JAHNAZAIB WAHLAH, MEMBER JUDICIAL-III.---- I dispose off Customs Appeal No.K-75/2018 preferred against Order-in-Appeal No.782/2017 dated 11.12.2017 passed by the learned Collector of Customs (Appeals) by maintaining the assessment order dated 02.02.2017 passed by Deputy Collector of Customs, Group-III, MCC of Appraisement-East, Karachi.
2. Briefly facts of the lis are the appellant during the course of his business activities imported a consignments 3690 sets of PVC Floor Mats falling under PCT Heading 3926.9099 @ US $ 2.45 from China, upon receipt of shipping documents delivered those to his clearing agent M/s. Khurram Brothers, Karachi for transmitting Goods Declaration
(GD) with the MCC of Appraisement-East under the provision of section 79(1) of the Customs Act, 1969 (Act) and Rule 433 of Sub-Chapter III of Chapter XXI of Customs Rules, 2001 (Rules), which he did and as per pre-requisite for availing the regime of Custom Computerized System (CCS) deposited upfront duty and taxes of Rs.467,346.00/- vide cash No.C-KAPE-01 2819-23122017. Consequent to which GD was numbered as KAPE-HC- 99984-23012017, upon receipt of which on his workstation the Assessing Officer instead of passing the assessment order under the provision of Section 80 and Rule 438 of the Act/Rules opted to get the goods examined first as per the contemplation of Section 198 and Rule 435 of the ibid., to proceed with adduced his opinion and forwarded to the respondent No.1, who gave his assent and transmitted the GD to the Deputy Collector of Customs, PICT , who nominat ed the examiner/Appraiser for the said purpose, who carried out physical verification of the goods and found those in accordance with declaration, report prepared to the said effect was uploaded in the reservoir of GD or the perusal of assessing officer, who upon appearance of that on his passed assessment order dated 25.01.2017 while changing the PCT 8708.2941 as agains t declared and applied the value circulated with the Clearance Collectorate by the Deputy Director (HQ), Directorate General of Valuation (respondent No.3) in VDB No.14 dated 23.07.2016, while adducing remarks in assessment note reading as "As per VDB, PCT changed 8708.2941(C)15CD@35%". Being aggrieved, the appellant filed 1st review before the Principal Appraiser under Rule 441, who rejected that on 31.01.2017 while stating in the note "Upheld vide GD number KAPW -HC-81081-26102016 but PCT Heading 8708.2931", Since the said assessment and the addu ced note was nullity to law appellant filed 2nd review before respondent No.1, which he rejected on 02.02.2017 in very causal and perfunctory manner as evident from his observation reading as "Assessment of PA upheld". Consequent to which appellant consultant forwarded letter dated 22.01.2017 to the Collector of Customs Appraisement-East, no action whatsoever was taken upon that and appellant was left with no other option to obtain delivery of the consignment while paying the additional amount of duty and taxes levied on the strength of invalid classification ruling and VDB, subject to challenging the vires of the assessment order before respondent No.4, which he did through an appeal dated 04.04.2017, the respondent No. 4 rejected the same on the basis of imported alien grounds having no nexus with the ground of appeal of appellant. Para 5 which is relevant and which read as: "I have examined the case record and heard the arguments of the appellant and the respondents. The appellant has challenged the changing of classification as well as valuation of the goods in the impugned order . It has categorically been in the examination report that the goods are "assorted PVC universal car floor mats" as against the declared description of PVC Floor mats. The examination reports confirms that the goods are for vehicle and the appellant did not challenge it at any forum it has been proved by the responde nts that the floor mats used for vehicle have specifically been mentioned in PCT heading 8708.2931 and thus were correctly classified therein. As regard valuation aspect department has proved that even mentioned in the assessment remarks the evidential value of the identical goods. On the other hand appellant could not produced any documentary evidence like contract, L/Cs etc., to prove that the declared value was transactional value. In these circumstances I do not find any reason to interfere with the impugned order and the same is upheld. The appeal being without any cogent ground is rejected"
3. The appellant filed the instant appeal on the basis of grounds enumerated therein, the consultant/advocates on the date of hearing argued the case strictly in accordance with those. No cross objection under subsection (4) of Section 194A of the Act has been filed within the stipulated period of 30 days by either respondents No.1 or 2, instead comments were filed by responde nt No.1, which does not qualify in any manner memo. of cross objection, resultant, could not be termed as cross appeal within the meaning of subsection (3) of Section 194A of the Act.
