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Customs Appeal No.289/LB of 2011, decided on 28th April, 2012.

----Ss. 2(b), (s), 156(1)(89), 157, 168, 181 & 194-A---S. R.O. 499(1)/ 2009, dated 13-6-2009---Smuggling---Confiscation of smuggled goods---Option to pay fine in lieu of confiscation---Reduction in fine---Alleged smuggled goods along with carrier/vehicle were seized under Ss.168 and 157 of Customs Act, 1969---Adjudicating Officer, on option of importer vide order-in-original released goods along with vehicle against payment of 20% redemption fine of its assessed value---Collector (Appeals) reduced said fine---Order of reduction of fine had been challenged by the department in appeal before the Appellate Tribunal contending that impugned order was against the law as Collector (Appeals) had exceeded the powers conferred on him by Customs Act, 1969---Validity---Under provisions of 5.181 of the Customs Act, 1969, Federal Board of Revenue was competent to issues order to specify the goods where option of fine in lieu of confiscation would not be given as per first Proviso of S.181---Second Proviso of S.181 of Customs Act, 1969 empowered the Board to fix the amount of fine which in lieu of confiscation would be imposed on any goods---Order issued by the Board under S.181 of Customs Act, 1969 was binding on the appropriate officers directing confiscation of goods---Goods were rightly released vide order-inoriginal against payment of 20% redemption fine of customs value of the impugned vehicle---Collector (Appeals), in circumstances, was not justified in modifying order-in-original---Impugned order was set aside. 2002 MLD 296 rel. Aitzaz Ahsan D.R. and Muhammad Ali D.S. for Appellant. Hafeez-ur-Rehman, A.R. for Respondents. Date of hearing: 26th April, 2012.

We intend to dispose of Customs Appeal filed by the appellant department bearing No.289/LB/2011 against Order-in-Original No.474 of 2011 dated 27-9-2011 passed by the learned Collector Appeals, Multan. 2. Brief facts, as stated in the order-in-appeal are that the staff of Customs Anti-smuggling Organization, Multan intercepted Truck No. P-2836-Peshawar on 26-3-2011 near Umer PSO Pump Bye pass Road, Sadiqabad. The said vehicle was found with foreign origin non duty paid miscellaneous goods against proper bilities. The said goods along with carrier vehicle were seized under sections 168 and 157 of the Customs Act, 1969. After completing all legal formalities, the 2 case paper was sent to the adjudicating authority for adjudication, who after hearing the parties passed the order-in-original. Feeling aggrieved by the said order, the appellant filed the appeal before the learned Collector Appeals, who modified the impugned order. Being dissatisfied with the order, the appellant department filed the appeal before this Tribunal.

3. It is stated by the learned D. R. for appellant that the impugned vehicle was released by the learned adjudicating officer against payment of 20% redemption fine of its assessed value. The respondent "being , aggrieved filed an appeal before the learned Collector Appeals who was pleased to reduce the fine. It is contended by the learned D.R. that the impugned order is against the law as the learned Collector Appeals has exceeded the powers conferred by Customs Act, 1969. It is further submitted that S.R.O. 499(1)/2009 dated 13-6-2009 has been issued by the FBR under section 181 of the Customs Act, 1969, therefore, the adjudicating officers are bound to follow the said S.R.O. but in the present case, the learned Collector Appeals has reduced the redemption fine by violating the said S.R.O. Therefore, the impugned order being against the law and facts is liable to be set aside. It is further added that the vehicle carrying smuggled goods in false cavities or being used exclusively for transporting of offending goods under section 2(s) of the Customs Act, 1969 is liable to be confiscated out rightly as required under clause (b) of S.R.O. 499(I)/2009 dated 13-6-2009. The vehicle found carrying offending goods under section 2(s) ibid not covered under clause (b) of the said S.R.O. can be redeemed only against the payment of 20% redemption fine of customs value of the impugned vehicle. Reliance is placed on 2002 MLD 296.

