Customs Act, 1969: SC sets aside PHC order in seized vehicle case
ISLAMABAD: The Supreme Court has held that where the Federal Board of Revenue (FBR) has excluded a particular class of conveyances from redemption, the Customs Appellate Tribunal has no jurisdiction to order their release against payment of a fine.
A three-member bench, headed by Chief Justice Yahya Afridi and comprising Justice Muhammad Shafi Siddiqui and Justice Miangul Hassan Aurangzeb, heard an appeal filed by the Collector of Customs (Enforcement), Peshawar, against a Peshawar High Court (PHC) judgment.
According to the facts, a Hino Mazda truck bearing Registration No. TKK-500 was intercepted at JCP Tunnel, Kohat, on February 16, 2025, and foreign-origin spare parts were recovered therefrom. The driver, respondent No. 1, failed to produce documents evidencing their lawful import. The goods were seized under section 168 of the Customs Act, 1969, while the vehicle was seized under section 157(2) thereof.
The adjudicating authority ordered outright confiscation of the goods and the vehicle. The Collector of Customs (Appeals) dismissed the appeal. However, the Customs Appellate Tribunal, on July 30, 2025, modified the order to the extent of permitting release of the vehicle against a redemption fine equivalent to 40 percent of its appraised value. The High Court maintained that order.
The controversy concerned the Tribunal’s jurisdiction to allow redemption of the vehicle in the face of the restrictions imposed by the Federal Board of Revenue under section 181 of the Act. Section 157(2) makes a conveyance used in the movement of goods liable to confiscation, whereas section 181 provides for an option to pay a fine instead of confiscation. The latter discretion is, however, subject to its first proviso, which empowers the Board to specify goods or classes of cases in which such an option shall not be given. The distinction is material as liability to confiscation under section 157(2) does not, by itself, confer a right to redemption contrary to a restriction imposed under section 181.
The Board on June 13, 2009 issued SRO 499(I)/2009, and excluded clause (b) from redemption lawfully registered conveyances, including packages and containers, found carrying goods in false cavities or used wholly or exclusively for transporting goods involved in smuggling.
The judgment, authored by Justice Shafi, said the redemption rates in the table appended to the notification cannot be read independently of that exclusion or invoked to circumvent it. It noted that in Bashir Ahmad, the apex court held that where the Board has excluded a class of conveyances from redemption, the Tribunal has no jurisdiction to order their release against payment of a fine.
The judgment further observed that the notification was subsequently amended through SRO 1280(I)/2024 dated August 20, 2024, which introduced a limited, conditional relaxation for certain conveyances falling outside clause (b), seized for the first or second time. That relaxation was rescinded by SRO 1619(I)/2024 dated October 3, 2024, which introduced clause (ba) in respect of lawfully registered conveyances, including packages and containers, other than those falling under clause (b), if seized and found carrying smuggled goods.
The judgment stated that in the case of Director, Intelligence and Investigation (Customs), FBR, Peshawar, the Supreme Court considered the amendments and reaffirmed that the temporary relaxation did not dilute the prohibition imposed by the notification. It further held that the plea that a vehicle was hired for public transport could not override the express statutory restriction, which otherwise made no such distinction.
The present seizure took place on February 16, 2025, after the insertion of clause (ba). The Tribunal itself proceeded on the basis that the vehicle was lawfully registered, while the adjudicating authority had found the recovered goods liable to confiscation for want of documents evidencing lawful import. The question of redemption, therefore, had to be determined under the notification as amended and not merely by reference to the asserted use of the truck for carrying goods for hire. The Tribunal’s reliance on that circumstance, without giving effect to the applicable statutory restriction, was legally unsustainable. The High Court likewise erred in maintaining the order, the judgment said.
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