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Appeals C. Nos. 128 to 132, 134, 135 of 2004, 61 of 2003 and 79 of 2006, decided on 30th June, 2008.

----Ss.2(s), 16, 156(1), 8, 70, 57 & 171---Imports and Exports (Control) Act, (XXXIX of 1950), S.3 (1)---Foreign Exchange Regulation Act (VII of 1947), S.8---Economic Reforms Act (XII of 1992), S. 2 (1)(b)---Foreign Exchange (Temporary Restrictions) Act, (IV of 1998), S.2---State Bank of Pakistan Notification No.1017(I)/1998---Smuggling---Recovery of foreign currency from passengers after completion of travelling formalities who wanted to take it out of Pakistan without any authorization---Customs authorities seized such recovered foreign currency under proper documentation for contravention of Ss.2(s) and 16 of the Customs Act, 1969, read with S. 3 (1) of the Imports and Exports (Control) Act, 1950 and S. 8 of the Foreign Exchange Regulation Act, 1947, punishable under S. 156(1), 8, 70 and 57 of the Customs Act, 1969---Collector (Adjudication) concluded that the appellants were not permitted by law to take foreign currency out of Pakistan---Seized foreign currency was ordered outright confiscation and penalty of Rs.100,000 was imposed under Ss. 156(1), 8 and 70 of the Customs Act, 1969---Appellant contended that seizure was made by the Airport Security Force, therefore, the seizure was illegal---Further, foreign currency was purchased from the Money Changers and produced certified copies of the receipts issued by the Money Changers---Department pleaded that since the foreign currency recovered from the appellants was purchased from the money changers and not from the authorized dealer, the appellants were not legally authorized to take the foreign currency out of Pakistan---Validity---Seizure was made by the customs authorities after completion of all legal formalities after detection of case by the staff of Airport Security Force---Action taken by the. customs authorities was perfectly in accordance with the law as seizure and all other subsequent actions were taken by the customs authorities---Since foreign currency was purchased from the money changers and not from the authorized dealers, the appellants were not authorized to take the foreign currency out of Pakistan---Appeals were dismissed by the. Appellate Tribunal being devoid of merit in circumstances. Government of Pakistan v. Mahmood Ahmad Qureshi Civil Appeal No.1582 of 2001 and Criminal Appeals Nos. 519 to 527 of 2005 rel. Athar Minallah and Mian Abdul Ghaffar for Appellant. Syed Aun Muhammad and Malik Itaat Hussain for Respondent. Date of hearing: 16th June, 2008.

The following appeals in which common questions of law and facts are involved are disposed of by this consolidated judgment in purchased of Honourable Lahore High Court Rawalpindi Bench, judgment in Customs Appeal No.12/2004 dated 28-10-2004, Honourable Supreme Court of Pakistan judgment dated 16-1-2003 in Appeal No.2352 of 2002 and Honourable Supreme Court dated 18-4-2006 in Civil Appeal Nos. 1829 to 1838 of 2005.

2. Brief facts of the case are that staff of Collectorate of Customs, Rawalpindi posted at Islamabad Airport on 11-4-2001, in pursuance of an information that huge quantity of foreign currency would be smuggled to China through China Airline"s Flight No.XI-722, intercepted suspected passengers after- completion of travelling formalities and recovered from their possession foreign currency as detailed below which they wanted to take out of Pakistan without any authorization. (Appeals Nos. 128/2004 to 132/2004, 134/2004 and 135/2004). The custom authorities seized the recovered foreign currency under proper documentation for contravention of sections of sections 2(s) and 16 of the Customs Act, 1969, read with section 3(1) of the Imports and Exports (Control) Act, 1950 and section 8 of the Foreign Exchange Regulation Act, 1947, punishable under sections 156(1), 8, 70 and 57 of the Customs Act, 1969. The accused persons were placed under arrest after due service of notice as envisaged under section 171 of the Customs Act, 1969 for the violation of above mentioned provisions of customs law and F.I.Rs. were lodged with the Police Station at Rawalpindi.

