MUHAMMAD ARIF MOTON, MEMBER (JUDICIAL- II). - This order will dispose of Customs Appeal No. K- 118/2009, filed by the appellant against Order-in-Appeals Nos. 847-848 of 2007, dated 15.1.2008 passed by the Collector of Customs, Sales Tax and Federal Excise (Appeals), Karachi.
2. Brief facts of the case are that the appellant had imported a number of consignments of Dai-ichi Energy Saving Lamps, from China during November, 2005 to Feb. 2006. The importers opted for the electronic clearance of the goods in terms of Section 79(1) of the Customs Act, 1969, and filed their Goods Declaration (GD) for clearance of the same as per their declaration. The declaration and self- assessm ent made by the importers was checked in terms of Section 80 of the Customs Act, 1969, in the light of customs value data of identical/similar imports and found that the above- named importer had imported the goods at suppressed value. Further considering the facts that the importers failed to provide the detailed particulars regarding the way their transaction was completed and they also failed to submit the requisite information/documents, as envisaged under sub-section (2) of. Section 25 of the Customs Act, 1969, that being so, there was no question to accept their declared value as customs value in terms of sub-section (1) of Section 25 of the Customs Act. 1969. Lt was also gathered that in case of the subject item (i.e. Energy Saver Lamps/bulbs) most of the time the assessments were made provisionally or the customs value determined under secondary methods of valuation that being so, during the routine course of hearing of "Review Request" the importers were informed that the value of their consignments will also not be determined in terms of sub-sections (5) and (6) of Section 25 of the Customs Act, 1969, and in fact value of their consignment would be determined in terms of subsection (7) read with sub-sections (9), (11) and (13(a)) of Section 25 of the Customs Act, 1969. Instead of joining the exercise of sub-section (7) of Section 25 of the Customs Act, 1969, the importers requested for the release of their consignment provisionally under Section 81 of Customs Act, 1969. The appellant also filed C.P. No. 881 of 2006 in the Hon'ble High Court of Sindh. Their consignments were thereby provisionally released under Section 81 of the Customs Act, 1969 and the Assistant Collector of Customs passed the Assessm ent Order dated 25.6.2007 in terms- of Hon'ble High Courts' order dated 5.6.2007. The relevant extract is as follows:- "From the foregoing factual and legal position it is clear that in the light of provisions of clause (f) of subsection (2) read with sub-section (13(a)) of Section 25 of the Customs Act, 1969, and Rules 107(a) and 121 of the Customs Rules, 2001 the importers have , neither been able to substantiate that their declared value can be considered as customs value in terms of sub-section (1) of Section 25 of the Customs. Act, 1969, nor they have joined the exercise to determine the value under other secondary methods . Of valuation. Due to concealment of vital information from the customs it is clear that their consignment cannot be evaluated under sub-section (1) of Section 25 of the Customs Act, 1969. Further in the absence of any consignment where value was determined under sub-section (1) of Section 25 of the Customs Act, 1969, the value of the said consignment cannot be determined under sub-sections (5) and (6) of Section 25 of the Customs Act, 1969, in terms of Rules 117 and 118 of the Customs Rules, 2001. Therefore, considering the market enquiry so conducted by the Valuation Department intermittently, for the said kind of goods and also considering the customs value data of the said goods in terms of Rule 107(a) read with sub-section (13)(a) of Section 25 of the Customs Act, 1969, the value of the subject consignment is correctly determined US$ 1.64 in terms of sub-section (9) read with sub-sections (7) and (13(a)) of Section 25 of the Customs Act, 1969, further read with Rules 107(a) and 121 of the Customs Rules, 2001. As the information like raw material cost manufacturing cost etc. Has also not been provided by the importer that, being so, the determination of value in terms of sub-section (8) of Section 25 of Act, 1969 is also not practicable.
Considering the principle of equity and to any discrimination in the light of Article 25 of the Constitution of Islamic Republic of Pakistan, 1973, the consignment of other importers of same kind of goods were also shown to the importers during the course of hearing, the assessment so made above in line with the current assessm ent practice and within four corners of law.
The importers are directed to make the payment of amount of duties and taxes, as per final assessm ent, a 1.34/pc for 24W, already communicated to the importers on GDs for other specifications also through PACCS, within ten days from the date of issue of this order, failing which the assessed amount will be recovered alongwith surcharge, as envisaged in Section 202A of the Customs Act, 1969.
This order is being issued in obedience of the honourable High Court of Sindh's order dated 5- 6- 2007, which was received in the Collectorate on 6- 6-2007. The importers, if being aggrieved with this order may file an appeal under Section 193(1) of the Customs Act, 1969, before the Collector of Customs (Appeal)." '
4(sic). Appellant preferred an appeal against the above order before Collector (Appeals) who also upheld the assessm ent order. Hence the subject appeal on the following grounds:-
(i) That the appellant protested against this arbitrary assessment and therefore failing to get any relief filed a Constitutional Petition No. 881 of ,2006 challenging the arbitrary increase in the declared value by the Customs Authorities without having any. Evidence contrary to the declared value of the appellant.
(ii) That the appellant in the petition emphasized that the amendment in Section 25 of the Customs Act has enacted to remove the discretionary powers of the functionaries of the C.B.R, and the concept was now based on Transaction. Value' and unless proven by Customs Authorities that the transaction value was fraudulent and ' such an allegation supported by evidence of the same, the declared value must be accepted. {iii) That the said petition was disposed of by the honourable High Court vide an order dated September 8,. 2006 whereby the Customs Authorities were directed to provide the appellant an opportunity to be heard before the matter was to be decided by passing a , speaking order. The honourable Court further emphasized that before passing any new order the adjudicating authority must keep in mind the law laid down by the honourable High Court in the ease of Rehari Umer, 2006 PTD 909.
(iv) That the respondent did not abide by the Order of the honourable High Court and tried to cash the post dated cheques, furnished by the appellant under Section 81, before finalizing the assessm ent. The appellant subsequently .Stopped payment.
(v) That the appellant stopping payment on the cheques was made grounds for the respondent refusing to accept post dated cheques for release of other pending consignments. The appellant subsequently filed Constitutional Petition No. 792 of 2007.
(vi) That it is. Respectfully submitted that no evidence was supplied by the respondent and instead a frivolous letter was written calling upon the respondent to supply the entire record of his imports.
(vii) That if the respondent was not clear in his mind about the task being entrusted to him he ought to have sought clarification from the Hon'ble Court however the manner in which the respondent has acted amounts sitting as a Court of appeal over the order passed in Rehan Umer's case and falls in the ambit of contempt of Court, lt is respectfully submitted that an adjudicating officer has flouted the law tq please his superior.
(viii) That without prejudice to What has been stated above, it is submitted that the Assistant Collector acting as an adjudicating officer totally ignored the fact that the arbitrary increase in declared value has been made at the dictates of multi-national companies in Pakistan and the procedure for fixation of value as provided under Section 25 of the Customs Act has not been followed.
(ix) That the respondent totally ignored the guidelines given by the Division Bench of the honourable High Court in Shoaib Khan's case wherein the Honourable High Court has laid down guidelines for the application of Section 25 of the Customs Act.
(x) That the Valuation Advice dated October 5, 2006 has no legal sanctity as in the past the honourable High Court has struck down such letters. Such letter is without any lawful authority, illegal, baseless and devoid of any logic or substance.The price mentioned in the said letter has been concocted, fabricated and enhanced m ignorance of Section 25 of the Customs Act and provisions of Section 25(7) have been invoked arbitrarily without affording the appellant with an Opportunity to fee heard.
