' IQBAL HAMEEDUR RAHMAN, J.---Through the instant appeal, by the leave of the Court, the appellants have assailed the order dated 1-12-2006 passed by the Lahore High Court, Lahore, in W.
P. No,3726 of 2006, whereby the said writ petition filed by the respondent has been allowed.
2. The concise facts are that the respondent imported a consignment of Iron Flex-able Pipes of different size weighing 4030 kg. (net) and declared its value as US $ 0.25 per kg., total value being US $ 1047.80. The declared price was found to be on the lower side. The goods of respondents were released under provisional assessme nt made on 29-12-2004 after obtaining post-dated cheques and indemnity bond for the difference in liability on account of higher value of the imported goods claimed by the appellants. In view of the provisions of section 81(4) of the Customs Act, 1969 (hereinafter to be referred as "the Act"), the appellants had asserted the provisional assessment is deemed to have become final after lapse of one year in absence of any finding being recorded, as such the appellants raised the question that respondent's liability stands finalized as determined by the provisional assessm ent. On the other hand, the respondent's contention was that the declared value and the price given by the respondent is deemed to have been accepted and finalized upon the failure of the appellants to establish on record through a speaking order the higher price claimed by the appellants at the time of provisional assessment. The High Court while relying upon the case of Quetta Textile Mills Ltd. v. Federation of Pakistan and 2 others (1999 CLC 755), Messrs Farooq Woollen Mills v. Collector of Customs, Customs Dryport, Sambrial and 2 others (2004 PTD 795), Collector of Customs, Appraisement, Karachi v. Messrs H. M. Abdullah and another (2004 PTD 2993), Collector of Customs (Appraisement), Karachi v. Messrs Auto Mobile Corporation of Pakistan, Karachi (2005 PTD 2116), Messrs Trade International through Proprietor Habib-ur- Rehrnan v. Deputy Collector of Customs (Bank Guarantee Section) and 3 others (2005 PTD 1968), Messrs Dewan Farooque Motors Ltd., Karachi v. Customs, Excise and Sales Tax Appellate Tribunal, Karachi and 2 others (2006 PTD 1276), Sus Motors (Pvt.) Ltd., Karachi v. Federation of Pakistan through Secretary Revenue Division/Chairman, Islamabad and 2 others (2011 PTD 235) and Messrs Crescent Art Fabrics (Pvt.) Ltd. Through Managing Director v. Assistant Collector Customs and 4 others (2011 PTD 2851) had allowed the writ petition by holding as under:-- "(3) The approach adopted by the learned counsel for the respondents is based on a logical analysis of the bare provisions of section 81 of the Act. The weakness in his argument lies in the assumption that the said statutory provisions relieve the respondent authorities from their obligation to demonstrate the basis of their claimed higher assessment. In this regard it is pointed out that section 25(4) of the Act casts a duty on the taxing officer to demand proof or documents from an importer in respect of which corroboration or clarification is required. This duty is reinforced by the provisions of Rule 109 of the Customs Rules, 2001. No such demand was raised by the respondents to the petitioner. Nor any material was confronted to the petitioner to substantiate the higher value claimed. Clearly the importer cannot be penalized for default committed by the respondent authorities."
' Feeling aggrieved, the appellants approached this Court by filing C. P. No,442-L12007, wherein leave was granted vide order dated 7-3-2007.
3. Sh. Izhar-ul-Haq, learned counsel for the appellants, contends that goods were imported and according to the bill of entry the value of the goods were shown as US $ 1047.80; that Customs department found that the value was not correctly made and was on the lower side as such a provisional assessm ent was made by the Customs department amounting to 14400 UK Pounds.
The respondent accordingly made the payment of tax and duties at the rate of US $ 3828.50 and also furnished post-dated cheque and indemnity bond for Rs,789,268 as the differential amount which was provisionally assessed by the Customs department. It was further argued that the respondent could not deposit the required documents within one year in support of the price shown in the bill of entry and did not deposit any proof of payment of price of the imported goods, hence the Customs department could not finalize the matter within the stipulated period of one year. It was further contended that the respondent after the expiry of one year on 29-12-2005 again furnished a fresh indemnity bond and also deposited a post-date cheque in reply to the demand of the department. It is further contended that the provisional assessment will be considered as the final assessm ent. It was also argued that if the respondent was of the view that the provisional assessm ent was not be considered as final assessment, they could have refused to deposit the fresh indemnity bond and fresh postdated cheque of the differential amount, in such circumstances the respondent was clear that the provisional assessment amount of 14400 UK Pounds and not at the rate of US $ 3828.50. .
