' SYED GUL MUNIR SHAH MEMBER (JUDICIAL-I).---This appeal has been filed agaii.St Order-in- Original No, 35 of 1997 dated 8-8-2007 passed by Collector of Customs (Export), Karachi whereby penalty of Rs,1,00,000 (Rupees one lac only) has been imposed against the appellant; hence this appeal before this Tribunal.
2. Brief facts of the case are that Messrs Arif Industries (the present appellant) filed the bill of export for the export of manmade dyed ladies dupattas contained in 84 bales. The bill of export along with other attached documents i,e, invoice and packing list was duly processed by the Examining Officer.
' On physical examination of the goods, the weight was found 16% and 24% less as against the declaration given by the appellant and the declared value was also found over-invoiced. The case was accordingly put up in the Price Check Committee meeting, on 28-6-1992 for value cheek. After scrutiny of the case by the price Check Committee, value was ascertained as US$ 0.80/piece. In view of the ascertained weight and value it was established beyond doubt that Messrs Arif Industries, Karachi deliberately misdeclared the weight and value of the goods with the objective to entitle themselves of a higher rate of rebate. Had this mis-declaration not been detected, the Government would have suffered a loss of revenue to the extent of Rs,1,79,645.
' Messrs Arif Industries, Karachi were thus alleged to have contravened the provisions of section 32(1) of the Customs Act, 1969 punishable under clause (14) of subsection (1) of section 156 ibid.
3. A show cause notice dated 27-7-1992 was issued to the appellant to which the appellant failed to reply.
4. I have heard the arguments of learned Consultant for the appellant and the Appraising Officer for the respondent.
5. Mr. Nadeem Ahmed Mirza Consultant for the appellant argues that no proper section has been applied in the show cause notice as mentioned as such notice itself is illegal. He has relied upon PLD 1996 Karachi page 68, PTCL 2000 CL page 35. He further argues that value has not been assessed as per section 25 of the Customs Act, 1969 .But on the basis of report of Price Checking Committee which is illegal. He has relied upon PLD 1996. Karachi page 451, 2005 PTD 21, 2004 PTD 2993, 2006 PTD 671, and order passed by this Tribunal in Custom Appeal No, 353 of 2003. Mr. Nadeem Ahmed Mirza, Consultant, further argues that declaration made by the appellant was @ 1.20 US$ while assessm ent made by the customs was 1.75 US$ and thus value assessed by the appellant was less than that of the department. He prayed that appeal be allowed and show cause notice and order-in-original are bad in law and liable to be set-aside. He further prayed that bill of export may be released and further order be passed for payment of duty drawback in full to the extent of value declared in invoice.
6. Syed Zameer Akram, Departmental Representative argues that Price Check Committee was formed which checked and give its report regarding valuation made by the appellant of the consigned goods as higher than the actual value. He however conceded that the report of the Committee is silent as to what method was applied while determining the value of the consignment. He further argues that appellant had made miss-declaration of the value of exported goods and thus was rightly imposed fine by the Adjudicating Officer.
7. I have given my patience hearing to the arguments advanced by both the parties and have gone through the relevant provision of law as well as law relied upon. In the case in hand simple point involved is whether appellant declared high value of the exported goods in invoice and customs authorities had rightly ascertained the value and imposed fine amount upon the appellant. Consultant for the appellant in his arguments urges that show cause notice issued does not disclose as to under what provision of law/section the appellant was liable to be dealt with. He further argues that assessm ent was not made in accordance with section 25(4)(5) of the Customs Act, 1969. For ascertaining the valuation of imported and exported goods, the relevant provision in Customs Act, 1969 is section 25. The customs value for any exported goods shall be at ' the prescribed time and sale in open market for exportation to the country to which the goods are consigned. In 2005 PTD 21 it is clearly held that when system is laid down for purpose of valuation, it is to be adhered to and appreciation of any evidence in this respect has to be in conformity with what is prescribed because otherwise depending on something outside the laid methodology would amount to an aberration and upon hearsay and can damage the requirement given by the law. In the case in hand it is an admitted position that valuation has been assessed on the basis of report of Price Checking Committee and without following the directions contained in section 25 of the Customs Act, 1969. In 2006 PTD page 674 it is clearly held that customs authorities cannot have a fixed predetermined value of the imported consignment in the form of Valuation Advice issued by an officer of the Customs Department. It matters not whether the valuation advice is made after inquiry or with the consent of the persons affected by the valuation as valuation advice goes contrary to the provision of S. 25(1) of the Customs Act, 1969. It is further held that final assessment is to be made in accordance with section 25 of the Act and Rules after providing due opportunity to the importer to place material with regard to the value declared by it. In the case in hand as argued and is obvious from the Order-in-Original that appellant was not heard at the time of assessing the value by the Valuation Committee. So far Valuation Committee formed in this' case for determination of valuation is concerned, it has no legal value as there is no such provision in the Customs Act for formation of such kind of committee . The same point was raised before Member (Judicial) of Bench-II, Karachi wherein it was held that section 25(15) of the Customs Act, 1969 clearly specified that the customs value of any exported goods shall be the value at the prescribed time on sale in open market of the country of exportation for the country to which the goods are consigned. The said section nowhere states valuation of exported goods through formation of any Valuation Committee and formation of any Valuation Committed constitute in absence of legal sanction amounts to transgression of authority and construction of law.
8. In the case in hand admittedly the appellant had not appeared at the time of alleged assessm ent of value by the Price Check Committee and his objections raised were not attended to in his presence. More so the very notice dated 27-9-1992 nowhere discloses the provision of law violated by the appellant as such is illegal as is held in 2001 SCM R 838, if specific particulars are not stated in the notice, the notice would be vague and would not be in conformity with the requirement of subsections (2) (3) of section 32 of the Act. It is also admitted by the Departmental Representative that in the report of Committee nothing is disclosed as to what methodology was applied for arriving at the conclusion that valuation was declared higher then the actual. The report is silent to that effect on what basis the Price Committee had assessed value of the consignment for exportation nothing is provided therein. There is nothing on record to indicate that appellant had claimed for larger amount of duty draw back than due or admissible.
9. In the above circumstances and for the reasons particularly that appellant was not joined in the process of assessm ent of value by the alleged Price Check Committee and further was not heard by the Adjudicating Officer as such I am of the view that impugned order suffers from legal infirmity and imposition of fine against the appellant was not supported by any evidence or Valuation declared of the consignment was for larger amount of duty draw-back. No proper procedure was adopted for assessing the valuation as required under section 25 of the Customs Act, 1969 as such the impugned order on the face of it is based on no evidence and on illegal and wrong approach of law as such by allowing this appeal I set aside the show cause notice and the order-in-original being based on erroneous construction of law and thus have no legal effect. The detained consignment should be released and also payment of duty draw-back as per invoice.
10. Announced in open court this 30th July, 2010.