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Petitioner: Messrs M.I. Traders, Lahore VS Respondent: Principal Appraiser, Group-I, Mcc Of
Court Name: Customs Appellate Tribunal Judge(s): Jehanzaib Wahlah Title:Messrs M.I. Traders, Lahore vs Principal Appraiser, Group-I, Mcc Of
JUDGMENT
Reported As: 2021 PTD (Trib.) 2113 Result: Appeal allowed Judgment JUDGMENT JAHANZAIB WAHLAH, MEMBER JUDICIAL-III .----Through this order , I intend to dispose off Appeal No.71 1/2019 directed against Order-in-Appeal No.1882/2019 dated 03.05.2019 passed by Collector of Customs (Appeals), disposing the appeal as not maintainable against the passed re-assessment order dated 07.12.2018 by Deputy Collector , Group-I, MCC of Appraisement, East, Karachi in GD No.KAPE-HC-30232-2008/2018. 2. Briefly facts of the case are appellant, during the course of his business activities imported a consignment of 189Q2 kgs. of Kinder Joy Choco Roco from UAE @ US$. 0.80/kg. Upon receipt of shipping documents appellant transmitted Goods Declaration (GD) under the provision of Section 79(1) of the Customs Act, 1969 (Act) and Rule 433 of the Sub-Chapter III of Chapter XXI of the Customs Rules, 2001 (Rules) with the MCC of Appraisement-East under the regime of Custom Computerize d System (CCS), which transmitted view message for payment of upfront duty and taxes of Rs.1,537,177/- which were paid on 20.08.2018, consequent to which GD was numbered as KAPE-HC-30232-2008/2018, upon appearance of GD the Assessing Officer opted to get the goods examined as per the contemplation of Section 198 and Rule 435 of the Act/Rules and to proceed with after recording his opinion/apprehension transmitted the GD to respondent No.2 who gave his assent and referred the GD to the Deputy Collector , Terminal, who got the goods examined form the Officer of his choice, the goods were found in accordance with the declaration in all aspect, report so prepared was uploaded in the reservoir of the GD. The Assessing Officer upon receipt of that on his workstation passed assessment order dated 27.08.2018 while accepting the declared value in the capacity of the authority defined in Section 2(a) under the provision of Section 80 and Rule 438 while observing in the assessment note "examination report/packing list/data. KAPE-HC-27244- 15082018 and referred the same to Principal Appraiser (respondent. No.1), who transmitted view message dated 25.8.2019 under Rule 437 ibid to the appellant for uploading previous lab report, literature and GDs, wherein
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identical/similar goods were cleared on declared value. Appellant in compliance scanned the requisite, consequent to which he approved the assessment order vide dated 28.6.2018 and the inbuilt authority of the CCS passed Clearance order under the provision of section 83 and Rule 442 ibid. The appellant representative after obtaining delivery order form the shipping compan y approached the official of terminal operator for obtaining delivery , who showed their inability to entertain appellant representative by virtue of the fact that the Principal Appraiser (R&D) put an hold on the GD/detained the consignment under the provision of Section 186 of the Act. The representative of the appellant rushed to him for inquirin g the reason, he opined that it is the case of mis-declaration of value and he desire to initiate adjudication proceeding, when he was confronted that how he arrived on such conclusion and as to whether there exist any mis-declaration in material particular , his answer was in negative. Subsequently , after lapse of 45 days from the hold, the Principal Appraiser (R&D) ordered respondent No.2 to reassess the GD in the garb of review at US$. 1.96 as against declared/assessed US$ 0.80/kg, which he did on 09.10.2018 while adducing remarks in the assessment note reading as "Reviewed, assessed as per evidential data vide GD No.KAPW -HC-30608-2808/2018.. Since the goods imported vide referred GD is non famous brand and of China origin, whereas, the goods under this GD are superior/famous brand, therefore, keeping in view the assessment criteria the impugned goods are being assessed after enhancement of 20% in value of the afore referred GD i.e. US$. 1.6296/kg x20% = US$.1.9555/kg". Being aggrieved and dissatisfied from the reassessment order in the garb of review passed by respondent No.2, appellant assailed its vires before respondent No.3 on 25'.10.2018 vide Appeal No.Cus/2951/2018, multiple hearings were conducted by the respondent No.3 and thereafter passed order dated 03.05.2019. Para 4 of the order is relevant, which read as: I have examined the case record and the arguments of both the side and have given careful consideration to the facts of the case. The department has contended that since the assessment has done under section 83(B) of Customs Act, 1969, which is not covered under Section 193 of the Customs Act, 1969 hence, appeal cannot be filed with Collector (Appeals). The point is well taken. However , department is directed to finalize provisions assessment under Section 80 of the Custom Act, 1969 to enable the importer to seek remedy as per law. The appeal is dispose off accordingly ." 