' UMAR ATA BANDIAL, J.---With the assistance of the learned counsel for the parties the following essential facts of the case stand established. The motor vehicle forming the subject-matter of the present controversy ("vehicle") was imported by a foreign mission under diplomatic privilege vide bill of Entry No,70715, dated 30-1-2001. The vehicle was cleared without payment of duty pursuant to exemption under S.R.O. 506(I)/88, dated 26-6-1988 ("S.R.O."). In breach of the terms of the S.R.O., the vehicle was sold by the foreign mission to the petitioner who used it for one year or so when it was seized by the customs intelligence, respondent No,4 on 22nd November, 2003. Such seizure was challenged before the Collector Customs Adjudication, who passed an order, dated 12-7-2004 directing release of the vehicle upon payment of a redemption fine along with customs duty and taxes leviable on its import in accordance with law. That decision by the Collector Adjudication was affirmed by the learned Customs, Central Excise and Sales Tax Appellate Tribunal ("Tribunal") by its judgment, dated 25-6-2005. .2. Pursuant to the said orders, when the assessing authorities subsequently took up the matter of calculating the leviable duties and taxes on the vehicle they have allegedly adopted a value for the vehicle that was far higher than its declared value recorded on the aforesaid bill of entry. It is pointed out that the customs department had never previously disputed the declared value of the vehicle. The claim of the petitioner is that when the bill of entry for the vehicle was processed without objection to its declared value and it was cleared from customs port by the customs authorities, then in the absence of any allegation of fraud or misdeclaration, it is obvious that the respondent No,3 had accepted its declared value. However, after the litigation between the parties about seizure of the vehicle had concluded, the unilateral action by the respondents Nos. 3 and 4 to re-open the valuation of the vehicle and to increase the same is claimed by the petitioner to be without lawful authority. It is urged that without commencing proceedings under section 32 of the Customs Act, .1969 ("Act") the impugned purport to increase valuation of the vehicle is incompetent, arbitrary and devoid of legal cover. Accordingly, the tax demand under the impugned letter, dated 12-9-2005 by the respondent No,4 based on a re-assessment value of the vehicle is sought to be annulled by the present petition. No assessment order or other order indicating the enabling law for the impugned revaluation is disclosed on record by the respondents and the vehicle continues to remain in their detention since 22-11-2003.
3. Learned counsel for the respondents has submitted that the initial clearance of the vehicle from customs port took place subject to the terms of the S.R.O. And without assessment of leviable duties and taxes thereon. In particular, he has referred to the condition in the S.R.O. That the diplomatic privilege holder importing a vehicle cannot transfer it without prior consent of the Federal Government. That the imported vehicle was sold to the petitioner without knowledge and consent of the Federal Government and was plied illegally by him until the customs authorities seized the same on 22-11-2002. At the outset, this demonstrates the petitioner's conduct to the tainted with unclean hands. He is therefore, disentitled to equitable relief. Correspondingly, the sale of the vehicle is ineffective and voidable until permission of the Federal Government is given.
Therefore, the petitioner lacks locus standi unitl the sale of the vehicle is approved by the Federal Government. Indeed, this is also spirit of the S.R.O. And the upshot of the adjudicative orders passed in the case by the Collector Adjudication and the learned Tribunal allowing redemption of the vehicle to the petitioner subject to payment of fine and leviable duties and taxes. As a result of the said orders that have attained finality, the petitioner does have locus standi to contest the quantum of his liability to leviable duties and taxes. Finally the learned counsel for the respondents explains that both under section 81 of the Act and the S.R.O. The respondents have power to assess the value of an imported vehicle latter than the event of is import. In the present case the clearance of the vehicle by the customs authorities was merely a mechanical exercise because due to complete exemption under the S.R.O., no duty was payable by the importing mission and therefore no assessm ent was necessary. Such a course is visualized by section 81 of the Act dealing with provisional assessm ent whereby the enabling power to subsequently carry out a final assessm ent is provided.
4. Submissions of the learned counsel for the parties have been heard. These boil down to a dispute as to the authority of the respondents to re-asses the value of the vehicle. Under sections 80 and 83 of the Act, imported goods may be cleared for home consumption after these have been assessed to duty and the same is paid. It is axiomatic that exemption from duty does not mean exemption from assessm ent. The process of assessment of duty must be completed even for wholly exempted goods so that their eligibility to exemption and the quantum of exempted liability to duties and taxes are duly established prior to their clearance A for home consumption.
