COLLECTOR OF CUSTOMS, PESHAWAR vs Messrs PAPER INTERNATIONAL (PVT.)
This matter concerns a petition for leave to appeal filed by the Collector of Customs against a judgment of the Peshawar High Court, which had determined the applicable penal provision under the Customs Act for the unauthorized removal of goods from a bonded warehouse. The respondent had imported wood pulp, a portion of which was found missing from a private bonded warehouse without prior intimation to customs authorities. The core legal question was whether the respondent's conduct attracted the penalty provision under Section 156(1) clause (62), which pertains to illegally taking goods out of a warehouse, or clause (90), which relates to the unlawful removal or concealment of goods involving fraudulent evasion of duty. The Supreme Court upheld the High Court's decision, affirming that clause (62) was the correct provision applicable to the facts. The Court held that the specific nature of the unauthorized removal from the warehouse fell squarely within the scope of clause (62), thereby limiting the penalty to the statutory maximum prescribed therein, rather than the more severe penalties associated with clause (90).
- Does the unauthorized removal of goods from a bonded warehouse without payment of duty fall under Section 156(1) clause (62) or clause (90) of the Customs Act 1969?
- What is the maximum penalty applicable under Section 156(1) clause (62) of the Customs Act 1969 for the illegal removal of goods from a warehouse?
- Section 156(1) clause (62), Customs Act 1969
- Section 156(1) clause (90), Customs Act 1969
' SARDAR MUHAMMAD RAZA KHAN, J.---The Collector Customs Peshawar seeks leave to appeal against the judgment, dated 12-12-2001 rendered by a learned Division Bench of Peshawar High Court whereby, it was held that, to the irregularity committed by Messrs Paper International (Pvt.)
Ltd., the correct section of Customs Act applicable was section 156(1) clause (62) and not section 156(1) clause (90), as claimed by the Customs department.
2. The respondent imported two consignments of wood pulp on 20-5-1998 and 25-5-1998 from Canada and Indonesia. The consignment of 3000 metric tons of Indonesian origin was cleared at Karachi while Canadian consignment of 497.361 metric tons was unloaded in the factory in private bonded warehouse, both simultaneously. When the department physically checked the consignment on 5-10-1998, a shortage of 357.361 metric tons was discovered, to have been consumed without intimation to the Customs authorities.
3. The Adjudicating Officer vide order-in-original, dated 4-11-1998 imposed a penalty of rupees three million plus duties which, by the Customs Appellate Tribunal was reduced to rupees one million. The order of the Tribunal was set aside by the Hon'ble High Court through impugned judgment, holding that the respondents were liable to a penalty not exceeding rupees twenty-five thousand as provided by section 156(1) clause (62) of the Customs Act.
4. Having comprehended the actual commission or omission by the respondent-Company, we are left to determine as to what section of law is attracted, in the circumstances. Clauses (62) and (90) of section 156(1) of the Act are reproduced for facility of ready reference:-- Offences Penalties Section of this Act to which offence has reference.
62. If any person illegally takes any goods out of any warehouse without payment of duty, or aids, assists or is otherwise concerned therein.Such person shall be liable to a penalty; not exceeding twenty five thousand rupees and upon conviction by a Special Judge, he shall further be liable to imprisonment for a term not exceeding five years or to fine, or to both.
90. If any person, without lawful excuse, the proof of which shall be on such person, acquires possession of, or is in any way concerned in carrying, removing, depositing, harbouring, keeping or concealing or in any manner dealing with any goods, not being goods referred to in clause (89), which have been unlawfully removed from a warehouse or which are chargeable with a duty which has not been paid, or with respect to the importation or exportation of which there is a reasonable suspicion that any prohibition or restriction for the time-being in force under or by virtue of this Act has been contravened, or if any person is in relation to any such goods, in any way without lawful excuse, the proof of which shall be on such person, concerned in any fraudulent evasion or attempt at evasion or any duty chargeable thereon, or of any such prohibition or restriction as foresaid or of any provision of this Act applicable to those goods."Such goods shall be liable to confiscation; and any person concerned shall also be liable to penalty not exceeding ten times the value of the goods.
5. A plain reading of the two clauses juxtaposed, would indicate without difficulty of comprehension or interpretation that to the circumstances of the present case, it is clause (62) of the section that applies and not clause (90). It clearly provides that the penalty shall not exceed rupees twenty five thousand and the person concerned can also be tried by the Special Judge Customs. It found guilty he shall be liable to imprisonment for a term not exceeding five years or fine or to both.
6. In the circumstances, the High Court rightly came to the conclusion that it arrived at. There being no force in the petition, it is hereby dismissed and leave to appeal refused.