Setting aside the rules, the Central Board of Revenue (CBR) has sold gold confiscated at Karachi airport to the State Bank of Pakistan (SBP), declaring an incoming passenger as smuggler.
The customs department sold the confiscated gold without waiting for the order from CBR Member Legal. The petitioner filed appeal before Member Legal on March 7, 2002, which was decided on September 10, 2002, while the gold, in question, was sold to SBP on March 29, 2002.
The fact came into light from a recent judgement (writ petition 247 of 2005) passed by Lahore High Court Rawalpindi Bench against the Central Board of Revenue (CBR), Member Legal.
On behalf of the petitioner Nazir Azhar advocate presented the case, while Farhat Nawaz Lodhi was the departmental representative.
The Court ordered that CBR should return, to the passenger, the value of the gold, estimated at Rs 9,89,800, after deducting customs duty leviable at that time. The remaining amount should be returned, along with profit/interest at the rate which would have accrued to him if he had invested the same amount in defence saving certificate of national savings, till actual payment is made.
The action of CBR to sell the gold to SBP during pendency of appeal cannot make the issue dead, nor it justifies rejection of the petition.
According to details of the case, a passenger returned from Dubai after staying for less than six months abroad and brought over 2 kg jewellery on May 17, 2000. The flight, originated from Dubai to Islamabad, was diverted to Karachi due to bad weather.
The order passed by the then additional collector of customs, Jinnah Terminal Complex, Quaid-e-Azam International Airport, Karachi, said that only a lady passenger with less than six months stay aboard was entitled to import personal jewellery of value up to $600 under baggage rules notified vide SRO 570(I)/98. The appellant was not entitled to import jewellery in his baggage.
Under another SRO 555(I)/98, a Pakistani passenger can bring up to one kg gold under the personal baggage scheme on payment of 5 percent customs duty, provided his stay abroad should be above six months and duty is being paid in foreign exchange. According to order, passenger was not entitled to import jewellery under this notification and import had been made in violation of SRO 555(I)/98. The passenger insisted that he made a declaration and was thus entitled to the release of gold jewellery. The department pleaded that it was correct that the passenger had declared gold in the baggage, but he never requested the customs official to detain the same under section 142 of Customs Act, 1969 for taking it out of Pakistan to Singapore. There was no evidence to prove that gold jewellery was meant for Singapore. He did not make any request of taking the gold to Singapore.
On appeal, CBR Member Legal refused to amend order-in-original, passed by the concerned customs official.
Turning down the plea of customs officials, the Court held that the passenger, even before screening his baggage came to customs, had declared jewellery, which was outrightly confiscated by the customs at the Karachi airport. The passenger made no attempt to hide or secretly clear the gold. However, additional collector refused to allow any relief to the passenger on the ground that there was no precedent of release.
The petitioner exercised right of making appeal to Member Legal that there was no justification to sell the gold during the pendency of appeal. The petitioner filed an appeal before Member Legal on March 7, 2002 and was decided on September 10, 2002, whereas gold was sold to SBP during this period of legal proceedings.
The Court held that the passenger did make a declaration of its import. Therefore, he cannot be held to have attempted to smuggle the same into Pakistan. The CBR should have taken the declaration made by passenger in an objective manner and should have allowed release of goods on payment of customs duty. The department has shown undue haste in disposal of gold, the Court added.
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