(xi) That it is respectfully submitted that no basis for evaluation and determination as stated in the Assessm ent Order No. MCC-LAW-21- 2007, dated June 25, 2007 was provided to the appellant despite numerous .Requests asking for the same. No details were provided by the Customs Authorities as to the manner or method used to conduct the market inquiry and . Arrive at the price mentioned in the Assessm ent Order.
(xii) That it is further respectfully submitted that the Customs Authorities vide Valuation Ruling No. Misc. /5212007-VI1AJ801120, dated February 9, 2008 reduced the price determined by the Assessm ent Order by 30%, lt is hereby respectfully submitted that the Valuation Ruling clearly shows that the attitude of the Assessing Officer was biased and the order so passed was done with malice to injure the good name and reputation of the appellant as it would be impossible to justify a reductioR in the pried evaluated considering the global price increase in energy saver light bulbs.
(xiii) That the 'respondent failed to appreciate that Section 25 does not allow the department to fix the price by issuing such Valuation Advices. The learned Assistant Collector failed to appreciate that valuation advice is to be obtained by the assessing authority if so requested by the importer'to resolve the dispute or where the transaction value cannot be ascertained otherwise the assessm ent has to made in items of Section 25 on the basis of the declared value or evidentiary value if any available with the assessing authority in respect of identical goods from the same country of origin for the maximum quantity available and must not be determined on the basis of price offered for the purchase of a single unit from, the local market as conducted by the Customs Authorities in the present matter.
(xiv) That it isi respectfully: submitted that the local price increase was a direct reflection of an increase in global prices of energy saver light bulbs during the year and a half and the respondent's declared value' of energy saver light bulbs increased by 60% during the same period.
(xv) That The respondent failed to appreciate that there is n6t an iota of evidence to suggest that Transaction Valub on -the' basis 6f which the appallant has declaredits value is fraudulent or the parties to the transaction are related in any jhannar. 1h the absehcb of any such evidence the value declared by the appellant must be accepted- The adjudicating officer had nothing before him to support the impugned order. The impugned order has been passed jwith mala f/de intentions and motives in bad faith.
(xvi) That the Collector ought to have considered that the respondents being government functionaries and* a revenue collecting agency are bound to follow the provisions of the Customs Act in letter and- spirit and the declared value of the appellant cannot be ignored or enhanced.
(xvii) That the Collector ought to have considered that the valuation was not completed or finalized by the Customs Authorities for eighteen (18) months after the said Order-in- Original was issued and this ground alone is sufficient for granting him the relief he seeks from this honourable Court.
Without prejudice to the respondent or the Customs Authorities the appellant did furnish them with a 'Certificate of Pricing' which was rejected by the Customs Authorities.
(xviii) That the learned Assistant Collector, failed to appreciate that neither any reasoning nor any justification has been given for not believing the Declared Value of the appellant and accepting the value suggested by some complainant whose identity and credentials are doubtful. .
(xix) That any doubts over the Declared Value and/or Value could have been confirmed from the Pakistan Customs Computerized System (PaCCS). A pre-requisite for clearing goods using the mode by an importer must be made electronically through a.Local bank.
(xx) That the learned Assistant Collector failed to appreciate that the Department has no lawful authority to fix the price of any imported item unless it has in its possession evidence of higher price of the same period and even then the price cannot be enhanced unless and until it is proved that a relationship exists between the exporter and importer. Therefore, the letter dated October 5, 2006 is illegal, without jurisdiction and has no legal sanctity. The prices suggested in the letter therefore cannot be made the basis for disregarding the Declared Value of the petitioners imports and, therefore, such letters are liable to be struck down.
(xxi) That the learned Assistant Collector ought to have held that the manner in which the. Letter dated October 6, 2006 renders the provisions of Section 25 of the Customs Act redundant is violative of the law and therefore liable to be struck down ab initio, it appears that the impugned order has been passed in ignorance * of the law. (xxii) That the impugned order passed by the respondent is therefore illegal, against the relevant law, rules, regulations and based on an incorrect application of mind and interpretation of the same.
(xxiii) That the impugned order is a poor attempt to nullify the effect of Rehan Umer's case which is still in the field, The impugned order amounts to belittling and contempt of the Superior Judicial forum.
(xxiv) That the assessm ent of the payable amount has not been done in accordance with the law and nothing is on record to show/substantiate/authenticate and support it. The impugned order is a result of lack of knowledge of the law.
5. The departmental representatives during the course of hearing conducted on 12.12.2009, 21.12.2009 and 6.1.2010 argued the case and read the assessment order dated 25.6.2007 thereby supporting their verbal and written depositions:- COUNTER SUBMISSIONS ON BEHALF OF THE RESPONDENTS FILED ON 29.9.2008.
(i) That the appellants approached this honourable "Court with unclean hands and false statements. As evident from the contents of para. (1) of the assessment order, impugned by the appellant, the respondents followed the guidelines provided by the honourable High Court of Sindh in the cases of Rehan Umer and Shoaib Khan, cited by the appellants.
(ii) lt is respectfully submitted that nowhere in Section 25 of the Customs Act, 1969, it has been stated that every declared value is to be accepted for the assessment purposes and rather the provision of sub-section (1) of Section 25 of the Customs Act, 1969, asking for the acceptance of a payable transaction value (which is not in this case) as customs value on the following conditions:
(i) subject to subsequent sub-sections of Section 25 and rules (i.e. Chapter-IX of the Customs Rules, 2001).
(ii) that the value paid by an importer must be in agreement with the "payable" value in the market of similar kind of goods.
That first of all it is proved from the record of the case that no information or corroborative documents were provided and the appellant have failed to provide any corroborative documents i.e. L/C, etc. To prove the transaction of even suppressed declared value. Thus, the appellants have failed to substantiate their "paid" value.
(4) That secondly, the Appropriate Officer, by virtue of powers conferred under sub-section (11) of Section 25 of the Customs Act, 1969, shall have a right to satisfy himself 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 the importer is duty bound to provide the information about .The. Price adjustments, alongwith corroborative documents, as envisaged in sub-section (2) of . Section 25 of the Customs Act, ,.1969.
Admittedly in the instant case the appellants have failed to- provide the said information/ documents thus, in terms of clause (f) of Section 25(2) of the Customs Act, 1969, there is no question to accept the declared value as:, customs value in terms of Section 25(1) of the, Customs.
Act, 1969. The record ,and circumstances of the case proving that the customs value of the appellant's consignment cannot be determined on the basis of their declared value (5) That thirdly, the words "subject to the provisions of this Section and rules, appeared in Section 25(1) of the Customs Act, 1969, have a great importance while accepting any transaction value as .
Customs value. These words clearly confirm that even if an, importer proves his declared value as truly paid transaction value in that case too the acceptance of the said value as customs value is subject to comparison with the 90 days' data of the customs values in terms of Rule 107 of the Customs Rules, 2001. If the said declared value is not in agreement with Rule 107's data then the same cannot be accepted as payable transaction customs value.
(6) That the determination of customs value for assessment purposes is subject to all subsection
(25) of the Customs Act, 1969 and the Rules thereof (Chapter-IX of the Customs Rules, 2001). Once an evidence of determined customs value, proving that the imported goods are of higher value, comes to-notice, as it happened in the subject case, the credibility of the value declared by an importer ceases to exist and then other methods of valuation for the determination of the customs value of imported goods become available to the customs authorities. This is the position which emerges after plain reading of whole provisions of Section 25 of the Customs Act, 1969, in totality, as well as the Rules made thereunder. The record confirms that the appellant approached, this honourable Tribunal with only one motive to get their goods reassessed at their suppressed declared value.
