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Petitioner: Messrs ALIYAAN TRADERS, KARACHI and 3 others VS Respondent: DEPUTY,COLLECTOR OF CUSTOMS, KARACHI and another
Court Name: Customs Appellate Tribunal Judge(s): Shahid Mehmood Bhatti, Ghulam Ahmed Title:Messrs ALIYAAN TRADERS, KARACHI and 3 others vs DEPUTY,COLLECTOR OF
CUSTOMS, KARACHI and another Case No.: Customs Appeals Nos.K-883 to 885 and 905 to 912 of 2010 Date of Judgment:2012-07-09 Reported As: 2012 PTD (Trib.) 1917 Result: Appeals allowed Judgment ORDER GHULAM AHMED MEMBER (TECHNICAL-II).---By this order, we intend to dispose above captioned Customs Appeals filed by the appellants against Order-in-Appeals Nos. 3999-4001 of 2010 dated 23-6-2010, 4156 to 4162 of 2010 dated 5-8-2010, 4259 of 2010 dated 17-8-2010 passed by the Collector of Customs (Appeals), Karachi. These appeals have identical issues of law and fact and are, therefore, being heard, dealt with and disposed of simultaneously through this common order in the light of the judgment of the Hon'ble High Court of Sindh in Custom Reference Application No. 157 of 2008 S.M. Naqi son of Syed Muhammad Hussain, Karachi v. Collector of Custom (Adjudication-I) and others, Karachi. 2. Brief facts of the case are that the appellant imported consignments of steel were rod dia 4 & 5 mm from China, Canada and South Korea and declared to assessable @ US$ 0.3542/kg which was revised by the Collectorate at US$ 0.5630/kg. The Collector of Customs (Appeals) vide his order dated 23-6-2010 rejected the appeals by observing that:-- "I have examined the entire case record and given due consideration to the arguments advanced before me. Clearly, the customs value of the steel were rod imported in this case had been determined by the department at US$. 560/MT as against declared US$ 354/MT. On the basis of evidence of similar import and the prices of the goods quoted in the London Metal Exchange (LME) as per practice. The appellant's principal contention is that since the department had not been able to prove that the value declared by the appellant was result of some manipulation, the declared transaction value needed to be accepted. In other words, the department had rejected the declared transaction value in violation of the provision of law contained in section 25 of the
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Customs Act, 1969 and the Rules made thereunder with the interpretation of the aforesaid provision of law by the superior judicial fora. However, on examining the entire record of the case, I observed that the appellant's contention is not tenable. The value of the goods quoted by the appellant was well below the price of commodity quoted in the LME as well as value declared in respect of similar goods imported during the relevant period. Value declared in respect of similar goods imported was US$. 986.70/MT. Therefore, the department had valid reason to believe that the transaction value declared by the appellant's was not the actual price paid by him and rejection of the declared value was fully justified under the law. The manner in which Customs Value of the goods was determined by the department is transparent due adjustments were provided from the evidence of import of similar goods and the price of the same commodity in International Magazine for the relevant period was also taken into consideration. I do not see any illegality in the above manner of determination of customs values of the goods, particularly when the customs value of all consignments of identical goods are being determined in the light of International Magazine prices for the relevant period as per standard practice. Therefore, no discriminatory treatment has been meted out to the appellant. The arguments advanced by the learned consultant do not find enough support from the evidence on record and the case-law quoted by him are not applicable to the fact and circumstances of the instant case. Therefore, I hold that the impugned order is correct in law and on facts and there is no reason to interfere with the same. The appeal is rejected accordingly." 3. The appellant has now challenged the above order by way of this appeal. The consultant Nadeem Ahmed Mirza appeared on behalf of the appellant who reiterated the arguments incorporated in the memo. Of the appeal and emphasized that:-- (i) That since the import was against firm contract/LC's confirming that the appellant paid the amount of goods in terms of Rule 113, of the Customs Rules, 2001 and this also confirms that the appellant discharged burden of proof laid upon them under Rule 109 ibid. (ii) That the shippers of appellant also pasted the invoice of the goods on the inner side of the door of container as per provision of Rule 389 of Customs Rules, 2001 notified vide S.R.O. No. 450(1)/2001 dated 8-6-2001, which were retrieved during the course of examination, as evident from order-in- original. Rendering the declared value of appellant as fair and transaction value in terms of section 25(1) of the Customs Act, 1969. (i.e) That the respondent