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166. Power to summon persons to give evidence and produce documents or things.--(1) Any gazetted officer of customs shall have power to summon any person whose attendance he considers necessary either to give evidence or to produce a document or any other thing in any inquiry which such officer is making in connection with the smuggling of any goods.

(2) A summons to produce documents or other things may be for the production of certain specified documents or things or for the production of all documents or things of a certain description in the possession or under the control of the person summoned.

(3) All persons so summoned shall be bound to attend either in person or by an authorised agent, as such officer may direct; and all persons so summoned shall be bound to state the truth upon any subject respecting which they are examined or make statement and produce such documents and other things as may be required:

Provided that the exemption under section 132 of the Code of Civil Procedure, 1908 (Act V of 1908), shall be applicable to any requisition for attendance under this section.

(4) Every such inquiry as aforesaid shall be deemed to be judicial proceeding within the meaning of section 193 and section 228 of the Pakistan Penal Code (Act XLV of 1860).

NOTES

General.--This section corresponds to Section 171-A of the Sea Customs Act, 1878. Under the new section it is the gazetted officer of customs who can have the power to summon the person whereas under the old law any officer of customs duly employed in the prevention of smuggling whether he was gazetted officer or not, was competent to summon the person. Other provisions of the section are the same as contained in the old Section 171-A.

Scope.--From the setting of Section 166 it appears that the section is enacted to facilitate an enquiry to find out whether an offence had been or is being committed. It may lead to a prosecution before the criminal court, if an offence is disclosed or the Customs Authorities might consider it sufficient to impose an administrative penalty without prosecuting the offender. (AIR 1963 Mad. 334, 434 (DB). Section 166 does not expressly place any limitations on the powers of the officer of customs. He can summon any person whose attendance he considers necessary. So long as there may be any reasonable or possible chance of such documents at the enquiry that he is making, being in connection with the smuggling of any goods, it is not for the court to draw any limits except that the document demanded must be in aid of the enquiry. (AIR 1961 Cal 86 = 1961 (1) Cri. L. Jour 237).

No conflict between Sections 166 and 187.--There is 'no conflict between Sections 166 and 187. Section 166 does not say that when a document is produced thereunder it will not be available any longer to the party producting it when he will be required to give evidence, and in fact Section 166 and the summons thereunder ask him to give evidence. These two sections can be read together and one does not impinge on the field of the other. Therefore Section 166 does not violate Section 187. (AIR 1961 Cal 86).

Summons-Meaning.--What is called a "summons" in this section is not really a summons issued under the Civil or Criminal Procedure Code by any court. The summons, as not stating anything more than an enquiry under Section 166 of the Customs Act cannot be held to be and had invalid on the ground of lack of details of the enquiry. It will be unwise to introduce the details and concept of a lis and the particulars of a lis or regular criminal case in this context of the enquiry by a customs officer under Section 166. (AIR 1961 Cal. 86 + 1961 (1) Cri. L. Jour 237). The power under this section is a power to summon and not a power to issue a summons. The ordinary meaning of the word "summons" is to demand presence of; call upon a person to appear. The power that is conferred is to require a person to appear. Having regard to the phraseology used in this section of the Act, and having regard to the fact that there is no procedure prescribed for issuing a summons, and no form of summons having been prescribed the section does not contemplate the service of a summons as a condition precedent enabling the customs officer to record the statement under this section. The customs officers were not, therefore, acting without jurisdiction in recording the statement even though in some cases there had been no service of a written summons as such on some of the persons. (AIR 1965 Bom. 195 DB).

Statements made to Customs Officers.--When notices under this section are issued to the petitioners alleging that there is a reason to believe that the goods mentioned in the schedule attached to the notices have been imported without payment of customs duty, the petitioners are not persons accused of any offence and they are bound to appear in obedience to the summons issued to them and answer question that may be put to them. (AIR 1960 Mad. 225=ILR 1960 Mad. 267=1960 Cri. L. Jour 625). The statement if not otherwise inadmissible may be admitted in evidence at trial. Where in a case of smuggled goods, the accused persons made statements before the Customs Authorities, which were signed not only by their lawyer but also by the accused themselves and during the trial the signatures were admitted by the accused but the lawyer was not examined to prove them, the statements must be held to be proved by this admission and it was not further necessary to examine the lawyer. (AIR 1965 SC 481). But if they are asked questions the answers to which are likely to incriminate them, it is open to them to claim the protection provided by Article 20 of the Constitution (Indian) (Article 13 of the Pakistan Constitution). If that claim is overruled and they are compelled to answer those questions, then such answers will not be admissible in evidence against them had they been at a later stage prosecuted in a criminal court. (AIR 1960 Mad. 225=ILR 1960 Mad. 267=1960 Cri. L. Jour. 625). Where in the case notices issued under Section 166 to certain persons to appear before certain customs officials and to produce certain documents, it appeared from the accusations made in the search warrants at the instance of the customs authorities and those made in one of the notices that the accusations of criminal offences could not be excluded, it was held that the requirements of Article of the Constitution were satisfied and the protection under that Article was available to the persons concerned. (AIR 1958 Cal. 628 = 1958 Cri. L. Jour. 1469 DB).

Validity of section.--This section is not in conflict with Article 20 of the Constitution (Article 13 of the Constitution of Pakistan) and is therefore valid law. (AIR 1963 Mad. 434 (DB) + AIR 1958 Cal. 682). When in a particular case on its own facts any particular summons under Section 166 of the Customs Act violates Article 20 Constitution of India (Article 13 of Pak. Constitution) will depend on the alleged and established facts of that case showing what evidence and what document compels a person accused of an offence to be a witness against himself within the meaning of that constitutional immunity. The possibility of such an unconstitutional summons does not make Section 166 itself unconstitutional under Article 20. (AIR 1961 Cal. 86 = 1961 (I) Cri. L. Jour. 237).

Compulsion to incriminate.--There is enough compulsion in the terms of Section 166 itself, but when one takes the provisions of the section along with the sections of the Penal Code, one must find so far as these provisions go, the compulsion overwhelming. It follows that if by being compelled to tell the truth, the person summoned under the section is compelled to make a statement which incriminates him, or if by being compelled to produce 'all documents' he is compelled to produce a document which shows him as having committed an offence, he is clearly compelled to be a witness against himself. (AIR 1958 Cal. 682 = 1958 Cri. L. Jour. 1469 DB).

Validity of Section 166.--This section is not in conflict with the provisions of Article 13 of the Constitution of Islamic Republic of Pakistan, 1973 which provides protection against self-crimination. The equivalent provisions of Indian Constitution is contained in Article 20. The question of validity of Section 171-A was decided by the Calcutta High Court in the case of Collector of Customs vs. Calcutta Motor and Cycle Company. (AIR 1961 Cal. 86). It was held that Section 171-A is not ultra vires the provisions of the Constitution.

It cannot, however, be held that Section 171-A authorising issue of such notices is ultra vires the Constitution and therefore, void in so far as it enables the Customs Authorities to summon a person accused of an offence to appear or to produce documents which are likely to incriminate him. The section only provides that any person may be summoned either to appear or to produce specified documents or all documents of a certain description. It would thus seem that no certainty of a violation of Article 20(3) is inherent in the section but that a possibility of its violation may arise only in individual cases in the course of the application of the section. If so, it would seem to be more logical to hold that the section as such is not ultra vires but it cannot be relied on as authorising extraction of answers or extortion of documents which would incriminate the person summoned if he has been accused of an offence.

In any event, all statutes must yield to the Constitution and, therefore, it would be correct to hold that Section 171-A as such is not bad, but the person summoned under its provisions will necessarily be entitled to claim the constitutional privilege as soon as he is asked to answer a question or produce a document incriminating himself, if he has previously been accused of an offence.

It would have been certainly better if Section 171-A of the Sea Customs Act contained an exception as given in Sections 161 and 175 of the Criminal Procedure Code, but since all laws made by the Legislature must be subject to the Constitution, the effect of the section even in the absence of such an exception is the same. (1958 Cr. L.J. 1469 + AIR 1958 Cal. 682).

All persons shall be bound to state the truth.--This phrase does not provide for giving statement which is incriminatory for the reason that a guarantee is given by the Constitution of the Islamic Republic of Pakistan, 1973 in its Article 13 (b). The person examined in the courts of law is thus required to answer all questions put to him other than the questions the answer to which would have a tendency to expose him to a criminal charge. A person who is examined if he gives false information in any answer to such question, can be prosecuted under Sections 202 and 203 of the Pakistan Penal Code.

Disobedience of order.--Where an order in writing by the duly empowered customs officer, requiring the attendance of a person is disobeyed, the only course open is to prosecute that person for such disobedience under the Pakistan Penal Code.

