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Petitioner: ZEB TRADERS through Proprietor VS Respondent: FEDERATION OF PAKISTAN through JUDGMENT
Court Name: Sindh High Court Judge(s): Muhammad Mujeebullah Siddiqui, S. A. Sarwana Title:ZEB TRADERS through Proprietor vs FEDERATION OF PAKISTAN through
JUDGMENT
Reported As: 2004 PTD 369 Result: Order accordingly Judgment JUDGMENT MUHAMMAD MUJEEBULLAH SIDDIQUI, J.---The petitioner engaged in the import business is aggrieved with the order of the respondents, whereby the goods imported by the petitioner are not being allowed to be released. The relevant facts as gleaned from the material placed by the parties on record are that the petitioner imported consignment containing dry battery cells, small antina for mobile phones and ear-phone from China against IGM No,791 of 2003, dated 21-5-2003. The Bill of Entry was submitted on 22-5-2003. The release of goods was blocked on 26-5-2003 by Deputy Director Intelligence Customs on the basis of some information received by the said officer. According to petitioner the appraisement of the goods was finalized and assessment was made on 27-5-2003 levying custom-duty and taxes at Rs,3,58,050. The amount of duty and taxes assessed was deposited in the National Bank of Pakistan on 28-5-2003. However, the consignment was not released for the reason that it was blocked. On the insistence of petitioner for the release of goods he was served with the notice under section 26 of the Customs Act 1969, dated 11-6-2003 on 16-6-2003. The petitioner was called upon to furnish information/documents as follows:-- (i) Copy of pro forma invoice. (ii) Mode of payment as is governed by the rules and procedure prescribed by the State Bank of Pakistan. (iii) Proof of payment/transaction of foreign exchange. The information sought for was furnished however, the goods were not released with the result that the petitioner filed this petition on 23-6-2003 seeking declaration that the blocking of goods was
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illegal and a direction for the release of goods. Notices were issued to the respondents who sought time. On 24-7-2003 it was stated on behalf of the respondents that there was apprehension that the goods imported were not original and the investigation was in progress. On the said date a Division Bench of this Court directed the respondents to complete the investigation within two weeks and if anything wrong was found notice be given to the petitioner. The petitioner apprehended that the contents of the container may be changed and therefore, it was directed that the container be opened and sealed in presence of the petitioner. The respondents did not comply with the direction and submitted that there was some confusion and further time was allowed for complying with the direction of the Court, dated 24-7-2003. The Seizure Report, dated 6-8-2003, was submitted on 7-8-2003. The Seizure Report, dated 6-8-2003 was not in accordance with the directions given by the Court on 24-7-2003, therefore, further directions were, given for making compliance of the directions given by the Court. Finally compliance report was submitted on 26-8-2003. The respondents filed their comments stating that the release of imported goods were blocked on the basis of information received by them to the effect that counterfeit mobile phones accessories and watches were being imported. The respondents submitted that the container was examined by a team of Custom Officials and it was found that the container was containing the goods other than the goods declared in the Bill of Entry. They further contended that samples were taken and market survey was conducted. For ascertaining the correct facts notice under section 26 of the Customs Act was served. They further stated that the local dealers were requested to give opinion about the genuineness of the imported goods but the local dealers did not cooperate with the Customs Officials. .The contact was thereafter established with the manufacturer at Japan through Director-General of Intelligence and Investigation (Customs and Excise), Islamabad. The respondents alleged that they were competent in terms of sections 168 and 198 of the Customs. Act, 1969 to detain/seize goods. They stated that the petitioner could not take the delivery of goods as the container was blocked/stopped on the basis of information received by the Directorate of Investigation. They further took plea that the petition was premature. The respondents have produced copy of Seizure Report, dated 6-8-2003 containing the same facts as narrated in the comments filed before this Court. They have further produced copy of letter, dated 6-8-2003 addressed to Collector of Customs, Central Excise and Sales-tax (Adjudication-I) Custom House, Karachi whereby seizure report and a draft show-cause-notice was forwarded requesting initiation of adjudication proceedings against the petitioners. The notice under section 168(1) of the Customs Act, 1969, dated 6-8-2003 issued by