No.1 cannot discard the transaction value unless he asks for documents for satisfying him i.e. Discharge burden of proof laid on appellant under Rule 109(1) of the Customs Rules, 2001, while transmitting view message under Rule 437 of Sub-Chapter III of Chapter XXI of Custom Rules, 2001. Contrary no message was transmitted under the said Rule to the appellant and neither any evidential invoice relied upon were supplied to appellant as per direction of the FBR given in para 78 of CGO 12/2002 with the reason to the appellant person under sub-rule (2) of Rule 109 of Customs Rule, 2001 nor message was communicated in writing or through e-mail about the decision and the ground in terms of Sub-Rule (3) of Rule 109 ibid. Any action contrary to the provision of section 25 and the Rules framed is nullity in the eyes of law..Reliance is placed on PLD 1986 Karachi 68, Kamran Industry v. Collector of Customs, Exports, 2002 PTD 2957, Punjab Baverages (Pvt.) Ltd. v. CEST and 2 others 2008 SCMR 438 and Messrs Collector of Customs Port Muhammad Bin Qasim Messrs Zymotic Diagnostic Int'l. Faisalabad. (iv) That irrespective of the above, in case of disagreement, for which the respondent No.1 has to give the reason he is empowered to assess the value of the appellant goods only with the application of different subsections of section 25 of the Customs Act, 1969 in sequential manner as expressed in section 25(10) of the Act, as held by the Superior Court in judgments reported as 2004 PTD 38, Innovative Trading Company Ltd. v. Appellate Tribunal 2006 PTD 232, S.T.B. International v. Collector of Customs, Lahore and 5 others 2006 PTD 909, Rehan Umer v. Collector of Customs,
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Karachi and 2 others 2008 PTD 1250, Najam Impex Lahore v. Assistant Collector of Customs, Karachi and 4 others and 2008 PTD 1494 Toyo Int'l Motorcycle v. Federation of Pakistan and 3 others and C.P. No.2673 of 2009 Messrs Sadia Traders and others v. Federation of Pakistan. (v) That the respondents totally ignored the provision of law and the available evidences of value of identical/similar goods expressed in subsections (5) and (6) of the Customs Act, 1969, read with Rules 117 and 118 of Customs Rule, 2001 i.e. Data maintained by PACCS under Rule 110 of Customs Rules, 2001. The respondent No. 1 despite gross illegality as discussed above, could had assessed the appellant goods on the basis of the identical/similar goods. Contrary, he adopted an alien method, not prescribed anywhere either in the provision of section 25 of the Customs Act, 19.69 or Chapter IX of Customs Rules, 2001 as evident from the assessment, which was made on the basis of prices quoted in LME on the date of firm contract. Which is erroneous and render the assessment order/order-in-appeals arbitrary unilateral and nullity in the eyes of law. Resultant, void and ab- initio. (vi) That it was mandated upon the respondents to adhere the provision of 'law and direction contained in Chapter IX of Customs Rules, 2001 i.e. To consider the available data of import, maintained as per Rule 110 ibid for the assessment purpose, if the importer fails to discharge burden of proof laid upon him under Sub-Rule (1) of Rule 109 and while doing so the lowest value of available data has to be applied as per clause (d) of subsection (5) of section 25 of the Customs Act, 1969. That even the data of similar/identical goods e.g. Corresponding to C.R. Nos. 1194550- 021109, 1225792-021209, 1241517/151209, 1252652/231209 and 1258728/301209 confirms that the appellant declared value was fair as the consignments against the said C.R. Nos. Were allowed clearance on import value of US$. 354.20 to 404.48 and assessed at US$ 450/MT. The said proposition of law stood validated from the reported judgments 2009 PTD (Trib.) 1926 and 2010 PTD (Trib.) 2432, 2010 PTD (Trib.) 2472, 2011 PTD (Trib.) 987 and 2011 PTD (Trib.) 2624. (vii) That the assessm ent/determination of the appellant goods value by the respondent No. 1 and his subordinate is manifestly capricious and based on erroneous and forced construction of law and beside loudly speak about a differential treatment, not permitted under law. Hence, the assessm ent and order-in-appeal are nullity/bad in law and discriminatory 1975 SCMR 352, 1990 SCMR 1059, PLD 1995 SC 396, PLD 1997 SC 334, PLD 1997 SC 582, 1997 SCMR 874, 1998 SCMR 1404, 2002 PTD 976, 2002 SCMR P.312 and 2005 CL 135(sic). (viii) That the respondent No. 2 passed the judgment on personal whims and wishes and biased opinion, while ignoring the provision of the Act, rules and regulation framed thereunder and the said 'fact stood verified from the fact that the respondent No.2 passed judgment are without framing issue and rebottle on a single ground of the memo. Of appeal and additional written arguments/grounds submitted subsequently, rendering the order suffer from legal infirmity, partial and influenced. Such orders are termed as void ab initio by the Superior Courts reliance is placed on 2005 PTD 2417 and 2012 PTD (Trib.) 1697. x) That the