Therefore, these are to be considered merely opinion, having no binding force, nevertheless, placed on record of the case.
3 (sic) Heard and case record perused and so the relied upon judgments, this appeal could be decided on a short point of limitation among others, which shall be deliberated subsequent to decision on the said point of law. Appeal before Respondent No.4 was filed on 07.04.2017, in terms of subsection (3) of Section 193A of the Customs Act, 1969, Order has to be passed within 120 days or within further extended period of 60 days in terms of its proviso by the Respondent No.3, himself, upon availability of exceptional circumstances ' and recording of those after issuance of notice to the subject as held by Hon'ble Supreme Court of Pakistan in reported judgment 2009 SCMR 1881 , Khalid Mahmood v. Collector of Customs i.e. by on or before 14.07.2017 which he failed to pass, additionally no extension whatsoever was given as evident from the Order , which is silent. As regards to the extension given by the. Board vide letter C.No.1(03)T O-II/2017 dated 14.11.2017, it is not valid by virtue of the fact that it has to be given prior to the lapse of currency of extended period of 60 days after lapse of initial period of 120 days i.e. on or before 14.07.2017. Extending period after lapse of 120 days is tantamount to flogging a dead horse to give a new lease of life, which is not possible, any medication has to be administrated prior to demise of issue not after that, when it has gone to the annuls of history . Hence, order passed by the respondent No.4, is barred by time by 149 days. Rendering it without power/jurisdiction, hence void, ab-initio and not enforceable under law as held in the reported judgments 2017 PTD 1756 , 2017 SCMR 1427 Collector of Customs Sales Tax Gujranwa la and others v.
Super Asia Mohammad Deen and Sons and others, 2008 PTD 60 Messrs Super Asia Muhammad Din Sons (Pvt.)
Ltd. v. Collector of Sales Tax, Gujranwala , 2008 PTD 578 Messrs Hanif Strawboard Factory v. Additional Collector (Adjudication) Customs, Sales Tax and Central Excise Gujranwala, 2009 PTD 762 Messrs Tanveer Weaving Mills v. Deputy Collector Sales Tax and 4 others 2009 PTD (Trib.) 1263, Messrs Syed Bhai Lighting Limited, Lahore v.
Collector of Sales Tax and Federal 2 others 2009 PTD 1978 ; Leo Enterprises v. President of Pakistan and others, 2010 PTD (Trib.) 1010 Innovative Impex v. Collector of Customs, Sales Tax and Federal Excise (Appeal), 2011 PTD (Trib.) 79 Fazal Ellahi v. Additional Collector of Customs, MCC of PaCCS, 2011 PTD (Trib.) 987 Unique Wire Industries v. Additional Collector of Custo ms, MCC of PaCCS, 2011 PTD (Trib.) 1146 Kaka Traders v. Additional Collector of Post Clearance Audit and 2012 PTD (Trib.) 1650 Pak Electron Ltd. v. Collector of Customs, Lahore and others.
4. Reverting back to the merit of the case the classification decision dated 02.03.2016 issued by respondent No.2 in the shape of Public Notice No.02/2016 dated 15.03.2016 through which he reclassified the goods namely Polyvinyl Floor Mats for the purpose of assessment for levy of duty and taxes under PCT heading 8708.2931 as against existing 3626.9090, under which the said product was assessed/cleared since, time immemorial cannot be termed as valid and legal, due to the fact that none of the stake holder were called for deliberation, instead was issued on predetermined formed opinion, evident from the fact that while doing so with mala fide intention ignored time immemorial cannot be termed as valid and legal, due to the fact that none of the stake holder were called for deliberation, instead was issued on predetermined formed opinion ignoring intentionally direction contained in clause (v) of para 2 of CGO 12/2002, which read as under: "On receipt of the above request, the centre will seek opinion from the relevant group of Appraisement Collectorate, Custom House, Karachi as soon as possible but not later than 15 days (fifteen days) of the receipt of the request.
