' MUHAMMAD ARIF MOTON (MEMBER (JUDICIAL)). --This order will dispose of aforesaid Customs Appeals filed by the above named appellants against Orders-in-Appeals Nos. 3853 to 3857 of 2010 dated 28-5-2010 and 3710 to 3731 of 2010 dated 26-4-2010 passed by the Collector of Customs (Appeals), Karachi. These appeals have identical issues of law and fact and are, therefore, being heard, dealt with and disposed off simultaneously this common order.
2. Brief facts of the case are that the appellants had imported five consignments of various types of float glass vide various CRN Nos. Which were cleared at grossly under- assessed values in violation of Valuation Ruling No, Misc/10/70-III-C/1029/1037 dated 14-2-2008 and No .Misc/13/2006-IVA-Part- 111/2611 dated 22-5-2008 wherein assessable values of the goods had been duly determined by the Directorate General of Customs Valuation, Karachi in terms of section 25A of the Customs Act, 1969 (hereinafter the Act). The appellants were accordingly issued show-cause for recovery of the short levied amount under the relevant provisions of law and the adjudicating officers passed two identical orders in all the cases. The relevant operative part of the two orders (Order-in-Original No,23 of 2010 dated 1-2-2010) is as follows:--- "I have -gone through the record of the case and arguments advanced by the learned counsel of the importers. It is an admitted fact that neither the importer, at the time of self-assessment in terms of section 79(1)(b) of the Customs Act, 1969, nor the customs authorities /PaCCS system at the time of assessm ent under section 80 of the Customs Act, 1969 have applied the customs value determined under section 25A(1) of the Act, which are/were mandatory assessment in duty/taxes of section 25A of the Customs Act, 1969. It is clearly a case where duty/taxes were chargeable at the customs values determined under section 25(1) of the Act, hence it is a case where short payment/assessm ent has been made, hence duty and taxes are recoverable under sections 32(3) and 32(3A) of the Act. The respondent importers have no plausible rebuttal to the aforesaid legal position. The respondent importers are only taking refuge behind the honourable High Courts Judgments, whereas not in a single judgment cited by the learned counsel, the honourable High Court has passed any orders to make the, provision of section 25A of the Act as redundant. The law is very loud and clear that in terms of section 25A(1) of the Act, in order to make the assessment uniform and transparent and to combat the menace of group under invoicing the Director (Valuation) is empowered to determine the customs value of any class of goods and in terms of section 25(2) of the Act, it is mandatory for the Government to collect the revenue as per determined customs value. In the presence of section 25A(2) and amended provision of section 25(10) of the Customs Act, 1969, the application of valuation methods is sequential order are no more mandatory. In the case of customs value determined under section 25(1) the same can only be changed through an order from. Director General Valuation in terms of section 25A(3) or 25D, as the case may be and not otherwise. The arguments advanced by the learned counsel are devoid of any merits and against the provision of law referred to above, hence no force of law. The importers are, therefore directed to make payment of short levied amount, as stated below, within 30 days hereof along with surcharge in terms of section 83(2) of the Act, failing which the short levied amount will be recovered in terms of section 202 of the Customs Act, 1969."
Order-in-Original No,18 of 2010 (Manual (05) Case) is as follows:-
(6) The show-cause notice in this case was issued on 14-9-2009. The period of 120 days as provided in subsection (3) of section 179 of the Customs Act, 1969, for conclusion of adjudication proceedings expired on 12-1-2010. The Collector, Model Customs Collectorate of PaCCS, was pleased to allow an extension of sixty days, up to 13-3-2010, to decide the case in exercise of powers conferred under the said subsection (3). However, the same period stood extended by thirty days, in terms of proviso to the said subsection by thirty days, up to 12-4-2010, in view of the adjournments of more than thirty days sought by the respondents as mentioned in the preceding para. 14 In view of the findings above, in the cases under reference, duty/taxes were chargeable at the customs values determined under sections 25A(1) and 25D of the Customs Act, 1969 but the same were not assessed. Therefore, these are all cases where short payment/assessment of duties and taxes has been made, hence duty and taxes, as per specified in show-cause notice in each of fine cases, are recoverable under sections 32(2) and 32A of the Customs Act, 1969 and other relevant provisions as mentioned in the show-cause notices. The respondent importers have no plausible rebuttal to the aforesaid legal position. Accordingly, the importers involved are ordered to make payment of short levied amount, as stated below, within 30 days hereof along with surcharge in terms of section 83(2) of the Act, failing which the short levied amount will be recovered in terms of section 202 of the Customs Act, 1969. In each of the cases, a penalty of Rs,25,000 is also imposed on each of, the respondents (i,e, importers and the clearing agents) involved under Clause 14A of section 156(1) of the Customs Act, 1969.
3. The orders-in-original were challenged before the Collector (Appeals) who also rejected the appeal vide Order-in-Appeals Nos.3710 to 3731 of 2010 dated 26-4-2010. Hence these appeals on the following grounds incorporated in the memos. Of appeal:---
(i) That the learned respondent has passed the impugned order-in-appeal contrary to the facts and law points involved in the case, hence the same is not maintainable at law.
(ii) That is was held in Para 5 of the order-in-appeal that the said Valuation Rulings are valid until the same are either revised by the Director General of Customs Valuation under section 25-D of the Act or revised by the issuing authority. It is submitted in this regard that the Valuation Ruling No,Misc/10/07-III-C/ 1029/1037 dated 14-2-2008 fixing value of Float Glass under section 25A of the Customs Act, 1969 was challenged by the Glass Merchants Association under section 25D ibid. Resultantly the Assistant Director, Directorate General of Valuation advised A.D.0 (Appraisement) and ADC (PaCCS) for provisional release of the goods against some security.
(iii) That the learned respondent No, 1, has failed to consider that the aforesaid advice was issued by the Assistant Director Valuation on 27-2-2008 for and on-behalf of the Director General Valuation, on the basis and strength of the Review Petition filed by Glass Merchants Association. In consideration there-of the Additional Collectors of Appraisement and MCC/ PaCCS, in exercise of their statutory powers released the goods either under section 80 or 81 of the Customs Act, 1969. In other words, the application of Valuation Ruling No,Misc.10/07-III-C/ 1029 dated 14-2-2008 was with-held and the Collectorates were allowed to clear the goods on transaction value or under section 81 of the Customs Act, 1969. Thus, it is abundantly clear that the application of Valuation Ruling was the function of the Collectorates and for any deviation there-from by the Collectorates the appellants cannot be charged for miss-declaration or filing of an untrue statement.
(iv) That it is a well-settled principle that where the Directorate General of Valuation, withholds the application of Valuation Ruling through a written Order and such advice is acted upon by Collectorates (and goods are cleared under sections 80 and 81 with the knowledge of the Department), in such situations the importers cannot be charged for miss-declaration or short payment. Furthermore, the values given in the Valuation Ruling cannot be applied to goods which were cleared earlier by accepting the transaction value. The Directorate General of Valuation should have undertaken the re-valuation and such revaluation should have been effective from the date the Department issued the revised Valuation Ruling. Therefore, the Department is precluded from demanding the differential amounts of duties. Thus, the show- cause notice issued for short-recovery is void and of no legal consequences.
(v) That the contention of the learned respondent No, 1, regarding mandatory application of the Ruling prices is misplaced. In this regard, it is submitted at the very out-set that the Directorate General Intelligence and Investigation, F.B.R., have no jurisdiction and powers in-terms of S.R.O.
486(1)/2007 to investigate cases of post-importation scrutiny, thus they have acted beyond the scope of their jurisdiction and powers. Hence, these acts are void and of no legal consequences which may best-aside. Reliance in this regard is placed on the findings of the honourable High Court in the case reported Messrs Shahzad Ahmed. Corporation v. Federation of Pakistan (2005 PTD 23).