Exemption of certain persons from personal appearance.--Following persons are exempt from personal appearance before the customs officer:--

(i) women who, according to the customs and manners of the country, ought not to be compelled to appear in public; and
(ii) any notified person whose rank, in the opinion of Provincial Government entitled him to the privilege of exemption.

Giving false evidence; offering any insult or causing any interruption.--The enquiry under this section is a judicial proceeding within the meaning of Sections 193 and 228 of the Pakistan Penal Code and the person so summoned, if gives false evidence or offers insult or causes interruption intentionally to the customs officer making such enquiry, is liable to be prosecuted under the aforesaid sections of the Pakistan Penal Code in addition to any action taken against him under this Act or Rules framed thereunder.

Sub-section (4).--Sub-section (4) provides that the inquiry under Section 166 will be a judicial proceeding within the meaning of Section 193 and Section 228 of the Pakistan Penal Code.

Section 193 of the Pakistan Penal Code provides that whoever intentionally gives false evidence in any stage of a judicial proceeding, or fabricates false evidence for the purpose of being used in any stage of a judicial proceeding, shall be punished with imprisonment of either description for a term which may extend to seven years, and also be liable to fine: and whoever intentionally gives or fabricates false evidence in any other case, shall be punished with imprisonment of either description for a term which may extend to three years, and shall also be liable to free.

Section 228 of the Pakistan Penal Code provides for the punishment of intentional insult or interruption to public servant sitting in judicial proceeding. The punishment provided for this offence is a simple imprisonment for a term which may extend to six months, or fine which may extend to one thousand rupees or both.

Entrustment of the functions of Customs Officers to officers of the West Pakistan Rangers.--The Central Board of Revenue has entrusted the functions of the officers of Customs under Section 166 of the Customs Act, 1969 to all officers of the West Pakistan Rangers not below the rank of sub-Inspector within their respective jurisdiction. (See Notification No. S.R.O. 29(I)/73, reproduced at page 97 of the Customs Rules and Notifications, 1998-99 Edition - An allied publication).

Entrustment of the functions of Customs Officers to officers of the Coast Guard.--The Central Board of Revenue has entrusted the functions of the officers of Customs under Section 166 of the Customs Act, 1969 to all officers of the Coast Guard not below the rank of Junior Commissioned officers of the Coast Guard within their respective jurisdiction. (See Notification No. S.R.O. 30(I)/73, reproduced at page 97 of the Customs Rules and Notifications, 1998-99 Edition - An allied publication).

Entrustment of powers to the officers of the Frontier Constabulary.--The Central Board of Revenue has entrusted subject to such limitation and restrictions as laid down in the rules, the functions of the officers of Customs under Section 166 of the Customs Act, 1969 to officers not below the rank of Junior Commissioned Officers within their respective jurisdiction. (See Notification No. S.R.O. 524(I)/74, reproduced at page 136 of the Customs Rules and Notifications, 1998-99 Edition - An allied publication).

Entrustment of powers of the Officers of Customs to the Officers of the Frontier Corps.--The Central Board of Revenue has entrusted the functions of the officers of Customs under Section 166 of the Customs Act, 1969 to the officers of the Frontier Corps not below the rank of Junior Commissioned Officer within their respective jurisdiction. (See Notification No. S.R.O. 1017(I)/74, reproduced at page 137 of the Customs Rules and Notifications, 1998-99 Edition - An allied publication).

Entrustment of function of the Customs Officers to the Officers of the Directorate of Vigilance.--The Central Board of Revenue has entrusted the functions of the officers of the Customs under Section 166 of the Customs Act, 1969 to the Officers not below the rank of Assistant Director within their respective jurisdiction. (See Notification No. S.R.O. 739(I)/79, reproduced at page 170 of the Customs Rules and Notifications, 1998-99 Edition - An allied publication).

Powers of the Officers of the Directorate of Intelligence and Investigation (Customs and Excise).--The Intelligence Officers, Senior Intelligence Officers, Principal Appraisers, Appraisers, Superintendents, Assistant Directors, Deputy Directors, Director, Director General of the Directorate of Intelligence and Investigation (Customs and Excise) have been authorised to exercise powers and discharge duties of the Officers of Customs under the provisions of Section 166 of the Customs Act within their respective jurisdiction. (See Notification No. S.R.O. 388(I)/82, reproduced at page 220 of the Customs Rules and Notifications, 1998-99 Edition - An allied publication).

Entrustment of functions of the Officers of Customs to the Officers of the Directorate of Inspection.--The Central Board of Revenue has authorised the Director, Deputy Director, Assistant Director, Principal Survey Officer and Survey Officer of the Directorate of Inspection (Customs and Central Excise) to exercise the powers and discharge the duties of the officers of Customs under Section 166 of the Customs Act, 1969. (See Notification No. S.R.O. 723(I)/84 = PTCL 1985 St. 19 or page 321 of the Customs Rules and Notifications, 1998-99 Edition - An allied publication).

Powers and Functions entrusted to the Officers of Police other than Railway Police.--Functions under Section 166 of the Customs Act, 1969 have been entrusted to Officers not below the rank of Assistant Superintendent, Deputy Superintendent of Police other than Railway Police within their respective jurisdiction. (See Notification No. S.R.O. 913(I)/86 = PTCL 1987 St. 80(ii) or page 396 of the Customs Rules and Notifications, 1998-99 Edition - An allied publication).

Entrustment of powers of the Officers of Customs to the Officers of Frontier Corps NWFP for certain areas.--The Central Board of Revenue has entrusted the functions of the officers of Customs under Section 166 to the Officers not below the rank of Junior Commissioned Officer of the Frontier Corps NWFP operating within twenty miles along the international borders adjoining the Province of NWFP and within the territorial/administrative limits of:--

(a) Bajaur Agency including Jandool and Baraul of Dir,
(b) Mohmand Agency,
(c) Khyber Agency,
(d) Orakzai Agency,
(e) Kuram Agency,
(f) N. Waziristan--including Bannu FR,
(g) S. Waziristan, and
(h) Kohat FR (Darra Adam Khel),

within the NWFP. (See Notification No. S.R.O. 281 (I)/95, reproduced at page 737 of the Customs Rules and Notifications, 1998-99 Edition - An allied publication).

167. Person escaping may be afterwards arrested.--If any person liable to be arrested under this Act is not arrested at the time of committing the offence for which he is so liable, or after arrest makes his escape, he may at any time afterwards be arrested and dealt with in accordance with the provisions of
[***] section 161 as if he had been arrested at the time of committing such offence.

NOTES

General.--This section corresponds to Section 176 of the Sea Customs Act with the amendment that person arrested after his escape may not be taken forthwith before a Magistrate but he will first be dealt with in accordance with the provisions of Section 161 of the Act. These provisions are to be read with the constitutional provisions. The person so arrested must be produced before the nearest Magistrate within 24 hours of his arrest if not released by the Customs Authorities in accordance with provisions of Section 161 within 24 hours of his arrest.

Apart from this the provisions contained in Sections 47, 48 and 49 of the Procedure of Criminal Code, 1898 are to be followed.

Identical provisions are also contained in Section 66 of the Criminal Procedure Code, 1898.

Entrustment of the functions of Customs Officers to officers of the West Pakistan Rangers.--The Central Board of Revenue has entrusted the functions of the officers of Customs under Section 167 of the Customs Act, 1969 to all officers of the West Pakistan Rangers not below the rank of sub-Inspector within their respective jurisdiction. (See Notification No. S.R.O. 29(I)/73, reproduced at page 97 of the Customs Rules and Notifications, 1998-99 Edition - An allied publication).

Entrustment of the functions of Customs Officers to officers of the Coast Guard.--The Central Board of Revenue has entrusted the functions of the officers of Customs under Section 167 of the Customs Act, 1969 to all officers of the Coast Guard not below the rank of Junior Commissioned officers of the Coast Guard within their respective jurisdiction. (See Notification No. S.R.O. 30(I)/73, reproduced at page 97 of the Customs Rules and Notifications, 1998-99 Edition - An allied publication).

Entrustment of functions of the Customs Officers to the Officers of the Directorate of Vigilance.--The Central Board of Revenue has entrusted the functions of the officers of the Customs under Section 167 of the Customs Act, 1969 to the Officers not below rank of Investigator within their respective jurisdiction. (See Notification No. S.R.O. 739(I)/79, reproduced at page 170 of the Customs Rules and Notifications, 1998-99 Edition - An allied publication).

Powers of the Officers of the Directorate of Intelligence and Investigation (Customs and Excise).--The Intelligence Officers, Senior Intelligence Officers, Principal Appraisers, Appraisers, Superintendents, Assistant Directors, Deputy Directors, Director, Director General of the Directorate of Intelligence and Investigation (Customs and Excise) have been authorised to exercise powers and discharge duties of the Officers of Customs under the provisions of Section 167 of the Customs Act, 1969 within their respective jurisdiction. (See Notification No. S.R.O. 388(I)/82, reproduced at page 220 of the Customs Rules and Notifications, 1998-99 Edition - An allied publication).

