' MUHAMMAD NADEEM QURESHI (MEMBER (JUDICIAL-I)).-This order shall dispose of the instant appeal filed by Messrs Advent Technologies against Order-in-Appeal No,3219 of 2010 dated 2-2-2010, passed by the Collector of Customs (Appeals), Karachi against the Assessment Order No,MCC- FTO-42 of 2008-PaCCS dated 21-8-2009, passed by the Additional Collector of Customs, Model Customs Collectorate of PaCCS, Customs House, Karachi.
2. Brief facts of the case are that the appellant had imported a consignment comprising Plastic Caps for Drinking Water Bottles (180,000 pcs) and filed Goods Declaration (GD) with self- assessm ent and made payment of duty/taxes @ US$ 0.30/pc, in terms of section 79(I)/(b) of the Customs Act, 1969. The GD was checked in terms of section 80 of the Customs Act, 1969, and it was found that the unit of measure (UOM) of the goods falling under PCT Heading 3923.5000 is Kilogram and despite clear indication of UOM in the Pakistan Customs Tariff and PaCCS system the appellant had deliberately of UOM mis-stated the quantity and value thereof in the relevant columns in a bid to get their goods cleared at lesser payment assessment. Therefore, the goods were got examined to determine the correct weight and subsequently it was gathered that in kilogram terms the declared value of goods was @ US$ 2.1714/kg. The data of similar kind of goods, maintained in terms of subsection 13(a) of section 25 of the Customs Act, 1969, was checked and the assessm ent was proposed @ US$3.1568/kg. The appellant had however, shown his disagreement and as per PaCCS procedure appellant filed his first shown review request and insisted for acceptance of the declared value on the basis of few isolated lower assessed G.Ds. He did not produced any proof of mode of payment of true payable transaction value with any corroborative documents regarding adjustments as envisaged in terms of subsection (2) of section 25 of the Customs Act, 1969. Therefore, considering the provisions of subsections (2)(f), (9) and (13)(a) of section 25 of the Customs Act, 1969, read with Rule 107 of the Customs Rules, 2001, the assessm ent was maintained @ US$ 3.1568/kg.
' Subsequently as per PaCCS procedure and in terms of Rule 441 of the Customs Rules, 2001, the appellant filed second review request before the Deputy Collector of Customs (PaCCS), who disposed of the second review request of the appellant in the following terms:- "There is variation in data such closures for Pepsi and other are assessed at DV 3.1568/kg, as they are of different brand and supplier, hence, discount of 10% is accorded. But as CA is insisting of DV, hence, the case is assessed provisionally."
' Accordingly provisional assessme nt was made @ US$ 2.8411/k and the said provisional assessm ent was accepted by the appellant and not only submitted post-dated cheque of Rs,53,610 but also submitted an Indemnity Bond whereby the appellant bound himself to pay the indemnified amount immediately on demand from the Customs. The provisional assessment under section 81(1) of the Customs Act, 1969 was made on 6-10-2007 and the case was referred to the Directorate General of Valuation for final determination of customs value and finalization of provisional assessm ent. Subsequently, on 30-10-2006 the Deputy Director of Valuation vide electronic notice/message, issued in terms of sections 155E & 1550 of the Customs Act, 1969, had called the appellant to appear for hearing on 11-11-2006 and asked him to submit supporting documents to substantiate his self-assessment which was made on declared value. After examination of the documents produced by the appellant and the date of customs value of similar kind of goods the provisional assessment was finalized @ US$ 2.8411/kg on 31-1-2007 i,e, within the stipulated period of section 81(2) of the Customs Act, 1969. The finalization of the assessment was conveyed through electronic message/decision in terms of sections 155E and 1550 of the Customs Act, 1969. Immediately after receipt of Valuation Department's decision/message the provisional assessm ent was also finalized on G.D. And the re-assessed G.D. @ US$ 2.8411/kg was also shown on the appellant's screen in terms of sections 155E and 1550 of the Customs Act, 1969. Every importer who obtained user I.D. In terms of section 1550 of the Customs Act, 1969, clearance of goods through PaCCS knows that all correspondence under PaCCS is to be made through internet/web, however, despite the explicit provisions of Chapter-XVIA of the Customs Act, 1969, the appellant approached the Hon'ble F.T.O. On the ground that the provisional assessment had not been finalized as no written order for finalized as no written order for finalization of provisional assessm ent had been issued. The Hon'ble F.T.O. Vides findings/Decision dated 27-6-2009 recommended to issue written order informing the appellant about finalization of the provisional assessm ent. Therefore, in pursuance of the directive of the Hon'ble FTO, the decision of finalizing the assessm ent @ US$ 2.8411/kg conveyed on 31-1-2007 through electronic message in terms of sections 155E and 1550 of the Customs Act, 1969, was re-issued in shape of the assessment order dated 21-8-2009.