4. On the other hand, Mr. Abdul Ghaffar Mian, learned counsel for the respondent, submitted that the provisional assessm ent was made at the rate of US $ 3828.50 and this was the provisional assessm ent and when the final assessment was not made by the authorities this assessment will be considered as final assessm ent and the duties at that rate has to be finalized. It is further contended that as the authorities were entitled to extend the time after the lapse of one year due to this reason the fresh indemnity bond and the post-dated cheque was issued. It is further contended that it is mandatory under section 25(4) of the Act that the department should give in writing notice to the respondent for providing the documents if the documents already submitted by the respondent were not sufficient for finalizing the assessment and no notice has been given to the respondent nor any order under Rule 109 of the Customs. Rules, 2001, was passed by the department. It was further submitted that under section 81 of the Act the amount for which the indemnity bond or post-dated cheque was issued will be considered as additional amount and that is security which has been deposited by the respondent with the appellants; that in case the matter is not finalized. It was also submitted that if the contention of the learned counsel for the appellants is accepted, then the department will never finalize and will raise its demand later on.
Learned counsel in support of his submissions placed reliance on the reported cases referred to above.
5. We have heard the learned counsel for the parties and have gone through the impugned order, the material available on the record and examined the provisions of sections 81(4), 25(4) of the Act and Rule 109 of the Customs Rules, 2001.
6. Before proceeding with the matter it would be apt to reproduced hereinbelow the above- mentioned provisions of law/rules for ready reference : "81 Provisional determination of liability.........................
(4) If the final determination is not made within the period specified in subsection (2), the provisional determination shall, in the absence of any new evidence, be deemed to be the final determination."
' "25 Value of imported and exported goods..........................
(4) Where, in relation to the goods being valued, the appropriate officer is of the opinion that the importer has not, for the purposes of clause (a) of subsection (3), demonstrated that the relationship did not influence the price or, for the purposes of clause (b) of subsection (3), that the declared price at which the goods are imported does not closely approximate to one of the test values mentioned therein, the appropriate officer shall inform the importer of his reservations in writing and give the importer an opportunity to justify the price difference. If the importer fails to justify the price difference, the customs value cannot be determined under the provisions of subsection (1)."
"109. Burden of proof.---(1) Where the appropriate officer has reason to doubt the truth or accuracy of the particulars or of documents produced in support of the declaration, such officer may ask the importer to provide further explanation, including documents or other evidence.
(2) If, after receiving information referred to in sub-rule (1) or in the absence of a response, the appropriate officer still has reasonable doubts about the truth or accuracy of the declared value, it may be deemed that the customs value of the imported goods cannot be determined under the provisions of subsection (1) of section 25 of the Act.
(3) When a final decision is made, the appropriate officer shall communicate to the importer in writing his decision and the grounds therefor."
Admittedly, in this case no final assessment has been made by the Customs department and the matter is lingering on for quite some time without there being any adjudication or final assessment even after a lapse of one year and neither the appellants have been able to place on record any notice or demand being made by them to the respondent in seeking corroboration or clarification with regard to the same nor they A have been confronted with any material to substantiate the higher value claimed by the Customs department as propounded under subsection (4) of section 25 of the Act. It is.Being further observed that the Customs department has also failed to pass an appropriate order to reinforce the same as required under the provisions of rule-109 of the Customs Rules, 2001.
7. Subsection (4) of section 81 of the Act provides that if the final assessment is not completed within the period specified therein, then the provisional assessment shall become final. The same has been provided as a safeguard to the benefit of the assessee/importer/exporter to save them from unnecessary harassm ent by Customs authorities by unnecessarily delaying their cases for an indefinite period on the pretext of making a final assessment. But in the instant case, the Customs authorities after making a provisional assessment did not proceed in the matter for the determination of final assessm ent which is apparent from the fact that neither a notice of demand to prove any document from the respondent has been sought nor any corroboration or clarification had been sought, which were to be made under section 25(4) of the Act nor any order under rule-109 of the Customs Rules, 2001 has been passed to determine the custom value of the imported goods, in the absence whereof the appellant could not be afforded a clean chit to use section 81(4) as a tool to delay the making of final assessment upon proper assessment of the value by affording the assessee proper opportunity of contesting the same, thus, depriving him' of fair trial, therefore, in the above facts and circumstances of the case to consider the provisional assessm ent as a final assessm ent cannot be justified.
8. In the above perspective, keeping in view the lapses and defaults on the part of the appellants, the High Court has rightly come to the conclusion that the importer cannot be penalized for the default caused by the departmental authorities. Therefore, we are not inclined to interfere in the well reasoned impugned order of the High Court. Resultantly, this appeal is dismissed being devoid of merits. No order as to costs.