3. The appellant assailed the above order before this Tribunal through Appeal bearing No.K-637/2019 which was heard and decided vide order dated 11.12.2019 through which reassessment order dated 09.10.2018 passed by respondent No.3 and order-in-appeal dated 03.05.2019 passed by respondent No.4 were set aide and appeal was allowed, while maintaining the assessment order dated 28.08.2018 passed by respondent No.1 being correct in fact and law , para 18, of which is relevant and read as: In deciding the subject case, I have given anxious consideration to the arguments of the rival parties and perused the impugned order , the relevant provisions of law, the case law referred specifically the interpretation of law, legal propositions and observations made thereon and infield ratio decidendi observed by the Superior Courts, I, have reached to the irresistible conclusion that the appellant has been needlessly dragged into the litigation by the respondent No.1. despite not warranted under law. I hereby ser aside the reassessment orders dated 09.10.2018 passed by respondent No.2 and order -in-appeal dated 3.05.2019 passed by respo ndent No.3 as ab-initio, null and void while maintaining the assessment order dated 28.8.2018 being correct in fact and law. Appeal is accordingly allowed with no order as to cost. The respondent No.2 is directed to issue delay detention certificate in terms of Section 14A (2) of the Act in duplicate, for submission with the respective shipping company and terminal for waiver of paid container detention/rental and terminal demurrage/storage charges accumulated manifold without any fault or default on the part of the appellant. 4. On 26.10.2018, the Assistant Collector of Customs, Group-I MCC of Appraisement- West, Karachi (respondent No.2) issued and circulated an "Asse ssment Alert" with the approval of Collector of Customs, MCC of Appraisement-W est, Karachi having caption "IMPOR T OF ASSOR TED DRINK AND KINDER JOY AT LOW VALUE" stating inter alia that "it has been observed that imparter of "various flavored drink" as detailed below and confectionary item "Kinder Joy" are decla ring low values at import stage. Whereas a market survey reveal that the actual prices of these items are quite higher and do not commensurate with declared values at import stage and directed all the Assessing Officer of Model Customs Collectorate of Appraiseme nt-W est, Karachi not to assess
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these items below to the value. mentioned below , Kinder Joy appears in the list at serial No.6 and value of which has been determined/fixed by the respon dent No.2 at US$ 10/kg. the assessment alert further contained direction that, in case the declared value are higher than the above value, the higher value shall be applicable and clarified that the confectionary items "Kinder Joy" is correctly classifiable under PCT Heading 1806.9000. The Deputy Collector , Group-I, MCC of Appraisement-East, Karachi (respondent No.3) in the presence of pendency of the appeal bearing No.Cus/2951/2018/A-East with the respondent No.4, despite non availability of enabling provisions in the Act, respondent No.3 ones again passed reassessment order dated 07.12.2018, 2nd in number reading as "GD is reassessed as per assessment alert (as attached @ 10 US$ /kg. The GD is being finalized accordingly . Amount of Rs.8,341,371/- amount of fine and penalty in the tune of 35% is to be secured under section 83(B) of the Customs Act, 1969 in form of Pay Order" and pile that on the existing assessment order dated 28.08.2018 passed by respondent No.1 and reassessment order dated 09.10.2018 passed by respon dent No.3 which was sub judice before the respondent No.4 by virtue of filing appeal dated 25.10.2018. The appellant challenged the vires of the impugned reassessment order ones again before respondent No.4 on 01.01.2019 vide No.Cus/3054/2018/A-East. The respondent No.4 decided the subject appeal through a common order dated 03.05.2019 in appeal No.Cus/2995/2018/A-East. Corresponding to GD No.KAPE-HC-46356-18-09/2018 and applied that mutatis mutandi on the present appeal, having different facts and grounds Para 4 of which is relevant and has already been incorporated at the bottom of para 2 supra. 