(vi) That it is further submitted that appellants transactions were past and closed transactions, which could not be re-opened at this stage. In similar circumstances the honorable Lahore High Court in case. Messrs S.T. Enterprises v. Federation of Pakistan 2009 PTD 467 had held as under:--
(vii) "10. Once a consignment is out of charge after due consideration of relevant facts it becomes a past and closed transaction to the extent of its value etc. The same, therefore, should not be invoked only on the basis of the mere estimate gossips personal whims or feelings that the value could have been enhanced or it could fetch more taxes etc. The opening of an appraisement for the purposes of re-valuation of an earlier estimate or adopted figure would require 'reason to believe' and not 'reasons to suspect. "
(vii) That the learned respondents have failed to consider that show-cause notice in this case had been issued under section 32(1) and (2) whereas the impugned order-in-original and order-in- appeal have invoked the provisions of sections 32(3) and (3-A) which amounts to travelling beyond the scope of the show- cause notice. As the impugned orders are based on the provisions of law which do not exist in the. Show-Cause Notice, therefore, these orders are void and without jurisdiction hence are required to be set aside.
(viii)That the learned respondent has failed to consider that the Show-Cause Notice was issued on 8-10-2009 whereas Order-in-Original was passed on 16-2-2010 and received on 18-2-2010.
However, the date shown is 1-2-2010 and as such the same is barred by time by 10 days in-terms of section 179(3) of the. Customs Act, 1969, read with section 215(a) ibid.
(ix) That the learned respondents Nos. 1 and 2 have failed to apply their judicious mind to address and rebut the appellants submissions to the effect that the concept of Agreed Values is alien to the Valuation Law as envisaged in the Customs Act, 1969 read with the Rules notified by the Federal Board of Revenue under section 219 of the Customs Act. These were in fact minimum prices of float glass fixed in violation of provisions of Rule 110 of Customs Rules which prohibits fixation of minimum Customs Values. It is now a known fact that these values were fixed on the behest of Messrs Ghani Glass Limited, Lahore, manufacturers of Float Glass in Pakistan, who have all along been trying to obtain non-tariff protection by pressurizing the Customs authorities to notify artificially high prices of Float Glass of various varieties to the detriment of genuine importers of Float Glass.
(x) That Customs value declared by the appellants actually represents the price paid to their suppliers and no evidence whatsoever has been plated on record to prove that any additional payment was ever made to the said supplier; nor is there any other lawful basis to reject the subject transaction values. In fact the appellants were never informed as to why transaction value as declared on the GD was not acceptable to the Customs and in this regard the provisions of Rule 109 of the Valuation Rule were never followed.
(xi) That a careful perusal of the Valuation Ruling dated 14-2-2009 indicates that a local market inquiry was conducted to determine the Customs value in terms of the Deductive Method of Valuation as prescribed under section 25(7) of the Customs Act, 1969. However, quite strangely, the ruling was notified in terms of section 25(9) of the Customs Act. Mandatory provisions as laid down under sections 25(7) and 25(9) of the Customs Act, 1969 read with the Rules as laid down under Rules 119 and 121 of the Customs Rules for the determination of Customs Value of imported goods were not followed by the Director Customs Valuation. Thus the Valuation Ruling in question was void and unlawful ab initio having been issued in violation of the Customs Law and Rules applicable on this subject.
(xii) That DG Valuation issued a revised ruling under section 25(7) of the Customs Act, - 1969, vide C. No, Misc/13/2006-IVA Part 111/2611 dated 22-5-2008 in exercise of the powers conferred upon him under section 25Dof the Act ibid. A careful perusal of the said Ruling highlights the following important points:
(i) The values were determined on the basis of Deductive method of Valuation after giving discount on the wholesaler's and retailer's margin.
' The input provided by Messrs Ghani Glass, the local manufacturers, was also used without disclosing any basis for the fixation of values on a higher side and disregarding the evidence of transaction values available in the data bank of Customs authorities.
(iii) The notified prices were made applicable to only the Chinese origin Float Glass of different description/sizes as mentioned in the said ruling.
(iii) That section 25(7) of the Customs Act, 1969 clearly states that the Customs value of imported goods under the said subsection shall be determined, subject to Rules on the basis of a specified criterion: Clearly, section 25(7) and Rule-119 warrant the determination of Customs Value on the basis of data pertaining to the greatest aggregate quantity at the post sale level after importation of goods at or about the time of the importation of the goods being valued. Apparently none of the provision of Customs law for the determination of value under the Deductive method of valuation as quoted above was followed (the Ruling dated 22-5-2008 specifically mentions the data based on retail sales after importation was taken into account --- which is not admissible in terms of the aforementioned Customs Law). Further the appellants were never associated in any meaningful way with the exercise undertaken by the DG Valuation thereby flouting the principles of natural justice.
(xiv) That without prejudice to what has been stated above, the goods imported vide CRN No, 1- HC-601075-050408 consisted of Dark Green Float Glass 4MM which was not covered under the Valuation Ruling. Clearly the allegation mentioned in the show-cause notice that Valuation Ruling was deliberately not applied to the two consignments in question was factually miss-leading and incorrect.
(xv) That attention is also invited to Valuation Directorate's letter No,Misc/10/2007-III-C dated 4-9- 2008 wherein Valuation Department after conducting detailed investigation concluded that there was no higher evidence of values of float glass of 5, 8 and 12 MM thicknesses of Middle East and. Far East origin and that prices of Chinese origin goods are not applicable to the aforementioned goods. The Valuation Department had directed that in the absence of any higher value evidence, the transaction value is fair and the Collectorate was advised to finalize the assessment on the declared values after allowing quantity discount as mentioned in the Commercial Invoices.
(xvi)That in the light of factual and legal position state above, no additional amount of Sales Tax, Withholding Tax and Special Excise Duty was recoverable. Hence, the provisions of Sales Tax Act, 1990, Income Tax Ordinance, 2001 and Federal Excise Act, 2005 as cited in the Show-Cause Notice are not applicable at all.
(xvii) That the Goods Declarations in question have been filed electronically in terms of the prevalent PaCCS e-filing system. The relevant entries regarding values contained only two columns viz. The Declared Value an assessed Value. There was no provision for declaring the values fixed under the Valuation Ruling. Thus, non-declaration of value fixed through Valuation Ruling does not amount to miss-declaration.
(xviii) That without prejudice to what has been stated above it is submitted that the learned respondent No, 3 has fixed the values of Float Glass in an unlawful manner whereas under the provisions of section 25A of the Customs Act, 1969 he can only determine the value of imported and exported goods. The provisions of section 25A are reproduced below as ready reference: "25A. Power to determine the customs value.---(1) Notwithstanding the provisions contained in section 25, the Collector of Customs on his own motion, or the Director of Customs Valuation 88 [on his own motion or on a reference made to him by any person 88 [or an officer of Customs], may determine the customs value of any goods or category of goods imported into or exported out of Pakistan, after following the methods laid down in section 25, whichever is applicable
(2) The Customs value determined under subsection (1) shall be the applicable customs value for assessm ent of the relevant imported or exported goods.
' In case of any conflict in the customs value determined under subsection (1), the Director-General of Customs Valuation shall determine the applicable customs value.
(xix)The aforesaid provisions of section 25A do not authorize respondent No, 4 to fix the value for future imports also. Factually the impugned Valuation Rulings are applied to imports which are yet to be made, usually stretching to months. The provisions of section 25A. Of the Act only allow the respondent to determine the value of goods or category of goods imported. (Goods already imported not covering future imports). In this regard reference is made to the provisions of section 25B as they existed before their omission by the Finance Act, 2004. At the time of omission section 25B read as under: "25B-Fixation of Value for Imports and Exports:--
(1) Notwithstanding anything contained in section 25, the Board or such officer as is authorized by the Board in this behalf may, from time to time, by notification in the official gazette, for the purposes of levying Customs duties under this Act or any other law for the time being in force, fix the value of the goods specified in the First Schedule and the Second Schedule at such rates as it may deem fit and subject to such conditions or limitations as it may impose.
(2) Different values may be fixed for different classes or descriptions of the same type of goods.
(3) A notification issued under subsection (1) shall be effective from the day specified therein, notwithstanding that the official gazette in which such notification appears is published at any time after that day."
(xx)Now interestingly the learned respondent No,4 without the backing of any statutory provisions issues Valuation Rulings which have the effect of fixed values as under the aforesaid omitted section 25B and such Valuation Rulings are actually issued under the provisions of section 25A of the Act which allows a limited jurisdiction for determining the value of goods imported and exported only meaning thereby that once a consignment is imported and the Customs assessing authorities somehow find it difficult to accept the declared value, then they can have recourse to the determination of value under the provisions of section 25A. But in effect the provisions of section 25A of the Customs Act, 1969 are being continuously misused in the aforesaid manner by way of fixing of values for future imports. Such powers have not been extended to the learned respondents and such fixation is even otherwise in clear violation of the WTO Agreement on Valuation, to which Pakistan is a signatory: Such fixation of values is even otherwise against the concept of Transactional Value, as embodied in the provisions of section 25 of the Act and in violation of Rule 110(iv) of the Customs Rules (S.R.O. 450(1)/2001, dated 18-6-2001) which specifically prohibit the fixation of such minimum values.
