ORDER MUHAMMAD ARIF MOTON, MEMBER (JUDICIAL-II) - This Order will dispose off above-captioned Customs Appeal filed by the Appellant against Review Application under Section 25-D of the Customs Act, 1969 (against Valuation Ruling No. 903/2007) passed by the Director General, Directorate General of Customs Valuation, Custom House, Karachi.
2. Brief facts of the case are that the appellant sent a letter on 13.2.2010 requesting for review of assessable value in terms of Valuation Ruling No. 903/07, dated 14.06.2007. It was stated that both goods declarations, were assessed under Section 81 of the Customs Act, 1969 but their concern was not heard by Valuation Department. He further requested that order for review of Valuation Ruling'
903/07, dated 14.06.2007 may be issued.
On scrutiny of the Review application, following discrepancies / legal infirmities were found which were communicated to the applicant vide letter of even number dated 17.3.2010.
(a) .- The review application is not accompanied by the relevant import documents like commercial invoice, bill of lading, copy of L/C, proforma invoice and goods declaration. In the absence v of these documents, it cannot be ascertained that you are an aggrieved person nor it can be determined that the declared value is the true transactional value in terms of Section 25(1) of the Customs Act, 1969.
(b) You have not submitted any sales tax paid invoice meaning thereby that the incidence of duties and taxes has been passed on to the consumers and therefore, review application is not maintainable, in terms of Section 19-A ibid.
(c) The review application has been filed against valuation advice issued in case referred to this Directorate by the clearance Collectorate after processing it provisionally under Section 81 ibid. Now you may approach the relevant Collectorate for issuance of final assessment order after due process under law. You are informed that final assessment order passed by the Collectorate, is appealable under Section 193 of the Customs Act, 1969 before Collectorate Customs (Appeal). If you still feel aggrieved with the order of Collector Appeal, you have second opportunity of appeal before Customs Appellate Tribunal under Section 194 ibid. You are advised in your own interest to exhaust legal remedies available to you under the law.
(d) That it is the sole right of the aggrieved person to approach this office for review under Section 25.-D. Neither you have produced any proof of your grievance nor any power or authority from the importer authorizing you to represent his case be/or this forum.
Thereafter, the applicant filed another review application through their Counsel M/s. Mohabbat Hussain Awan, Legal Consultant. The applicant rebutted the above stance of the Directorate and inter alia stated that:-
(i) The Applicant imported two consignments of motor cycle parts'/Chain Kit (Non-Genuine) from Thailand vide 1GM No. 2183/07, dated 10.12.2007 index No. 259 and IGM No. 92/08, dated 16.1.2008 Index No. 102 against transactional value vide Goods Declaration No. I-HC-52425, dated 14.12.2007 and 'MHC- 64421, dated 23.1.2008 respectively and the Custom Department provisionally assessed the value of the consignments and referred the cases to Valuation Directorate for the determination of correct transaction value. But the Deputy Director of Directorate General Customs Valuation Karachi has passed the following orders:- "The case has been examined in the light of reference made and data available on record. On scrutiny it has ' been found the assessment made by the Collectorate is fair. The Collectorate may, therefore, finalize the case on the assessed value."
(ii) That the Custom Department had proposed assessed value @ US$ 1.53/Kg. Vide IGM No. 2183/07, dated 10.12.2007 Index No. 259 whereas in other case IGM No. 92/08, dated 16.1.2008 Index No. 102 value was proposed @ US$ 3.41/kg. This aspect shows that the learned Deputy Director has not examined, the case properly.
The stance taken by the applicant was forwarded to the relevant wing of the Valuation Directorate for examination who submitted following comments:
(i) That since the provisional assessme nt made by the Collectorate was found in order, therefore, the Collectorate was . Advised to finalize the assessment on assessed value.
(ii) That in G.D bearing IGM No. 218307, dated 10.12.2007, the declaration's in unit and G.D. Bearing No. 9212008, dated 16.1.2008, the declaration is in kilogram by weight. Assessment has been finalized as per declaration of unit of measurement.
(iii) That Review Application filed against Valuation Ruling No. 903/2007, under Section 25-D of the Customs Act, 1969 before the then Director General in 2008 was disposed of and the competent forum rejected the application vide Order-in-Review bearing No. 51 of 2008, dated13.11.2008, as such the present review application is not maintainable.
(iv) That the Directorate General has disposed of the provisional assessment reference received from the clearance Collectorate.
(v) That although unit of measurement (UOM) is in Kilogram but the declaration of the applicant is on unit basis i.e. Per Kit contrary to the objection raised by the applicant.