3. After completion of investigation the customs authorities forwarded the cases of the learned Collector (Adjudication) Rawalpindi who after considering the contentions of parties reached to the conclusion that the appellants were not permitted by the law to take foreign currency out of Pakistan. The seized foreign currency was ordered outright confiscation and penalty of Rs.100000 was imposed on the appellants in each case under sections 156 (1), 8 and 70 of the Customs Act, 1969. The appellant filed appeal before the Appellate Tribunal Customs Excise and Sales Tax, Islamabad Bench who after considering the contentions of the parties concerned accepted the appeals and ordered release of currency to the appellants subject, to the condition that the Collector of Customs will confirm that the currency was issued to the appellants by the authorized money changers in foreign exchange. The penalties imposed on the appellants were also remitted. The customs authorities filed appeal against the decision of learned Appellate Tribunal before the Honourable Lahore High Court, Rawalpindi Bench. The Honourable High Court after considering the contentions of both the parties directed that all the evidence pertaining to legal and factual issues shall be raised before the Collector during the course of hearing to be conducted by him pursuant to the judgment passed by the learned Appellate Tribunal in all the cases. The learned Collector of Customs, Rawalpindi held inquiry as directed by the Appellate Tribunal and considered all the evidence produced by the appellants. The learned Collector of Customs after examination of relevant evidence reached to the conclusion that the evidence produced was ambiguous, unreliable and invalid and it does not meet the requirement laid down in the Appellate Tribunal Judgment. The claim of appellants for having purchased the foreign currency from the authorized money changers was not found tenable. The appellants approached the learned appellate Tribunal against the findings of the learned Collector of Customs regarding genuineness of possession of foreign currency. The learned Appellate Tribunal considered the contentions of the learned counsel for the appellants and the customs department and reached to the conclusion that the foreign currency was not procured lawfully and cannot be released to the appellants. The appeals were accordingly dismissed. The appellants filed appeals before the Honourable Lahore High Court Rawalpindi Bench against the judgment dated 11-5-2004 passed by the learned appellate Tribunal (Customs Excise and Sales Tax), Islamabad. The Honourable High Court after considering the contentions of parties reached to the conclusion that the findings under reference and impugned are infirm and remitted the case to the learned Appellate Tribunal for decision afresh after hearing the parties concerned. The parties were directed to appear before the Appellate Tribunal on 6-11-2004 who shall try to resolve the issues involved within one month. 4. The customs department approached the Honourable Supreme Court of Pakistan for leave to Appeal No. 2352 of 2002 against the judgment in CA No.1/2002 etc. of Lahore High Court of Rawalpindi Bench. The Honourable Supreme Court of Pakistan after considering the contentions of the parties observed that the Honourable High Court after having examined the statutory provisions has directed the Collector to determine the validity of purchase of foreign exchange from the authorized dealers before the date of seizure in each case. It was directed by the apex Court on 16-1-2003 that the Collector should conduct the inquiry as already directed by the High Court. The Honourable Supreme Court of Pakistan in its judgment dated 18-4-2004 "in Appeal Nos. 1829 to 1838 of 2005 again directed the Appellate Tribunal to conduct fresh inquiry in pursuance of earlier order dated 16-1-2003 and dispose of the appeals independently. In order to carry out the directions of Honourable Lahore High Court and Honourable Supreme Court of Pakistan notices of hearing were issued by this Appellate Tribunal to the parties concerned. 5. Appeal No. 61 of 2003 filed by the appellant Muhammad Irfan is against Order-in-Original No.02/2003 passed by the learned Collector of Customs, Rawalpindi where-under the foreign currency US Dollars 50,000 & Chinese Yuan 2900 seized on 11-7-2002 from the possession of Muhammad Irfan son of Muhammad Rafiq at the Islamabad Airport while he was leaving for Beijing, China. The appellant could not produce evidence regarding purchase of seized currency from the authorized dealer and the evidence produced was held unreliable and invalid by the learned adjudicating officer and seized currency was ordered outright confiscation vide Order-in-Original No.2/2003 against which Appeal No.61/2003 has been filed before this Tribunal. 6. Appeal No.79 of 2006 filed by the appellant Sheikh Muhammad Akmal is against Order C. No.85/Law/PF/2002/PT-II/632, dated 23-1-2003 passed by the learned Collector of Customs, Rawalpindi where-under the evidence produced by the appellant regarding lawful possession of foreign exchange was held unreliable and invalid. This order was passed by the learned Collector of Customs in pursuance of directions of Appellant Tribunal in judgment in Appeal No. 362 of 2001 whereunder while ordering release of foreign currency the Appellate Tribunal directed the learned Collector of Customs to confirm as a result of inquiry that the foreign currency recovered from the appellant at the Islamabad Airport on 8-12-1999 while he was going to China by flight No.XO-722 was issued by an authorized money changer in foreign exchange. 