ORDER SHEET

IN THE HIGH COURT OF SINDH AT KARACHI

Present: Mr. Justice Aqeel Ahmed Abbasi

Mr. Justice Mahmood A. Khan

Spl.Custom Reference Application No.155 of 2016

___________________________________________________________ Date Order with signature of Judge

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Hearing of Case:

1. For hearing of main case.

2. For hearing of CMA No.963/2016.

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12^th December 2019

Mr. Khalid Mahmood Rajpar, Advocate for Applicant.

Sardar Muhammad Ishaque, Advocate for Respondent.

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O R D E R

AQEEL AHMED ABBASI, J : -- Through instant Custom Reference Application, the applicant had proposed seven (7) questions, however, after having read out the questions and argued the matter at some length, learned counsel for applicant submits that he will press the following first three Questions No.I, II and III only, which according to learned counsel, are questions of law arising from the impugned order dated 24.11.2015 passed by the Customs Appellate Tribunal, Karachi Bench-I, in Customs Appeal No.K-591/2015:

I. Whether on facts and circumstances of the case, the learned Tribunal seriously err in to release the smuggled auto parts of Indian Origin, the import of which is not allowed in terms of Import Policy Orders in vogue?

II. Whether on facts and circumstances of the case, the learned Member Technical err in law to assume that the goods were locally purchased which were sold without issuance of Sales Tax Invoice?

III. Whether on facts and circumstances of the case, the burden of proof in terms of section 156(2) read with section 156(1) 89 of the Customs Act, 1969 was discharged by the seller of smuggled notified goods?

2. Learned counsel for the applicant has argued that respondent could not discharge its onus with regard to the lawful possession of the imported articles consisting of Rickshaw Auto Parts, therefore, the same were seized and Order-in-Original has been passed against the respondent in accordance with law. It has been prayed by the learned counsel that impugned order passed by the Customs Appellate Tribunal may be set aside and the questions proposed hereinabove may be answered in ‘negative’ in favour of the applicant and against the respondent.

3. Conversely, learned counsel for the respondent has vehemently opposed the submissions made by the learned counsel for applicant and submits that the proposed questions are not questions of law, as according to learned counsel, the order passed by the Customs Appellate Tribunal is based on findings of facts, which does not suffer from any factual error or illegality. It has been further contended by the learned counsel that respondent had discharged the onus relating to the lawful possession of the subject Rickshaw Auto Parts, which are otherwise freely available in the open market, whereas, the same were purchased by the respondent from M/s. Allied Business Corporation and a purchase receipt to this effect was also supplied to the customs authorities at the time of seizure, however, the same has been ignored by the customs authorities. Learned counsel for the respondent further submits that the fact regarding sale and purchase of the Rickshaw Auto Parts has been duly taken cognizance by the Customs Appellate Tribunal Bench-II Karachi, while deciding Customs Appeal No.K-153/2014 vide order dated 12.11.2015 in the case of M/s. Allied Business Corporation from whom the respondent purchased the subject Rickshaw Auto Parts, therefore, the adverse inference drawn and contrary view taken by the Customs Authorities in respect of same Auto Parts was not justified. In support of his contentions, learned counsel for respondent has read out the relevant para 6 to 9 of the order dated 12.11.2015 passed by the Customs Appellate Tribunal Bench-II Karachi in the aforesaid case.

4. We have heard the learned counsels for the parties, perused the record and the impugned order passed by the Customs Appellate Tribunal in the instant case with their assistance and have also gone through the order of the Customs Appellate Tribunal Bench-II Karachi in Customs Appeal No.K-153/2014 passed in the case of importers M/s. Allied Business Corporation.

5. The contentions of the learned counsel for the respondent to the effect that there is no restriction with regard to the import of subject articles Rickshaw Auto Parts, which are freely available in the open market, could not be disputed by the learned counsel for applicant. Whereas, respondent appears to have shifted the burden of proof regarding lawful possession of such subject articles, which were purchased by the respondent from M/s. Allied Business Corporation (who claimed to have imported subject articles Auto Parts more than 10 years back). After perusal of relevant documents, such fact has also been acknowledged by the Customs Appellate Tribunal Bench-II Karachi in its order dated 12.11.2015 while deciding the appeal of the importer i.e. M/s. Allied Business Corporation. It will be advantageous to reproduce the relevant finding of the Customs Appellate Tribunal to this effect as contained in Paras 6 to 9 of the said order, which read as follows: -

“6. I have minutely perused the available record inclusive the show cause notice, order-in-original, memo of appeal and cross objections filed on behalf of Respondent No.3. The cross objections filed by the Department categorically confirms that confiscated goods are in good packing condition being new, whereas, the appellant failed to bring on record any evidence to rebut the contentions of the Department.