Entrustment of functions of the Officers of Customs to the Officers of the Directorate of Inspection.--The Central Board of Revenue has authorised the Director, Deputy Director, Assistant Director, Principal Survey Officer and Survey Officers of the Directorate of Inspection (Customs and Central Excise) to exercise the powers and discharge the duties of the officers of Customs under Section 167 of the Customs Act, 1969. (See Notification No. S.R.O. 723(I)/84 = PTCL 1985 St. 19 or page 321 of the Customs Rules and Notifications, 1998-99 Edition - An allied publication).

168. Seizure of things liable to confiscation.--(1) The appropriate officer may seize any goods liable to confiscation under this Act, and where it is not practicable to seize any such goods, he may serve on the owner of the goods or any person holding them in his possession or charge an order that he shall not remove, part with, or otherwise deal with the goods except with the previous permission of such officer.

(2) Where any goods are seized under sub-section (1) and no show cause notice in respect thereof is given under section 180 within two months of the seizure of the goods, the goods shall be returned to the person from whose possession they were seized:

Provided that the aforesaid period of two months may, for reasons to be recorded in writing, be extended by the Collector of Customs by a period not exceeding two months.

(3) The appropriate officer may seize any documents or things which in his opinion will be useful as evidence in any proceeding under this Act.

(4) The person from whose custody any documents are seized under sub-section (3) shall be entitled to make copies thereof or take extracts therefrom in the presence of an officer of customs.

NOTES

General.--This section corresponds to Section 178 of the Sea Customs Act, 1878. The present section has been redrafted in a different manner.

Appropriate Officer.--The Inspector/Preventive Officer/Examiner has been assigned the functions of the appropriate officer for the purpose of the provisions of Section 168 of the Customs Act, 1969. (See Notification No. S.R.O. 56(I)/93, dated 19th January, 1993, reported as PTCL 1993 St. 461 or seepage 586 of the Customs Rules and Notifications, 1998-99 Edition - An allied publication).

Object of Section 168.--A deeper look at section 168 of the Customs Act would show that the intention of law-makers appears to be that the period for seizure should not be prolonged and that the Customs Authorities must give a show-cause notice for confiscation of the goods in question within two months of seizure failing which the person from whom the goods were recovered earns a right to be restored the possession of those goods (PTCL 1998 EL. 435).

Forms of "seizure" of goods.--The "seizure" of goods can be either of the two ferms i.e. either the Customs Authorities may take the goods away and keep them under their own custody or where the same is not possible, can be kept with the owner after obtaining bond for their safe custody (PTCL 1998 CL. 435).

Who can seize the goods.--The goods liable to confiscation can be seized by an appropriate officer of the department only authorised in this behalf. (PLD 1977 Lah. 300). If he seized goods are not liable to confiscation then Section 168 is not applicable (PTCL 1986 CL. 263).

Seizure of things without search warrant.--If the Customs Authorities desire to search any premises on the belief that dutiable or prohibited goods are secreted therein then they will have to comply with the provisions of Sections 162 and 163. However these sections will have no application to cases in which, without the necessity of a search of contraband goods are found by the Customs Authorities either at the pointing out of the person who possesses them or the goods are so displayed which could be conveniently seen by any one. In a situation, such as this the question of "search" would be not only irrelevant but altogether unnecessary. In this view, the contraband goods will be liable to seizure under Sections 168 and 169 of the Customs Act pending adjudication proceeding and their ultimate confiscation otherwise. (PLD 1970 Kar. 97=22 DLR (WP) 121 (DB)). Where the search and seizure are against law the subsequent proceedings are non-existent in the eye of law (PTCL 1986 CL. 363).

"Anything liable to confiscation under the Act".--The phrase "anything liable to confiscation under the Act" makes it clear that liability of confiscation is already determined or is no longer in dispute (1973 SCMR 411). Provisions of this section are not applicable if the goods are not liable to confiscation (PTCL 1986 CL. 253). While releasing the goods no condition can be imposed (1972 SCMR 87).

Section 168 empowers the appropriate officer to seize goods with an obligation to proceed for adjudication of confiscation of goods at an early date.--The ordinary rule is that no goods or property of any citizen can be seized and he cannot be deprived of its user. In departure of this rule, section 168 of the said Act empowers the appropriate officers that when any .goods are liable to confiscation to seize the same. When sub-section (1) of section 168 has empowered the appropriate officer the special right to seize such goods, its sub-section (2) places a corresponding obligation on him. That in the event of seizure of goods he is bound to proceed for adjudication of confiscation of the goods at an early date. In order to see that the appropriate officer should not retain such goods after seizure of the same and deprive the owners of their user, sub-section (2) of section 168 requires that a notice, as required under section 180 of the said Act, should be given to the person from whom goods had been seized, within a period of two months, and if such notice is not given to him the goods must be returned to him. (PTCL 1991 CL. 177).

Departmental Proceedings cannot be taken if notice is not given within the prescribed period.--See Section 179.

"Seizure"--Seizure of goods follows when the search is complete and does not proceed it or take place during the course of search itself. Seizure takes place only when the authority competent to seize the movable property has not only intention to seize it, not only where the circumstances justifying seizure has come to his notice but when he overtly seizes the movable property by divesting the possessor thereof with its possession and investing the possession in himself or through himself in some other persons (PTCL 1983 (CL) 184). Seizure includes the order of restraint (PTCL 1983 (CL) 280) Now for statutory definition see Section 2(rr).

The word "detention" is alien to section 168(2) of the Customs Act, the orders of seizure therefore are not detention orders of the goods in question.--Learned counsel for the respondent defended the action of the Customs Department by submitting that the order dated 18-11-1989 was not a seizure in the eyes of law and that the goods were only detained for the purpose of inspection at the godown and it was only on 23-11-1989 that the order of seizure was passed.

The attempt by the learned counsel for the respondent to describe the orders as detention orders of the goods in question is not only in conflict with the comments submitted and the material on record but the word "detention" is alien to section 168(2) of the Customs Act under which admittedly the respondent authorities had proceeded against the petitioners (PTCL 1998 CL. 435).

When the seizure takes place?--Seizure of goods under Section 168 takes place either by physical taking over of such goods by the Customs officer or where physical taking over of the goods is not possible or practicable it may be effected by serving on the owner of the goods or any person holding these goods in possession or charge. An order that he shall not remove, part with or otherwise deal with the goods except with the previous permission of such officer. The effect in both the cases is same namely, the owner or the person in possession of goods is deprived of the right to deal with goods in any manner. It is true that in the latter case the owner or the person in possession of such goods is not deprived of its physical possession but in effect as soon as the restraint order is served on him, he is deemed to hold those goods for and on behalf of customs Authorities and its disposal become subject to the orders of .the Customs Authorities (PTCL 1983 (CL) 280).

Who seized the goods?--Seizure of goods is supposed to have been made by the officer who took the possession of the goods and prepared recovery memo. (PTCL 1988 CL. 34).

Power of seizure is an extraordinary power.--The power of seizure founded on a mere reasonable belief being obviously an extraordinary power (PTCL 1983 (CL) 46).

Section 168 is to be read with Section 180.--Sections 168 and 180 have to be read together as the notice is only for adjudication proceedings and must be given in time (PTCL 1988 CL. 172).

Can the Collector of Customs extend the period of two months for issue of show cause notice after the expiry of the initial two month period.--The following reference was made to the Ministry of Law in connection with the interpretation of Section 168(ii):--

Can the Collector of Customs extend the period of two months for the issue of show-cause notice after the expiry of the initial two months period or whether the extension has to be given by the Collector during the period of two months from the date of seizure of the goods.

2. The advice of the Ministry of Law on the issue is reproduced below:--

"The word extension imports the continuance of an existing thing, and must have its full effect given to where it occurs. Similarly according to the dictionary meaning of the verb "extend" in the relevant context means "to stretch out to prolong in any direction, to enlarge, to expand....." Therefore, if the initial period of two months is allowed to expire, then there is no question of extending it. In that event there will be new terminus a quo for fresh period not exceeding two months.

While under the substantive provision of Sub-Section (2) of Section 168 of the Customs Act, 1969, the period for which the goods are to remain in custody is definite, namely two months from the date of seizure, under the proviso the period of extension is not definitive, it may be for a period not exceeding two months and then it is subject to the further condition of "reasons to be recorded in writing". This connotes that the Collector has to make up his mind not only on the necessity of extension but as to its duration not exceeding two months.