3. The appellant against impugned assessment Order No,MCCFTO-422008 Pass dated 21-8-2009 filed an appeal before the Collector (Appeals), Karachi who hold the impugned order and rejected the appeal.
4. Being aggrieved and dis-satisfied with the impugned order-in-appeal the appellant filed the instant appeal before this Tribunal on the following grounds:-
(1) That the respondent illegally and unjustifiably assessed the liability of imported goods on the basis of "KG" instead of pieces. They have also wrongly discarded the transaction value declared by the appellant which was true and fair.
(2) That the Collector of Customs (Appeals) Karachi has wrongly and unjustifiably rejected the report of SGS which was and independent agency appointed by F.B.R. For verification of import documents. He has wrongly held that SGS report does not enjoy any official sanctity and there was a good chance of the same having been issued incorrectly as the learned Collector (Appeals) had seen many instance where SGS had submitted false report but he miserably failed to support his observation with any cogent evidence. SGS is an international agency particularly appointed for verification of import documents and its report is always authentic and acceptable unless contrary is proved through Cogent evidence.
(3) That the appellant also placed on record all requisite documents in support of his declaration.
He has also produced evidence showing that the value declared by him was correct and true.
(4) That the contention of respondent No, I as well as the appellant authority that the provisional assessment was finalized on 31-2-2007 are totally false, frivolous and self concocted because the record of PaCCS web was continuously redecting(sic) the assessment as provisional till the time the order dated 21-8-2009 was passed by respondent No,
1. Thus, the declared value attained finality after expiry of limitation prescribed under section 81(2) of the Customs Act, 1969 and the order dated 21-8-2009 passed after expiry of limitation has nullity in the eyes of law.
(5) That the system was showing the GD in question as provisionally cleared and in support of this contention the appellant placed on record the hard copies of system generated information but both respondent No, 1 as well as the appellant authority have ignored this piece of this evidence without any legal justification.
(6) That at the time of clearance, Goods Declaration No, KAPR 19535 dated 11-8-2006, KAPR 28349 dated 30-8-2006, KAPR 33191 dated "1-9-2006, KAPR 37205 dated 18-9-2006 relating to importation and clearance of identical goods were placed before customs authorities for consideration but the Appellant was not given equal treatment as given to others being importer of identical goods.
This attitude of the respondent was against the norms of natural justice.
(7) That the Appellant is/was in possession of Goods Declaration CRN: I-HC-295394-130607, I-HC- 277302-240507 and I-HC241871-160407 which confirm the declaration of the appellant and subsequently release of imported goods by customs authorities at declared value. It is specifically pointed out that the goods so imported and allowed release through aforementioned Goods Declaration were from same supplier as of the appellant, as to. Why such piece of evidence were not given due weight for consideration the release of goods of the appellant. Not only this, the appellant also placed on record a list of Goods Declaration which also confirms that the identical goods as of the appellant were released by accepting the declared value.
(8) That the appellant with due diligence exhausted all out efforts to convince the customs authorities regarding his contention for value of imported goods. Such efforts of the appellant are reflected in his letter dated 27-7-2009 address to the Assistant Collector of Customs, MCC PaCCS Group II. Unfortunately, the contents of aforementioned letter which were self speaking in the matter were deliberately ignored by the customs authorities without any plausible reasons. This intransigency on the part of customs authorities speaks a lot for the wilful victimization of the appellant.
(9) That an invoice price cannot be routinely discarded except on the strength of clear evidence that the invoice is not genuine and it does not show the real price as has been transacted between the importer and foreign, supplier, and that something else has passed clandestinely between the importer and foreign supplier.
(10) That a transactional value cannot be rejected because there are some contemporaneous imports made at higher price. It has to be shown that invoice price is not genuine and does not show the real price paid for the imports. The Customs authorities failed to produce any evidence to justify the enhancement of invoice value of imported goods.
(11) That as per Rule 109 of Chapter-IX of the Customs Rules, 2001 the burden of proof rests on the shoulders of Assessing Officer to explain the method of assessment.