7. It is also noticed with deep consent that confiscated goods were sold out to Mr. Arif-ur-Rehman by the appellant vide Sale Receipt in consideration of Rs.500,000/- and physical possession was given to the above named purchaser and the sold goods in question were in process of transportation from Karachi to Lahore which further substantiate the sale transaction. The auto parts, as per contention of the appellant are meant very model of Auto Rickshaw are now absolete, however, ground realities are contrary to the contentions of the appellant as confiscated Auto Parts at present as well as in the past are/were demanded in local markets of Pakistan. Under the circumstances it is beyond logic that market demanded auto parts, even it may be meant for outdated Auto Rickshaw, were retained by the appellant and considerable finances were blocked for no cogent reasons. In consideration of such analysis it is believed that confiscated auto parts might have been imported in the past but not more than decades as contended by the appellant, therefore, they must have prove their contentions with documentary evidences which they failed to produce before the Seizing Agency, Adjudicating authority and before this Tribunal as well.

8. The perusal of available record confirms that Mr. Arif-ur-Rehman was served with show cause notice as Respondent No.2 but he did not contest his own case being lawful owner of the goods during the adjudication proceedings Moreover, the above named owner of confiscated goods was served with order-in-original as such he was at liberty to prefer an appeal before this Tribunal for the exercise of lawful rights and protection of considerable amount paid by him to the appellant but it has not been done in letter & spirit. Now, therefore, I have reached to the logical conclusion that the appellant i.e. M/s. Allied Business Corporation, Karachi, after materialization of sale proceeds and handing over the physical possession of confiscated goods to its buyer is no more lawful owner of confiscated goods, therefore, has no locus standi for filing the present appeal before this Tribunal.

9. Under the circumstances discussed herein above, I find no reason to interfere with the impugned order-in-original appealed before this Tribunal, therefore, present appeal is dismissed being not maintainable in above terms.”

6. It has been further observed that while deciding appeal of the respondent in the instant case, Customs Appellate Tribunal has also taken cognizance of these facts and recorded its findings in the following terms: -

“6. I have heard the arguments of the advocate of the appellant, representative of the respondent MCC (Preventive) and gone through the complete record of the case. Perusal of the record shows that after the seizure has been effected the appellant produced a copy of sale receipt dated 05.07.2013 issued by M/s. Allied Business Corporation in respect of impugned goods sold to M/s. Arif Autos, McLeod Road, Lahore which was reconfirmed by them vide their letter dated 05.07.2013. Subsequently, the respondent issued a notice under Section 26 to the appellant on 15.07.2013, whereby M/s. Allied Business Corporation was asked to furnish a host of information. In response M/s Allied Business Corporation informed that since the record is almost twenty years old, as such same cannot be produced, even otherwise under Customs Act, 1969 one can only maintain record upto five years. At this point of time the respondent did not make any effort to ascertain the nature of business activities of M/s. Allied Business Corporation, as whether they are involved in any import and clearance of such goods or not, if they are, which commodity they have been importing and trading therein. The respondent has not conducted any investigation but hastily issued the Show Cause Notice and the Order-in-Original.

7. In view of my above observations and discussions I am convinced that calling for record from M/s. Allied Business Corporation in respect of goods decades old was a futile exercise, as such I have no other option but to vacate the Show Cause Notice No.ADJ-I/ADC/PRV/02/2013-14 dated 06.08.2013, Order-in-Original No.311/2013-14 dated 27.12.2013 and accept the appeal accordingly with no order as to cost.”

7. In the instant case, decision of the Tribunal is based on finding of facts duly verified from the judgment of the Customs Appellate Tribunal in the case of importer of old rickshaw auto parts from whom the respondent claimed to have purchased. Whereas, Customs Authorities could not dispute such sale/purchase transaction, however, insisted upon production of ten years old import documents. Learned counsel for the applicant could not refer to any provision of law, whereby, record of import more than ten years old could be demanded from the importer. Mere presumption as to allegations of smuggling, in the absence of any tangible material or evidence, cannot be approved, particularly, in respect of importable articles beyond the period available to Customs Authorities for calling of such documents or record under the Customs Act, 1969. Therefore, we do not find any factual error and legal infirmity in the impugned order passed by the learned Customs Appellate Tribunal Bench-I Karachi, which does not require any interference of this Court while exercising its Reference jurisdiction under Section 196 of the Customs Act, 1969. Accordingly, instant Spl. Customs Reference Application is dismissed. Consequently, proposed Questions Nos.I & II are answered in ‘negative’, whereas, Question No.III is answered in ‘affirmative’, against the applicant and in favour of the respondent.

J U D G E

*Farhan-PS*