Ashfaq Ali Khan, Seizing Officer/Investigating Officer, has also been produced. Through this notice Messrs Megatrans Private Limited, the shipping agent was informed that the staff of Director-General Intelligence and Investigation (Customs and Excise), Karachi has seized foreign origin goods i,e, electronic parts of different countries imported from China through I.G.M. No, 791, dated 21-5 -2003. It further contains that the goods have been imported in violation of the provisions contained in sections 15,16,18,25,32(1)(2) and 79 of the Customs Act, 1969. It further contains that the shifting of seized goods to the Intelligence State Warehouse is not practicable therefore, the above seized goods were given in the Superdari of shipping agent in terms of section 168(1). The shipping agent was directed not to remove, part with, alter, shift, mortgage or deal with the seized property under any circumstances without prior permission of the Directorate of Intelligence and Investigation (Customs and Excise). The respondents have further produced a notice under section 171 of the Customs Act, 1969, dated 6-8-2003 issued and signed by the same officer Ashfaq Ali Khan, describing himself as Seizing Officer. Through this notice the Investigating Officer has informed the reasons for the seizure of goods to the effect that they were imported in violation of various sections of the Customs Act,
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enumerated in the notice under section 168. It was further stated that the goods were misdeclared and grossly under-invoiced. It was informed that as per inventory-sheet the goods were seized. Copy of Mashirnama, dated 6-8-2003 has also been produced. It has been further contended that the Collector of Customs and Central Excise and Sales Tax (Adjudication-1) extended the time limit under section 168(2) of the Customs Act, 1969 vide order, dated 23-7-2003 up to 26-8-2003 and a show-cause notice under section 180 has been issued on 19-8-2003 within the extended period as provided in proviso to section 168(2) of the Customs Act, 1969. We have heard, Syed Ali Bin Adam Jafri learned counsel for the petitioner and Syed Tariq Ali, Federal Counsel assisted by Mr. Ashfaq Ali Khan, Investigating Officer, for respondent No,1, Mr. Mohsin Inam, learned counsel for respondent No,4. Mr. Ali Bin Adam Jafri, learned counsel for the petitioner has vehemently argued that the respondents Nos.2 and 3 in collaboration with Mr. Ashfaq Ali Khan, Investigating Officer, have illegally acted in blocking the goods imported by the petitioner with mala fide intention. He has submitted that the Bill of Entry was filed on 22-5-2003 and the consignment was duly appraised and assessed to custom-duty and taxes on 27-5-2003. The release of consignment was blocked on 26-5-2003 by the respondent No,2, Saifuddin Junejo , Deputy Director, Intelligence, Karachi, without assigning any reason as is evident from the document produced by the petitioner and admitted by the respondents. He has further contended that the goods were seized by blocking the release thereof on 26-5-2003, however, no reasons whatsoever, were informed to the petitioner as required under section 171 till 6-8-2003. He has further submitted that the mala fide on the part of. Custom officials is evident from the fact that the goods were seized by blockage on 26-5-2003 under the purported orders of respondent No, 2, Mr. Saifuddin Junejo, Deputy Director, Intelligence, Karsaz but the order under section 168, dated 6-8-2003 is signed by the Intelligence Officer posing himself as Seizing Officer. He has further pointed out that the notice under section 171, dated 6-8- 2003 has also been issued by Mr. Ashfaq Ali Khan, Intelligence Officer, describing himself as Seizing Officer, although in their comments the respondents have stated that a request was received from Regional Intelligence Laison Office (RILO) for Asia and Pacific Region C/o Tokyo Custom vide fax message, dated 7-5-2003 to monitor two containers destined for Karachi and other tax message was received on 12-5-2003, therefore, vide letter, dated 26-5-2003 annexure 'Cwith the comments filed: by the respondents, the container containing the goods imported by the petitioner was blocked. The letter, dated 26-5-2003 is signed by the respondent No,2 Mr. Saifuddin Junejo. Thereafter no other order was passed by any Custom official pertaining to the seizure of goods and on the insistence of petitioner for the release of goods after the appraisement and assessment on 27-5-2003 a notice under section 26, dated 11-6-2003 was issued by the respondent No,3. Mr. Ali Bin Adam Jafri, has vehemently argued that according to the comments filed by the respondents the goods were seized by blockage under the directive of respondent No,2, Mr. Saifuddin Junejo and therefore, he was required to pass order under section 168 assigning reason as to why goods were liable to confiscation and to communicate the reasons for the seizure of the goods as required under section 171. He has