(7) That in the presence of the evidential Goods Declaration (G.D.) of higher customs value the re- assessm ent of the imported consignments are invariably made accordingly under Section 80 of the Customs Act, 1969 read with subsection (11) of Section 25 ibid. Thus, any deviation, as claimed by the appellant, would hit the rights of the respondents to determine the value of the imported goods in the light of sub-section (11) read with sub-sections (5) to x (9) of Section 25 of the Customs Act, 1969, and also seriously prejudice, to the other similarly placed importers for such discrimination.
(8) That as stated above all the consignments are to be evaluated in the light of provisions of subsections (1) to (9) of Section 25 of the Customs Act, 1969, read with Chapter-IX of the Customs Rules, 2001. Lt is pertinent to mention here that under the Pakistan Customs Computerized System (PaCCS) an importer may file his Goods Declaration (GD) electronically in terms of sub-section (1) of Section 79 of the Customs Act, 1969, and pay duties and taxes per his M/s. Abdul Wahid & Co. V.
Assistant Collector of Customs G.L. 235 (Muhammad Arif Moton, Judicial Member-II.) = declaration and determination of his liability unilaterally at his own. Under selectivity criteria, considering the provisions of subsections (1), (2) and (11) of Section 25 and Section 80 of the Customs Act, 1969, read with Rules 107, 110, 111, 121 and 125 of Chapter- IX of the Customs Rules, 2001, the importer's declaration is to be checked with the available data. The provision of sub-section (1) of Section 25 of the Customs Act, 1969, clearly says that the determination of correct payable transactional value is subject to Rules and subsequent provisions of Section 25 of the Customs Act, 1969. 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 similar kind .Of goods with a view to eliminate any discrimination and market distortion, in the afore-cited case the honourable High Court held that one of the cardinal principles of tax law is that the revenue method should be consistent in practice and version. The proposed assessment invariably shown electronically on the In-Box (Screen) of the importer, who then have an option either to pay the duties and taxes after accepting the proposed assessm ent or file a "Review" which has to be reviewed by Senior Assessing Officer i.e. Principal Appraiser. If an importer is not satisfied with the results of review/decision made by the Principal Appraiser, then, he may file a "Second Review" before the Assistant/Deputy Collector of Customs, if an importer is still aggrieved with the Assistant/Deputy Collector's review decision then he may avail the remedy provided under Section 25D of the Customs Act, 1969. Ln the presence of such a comprehensive forums of remedies available to the importer/appellant, in the hierarchy of the Customs Act, 1969, and under PaCCS,, the appellant has invoked the jurisdiction of this honourable Court unnecessarily, on' value aspect.
That the determination of correct customs value in terms of, Section 25 of the Customs Act, 1969, and enquiry about the'fraudulent element of misdeclaration of value in terms of Sections 32 and 32A of the Customs Act, 1969, are two different things, it is pertinent to mention here that when any goods imported arrive at the -port it is responsibility and duty of the importers as well as customs to take such measures that the goods should be released from the port as soon as possible/Thus, under these' circumstances it is not practicable and possible for the customs authorities .To chase every import upto the country of export.1 Besides above the possible / existence of collusion between the sellers and the importers also cannot be - ruled . Out: Since all these actions are time consuming, that is why, a period-of three to five years has been provided under section 32 and 32A of the Customs Act, 1969, to investigate the existence of any fraud. The .Provisions of Section 25 of the; Customs Act, 1969, and contents of Chapter-IX valuation data maintained in terms of Rules.
107(a), 110, 111 and 121 of the Customs Rules, 2001, -read with sub-sections (5), (6), '(9), (11) and 13(a) of Section 25. Of the Customs Act, 1969.
(10) That without prejudice' to above, the subject- matter relates to dispute of determination of value, thus, in terms of newly promulgated v provisions of law Section 25 of the Customs Act, 1969 this case falls outside the jurisdiction of this honourable Tribunal. For ease of reference the said Section is re-produced below:--- "25D. Review of the value determined -Where the customs value has been determined by the Collector of Customs or Director of Valuation or any other authority competent to do so, a review application shall lie before Director. .General of Valuation and any proceeding pending before any Court, authority or Tribunal shall forthwith abate."; Thus, the value determined by an appropriate officer, cannot be challenged before any Court unless a review is filed before the Director General of Valuation.
(11) That the contents of appeal filed before this Tribunal is a replica of the appeal filed before the learned Collector (Appeal), thus, the submissions made by the answering respondents and recorded by the learned Collector (Appeals) in para. 4 of the impugned Order-in-Appeals Nos.
847-848 of 2007, dated 15.1.2007 (annexed as "A" at page 15 of the appeal) may be treated as an integral part of this reply/counter submissions.
(12) That the Tribunal may allow the reading of the Assessment Order dated 25.6.2007 for award of (considered decision.
"ASSESSMENT ORDER SUBJECT:-FINAL ASSESSMENT OF THE CONSIGNMENTS COVERED UNDER CP No. 792 of 2007.
Brief facts of the case are that M. a^ji Wajid of Messrs Abdul Wahid and Company, imported number of consignments of Dai-ichi Brand Energy Saving Lamps, from China during November, 2005 to February; 2006. The importers opted for the electronic clearance of the goods in terms of Section 79(1) of the Customs Act, 1969, and filed their Goods Declarations (GD) for clearance of the same as per the declaration. The declaration and self-assessment made by the importers was checked in terms of Section 80 of the Customs Act, 1969, in the light of customs value data of identical/similar imports and found that the above-named importer has imported the goods at suppressed value. Further considering facts that the importers failed to provide the detailed particulars regarding the way their transaction was competed and they were also failed to submit the requisite information/documents, as envisaged under sub-section (2) of Section 25 of the Customs Act, 1969, that being so, there was no question to accept, the declared value as customs value in terms of subsection (1) of Section 25 of the Customs Act, 1969. Lt was also gathered that in case of the subject item (i.e. Energy Saver Lamps/bulbs), most of the time the assessments were made provisionally or the customs value (determined under secondary methods of valuation, that being so, during the routine course of hearing of "Review Request" the importer were informed that the value of their consignments also cannot be determined in terms of sub-sections (5) and (6) of Section 25 of the Customs Act,, 1969, and in fact value of their consignment would be determined in terms of sub-section (2) read with sub-section (9), (11) and (13(a)) of Section 25 of the Customs Act, 1969. Instead of joining the exercise of sub-section (7) of Section 25 of the Customs Act, 1969, the importers requested for the: release of their consignment provisionally under Section; 01 of the Customs Act, 1969.
(2) On importer's persistent requests their plea was considered and they were asked to submit the bank guarantee for differential amount of Customs Duty, Sales Tax other charges in terms of sub- section (1) of Section 81 of the Customs Act, 1969.'The above-named importers cleared their consignments under Section 81(1) of Customs Act, 1969. Subsequently, in terms of S.R.O. No. 917 (l)/2004, dated 11.11.2004 read with Board's letter C.No. 1(19)SA/al/2004, dated 19.1,2005 the cases were forwarded to the Directorate General of Valuation and PCA, Karachi for determination of value in terms of sub-sections (7) to (9) of Section 25 of the Customs Act, 1969. After investigation the matter the Directorate of Valuation .Has determined the values of all those consignments in terms of sub-section (7) of Section 25 of the Customs Act, 1969. Consequently. This Collectorate finalize the assessm ent through PACCS, in terms of sub-section (2) of Section 81 and asked the importers to pay the differential amount of duties and taxes in terms of sub-section (3) of the Customs Act, 1969.
