Law: Customs Act, 1969

Section: 18, 19, & 32-A, 156(1), 161, 179, 185, 219

Law: Imports and Exports (Control) Act, 1950

Section: 3(1) and 3(3)

Law: Sales Tax Act, 1990

Section: 50

Law: Federal Excise Act, 2005

Section: 40

Law: Income Tax Ordinance, 2001

Section: 237

Summary The petitioner, a company engaged in the import and manufacture of seeds, challenged the registration of an FIR (No. 02 of 2026) regarding alleged violations of the Export Facilitation Scheme (EFS). After a stock-taking inspection revealed a significant deficiency in raw materials imported duty-free, the Customs authorities suspended the petitioner’s EFS authorization and initiated criminal proceedings. The petitioner sought the quashment of the FIR on the grounds that it was premature, arguing that criminal prosecution should not proceed until civil/departmental liability was finally determined through adjudication. The High Court dismissed the petition, holding that departmental adjudication and criminal prosecution are concurrent and independent remedies. Relying on Supreme Court precedents, the Court established that these two processes operate in parallel and are not mutually exclusive. The Court further emphasized that delaying an FIR until the conclusion of civil proceedings would impede the investigating agency's ability to collect evidence and could render the penal provisions of the Customs Act, 1969, redundant or otiose. Tagline Departmental Adjudication and Criminal Prosecution Under Fiscal Laws are Independent and Concurrent Remedies. SYED ARSHAD ALI, J.- The Federal Board of Revenue (FBR), while exercising its powers under Section 219 of the Customs Act, 1969 (IV of 1969), Section 50 of the Sales Tax Act, 1990, Section 40 of the Federal Excise Act, 2005, and Section 237 of the Income Tax Ordinance, 2001, introduced a scheme commonly known as the Export Facilitation Scheme (EFS) through SRO 450(I)/2001, allowing the acquisition of inputs without payment of duties and taxes by certain categories of exporters engaged in the manufacturing and export of goods. The said scheme enabled exporters to procure inputs without payment of taxes and duties so that the manufactured goods could be exported without the burden of such taxes and duties. The detailed mechanism governing the application, authorization, and oversight by the Regulatory Collector has been elaborately provided in SRO 450(I)/2001 (“the SRO”). Rule 879(3)…

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