ISLAMABAD: The Supreme Court set aside the Lahore High Court (LHC) and Appellate Tribunal judgments to release vehicles on payment of redemption fine at the rate of 35 percent confiscated under Appendix-E of the Import Policy Order, 2022.
A three-judge SC bench, headed by Justice Naeem Akhter Afghan and comprising Justice Muhammad Shafi Siddiqui and Justice Miangul Hassan Aurangzeb, heard the civil petitions against the LHC order dated 30 July 2025.
The High Court, while dismissing the department (Collector of Customs Collectorate of Customs (Appraisement), Lahore, interpreted Appendix-E of IPO 2022 read with S.R.O. 499(I)/2009 dated 13.06.2009 for the release of the subject vehicle, provided in para 5 of the impugned judgment.
Muhammad Rizwan (respondent No.1) filed a goods declaration electronically through a clearing agent (respondent No.2) for the release of a vehicle, imported under the baggage scheme provided in Appendix E of the Import Policy Order, 2022 (IPO 2022).
The department told the Court that the model year of the vehicle has taken it beyond the age limit prescribed under Appendix E of the IPO 2022, that is, three or five years, respectively, depending on the nature of the vehicle. It is claimed by the department that in terms of para 3 of the Appendix-E of the IPO 2022, the vehicle older than three and/or five years, respectively, are not importable.
Additional Collector of Customs (Adjudication), Lahore vide order-in-original dated 13 December 2024, confiscated the vehicle outrightly, and a personal penalty of Rs 50,000 was imposed on the importer and clearing agent. The Collector determined that the importer has violated para 4 of the IPO 2022 as well as para 3 of the Appendix-E, knowingly and intentionally, and hence the charge of violation and non-importability stands established.
The respondent No.1 being aggrieved of the order-in-original, filed an appeal before the Customs Appellate Tribunal, Bench-II, Lahore, which disposed of the appeal by maintaining confiscation order, however, an option was given to the lawful owner of the vehicle for its release on payment of redemption fine at the rate of 35% of the value of the vehicle, and reduced the fine to Rs15,000/- and the penalty imposed upon the clearing agent was set aside. The department then approached the LHC, in reference jurisdiction, which dismissed it.
The judgment, authored by Justice Shafi Siddiqui, observed that the interpretation provided in para 5 of the impugned judgment is beyond the cumulative intent and spirit of the law.
The IPO 2022 is the outcome of Section 3 of the Imports and Exports (Control) Act, 1950, which regulates imports and exports in the country. The concept of the Imports and Exports (Control) Act, 1950, is to empower the federal government to prohibit, restrict, or control the import and export of goods to regulate trade. It allows the Federal Government to issue orders, such as import policy orders to regulate trade practices and issue licenses for controlled goods. This import policy is not challenged before us or any forum.
The judgment said that Appendix E determines the eligibility of a vehicle under baggage, gift, and transfer of residence, in terms of para 3. It provides a cap on the age of a vehicle, which cannot be more than three/five years, respectively. Such vehicles are not permitted to be imported under the gift, personal baggage and transfer of residence scheme if they do not fulfil age limit and conditions specified; and these conditions however are not applicable to secondhand or used bulletproof vehicles, if imported under this scheme, which is not the case of respondents.
This phrase of secondhand or used bulletproof vehicles, should not be mixed up with para 5(3) of IPO 2022 or with the import of normal vehicles described in 1(d) of the Appendix-E. In the opening lines of para 5 of the impugned judgment, the learned Bench misapplied the phrase “secondhand/used category”. It is not a question of the used/secondhand category but of specific age in Appendix-E, which required consideration.
It noted that the goods of Appendix-C have been separately described, which does not include goods of Appendix E. Thus, the view that since the goods are used/secondhand and thus could be interpreted “in the wake of the exemption provided” is erroneous.
The conditions specified in the Appendix-E are to be read with SRO 499, which (in terms of its clause (f)) does not provide an option to importer to pay a fine in lieu of confiscation. The eligibility conditions of import for the importer thus play a pivotal role insofar as the lawful import of the vehicle is concerned.
Copyright Business Recorder, 2025
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