(4) Subsequently instead of making payment in terms of Section 81(3) of the Customs Act, 1969, the importers approached the honourable High Court of Sindh at Karachi vide C.P. No. 792 of 2007 with the prayer to stop the demand of payment and direct the customs authorities to act in accordance with the order dated 8.9.2006 of the honourable High Court in C.P. No. 881 of 2006. The honourable High Court of Sindh at Karachi vide Order dated 5.6.2007, disposed of the subject petition with the following direction:- "Upon payment of Customs duties, Sales Tax, etc., on the imported consignment at the declared value and on furnishing post-dated cheques with the respondent No. 1 for the differential amount as per the value of the consignment assessed by them the disputed consignment of the petitioner shall be released by the respondent within one week from the date of this order. The concerned officer of the Customs/respondents will afford proper opportunity of hearing to the final valuation of the goods involved in the imported consignment of the petitioner. The assessments shall be finalized within three weeks from today. After passing of the final order, it will be open for the aggrieved party to avail any remedy provided under the law."
(5) ln obedience, "of the honourable High Court's aforesaid order the disputed consignment was allowed release on submission of Post Dated Cheque by the importers and they were also asked to submit the following information supported with corroborative documents:-- >
(i) Chain of transfer of money to the seller's account;.
(ii) Name, address, contact numbers of the manufacturer of the imported goods.
(iii) The cost of transportation; right from the factory to the Karachi Port;
(iv) Loading, un-loading and handling charges at port of destination port;
(v) Cost of insurance substantiated with memo, and cover note;
(vi) Indenting commission and brokerage, if any;
(vii) Cost of containers;
(viii) Cost of packing;
(ix) Cost, weight and specification of the materials, components, parts etc. Incorporated in the imported goods;
(x) Details of any royalties payable.
(xi) Copies of last three (3) previously cleared consignment, if any, of the similar/identical goods.
(xii) Copies of the locally sale invoices of the-last three previously cleared consignments, showing the detailed particular of the contact address and sales tax Registration Number of the local buyer.
(xiii) Copies of sales contract, letter of credit, pro forma invoice, indent, purchase order, etc.;
(xiv) Copies of commercial invoice/packing list (showing weight (gross/net) of each article).
(xv) Copies of B/L and Freight Memo.
(xvi) Copies of catalogue, literature, brochure, etc.
(6) Despite repeated requests the importers failed to provide the requisite information/documents, that being so, vide letter dated 12.6.2007, the importers were required to. Provide the aforesaid information/documents to enable the Assistant Collector to proceed further in the matter. The importers have failed to respond to the said letter also, that being so, another letter dated 14.6.2007 was issued to them and not only they were asked to submit the aforesaid information they were also asked to appear before the Assistant Collector (Group IV) on 18.6.2007.
(7) On 18.6.2007 Mr. Abdul Wajid, the importers, appeared before the Assistant Collector (Group4V) and instead of providing the aforesaid information/documents submitted his written arguments, vide letter dated 18.6.2007, which, inter alia, contained the following:-
(I) The honourable High Court by an order dated 5.6.2007 directed you to determine the final value after affording an opportunity of hearing to the party. This order was passed keeping in view the Judgment of Rehan Umer's case and therefore the issuance of a so-called question under the cover of your letter of 12th June, 2007 is a poor attempt to negate the time factor given by the honourable High Court;
(II) You assessed ,a certain value as against our declared value which prompted us to seek the protection from the honourable Court. Now it is upto you to justify the assessed value on basis of evidence, if any, available with you. You cannot question us to supply you bundle of documents which have no relevance to the issue in dispute. Your sole object appears to gain time and delay the matter just to negate the effect of the Order by the honourable High Court;
(III) We shall attend the hearing on the date fixed and will expect you to provide us the evidence in support of your assessed value so that the matter be failure on your part to substantiate your assessed value with in support thereof, the value declared by us should then be treated as fair transaction value and the declared value be treated as final;
(IV) The ball is in your Court and you have to prove your value by supporting evidence. You cannot call upon us to produce bunch of record with no relevance to the issue so that you may finalize the value. Kindly provide the. Evidence available with you to support the provisional assessment- and in case; you cannot support your provisional assessm ent, you are requested to finalize the matter keeping in view the dictum laid down by the honourable High Court in Rehan Umer's case;
(V) Any act on your part which may violate the order passed by the hpnourable High Court shall be brought to the immediate notice of the Court for taking action against you under the relevant law;
(8) Mr Ilyas Ahsan Khan, Appraising Officer (MCC) and Hafiz Muhammad Jokhio, the Valuation Officer of the Directorate General of Valuation and PCA, Karachi, also attended the hearing. The representative of the Valuation Department stated that the Valuation Rulings have been issued after due process of law and consultation with the importers, KCCI and FPCCI. The said importer Mr. Abdul Wajid has also attended the meetings held in the Valuation Departments but despite repeated requests the importer refused to participate in the market enquiry on the plea that the value of their goods have to be determined under subsections (1), (5) and (6) of Section 25 of the Customs Act, 1969. The Valuation Officer showed the record of the exercise undertaken by them while determining the value of this item (i.e. Energy Saver Lamps/bulbs). Since all the major importers are/were importing this item at suppressed value, that being so, [hey alt have joined hands and did not participate the market enquiry conducted by the Valuation Department. The .Valuation Officer added that under the said circumstances they had no other alternative but to proceed further for market enquiry. Mr. Abdul Wajid and he was again offered to join and proceed for the local market enquiry even at this stage. Mr. Abdul Wajid not only refused to proceed for the market enquiry but also stated that he does not believe on such market enquiry and instead he is offering to surrender the imported goods at D.V + 5% without guarantee card. Though the importers have failed to justify as to why there is no guarantee about the quality of the goods, however, it was clarified to them that in obedience of the honourable High Court's Order dated 5.6.2007 we have to finalize the assessment by considering the provisions of Section 25 of the Customs Act, 1969, whereas their proposal cannot be entertained unless there is any offer from a 3rd party in terms of Section 25C of the Customs Act, 1969, Mr. Abdul Wajid admitted that he attended the meetings held in the Directorate General of Valuation and PCA, Karachi, but not participated in' exercise of the market enquiry.
(9) From the foregoing factual and legal position it is clear that in the light of provisions of clause
(f) of sub-section (2) read with sub-section (13(a)) of Section 25 of the Customs Act, 1969 and Rules 107(a) and 121 of the Customs Rules, 2001 the importers have neither able to substantiate that their declared value can be considered as customs value in terms of subsection (1) of Section 25 of the Customs Act, 1969, nor they have joined the exercise to determine the value under other secondary methods of valuation. Due to concealment of vital information from the customs it is cleared that their consignment cannot be evaluated under sub-section (1) of Section 25 of the Customs Act, 1969. Further in the absence of any consignment where value was determined under sub-section (1) of Section 25 of the Customs Act, 1969, the value of the said consignment cannot be determined under subsections (5) and (6) of Section 25 of the Customs Act, 1969, in terms of Rules 117 and 118 of the Customs Rules, 2001. Therefore, considering the market enquiry so conducted by the Valuation Department intermittently, for the said kind of goods and also considering the, customs value data of the said goods in terms of Rule 107(a) read with sub-section (13)(a) of Section 25 of the Customs Act, 1969, the value of the subject consignment is correctly determined US$ 1.64/PC in terms of subsection (9) read with sub-sections (7) and 13(a) *of Section 25 of the Customs Act, 1969, further read with Rules 107(a) and 121 of the Customs Rules, 2001. As the vital information like raw material cost manufacturing cost etc. Also not ' provided by the importers, that being so the determination of value in terms of sub-section (8) of Section 25 of the Customs Act, 1969 is also not practicable. Considering the principle of equity and to eliminate any discrimination in the light of Article 25 of the Constitution of Islamic Republic of Pakistan, 1973, the consignment of other importers of same kind of goods were also shown to the importers during the course of hearing, the assessment so made above in line with the current assessm ent practice and within four corners of law.