appeal with the respondent No. 2 was filed on 29-1-2010 and an order under the proviso of subsection (3) of section .193-A of the Customs Act, 1969 should had been decided by the respondent within 120 days from the date of filing of appeal or within a further extended period of 60 days during the initial period of 120 days with reason to be recorded for extension in writing. No extension was granted by respondent No. 2 prior to expiry of initial period of 120 days. Contrary the order-in-appeal was passed on 17-8-2010 i.e. After expiry of 61 days of the initial period and 1 day after the expiry of entire allotted period of 180 days. Rendering the order-inappeal barred by time by 61 day and 1 day simultaneously. (x) The narration of the respondent at para 4 of order-in-appeal that the proceeding in this case could not be finalized within the stipulated time limit due to extended hearing and adjournment granted on the request of both parties, therefore the requisite extension in terms of 1st proviso to
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subsection (3) of section 193-A of the Customs Act, 1969 was extended for 60 days is without any substance as no adjournment was applied by the appellant or by the respondent No. 1. Hence, the extension granted if any by the respondent No.2 is illegal. Beside the respondent No. 2 could not extend the time, unless a notice was served on the appellant as held by the Supreme Court of Pakistan in its reported judgment 1999 SCMR 1881 Khalid Mehmood v. Collector of Customs, Customs House, Lahore. Their lordship of Supreme Court held: "S. 168---If initial period of two months, envisaged in S.168, Customs Act, 1969 is allowed to go by without any extension having been made, vested right may come to accrue to the affectee and Collector should be obliged to issue a notice and accord necessary hearing before granting my extension---Question whether an extension, if any was actually made, within the initial period of two months from the date of seizure and merely because it purported to have been so made, within time may not in itself be enough. The contrary may be shown but, ordinary within the Customs Jurisdiction alone." "thus if initial period of two months, envisaged in 5.168, Customs Act, 1969 is allowed to go by without any extension having been made, a vested right may come to accrue to the affectee and Collector should be obliged to issue a notice and accord necessary hearing before granting any extension---correspondingly as always , it would remain a moot question whether an extension, if any, was actually made within the initial period of two months from the date of seizure and merely because if purports to have been so made within time, may not be itself be enough the contrary may be shown but, ordinarily within the Customs Jurisdiction alone." (xi) That in the instant case no extension was given by the respondent No. 2 prior to expiry of initial period of 120 days. Nevertheless, if it is considered for the sake of arguments that that was given even prior to expiry of initial period of 120 days i.e. Also illegal, because the said extension was given without answering the condition prescribed for exercising such powers i.e. He has to apply his mind and after making an objective assessment, if he comes to the conclusion that the extension of time is to be granted, he has to grant the same, not merely on the basis of his personal opinion that the time was lapsed due to frequent adjournment, which were infact never applied by either side and the said fact can be re-verified by calling the record of the case resting with respondent No.2. The granted extension of 60 days was unlawful and without jurisdiction. It is settled principle that "where exercise of jurisdiction by any authority or court or Tribunal is made subject to existence of a specific condition , then such power cannot be exercise in the absence of that condition---where an executive authority exercise its jurisdiction after expiry of period provided in the statute, such exercise manifestly suffer from lack of jurisdiction as held by the Superior Court in umpteenth judgment e.g. 1998 MLD 650, 2004 PTD 369, 2004 PTD (Trib.) 2898, 2005 PTD 23, 2003 PTD 2821, 2007 PTD 2092 and 2011 PTD 235, 2011 PTD 1185 and 2012 PTD 980. (xii) That since the extension was granted by the respondent No.2 without any lawful authority and in the absence of adherence of proposition of law (even then the order-in-appeal was passed after 181 days). Hence, it hits by limitation as it was passed after the lapse of initial period of 120 days and entire 180 days given in subsection (3) of section 193A of the Customs Act, 1969. Hence, it is of no legal effect, void ab initio as held by Superior Courts in their reported judgments 2008 PTD 60 Messrs Super Asia Muhammad Din Sons (Pvt.) Ltd. v. Collector of Sales Tax, Gujranwala and 2008 PTD 578, Messrs Hanif Strawboard Factory v. Additional Collector (Adjudication) Customs, Sales Tax and Central Excise Gujranwala, 2009 PTD 762 Messrs Tanveer Weaving Mills v. Deputy Collector Sales Tax and 4 others and 2009 PTD (Trib.) 1263 Messrs Syed Bhai Lighting Limited, Lahore v. Collector of Sales Tax and Federal Excise, Lahore and 2 others and 2009 PTD 1978, Leo Enterprises v. President of Pakistan and others 2010 PTD (Trib.) 1010; Innovative Impex, v. Collector of Customs, Sales Tax and Federal Excise (Appeal) 201.1 PTD (Trib.) 79, Fazal Ellahi v. Additional Collector of Customs, MCC of PaCCS, 2011 PTD (Trib.) 987 Unique Wire Industries v. Additional Collector of
