By this Special Custom Reference Application, order dated 01

IN THE HIGH COURT OF SINDH AT KARACHI

Special Customs Reference Application No.14 of 2009

Present:

Mr. Justice Gulzar Ahmed &

Mr. Justice Irfan Saadat Khan.

J U D G M E N T

Date of hearing : 28^th October 2009.

Applicant through : Mr.Shakeel Ahmed, Advocate.

Respondent through : Mr.Ziaul Hassan, Advocate.

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GULZAR AHMED, J.:- By this Special Custom Reference Application, order dated 01.11.2008 of the Customs, Excise & Sales Tax Appellate Tribunal Bench-II, Karachi is assailed, in which the following questions of law have been raised:-

i) Whether in the facts and circumstances of the case the Appellate Tribunal was justified in allowing release of the prohibited goods without taking into account the provisions of Section 16(A)(ii) and Sr.No.7 of Appendix-C of the Import Policy Order, 2007?

ii) Whether in the facts & circumstances of the case the Appellate Tribunal’s order for release of the prohibited/confiscated goods on payment of fine is not against the law in the presence of first proviso to Section 181 of the Customs Act, 1969, read with Para 1(d) of SRO 487(I)/2007 dated 09.06.2007?

iii) Whether in the facts & circumstances of the case the Tribunal’s order dated 01-11-2008 is not contrary to the Tribunal’s earlier order dated 17-09-2008 (para 5 of the order refers) passed on an application of the same case.

iv) Whether in the facts & circumstances of the case the Tribunal’s order is not against the Government’s policy and in violation of Article 29 & 30 of the Constitution of Islamic Republic of Pakistan, 1973?

Learned counsel for the applicant has contended that the impugned order of allowing release of prohibited items on payment of redemption fine is contrary to law and the order-in-original dated 27.2.2008, by which the goods were ordered to be confiscated which order was maintained by order in appeal, is just and legal order.

On the other hand, learned counsel for the respondent did not dispute the fact that respondent has imported prohibited goods but stated that as a matter of natural justice and for the purpose of generation of Government revenue, the order of Tribunal is just and legal.

We have considered the submissions made learned counsel and have gone through the record.

The facts of the matter are that the respondent imported a consignment of used computer parts and filed a goods declaration. The goods declaration of the respondent was checked when it was found that amongst imported used computer parts, the respondent has also attempted to clear used empty computer printer cartridges, the import of which is banned in terms of Sr.No. 8 of Appendix-C of Import Policy Order 2007-08 read with Section 16A(ii) of the Customs Act, 1969. A show cause notice was served upon the respondent. The respondent did not appear for hearing and accordingly order-in-original was passed by which the banned imported consignment was confiscated and respondent was warned to be careful in future. The order-in-original was challenged by the respondent by filing an appeal before the Collector, who through order-in-appeal No. 1080/2008 dated 12.4.2008 refused to interfere with the order-in-original and rejected the appeal. Respondent, however, challenged the order-in-appeal before the Customs, Excise & Sales Tax Appellate Tribunal, who through the impugned order allowed the appeal.

There is no dispute on the fact that goods, ordered to be confiscated, were banned items and their import was not permissible by law. Whether in the circumstances, such goods could be allowed to be released on payment of redemption fine. The provision of section 181 of the Customs Act, 1969 itself in its first proviso gives power to Board to pass an order specifying the goods or class of goods where option to pay fine in lieu of the confiscation of the goods shall not be given. The Federal Board of Revenue through Notification SRO 487(I)/2007 dated 09.6.2007 has directed that no option shall be given to pay fine in lieu of confiscation in respect of goods and in clause (g) provided commodities which are not importable in used or second hand condition under the Import Policy Order for the time being in force.

As noted above, there is no dispute that the confiscated goods import was not permissible and in terms of first proviso of section 181, the Federal Board of Revenue has also issued notification of not allowing the option of payment of fine to the importer in lieu of confiscation of goods. By this it means that Federal Government does not wish such goods to have free circulation in the market and thus have deprived such goods of being released to the importer on payment of redemption fine.

In the case of ABU BAKAR SIDDIQUE & OTHERS V/S COLLECTOR OF CUSTOMS, LAHORE & ANOTHER (2004 PTD 2187) the Hon’ble Supreme Court has observed at page 2198 as follows:

“The bringing of gold in personal baggage in violation of the Import Policy was definitely illegal but it being not a banned item was not included in the list of items specified by the Central Board of Revenue, in which the option under section 181 of the Customs Act, 1969 could not be given.”

The above observation of the Hon’ble Supreme Court in clear terms provides that where the Central Board of Revenue now Federal Board of Revenue have included in the list the imported goods which are not importable the exercise of option of payment of redemption fine is specifically denied. No option to the importer can be given of payment of redemption fine in lieu of confiscation of the imported goods.

This being the state of law, on the threshold of which the impugned order fails as it gives option to the importer of payment of 30% redemption fine in lieu of confiscation of goods, the import of which is not permissible as the Federal Board of Revenue through notification dated 09.6.2007 has prohibited such option in terms of the first proviso of section 181 of the Customs Act, 1969. Consequently, this Special Customs Reference Application is admitted to regular hearing and is allowed and impugned order is set aside.

J U D G E