(10) The ^importers 'are directed to make the payment of amount of duties and taxes, as per final assessm ent @ 1.34/pc for 24W, already communicated to the importers on GDs for other specifications also through PACCS, within ten days from the date of issue of this order, failing which the assessed amount will be recovered alongwith surcharge, as envisaged in Section 202A of the Customs Act, 1969.
(11) This order is being issued in obedience of the honourable High Court of Sindh's order dated 5.6.2007, which was received in the Collectorate on 6.6.2007. The importers, if being aggrieved with this order may file an appeal under Section 193(1) of the Customs Act, 1969, before the Collector of Customs (Appeal).
(12) This order consists of ten (10) pages and each page bears my initials and signature.
(Sd.)
(Basit Hussain)
Assistant Collector
6. That during the course of hearing before this forum the Advocate of the appellant submitted his written submissions dated 6.1.2010 and requested for placing them on record. The written submissions are as follows:-
(1) That all payments for the goods imported were made through proper banking channels and proof of the same has been submitted to this honourable forum.
(2) That a sales contract entered into by and between the supplier and the appellant attested by the China Council for the Promotion of International Trade (CCPIT) certifying the price declared by the appellant to be true and the actual price paid was produced before the Customs Officials but was rejected without reason. The same has already been submitted by the appellant.
(3) That the appellant has also submitted a letter by his supplier in China stating that the price offered in the Sales Contract has been increased due to increase in the cost of raw materials.
(4) That in light of the above documents the burden of proof or onus is upon the Customs authorities to show that the price declared by the appellant is false and that there is collusion between the supplier and the appellant.
(5) That there has been no justification shown or evidence brought on record to prove that the Sales Contract (Exhibit 1) ,is false and/or fake.
(6) That the customs authorities failed to implement Section 25 as envisaged and laid down by the honourable High Court in the case of Rehan Umer and are hiding behind their non-existent discretionary powers.
(7) That the respondent despite having repeatedly stated that the appellant's price could not be accepted as it would be discriminatory to others importing similar products has failed to bring forth any evidence or proof suggesting that other importers have declared the price assessed by them.
(8) That in either event it would not be discriminatory if the appellant was allowed to clear the goods at his declared price but rather would be in line with economic principles keeping in mind the concept of buyer's advantage. That denying the appellant the price negotiated by him is against the principles of justice, free markets and democracy and common sense.
(9) That had the respondent read the judgment of Rehan Umer they would be aware that simply stating that others are importing similar goods at a higher price is no justification for rejecting the price declared rather they must show that the price mis-declared or the goods under invoiced.
(10) That the respondent's claim that the appellant did not cooperate with them to determine the price of his goods is completely baseless, false and void of any truth. The appellant's goods were imported as "C&F" implying that the cost of transportation to the port, handling and shipping were included in the price quoted as such providing the several costs required by the respondent under Section 25(1) would not be possible.
(11) That the respondent has misrepresented before this forum that the appellant's association minus the appellant took part in the market inquiry conducted by the Department.
(12) That the respondent claims that a market enquiry was conducted to determine the price of the goods in question however have failed to show how the said market inquiry was conducted and whether if the said market inquiry was conducted in terms of Section 25 of the Customs Act, 1969.
(13) That despite the respondent's assertions that they have obeyed the law to the letter they failed to realise that any market inquiry under Section 25(7) of the Customs Act, 1969 must be conducted in the market where the said goods were produced and cannot be conducted locally unless the cost of importing the goods, all duties and taxes payable thereon and any commissions paid to re- sellers are deducted from the price offered in the local market.
(14) That investigation into the market inquiry conducted will show that the respondent obtained the retail price for one unit of the goods in question rather than the price at which the maximum quantity of the goods is offered in terms of Section 25(7) after deducting any and all duties, taxes and costs associated with importing tile goods into Pakistan. Clearly failure on the part of the respondent to submit detail with respect to the market inquiry committed is proof of the haste and illegality with which it was carried out.
(15) That the respondent failed to produce a buyer when the appellant offered to sell his imported goods at +5% of the Declared Value and are trying to hide behind the fact that he refused to offer warranty/guarantee for the same, it is respectfully submitted that the appellant cannot be compelled to offer a warranty/guarantee for the goods if he is to make just 5% profit on his investment why should the importer involve himself with the cost and hassle of claiming guarantees when he is barely covering his costs?
(16) That despite their representations the respondent has failed to provide any concrete basis or calculation for the price assessed by them.
(17) That the honourable High Court at Sindh has clearly stated in the case of Rehan Umer that the price of similar or identical goods cannot be used as a basis for evaluating the price declared and would amount to discrimination contrary to the respondent's assertions in the instant case.
7. At the time of hearing learned counsel for the appellant argued as under:-
(i) That the transaction value of the appellant is correct and substantiated by certificates issued by the supplier/manufacturer. The certificates and letter of the supplier are dated 1.6.2006 and October 28, 2006 whereby the prices have been certified and enhancement of the price intimated clue to increase in the cost of raw materials. The price certificate is attested by China Council of promotion of. International Trade which is a Chinese Government Organization. The respondent has not negated and rebutted this certificate with any counter- affidavit.
(ii) That the documents are bank retried through PICIC Bank. The whole transaction has been conducted in a transparent mode.
(iii) That during the detention of the goods by the Customs Authorities the appellant offered their goods to customs to acquire them under Section 25-C with 5% M.O.P. However the customs insisted on warranty card since the goods were light bulbs and the appellant refused to give warranty as the M,O.P. Was only 5%.
(iv) That the goods were being valued under Section 25-A by the Customs Authorities. However the appellant insisted that contrivance or colorable exercise may be proved by the customs authorities in the first instance to apply provision of Section 25 other recourse to Section 25(7) was adopted through market inquiry by associating all the stakeholders by the respondents.
(v) That market inquiry was conducted on the basis of a single invoice of few pieces from the local market behind the back of the appellant. Such evidence is not acceptable in conformity with the provision of Section 25 and judgments of the superior Courts.
(vi) That assessm ent was finalized in appellant's case vide valuation advice 871/2006, 872/2006 and 873/2006, dated 26.2.2007. A reference was filed by Pakistan Electric and Electronic Merchant Association and all the advices were revised by D.G. Valuation. To cite an example the energy saver of 24 watts earlier assessed at $ 1.64 was subsequently assessed at $ 1.02/piece. Lt shows that the basis of earlier assessm ent was not reliable.
(vii) That breakages and wastages due to handling and voltage fluctuation are very high and has to be covered by the warranty. As such the retail price is higher than the import price and that's why warranty was refused by the appellant to customs under Section 25-C where M.O.P. Was simply 5%.
(viii) That the judgment of Messrs Rehan Umar delivered by the Hon'ble High Court of Sindh is in the field and is applicable mutatis mutandi to the facts and circumstances of the present case.
8. The A.O. Contended as under:-
(i) That it is wrong to say that valuation advice dated 26.2.2007 was revised through valuation advice dated 9.2.2008. Lt is illogical to say that the revised advice may be made applicable to appellant's case retrospectively.
(ii) That different documents/data was requisitioned from the appellant which they have failed to produce till to date.