(12) That the procedure adopted by the customs is in violation of existing provisions of section 25 of the Customs Act, 1969, read with rules framed thereunder. The basis frame work of the new law is that there are multiple methods for determining the value and each method i,e, if the value of a particular consignment cannot be determined by rule 'I' then were have to examine rule 'II' and thereafter rule ?II' and so on, but in this case the department has simply disregarded the relevant provisions of law and did compare the goods with the goods from a different market zone, and that too during a different import period which had no relevance with the consignment in question. Any raise in the import value of the goods in the manner in not only illegal but also arbitrary and in complete disregarded of the newly promulgated law.
(13) That under the new system presently in vogue every individual transaction of sale of goods is being treated as a peculiar transaction having no relationship with any other transaction. In order to reject the transaction, there must be evidence to show that the transaction, there must be evidence to show that the transaction, relied upon is fraudulent and is based on untrue statement in material particulars. The customs have only relied upon a previous transactional value of the similar goods not meant for water bottle and having no relationship with the present import.
Furthermore, no evidence exists to reject the commercial documents presented by the appellant.
5. On the last date of hearing Mian Abdul. Ghaffar, Advocate appeared for the appellant and argued on the basis of grounds already mentioned in the memo. Of appeal. Mr. Ghulam Yasin, Appraising Officer appeared for the respondents and defended the Order-in-Appeal passed by the Collector (Appeals), Karachi.
6. It is evident from the record of the case that during the hierarchy of the customs, the subject matter was placed before the Federal Tax Ombudsman through Complaint No, 1766-L/2008.
Wherein, the respondents during the proceedings before the F.T.O reflected their non serious attitude. The controversy has allegedly made in the case. Evident from the proceedings of the case before the F.T.O., clearly gathered that after having the knowledge the respondents had not acted in time. The respondents also not filed the comments on the directions of the F.T.O, respondents were directed to furnish parawise comments. It is also evident that on the date of hearing the respondents were not in attendance and as such the final order under section 81 of the Customs Act could not be placed on record because of non-availability which was the main controversy of the matter and as such the failure to issue formal order of final assessment by the respondents.
Which was observed as maladministration within the meaning of section 2(3) of the F.T.O Ordinance, 2000 and he had made observations/recommendations as under: -
(i) The provisional assessment made under section 81 of the Customs Act by finalized and the importer/complainant be informed in the shape of an order, which should be appealable. This action must be completed within a period of one month of receipt of this order. In this exercise the complainant has to be associated.
(ii) In case of failure to complete the action within the stipulated period i,e, one month the I.D of the importer shall be deemed to have been de-blacked and complainant be allowed access to system of automated clearance.
(iii) Compliance be reported within 30 days of the receipt of this order.
7. It is evident from the recommendations of the F.T.O that compliance be reported within 30 days on the receipt of his order but on the contrary the assessment order was passed by the respondents on 21-8-2009 while the order of the F.T.O was passed on 27-6-2009 which itself, requires the consideration, to be observed in the right of conduct and the behavior of the respondents with regard to the reflection of their intention and carelessness.
8. The learned F.T.O had given a option to the respondents through recommendations as mentioned in Para(I). Inspite of doing so they had issued the assessment order referring the finalization of the assessm ent dated 31-1-2007. Against the recommendations of the learned F.T.O, the respondents passed the impugned assessment order on 21-8-2009. Finalization of the provisional assessm ent was never communicated to the appellant in writing as per Rule 109(3) of the Customs Rules, 2001, as per the respondents version, the finalization was completed on 31-1- 2007, while the same was communicated after a lapse of 18 months whereas stipulated time period for finalization of provisional assessment is 9 (Nine months) which could be further extended upto 90 days by the Collector of Customs. Under these circumstances the subject final valuation assessm ent is time barred.
9. It is also evident from the record of the case that at the time of assessment value of similar goods were taken into account by the DC PaCCS and evidential GD's (KAPR Machine No,19535 dated 11-8-2006, 28349 dated 30-8-2006, 33191 dated 11-9-2006, 37205 dated 18-9-2006) of identical Goods were not accepted by the DC, appraisement MCC, even though all above quoted GD's falling with 90 clays criteria as per rules. Whereas law says "when evidential Invoices pertaining to identical goods is available and that too of the nearest period, then the price of the similar goods cleared in the past is immaterial (PTCL 1998 CL 243). Transactional value cannot be rejected on the mere ground that customs are in possession of evidential invoices of higher value "it is now a well settled law, that the transaction value cannot be rejected on the mere ground, that the customs have found that identical or similar consignments have been imported at a higher value. The law relating to the assessment of the customs value on the, basis of price paid or payable means only, that the transaction value should be accepted. Even if four different identical consignments arrived by the same ship and the value of one of these our consignment is lower than the three others, the lowest value must be accepted, if the same is shown to be bona fide.