(xxi) That the Honorable Supreme Court of Pakistan in the case 2007 PTD 2623 Collector of Customs Port Muhammad Bin Qasim v. Messrs Zymotic Diagnostic International, Faisalabad while discussing the valuation matter in similar circumstances has held as under:-- "6. Section 25 of Customs Act authorizes an officer of the Customs Department to reject the declared value of a consignment imported in Pakistan and to assess the same. Section 25 lays down various modes in which the officials of the Customs Department are required to proceed in determining or assessing the value of the consignment after rejecting her declared value. However, for rejecting or refusing to accept the value declared by a consignee in respect of imported goods, the concerned officer is required to give cogent, plausible and satisfactory reasons for non- acceptance of the declared value and rejection thereof which cannot proceed on the whims or desires of the officer of the customs. He is required to point out some flaw or defect or such circumstances which create doubt with regard to the veracity and correctness of the declared value or that the same had been under invoiced. Similarly in determining or assessing the fair value or normal price of such imported consignment the concerned officer.Is under an obligation to take into consideration all the necessary factors and circumstances enumerated in section 25 of the Customs Act for such determination and assessment. From a perusal of order of the Collector of Customs it transpires that neither satisfactory and convincing grounds for not accepting the declared value of the imported consignment were given nor the factors and grounds necessarily required to be taken into consideration for determining the fair or normal value of imported consignment were adhered to. The Customs Officer was required to obtain identity of the country of origin of the consignment. Thereafter attempt should have been made to find out the prevailing price of the consignment in the country of origin. There is nothing on record to indicate that the Customs Department had secured or had attempted to secure invoices from other importers who had imported identical or similar consignment in Pakistan with a view to show that the price declared by such other importers greatly varied from the price declared by the respondent. In absence of such an exercise action in rejecting the declared value of -consignment would amount to an arbitrary and capricious exercise. Resort to subsection (7) of section 25 of the. Customs Act is to be made only when the Customs Officer who has to make assessment or determination of the fair or normal value of the consignment is of the view that the same cannot be determined otherwise in view of impossibility of procuring evidence as referred to above.
' The order of the Collector of Customs is absolutely silent in this regard which is an important factor for drawing an interference that no such attempt was made before passing the order. The Customs Officer dealing with the case proceeded in a perfunctory, whimsical and arbitrary manner and the Customs, Excise Sales Tax Appellate Tribunal was justified in setting aside the same."
(xxii) That High Court of Sindh in the Case of Rehan Umar v. Collector of Customs, Karachi and 2 others (2006 PTD 909) held as follows: (xxiii) "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 subsection
(1) of section 25 that the Customs value of the imported goods, subject to the provisos 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 subsections (1), (2), (3) and (4). The provisions contained in section 25(1) to (4) contain primary method of valuation and in the first instance the primary method of valuation is required to be adopted in each case of 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 mandatory requirement of law that before resorting to the method provided in subsection (5), the customs officials shall make an exercise in accordance with the provisions contained in subsections (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 subsection (1) they shall resort to the method provided in subsection (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. The provisions contained in sub-rule (3) of Rule 109 provides that, 'when a final decision is made, the appropriate officer shall communicate to the importer in writing his decisions and the grounds' thereof. In addition to the specific provisions contained in subsection (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 subsection (6) that, if the customs value of the imported goods cannot be determined under the provisions of subsection (5) the method provided in subsection (7) shall be resorted to and similar provisions are contained in subsections (7), (8) and (9).
(xxiv) 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 subsection (5) and likewise without similar exercise under subsection (5) no resort can be made to subsection (6). In the same manner without an exercise in writing on record under subsection (6) no resort can be made to subsection (7) and similarly to subsections (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 treated at par with the consignments of those specific supplier which were different with reference to declared values, time lag, specification/ size, etc.
(iii) That there is no advice/letter dated 27-2-2008, as no such copy has been annexed with the appeal, hence no comments. It is not a case of miss-declaration of quantity, description, etc., rather it is a simple case where due to incorrect assessment in terms of sections 79(1)(b) and 80(3) of the Customs Act, 1969, duty/taxes have been short levied and the recovery proceedings have been initiated. It is clear that as per section 32 of the Customs Act, 1969 the respondents are empowered to recover the short paid legitimate revenue. It is clear from the facts that in terms of section 25A(2) of the Customs Act, 1969, the duties/taxes were required to be paid as per Valuation Ruling dated 4-2-2008 a review by D.G. (Valuation) under section 25D of the Customs Act, 1969, is a continuous process of application of customs value determined under section 25A(1) of the Customs Act, 1969. If a review is pending with D.G. (Valuation) the said action/review application does not render a Valuation ruling as suspended or invalid.
(iv) That the appellant's consignments are related to the period of March, 2008 and there was no suspension order during the said period, thus, the contents of para (4) of Grounds of appeal are incorrect, hence denied.
(v) That the role of the Directorate General of Intelligence 2nd Investigation, is only of an informer who has provided the information to the effect that some of the importers had clear the goods- by less payment of revenue due to non-application of Valuation Ruling issued under section 25A(1) of the Customs Act, 1969. The show-cause notice and order-in-original have been issued by the competent customs officers under the relevant provisions of law, thus, it is not a case of outside the scope of jurisdiction. Without prejudice to above. It is submitted that in terms of section 3A of the Customs Act, 1969, read with preamble paragraph Of S.R.O. 487(1)/2007 dated 9-6-2007 the Directorate's officers are empowered to act as officers of Customs. Besides above, even otherwise in terms of section 192 of the Customs Act, 1969 every citizen can pass the information about commission of any offence under the Customs Act, 1969. It is clearly a case of offence of short payment of Government's legitimate revenue. Therefore, considering the fact, circumstances of the case and amended provisions of law the case-law cited by the appellant is not applicable on the subject case.
(vi) That is not a case of valuation on estimation rather it is a case where a lawful customs value, determined under section 25A of the Customs Act, 1969, was required to be applied and as per section 25A(2) of the Customs Act, 1969, the "Assessors" were/are duty-bound to Levy/collect the duty and taxes as per Valuation Ruling, thus, as per facts and proposition of law the cited case 2009 PTD 467 is identical, hence, cannot be applied on the subject case/appeal.
(vii) That it is clearly a case of recovery of short paid revenue, thus the order-in-original has been correctly issued under sections 32(3) and 32(3A) of the Customs Act, 1969, mere mentioning of different subsection shall not make the notice or order-in-original as invalid. Reliance is placed on the aforesaid two judgments of the Chief Justice of Supreme Court of Pakistan, which clearly say that substantial compliance has been made and merits of the case cannot be scraped on sheer technical.
(viii) That the order-in-original neither involves confiscation of the goods nor imposition of penalty, thus, there is no question of applicability of section 179 of the Customs Act, 1969 on the subject appeal. As such there is no question of time barred issuance of order.
(ix) That it is not a case of determination of value of the Customs Act,. 1969 rather it is a case of determination of customs value in terms of section 25A of the Customs Act, 1969, thus there is no question of application of Rule 1.10 on the subject appeal. The provision of section 25A(1) of the Customs Act, 1969 starts from the words "notwithstanding anything contained above----:, which clearly means that the provisions of section 25 of the Customs Act, were considered prior to domination of customs value under section 25A(1) of the Customs Act, 1969 and as per section 25A(2) of the Customs Act, 1969 the Assessing Officer has to apply the customs value determined by the Director (Valuation).
(x) That in the presence of Valuation Ruling, issued under section 25A of the Customs Act, 1969 there is no question to assess the goods at declared value.
(xi) That neither any review application, under section 25D of the Customs Act, 1969 nor any representation under section 25A(3) of the Custom Act has been filed by the appellants, thus, the contents of para (11). Of the appeal at this belated stage carries no weight particularly when number of consignments have already been assessed and released as per Valuation Ruling.