(vi) That Valuation Ruling No. 903/2007, dated 13.6.2007 was to be applied being identical in the subject reference. Hence, declared value of the applicant may not be accepted in view of the aforesaid ruling rejected in Review dated 13.11.2008.
3. The Director General of Customs Valuation after hearing the parties passed the order vide File No. 1/03/2008-VI-A/3757,, dated 24.01.2010 held that the legal position is that no review application could be filed before the same forum against valid order-in-Review passed under Section 25D. The applicant has also failed to submit any proof that the incidence of duties and taxes paid had not passed on to the buyers, therefore the application is also not maintainable in terms of Section 19-A ibid. Hence this appeal filed by the appellant before this Tribunal on the following grounds incorporated in this memo, of appeal:-
(i) what the Director General Valuation has seriously erred while passing the impugned order as the same is bad in law.
(ii) That first and foremost it must be seen as to what were the circumstances which led to the passage of Valuation Ruling No. 903/2007, firstly when the case of Momin Traders at the time of assessm ent was finally assessed under order of the then Assistant Collector there was no reason and no power with the Principle Appraiser to refer the matter for valuation. Secondly it would be seen from a mere perusal of the Valuation Ruling No. 908/07 that the same has been passed by the Deputy Director of the Directorate General of Valuation, this fact alone vitiates the entire proceedings as the Customs Act does not confer any power whatsoever over, the Deputy Director of the Valuation Department to pass Valuation . Rulings.
(iii) That in the present case of the Appellant the Collectorate and the Directorate of Valuation have gravely cared while assessing the value of the goods as there are multiple evidences available and Section 25 of the Customs Act which has to be complied ,with in a sequential order has not been done.
(iv) That the Director General Valuation while rejecting the Review Application of the Appellant under Section 25-D of the Customs Act, 1969 has given no plausible reason and has nearly placed all reliance on Valuation Ruling No. 903/2007 which itself is an illegal ruling.
(v) That the Appellant is hereby filing evidence from different Collectorate of most recent time for the perusal and consideration of this Hon'ble Tribunal and hope that the would prove to be of assistance to this Hon'ble Tribunal.
(vi) Lastly he prayed to set aside the order impugned herein passed by the Director General Valuation in Review and except the declared value of the goods in question or direct the Respondent No. 2 herein to pass proper and appropriate orders with respect to the case of the Appellant
4. The respondent filed parawise comments on grounds of Appeal which are as under:-
(i) Para (a) Denied'. It is submitted that the review order passed by the Director General (Valuation) is legally correct as the review application filed against the Valuation Ruling No. 903/2007 was already dismissed by the then Director Genera) (Valuation) -vide Order- In-Review No. 51, dated 13.11.2008 and in legal parlance the impugned Valuation Ruling has merged into Order-in-Review dated 13.11.2008 and no review application can be filed before the same forum against a valid Order-In-Review.
(ii) Para (b) The Valuation Ruling No. 903/2007 was passed on a reference received from the Collectorate and the Deputy Director was empowered under the law to issue Valuation Ruling In cases referred by the Clearance Collectorate. Actually, the applicant is confusing the Valuation Ruling issued by the Director (Valuation) under Section 25A which has been inserted vide Finance Act, 2007-08, where as the Deputy Director used to issue Ruling on a format as per the previous enactment.
(iii) Para (c) Denied. It is submitted that the Valuation Ruling was issued on the basis of the direct evidence and importer could not deny the available evidence and the grounds were taken by the Director General initially while rejecting the application of MIS Momin Traders.
(iv) Para (d) It is submitted that the rejection of instant application by the Director General (Valuation) is based on the fact that review application against the Valuation Ruling No. 90312007 was already rejected by the then Director General (Valuation) vide Order-In- Review No. 51, dated 13.11.2008 and Review cannot be filed before the same forum against valid Order-In-Review.
(v) Para (e) Needs no comments. However it is pointed out that the Valuation Ruling was issued on the basis of ply evidences.
(vi) Para (f) Needs no comments.
(vii) Lastly he prayed to reject the appeal.
5. Hearing in this case was conducted on 13.4.2011, the advocate of the appellant argued as under:-
(i) The Ruling No. 903/2007, dated 14.06.2007 has been issued by Deputy Director, Directorate General of Customs Valuation, Custom House, Karachi.
(ii) That this is unlawful, illegal and coram-non- judice, since the Director is the competent officer to issue rulings in terms of Section 25-A of the Customs Act, 1969.
(iii) That no amendment there to has been issued in the Finance Act till to-date.
(iv) That the Director Customs Valuation is not allowed to delegate powers to Section 25A to any other officer.