(iii) That no warranty was agreed to be given to customs when appellant offered to surrender their goods under Section 125-C of the Customs Act, 1969
(iv) That Valuation advice has been implemented in respect of all the importers who are getting their consignments cleared as per valuation advice, In a case to the contrary element of discrimination would creep into the Valuation Data determined by D.G. Valuation to the detriment of other importers.
(v) That valuation advices are issued irrespective of the quantities purchased since it is based on deductive method.
(vi) That valuation assessm ent ordered by office of D.G. Valuation was issued under orders of Hon'ble High Court of Sindh after considering all aspects of the case therefore a detailed assessm ent order was issued after associating all the stake holders including the appellant.
9. On 6.1.2010 Mr. Naeem Appraising Officer from Directorate General Valuation argued as under:-
(i) Case was refixed for hearing by Custom House PaCCS under Section 81 of Customs Act, 1969 for finalising assessm ent Group under invoicing was suspected. As such case was decided under Section 25(7) and (9).
(ii) On the basis of above market inquiry Valuation ruling/assessment order dated 25.6.2007 under Section 25(a) was issued by DD Valuation.
(iii) All Stake Holders were associated with the market inquiry, lt was reportedly obtained from Wholesale Market. However, it is not indicated that prices were for one unit or for bulk quantity.
(iv) That no review has been filed by any importer against this ruling.
10. Rival submissions heard. Case record 'examined. The concept of transaction value under World Trade Organization (WTO) regime is quite different from the concept of normal value under Brussels Definition of value, the former being based on real/actual value of-the goods and the later advocating notional value. Each and every transaction has to be treated separately though within the parameters laid down in Section 25 of the Customs Act, 1969 and the relevant Customs Rule^made thereunder. However the onus of proving that the declared transaction value is dubious, tainted or colourable lies on the customs authorities, in this respect through a series of well articulated and exhaustive judgments, the superior Courts of the country including the Hon'ble apex Court have fixed/laid down certain parameters/criteria regarding assessment/fixation of values in terms of Section 25 of the Customs Act, 1969 and the same ought to be strictly adhered to by the customs administration.
11. The commercial invoice, pro forma invoice, letter of credit and correspondence through normal banking channels are privileged customs/commercial documents and to bring a charge of undervaluation against the taxpayer, the customs authorities need to prove the falsity of these documents with cogent evidence, ln other words under the aegis of real concept of value the taxpayer is under obligation to discharge evidential or persuasive burden of proof by producing the aforesaid documents before the customs authorities in the first instance and the customs in their turn are obliged to discharge the legal burden or the ultimate burden of proof by negating the documents put forth by the taxpayer with concrete, evidence with concrete rebutting evidence.
12. Under the present system of Sales Tax, the sales tax invoices are also a key document, instrumental and helpful in determining the assessable value of goods where secondary method i.e. Deductive Method under Section 25(7) of the Customs Act, 1969 is empowered.
13. The Hon'ble High Court of Sindh while reminding this case to the respondent in C.P.No. 881 of 2006 vide their order dated 5.6.2007 has given clear cut and distinct directives to follow the guidance, as incorporated in the case of Rehan Umar reported as 2006 PTD 1109, which advocates that:- "Provisions of Section 25, Customs Act, 1969 are to be followed in. The sequential manner, in addition to the concession on the part of respondent Nos. 1 and 2 it is specifically provided by the legislature in sub- section (10), of Section 25 that sub-sections (1), (5), (6), (7), (8) and (9) define how the customs value of imported goods is to be determined under the Customs. The method Of customs valuation are required to be applied in a sequential order except reversal of the order of sub-sections (7) and (8) at the importer's request, if so agreed by Collector of Customs. This aspect has been examined in a Division Bench in a case of Shoaib Khan v. Collector of Customs Appraisement (2005 PTD 1069), wherein it has been held that "whenever a question for determination of the customs value of goods for the purpose of Customs Act, arises, the methods provided in Section 25 are to be applied in a sequential order, in the cited judgment the question under consideration was as to how Section 25-A of the Customs Act, is to be applied and it was held that, the appropriate officer is required to determined that the value of import goods declared by the importer is under stated in accordance With the method specified in Section 25 of the Customs Act.
The established principle' of interpretation of the tax laws is that the plain language of the law is to be applied. A bare perusal of Section 25 shows that it is specifically provided in sub-section. (1) of Section 25 that the customs value of the imported goods, subject to the provisions of this Section and rules shall be the transaction value i.e. The price actually paid or payable for the goods when sold for export to Pakistan. The detailed guidelines in this behalf are given in' sub-sections (1), (2),
(3) and (4). The provisions contained in Section 25(1) to (4) contain primary methods of valuation and in the first instance the primary method of valuation is required to be adopted in each case of the valuation of the imported consignment . Which is mandatory. The detailed guidelines in this behalf are contained in Section 25 and the rules reproduced above. Thus, it is the mandatory requirement of Jaw that before resorting to the method provided in sub-section (5), the customs officials shall make an exercise in accordance with the provisions contained in sub-sections (1) to
(4) of Section 25 and if thereafter they find that the customs value of the imported goods cannot be determined under the provisions of sub-section (1) they., shall resort to the method provided in sub-section (5) and not otherwise, it shall be an exercise duly reflecting on the record so that the appellate forums may examine whether the mandatory requirement of law has been carried out or not. We are further fortified in our views in this behalf with the provisions contained in sub-rule (3) of Rule 109 which provided that "when a final decision is made, the appropriate officer shall communicate to the importer in writing his decision and the grounds therefor", in addition to the specific provisions contained in sub-section (10) of Section 25 to the effect that the methods of customs valuation are required to be applied in a sequential order we find that it is provided in sub-section (6) that, if the customs value of the imported goods cannot be determined under the provisions of sub-section (5) the method provided in sub-section (7) shall be resorted to and similar provisions are contained in subsections (7), (8) and (9).
For the foregoing reasons it is held that different methods of valuation provided in Section 25 of the Customs Act, 1969 and the Customs Rules, 2001 are required to be applied in a sequential order and without visible exercise reflected on record no resort can be made to sub-section (5) and likewise without similar exercise under sub-section (5) so resort can be made to sub-section (6).
Ln the same manner without an exercise in writing on record under subsection (6) no resort can be made to sub-section (7) and similarly to sub-sections (8) and (9). This exercise is to be made in each case separately. On the basis of exercise in the case of earlier imports by other importers it cannot be applied to any subsequent import by another importer. The reason being that it is provided in Rule 109 that where appropriate officer has reason to doubt the truth or accuracy of the particulars or of documents produced in support of the declaration, such officer may ask the importer to provide further explanation, including documents or otherwise. Under sub-section (1) of Section 25, the customs value of the imported goods is to be determined subject to the provisions of Section 25 and the rules. The rules envisage inquiry in case of each import giving right to each importer to provide explanation and produce documents or other evidence in support of his/her declaration. When the provisions contained under Section 25(1) of the Customs Act and the rules are read with Sections 79 and 80 of the said Act, they lead to same conclusion. Under Section 79 the owner of any imported goods is required to file a goods declaration containing correct and complete particulars of the goods and its assessm ent i.e. Valuation of the goods, its value and the duty, taxes and other charges payable thereon. Under Section 80, on the receipt of goods declaration under Section 79, an officer of the customs shall satisfy himself of the correctness of the import including declaration and assessm ent, it indicates that 'initially, the valuation of goods and assessment is to be given by the importer himself, which, if found satisfactory, shall be accepted. However, if the appropriate officer is not satisfied with the said declaration, he shall make his own assessment in accordance with the law. This exercise cannot be done without examination of each consignment, declaration of goods examination of assessm ent given by importers and of the documents in this behalf."