4. On the other side the learned A.R. for the respondent controverted the contentions raised by the learned D. R. for the appellant by submitting that the impugned vehicle being a bona fide public carrier is liable to be released without any redemption fine. It is further submitted that the impugned vehicle is not involved for smuggling of goods as the learned adjudicating officer as well as the learned Collector Appeals have released some of the seized goods unconditionally and rest of the goods have been released against the payment of duty and taxes. It is also pleaded that neither the impugned vehicle was involved for carrying the smuggled goods in the past and nor presently seized goods were loaded against un-fair fair. It is also claimed that the learned Collector Appeals has already reduced redemption fine in identical cases such as Appeals Nos.417," 418 and 419 of 2011 but no appeal was filed by the learned Collector of Customs against those orders. Therefore, filing of appeal in the present case amounts to discrimination.

5. After hearing the arguments advanced by the learned counsel for the parties and perusing the relevant record, it appears that the main issue between the parties is whether the learned Collector Appeals is authorized to reduce the redemption fine fixed under S.R.O. 499(I)/2009 issued by the board under section 181 or the customers Act 1969. Before passing any observation in the relevant session i.e. 181 of the Customer Act, 1969 is re-produced herein below:--

"181----Option to pay fine in lieu of confiscated goods.---Whenever an order for the confiscation of goods is passed under this act, the officer passing the order may give the owner of the goods an option to pay in lieu of the confiscation of the goods such fine as the officer thinks fit.

Explanation,--- Any file in the lieu of confiscation of goods imposed under this section shall be in addition to any duty and charges payable in respect of such goods, and of any penalty that might have been imposed in addition to the confiscation of goods.

Provided that the Board may by an order specify the goods or class of goods where such option shall not be given;

Provided further that the Board may by an order fix the amount of fine which in lieu of confiscation shall be imposed on any goods or class of goods imported in violation of the provisions of section 15 or of a notification issued under section 16 or any other law for the time being in force.

The plain reading of the said provision shows that the Board is quite competent to issue an order to specify the goods or class of goods where option of fine in lieu of confiscation shall not be given as per first proviso of the said section. The second proviso of the said section empowers the Board to fix the amount of fine which in lieu of confiscation shall be imposed on any goods or class of goods. Therefore it is evident that an order issued by the board under section 181 of the Custom Act, 1969 is binding on the appropriate officers directing confiscation of goods. It is binding both when it specifies the goods where such option is not to be given as also when it fixes the amount of fine which in lieu of confiscation is to be imposed. It is also evident that S.R.O. 499(I)/2009 are re-produced as under;

(a)

(b) Lawfully registered conveyance including packages and containers found carrying smuggling goods in false cavities or being used exclusively or wholly for transportation of ending goods under clause (s) of section 2 of the Customs Act 1969 (IV of 1969).

1. Offences related to misdeclaration of,--- 2. Other offences related to, (f) lawfully registered conveyance including packages and containers, not covered under clause (b) of the preamble of this notification, found, carrying offending goods under section 2(s) of the Customs In the present case, it is established from record that the goods relating to bilities Nos.4111/100, 4105/100, 4108/100, 4107/90, 4101/90, 4109/90m 3953/11, 3952/2 and 35951/26 were confiscated under section 156(1)89 as smuggled goods. Therefore, it is established beyond any shadow of doubt that the impugned vehicle was carrying the goods falling under section 2(s) of the Customs Act, 1969. It is also evident that the impugned vehicle is not covered under clause (b) of the preamble of S.R.O. 499(I)/2009 as it is neither used exclusively nor any false cavities are found there. Therefore, the same can be ,released only under S. No. 2(f) of S.R.O. 499(I)/2009 against payment of 20% redemption fine of the customs value of the impugned vehicle. The observations given by us are also based upon the ratio of the judgment reported as 2002 MLD 296 of the Hon"ble High Court wherein it is observed that an order issued in accordance with law by the Board under any of the two provisos of section 181 of the Customs Act, 1969 can be read as part of section 181 and has the force accordingly. Keeping in view discussed above, the impugned order is set aside and the appeal is accepted. No order to costs. Parties be informed by post or through UMS. HBT/150/Tax(Trib.) Appeal allowed.