Collector of Customs, Peshawar vs MJs. Paper International (Pvt.) Ltd., Nowshera and another
This petition for leave to appeal arose from a dispute between the Collector of Customs and a private company regarding the correct penal provision applicable to the unauthorized consumption of imported wood pulp stored in a private bonded warehouse. The respondent had cleared consignments but subsequently consumed a portion without notifying customs authorities, leading to a penalty imposition. The core legal question was whether the respondent's actions fell under clause (62) or clause (90) of Section 156(1) of the Customs Act, 1969. The High Court had previously ruled that clause (62) was the applicable provision, limiting the penalty to twenty-five thousand rupees. The Supreme Court upheld this decision, finding that the specific facts—illegally taking goods out of a warehouse without duty payment—squarely fit the description of clause (62) rather than the broader, more severe penal provisions of clause (90). The Court affirmed that when specific conduct is clearly addressed by a particular clause, it takes precedence over general provisions, thereby dismissing the petition and refusing leave to appeal.
- Does the unauthorized consumption of goods from a private bonded warehouse attract the penalty under clause (62) or clause (90) of Section 156(1) of the Customs Act 1969?
- Is the penalty for illegally taking goods out of a warehouse without payment of duty governed by clause (62) of Section 156(1) of the Customs Act 1969?
- Section 156(1) clause (62), Customs Act 1969
- Section 156(1) clause (90), Customs Act 1969
JUDGMENT: MR. JUSTICE SARDAR MUHAMMAD RAZA KHAN.--(1). 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'bl 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, the proof lawful excuse of which shall be on such person, acquires possession of, or is in any way concerned in carrying, removing, depositing, harboring, 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 aforesaid 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.