5. The appellant filed the appeal on the basis of grounds enumerated therein, the consultant of the appellant argued the case strictly in accordance with the ground enumerated therein. No pass objections under Section 194A(4) of the Act have been submitted within the stipulated period of 30 days by the respondents Nos.2 and 3 resultant, lost right of cross appeal within the contemplation of section 194A(3) ibid. Non submission of counter affidavit whether by will or default forfeit the respondents Nos.2 and 3 right to deny assertion made in the affidavit. This proposition of law stands, validated from the following judgments of the Superior Judicial Fora reported. as (1974) 94 ITR--I, PLJ 1979, 71 & 72, 1986 CLC 745 KAR, (1984) 146 ITR 140, (1985) 53 Taxation--I (Trib.) 1986 CLC 1119, 1986 CLC 1408 Kar, 199. MLD 1243, PLD 1992 SC 317, 1993 SCMR 662, PLD 1996 Karachi 68 and PLJ 197(sic) Quetta 66, 2003 PTD 2118. However , respondent No.3 submitted comments, which least qualify the definition of memorandum of cross objection as defined in section 194A(4) of the Act. Hence, cannot be construed as appeal under the aforesaid section, instead to be termed as opinion/averment on the memo. of appeal having no warrant of law. Therefore, placed on record of the case for perusal. On the date of hearing the representative of respondent No.3, stated that the second reassessment order passed by the respondent No.3 and order passed by respondent No.4 are correct in fact in law, irrespective of deficiencies and ought to be maintained and appeal be dismissed as of no substance/merit. 6. Arguments heard and case record perused and so the relied upon citation. Since, I have already decided the merit and legality of reassessment order dated 09.10.2018 passed by the respondent No.3 in the garb of "Reviewed" and order-in-appeal dated 03.05.2019 passed by respondent No.4 in Appeal No.Cus/2951/A-East, operating para of which has been reproduced at the bottom of para 3 supra. I will record my decision on the events emerged subsequent to those and in regards to the act and commission of respond ents Nos.2 to 4 i.e. firstly on the powers of Collector of Customs, MCC of Appraisement-W est, whether he was within his right to approve an illegal document and whether the respondent No.2 was empowered to comply illegal order of his superior having no warrant of law and whether he can issue assessment alert in substitution of Valuation Rulings (VR) through which Director , Directorate General of Valuation determined value of the goods and class of goods under the provision of section 25A of the Act for levy of duty and taxes with the application of those. Indeed Collector of Customs and respondent No.2 have been appointed under the provision of Section 3 of the Act and been delegated powers under different provision of the Act and through SRO 371(1)/2002 dated 15.06.2002 for exercising those; in case of need. However , Collector of Customs is not empowered to issue any order/direction to his subordinates or to approve any communication for circulation in nullity/derogation of the provision of the Act. Subordinates including respondent No.2 are bound to adhere orders, directions or instructions issued by the Collector in consonance with the provision of the Act and Rules and regulation framed there under/law laid down by the Superior Judicial Fora.
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They are under no circumstances are under obligation to adhere any, instruction, direction or order issued in negation of the provision of the Act and Rules and regulation framed there under . They are also not empowered to determine value goods/class of goods under the provision of section 25A A ibid., under which Director , Directorate General of Valuation is empowered to determine the value of the goods/class of goods through valuation ruling for application on the imported goods for levy of duty and taxes. The respondent No.2 by issuing/circulating assessment alert dated 26.10.2018 said to be with the approval of Collector of Customs committed a grave illegality as he is least empowered to either determine value of any imported good and circulate the same in the shape of either B assessment, alert or guideline in substitution of valuation ruling. By issuing and circulating assessment alert or Guideline. By doing so, he encroached the sovereign powers/jurisdiction of Director , Directorate General of Valuation, in nullity to his allotted sphere. Rendering C assessment alert dated 26.10.2018 through which he determined the values juices and kinder joy and direction to the Assessing Officers to assess those with the application of those values, despite having no power/mandate to direct the Assessing Officer to adhere the values given in assessment alert, which is not in any manner substitution of valuation ruling, adherence/application of which is mandatory on the field formation as per the contemplation of section 25A(4) of the Act as ab-initio, null and void. It has also been noted by me that while committ ing the aforesaid illegality by the Collector of Customs and respondent No.2 they intentionally ignored the direction of Board issued vide letter dated 22.07.2000 that "with the introduction of transaction value under the WTO Valuation Agreement, the concept of value data base became infructous and cannot be relied upon for any purpose, inclusive of assessment and stand withdrawn" for achieving the desired result under no provision of the Act inclusive of section 25 or 25A. Neither Collector of Customs is empowered to issue direction/instruction/order to the subordinates contrary to law, nor can approve any communication/circular/assessment