Contrary to the argument advanced by the learned counsel for the respondents there is no provision in the S.R.O. Which authorizes the customs authorities to postpone the event of assessm ent of exempted goods after their clearance. Section 81 of the Act does indeed vest power in the respondents to postpone final assessment of imported goods. But the exercise of such power is subject to certain conditions. The relevant provisions of section 81(1) ibid are reproduced below:- - "(81) Provisional assessm ent of duty.---(1) Where it is not possible immediately to assess the customs-duty that may be payable on any imported goods entered for home consumption or for, warehousing or for clearance from a warehouse for home consumption or any goods entered for exportation, for the reasons that the goods require chemical or other test or a further enquiry for purpose of assessm ent, or that all the documents or complete documents or full information pertaining to those goods have not been furnished, an officer not below the rank of Assistant Collector or Deputy Collector of Customs may order that the duty payable on such goods be assessed provisionally; ' Provided that the importer (save in the case of goods entered for warehousing) or the exporter pays such additional amount as security or furnishes such guarantee of a scheduled bank for the payment thereof as the said officer deems sufficient to meet the excess of the final assessment of duty over the provisional assessm ent."
5. It is plain from the foregoing statutory provisions that the power of provisional assessment is exercised where final assessm ent of imported goods cannot be completed immediately for the want of tests, reports, complete documents or other further enquiry about the imported B goods for purpose of final assessm ent. In such cases a provisional assessment order must be passed allowing for clearance of the imported goods subject to furnishing securities. Reference is made to the case of Collector of Customs (Appraisement) Karachi v. Messrs Automobile Corporation of Pakistan (2005 PTD 2116). In the present case there is no order or other indication on the bill of entry and the remaining record that at the time of clearance of the vehicle for home consumption its provisional assessm ent had been made by the respondents No,3 for want of further enquiry, other verification or complete documents. Therefore no security was taken by the respondents as also visualized by section 81 of the Act. Hence, the argument by the learned counsel for the respondents on the basis of section 81 of the Act is not borne out from the record of the case.
6. The true essence of the respondents case is that the value of the vehicle was not assessment properly at the time of its clearance for home consumption. Therefore, the customs authorities can re-assess the same later. This view may have had substance if allegations under section 32 of the Act for dishonest mis-declaration of value of by the importer or inadvertence or error by the Assessing Officer had been made. In such event, a past assessment may be validly reopened.
However, that is neither the position on the respondents record nor is possible under the adjudicative orders made in the case that have also attained finality and thereby created vested rights.
7. Notwithstanding the forgoing, there may be substance in the objection by the learned counsel for the respondents that the admitted violation of a term of the exemption S.R.O. Has gone unpunished. This is the breach of the condition that the vehicle could not be sold and transferred without consent of the Federal Government. Two things must be noted here. One that the importing mission and not the petitioner committed the said breach and second that the record and the Tribunal's adjudicative order that has attained finality ignores that breach of the aforesaid term of the S.R.O. The departmental view appears to be that the breach carries insignificant consequences.
Clearly the petitioner cannot be saddled with the liability of an errant diplomatic mission that is the importer in the present case. Nor should the respondents assume the authority to start a brand new case against the petitioner as soon as the present one ends. They may, however, act in the matter within the foregoing limits.
8. It is accordingly held that the impugned order, dated 12-9-2005 by the respondents Nos. 3 and 4 wrongly arrogates a power to redetermine value of the vehicle afresh. Law does not confer such a power. Consequently, the impugned demand and its underlying reassessment of value of the vehicle are declared to be illegal and without lawful authority.
9. Be that as it may, the order, dated 25-6-2005 passed by the learned Appellate Tribunal allows the respondents to "calculate" the leviable dutties and taxes on the vehicle in accordance with law.
The vehicle must therefore remain seized with the respondents until payment of the lawfully leviable duties/taxes assessed on the basis of its declared value, the amount of adjudicated redemption fine and the amount of penalty, if any, that is lawfully determined for breach of condition of S.R.O. By the respondent No,3 or his competent subordinates is duly paid.
10. The vehicle in question has remained under seizure for the last three years. It is in the interest of justice that the concerned customs authorities endeavour to decide the matter of quantum of liability within two months of the date of receipt of a certified copy of this order. Disposed of.