Thereafter the case will be presented in the meeting of classification committee where the importer or his representative shall also be invited for discussion. The Committee may also direct the importer to supply any other information or documents as it may deem necessary before making it decision. (Emphasis supplied)
The Public Notice on the face of it speaks volume about the working of Classification Committee, which intentionally has not invited the importer even whose imported goods were to be reclassified nor took the pain to call other importer of the said product operating in Karachi. The classification was made for appeasing the officials of MCC of Appraisement-Lahore and validation of their formed opinion based on flimsy grounds, having no nexus with the terms of reference for classifying any goods and decision of the World Customs Organization and First Schedule to the Act. .Since, none of the importers of the said item were called. This fact alone renders the Public Notice as of no legal effect and as such not enforceable under law for the purpose of reclassification/assessment as held in reported judgment 2019 PTD 288 Messrs Nayatl (Pvt.) Ltd. v. Appellate Tribunal Customs, Islamabad and others that "where mandated requirement of inviting importer or his representative for discussion before Customs, Classification Committee had not been fulfilled and importer had not been invited for discussion or afforded opportunity for hearing before the Customs Classification Committee and such committee made ruling adverse to the importer's interest, then requirement of Custom General Order No.1 0 of 2001 had not been fulfilled.
Order of the Appellate Tribunal based on such opinion/Ruling of the Customs Classification Committee was therefore liable to be set aside".
5. The respondent No.2 while determini ng the classification of made under PCT 8708.23 completely failed to consider the section notes and Chapter notes of Explanatory Notes Version 2012 and Section Notes of Section XVII at page XVII -1 Chapter Notes and Explanatory Notes confirms that the goods under dispute are appropriately classifiable under PCT 3926.9099 of Chapter 39 as evident from explanation given in Explanatory Notes of Chapter 89.08 at page XVII-1, which read as: "this heading covers parts and accesso ries of motor vehicle of heading 8701 to 8705 provided the parts and accessories fulfill both the following conditions:
(i) They must be identifiable as being suitable for use solely and principally with the above mentioned vehicle and
(ii) They must not be excluded by the provision of the notes to Section XVII (see corresponding General Explanatory Notes). Which are given at page XVII-1 of Secti on XVII (underlining and addition is being done for laying emphasis.
The Note 2 relevant note of Section Notes at page XVII -1 read as "the expression "parts" and " accessories do not applied to the following articles, whether or not they are identifiable as the goods of this Section":
(a) ..............
(b) Parts of general use as defined in Note 2 to Section XV of based metal (Section XV of similar goods) of Plastic (Chapter 39)
That the respondent No.2 has intentionally ignored the Explanatory note given at page XVII-3 of Section XVII "(III)
Parts and Accessories", relevant part of which read as : ...............the other chapter of this Section each provides for the classification of parts and accessories of the vehicle, aircrafts and equipment concerned. It is to be noted that these headings applies only to those parts of accessories which comply with all the 3 conditions enumerated here-in-under:
(a) They must not be excluded by the term of reference of Note 2 of this Section and;
(b) They must be suitable for use solely and principally with the. Article of Chapters 86 to 88 and;
(c) They must not be more specifically included elsewhere in Nomenclature below Relevant Part of Para A at page XVII-3 read as Parts and Accessories excluded by Note 2 to Section XVII, this note exclude parts and accessories, whether or not they are identifiable as for the Articl e of this Section namely (Joints, Gaskets, Washers and alike items.............Parts of general use as defined in note to Section XV ........ and similar goods falling under Chapter 39, mats of Polyvinyl Chloride for used either in the vehicle, offices or homes, hotels, restaurants falls under PCT 3926.9090.
