SABIHUDDIN AHMAD, J:-- The petitioners in all these petitions are manufacturers of toffees and have been imported wrapping paper, which prior to 1988 was being charged with custom duty at the rate of Rs.80% ad valorem, after the witch over to the international harmonized system (I.H.S) in the schedule to the Customs Act a dispute arose as to the proper classification of such wrapping paper. The petitioners' claim that they were liable to pay duty under Heading 4823. 19900 (gummed or adhesive paper) at the rate of 80%, while the respondent/Custom authority contended that such paper fell under Heading 4823.90 described as follows:- 4823.90 "Strips of paraffin-waxed paper of a width not exceeding 15cm, treated with sorbitol, with an appreciable narrower strip of aluminum foil fixed length-wise to the center of one side, put up in rolls for wrapping sweets."
2. With respect to consignments covered by C.Ps. No.D-3020/92, 1533, 2783 of 1993, the imported goods were provisionally assessed to duty at the rate of 80% and the opinion as to proper classification was sought from the respondent No.2/Central Board of Revenue (CBR). Through a letter dated 24:10.1989 the CBR after having obtained some exported advise took the view that the goods were classifiable under Heading 4823.9090 chargeable to duty at the rate of 125%.
Accordingly show cause notices were issued to the petitioners, who submitted their written replies, but the respondent No.4 assessed the goods to be liable to custom duty at the rate of 125% with proportionate amount of sales tax, Appeals and revision applications against such assessment also failed.
3. The consignment in C.P. No.1940 of 1996 was apparently imported after the CBR advised had become available and therefore, the petitioners were required to pay. Customs duty at the rate of 125% with proportional amount of sales tax under compulsion. Nevertheless since the controversy was still live they applied for refund of duty in excess of 80% which was dismissed: Appeal and revision against the order-in-original also met the same fate. All the orders passed by the respondent No.1 in revisional jurisdiction have now been impugned in these petitions.
A. Mr, I.H.Zaidi, learned counsel for the petitioners appearing in al the petitions mainly urged that adverse orders were passed against the petitioners without affording them a proper opportunity of being heard. Indeed this arguments not available in respect of the orders passed by the respondents No.1 & 3 where the record shows that in each case the petitioner heard through counsel, both in appellate and revisional proceedings. As regards the orders passed by respondent No.4 it is no doubt correct that orders in-original impugned in C.P. No.3020/92 and C.P. No.1940/96 were passed in the absence of the petitioners. However, the orders indicate that notices of hearing were given but the petitioners failed to appear and this has not been disputed in any affidavit filed.
If the petitioners failed to avail and opportunity of hearing they could blame nobody but themselves.
5. Mr. Zaidi further argued that the impugned orders were passed primarily on the basis of classification of goods made by the respondent No.2 (CBR) and the petitioners were never heard before the Board. Indeed it has not been disputed that no hearing was granted by the CBR and even otherwise it is well known that the CBR and even otherwise it is well known that the CBR does not normally hear importers or the potential importers before issuing. Directions under section 223 of the Customs Act.
6. What needs to be considered however, is whether such hearing was necessary under the law?
No doubt the well-settled principles of natural justice require that no action detrimental to the interest of a person can be taken without hearing the affected parties. Section 223 of the Customs Act does enable the CBR to issue orders and directions, which are, require to be followed by officers of Customs. Nevertheless it makes an important exception by stipulating that no such instructions shall be given to interfere with the discretion of officers in exercise in their quasi-judicial function.
7. Indeed valuation of imported goods in a particular consignment for the purpose of levy of customs duty is ex facie a quasi-judicial function and the orders passed are subject to the incidents of appeal and revision. In M.A.Rehman vs. Federation of Pakistan (PLD 1988 S.C. 695), it was held, while deciding an appeal the concerned. officer acts in quasi-judicial capacity and is not liable to follow directions under Section 23 of the Customs Act. In Central Insurance vs. Central Board of Revenue (1993 PTD 766), the Supreme Court while interpreting section 8 of the Income Tax Ordinance, 1979 (which is similar to Section 223 of the Customs Act) held that only directions of . An administrative nature could be issued by the CBR and not whose incorporating statutory provisions for determining tax liability of assessed.
8. From the above it is clear that the CBR was not required to hear the petitioner, though the alternate contention raised in the petition, but surprisingly not seriously pressed before us, that the respondents No.1, 3 & 4 were required to apply their minds independently instead of following directions of the respondent appear to be far more formidable. In this context we have carefully gone through the orders passed in all these petitions. Indeed it does appear that while passing original and appellate orders the respondents No.3 & 4 were substantially influenced by the directions of the CBR and considered them to have a binding effect. Nevertheless in C.Ps. No.D- 3020/92, 1533/93 and 2783/93 make no reference to such directions and clearly indicate that they were passed upon an independent application of mind by the concerned officer, hearing the revision application. In C.P. No.1940/96 the specific orders were required to be passed on independent application of mind and not on account of any directions of the CBR was duly considered and it was observed that the Tribunal follow it in fact applied their independent mind. In Collector Sahiwal vs. Muhammad Akhtar (1971 S.C.M.R. 681) and Government of Pakistan vs. Indo Pakistan Corporation (PLJ 1979 S.C. 13), the Honourable Supreme Court has clearly drawn a distinction between cases, where orders have been. Passed in violation of mandatory provisions of law regarding notice before passing an order and those where such notice is claimed on the principle of natural justice. It has been held that whereas in the first category of cases the order passed in void ab initio, in those falling in the second category, the defect would be deemed to be rectified if proper hearing is accorded at the appellate or revisional stage and no prejudice is shown to have been caused.
9. In view of the above, therefore, once the orders in revision are forced to have been passed after duly hearing the petitioners and they being treating the opinion of the respondent No.2 as binding, the petitioners claim founded upon the principle of natural justice loses all its force. On merits the respondent No. 1 has observed that once the paper in question could not be classified as adhesive, was imported in scripts of less than 15 cm width and was meant for wrapping sweets Heading 48230.90 was clearly applicable in any event as held by the Honourable Supreme Court, inter alia, in Collector of Customs vs. New Electronics (PLD 1994 S.C. 363), this Court cannot enter into an independent inquiry as to classification of goods or substitute its opinion for that of the competent authorities.
These are our reasons for dismissing the above petitions by short order dated 9.9.2004.