alert, guideline or VDB. Similarly respondent No.2 is not duty bound to comply such direction issued by Collector of Customs, with the exception of Board whose direction/instruction and orders are mandatorily to be adhered by the field formation sans adjudicating authority as contemplated in section223 of the Act. The assessment alert dated 26-10-2018 by the respondent No.2 in substitution of VR has no warrant of law as held by this Tribunal in reported judgments 2014 PTD (Trib.) 510 M/s. S.S. Trading v. Additional Collector of Customs Adjudication-PaCCS, Karachi that "The Act of issuance of Guidance fixing the price is in the absen ce of legal sanction, amounts to transgression of authority and forced construction of law as held by Superior Judicial Fora in umpteenth reported judgment and these depreciate such unilateral and arbitrary determination of import value which render the Valuation of the subject goods fixed as a nullity in the eyes of law. Hence, this Tribunal hold the Guideline dated 13.05.201 1 as ab-initio void and of no legal effect and no assessment can be completed of the imported goods under Section 80 of the Customs Act, 1969 and Rule 438 of Sub-Chapter III of Chapter XXI of Customs Rules, 2001" and in Custo m Appeal No.K-2164/2016 titled as Messrs Hunain Enterprises v. The Director General, Directorate General of Valuation that "the Director General had no authority under the Customs Act, 1969 to issue Guidelines/reference to the Chief Collector of Customs or Collector of Customs, to assess Goods its per value given in such Guidelines/reference. Section 25A of the Customs Act, 1969. authorizes Director of Customs Valuation and also the Collector of Customs, to determine value of imported items. As per section 25D the Director General Valuation is competent to hear Revision Application filed against the VR issued under Section 25A, in terms of subsection (3) of Section 25A, he is also empowered to determine the applicable custom value in case of conflict in the Custom value determined under subsection (1) of the said section. The Custom Act, 1969 has clearly defines mandate/domain of the Director General Custom Valuation which does not include issuance of Guidelines to Chief Collector of the Collector of Customs to assess imported goods on the value as determined by him. Since, he is not competent/authorized to determine value of the imported goods, in fact the letter of the learned Director General of Customs, Valuation dated 18.05.2018 is ultra vires the law and as such void having no legal sanctity at all". Whereas, the double bench of this Tribunal held in 2018 PTD (Trip.) 2418 Deen Sons v. The Director , Directorate General of Valuation and another that "He is in no way empowered to issue a 'valuation ruling under the provision of Section 25A of the Act, which stood validated from various orders of the Honorable High Court of Sindh in which it has been held that Section 25-A does not grant or delegates powers to Deputy Director (HQ) Valuation to issue a Valuation Data Base
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or any kind of letter that suggests determination of value of goods. That by issuing VDB Letter No.179 dated 03.02.2017, the Deputy Director (HQ) Valuation acted in derogation of the provisio n of Sections 25, 25A and Order of the Board dated 22.07.2002 through which value data base maintained by the Collectorate/DGV was withdrawn with the introduction of transaction value under the WTO Valuation Agreement, rendering the letter as of no legal effect and as such void and ab-initio." Hence, the assessment alert dated 26.10.2018 issued by respondent No.2 is without lawful authority/jurisdiction being issued/circulated on self acquired powers, unauthorized, without any legal basis hence without any legal consequ ences and 2nd reassessment order dated 07.12.2018 passed by the respondent No.1 with the application of aforesaid assessment alert.. Hence, in the absence of availability of Valuation Ruling of the goods imported in the present case, assessment had to be made with the application of identical/similar value within the meaning of Section 25(5), (6) and Rules 117 and 118 available in the data reservoir maintained by PRAL under Rule 110 of the period given in Rule 107(a) of the Act/Rules, which respondent No.3 made on 28.08.2018 through assessment order passed under section 80 and Rule 438 of the Act/Rules, which has been held Correct in fact and law by me in order dated 11.12.2019 in Custom Appeal No.K- 637/2019. 