further submitted that in their parawise comments the respondents have stated that after the appraisement and assessment and determination of duty and taxes the container containing the goods imported by the petitioner was examined by a team of officers of the Directorate of Intelligence and Investigation (Customs and Excise), Karachi and it was found by them that the container was also containing the goods other than the goods declared in the relevant Bill of Entry. Mr. Jafri has maintained that no such inspection/examination report of the team of officers has been produced and the date of such examination has not been given in the comments. Mr. Jafri has pointed out that the petition was filed on 23-6-2003, notice whereof was issued to the respondents on 24-6-2003. The petition was heard for the purpose of Katcha Peshi on 24-7-2003 when the learned Standing Counsel informed on behalf of the Custom
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Department that the investigation was in progress and further time was required, however, no orders were passed till then under sections 168, 171 and 180 of the Customs Act. On 7-8-2003, the comments were filed on behalf of respondents but even on that date the orders under sections 168(2) and 171 of the Customs Act were not filed. He has pointed out that the entire file of the, Customs Department was produced by Mr. Ashfaq Ali Khan, Intelligence Officer and was perused by the Court but the order under sections 168(1), 171 and 168(2) were not available in the file and in reply to a specific question by the Court whether there was any other file pertaining the this case and any other orders were made by the competent officers, it was categorically stated by Mr. Ashfaq Ali Khan, Intelligence Officer that no other orders whatsoever, were passed. Mr. Jafri has submitted that the quarry was made by the Court for the reason that the release of consignment was blocked on 26-5-2003 and period of two months had already expired, and with the non- issuance of notice under section 180, the petitioner had become entitled for the return of goods in accordance With the provisions contained in section 168(2) of the Customs Act. He has further pointed out that it was specifically asked from Mr. Ashfaq Ali Khan, whether any order has been passed by the Collector of Customs under proviso to subsection (2) of section 168 of Customs Act, before expiry of two months from 26-5-2003 extending the period for issuance of show-cause notice under section 180 and Mr. Ashfaq Ali Khan, had stated that no such order was passed and at least no such order was available on the departmental file. On 7-8-2003, the Investigating Officer Mr., Ashfaq Ali Khan, was directed to examine the goods in presence of the petitioner as directed vide order, dated 24-7-2003 and to submit the report on 26-8-2003. He was verbally warned that no new order should be inserted in the departmental file. Mr. Jafri has urged that in spite of verbal warning given to Mr. Ashfaq Ali Khan, on 7-8-2003, he has manipulated the departmental record and while producing his report, dated 26-8-2003 in compliance of the Court's order, dated 7-8- 2003 produced copies of forwarding letter addressed to Collector of Customs, Central Excise and Sales Tax (Adjudication-1) as well as copies of notices under sections 168, 171, Mashiranama, dated 6-8-2003 showing detention and seizure of the goods. This Mashirnama is allegedly prepared by Ashfaq Ali Khan and is attested by respondent No,3, Pir Alam Shah, Senior Investigating Officer and one Sakhi Mohammad. Although the Mashirnama of detention and seizure purported to have been prepared by Ashfaq Ali Khan contains that the officers of the Director-General Intelligence and Investigation, examined the goods and that the officers prepared a separate inventory of recovery of goods duly signed by the two Mashirs but no such inventory signed by the officers, who examined the goods has been produced. Mr. Jafri has next contended that on 7-8-2003, the departmental file which was examined by the Court did not contain any order of extension passed by the Collector of Customs under proviso to subsection (2) of section 168 of the Customs Act, but on 2-9-2003 Mr. Ashfaq Ali Khan, has produced copy of such an order and the departmental file ,produced on 3-9-2003 contains such order which according to him has been inserted subsequently to avoid the consequences provided in subsection (2) of section 168 of the Customs Act. Mr. Jafri has vociferously argued that the consignment imported by the petitioner has been blocked after the appraisement and due assessment of customs-duty and taxes with ulterioi motives Wand the departmental officers have acted in an arbitrary manner violating the mandatory provisions of law and the orders under sections 168(1), 171 and 168(2) and section 180 of the Customs Act, have been manipulated with mala fide intention. He has submitted that in these circumstances, the petition be allowed and the respondents be directed to release the goods as the assessed customs duty and taxes have already been paid. On the other hand, Mr. Tariq Ali, learned Federal Counsel, assisted by Investigating Officer, Mr. Ashfaq Ali submitted that the petitioner imported counterfeit mobile phones accessories and watches, and on receiving of such information the release of consignment was blocked. He has