6. Despite apparent misreading of the Chapter note and commission of illegality as deliberated here-in-above, respondent No.2 was not empowered even to issue public notice in terms of Sub-para (vi) of para (ii) of CGO 12/2002 dated 15.06.2002, it is for the Collector of Customs to issue the same after obtaining validation from the Board as ordered in CGO 9/2004 dated 20.08.2004 prior to issuance of that reading as "It has been observed that Collectorates issue Public Notices and Standing Orders for facilitation, clarification, standardization of procedures etc. however , due to divergent practices and order issued by the Collectorates on same issue, uniformity as envisaged under the Revised Kyoto Convention is not being attained at all the customs stations. Therefore, it has been decided that Collectorates will not issue Public Notices and Standing Orders, in future. However , if a need arises, a draft Public Notice or Standing order will be sent to the Central Board of Revenue for further necessary action." Compliance of orders, instructions and B direction of the Board is mandatory under Section 223 ibid and no defiance is permitted to be made as held by the Hon'ble High Court of Sindh in reported judgments 2003 PTD 2821 Syed Muhammad Razi v. Collector of Customs, (Appraisement), Karachi and 2 others that "in the wake of clear instruction contained in Customs General order No. 12/2002, the importer may not be charged for misdeclaration under Section 32 of the Customs Act, 1969, the impugned action on the part of Customs Officials is not sustainable in law and liable to be struck down as illegal and without lawful authority" and in 2016 PTD 35 Muhammad Waheed v. Customs Appellate Tribunal , it was observed that "Direction contained in Customs General Order 12 of 2002 though not binding upon Field Officer of the Department in terms of section 223 of the Customs Act, 1969. Field Officer were required to follow such direction or guideline before making any contravention report/case against an importer ---- any act of field officer in violation of such direction would be of no legal consequences." Seeking approval in the matter of classification is no exception as the word "classification has been specifically incorporated in the CGO, it is due to the fact that Board has to incorporate fresh determined PCT Heading in para 3 of CGO 12/2002 dated 15.06.2002 for application/implication by the field formation on the forth coming consignments. In the absence of availability of any power either under the provision of the Act and para 2 of CGO 12/2002 and that also without approval of the Board, renders the same without lawful authority and as such void and ab-initio and so the assessment made of the appellant or any importer consignment on the strength of the said classification ruling are as well without lawful authority and as such ab initio, null and void.
7. It is right of the appellant to obtain provisional clearance of his consignment under the provision of Section 81 of the Act and the authority defined in Section 81 ibid, which is Assistant/Deputy Collector of Customs, are bound to acceded to the request without any exception, no interference could be made by any authority , including Collector of Customs, under law, he has to exercise the delegated powers independently and judiciously and for the benefit of exchequer as well as importer as held by Superior Judicial For4 in umpteenth reported judgments and in 2014 PTD 525 Waseem Radio Trader v. FOP and 2013 PTD 2064 Alpha Chemical (Pvt.) Ltd. v. FOP and 4 others. I am highly dismayed on the behavior of Collector of Customs, MCC of Appraisement- East, who despite receipt of representation dated 22.01.2017 sat on that and denied release of consignment provisionally despite guaranteed to him in the Act. Rendering the assessment so made under the provision of Section 80 and Rule 438 of the Act/Rules in excess of vested discretionary powers, which otherwise has to be used for the benefit of the tax payer which is tantamount to abuse of powers with mala fide intention. Rendering the assessment so made by the respondent No.1 and upholding of that by respondent No.3 as of no legal effect/jurisdiction being in derogation of the provision of Section 81 of the Act and the law laid down by the Superior Judicial Fora.