The question here is not of the Collector becoming functue officio after the expiry of the initial period of two months. The question really is that after the expiry of the two months, the person from whose possession the goods are seized acquires a mandatory right for the return of the goods. The requirement of law is clear and it is not possible to read it in any other sense."

3. The above opinion of the Ministry of Law is circulated for guidance (See Customs General Order No. 58 of 1973).

Collector cannot extend the period for giving notice of confiscation without hearing the respondent (Indian view).--The power under the proviso to Section 110(2) is quasi-judicial and at any rate one requiring a judicial approach and as such an opportunity of being heard ought to have been given to the respondent before orders of extension are made. The power under the proviso is not to be exercised without an opportunity of being heard given to the person from whom the goods are seized. (PTCL 1983 (CL) 46) + PTCL 1988 CL. 172).

Inquiry before allowing extension (Indian view).--The proviso to Section 110(2) of the Customs Act, 1962 contemplates some sort of inquiry. The Collector obviously is expected not to pass extension order mechanically or as a matter of routine but only one being satisfied that there exists facts which indicate that the investigation could not be contemplated for bona fide reasons with the time laid down in Section 110(2), and that therefore, extension of that period has become necessary. He cannot therefore, extend the time unless he is satisfied on facts placed before him that there is a sufficient cause for extending extension. The burden of proof in such inquiry is clearly on the Customs Officer applying for extension and not on the person from whom the goods are seized. (PTCL 1983 (CL) 46). However the Pakistan Courts have held that no notice is necessary before extending the period beyond two months (PTCL 1988 CL. 172).

Extension order can only be passed within the time. (Indian view)--The original time of six months or extended time of four months having expired and no order for further extension has been made, it was an obligatory on the Customs to return the goods to the person from whose possession they were seized. There being such a statutory obligation there was a corresponding statutory right to the person to have them restored to him. Such a right having accrued it could not be defeated by an order passed after the lapse of the period. (PTCL 1983 (CL) 46).

Policy for fixation of time limit for issuing show cause notice. (Indian view).--The policy of the legislature therefore clearly was that in view of the extraordinary power of seizure, the inquiry should ordinarily be completed within six months but since it might be not possible to do so in some cases, it gave power of extension to the Collector. The Legislature was thus careful to entrust the power of extension to the superior officer who also has the power to hear inquiries under the Act involving penal consequences and also appeals. Case where extension has to be asked for and granted are thus envisaged as exceptions to the general rule of six months laid down in sub-section (2). The second limitation to the power is that such extension can be granted only on sufficient cause being shown, a phrase often used in provisions for condonation of delay such as Section 5 of the Limitation Act, 1908. (PTCL 1983 (CL) 46).

The object of prescribing period for issue of notice is to compel the adjudicating authority to make up its mind to proceed with or not to proceed with the case (PTCL 1988 CL. 172).

Goods otherwise returnable on account of no notice issued, goods not released in Writ Petition without payment of duty and taxes.--It was prayed that no notice under Section 180 of the Custom Act, 1969 within two months of the seizure was served on the petitioner therefore they are entitled to return of the articles. It was held that the writ jurisdiction is essentially discretionary, the relief as prayed by the petitioner was thus refused. The relief was however given subject to the conditions that only those articles, the import of which, under the Import Laws is not completely prohibited and for taking delivery of such goods they shall have to pay the duty if any. (PTCL 1983 CL 209).

Seizure of goods.--A customs officer under reasonable suspicion for the purpose of prevention of smuggling, can search a person at an airport and he can also seize goods which he believes to be smuggled. (AIR 1956 Tripura 35).

Goods not liable to confiscation.--The goods in relation to which it has not yet been determined in proper proceedings whether any of the provisions of the Customs Act have been contravened or that they are liable to confiscation are not liable to seizure under Section 168. (1973 SCMR 411). Where the liability is not determined the provisions of Section 168 are not of avail. (PLD 1977 Lahore 1318). Where no determination of goods being liable to confiscation has been made through proper proceedings, the seizure, though notional in nature, is therefore, without lawful authority. (PLD 1980 Quetta 1).

Lawful seizure.--In case the seizure of the goods from the possession of a person is illegal apparently the goods are not seized lawfully under the Customs Act, 1969. (PLD 1981 Kar. 250).

Seizure of goods liable to confiscation.--Seizure of goods without warrants can take place either under Section 163 of the Customs Act, 1969 or under Section 168. But in order to proceed under Section 163 of the Customs Act the officer proceeding has to record the reasons for his belief that if he does not proceed under the provision the goods required to be seized would be removed before search can be effected under Section 162. Section 162 deals with seizure through warrants issued by a Magistrate. The Director General Coast Guard had evidently not proceeded under Section 163 of the Customs Act. He has, as is evident from the show-cause notice referred to above, seized the ship under Section 168 of the Customs Act.

This provision is in pari materia with Section 178 of the Sea Customs Act, 1878, since repealed. In the case of Collector of Customs and others vs. S.M. Yousaf (1973 SCMR 411) their Lordships of the Supreme Court had the occasion to examine the provisions of Section 172-A (which is equivalent to Section 163 of the Customs Act) and Section 178 of the Sea Customs Act, 1878. In that case High Court had come to the conclusion that the Customs officer had failed to record the grounds for believing that any goods liable to confiscation were either concealed or kept at any place that there is a danger of their removal before search. For this reason the seizure was held to be illegal and direction for the return of the goods was made. But in appeal before the Supreme Court the Advocate for the Collector of Customs took the plea that after returning the goods to the respondents and before the truck would move, the Customs authorities had seized the goods under Section 178 of the Sea Customs Act, 1878. Their Lordships, while dealing with this aspect of the matter, came to the conclusion that the authority of seizing the goods could not be exercised unless the goods "are liable to confiscation under the Act which means that liability for confiscation has already been determined in appropriate proceedings or is not in dispute."

On the same analogy it can be held that in the absence of a determination, that goods being seized are liable to confiscation, through proper proceedings, the seizure of ship, under Section 168 of the Customs Act is without lawful authority. In the present case the allegation is that the, import of the ship is illegal. The fact of such illegal import has to be established through proper proceedings before such seizure can take place. The seizure, though notional in nature, is therefore, without lawful authority. (PLD 1981 Quetta 1). Also see Notes under Section 163.

Scope of Section 168 as regards powers of the customs officer.--A perusal of Section 168 of the Customs Act shows that it gives two powers to the Customs Officer: (1) to seize any goods liable to confiscation under the Act or to serve an order on the owner or the person holding them in his possession or charge that he shall not remove, part with or deal with the goods except with the previous permission of the officer; (2) to keep the seized goods and deal with them in accordance with the provisions of the Customs Act. But if he does not give show-cause notice within two months of the seizure of the goods he 'is under a duty to return the goods to the person from whose possession they are seized. It is, therefore, clear that the restriction on his powers to keep the goods beyond two months is removable as soon as the notice within two months is given. The issuance of notice within two months is the inner limit and not the outer limit. It does not depend on the receipt of the notice by the owner or the person concerned. (PTCL 1990 CL. 406).

Object of Section 180 read with Section 168(2) is to commence the proceedings within two month by giving show cause notice and notice is served if it is sent by registered post.--See Notes under Section 180.

Section 168 and Section 163 Distinction.--See "Notes" under Section 163 of the Act.

Effect, if no Show Cause Notice is given.--If a notice under Section 180 is not given to the person from whose possession they were seized, within two months or extended time upto four months, then it is mandatory for the officers of customs to return the goods. [PTCL 1983 (CL) 280].

Failure to issue show-cause notice within a period mentioned in Section 168(2) gives a right to a person, from whom the goods were seized, to claim the return of seized goods but it will not deprive of the Customs Officer to issue show-cause notice under Section 180 (PTCL 1991 CL. 177 + PTCL 1998 CL. 275). But it may not absolve the delinquent from liability of fine if the same is warranted in law (PTCL 1998 CL. 435).

Purpose of a notice under Section 168(2).--The mandatory provision for a notice within two months has been enshrined for two-fold purposes, firstly, to ensure that the Customs Authorities proceed and adjudicate the matter expeditiously and secondly, that the affected persons are not left at the vagaries of Customs Authorities to the utter peril of their business. Beneficial construction has to be accorded and any violation thereof follows a consequence which deprives the Customs Authorities to retain the goods and confers right on the person from whom the goods were recovered to claim their restoration (PTCL 1998 CL. 435).

Right vests if no Show Cause Notice is given within the statutory period.--A right vests to the person from whose possession goods are seized, to receive the goods back as soon as two months' period is over if no notice is given.

Notice.--Notice is an intimation or information or a warning of proceedings against a party for the purpose of preparing and explaining its side of the case and contesting the merits of the matter on law as well as facts at issue. (PLJ 1981 Cr. C. 99). If a notice is issued after two months but within the time extended then no illegality can be attributed (PTCL 1990 CL. 370).