Without prejudice to above, even otherwise in terms of section 25A(2) of the Customs Act, 1969 the duties and taxes are required to be assessed/paid as per customs value already determined under section 25A(1) of the Customs Act, 1969. ii) That in the light of submissions made above the contents of para. (12) of the grounds of appeal required no comments.
(xiii) That the D.G. (Valuation)'s decision dated 22-5-2008 is just and proper, which was issued after calling and consulting all the stake holders, including importers and manufactures. Therefore, any objection, nearly after .2 years without any cogent ground is nothing but to avoid the payment of Government's legitimate revenue.
(xiv)That the date of G.D. Is 24-3-2008 and as per Serials Nos.10 and 11 of Table to Valuation Ruling dated 14-2-2008 the Green Float Glass of size 0.5 mm to 5.00 mm, are/were required to be assessed @ US$ 4.65/Sq. In the D.G. (Valuation)'s decision dated 22-5-2008 the customs value of Green Float Glass up to 5 mm size has been revised to US$ 4.20/Sq. Therefore as per Serial Nos. 10 and 11. Of Table to valuation Ruling dated 14-2-2008 it is clear that there was no difference of the determined customs value of Green Float Glass up the size of 5 mm.
(xv) That as stated above the letter dated 4-9-2008 was/is not applicable on the appellant's consignment where G.D was filed prior to September, 2008 without prejudice to above, even otherwise the said letter was only for the specific transactions of three specific suppliers.
(xvi)That in the presence of section 32 of .The Customs Act, 1969, the contents of para. (16) of grounds of the appeal are incorrect, hence, denied.
(xvii) That the column of "Declared the the G.D. Means that the assessment made by the importer under section 79(1)(b) of the Customs Act, 1969 and column of "Assessed" means the reassessm ent made by the customs under section 80(3) of the Customs Act, 1969 for easement under section 79(1)(b) of the Customs Act, 1969 there is no binding on an there is importer to declare the invoice value whereas as per section 25A(2) of the Customs Act, 1969 being an "Assessor", an importer is also responsible to make self-assessment and pay duty/taxes as per customs value, determined by the Director (Valuation) through Valuation Ruling. Thus the appellants' contention in para (17) of grounds of the appeal are incorrect.
(xviii),That in the presence of sections 32 and 32A of the Customs Act, 1969 any assessm ent/release made under section 80 of the - Customs Act, 1969 can be questioned/scrutinized, within 3 years or 5 years, as the case may be for recovery of short paid revenue.
(xix) That the Rule 107 of Chapter-IX promulgated in 2001, meant for section 25 of the Customs Act, 1969 cannot be applied, mutatis mutandis, on the provisions of section 25A of the Customs Act, 1969 which has been subsequently promulgated in 2006 besides this, without prejudice to above, the provisions of Rule 107 of the Customs Rules, 2001, is only defining the "same time" and it does not means that any evidential G.D. Or basis cannot be considered flexible for reference purposes.
Secondly while determining the customs value in terms of section 25A(1) of 'the Customs Act, 1969 the Direction (Valuation) invariably takes into consideration all the provisions of section 25 of the Customs Act, 1969 and Chapter-IX of the Customs Rules 2001 and once customs value determined under section 25A(1) of the Customs Act, 1969, all the Assessors of section 79(1)(b) and section 80(3) of. The Customs Act, 1969 are duty bound to assess the goods accordingly unless the said determined customs value of section 25A(1) of the Customs Act, 1969 is revised or annulled under section 24A(3) or 25D of the Customs Act, 1969 or superseded through new Ruling issued under section 25A(1) of the Customs Act, 1969.
(xx) That plain reading of the section 25A of the Customs Act, 1969 is confirming that he Director (Valuation) has powers to determine the customs value for any class of goods including the upcoming consignments. First of all, the appellant has not mentioned the very first/important clause/condition that "Notwithstanding the provisions contained in section 25" appearing the start of section 25A (1) of the Customs Act, 1969 moreover, the word "determine" used in subsection (1) of section 25A of the Customs Act, 1969 whereas the word "determined" used in subsection (2) of section 25A of the Customs .Act, 1969, confirming the intention to the legislature whereby the Assessors are required to assess the goods as per customs values already determined in subsection (1) of section 25A of the Customs Act, 1969 this is highlighted that the concept of Valuation Ruling has not only been embedded in Revised Kyoto Convention but also has been thoroughly advocated by the World Customs Organization (WTO) for smooth cleanse of goods and facilitation to trade. Secondly, the provisions of subsection (2) of section 25A of the Customs Act, 1969 are very much clear that the assessment is to be made as per customs value already determined under subsection (1) of section 25A of the Customs Act, 1969 taking into consideration the provisions of Rule 107 of the Customs Rules, 2001 and spirit of section 25A of the Customs Act, 1949 which was promulgated to combat the menace of group under-invoicing the customs values already determined for similar class of goods shall be applied as customs value for assessment purposes. Without prejudice to above, it is submitted that the intentions of the legislature are not to consume weeks/months time for clearance of each consignment by resorting to extraneous exercise for assessm ent purposes at the time of clearance of the goods. That was the reason that the provisions of section 25A of the Customs Act, 1969 was promulgated through Finance Act, 2006.
Without prejudice to above, if the absurd interpretation of the appellant is accepted, the whole provision of section 25A of the Customs Act, 1969 would become redundant. Thus the contents of para. (20) of the grounds of appeal are incorrect, hence denied.
(xxi) That due to change of facts and circumstances and position of law the cited case law is not applicable on the appellant's case.
(xxii) That due to change of facts and proposition of law the cited case-law is not applicable on the appellant's case. Further without prejudice to above, the said judgment is related to a consignment imported in the year 2005 or prior to 2005 whereas the section 25A of the Customs Act, 1969 has been promulgated through Finance Act, 2006 in June 2006 thus the contention of the appellant in ground (22) is not acceptable.
(xiii) Lastly he prayed to dismiss these appeals.
5. Rival submissions heard. Case record examined. Following issues are framed for consideration by this Tribunal:--
(i) Whether Valuation Rulings issued in terms of section 25-A of the Customs Act, 1969 prior to 1st July 2009 are valid beyond period of (90) days in terms of the provisions of section 25(1) read with Rule 107(a) of Customs Rules 2001?
(ii) Whether Valuation Ruling can be applied to consignments which were cleared prior to their issuance through acceptance of their transaction values?
(iii) Whether the two methods of Valuation as envisaged under section 25 of the Customs Act, 1969 namely Deductive Method under section 25(7) and Fall Back Method under section 25(9) have been lawfully and competently applied by the Directorate General of Customs Valuation for the determination of Customs assessed values in these cases?
(iv) Whether the market inquiry has been conducted by the respondents in terms of clause (a) of subsection (7) of section 25 of the Customs Act, 1969 while determining the Customs assessed values in review filed by the appellants under section 25D of the Customs Act, 1969?
(v) Whether issuance of notice under subsections (2) or (3) of section 32 of the Customs Act, 1969 for short levied amount of revenue was, competent in these cases where assessments were provisionally made under section 81 of the Customs Act, 1969?
(vi) Whether the show-cause notices issued in these cases are defective and deficient and hence ab initio null and void in material particulars for want of non-mentioning of subsections (3) and 3A of section 32 of the Customs Act, by the adjudicating officer?
(vii) Whether show-cause notice issued under subsections (1) and (2) of section 32 of the Customs Act, 1969 and 32A ibid can be adjudicated upon by the adjudicating officer under different subsection (3) and 32(3A) ibid. Not mentioned in the show-cause notice in term of section 180 (a) of the Customs Act, 1969 read with the judgment of the honourable Apex Court in the case of Collector of Customs v. Rahim Din reported as 1987 SCMR 1840?
(viii) Whether the issuance of show-cause notice, and subsequent adjudication under section 179 of the Customs Act, 1969 in those cases where assessments were completed in terms of sections 80and 83 ibid is a violation of law laid down by the honourable Supreme Court in the case of E.A.
Evans reported as PLD 1964 SC 536?
(ix) Whether the order-in-original and order-in-appeal are nonspeaking, non-judicial and perfunctory orders based on non-reading/misreading of the documents on record?
(x) Whether cases in which assessments have been finalized under sections 79(1) and 80 of the Customs Act, 1969 and goods made out of charge under section 83 ibid can be adjudicated upon in terms of section 179 ibid after issuance of the show-cause notices?