8. The respondent No.3, indeed has been appointed under the provision of Section 3D of the Act and has been delegated powers through Notification 494(1)/2007 dated 09.06.2007 for assisting the Director , Directorate General of Valuation in determining the prices of the goods and class of goods under the provision of Section 25A ibid. He is not in any manner empowered to issue valuation ruling under the provision of Section 25A nor is empowered to encroach the sovereign powers /jurisdiction of Director , Directorate General of Valuation. In nullity to his job description, the respondent No. 3 issued VDB No. 14 dated 23.07.2016 through which he determined the value of Car Floor Mats (plastic material) @ US $ 1.50/kg and directed the Clearance Collectorate to assess the imported plastic mats with the application of said value, despite having no power/ma ndate directed the Clearance Collectorate and the official posted therei n termed the same as Valuation Ruling while ignoring the fact that value data base stood withdrawn by the Board vide letter dated 22.07.2000 stating inter alia that with the introduction of transaction value under the WTO Valuation Agreement, the concept of value data base became infructuous and cannot be relied upon for any purpose, inclusive of assessment. Under no provision of the Act inclusive of Section 25 or 25A, respondent No.3 is empowered to issue either guideline or value data base through letter , which stood withdrawn and even find no place in any of the provision corresponding to the determination of value of the goods and class of goods and this has been held by this Tribunal in reported judgments 2014 PTD (Trib.) 510 Messrs S.S. Trading v. Additional Collector of Customs Ad judication-PaCCS, Karachi that "The Act of issuance of Guidance fixing the price is in the absen ce of legal sanction, amounts to transgression of authority and forced construction of law as held by Superior Judicial Fora in umpteenth reported judgments and these depreciate such unilateral and arbitrary determination of import value which render the valuation of the subject goods fixed as a nullity in the eyes of law. Hence, this Tribunal hold the Guideline dated 13.05.201 1 as ab-initio void and of no legal effect and no assessment can be completed of the imported goods under Section 80 of the Customs Act, 1969 and Rule 438 of Sub-chapter III of Chapter XXI of Customs Rules, 2001" and 2018 PTD (Trib.) 2418 Deen Sons v. The Director , Directorate General of Valuation and another that "He is in no way empowered to issue a valuation ruling under the provision of Section 25A of the Act, which stood validated from various orders of the Honorable High Court of Sindh, in which it has been held that Section 25-A does not grant or delegates powers to a Deputy Director
(HQ) Valuation to issue a Valuation Data Base or any kind of letter that suggests determination of value of goods.
That by issuing VDB letter No. 179 dated 03.02.2017, the Deputy Director (HQ) Valuation acted in derogation of the provision of Sections 25, 25A and Order of the Board dated 22.07.2002 through which value data base maintained by the Collectorate/DGV was withdrawn with the introduction of transaction value under the WTO Valuation Agreement, rendering the letter as of no legal effect and as such void and ab initio." Rendering the assessment order passed by the respondent No.1 with the application of VDB No. 14 dated 23.07.2016 as well without lawful authority and jurisdiction and as such ab-initio, null and void. In the absence of availability of Valuation Ruling of the goods imported in the instant case assessment could had been made with the application of identical/similar value within the meaning of Sections 25(5), (6), Rules 117 and 118 available in the data reservoir maintained by PRAL under Rule 110 of the period given in Rule 107(a) of the Act/Rules, which as per the copies of the GDs placed on record by the appellant, veracity of which has not been disputed upon by the representative of the respondent is in between US $ 0.3609 to 0.6487/kg, his consignment therefore ought to be assessed on the basis of average price of 0.55/kg, which comes to Rs.244,433.00/- as against deposited by the appellant upfront amounting to Rs.467,346.00/- on declared value of US $ 2.45/unit , there exist no rationale or cause or reason in not accepting the declared value, which resulted in excess payment as against assessment on the basis of identical similar value.
Levying of duty and taxes in excess of declared value with the application of value of VDB is without lawful authority/jurisdiction and has to be refunded to the appellant, keeping the same by the Clearance Collectorate is immoral and tantamount to extortion, neither leviable nor payable under law, ergo paid under compulsion/duress only for saving him from accumulation of container detention/rental and terminal demurrage/storage charges.
9. What has been discussed hereinabove, particularly the interpretation of law, legal propositions and observations made thereon and to follow the ratio decidendi observed by the superior Courts, I annul Public Notice No.02/2016 dated 15.03.2016 and VDB No.14 dated 23.07.2016 issued by respondents Nos.2 and 3 and set aside the orders passed by respondents in totality being illegal, void and ab-initio, appeal is allowed accordingly with no order as to cost
10. Judgment passed and announced accordingly .