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further submitted that the team of officers of Directorate of Intelligence (Customs and Excise), Karachi, examined the container and found that it contained goods other than the goods declared in the Bill of Entry. Mr. Tariq Ali, has reiterated the pleas taken in the parawise comments. He has submitted that the points for consideration are whether the respondent No,2, Deputy Director, Intelligence (Customs and Excise) is competent and authorized to block the Bill of Entry and detain the goods and whether the cargo of an importer could be seized/detained on verbal orders of the respondent No,2 and whether the respondent No,4 could turn down the Bill of Entry. He has contended that by virtue of the provisions contained in sections 168 and 198 of the Customs Act read with S.R.O. 388(1)/82, dated 22-4-1984 issued under section 3 of the Customs Act, 1969, the respondent No,2 is competent and authorized in law to block the container and detain/seize the same. It is further contended that the container of the petitioner was blocked as it was found expedient to do so on the basis of well placed information provided by the Regional Intelligence Liaision Office, Tokyo. It is specifically stated in the parawise comments that the respondent No,4 blocked the container of the petitioner on the direction of respondent No,2. The respondents have taken plea in the 'comments that it is incorrect to allege that the petitioner was not aware of the reasons regarding blockade of the container. It is stated that the petitioner was informed by respondent No,2 when the petitioner met him in his office that the container was blocked on the information provided by R.I.L.O., Tokyo, Japan. The comments were filed on 31-7-2003 and thereafter another statement has been field by Mr. Ashfaq Ali Khan, Investigating Officer on 3-9- 2003 wherein it is stated that the staff of the Directorate Intelligence and Investigation, is empowered to detain/seize the goods liable to confiscation and that before submission of seizure report and issuance of show-cause notice under section 180, the Collector of Customs (Adjudication-1) extended the time limit for, show-cause notice in terms of section 168(2). At this stage, it is pertinent to note that the order under section 168(2) produced on 3-9-2003 is dated 23- 7-2003 but in the comments filed on 31-7-2003 neither any such plea was taken nor the copy of such order was produced. In the end, Mr. Tariq Ali has submitted that the petitioner has made misdeclaration and is trying to take the benefit of technicalities which should not be exnded to him. We have given our anxious consideration, to the facts placed on record and the contentions raised by the learned Advocates for the parties. The plea taken on behalf of the respondents that the petitioner imported counterfeit goods and made misdeclaration in this behalf shall not be considered and determined by us, for the reason that it is a question of fact which cannot be ascertained and decided in exercise of the writ jurisdiction. We shall consider the admitted facts and the actions taken by the Department during the pendency of the petition and shall examine whether the respondents have .Exercised their jurisdiction in accordance with the law or have acted otherwise than in due course of law. The admitted facts are thatthe goods imported by the petitioner arrived at Karachi on 21-5-2003. The Bill of Entry was filed on 22-5-2003. The release of consignment was blocked by the respondent No,2 on 26-5-2003 under his verbal directions followed by his written order which reads as follows:- - "As already informed to you on telephone number of times you are once again requested to block containers at cash stage. The detail is given below:-- (i)GATU 1154479 (ii)TRLU 2266342 GATU 1154479 is the container, which contained the goods imported by the petitioner. The goods were appraised and assessed on 27-5-2003 but consignment was not released. A perusal of Bill of Entry shows that the Principal Appraiser and Appraising Officer passed examination order to the extent of 5% examination and verification of description, quantity, brand and sizes as per invoice