(xi) Whether the Order-in-Original No,23 of 2010 dated 1-2-2010 is barred by limitation in terms of provisions of subsection (3) of section 179 of the Customs Act, 1969 and umpteen numbers of judgments of the superior judicial for a in 22 cases in Appeal Nos.638 to 659 of 2010?
6. As regards Issue No,(i), it is an admitted position that the Valuation Ruling issued in terms of section 25-A of the Customs Act, 1969 prior to the amendment in section 25A vide Finance Act, 2009-2010 had a validity of (90) days in terms of the provisions of Parent section 25(1) read with Rule 107(a) of Customs Rules, 2001. This fact regarding the life of Valuation Rulings was generally incorporated by the Directorate General Customs Valuation in the Valuation Rulings themselves.
This is the correct legal position regarding the validity of the period of the Valuation Ruling and has also been ratified by the recent amendment carried out by the legislature in section 25A of the Customs Act, 1969 through Finance Act, 2009-2010 which reads as under: --
(3) In section 25A, after subsection (3), the following new subsection shall be added, namely:- "(4)" The customs value determined under subsection (1) or, as the case may be, under subsection
(3) shall be applicable until and unless revised or rescinded by the competent authority.
' The issuance of the above amendment in section 25A through Finance Ordinance, 2009-2010 was necessitated in view of the fact that different interpretations were being resorted to by the Revenue Authorities and Quasi-judicial Forums as to the period of validity of the Valuation Ruling in terms of section 25(1) of the Customs Act, 1969 read with Rule 107(a) of Customs Rules 2001. The aforesaid amendment has vindicated the stance of taxpayer the appellant as against the Revenue and now the, validity of the valuation Ruling in respect of assessed Customs Value of goods imported after the insertion of the aforesaid amendment determined under section 25A shall be applicable until and unless revised or rescinded by the competent authority. As such Issue No,(i) is answered in the negative.
7. As regards Issue No,(ii), though the Valuation Rulings are issued under a mandate awarded by the legislature under section 25A of the Customs Act, 1969 yet the modus operandi generally adopted by the Directorate General of Valuation is not very transparent, proper and according to criteria laid down in as much as that the exercise and worksheets for the determination of the values are not brought on record. All stakeholders are not fully associated and investigation is halfheartedly conducted. The Lahore High Court in its judgment reported as 2009 PTD 467 went on to brand the Valuation Rulings as estimates if the same were not followed at the time of earlier Appraisement and cannot be used against an importer whose consignments have already been appraised and have been made out of charge by the Customs Authorities. This observation was further strengthened by the judgment of the honourable Lahore High Court in its Judgment reported as 2009 PTD 281 wherein it has been ruled that the Valuation Rulings cannot be considered as valid documents for cancellation of an appraised assessment. The opening of an Appraising for the purposes of revaluation of an earlier estimate or adopted figure would require "reason to believe and not "reason to suspect". As such Issue No (ii) is answered in the negative.
8. As regards Issue No,(iii), a scrutiny of the record indicates that the Director of Customs Valuation while exercising his powers under section 25A of the Customs Act, 1969 applied Fall Back Method in terms of section 25(9) of the Customs Act, 1969 by stating that determination of value of the subject goods under the earlier Primary and Secondary methods was not possible due to divergent reasons. However no visible exercise was conducted or brought on record which could show the efforts on behalf of the. Directorate General of Customs Valuation for exhausting all the earlier primary and secondary methods. This was in disregard of the directives -given by the Honourable High Court of Sindh in the case of Rehan Umar reported as 2006 PTD 909 and directives given by the Honourable Supreme Court of Pakistan reported as Collector of Customs Port Muhammad Bin Qasim v. Messrs Zygotic Diagnostic International, Faisalabad reported as 2007 PTD 2623 where the values assessed in terms of section 25A of the Customs Act, 1969 were challenged by the appellants in terms of Review under section 25D to the Director General Customs Valuation, values were surprisingly determined under section 25 (7) of the Customs Act, 1969 through Deductive Method. It is not understood and does not appeal to common sense that the values of the same goods which could not earlier be determined in terms of Deductive Method under section 25(7) and therefore, determined under Fall Back Method under section 25 (9) can again be determined under section 25(7) of the Customs Act, 1969. The Fall Back Method is applied in those cases where the. Customs value of the imported goods cannot be determined under subsections (1), (5), (6), (7) and (8), it shall, subject to the rules, be determined on the basis of a value derived from among the methods of valuation set out in sub-sections (1), (5), (6) and (8), that when applied in a flexible manner to the extent necessary to arrive at a customs value. This indifferent attitude of the officers of Directorate General of Customs Valuation is arbitrary, capricious and whimsical. The authority entrusted to them by the legislature has been exercised in a very wanton, haphazard and unlawful manner through a policy of convenience on pick and choose basis. This is also in violation of the directives of the superior judicial fora. The customs values arrived at through such an unlawful exercise is ab initio null and void. The Issue No, (iii) is therefore, answered in the negative.
9. As regards Issue No, (iv) Deductive method for determining assessable value in terms of subsection (7) of section 25 advocates that if the customs value of the imported goods cannot be determined under subsection (6) it shall subject to Rules be determined on the basis of customs value of the imported goods or identical or similar goods relying upon the unit price at which such imported goods are also sold in the aggregate quantity at or about the time of importation of the goods being valued to persons who are not related to the person from whom they buy such goods subject to certain specified deductions. This Deductive Method is primarily 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, 2002.
' 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 so called market enquiry conducted by the respondent field officers is reportedly in absolute contradiction with the provisions of the relevant subsection (7) of section 25 of the Customs Act, 1969 and is null and void ab initio. As such Issue No,
(iv) is answered in the negative.
10. As regards the Issue No, (v) it has been observed by the honourable High Court in their judgment reported as PLD 1990 Kar. 378 that "the goods have been provisionally released subject to post importation check, and corresponding order having been passed by the competent authority under section 81 of the Act, the release of the goods could be under such section 81 alone and neither subsection (2) nor subsection (3) of section 32 would be applicable. These subsections of section 32 in the Customs Act, which contemplate absence of levy or short levy or erroneous refund of any duty or charge, are attracted only and notices under one or the other of the subsections are issuable exclusively, when a final assessment neither wrongly or erroneously has been made. If a case is not covered by section 32(2) or 32(3) no notices under those provisions can arise. A fortiori no periodicity for notices as contemplated in section 32 of the Customs Act, 1969 would be attracted and a notice under section 81 ibid would be competent without any restriction as to limitation of time.
11. In view of the above principle of law settled by the honourable High Court the provisions of section 32(3) of the Customs Act, 1969 which deal with those cases where duty and taxes has not been levied or short levied due to inadvertence, error or misconstruction are to be decided in terms of the provisions of section 81 ibid. Above.
12. The Customs authorities have no jurisdiction to Issue a notice for miss-declaration, in a matter, where provisional assessm ent had been made under section 81 of this Act, during the course of which the question of miss-declaration could have been raised and considered. The provisions of subsections (2) and (3) of section 32 would be attracted only when a final assessment had been made either wrongfully or erroneously. Where the goods were provisionally released under section 81, the Customs Department could have issued a notice under section 81 for any discrepancy which was found in the case subject to the period of limitation prescribed by section 81 as has been observed by the honourable High Court in the aforesaid case of Abdul Aziz Ayoob v. Assistant Collector reported as PLD 1990 Kar. 378 reconfirmed in Hassan Trading Company v. Central Board of Revenue, Islamabad 2004 PTD 1979. As such Issue No,(v) is answered in the negative.
13. As regards Issue No, (vi) a scrutiny of the documents and synopsis of the case submitted on record indicates following important factors:--
(i) The superior courts of the country in Pakistan have time and again observed that the validity of the Show-Cause Notice is fundamental to the assumption of jurisdiction by the Revenue Authorities to pass the impugned orders. A vague, unspecific and too general Show-Cause Notice may not enable the reader or the notified person to make out or clearly identify the particular clause/subsection or the reason etc., applicable to the case of the appellant.