(v) That evidences of identical and similar goods on records in terms of Section 25(5) & (6) of the Customs Act, has not been* taken into consideration by the Directorate General of Valuation while issuing the ruling.
(vi) That no cogent reasons have been put forth by the Director General in the Review Application filed by the appellant in terms, of Section 25 of the Customs Act, 1969.
(vii) That the Valuation Ruling issued under Section 25(8) of the Customs Act have been declared ultra vires by the Honourable High Court of Sindh in CP.D-No.3353 of 2010, dated 28.2.2011.
6. The Principal Appraiser supported the impugned orders for the reasons stated therein. However, he could not reconcile the position that the Deputy Director had acted coram-non-judice in issuing the subject valuation ruling beyond the authority given to him by the statute itself and where Director is the competent authority to issue the valuation rulings in terms of Section 25A of ibid. .
7. Rival submissions heard. Case record examined. Following observations are made by this forum:- (i) In terms of Section 25 of the Customs Act, 1969, it is an admitted position that Director of Customs Valuation is the competent authority to issue Valuation Rulings and in case of any conflict regarding determination of customs value thereunder the Director General Customs Valuation shall determine the Customs value in a review filed to him under Section 25D of the Customs Act, 1969. For case of reference Sections 25A and 25D of the Customs Act, 1969 are reproduced as under:- [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 2 [on his own motion or] on a reference made to him by any person [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 sub-section (1) shall be the applicable customs value for assessm ent of the relevant imported or exported goods.
(3) 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.] [(4) The customs value determined under sub-section (1) or, as the case may be, under sub- section (3), shall be applicable until and unless revised or rescinded by the competent authority.] [25D. Revision of the value determined.- - Where the customs value has been determined under Section 25A by the Collector of Customs or Director of Valuation the revision petition may be filed before Director-General of Valuation within thirty days from the date of determination of customs value and any proceeding pending before any Court, authority or Tribunal shall be referred to the Director General for the decision.]
(ii) A plain reading of both the above Sections namely 25A and 25D in clear cut terms specifies the Director of Customs Valuation to be the authority entrusted- with the mandate thereunder to issue Valuation Rulings and Director General shall entertain and decide Review Applications in those cases * where Valuation Rulings have been issued by the Director Customs Valuation. Most apparently the Deputy Director in this case has acted beyond the charter provided to him by the statute under Section 25A as well as 25D as such the issuance of the ruling by the Deputy Director Customs Valuation and the entertainment of this Ruling by the Director General both aire not in accordance in terms of Section 25A and Section 25D. As such both the orders were ab initio null and void and the proceedings and super structure on such defective proceedings were also null and void. This is also substantiated by the recent judgment of the Honourable High Court of Sindh in Constitution Petition No. 3353 of 2010, dated 22.2.2011 the relevant extract is reproduced below:-- "30. We may note that in respect of at least some of the vacation rulings, it appears that the Director General Valuation has made orders in revision under Section 25D of the Act, whereby the rulings have been upheld. It is well- settled that if the basic order is set aside or' quashed, then the entire superstructure of orders resting thereon automatically falls away. Reference may, in this regard, be made to Atta-ur- ' Rahman v. Sardar Umar Faruq and v others (PLD 2008 SC 663) and Yousuf Ali v. Muhammad Aslam and others (PLD 1958 SC 104). Accordingly, it is not necessary to consider the orders of the Director General in detail. Once the valuation rulings are found to be ultra vires Section 25A, the orders in revision also cease to hold the field.
(iii) In the case of Rehan Umar subsequent followed by different superior judicial fora all over the country the sequential procedure laid down in Section 25 has to be strictly followed while deciding cases under Section 25A as well. This has also been ruled in the case of Sus Motors Pvt. Ltd. v.
Federation of Pakistan and others by the Honourable High Court of Sindh dated 12.11.2010 in C.P.No. 1285 of 2008, On this account also the Valuation Ruling as well as review order of the Director General are against the parameters laid down in the Customs Act and interpreted by the higher judicial fora.
(iv) The valuation Rulings issued under Section 25- A have been held to be ultra vires in the judgment delivered by the-honourable High Court of Sindh in C.P.No. D-3353/2010 Vide their judgment dated 28.2.2011. As such the proceedings of Directorate General Valuation and, orders based thereupon 25A & 25D are infested with violations of mandatory provisions inter alia "being beyond the jurisdiction of the issuing authority and leading to substantive illegalities which make the Valuation Ruling under Section 25A and Review order under Section 25D ab initio null and void.
8. In view of the above, the. Valuation Rulings being issued beyond mandate and jurisdiction and order in review passed by the Director General based upon a coram- non-judice Ruling are hereby set aside and the appeal is accordingly allowed.