Extension of period.--The vesting of the right of return of the goods is subject to another statutory provision whereby the Collector of Customs has power, for reasons to be recorded to extend the period by two months. If the Collector did not extend the period within two months of the seizure it would no longer be a case of exercising public powers possessed by a functionary but interference with the vested right that accrued to the individual on expiry of two month's period. The statute not expressly authorising the Collector to divest an individual of such a right after it has vested in him cannot proceed to exercise such a power after the period of two months. Any other view in the matter would lead to some very anomalous facts. For example, proceedings may be initiated within four months but after the expiry of two months prescribed therefor, and the Collector could even after the process of the jurisdiction or during the course of adjudication ipso facto extend the period to four months and thereby cure an inherent defect of jurisdiction. His power, on any other view would appear to be limitless making altogether nugatory, the period of two months prescribed in the statute.

Order of extension under Section 168(2) should be justified by "reasons to be recorded in writing".--Period of two months can be extended as provided in sub-section (2) but the order of extension has to be justified by "reasons to be recorded in writing" (PTCL 1998 CL. 435).

Collector of Customs cannot abdicate his authority to a subordinate functionary and pass mechanical order, he has to justify the extension by reason (PTCL 1998 CL. 435).

In absence of recorded reason which law enjoins, the orders of extension of two months of seizure of goods passed by Collector would be of no consequence, the show cause notices issued u/s 180 within this extended period are therefore not sustainable in law (PTCL 1998 CL. 435).

Return of goods.--It was contended that the use of expression "return of goods" in contradistinction to the other word "release" is for a purpose and that such a return of goods does not interfere with the adjudicatory proceedings conducted by the departmental officer under Section 179. Two features of the provision have to be noted in this context. Firstly, the return of goods is without any condition that there is no condition to either preserve the goods or to produce them at any stage when required by the adjudicating officer or to keep them available for being subjected to the orders passed in adjudication. There is no provision with regard to the quantification of the value of the goods for the purpose of constructively dealing with them. The other feature to be noted is that release of goods has not that meaning of un-conditional return as the learned counsel suggests to as to distinguish it from return of goods. For example in the proviso to sub-section (2) of Section 157 of the Customs Act, there is a power vested in the Collector to order the release of the conveyance pending the adjudication of the goods involving its confiscation if the owner of the conveyance furnishes him a sufficient guarantee from a scheduled bank for the due production of the conveyance at any time and place it is required by the Collector of Customs to be produced. Keeping in view this provision of conditional release the unconditional return of goods would appear to be more extensive in scope and meaning than the expression "release of goods." This argument of the learned counsel further invests a power in the departmental officer entrusted with the task of the adjudication in the matter to take up a case of breach of Section 156 any time that they please, a power limitless in point of time. In view of proviso to sub-section (2) which places a restriction on the departmental officer to make up their mind within a period of two months or in exceptional cases within a period of four months, the Legislature has unmistakable indicated the time within which the action be initiated or none at all. In the hands of the departmental officers and during the adjudication in proceedings concerning goods as distinguished from a criminal prosecution for the same offence the object of the various statutory provisions unmistakably appears to be to proceed against the goods and only consequentially against the persons. It is this fact which explains the invariable prescription of (i) confiscation of goods first followed by (ii) penalty bearing a certain relation to the value of goods or (iii) to the duty evaded. Section 168 which concerned in this case starts: "The appropriate officer may seize any goods, liable to confiscation under this Act" and its second pan concerns the preservation of goods "where it is not practicable seizure the goods." Therefore, such cannot be the argument for interpreting this provision that even if the goods are not there, and no trace of them is kept, and the law itself allows its unconditional return the proceedings can continue. (Lahore High Court W.P. No. 190 of 1975, decided by Mr. Justice Shafiur Rehman on 20th Sept. 1976 now reported as PTCL 1983 (CL) 184).

Meaning of the word "return".--The word "return" would mean to pass back or to release the same from seizure (PTCL 1991 CL. 177).

Service of the Show Cause Notice by post.--The show cause notice under Section 180 is to be given in the manner as prescribed under Section 215 of the Act. Sub-section (2) of Section 168 uses the expression given, which means the service shall be deemed to have been effected by properly addressing, pre-paying and posting by Registered Post. Such notice unless the contrary is proved is supposed to have been effected at the time at which the letter would be delivered in the ordinary course of post. (See Section 27 of the General Clauses Act, 1898). The presumption raised under Section 27 of the General Clauses Act is a rebuttable presumption. The onus is on the addressee to prove that the service of the notice was not effected on him within the statutory period. In the recent case of Manoo Gul (PTCL 1990 CL. 406) the Supreme Court of Pakistan has held that "give notice" means to issue notice and does not depend on the receipt of the notice by the addressee.

Service of notice to accused in jail.--Notice sent to the accused in jail at his last known residential address cannot be treated as mala fide (PTCL 1988 CL. 172).

Seizure of goods lying in open place.--The provisions of Sections 162 and 163 of the Customs Act, 1969 will not be applicable if the goods are not secreted in a closed premises. In case the goods are found in person at open place then the provisions of Section 168 will be applicable (PTCL 1988 CL.
74).

The jurisdiction of Coast-Guard extends only to prevention of smuggling and not to other illicit imports. (PLD 1981 Quetta 1).

Detection of cases of contraband intoxicants and dangerous drugs by the Customs.--See "Notes" under Section 179.

Entrustment to officers of Pakistan Navy the functions of the Customs Officers.--The functions of the Preventive Officers of Customs under Section 168 of the Customs Act, 1969 have been entrusted to all Petty Officers and Junior Commissioned Officers of the Pakistan Navy. (See Notification No. S.R.O. 556(I)/71, reproduced at page 56 of the Customs Rules and Notifications, 1998-99 Edition - An allied publication).

Entrustment to officers of Pakistan Army the functions of the Customs Officers.--The functions of the Preventive Officers of Customs under Section 168 of the Customs Act, 1969 have been entrusted to all Junior Commissioned Officers of the Pakistan Army. (See Notification No. S.R.O. 589(I)/71, reproduced at page 57 of the Customs Rules and Notifications, 1998-99 Edition - An allied publication).

Entrustment of the functions of Customs Officers to officers of the West Pakistan Rangers.--The Central Board of Revenue has entrusted the functions of the officers of Customs under Section 168(1), (3) and (4) of the Customs Act, 1969 to all officers of the West Pakistan Rangers not below the rank of sub-Inspector within their respective jurisdiction. (See Notification No. S.R.O. 29(I)/73, reproduced at page 97 of the Customs Rules and Notifications, 1998-99 Edition - An allied publication).

Entrustment of the functions of Customs Officers to officers of the Coast Guard.--The Central Board of Revenue has entrusted the functions of the officers of Customs under Section 168(1), (3) and (4) of the Customs Act, 1969 to all officers of the Coast Guard not below the rank of Junior Commissioned officers of the Coast Guard within their respective jurisdiction. (See Notification No. S.R.O. 30(I)/73, reproduced at page 97 of the Customs Rules and Notifications, 1998-99 Edition - An allied publication).

Entrustment of powers to the officers of the Frontier Constabulary.--The Central Board of Revenue has entrusted subject to such limitation and restrictions as laid down in the rules, the functions of the officers of Customs under Section 168(1) and (3) of the Customs Act, 1969 to officers not below the rank of Non-Commissioned Officers within their respective jurisdiction. (See Notification No. S.R.O. 524(I)/74, reproduced at page 136 of the Customs Rules and Notifications, 1998-99 Edition - An allied publication).

Entrustment of powers of the Officers of Customs to the Officers of the Frontier Corps.--The Central Board of Revenue has entrusted the functions of the officers of Customs under Section 168(1) and (3) of the Customs Act, 1969 to the officers of the Frontier Corps not below the rank of Non-Commissioned Officers within their respective jurisdiction. (See Notification No. S.R.O. 1017(I)/74, reproduced at page 137 of the Customs Rules and Notifications, 1998-99 Edition - An allied publication).

Entrustment of function of the Customs Officers to the Officers of the Directorate of Vigilance.--The Central Board of Revenue has entrusted the functions of the officers of the Customs under Section 168(1), (3) and (4) of the Customs Act, 1969 to the Officers not below rank of Investigator within their respective jurisdiction. (See Notification No. S.R.O. 739(I)/79, reproduced at page 170 of the Customs Rules and Notifications, 1998-99 Edition - An allied publication).