(ii) The honourable High Court of Lahore while deciding the. Sales Tax Appeal reported as 2003 PTD 1797 (D.G. Khan Cement Co. Ltd., Lahore v. Collector of Customs, Sales Tax' and Central Excise Multan) in respect of deficient vague, incomplete and unspecific Show-Cause Notice observed as follows:"
' Authority issuing a Show-Cause Notice would have to make out a case in the Show-Cause Notice itself as to under which provision of the Act the case fell and would have to incorporate the grounds and reasons in the show-cause notice very clearly and explicitly so that it could be ascertained that the show-cause notice fell under section 36 (1) or 36(2) of the Sales Tax Act, 1990.
Failure on the part of authority issuing show-cause notice in this behalf would render the same invalid and illegal."
(iii) Also the Judgment of the Honorable Appellate Tribunal India in the case reported as 1985 (19)
E.L.T.285 Tribunal (Cystic Resins (India) (Pvt.) Ltd. Faridabad v. Collector of Central Excise, New Delhi is applicable to the facts and circumstances of the case and observed as follows:-- "Show-Cause Notice is null and void, if not worded properly. If the Show-Cause Notice is not properly worded in as much as it does not disclose essential particulars of the charge any action K based upon it should be held to be null and void."
(iv) The above view also gains strength from the Judgment reported as 1984 ECR 645. Bombay (The Calcutta Manufacturing Co. Ltd. v. The Assistant Collector of Customs) is applicable to the facts and circumstances of the case and observed as follows:"
' A Show-Cause Notice must contain sufficient material to support a prime facie charge where the Customs produced no such material, the proceedings commenced by the impugned show-cause notice were to be struck down."
(v) Also a hallmark Judgment of the Honorable High Court of Sindh at Karachi in the case of Messrs Kamran Industries v. Collector of Customs reported as PLD 1996 Karachi 68 is applicable to the facts and circumstances of the case, and observed as follows:"
' Where Show-'Cause Notice is defective all subsequent proceedings will be void including the appellate orders. Therefore, show-cause notices should not be issued mechanically, but should exhibit a proper application of mind by the issuing authority.
(vi) Reference is made to the decision of the Indian Court in the case of Poona Bottling Co. v. U.O.I.
1981 ELT 389 (Del) and is applicable to the facts and circumstances of the case and observed as follows:"
' Where the Assistant Collector was required to apply his own mind, but he was shown to be merely following the official legal view, the show-cause notice was declared to be illegal and without jurisdiction."
(vii) The mentioning of the inapplicable subsections (1) and (2) of K section 32 of the Customs Act, 1969 and section 32A ibid in the show-cause notice which are in respect of deliberate act of miss- declaration and fiscal fraud attracting criminal proceedings redemption fine and huge penalties is not a technical discrepancy but a patent violation of mandatory requirement amounting to a substantive illegality.
(viii) Adjudication and appellate proceedings based upon such a defective and deficient show- cause notice are void ab initio.
' A scrutiny of the subject show-cause notice issued in these cases indicate that all the material particulars including subsections (3) and (3A) of Section 32 of the Customs Act, 1969 have not been mentioned therein and adjudication has been done and demands created under these L subsections in the orders-in-original. As such these show-cause notices are defective and deficient. In view of the above the Issue No, (vi) is answered in the affirmative.
15. As regards Issue No (vii), theses/show-cause notices were issued under subsections (1) and (2) of section 32 of the Customs Act, 1969 and 32A ibid. However, while adjudicating these show-cause notices and creating demands altogether different subsections namely (3) and (3A) of section 32 ibid were relied upon by the officer of original jurisdiction. Section 180(a) of the Customs Act, 1969 laid down the mandatory requirement for mentioning the grounds on which the competent authority proposes to take action against the incumbent. It is a condition precedent that all the legal and factual material particulars must be brought to the notice of is also one of the conditions of the famous dictum and principle of natural justice audi alterm partem. The order-in-original in this case is patently beyond scope of show-cause notice. The appellants advocate has therefore, rightly claimed the ratio decidendi determined vide judgment of the honourable Supreme Court of Pakistan in the case of Collector Central Excise and Land Customs and others v. Rahim Din reported as 1987 SCMR 1840 and the judgment: of the Honourable High Court of Sindh Karachi in the case of Messrs Exide Pakistan Ltd. Karachi v. Deputy Collector of Customs and others reported as 2005 PTD 1449, which in unequivocal terms deprecated the adjudication on the basis of grounds not mentioned in the show-cause notice. Such orders have been pronounced unlawful and ab into void. It is not a case of commission of a technical discrepancy or procedural lapse which is a curable lacuna. It is a substantive illegality for want of non-observance of a mandatory statutory requirement and emphasized upon for complete compliance by the adjudicating authorities since it would vitiate all the case proceedings on which the superstructure is built by different Quasi- judicial and judicial authorities. As such Issue No,(vii) is answered in the negative.
16. As regards Issue No,(viii), the issuance of show-cause notice and subject adjudication by officers of original jurisdiction in place of reopening of the case by Federal Board of Revenue or Collector under section 195 of the Customs Act, 1969 are in violation of the maxim "expression facist cessare pacitum" as held in the case of E.A Avans reported as PLD. 1964 SC 536 where it has been unambiguously and categorically, held that if the doing of a thing is made lawful in a particular manner then doing of that thing in conflict with the manner prescribed will be unlawful. The Hon'ble Apex Court in their judgments reported as 2001 SCMR 838 and 2003 SCMR 1505 while considering the impact of violation or non-observance of the method prescribed by law for dong an act in a particular manner or mode observed that if the laws had prescribed method for doing of a thing in a particular manner, such provision of law is to be followed in letter and spirit and achieving or attaining the objective of performing or doing of a thing in a manner other than provided by law would not be permitted. The same observation has been made by the Hon'ble Supreme Court of Pakistan in the Civil Petition filed by Director General of Intelligence and Investigation and others v.
Messrs Al-Faiz Industries (Pvt.) Ltd. And others reported as 2006 SCMR 129. The orders-in-original issued by the Assistant Collector/Deputy Collector are, therefore, unlawful, illegal without jurisdiction and ere non judice. The order of the Collector (Appeals) based on such orders is also ab initio illegal and void. As such issue No,(viii) is answered in the affirmative.
17. As regards Issue No, (ix) a plain reading of the impugned order-in-original and order-in-appeal issued by the adjudicating and appellate authorities shows that these are not speaking orders in which all issues raised by the appellant have not been discussed and dealt with properly. Such orders have been deemed to be without jurisdiction in which the competent authorities have not discussed questions of fact and questions of law addressed by the taxpayer. This position has been discussed at length in the case of National Bottlers decided by the Hon'ble Lahore High Court reported as 1994 CLC 2181 wherein it has been ruled that orders passed by the authorities were not only laconic and sketchy but there was no application of mind by either of the two authorities. It was further observed that it is now a well' settled law that authority exercising statutory powers of appeal and revision affecting valuable rights of the parties act in quasi judicial if not judicial capacity and it must pass a T speaking order duly supported by reasoning showing due application to facts and law applicable while disposing of the case before it. Orders lacking this criteria have been declared to be without lawful authority and of no legal effect and hence beyond jurisdiction and coram non judice. The operational portion of the subject order-in-Original No,23 of 2010 dated 1-2-2010 incorporated in its para 6 which contains inherent legal infirmities, deficiencies and substantive illegalities discussed herein under other issues dealt in by this forum in this judgment. The Order-in- U Appeals Nos.3710 to 3731 of 2010 dated 26-4-2010 in its last para also incorporated certain interpretations by Collector (Appeals) which are in direct contradiction with the judgments of the superior judicial fora and which have been vehemently contested by the Advocate for the appellant. The above position is also fortified by the judgments of superior courts reported as 2005 YLR 1019, 2007 PTD 2500, 2004 PTD 1973, 2005 YLR 1719, 2003 PTD '777, 2003 PTD (Trib.) 2369, 2002 MLD 357, 1983 CLC 2882, 2005 PTD 2519, 2005 PTD 1189, 2003 PTD 2369. As regards non-speaking orders the Hon'ble Supreme Court of Pakistan has time and again disapproved the passing of such perfunctory orders in the cases invoking valuable rights of the parties. It is settled law that the judicial order must be a speaking order manifesting by itself that the V Court .Has applied its judicial mind to the issues and the points of controversy invoked in the causes.
