Jurisdiction of Customs Enforcement – SHC decision to be assailed; Customs Enforcement seeks permission to file CPLA

KARACHI: The Collectorate of Customs ( Enforcement) has sought permission from Member, Custom Operations, Federal Board of Revenue to file Civil Petition for Leave to Appeal (CPLA against two judgment passed by Customs Appellate bench of High Court of Sindh.

The judgments were passed on 23/9/2020 and 22-12-2020 and pertains to search and seizure under Section 163 of the Customs Act 1969. The other issue is of jurisdiction of Customs over entire Karachi or restricted to port area only.

According to a letter written by the collectorate, the “ potential ramifications “ of the two judgments to be impugned before the apex court, were stated in the said letter.

The letter said that judgments mean that  Customs can have jurisdiction only in the Port area and not entire Karachi.

The letter says that “  the case of serious nature of smuggling has not been decided on merit, yet SHC has  declared search and seizure operation illegal and also ordered return of seized goods within 7 ( seven) days. The bench also left the question of quashing of the criminal proceedings before the special customs court asking the petitioners/ importers to file appropriate application before the trial court.

The judgment was termed “capacious decision without due appreciation of merit “ and it was stated that if these judgment were not assailed before the apex court, the anti-smuggling  functions of the Collectorate will be clogged and jurisdiction will be squeezed to Port area alone.

The Member Operation was requested to allow hiring of a counsel on special fee for filing of CPLA. The letter cites case law 2005-SCMR -37 titled Collector of Customs , Lahore versus  Universal Gateway Trading Corporation.

It was interesting to mention here that SHC has ordered Chairman FBR to  hold inquiry in this matter against senior custom officials for acting beyond jurisdiction but this fact was not stated in the letter seeking permission to file CPLA.

The court declared a raid conducted at locked rented ware houses and resultant search and seizure of fabric as illegal, incongruent with section 162 & 163 of the Customs Act 1969

The SHC bench was hearing a constitution petition filed by one Muhammad Hasan Nadeem and others challenging the raid at rented ware houses located in North Karachi, seizure of stored consignments of fabric.

Khawaja Shamsul Islam advocate represented the petitioners while departmental respondents included Collector, MCC ( Enforcement & Compliance). The counsel for petitioners contended that respondents acted beyond jurisdiction and violated laws particularly section 162 and 163 of the Customs Act. Admittedly, no one was available at the warehouses when the same were raided at 3 a.m  on 2-10-2020.

The respondents failed to follow the  section 162 of the Act, no search warrant was sought or obtained and alternative section  163 of the Act was employed in an attempt to garner the sanction of law, the  counsel for petitioners argued.

It was further contended that mandatory notice under section 26 was given to the petitioners/importers.

The bench noted the quantum of goods which took three days for preparing inventory after seizure and said that in view of quantity of goods it was surprising that why recourse to section 162 was abjured by the respondents.

The bench said that once the petitioners produced copies of documents to show the lawful import, the burden was shifted on the respondent officials to prove otherwise.

The bench deciding the petitions ordered release of goods but at the same time set the respondents at liberty to resort to adjudication proceedings if they have any cogent material.

The bench also asked the petitioners to approach the trial court  for quashing of FIR as well as  criminal proceedings. The bench also directed the Secretary Revenue Division / Chairman FBR  to conduct  an inquiry in respect of the “prima facie manifest unfettered  exercise of power  by functionaries, conducting search and seizures in violation of Act and the fundamental rights inter alia with respect to livelihood and liberty enshrined in the Constitution “. The bench also ordered “ appropriate proceedings against those found culpable “.

The bench also sought a report by Chairman FBR through the office of the Attorney General within 4 weeks to be submitted to the Registrar of SHC.

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