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Customs, MCC of PaCCS, 2011 PTD (Trib.) 1146 Kaka Traders v. Additional Collector of Post Clearance Audit and 2012 PTD (Trib.) 1650 Pak Electron Ltd. v. Collector of Customs, Lahore and others. 4. The department representative Mr. Ghulam Yasin, Appraising Officer appeared on behalf of the respondent and adopted the arguments incorporated by respondent No. 2 in paragraph 3 of order-in-appeal, and also filed para were comments on grounds of appeal which are as under:- (i) That in the light of submissions made above and considering the provisions of sections 80, 25(9), 25(11) and 25(13a) of the Customs Act, 1969, read with Rule 107 of the Customs Rules, 2001, it is clear that the respondents have discharged their duties provided that the said assessments are subject to audit and scrutiny as per section 32(3A) of the Act in accordance with law. (ii) That the pasting of an invoice does not means that the declared value is to be accepted as the customs value. The law is very much clear that the determination of customs value is subject to all subsections of section 25 and otherwise subject of section 25A of the Act, as the case may be. (i.e) That the contents of ground (C) are incorrect, hence, denied. The aforesaid submissions and the electronically recorded "Assessm ent Notes" are proving that ample opportunity of hearing was provided to the appellant and in the light of valuation data of similar kind of goods it is clear that the importers declared value can not be considered as payable transaction value/customs value for assessm ent purposes in terms of section 25(1) of the Customs Act, 1969. The objection of the importer regarding the assessm ent/valuation of the imported goods also is without any cogent reason/basis and devoid of merits. Without prejudice to above, it is clarified here that nowhere in section 25 of the Customs Act, 1969, it has been laid down that every declared value is to be accepted for the assessm ent purposes rather under subsection (1) of section 25 of the Customs, Act, 1969, the payable transaction value (which is not in this case) is to be accepted as customs value on the following conditions:-- (i) subject to subsequent subsection of Section 25 and rules (i.e. Chapter-IX of the Customs Rules, 2001). (ii) that the valae paid by an importer must be in agreement with the "payable" value in the market of similar kind of goods. (i.e) That first of all, it is proved from the record that no information or corroborative document has been produced to substantiate that their declared value is true "payable" transaction value of the imported goods. In the present scenario the whole world is a trade village and it is hard to believe that the same goods are available/sold with the difference of almost 90%. Secondly, by virtue of powers conferred under subsection (11) of section 25 of the Customs Act, 1969, the customs authorities have a right to satisfy themselves whether the "paid" value is true "payable" transaction value to be considered as customs value for assessment purposes. For this purpose, apart from other information/documents, as requisitioned by the customs, an importer is duty bound to provide the information about the price adjustments, along with corroborative documents, as envisaged in subsection (2) of section 25 of the Customs Act, 1969. Admittedly in the instant case the importers have failed to provide the said information/documents, thus, in terms of clause (t) of section 25(2) of the Customs Act, 1969, there is no basis, whatsoever, to accept the declared value as customs value in terms of section 25(1) of the Customs Act; 1969. Thirdly, the words "subject to the provisions of this Section and Rules", appearing in section 25(1) of the Customs Act, 1969, have great relevance while accepting any transaction value as customs value. It is an assistance to an assessor as well as importer to substantiate that his declared value is truly paid transaction value when his declared value is in accordance with the valuation data of already determined customs values, maintained in terms of subsection (13)(a) of section 25A of the Customs Act, 1969, read with Rue 107 of the Customs Rules, 2001. If the said declared value is not in agreement with data .Of already determined customs value then the same cannot be accepted as payable transaction