14. A perusal of the Assessm ent Order dated 26.6.2007 issued by the respondent in terms of the order of Hon'ble High Court in C.P. No. 881 of 2006, dated 5.6.2007 indicates that in addition to indulging into various procedural and substantive illegalities the directives given by the Hon'ble Court to the respondent to'follow parameters fixed in Rehan Umar case have also not been followed by them:-
(i) The modus operandi incorporated in the case of Rehan Umar for following sequential order of primary and secondary methods of Section 25 has not been^ adhered to by the respondent though this case pertains to the period where . Following aforesaid sequential order was mandatory before amendment in Section 25(10) of the Customs Act, 1969 through Finance Act, 2007.
(ii) No visible exercise has been reduced in writing for exhausting all the methods in a sequential manner and bringing on record evidence for determining the values under different methods as stated in Rehan Umar's case.
(iii) The customs/commercial documents viz. Invoice, pro forma invoice, letter of credit, other banking documents, supplier's valuation certificates regarding subsequent enhancement of values in conformity with international rising prices, duly attested by Government of China and attested Chinese Consulate etc. Have not been considered and negated or rebutted with any cogent evidence to exhaust primary methods in terms of Section 25(1) to (4) of the Customs Act, 1969.
Most of the documents/information not directly connected with and having no direct nexus or sufficient bearing in the determination of assessable transaction value of the subject goods and not available with the appellant were requisitioned from him.
(iv) No evidence of similar or identical goods has been considered or brought on record in terms of Section 25(5) and 25(6) of the Customs Act, 1969 read with Section 25(10) since allegedly Group under-invoicing was resorted to by all the importers of the subject goods. Even the procedure outlined by the Federal Board of Revenue regarding the implementation of Decision 6.1 of the WCO Technical Committee or customs valuation to be applied in doubtful cases of transaction value in their letter C.No.4/9/57Val. Audit/2008, dated 29.1.2009 addressed to Director,General Valuation has not been adopted by the respondent.
(v) Resort to Deductive Method in terms of Section 25(7) of the Customs Act, 1969 was made by the respondent without exhausting the aforesaid exercise in a sequential and visible manner. The record produced by the respondent does not show any effort, investigation or enquiry by the respondent to confirm/verify the veracity of the certificates and their contents produced by the appellant. No Counter-affidavit has been filed by the respondent in this behalf.
(vi) Though the appellant offered the goods at C&F price + 5% margin of profit to the respondent without warranty card in terms of Section 25-C of the Customs Act, 1969, the offer was not accepted by the respondent due to nonavailability of buyer. Acquisition of the subject goods on 5% margin of profit without warranty card was an economically feasible proposition floated by the appellant since the cumulative margin for breakage, seller's profit and importer's profit calculated by the respondent themselves while determining the assessable value in terms of Section 25(7) of the Customs Act, 1969 is 30%. This aspect alone substantiates the declared transaction value of the appellant.
(vii) The respondents have not brought on record evidence to the effect that other importers in case of contemporaneous import of the same item pertaining to 90 days valuation period in terms of Section 25(1) read with Rule 107(a) of Customs Rules, 2001 have cleared the goods or paid the differential amount of duty and taxes on the value assessed by the market inquiry conducted by the respondent in the year, 2007 while issuing the assessment order dated 25.6.2007.
(viii) That goods were imported during the period of November, 2005 to February, 2006 and the market inquiry was conducted during the month of May-June, 2007 which is against the provisions incorporated in sub-section (7)(a) of Section 25 of the Customs Act, 1969 and which reads as under:-
(a) If the other imported goods or identical or similar imported goods are sold in Pakistan in the condition as imported, the customs value of the imported goods shall be based op the unit price at which the imported goods Or identical or similar imported goods are so sold in the greatest aggregate quantity, at or about the time of importation of the goods being valued, to person who are not related to the persons from whom they buy such goods, subject to the deduction for the following:-
(a) either the commission usually paid or agreed to be paid or the additions usually made for profit and general expenses in connection with sales in Pakistan of imported goods of the same class or kind;
(b) the usual costs of imports and insurance of associated costs incurred within Pakistan; [and]
(c) [omitted]
(d) The customs duties and other taxes payable in Pakistan by reason of the importation or sale of the goods.
15. Ln view of the above observations by this forum, the following issues are framed for consideration:-
(i) Whether the parameters fixed by the Hon'ble High Court of Sindh in the case of Rehan Umar reported as 2006 PTD 909 have been followed while issuing the assessment order dated 25.6.2007 by the respondent as per directives of the Hon'ble Court in C.P.No. 881 of 2006?
(ii) Whether the market inquiry has been conducted by the respondent in terms of clause (a) of sub-section (7) of Section 25 of the Customs Act, 1969?
(iii) Whether the appellant and representatives of Pakistan Electrical and Electronics Merchant Association being the prime stakeholders participated in the market inquiry conducted by the respondent before issuance of assessment order dated 25.6.2007?
(iv) Whether the Appellate Tribunal Customs has jurisdiction to entertain, hear and decide the cases regarding deternrynation of value in terms of insertion of Section 25-D in the Customs Act, 1969?
16. As regards Issue No. (i) as already discussed supra, the respondent has not followed the parameters fixed in the case of Messrs Rehan Umar by not following the sequential order thereby exhausting primary methods (1) to (4) or secondary method at (5) to (6) without bringing in writing any evidence of higher value on record. The customs value of similar/identical imports which were compared with the declared transaction value of the subject goods in Customs Act, 1969 at the time of filing of Goods Declaration by the appellant as per opening para, (ninth line) of the Assessm ent Order dated 25.6.2007 magically disappeared from the data base/repository of the respondent and under the garb of under-invoicing even exercise in terms of subsections, (5) and
(6) of Section 25 ibid, was not undertaken and resort was made to Deductive Method under subsection (7) of Section 25 ibid. The respondents are therefore, estopped by their own aforesaid statement which is unambiguous and unqualified that evidential value of identical or similar goods are not on record for comparison with the declared transaction value, ln addition the customs/ commercial documents submitted by the respondent have neither been negated nor rebutted with any cogent evidence or enquiry from the concerned quarters. No counter- affidavits have been filed by the respondent to neutralize or extinguish the claim of the importer or his supplier or verification by Government of People's Republic of China, or attestation by Chinese Consulate in respect of transaction value. Filing of counter-affidavit is essential to controvert the assertion of the incumbent in terms of superior Courts' judgments reported as 1986 CLC 1408, 1993 SCMH 662, 1991 M LD 1243.
17. Lt is also against the settled law emanating from the hallmark judgment in Evans case by the House of Lords and still being followed by all superior Courts (1989 Crl.J. 631) including the apex Court that if the statute requires a particular act to be done in a particular manner then the act must be performed in that manner alone and all other manners of doing that act would be not permissible under the law. This has been followed by the Hon'ble Supreme Court of Pakistan where hundreds of Revenue's Appeals involving billions of rupees of duty and taxes have been dismissed where the Collector or the competent authority had not signed these appeals. The relevant extract in case decided by the Hon'ble apex Court in Civil Petitions No. 287 to 530 of 2005, dated 17.10.2005 is as under:- "lt is well-settled established principle of law that when the legislature requires doing of a thing in a particular manner then it is to be done in that manner and all other manners or modes of doing or performing that thing are barred."
18. Ln view of the above it is a foregone conclusion that the directives of the Hon'ble High .Court have not been followed by the respondent giving rise to a number of deviations involving glaring mandatory violations tantamount to substantive itleg a I ities/i nfirm ities which are floating on the surface of the assessm ent order. As such the issue No. (i) is answered in the negative.
