KARACHI: A custom appellate bench of High Court of Sindh (SHC) dismissed a Special Customs Reference Application filed by Model Collectorate of Customs Hyderabad impunging an order passed by Special Customs Appellate Tribunal (SCA) Karachi.

The SCAT while deciding an appeal ordered release of an Oil Tanker from which 540000 Liters of smuggled HSD was allegedly recovered. As per prosecution/customs, the oil tanker was taken into custody at Benazirabad (Nawabshah). It was brought to MCC Hyderabad and was detained. A show cause was issued to the owner of the Oil Tanker and later an Order in Original was passed ordering outright confiscation of the said Oil tanker used for transporting smuggled HSD.

Shahid Ali Qureshi advocate appearing for the appellant/applicant department challenged the order of release and said that it was used in commission of smuggling and hence is part and parcel of the smuggled goods.

Dr Khalid Hayat advocate appearing for the respondent/owner of the Oil Tanker rebutting the arguments submitted that the oil tanker was plying on the National Highway as a routine. At the time the alleged raid was conducted it was found parked/abandoned hence no question of showing of documents arised. He also submitted that vehicle was released after payment of 20 per cent fine of value. He further submitted that Show Cause as well as Order in Original were passed in haste.

The bench after perusing the case file and documents made following observations:

“It is interesting to note that at the time of raid the subject vehicle was found abandoned but it also said to have been registered with the Motor Vehicle Authority. The customs authorities, however, failed to acquire details and issue show cause notice to the owner. Though ownership documents of the O.T were furnished however, no effort was made by the customs authorities to verify the same from the Excise Department. It is also noted that prior to the incident, which took place on 26.05.2015 with regard confiscation of the HSD in the O.T, the department was not in possession of any material or evidence against the owner of the O.T to be involved in any objectionable activity. It is also noted that it was only when the customs authorities failed to release the O.T, the Respondent approached this Court and this Court vide order dated 16.01.2019 directed the release of the O.T, subject to furnishing ownership documents to the Nazir and obtaining an undertaking from the owner that till such time the present SCRA is pending he will not sale out the said O.T. It is also noted that the CAT while allowing the appeals has categorically observed that after seizing the O.T, necessary legal requirements with regard to issuing proper show cause notice to the owner and confronting him on other aspects was not carried out by the department, which is in violation of mandatory provision of Section 171 of the Act. 9. Perusal of the record further reveals that the customs authorities made no effort to create a link between the HSD and the O.T, which establishes that the confiscation of HSD and the O.T, were two different aspects requiring different treatments. 6 However, it is observed that a somewhat similar treatment was accorded by the department to the HSD as well as to the O.T. The record also reveals that nobody came forward to claim ownership of the HSD whereas owner of the O.T, under question, was claimed through some documents but the HSD and the O.T were incorrectly treated alike by the customs authorities. Hence, we are of the view, that the department has simply failed to make out a case of smuggling/confiscation of the O.T as mentioned under Section 2(s) of the Act and no misinterpretation on the part of the CAT has either been found or established by the department. The decision relied upon by the learned counsel for the department is quite distinguishable from the facts obtaining in the instant matter. Therefore, in our view confiscation of the O.T was unwarranted and cannot be approved. We therefore, under the circumstances confirm the release of the vehicle and answer the question raised in the instant matter in negative i.e. against the department and in favour of the Respondent No.1.

The bench then dismissed the SCRA on the basis of foregoing reasons above.