Furthermore, when the reasons would not be forthcoming, obviously the Appellate Court would be deprived of the views of the subordinate Court. In any way the impugned order, which is not a speaking order and devoid of reasons is not sustainable in law being in contravention of law declared by the Hon'ble Supreme X Court of Pakistan in various cases reported as PLD 1995 SC
(Pak) 272, PLD 1970 SC 158, PLD 1970 SC 173 and 1984 SCMR 1014. As issue No,(ix) is answered in the affirmative.
18. As regards issue No, (x), the word 'order' was interpreted in Noor Muhammad v. Member Judicial, BOR. Reported as PLD 1986 Lah.237 as follow:-- ' the word 'order' is not being a term of art has no fixed legal meaning. According to Prem's Judicial Dictionary, it covers commands or directions that something shall be done....The term order in general is comprehensive enough to include all kinds of order including a formal order."
The word 'order or decision' as used in section 193 of the Customs Act, 1969 were interpreted by a Division Bench of this Tribunal in Shaikh Muhammad Saeed and Co. v. Deputy Collector reported as PTCL 1997 CL 206 in which while relying upon Secretary of State v. Mask and Co. AIR 1940 PC 105, it was observed that the word 'order or decision' are not circumscribed by any specified, form or format. Thus the order passed by an appropriate officer of Customs at the time' of release is an order in terms of section 193 of the Customs Act, 1969.
19. The fact cannot be denied that goods imported by appellant have been assessed by competent officers exercising powers under section 79 read with section 80. This assessment order becomes a final order after the lapse of time period for filing an appeal against the said order.
Such right of appeal has not been given to Customs authorities in terms of section 193 of the Customs Act, 1969 in order to reopen a past and closed transaction, the only recourse available for the respondent was to initiate action within the framework of section 195 of the Customs Act, 1969 as it is a settled law that assessm ent orders are appealable and where an appeal has not been filed, the matter was to be reopened by a competent and authorized officer under section 195 of the Customs Act, A 1969 and failure to do so would render the initiated proceedings as being A illegal and not warranted by law. The Hon'ble Sindh High Court in Smith Kline French v. Pakistan (unreported) has held that once an order is passed which attains finality, the same cannot be subject to a show-cause notice again, considering that no appeal or revision is filed against the first order. This was held by the learned High Court to be in donation of the principles of administration of justice.
20. In this case the order of the Assessing Officer can only be reopened by the Collector under section 195 ibid to examine the record of any proceedings conducted under this Act' for the purposes and satisfying himself as to the legality or the propriety of the order passed c by the Assessing Officer. The respondent instead of reopening an already c finalized case of the appellant initiated adjudication proceedings through issuance of show-cause notice and adjudication of the whole matter afresh. This is explicitly not admissible under the law. In order to understand the application of the provisions of section 195 of the Customs Act, 1969 to reopen the proceedings where such proceedings suffer from irregularity and impropriety, reference is made to the Black's Law Dictionary in respect of the word "illegal" which means D unlawful in and of itself and not because of some extraneous ID circumstances e.g. a contract to assassinate a public official". On the other hand the word "improper" has been defined as Not suitable; unfit; not suited to the character, time and Place. Not in accordance with fact, E truth, or right procedure and not in accord with propriety, modesty, E good taste, or good manners". These two terms, therefore, have nexus with the abuse of power by the subordinate officers and otherwise the ethical moorings of a civil society, in relation to the relevant law. The revisional powers conferred vide section 195 do not authorize an officer to examine issue not falling within the scope of the terms "legality" and "propriety". It means, that the powers under section 195 are limited, -compared to an appeal before a competent authority.
21. Setting aside an order of clearance made under section 83 of this Act, for instance, is a type of 'order which can be revised by the Revisional Authority under section 195, for the simple reason, that such an order of clearance is subject to the satisfaction of the officer of customs which must be arrived at fairly and not arbitrarily as observed in the case East Jamunia Co. (Pvt.) Ltd. Calcutta v. Collector of Customs, Calcutta reported as 1978 ECR 790. In Council of Civil Service Union v.
Minister for the Civil Service reported as (1985) AC 374 and 410, it was said by Lord Diplock, that the Courts usually review an exercise of power to ensure that a public body:--
(i) has not made an error of law.
(ii) has considered all the relevant factors, and not taken into account any irrelevant factors.
(iii) has acted for a purpose expressly or impliedly authorized by statute.
(iv) has not acted in a way that is so unreasonable, that no reasonable public body would act in that way;
(v) that the public body has observed statutory procedural requirements of the principles of natural justice or procedural fairness.
22. Even in those cases where goods are cleared by customs officer after physical verification under section 80 of the Customs. Act, in such `cases goods cannot be confiscated except in pursuance of orders passed under section 195 ibid. As adjudged by Bombay High Court in its judgment reported as Union of India v. Popular Dechem 1987 [ELT 63] Bom. Even a bill of entry cleared for home consumption on order of an Appraiser and countersigned by the Assistant Collector constitutes an order of adjudication has observed by the Dehli and Madaras High Courts in their judgments reported as [1982 ELT 43 (Del) and judgment of Madras High Court in Writ Petitions Nos.5296, 5297 and 5654 of 1979 rel. On].
23. Under the provisions of Customs Act, 1969 any order passed in terms of section 79 read with sections 80 and 83 of the Customs Act, 1969 is appealable in terms of section 193 ibid. To Collector Appeals by the aggrieved person which of course does not include the Customs Officers. In the present case in wake of requests made by the appellants in terms of section 79(1) of the Customs Act, 1969 for 1st Appraisement, the assessments were finalized by the -Customs Officers through assessm ent orders in terms of sections 80 and 83 of the Customs Act, 1969. These orders if issued against the taxpayer could have been assailed by the taxpayer in terms of section 193 of the Customs Act, 1969 with the Collector (appeals). Since the officers of customs have no right to assail these orders in terms of section 193 ibid there is a course defined by the legislature in section 195 of the Customs Act, 1969 for reopening such cases where the legality or proprietary of any decision or order passed by sub-ordinate officer is in question. It may be noted that these officers also scrutinized the customs/commercial documents presented by the appellant to them and after exercising their authority expertise and wisdom allowed the clearance of these consignments to the appellant. In view of the aforesaid exercise spread over a number of consignments, the respondents at this belated stage are not allowed to take a complete' U-turn and start adjudication of past and closed transactions through issuance of show-cause notices and adjudication orders under section 179 of the Customs Act, 1969 when a lawful course has been prescribed by the legislature in section 195 of the Customs Act, 1969 for reopening of such decisions or orders whereby Federal Board of Revenue or Collector of jurisdiction can call for and examine the records of any proceedings under this Act for the purpose of satisfying as to their legality or propriety. For ease of reference section 195 of Customs Act is reproduced below:
195. Powers of Board or Collector [***J to pass certain order.---(1) The Board or the Collector of Customs [or the Collector of Customs (Adjudication) may, within his jurisdiction, call for and examine the records of any proceedings under this Act' for the purpose of satisfying itself, or, as the case may be, himself as to the legality or propriety of any decision or order passed by a subordinate officer and may pass such order as it or he may think fit: ' Provided that no order confiscating goods of greater value or enhancing any fine in lieu of confiscation, or imposing or enhancing any penalty, or requiring payment of any duty not levied or short-levied shall be passed unless the person affected thereby has been given an opportunity of showing cause against it and of being heard in person or through a counselor other person duly authorized by him.
(2) No record of any proceedings relating to any decision or order passed by an officer or customs shall be called for or examined under subsection (1) after the expiry of two years from the date of such decision or order.
24. It is a settled law that an order or decision passed or taken by the subordinate officer can only be corrected in revisional power and not under section 32 of the Customs Act, 1969 since the Collector or the Federal Board of Revenue exercise their revisional powers or correctional jurisdiction in terms of section 195 of the. Customs Act. For adjudication of a case through issuance of show-cause notice, the proof of miss-declaration has to be prima facie present in the first instance if N allegation of miss-declaration is to be leveled against the taxpayer in N terms of section 32 of the Customs Act, 1969 through issuance of show-cause notice by the officer of original jurisdiction. When the consignments were released on the basis of commercial documents and physical examination by the examining and Assessing Officers, the charges subsequently leveled at against the appellants under section 32 of the Customs Act, 1969 are unsubstantiated once the goods have left the customs/port area in terms of Hon'ble High Court's judgments reported as 2008 PTD 1968 wherein the Hon'ble High Court of Sindh has observed that it is a settled principle that after clearance of goods and P remand of consignment from customs area, customs authorities are functus officio to reopen the case again as it becomes a past and closed transaction. Their lordships also dilated upon the proper application of subsection (2) of section 32 of the Customs Act in such cases by observing that "even if it is taken under subsection (2) of section 32, which relates to miss-declaration along with the collusion of Customs Authorities then there is nothing on the record that whether the department had initiated any disciplinary proceedings against the alleged Q. Customs officers simultaneously along with the appellant. In absence of Q departmental proceedings against the delinquent officers, who were in collusion with appellant in evading the Government duty, the, proceedings conducted 'Only against appellant cannot be said to be a penal action under section 32(2) of the Act, but would be considered as discriminatory action taken only against the appellant/importer."