7. During hearing of these appeals before this Tribunal, the Additional Registrar Lahore High Court Rawalpindi Bench, Rawalpindi was asked to furnish original record pertaining to the appeals vide this Tribunal letter F. No. 128/CU/IB/2004/1318 dated 13-9-2006 and subsequent reminder of even number dated 7-10-2006 but no response was received form the office of Additional Registrar of Lahore High Court, Rawalpindi Bench. The office of Special Judge Customs Taxation and Anti-Smuggling was also requested to furnish relevant record pertaining to the cases vide letter No. 128/CU/IB/2004/391, dated 8-5-2007 but record was not provided to the Tribunal. The hearing of appeals during the period from 15-12-2004 to 16-6-2008 were fixed 26 times and the appellants were provided sufficient opportunity to produce evidence in support of their case. During the course of hearing Mr. Athar Minallah, Advocate appeared on behalf of ten appellants i.e. in Appeals Nos. 128/2004 to 136/2004 and 61/2003. During the course of hearing, the learned counsel stated that the appellants namely Sher Wali Khan Appeal No.133/2004 and Muhammad Zaman Appeal No.136/2004 are absconder and he does not represent them therefore the Tribunal may proceed against them in accordance with the law. The relevant record was perused and it was observed that Mr. Athar Minallah, Advocate held genuine power of attorney on their behalf but now according to him they have been declared absconder and he is no more interested to represent the persons who are fugitive from law. Since the appellant Sher Wali Khan in Appeal No.133/2004 and Muhammad Zaman appellant in Appeal No.136/2004 were absent, therefore, their appeal were dismissed due to non-prosecution. The learned counsel for the appellant Mr. Athar Minallah was afforded sufficient opportunity to adduce evidence in support of his case. On 8-4-2008 last opportunity was granted to the learned counsel to produce relevant evidence in support of cases of his appellants he was representing and hearing was adjourned to 29-4-2008. Since the learned counsel Mr. Athar Minallah Advocate could not produce relevant evidence in spite of last opportunity provided to him, the evidence of the appellants was closed on 29-4-2008, and appeals were fixed for arguments on 20-5-2008. The learned counsel for the appellants requested for adjournment on 20-5-2008 and appeals were re-fixed for hearing on 16-6-2008. On 16-6-2008 Mr. Akhtar Aziz, Advocate appeared on behalf of the learned senior counsel and stated that the learned counsel is out of station and he is under instructions from the learned counsel that the arguments advanced by Mian Abdul Ghaffar, Advocate in the case of Sheikh Muhammad Akmal v. Collector of Customs be adopted in addition to the arguments available in the appeal documents and these appeals may be disposed of in accordance with the law. Mian Abdul Ghaffar learned counsel in Appeal No.79 of 2006 "Sheikh Muhammad Akmal v. Collector of Customs" contended that the seizure was made by the Airport Security Force, therefore, the seizure was illegal. The learned counsel further contended that the foreign currency was purchased from the Money Changers and produced certified copies of the relevant receipts issued by the Money Changers. The learned counsel contended that the appellant Sheikh Muhammad Akmal is available and his statement may be recorded on oath. Sheikh Muhammad Akmal stated on oath that he purchased 69500 US from Royal Money Changer Karachi vide receipts dated 25-10-1999, 25-10-1999, 8-11-1999, 8-11-1999, 13-11-1999, 19-11-1999, 27-11-1999, 2-124999, 2-12-1999 and 3-12-1999. He produced certified copies of the receipts Exh. P1 of Exh.P10 of Messrs. Royal Money Changer who also issued a certificate confirming sale of US which is Exh.P.11. The appellant stated that he also purchased 63,500 US from Abid Butt and Shehzad Butt_ Money Changer Lahore vide receipts dated 9-10-1999, 16-10-1999, 22-10-1999, 30-10-1999, 6-11-1999, 12-11-1999, 20-11-1999, 26-11-1999 and 4-12-1999. He also produced certified copies which- are placed on record Exh. P12 to Exh. P20. The said money changer also issued certificate Exh.P21 confirming sale of US to the appellant. 8. The learned counsel contended that the appellant is engaged in the business of import of hardware from China. It was contended that the appellant had been importing goods through customs post Sust for which no letter of credit was required to be established. It was contended that the appellant usually carry foreign currency purchased from the authorized agent to China and make shipment on cash payment basis. It was contended that the appellant was genuinely involved in the import of Chinese goods which on import were cleared on payment of duties and taxes leviable thereon. The learned counsel contended that interception of the appellant and seizure of currency by the Airport Security Force staff was illegal and without lawful authority, in view of the fact that the members of Airport Security Force were never appointed as officers of customs. They were, therefore, not competent to take action under the provisions of Customs Act, 1969. The learned counsel contended that theforeign currency was purchased by the appellant from the authorized money changers, therefore, no illegality was committed by the appellant. The learned counsel for the respondent contended that