7. When, an appeal has been filed against the reassessment order dated 19.10.2018 passed by respondent No.3 before the respondent No.4 under the provision of section 193(1) of the Act on 25.10.2018 vide No.Cus/2951/2018/A-East and hearing notice dated 13.12.2018 intimating the date of hearing dated 19.12.2018 was received from the office of respondent No.4 by the office of Collector of Customs, the GD in question and so the reassessment order dated 19.12.2018 stands sub judice, further action, which also include reassessment order either or, first and second in number cann ot be initiated/passed, in the absence of availability of enabling provision in the Act, empowering Collector of Custom, or respondent No.3 to proceed with initiation of further proceeding/passing of reassessment order , even after filing of appeal against' the earlier reassessment order . The respondent No.3 without lawful authority/jurisdiction once again reopened the asse ssment order dated 28.08.2018 passed by respondent No.1 and reassessment order dated 09.10.2018 passed by him under the provision of Section 195 of the Act, under which either Board or Collector is empowered sans order/decision against which appeal has been filed. To the contrary , the respondent No.3 and his superiors interpret the provision of the Act in accordance with their whims and wishes for achieving the desired results in derogation of the actual essence and spirit of the provision of the Act and the law laid down by the Superior Judicial Fora that is 2002 PTD 2457 that "the thing should be done as they are required to be done, or not at all". The Apex Court held in judgment PLD 1971 Supreme Court 61 "neglect of plane requirement of an absolute statutory enactment prescribing how something is to be done, would invalidate thing being done in some other manner" and in PLD 1973 Supreme Court 236 'it is now well established that where an inferior Tribunal or Court has acted wholly without jurisdiction or taken any action "beyond the sphere allotted to the Tribunal by law and therefore outside the area within which to law recognizes a privilege to err" then such action amounts to a separation of power warranted by law" and as such an act is a nullity that is to say the result of a purported exercise of authority which has no legal effect whatsoever" in such a case, it is well established that a Superior Court is not bound to give effect to it." The said ratio was maintained, in the case of E.A Avans reported as PLD 1964 SC 536 "where it has been unambiguously and categorically held that if the doing of a thing is made lawful in a manner than doing of that thing in conflict with the manner . prescribed will be unlawful." The Hon'ble Apex Court in 2001 SCMR 838 and .2003 SCMR 1505 held that "while considering the impact of violation or non-observance of the method prescribed by law for doing an act in a particular Manner or-mode, such provision of law is to be followed in letter and spirit and achieving or attaining the objective of performing or doing of a thing in a manner other than provided by law would not be permitted. The same observation has been made by the Hon'ble Supreme Court of Pakistan in the Civil Petition filed by Director General of Intelligence and Investigation and others v. M/s Al-Pair Industries (Pvt.) Ltd. and others reported as 2006 SCMR 129 if the law had prescribed method for doing of a thing in a particular manner , such provision of law is to be followed in letter and spirit and achieving or attaining the objective of performing or doing of a thing in a manner other than provided by law would not be permitted". The super structure built on such foundation namely audit observation, show cause notice and order-in-original no matter how strong those may be have to fall,
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reference is made to PLD 1996 Karachi 68 which laid down that "where the initial order or notice was Void all subsequent preceding, orders or super structure built on it were also void. In reported judgment 2006 PTD 978 it is held 'that the entire proceeding initiated by the Adjudicating authority and further super structure thereon including the order passed by the learned Tribunal are without jurisdiction void and in-operative'. The Apex court in PLD 1971 Supreme Court 184 held that "order of a Tribunal found to be without jurisdiction---all successive orders based upon it illegal and liable, to be quashed ". As adumbrated, the second re-assessment order dated 07.12.2018 passed by the respondent No.3 is held to be passed without lawful authority / jurisdiction and as such ab-initio, null and void. 8. It is felt apt and just to visualize the essence and spirit of section 83(B) of the Act, verbatim of which read as: "83B. Provisional release of imported goods :- where any offence is detected in respect of imported goods which are not liable to confiscation or needed for evidence at a later stage, the Collector of Custom may, on written request of owner of the goods, allow release of the same on payment of duty; taxes and other charges and furnishing bank guarantee or pay order against the amount of any penalty or fine which may be imposed on such goods. ". 9. On plain reading of section 83(B), it has been observed that the said section comes into play, when in any imported consignments; offence of the provisions of the Act and Rules and regulation framed there under has been detected by the Customs Officials, against which framing of contravention report for…
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