Entrustment of the functions of the officers of Customs to the officers of the Valuation.--The Central Board of Revenue has appointed in relation to the areas of their respective jurisdiction, the Controller, Deputy Controllers, Assistant Controllers, Principal Appraisers, Appraisers and Valuation Officers of the Customs Valuation to be officers of Customs with said designations and to exercise the powers and discharge duties of the officer of customs and, as the case may be, assign them the functions of the appropriate officer under Section 168 of the Customs Act, 1969. (See Notification No. S.R.O. 203(I)/95, reported as PTCL 1995 St. 763, or page 736 of the Customs Rules and Notifications, 1998-99 Edition - An allied publication).

Entrustment of powers of the Officers of Customs to the Officers of Frontier Corps NWFP for certain areas.--The Central Board of Revenue has entrusted the functions of the officers of Customs under Section 168(1) and (3) to the Officers not below the rank of Non-Commissioned Officer of the Frontier Corps NWFP operating within twenty miles along the international borders adjoining the Province of NWFP and within the territorial/administrative limits of:--

(a) Bajaur Agency including Jandool and Baraul of Dir,
(b) Mohmand Agency,
(c) Khyber Agency,
(d) Orakzai Agency,
(e) Kuram Agency,
(f) N. Waziristan--including Bannu FR,
(g) S. Waziristan, and
(h) Kohat FR (Darra Adam Khel),

within the NWFP. (See Notification No. S.R.O. 281(I)/95, reproduced at page 737 of the Customs Rules and Notifications, 1998-99 Edition - An allied publication).

Powers of the Officers of the Directorate of Intelligence and Investigation (Customs and Excise).--The Intelligence Officers, Senior Intelligence Officers, Principal Appraisers, Appraisers, Superintendents, Assistant Directors, Deputy Directors, Director, Director General of the Directorate of Intelligence and Investigation (Customs and Excise) have been authorised to exercise powers and discharge duties of the Officers of Customs under the provisions of Section 168(1), (3) and (4) of the Customs Act within their respective jurisdiction. (See Notification No. S.R.O. 388(I)/82, reproduced at page 220 of the Customs Rules and Notifications, 1998-99 Edition - An allied publication).

Entrustment of functions of the Officers of Customs to the Officers of the Directorate of Inspection.--The Central Board of Revenue has authorised the Director, Deputy Director, Assistant Director, Principal Survey Officer and Survey Officer of the Directorate of Inspection (Customs and Central Excise) to exercise the powers and discharge the duties of the officers of Customs under sub-section 168(1), (3) and (4) of the Customs Act, 1969. (See Notification No. S.R.O. 723(I)/84 = PTCL 1985 St. 19 or page 321 of the Customs Rules and Notifications, 1998-99 Edition - An allied publication).

Powers and Functions entrusted to the Officers of Police other than Railway Police.--Functions under sub-sections (1) and (3) of Section 168 of the Customs Act, 1969 have been entrusted to Officers not below the rank of Sub-Inspector of Police other than Railway Police within their respective jurisdiction. (See Notification No. S.R.O. 913(I)/86 = PTCL 1987 St. 80(ii) or page 396 of the Customs Rules and Notifications, 1998-99 Edition - An allied publication).

169 Things seized how dealt with.--(1) All things seized on the ground that they are liable to confiscation under this Act shall, without unnecessary delay, be delivered into the care of the officer of customs authorised to receive the same.

(2) If there be no such officer at hand, such things shall be carried to and deposited at the custom-house nearest to the place of seizure.

(3) If there be no custom-house within a convenient distance, such things shall be deposited at the nearest place appointed by the Collector of Customs for the deposit of things so seized.

(4) When anything liable to confiscation under this Act is seized by the appropriate officer under section 168, the Collector of Customs or any other officer of customs authorised by him in this behalf may, notwithstanding the fact that adjudication of the case under section 179, or an appeal under section 193, or a revision under section 196 or a proceeding in any court, is pending, cause the things to be sold in accordance with the provisions of section 201 and have the proceeds kept in deposit pending adjudication of the case or as the case may be, disposal of the appeal or revision or the final judgment by the court.

(5) If on such adjudication or, as the case may be, in such appeal or revision or proceedings in court, the things so sold is found not to have been liable to such confiscation, the entire sale proceeds, after necessary deduction of duties, taxes or dues as provided in section 201, shall be handed over to the owner.

NOTES

General.--This section corresponds to Section 179 of the Sea Customs Act, 1878.

Appropriate Officer.--The Inspector/Preventive Officer/Examiner has been assigned the functions of the appropriate officer for the purpose of the provisions of Section 168 of the Customs Act, 1969. (See Notification No. S.R.O. 56(I)/93, dated 19th January, 1993, reported as PTCL 1993 St. 461 or see page 586 of the Customs Rules and Notifications, 1998-99 Edition - An allied publication).

Disposal of Goods-Competent Authority--(Customs General Order No. 30 of 1973):--

"Subject:--Legal proceeding and adjudication of goods under Customs Act, 1969. Section 169 of the Customs Act, 1969 and Sections 516-A and 517 of the Criminal Procedure Code--Authority competent to pass orders for the disposal of the case property.

The following reference was made to the Law Division:--

1. "Attention is invited to the Honourable High Court Karachi's ruling in Revision application No. 580 of 1964. It was decided therein that the Collector of Customs alone is the competent authority to adjudicate upon the contraband goods hit by Section 19 of the Sea Customs Act, 1878 (Section 16 of the Customs Act, 1969) and that the function of the Magistrate is to deal with the offender only, Section 169 of the Customs Act, 1969 contains provisions that seized goods are to be deposited with Custom-House for subsequent adjudication under Section 179 ibid.

2. Collector, Central Excise and Land Customs, Hyderabad has reported that in a case involving 94 bags of seized betelnuts, the superintendent of Police, Thatta refused to hand over the case property to customs for subsequent adjudication. Instead the case was challenged in the Court of Civil Judge and F.C.M., Thatta who ordered the release of seized goods. On criminal revision application filed by Superintendent of Police, Thatta, the judgment was upheld by District Magistrate, Thatta.

3. Law Division has given the following opinion:--

4. "The Customs Act, 1969 (Act IV of 1969) has been enacted in order to consolidate and amend the various customs laws. It repeals the Sea Customs Act, 1878, the Land Customs Act, 1924 besides other Acts with a view to removing the conflicting provisions found in those statutes.

5. This is a special law and wherever it is found to be in conflict with a general law of the country, it shall prevail. (Also see sub-section (2) of Section 1 of Cr. P.C.). It is a well established principle of law and needs no further elucidation. As such procedure laid down in the Customs Act for proceeding against the offenders and the seizure of the property shall over-rule the provisions of the Criminal Procedure Code.

6. The view held in Revision Application No. 580 of 1964 (Muhammad Rafique vs. State) still holds good. The Collector of Customs can only adjudicate upon the contraband goods, hit by Section 16 of the Customs Act. Section 169 of the Customs Act, 1969 contains provisions for handing over the goods to the Customs Authorities for adjudication as envisaged by Section 179 of the Customs Act. Section 169 read with the five sub-sections gives a clear picture of the procedure on seizure of contraband goods.

7. The provisions of the new Act mostly correspond to the provisions of the old Act, and the authority of customs department has nowhere been lessened. Therefore, the rulings relating to the subject-matter under reference parallel to the old Act shall hold good.

8. The powers of the police under the Customs Act, 1969 are not statutory. There is delegation of powers to the police officers under Section 3 of the Act for the areas mentioned in the Notifications issued from time to time but these powers are limited and cannot be exercised in excess of it to override the provisions of the Customs Act. The Customs Act, 1969 as exposed above has to be followed strictly. The view of the Customs Authorities appears to be correct.

9. The issue has been well settled by the authoritative pronouncements of the Supreme Court in Adam vs. The Collector of Customs, Karachi (PLD 1969 SC 446) as also of the High Court of West Pakistan in the State vs. Ghulam Jaffer (PLD 1970 Peshawar 66). The proceedings taken by the Customs Authorities for the confiscation of the goods are more in the nature of departmental proceedings while the proceedings for the criminal prosecution of a person who commits an offence under Sea Customs Act, 1878 (now the Customs Act, 1969) in relation to those goods are judicial proceedings for the determination of the guilt of the person concerned for commission of the alleged offence and entailing a punishment for the same. Both are concurrent remedies but each is independent of the other. They can proceed simultaneously and neither can remain under suspension for the sake of the other. The result of the one is not to affect the validity of the other. The Customs Authorities can proceed to take action admissible under the law in respect of the contraband goods even if the person alleged to have been connected with the commission of offence in respect thereof is acquitted by the criminal court. The provisions regarding the confiscation of goods and imposition of other penalties by the Customs Authorities contained in the Sea Customs Act, 1878, as also in the Customs Act, 1969 are part of the special law and would therefore, take under Sections 1(2) and 5(2) of the Code of Criminal Procedure, precedence over the general law contained in the Code pertaining to the forfeiture or confiscation of the goods which are subject matter of offence triable by a Magistrate under the Code.