during normal routine checking the staff of Airport Security Force observed that foreign currency was being carried by the passenger and they handed over the passenger to the customs authorities along with foreign currency and all legal formalities including seizure were made by the customs staff who was legally competent to take action against the accused persons under the provisions of Customs Act, 1969. It was contended that since all legal formalities where completed by the customs authorities in accordance with the law, therefore no illegality was committed in the case. The learned counsel for the appellants could not produce any evidence in support of his contentions that the seizure of the foreign currency was made by the Airport Security Force staff. The learned counsel for the respondent produced a list of authorized dealers issued by the State Bank of Pakistan and contended that the name of money changers who had sold the foreign currency to the appellant Sheikh Muhammad Akmal is not included in the list of authorized dealer, therefore, the appellant was not authorized to take out of Pakistan the currency purchased from the money changers as it was not being legally transferred from Pakistan. The learned counsel for the respondent referred to a judgment of Honourable Supreme Court of Pakistan in Civil. Appeal No. 1582 of 2001, The Government of Pakistan v. Mahmood Ahmad Qureshi, where the Honourable Court ordered confiscation of seized foreign currency in an identical case. The learned counsel for the respondent further contended that Honourable Supreme Court of Pakistan in Criminal Appeals Nos. 519 to 527 of 2005 enhanced the punishment awarded to the appellants by the Special Judge Customs, Taxation and Anti-Smuggling Rawalpindi. The Honourable Supreme Court of Pakistan in its judgment held that the transfer of foreign exchange means legal transfer of currency through authorized dealers, banks etc. and not through personal baggage or by any other illegal manner. 9. We have heard the contentions of both the sides and perused the relevant record available before us. We have observed that the foreign currency was being taken out of Pakistan by the accused persons on their body. The Honourable Supreme Court of Pakistan in its judgment referred above has observed that according to the definition of economic reforms, incorporated in section 2(1)(b) of the Act, 1992 it means economic polices and programmes, laws and regulations announced, Promulgated or implemented by the Government on and after the 7th day of November, 1990, relating to privatization of public sector enterprises, and nationalized banks, promotion of savings and investments, introduction of fiscal incentives for industrialization and deregulation of investment, banking, finance, exchange and payments system, holding and transfer of currencies. It was observed that in the foreign exchange (Temporary Restriction) Act, 1998, the concept of transfer of currency was not amended. The transfer of currency outside the country, therefore, means legal transfer i.e. through authorized dealers, banks etc and not through personal baggage or by any other illegal manner. It was observed that the Act of 1998 is applicable w.e.f. 28th May, 1998 and in pursuance of its section 2, the protection of Act of 1992 was suspended and after the promulgation of the same on 21-7-1998, the State Bank of Pakistan issued Notification No.1017(I)/1998. According to clause (d) of the said notification a person was authorized to take out of Pakistan foreign exchange issued to him by an authorized dealer in Pakistan and endorsed on his passport to the extent 10,000 are equivalent thereto any other currency. It was observed by the Honourable Court that the word transfer means a legal transfer and even if a person claim to be benefited of the Act, 1992 which was amended subsequently by means of Act, 1998 he has to show that he is legally authorized to transfer currency outside the country for any purpose including his business. It was held by the Honourable Supreme Court of Pakistan that if a person claims that he has been authorized to take the currency out of Pakistan, he has to adopt the proper procedure i.e. through banks and no one can be allowed to shift currency except to the tune of US 10,000 as it has been prescribed by the State Bank of Pakistan. The learned counsel for the respondent contended that since the foreign currency recovered from the appellants was purchased from the money changers and not from the authorized dealers, therefore, the appellants were not legally authorized to take the foreign currency out of Pakistan. 10. We have observed that the seizure in the case of appellant Sheikh Muhammad Akmal was made by the customs authorities after completion of all legal formalities after detection of case by the staff of Airport Security Force. In view of above, action taken by the customs authorities was perfectly in accordance with the law as seizure and all other subsequent actions were taken by customs authorities. The evidence produced by the appellants has been examined and we are of the view that since the foreign currency was purchased from the money changers and not from the authorized dealers, therefore, the appellants were not authorized to take the foreign currency out of Pakistan. In view of above there is no merit in the appeals and the same are dismissed. 11. The appeals stand disposed of as above. C.M.A./122/Tax(Trib.) Appeals dismissed.

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