19. As regardsr Issue No. (ii) deductive method for determining assessable value in terms of sub- section (7) of Section 25 advocates that if the customs value of the imported goods cannot be determined under sub-section (6) it shall subject to Rules be determined on the basis of customs value of the imported goods or identical dr similar goods relying upon.The unit price at which such imported goods are also sold in the aggregate quantity at or about the time importation of the goods being valued to person who are not related to the person from whom they buy such goods subject to certain specified deductions. This deductive method is pdmarily a work back method based on the Analytical Basis of Valuation prevalent under defunct/ erstwhile concept of Normal Price or Notional Value under Brussels' Definition of Value (BDV). The market inquiry to be conducted by the customs functionaries is to be restricted/ based on the following parameters:-
(i) That goods employed for determination of the customs value should comprise of the impugned imported goods or identical/similar imported goods which are sold in Pakistan in the same state;
(ii) That the inquiry should be based on the unit price at which impugned imported goods or identical or similar imported goods are sold in the greatest aggregate quantity;
(iii) That the words at or about the time of importation of goods being valued denotes 90 days valuation data in terms of Section 25(1) read with Rule 107(a) of the Customs Rules, 2001.
Amongst others the above two ingredients in respect of the imported goods to be so valued one relating to the quantity and the other relating to. The period during which the impugned imported goods or identical or similar goods are sold in the maximum aggregate quantity have been visibly and patently flouted by the respondent officers. The respondent officers have produced three undated quotations of single quantity of bulbs from local market vide their letter dated 7.1.2010 which is reproduced below:- "On behalf of respondent namely Dy. Director (Valuation), it is stated that the submission of documentary evidences in support of the arguments/statement given before the Hon'ble Appellate Tribunal during hearing on 6.1.2010 may be allowed for correct submission. Copy of documents are attached for kind consideration.
Prayed accordingly.
(Sd.)
(Altaf Ahmed)
Principal Appraiser (Law)
For respondent, Dy. Director Valuation
20. The aforesaid (3) undated quotations representing local sale price of single quantity/price of bulbs/energy savers in the domestic retail market reproduced above illustrate the irresponsible, indifferent and criminally careless , attitude of the respondents field officers who are professed to be the experts in their field. As such the so-called market enquiry conducted by the respondents' officers is patently in absolute contradict with the provisions of the relevant sub-section (7) of Section 25 of the Customs Act, 1969 and is null and void ab initio. As such issue No. (ii) is answered in the negative.
21. As regards issue No. (iii) it has been observed from the record that the above two principal stakeholders or their representatives did not participate in the so-called market inquiry conducted by the respondent from the local market of Liaquatabad from where three (3) undated quotations of single quantity of bulbs of different watts were procured by them. The main argument of the appellant for not participating in the market enquiry conducted by the respondent puts emphasis on the fact that the respondent did not exhaust the primary and secondary methods under sub- sections (1) to (6) of Section 25 of the Customs Act, 1969 and without bringing any evidence in writing on record jumped to sub-section (7) which is not permissible under the law. Even otherwise such a market inquiry which is conducted behind the back of the appellant and the concerned association has no evidentiary value in the eyes of law as adjudged by the superior Courts in their judgments reported as 1985 CLC 1781 and 20O2 PTD 2957. As such Issue No. (iii) is answered in the negative.
22. As regards Issue No. (iv), the representative of the respondent argued that the value determined by appropriate officer of customs could not be challenged before any Court unless review is filed before Director General, Customs Valuation, ln this respect, the relevant statutes in the Customs Act, 1969 are Sections 25-D, 193 and 194. Ln this case the appellant has preferred an appeal by exercising his legislative right before Customs Appellate Tribunal under Section 194 of the Customs Act, 1969 against Order-in-Appeal passed by the' Collector (Appeals) under Section 193 of the Customs Act, 1969. The Customs Appellate Tribunal has jurisdiction to entertain, hear and decide this appeal filed with it against order of Collector (Appeals) in terms of Section 194 of the Custom Act, 1969. This view has been taken by the Hon'ble High Court of Sindh while deciding the Spl. Ref. Appln. No. 35 of 2009 whereby the Customs Appellate Tribunal dismissed the appeal of the appellant which was filed in terms of Section 194 of the Customs Act, 1969 against order of the Collector (Appeals) passed under Section 193 ibid. The relevant extract from the judgment of the Hon'ble High Court is reproduced below:- "The Tribunal seems to have misled itself in considering that the impugned order before it was that of Valuation ruling which was not the case rather it was an order of adjudication passed under Section 193-A of the Customs Act against which appeal only lies to the Tribunal. The impugned order of the Tribunal is thus not in accordance with law. 'ln the circumstances, we set aside the impugned order and remand the matter to the Tribunal for fresh decision of the appeal."
As such Issue No. (iv) is answered in the affirmative.
23. Ln view of the factual and legal aspects of the case discussed supra this forum is of the opinion that the respondent while determining the assessable value of the goods in terms of the directives of the Hon'ble High Court of Sindh in C.P.No. 881 of 2005 vide their order dated 5.6,2007 has indulged into a number of violations of the mandatory provisions enumerated in the relevant Section 25 of the Customs Act, 1969 read with Customs Rules, 2001 and para 78 of CGO 12 of 2002 by not following sequential order as envisaged in Rehan Umar's case and also by not bringing on record the evidence regarding exhausting primary and secondary methods under sub-sections (1) to (6) of the Customs Act, 1969. Besides the provisions enumerated in Clause (a) sub-section (7) of Section 25 of the Customs Act, 1969 have also not been followed in respect of quantity and time period while obtaining the quotations from the local market. The quotations are undated representing prices of single piece of bulb energy saver of different descriptions, it is not even indicated as to during which year this weird undated quotations were obtained and by whom.
Moreover the market enquiry as per record has been conducted without the participation of the principal stakeholders viz. The appellant and the concerned association which has been deprecated and held to be ab initio void as per judgments of the superior Courts reported as 1985 CLC 1781 and 2002 PTD 2957.
24. As already stated supra no evidence of higher value through a visible exercise has been brought on record or intimated to the appellant. Rejection of value without production of evidence has been held to be inadmissible and of no legal significance/in terms of the judgments of the Hon'ble High Court reported as-20O2 PTD 1464 and 2004 PTD 2592 and 2007 PTD 1858. The following of sequential order as mandatory required in the relevant sub-section (10) of Section 25 of Customs Act' has not been followed and resort to Deductive Method under sub-section (7) of Section 25 ibid has been made in disregard of Court's directives in cases reported as 2006 PTD 232, 2006 PTD 909, 2006 PTD 2551, 2006 PTD 2807, 2007 PTD 2632, 2008 PTD 1760 and 2008 PTD 1494. Also the non-sales tax paid quotations relied upon by the respondent negate the observations of the learned Director General Valuation in a similar case regarding the necessity of production of sales tax paid invoices by the importers while putting their cases for determination of value before him.
This forum does not appreciate the failure of the respondent to give any weightage to the production of sales tax paid invoices of the subject imported goods by the*appellant as well as his offer in terms of Section 25-C of the Customs Act, 1969 for acquisition of his consignment @ C&F price plus 5% margin of profit while determining the assessable value in this case.
25. Ln view of the foregoing, the assessment order, dated 5.6.2007 is based upon the proceedings which are infested with patent illegalities and which are held to be null and void. As such the Assessm ent Order as well as the impugned order of the Collector (Appeals) based on such proceedings are also ab initio null and void and are, therefore, set aside. The subject appeal is accordingly allowed.