25. In its judgment reported as 2009 PTD 467 the Hon'ble Lahore High Court in respect of application of section 32 of the Customs Act, 1969 has observed that once a consignment is out of charge after due R consideration of relevant facts it becomes a past and closed transaction. The same position has been taken by a Division Bench of Customs. Appellate Tribunal in their judgment dated 18-10-2001 in Customs Appeal No,K-2352 of 99 in a case of reopening of Sales Tax Refund claim that once the disputed claims of the appellants were scrutinized by the competent authority and after being satisfied with the legality and propriety the same were sanctioned, that could not be reopened by the same authority as they are a past and closed transaction. The Tribunal went on to observe that show-cause notice issued was competent and beyond jurisdiction in term of judgment of the Hon'ble Supreme Court reported as PLD 1971 SC 197. The relevant extract being as under:-- "Whether the Court is not properly constituted at all the proceedings must be held to be coram non judice and, therefore, non-existent in the eye of law. There can also be no doubt that in such circumstances " it could never be too late to admit and give effect to the plea that the order was a nullity", as was observed by the Privy Council in the case of Chief Kwame Asante, Tredahone v.
Chief Kwame Tawia."
' In Raunaq Ali's case [PLD 1973 SC 236], their lordships of the Supreme Court did observe in the following terms:- "It is now well-settled that where an inferior tribunal or Court has acted wholly without jurisdiction or taken any action "beyond the sphere allotted to the tribunal by law and, therefore, outside the area within which the law recognizes a privilege to err", then such action amounts to a "usurpation of power unwarranted by law" and such an act is a nullity; that is to say, "the result of a purported exercise of authority which has no legal effect whatsoever". In such a case, it is well-established that a superior Court is not bound to give effect to it, particularly where the appeal is to the latter's discretionary jurisdiction. The Courts would refuse to perpetuate, in such Circumstances, something which would be patently unjust or unlawful".
26. If the subject assessm ent order passed by the Assessing Officer was not legal and it can only be challenged and reopened by the revisional authority i,e, Collector of Customs or Federal Board of Revenue in terms of section 195 of the Customs Act, 1969. It is an assessment order for all legal and practical purposes where goods have been released after examination and assessment of duties and taxes by the competent officers of the Customs and therefore, a past and closed transaction. General principle in such case employs that neither confiscation nor imposition of penalty is a determinative criterion or a condition precedent to stamp an order under law, as an order appealable in terms of the judgment reported as [Ajar Exports v. Collector of Customs] 1986 ELT (26) 8731. As such Issue No,(x) is answered in the negative.
27. As regards Issue No, (xi), the show-cause notice in this case was issued on 8-10-2009, the date shown on the title page of order-in-original is 1-2-2010. The booking date as per courier certificate is 17-2-2010 and the order was delivered to appellant on 18-2-2010. The provisions of section 179(3) of the Customs Act, 1969 required that the case should be adjudicated within a period of 120 days from the date of the show-cause notice. The said period of 120 days expired on 5-2-2010 and the order-in-original is therefore, barred by (12) days. Neither the Order-in-Original No,23 of 2010 dated 1-2-2010 speaks of any approval or any extension by the Collector during this adjudication period nor the departmental representative who possessed the relevant adjudication file at the time of hearing could show any such extension by the Collector. The order-in-original has been dated 1-2- 2010 to mislead the concerned authorities regarding the expiry of the stipulated period of 120 days from the date of the show-cause notice and which expired on 5-2-2010. The time period in such cases is to be calculated from the booking date of the documents with the courier. The impugned order-in-original has been issued beyond the stipulated limit of 120 days and is therefore, manifestly time barred with reference to the date of show-cause notice which is 8-10-2009 as no reasoned valid and lawful extension in terms of the proviso to section 179(3) of the Customs Act has been produced by the respondent. The limitation period for adjudication in terms of section 179(3) ibid. Is mandatory in nature and not a directory one and that "once limitation has started to run and had come to at end the assessee has acquired a vested right of escapement of assessm ent by lapse of time". This view is also supported by the judgments of the superior judicial fora reported as 2002 MLD 180, 2003 PTD 1354, 2003 PTD 1797, 2008 PTD 60, 2008 PTD 578, 2009 PTD 762, wherein the adjudication decision has been observed to be barred by limitation period since it becomes unlawful and void on the ground of time bar. As such Issue No,(xi) is answered in the affirmative.
28. As regards the rest of the (4) appeals, the limitation period expired on 12-1-2010. The case record does not show whether the extension in these (4) cases was procured from the Collector with the initial period of (9) months as envisaged by the judgment of the Honourable Supreme Court reported as. 1995 SCMR 1881. The departmental representative when confronted with the production of the relevant extension from the Collector failed to produce the same before this forum.
29. In view of the above narration the whole proceedings are infested with inherent legal infirmities and substantive illegalities tantamount to patent violation of mandatory statutory provisions and that, too, in utter disregard of the principles of law settled by the superior judicial fora. The chronological events right from the determination of customs values by the Directorate General of Customs valuation, their review under section 25-D of the Customs Act, 1969, issuance of show- cause notice adjudication of demands and order of the, Collector (Appeals) due to patent violation of law, Rules and procedure portray dismal state of affairs and careless and indifferent attitude of the authorities concerned and has resulted in manifestation of palpable inequity and an act of gross injustice to the detriment of the appellants. Even otherwise when the concept of Minimum Agreed Values has eclipsed and is alien under the present System of Transaction Value, total reliance on the prohibited methods (including reliance on values of the local manufacture) enumerated in Rules 110 of the Customs Rules, 2001 annihilates the essence and spirit of transaction value since a whole mechanism has been laid down in section 25 of the Customs Act, 1969 for determination of the Transaction Value. The initial Valuation ruling dated 14-2-2008 was issued in respect of 42 categories of float glass imported from China, Middle East and Far East. The revised Valuation Ruling dated 22-5-2008 issued in terms of Review under section 25-D of the Customs Act, 1969 filed against the aforesaid Ruling dated 14-2-2008 was in respect of 18 categories of items. This Ruling was issued in respect of goods of China origin only. The confusion got confounded when strange enough the goods of other origins were ordered to be assessed under the provisions of section 25 or may, after provisional assessment, to be referred to the Directorate General of Customs. Valuation under section 81 of the Customs Act, 1969 for final Valuation. One criterion was applied to umpteen number of CRNs pertaining to different periods. Even values of
(21) items not included in the Valuation Rulings were enhanced by the Customs Collectorate of PaCCS in an arbitrary manner on the basis of the revised Valuation Ruling. Even otherwise the erstwhile/defunct section 25B of the Customs Act, 1969 had entrusted wide powers to the Valuation Authorities for determination and assessment of customs values of different imported/ exported goods but under the existing section 25A ibid. The competent authority's powers have been curtailed/limited and restricted to the determination of customs values for the goods which have already been imported or exported No futuristic valuations can be contemplated under the provisions of the existing section 25A. The bar in the relevant section 25 of the Customs Act, 1969 read with Rule 107(a) of the Customs Rules, 2001 restricted customs/valuation authorities to travel beyond (90) days Valuation Data till 30th June, 2009 when amendment in section 25A has removed the aforesaid restriction but in patent violation of the spirit of Transaction Value advocated both by GATT Rules and section 25 of the Customs Act, 1969.
30. In view of the above the impugned orders passed by both the forums below are set aside and the subject appeals are accordingly allowed. revisions by the competent authorities. Therefore, it is advisable to consult the official sources or legal professionals for the most up-to-date and accurate information.