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and Bill of Entry. The goods declared were mobile battery, mini telephone battery, mini camera battery, antina for mobile etc., of Japan origin, Taiwan, China, Singapore and Hong Kong. Although the release of consignment was blocked on 26-5-2003 but no further order for seizure of goods was made on 27.5-2003 when the consignment was appraised and assessed. However, the goods were not released and on insistence of petitioner the notice under section 26 of the Customs Act, calling upon the petitioner to furnish information/ documents was issued on 11-6-2003. Here the question arises whether the blockade order passed by respondent No,2, on 26-5-2003 amounts to an order of seizure within the contemplation of section 168(1) of the Customs Act. We have already considered this issue in depth and detail in our judgment. Dated 21-8-2003, in C.P. No,D-713 of 2003, Syed Muhammad Razi v. The Collector of Customs and others. In this judgment we have held that the blockade of the goods by an appropriate officer amounts to seizure within the contemplation of section 168(1) of the Customs Act, 1969. It would be appropriate to observe that even the respondents have treated the blockade order issued by respondent No,2., dated 26- 5-2003 as an order of seizure under section 168(1) of the Customs Act, 1969 and have therefore, the Collector (Adjudication) was approached on 23-7-2003 for extension of time under section 168(2) for the issuance of notice under section 180 and obtained an order in this behalf which is available on the file and has been communicated to various officers of the Customs Department vide letter. Dated 23-7-2003. It has been produced by Investigating Officer, Ashfaq Ail Khan, with his statement, dated 2-9-2003 (this is without prejudice and notwithstanding, the objection raised by Mr. Ali Bin Adam Jafri, learned counsel for the petitioner that this order has been obtained by manipulation after expiry of the period of two months from the date of seizure). Thus, there appears to be no dispute on the point that the goods imported by the petitioner were seized under the directives of respondent No,2. Within the contemplation of section 168(1) of the Customs Act, 1969. There is no cavil to the proposition that the provisions contained in section 168(1), 168(2) and 171 of the Customs Act, are to be read together. Now we proceed to examine whether the respondents have acted within the mandate of law contained in sections 168(1)(2) and 171 of the Customs Act and if they have not acted in accordance with the mandate of law what is the effect thereof. The plea taken by the respondents is that the release of consignment imported by the petitioner was blocked by respondent No,2, under his verbal directions followed by his written order, which has already been reproduced in the earlier part of this judgment. In their comments the respondents have taken plea that the goods were seized on the basis of information received by them that the petitioner was trying to import some counterfeited goods. However, the letter, dated 26-5-2003 written by the respondent No,2 and addressed to Mr. Fida Hussain, Manager PRA L. The respondent No,4, in whose possession the goods were at the relevant time does not contain any reason for the seizure of goods as required under section 168(1) of the Customs Act. Investigating Officer, Ashfaq Ali Khan, has produced notice under section 168 of the Customs Act, 1969, dated 6- 8-2003 addressed to shipping agent Messrs Megatrans Pakistan Private Limited informing that the staff of Director-General of Intelligence and Investigation (Customs and Excise), Karachi has seized foreign origin goods imported from China for the violation of provisions contained in sections 15, 16, 1.8, 25, 23(1)(2) and 79 of the 'Customs Act, 1969. The notice further contains that as the shifting of seized goods to Intelligence State Warehouse is not practicable, therefore, above seized goods were given under the Superdari of the chipping agent in terms of section 168 of the Customs Act, 1969. Mr. Ashfaq All Khan has produced copy of notice under section 171 of the Customs Act, 1969 addressed to one Mr. Masharaq Ali Khan intimating that the goods imported by the petitioner were seized for violation of several provisions of the Customs Act, enumerated in the notice. He has also produced Mashirnama prepared by him, dated 6-8-2003 and the Seizure Report of the same date. A perusal of all these documents shows that the alleged Seizure Report is in fact a contravention
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report which has been sent to the Collector of Customs Central Excise and Sales Tax (Adjudication- 1) for initiation of adjudication proceedings. The point for consideration is whether the course adopted by the respondents is permissible in law or is in accordance with the specific provisions contained in section 168(1) read with section 171 of the Customs Act. It is provided in section 168(1) that the appropriate officer may seize any goods liable to confiscation under the Customs Act. The mandatory requirement contained in section 171 is that, when anything is seized, or any person is arrested under the Customs Act, the officer or D. 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 art seized, of the ground of such seizure or arrest. The provisions contained in sections 168(1) and 171 of the Customs Act, came for consideration in various cases…
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