion without providing any guideline on the question, as to when to give option and when not to give option in lieu of confiscation. Before dilating upon the merits of the above submission, it may be pointed out that this ground has not been urged in the petition, but during the submission of the arguments, Mr. Zaheer Ahmed, learned counsel for the petitioner has raised the same. Be that as it may, in our view, the above submission is not tenable. Whenever a discretion is given to an officer to do or not to do an act, guideline is not provided in every case. However, the officer is expected not to act arbitrarily or capriciously, but to exercise discretion
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vested in him in a fair and just manner. Learned counsel for the petitioner is unable to point out that exercise of discretion in the instant case, can be termed as arbitrary or capricious. Mr. Zaheer Ahmed has not cited any case-law in support of his above submission. 9. Adverting to Mr. Zaheer Ahmed, learned counsel for the petitioner's submission that the goods which were covered by the import licences and the bill of entry could not have been forfeited with the goods, which were not covered, it may be observed that he has referred to subsection (i) of section 157 of the Act, which provides that `confiscation of any goods under this Act includes any package in which they are found, and all other contents thereof. It has, therefore, been contended that the goods which were not covered by the import licences could have been confiscated and not the goods which were covered by the import licences. It was further submitted by him that if a container in the form of a wooden case contains mixed items, some of which are covered and some of which are not covered by the import licences, the entire contents of the case can be confiscated, but if the items of goods which are covered by the import licences are packed separately in the cases from the items of the goods which are not covered, the former cannot be confiscated. It will suffice to observe that the three competent forums have recorded finding of fact that none of the items was covered by declaration, which the petitioner had filed in the form of 3 bills of entries referred to hereinabove. A cursory perusal of the inventories jointly prepared in the presence of the petitioner indicates that the value of the items which are not covered at all by any import licence i.e.; cosmetics, perfumes, soaps, toilet preparations air-conditioners and automobile parts etc.; valued at about Rs. 5 lacs and, whereas, the other items valued at about Rs.2-1/2 lacs, as pointed out by the Deputy Collector in his letter, dated 19th February, 1977 at page 37 of the department file referred to by the learned counsel for the petitioner for contending that the petitioner was not associated. Even the above items valuing about Rs. 2-1/2 lacs were found not to be in conformity with…
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