Reference in this connection may be made to the all important. Advisory opinion rendered by World Trade Organization, which was asked to give an opinion, whether a price lower than the prevailing market prices of identical goods can be accepted for the purpose of Article 1 on implementation of Article VII of G.A.T.T. (section 25(1) of this Act). The issue was examined in detail by the World Trade Organization, which rendered the following advisory opinion. "The committee considered this question and concluded that the mere fact that a price for identical goods should not cause, to be rejected for the purpose of Art.1, subject of course to the provisions of Article 17 of the agreement.... See Advisory opinion 2.1 W.T.O. Agreement and texts of the technical Committee on Customs Valuation. The above-mentioned WTO advice is incorporated 'by legislature vide section 25(5)(d) in Customs Act,. 1969, "that if there are two or more transaction values, of identical goods, (that meet all the requirements of this subsection and clauses (b), (d), (e) and (f) of subsection (13) of section 25) then the customs value of the imported goods, shall be the lowest of such transaction value adjusted as necessary in accordance with clauses 25(5)(b) and (c).
Valuation of goods is a qusi-judicial function as held by appellate Tribunal, High Court and Supreme Court from time to time in below mentioned cases and all judicial aspect are to be examined before accepting or rejecting the transactional values. Collector of Central Excise v.
Imdad Ali 1969 SCM R 708. Indus Automobiles v.C.B.R. PLD 1988 Kar.
99. Zulifqar Brothers v. Member Judicial 1990 ALD 12 Kamran Industries v. Collector of Customs PLD 1996 Kar.
68. Punjab Beverages Ltd. v. Appellate Triubnal 2002 PTD 2957. Aftab Ahmed v. Collector (Adjudication) 2004 PTD (Trib.) 2898 Karachi Bulk Storage .v. Controller of Valuation 2004 PTD 2592.
Evidential G/Ds List (20 G/D from Apraisement KCH and 10 G/D and MCC Collectorate all released by the PaCCS/Appraisement Collectore are attached on record file.
10. In this present case respondent on its own, has gone to SGS for scrutiny, verification of declared values and presented documents and so far no evidence or information that relationship with the supplier influenced the declared price has been put forward on record by the department through their exercise,
11. On the contrary the observations made by the learned Collector (Appeals) with regard the SGS report based on Presumptions and assumptions and reflected personal intentions not based on the legal obligations by saying that "I have seen many instances where SGS had submitted false reports." Be doing so the learned Collector (Appeals) failed to refer any false report as evidence to collaborate with his observations to discard the sanctity of the documents.
12. Scrutiny of the record and arguments advance by the representative of both the parties transpires that the provisional assessment was finalized on 31-1-2007 @ 2.811/Kg that the decision was conveyed to the appellant on the same day electronically through PaCCS web site. This very point was controverted before the Federal Tax Ombudsman but not succeeded, the content of subsection (5) of section 81 clearly imposed the embargo, on the appropriate officer. That after the completion of final determination, under subsection (3) or (4) of section 81 appropriate officer shall issue a order for adjustment, refund or recovery of amount determined, as the case may be, in this particular case the appropriate officer/respondent neither passed any order within the prescribed period nor communicated the same in accordance with law but on the contrary for the purpose to cloud the original facts, respondents have taken plea of section 155(E) and (Q) of the Customs Act, 1969 where according to version of the respondent there was no need to issue any paper base assessm ent order, but in presence of the statutory provision as mentioned in subsection (5) of section 81 of the compliance of section 155(E) and (Q) are procedural and not to overcome the mandatory, provisions of law as mention in section 81(4)(5) of the Customs Act, 1969. It is also evident from the record of the case that no such kind of circumstances of exceptional nature are being recorded nor statutory time has been extended for finalization of the assessment.
13. Be that it may, considering the arguments written as well a s oral and record of the case it has been observed that the salutatory period as prescribed under the law for the finalization of the assessm ent order was not extended, neither any exceptional circumstances were recorded nor the same was issued or communicated to the appellant, which is violative and does not satisfy the para-meters laid down in the provision C of section 81 of subsections (2) and (5) of the Customs Act, 1969. In the aforesaid referred circumstances I find that the orders passed during the hierarchy of customs are based on presumption and assumption and perverse from the iota of evidence available on record and are, therefore, set aside. Appeal is allowed.
' Order passed accordingly.