10. The Sea Customs Act and the Customs Act contain special provisions whereby the Customs Authorities are invested with powers to search and seize goods which are liable to confiscation under the Act. Under Section 179 of the Sea Customs Act (Section 169 of the Customs Act) all things which are seized under the Act have to be delivered to the care of customs officers authorised to receive them and if no such officer is at hand they would have to be deposited at the nearest Custom-house or a place appointed for the purpose by the Chief Customs Officer. In the case of goods which are perishable the Chief Customs Officer or any other officer authorised by him can cause them to be sold by public auction and have the proceeds kept deposited pending the adjudication of the case. Under Section 180 of the Sea Customs Act (Section 170 of the Customs Act) where such things are seized by any police officer on the suspicion that they have been stolen he may carry them to any police station or court at which complaint connected with the stealing or receiving such things are to be made and enquiry connected thereunder is in progress. But the police officer seizing the things has to send a written notice of their seizure and deposit to the nearest Custom-house and after the conclusion of the enquiry or trial he has to cause such things conveyed or deposited in the nearest Custom-house for disposition according to law".

Disposal of confiscated/seized goods.--In supersession of Customs General Order No. 5 of 1989 dated 15th March, 1989 and all other orders/ instructions on the subject, the Central Board of Revenue is pleased to prescribe the following procedure for the disposal of confiscated/seized goods:--

(i) Narcotics, liquor and obscene films and literature.-- Narcotics, liquor and obscene and objectionable films and literature shall be destroyed. Opium shall, however in the first instance be offered to the Government Opium Factory, Lahore, as per instructions contained in Customs General Order No. 3 of 1980, dated 6th April, 1980. Committees for the destruction of such goods may be constituted by the respective Collectors, Directors, heads of the Agencies.

(ii) Gold and Currency.--The confiscated gold and currency should be deposited with the State Bank of Pakistan.

(iii) Silver.--Grading of silver ripe for disposal will be carried out by Pakistan Mint Lahore. Thereafter, the confiscated silver shall be auctioned through auctioneers of repute keeping in view the current value of silver reported in the press.

(iv) Precious stones.--Grading and valuation of confiscated/seized precious stones will be done by Valuation Committees constituted on Collectorate basis in consultation with the experts of Gemstones Corporation of Pakistan. On the basis of the grading and valuation, confiscated precious stones will be offered to the Gemstone Corporation of Pakistan for sale.

(v) Consumer durables & other miscellaneous goods.--The consumer durables like TVs, VCRs, refrigerators, deep freezers, micro-wave-ovens, etc, and other goods, when ripe for disposal, may be offered for sale, in the first instance, to the Utility Stores Corporation of Pakistan, Canteen Stores Department for disposal through their retail outlets.

(vi) Cigarettes.--Confiscated/seized cigarettes will be offered to PIA/Duty Free Shops on appraised value with 25 % discount.

(vii) Motor vehicles.--Motor vehicles ripe for disposal will be offered to the Government organizations through Cabinet Division in the first instance and thereafter will be disposed off through public auction.

(viii) Arms & Ammunition.--Arms & ammunition of prohibited bores shall be offered to the Civil Armed Forces, Police, FIA, PNCB, and other Forces for their official use at prices pre-determined by the Controller of Customs Valuation. Non-prohibited arms and ammunition shall be offered for sale through open tenders to licensed arms and ammunition dealers.

(ix) Antiques.--Antiques shall be handed over to the Department of Archaeology, without payment of any price.

2. Goods that cannot be disposed of in any manner specified above, should be sold by the respective departments, in accordance with the prescribed Auction Rules. If any claim of refund comes up later in respect of the goods disposed of in any of the aforesaid manners, the same, where admissible, should be met from the general account relating to the sale proceeds in question.

3. Before the goods are sold, disposed of, auctioned or destroyed, the owner/importer shall be served with a notice as prescribed under the law.

(See Customs General Order No. 5 of 1992, reported as PTCL 1992 St. 650(ii)).

Auction procedure.--See Registration of Auctioneers and Auction Procedure Rules, 1996, reported as PTCL 1996 St. 1215.

List of smuggled goods notified under clause 8.--See Notification No. S.R.O. 491(1)/85, dated 23rd May, 1985, reported as PTCL 1995 St. 783(iii) or page 387 of the Customs Rules and Notifications, 1998-99 Edition -An allied publication). Also see Notes under Section 2(s).

Application of the section to Central Excise Matters.--The provisions contained in Section 169 have been made applicable in regard to matters provided for in this section in respect of the duties imposed by Section 3 of the Central Excises and Salt Act, 1944. (Vide S.R.O. 227(I)/70, dated 25th September, 1970).

Seizure by police officers.--The terms of Section 169 are not inconsistent with seizure by the police and production before the Magistrate. They rather provide for as to for what the Magistrate or the police with the Magistrate's consent should do in respect of the disposal of the particular class of goods seized. There is no such provision, however, in respect of the documents seized in execution of a search warrant under Section 162. The Magistrate who issued the search warrant has power to insist, that the examination is completed within a reasonable time. The papers and books not required for the purpose of the case be returned promptly to the party from whom they were seized and the case contemplated. if any, is proceeded with expeditiously. (AIR 1956 Cal. 609=1956 Cri. L. Jour 1396).

Entrustment of the functions of Customs Officers to officers of the West Pakistan Rangers.--The Central Board of Revenue has entrusted the functions of the officers of Customs under Section 169 of the Customs Act, 1969 to all officers of the West Pakistan Rangers not below the rank of sub-Inspector within their respective jurisdiction. (See Notification No. S.R.O. 29(I)/73, reproduced at page 97 of the Customs Rules and Notifications, 1998-99 Edition - An allied publication).

Entrustment of the functions of Customs Officers to officers of the Coast Guard.--The Central Board of Revenue has entrusted the functions of the officers of Customs under Section 169 of the Customs Act, 1969 to all officers of the Coast Guard not below the rank of Junior Commissioned officers of the Coast Guard within their respective jurisdiction. (See Notification No. S.R.O. 30(I)/73, reproduced at page 97 of the Customs Rules and Notifications, 1998-99 Edition - An allied publication).

Entrustment of function of the Customs Officers to the Officers of the Directorate of Vigilance.--The Central Board of Revenue has entrusted the functions of the officers of the Customs under Section 169 of the Customs Act, 1969 to the Officers not below rank of Investigators within their respective jurisdiction. (See Notification No. S.R.O. 739(I)/79, reproduced at page 170 of the Customs Rules and Notifications, 1998-99 Edition - An allied publication).

170. Procedure in respect of things seized on suspicion by the police.--(1) When any things liable to confiscation under this Act are seized by any police officer on suspicion that they had been stolen, he may carry them to any police-station or Court at which a complaint connected with the stealing or receiving of such things has been made, or an inquiry connected with such stealing or receiving is in progress, and there detain such things until the dismissal of such complaint or the conclusion of such inquiry or of any trial thence resulting.

(2) In every such case the police-officer seizing the things shall send written notice of their seizure and detention to the nearest custom-house and immediately after the dismissal of the complaint or the conclusion of the inquiry or trial, he shall cause such things to be conveyed to and deposited at the nearest custom-house, to be there proceeded against according to law.

NOTES

General.--This section embodies the provisions of Section 180 of the Sea Customs Act, 1878.

Application of the provisions to goods other than stolen goods.--The provisions of this section become attractive only when anythings liable to confiscation under the Customs Act, are seized by any police officer on suspicion that they have been stolen. Where the goods are not seized on suspicion that they are stolen, but on suspicion of the commission of an offence under Section 550 of the Criminal Procedure Code then provisions of this section will not apply and the articles can be disposed off only by the Magistrate to whom it is the duty of the police officer who seized them to report the seizure forthwith. In any case when a police officer seizes any article under Section 550 of the Criminal Procedure Code he must report the seizure forthwith to a Magistrate and even if Section 170 of the Customs Act applies to the case, he can only apply to the Magistrate to have the goods conveyed to the Customs Authorities. This section directs a police officer to cause such things to be conveyed to the nearest Custom-house and he can cause them to be so conveyed only by applying to the Magistrate for it, by bringing Section 170 to the notice of the Magistrate (AIR 1963 Manipur 35).

Burden of proof.--The seizure from the owner of the property under Section 170 is not a seizure under the Act but by a police officer effecting the seizure under other provisions of law, for instance the Criminal Procedure Code. Hence, the possession obtained by the Customs department on goods being "conveyed to and deposited at the nearest Custom House" within the words of Section 170 are not goods which have been seized under the Act within the words of Section 187. And in such circumstances the terms of Section 187 which require a seizure under the Act are not satisfied and consequently that provision cannot be availed of to throw the burden of proving that the goods were not smuggled on the accused. (AIR 1962 SC 496).