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customs value. Taking into consideration the principle laid down by the Honourable High Court in the case of Messrs Super Industries (Pvt.) Ltd., v. Central Board of Revenue and others (2002 PTD 955) the assessm ent of the consignment has been made at par with the other importers' goods with a view to eliminate any discrimination and market distortion. In the aforecited case the honourable High Court held that one of the cardinal principle of tax law is that the revenue method should be consistent in practice and version. (iv) That in the light of submissions made above the contents of ground (D) are incorrect, hence, denied. (v) That the contents of para (E) of Grounds of appeal are incorrect, hence, denied. In the presence of large number of the assessm ent at the ascertained value, only a few isolated clearances at lower assessm ents make no defense for the appellants. In all such cases where the goods have been released with wrong assessm ent, the recovery proceedings, as provided under the law, are being initiated against the importers. Therefore, a Goods Declaration (GD) which is subject to post clearance audit can not be made basis for any subsequent wrong assessment and all such cases are subject to recovery action in terms of sections 32 and 32A of the Customs Act, 1969. Without prejudice to above, even otherwise it is cardinal principle of law that two wrongs cannot make one right. (vi) That in the light of submissions made above the contents of ground (F) are incorrect, hence, denied. (vii) That in the light of submissions made above the contents of para (G) of Grounds of appeal require no further comments. (viii) That in the light of submissions made above the contents of para (H) 9f Grounds of appeal are incorrect, hence, denied. (ix) That the contents of para (I) of Grounds of appeal are incorrect, hence, denied. As per first proviso to section 193-A(3) the Collector (Appeal) can decide an appeal within the extended period. (x) That in the light of submissions made above the, contents of paras (J) and (K) of Grounds of appeal require no further comments. 5. Rival parties heard and case records perused and the following issues are framed for consideration by this forum:-- (i) Whether appellant declared value was transaction value within the meaning of section 25(1) of the Customs Act," 1969 and the appellant's has discharged burden of proof laid upon him under Rule 109 of Customs Rules, 2001? (ii) Whether the respondent has discharged the burden of proof by following the provision enumerated in section 25 of the Customs Act, 1969 while determining the value of the subject consignments? (i.e) Whether the transaction values declared by the appellant are in conformity with the clause (d) of subsection (5) of section 25 of the Customs Act, 1969? (iv) Whether order-in-appeal is barred by time in terms of a proviso to subsection (3) of section 193-A of the Customs Act, 1969 is being issued after 1 day of the stipulated limitation period of 180 days in Appeal No.905 of 2010 and after the initial period of 120 days as no extension was granted prior to expiry of initial period of 120 days in 3 Appeals Nos. 883 to 885 of 2010? (v) Whether the subject imports of the appellants has been meted out a differential treatment as compare to other contemporaneous imports involving an element of discrimination in terms of Articles 4 and 25 of the Constitution of Pakistan read with number of judgments of the Superior Judicial fora?
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6. That as regard issue No. (i), this Tribunal has observed that when the appellant in the column of (financial information) of the GD transmitted clearly that the import is against confirmed letter of credit, its number and date and in the examination invoice was found as per Rule 389 of the Customs Rules, 2001 of the same amount, for which declaration was made, he discharged the burden laid upon him under section 25(1) of the Customs Act, 1969 and under Rule 109 of the Customs Rules, 2001. That for disputing the said value, it was mandated upon the respondents to transmit view messages under Sub-Rule (1) of Rule 109 of Chapter IX and 437 of Sub-Chapter III of Chapter XXI of Custom Rules, 2001 to the appellant for transmitting/scanning additional documents. On the contrary no such exercise was undertaken either by the Appraiser, Principal Appraiser and the respondent No. 1 as no copies of the transmitted view messages have been paced on record by the respondent, despite, shifting burden of proof. No decision was also communicated with grounds as enunciated in sub-rule (3) of Rule 109 confirming that no cause or reason was available with the respondent for disputing the value and the said fact further stood proved from the fact that no evidential invoice as directed by FBR in para 78 of CGO 12/2002 of the period expressed in Rule 107(a) was placed before this Tribunal. The department has miserably failed to discharge the onus of establishing that the price declared by the appellants of the imported goods are not the transaction value within the meaning of section 25(1) A of the Customs Act, 1969. The same view has…
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