171. When seizure or arrest is made, reason in writing to be given.--When anything is seized, or any person is arrested under this Act, the officer or other person making such seizure or arrest shall, as soon as may be, inform in writing the person so arrested or the person from whose possession the things are seized of the grounds of such seizure or arrest.

NOTES

General.--This section corresponds to Section 181 of the Sea Customs Act with the amendment that the officer or person making arrest of a person or seizure of goods shall, as soon as may be, inform in writing the person so arrested or the person from whose possession the things were seized of the grounds of such arrest or seizure. Under the old law such grounds were supplied if demanded by the person concerned.

Requirements of the section met with on furnishing of the recovery memo, to the person.--The preparation of the recovery memo. and tendering thereof in evidence for the purpose of section 171 constituted sufficient notice (PTCL 1994 CL. 322). It has been held that on furnishing of the recovery memo, mentioning grounds of seizure to the person from whose possession goods were recovered, the requirements of the Section 171 are met with notwithstanding the refusal of such person to receive the same. The person is at liberty to ask later on for the recovery memo. on grounds of seizure; if such request is not made the objections as to violation of requirements of Section 171 in such circumstances cannot be entertained (1980 SCMR 114). Also see Notes under Sections 162, 163 and 168.

This provision is mandatory and any departure from this will render the action of the officer illegal. The failure to comply with the mandatory provision will also violate the constitutional guarantee that all persons should be treated in accordance with law and only in accordance with law. (See Article 4 of the Pakistan Constitution, 1973).

The provisions of Section 171 are mandatory.--The arrest of the person and the seizure of goods being in breach of mandatory provisions of Section 171 is illegal. These provisions are mandatory as provisions of similar nature in the Sea Customs Act, 1878 regarding the search and seizure of the goods have been held to be mandatory. In the case reported as PLD 1968 Kar. 599, the effect of violation of Section 172-A of the Sea Customs Act was examined. One of the requirements of the said section for making a search for unearthing concealed smuggled goods was that the officer of the Customs was to prepare a statement in writing of the grounds of his belief and of the goods for which search was to be made and in case such search was effected a signed copy of such statement was to be delivered to the occupier of the place which was searched. It was held that where notice of search was received without the grounds of belief having been recorded before-hand such failure amounted to breach of statutory provisions and was violative of constitutional guarantees provided in Article 2 of the 1962 Constitution. The search and seizure of the goods was also held to be invalid. Anwarul Haq, J. (as he then was) made the following observations about the nature of these provisions:

"These are stringent requirements prescribed by law in order to ensure that the enormous power of search without warrant given to Customs Officer is exercised honestly and judiciously. By insisting that the grounds for his belief shall be recorded before hand by the Customs Officer concerned the law seeks to ensure that the search without warrant is made for a bona fide purpose and on reasonable grounds which can be tested later, if challenged by the aggrieved party. To put it differently, it seems to me that this is a safeguard prescribed by the Legislature to ensure that the rights of the citizen in respect of private property are interfered with only for genuine reasons related to the prevention of smuggling and evasion of customs duty etc. This safeguard can be effective only if the procedure prescribed by law is faithfully and honestly followed by application of mind in each individual case".

This case had gone to the Supreme Court, albeit on a different point, but the view held by the High Court as to the mandatory nature of the provisions of Section 172-A was not challenged by the customs and was expressly conceded in. (PLD 1981 Kar. 250 + PTCL 1987 CL. 328).

Purpose of issuing notice under Section 171.--The purpose of notice under section 171 is to post accused with the knowledge of the allegations against him and service of such notice is not the condition precedent for launching the prosecution. This requirement is substantially complied with where a recovery memo. is prepared in the presence of the accused or otherwise is brought to his notice and from its terms the accusation against the person concerned can reasonably be spelt out. What section 171 ordains is that when anything is seized or any person is arrested on account of violation of the provisions of the Customs Act, as soon as possible he may be informed in writing of the grounds of the seizure or arrest, as the case may be. Neither there is anything in the section itself nor in other provisions of the Act specifying any consequence of nullification for non-compliance therewith, which is generally a hallmark of the statutory provision mandatory in character. If the information sought to be conveyed to the accused by virtue of notice under section 171 is passed on to him through other steps taken in the course of the proceedings commenced against him, the requirement of notice would stand fulfilled substantially and validity of the action shall remain unaffected (PTCL 1994 CL. 322).

Effect of non-service of the mandatory notice under Section 171.--The conviction cannot legally be sustained when no notice under Section 171 of the Customs Act, 1969 is given which is mandatory. (PTCL 1983 CL 136 + PTCL 1983 CL 150 + PTCL 1987 CL. 328). The service of the notice under Section 171 is mandatory. Its non-compliance is not condonable on plea that it has a nexus only with investigation of case and after conviction it should be regarded a mere irregularity curable under Section 537, Cr. P.C. Such conviction is not maintainable. (See NLR 1982 Cr. 231).

Where the notice under Section 171 is not served on the owner or person in possession of goods under Section 171 the orders are rendered ineffective and the owners are entitled to delivery of goods. (PTCL 1983 CL. 280).

Non-service of notice under Section 171 renders the arrest and seizure of goods illegal (PTCL 1985 CL. 47).

It is not incumbent upon the department to prove the service of the notice under Section 171 in the absence of any objection (PTCL 1987 CL. 469).

Whether notice served or not was not considered in writ jurisdiction.--High Court did not consider the question whether notice is served or not as thus would require evidence (PTCL 1986 CL. 270). However such question should be raised at the earliest stage (PTCL 1987 CL. 469).

Entrustment to officers of Pakistan Navy the functions of the Customs Officers.--The functions of the Preventive Officers of Customs under Section 171 of the Customs Act, 1969 have been entrusted to all Petty Officers and Junior Commissioned Officers of the Pakistan Navy. (See Notification No. S.R.O. 556(I)/71, reproduced at page 56 of the Customs Rules and Notifications, 1998-99 Edition - An allied publication).

Entrustment to officers of Pakistan Army the functions of the Customs Officers.--The functions of the Preventive Officers of Customs under Section 171 of the Customs Act, 1969 have been entrusted to all Junior Commissioned Officers of the Pakistan Army. (See Notification No. S.R.O. 589(I)/71, reproduced at page 57 of the Customs Rules and Notifications, 1998-98 Edition - An allied publication).

Entrustment of the functions of Customs Officers to officers of the West Pakistan Rangers.--The Central Board of Revenue has entrusted the functions of the officers of Customs under Section 171 of the Customs Act, 1969 to all officers of the West Pakistan Rangers not below the rank of sub-Inspector within their respective jurisdiction. (See Notification No. S.R.O. 29(I)/73, reproduced at page 97 of the Customs Rules and Notifications, 1998-99 Edition - An allied publication).

Entrustment of the functions of Customs Officers to officers of the Coast Guard.--The Central Board of Revenue has entrusted the functions of the officers of Customs under Section 171 of the Customs Act, 1969 to all officers of the Coast Guard not below the rank of Junior Commissioned officers of the Coast Guard within their respective jurisdiction. (See Notification No. S.R.O. 30(I)/73, reproduced at page 97 of the Customs Rules and Notifications, 1998-99 Edition - An allied publication).

Entrustment of function of the Customs Officers to the Officers of the Directorate of Vigilance.--The Central Board of Revenue has entrusted the functions of the officers of the Customs under Section 171 of the Customs Act, 1969 to the Officers not below rank of Investigators within their respective jurisdiction. (See Notification No. S.R.O. 739(I)/79, reproduced at page 170 of the Customs Rules and Notifications, 1998-99 Edition - An allied publication).

Powers of the Officers of the Directorate of Intelligence and Investigation (Customs and Excise).--The Intelligence Officers, Senior Intelligence Officers, Principal Appraisers, Appraisers, Superintendents, Assistant Director, Deputy Directors, Director, Director General of the Directorate of Intelligence and Investigation (Customs and Excise) have been authorised to exercise powers and discharge duties of the Officers of Customs under the provisions of Section 171 of the Customs Act within their respective jurisdiction. (See Notification No. S.R.O. 388(I)/82, reproduced at page 220 of the Customs Rules and Notifications, 1998-99 Edition - An allied publication).

Entrustment of functions of the Officers of Customs to the Officers of the Directorate of Inspection.--The Central Board of Revenue has authorised the Director, Deputy Director, Assistant Director, Principal Survey Officer and Survey Officer of the Directorate of Inspection (Customs and Central Excise) to exercise the powers and discharge the duties of the officers of Customs under Section 171 of the Customs Act, 1969. (See Notification No. S.R.O. 723(I)/84 = PTCL 1985 St. 19 or page 321 of the Customs Rules and Notifications, 1998-99 Edition - An allied publication).

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