JEHANZAIB WAHLAH, MEMBER JUDICIAL-III.----Through this order I intend to dispose off Appeal No. K- 1216/2016 directed against Order-in-Appeal No.542/2016 dated 10.05.2016 passed by Collector of Customs (Appeals), Karachi (respondent No.2), maintaining assessment order dated 18.02.2016 passed by Deputy Collector of Customs, Group-VII, MCC of appraisement-East (respondent No.1).
2. Briefly facts of the case are that the appellant imported a consignment of 7118.40 kgs of Snow Spray for Birthday party filled in 142368 tin containers, onward in bags and then stuffed in 2066 cartons, having cumulative weight of 10677.60 kgs @ US$. 0.50/kg C&F from China against invoice No. XFGY20151207-2 dated 15.01.2016 and B/L No.NKHI16210430 dated 15.01.2016. Upon receipt of these the appellan t delivered those to his clearing agent Messrs UK Traders, Karachi for transmitting Goods Declaration (GD) with the MCC of Appraisement-East under the provision of Section 79(1) of Customs Act, 1969 (Act) and Rule 433 of Sub-Chapter III of Chapter XXI of Customs Rules, 2001 (Rules), which he transmitted and as per pre-requisite for availing the regime of Customs Computerized System (CCS) after obtaining pay order from the appellant deposited upfront duty and taxes of Rs.
144,945.00 on 06.02.2017 in the NBP, consequent to which GD was numbered as KAPE-HC-107499 dated 06.02.2017. Upon appearance of the GD on the desktop the Appraiser concerned opted to get the goods examined first under the provision of Section 198 and Rule 435 of the Act/Rules and to proceed with after adducing his opinion for conduction of examination transmitted the GD to (respondent No.1, who gave his assent and routed the GD to the Deputy Collector PICT , who onward marked it to the examiner for conduction of physical examination of the goods. Who accordingly complied to the order and confirmed the declaration in all aspects (no observation in regards to excess weight was adduced, evident from the report available in the reservoir of GD reading as: "Container No. BMOU4364152 and GD No. : "KAPE-HC 107499 dated 06.02.2016", no documents invoice and. packing list found inside the container goods examined and detailed as under , description : Snow Spray in Tine/CTN. Packing 50gx48pcs each bagx2966 cartons net contents WT 7118.400 kgs approx. with essential packing/tin wt 16230 kgs approx origin: Not shown and brand French Garden. 100% WT checked by PICT at PICT Weigh Bridge and found cargo weight 17300 kgs vide PICT Slip No. 421181 dated 07.02.2016 (images attached, group may check all other aspects including importability as per IPO and IPR condition invoked at the time of assessment" Upon receipt of which the assessing officer on his work station passed the assessment order dated 11.02.2016 while construing the weight of TIN, bags and cartons as weight of imported goods to the extent of 16230 kgs and passed assessment order for levy of duty and taxes under Section 80 and Rule 438 of the Act/Rules. While applying the value of US$. 0.80/kg of identical similar goods available in data reservoir maintained by PRAL under Rule 110 of the period given in Rule 107 (a) of the Rules while Adducing remarks in the assessment notes "GD assessed as per E/R in the light of data KAPE-HC-95131-12.01.2016". Being aggrieved appellant filed 1st review with the Principal Appraiser under Rule 441 , which he rejected vide dated 13.02.2016 while observing that "REV. as per data KAPW-HC-02-02022016" Since, the rejection of review by Principal Appraiser was without lawful authority, appellant preferred 2nd review before the respondent No. 1, who callously in summarily manner rejected that on 18.02.2016 evident from his remarks "upheld". After obtaining delivery from the terminal saving him from container detention/rental and terminal demurrage/storage charges, appellant assailed the assessment order before respondent No. 2, who rejected that vide order dated 10.05.2016 on pre-determined notions/formed opinion having no nexus either with the fact of the case or grounds of memo of appeal and the annexed documents/order etc.. Para 3 of order is relevant and which read as: "I have examined the case record. The appellants declared the value of the imported goods as US$. 0.55 kg on net contents basis. The said declaration was not accepted by the respondents and the customs value of the goods was determined at par with customs value of identical goods @ US$. 0.80/kg on gross weight basis. It is the main contention of the appellants that the C&F prices are inclusive of the cost of containers, therefore assessment should be made on net contents basis and there is no need to add weight of the tins. The appellant contention is relevant in case of determination of customs value under section 25(1) of the Customs Act, 1969 read with 25(2) ibid, in this case the respondents have applied previously determined customs value of identical goods of US$. 0.80/kg including the weight of the tin. If for satisfaction of the appellant, the custom value is juxtaposed to net content, it will work out to US$ 1.80/kg approximately. The respondents have produced number of evidences in support of their contention. I therefore, find no reason to disturb the assessment, the appeal being without merit failed."
3. The appellants filed the 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 have been filed within the stipulated period of 30 days by the respondent No.1 against the appeals preferred by the appellants instead comments , which are not in any manner qualify memo of cross objection , to be termed as cross appeals filed under subsection (3) by the respondent No. 1 as expressed in aforesaid section. Therefore, these are to be considered merely as opinion, having no binding force, however, are placed on record of the case for perusal and consideration.
4. Rival parties heard and case record perused, in addition with the relied upon citations. Prior to dilating upon other factual and legal aspects, it is of vital importance to adduce opinion on the manner/attitude adopted by the respondent No. 2 in handling the instant case. Upon examination of the order-in-appeal, it has been observed that the order passed by the respondent No. 2 is unique in nature and cannot be considered a valid order through any stretch of imagination, this stood validated from the fact that although he has stated in it "The respondents have produced number of evidences in support of their contention", but failed to give reasoning that why he ignored those and what was rationale behind that and how under which authority he mutilated/crucified the provision of Section 25 and Chapter IX of the Act/Rules. He himself became an assessing officer despite being an Appellate Authority , who is deems to be independent /fair and has to remain within the parameter of law and facts and grounds of the memo of appeal and the annexed documents/orders.
To the contrary he ventured astray and passed a completely unilateral/arbitrary order, while ignoring well settled dictum of law that the justice should not even been done but it should seems to be done. The entire order is based on the applied value for the assessment of the imported goods as against plea/contention adopted by the appellant right before assessing officer till respondent No. 2, about the addition of weight of essential/non essential packing utilized for filling/ export in the weight of the imported goods namely "Snow Spray", in the absence of warrant of law. This seems was done by him intentionally and purposely, for justifying the act of extortion of respondent No. 1. Rendering, the order dated 10.05.2016 being passed without application of judicial mind and conform that it suffer from lack of courage to do justice without fear and favour. Rendering it biased, suffers from the vice of self-interest or tardy , indolent and incompetent and shows that respondent No. 2 has no urge , will , passion and ability to decide the case/dispute put before him for decision. Rendering it perfunctory, sketchy, slipshod, bald and devoid of any reason and did not conform to the mandated requirement of section 24-A of the General Clauses Act 1897 and this stood further validated from the operative part of order confirming it is based on the version of Officials of respondent No. 1. Orders which did not contains rebuttal on the ground advanced and decision/judgments relied upon by the appellant and not containing substantial reasons shows it has not been passed on objective consideration, always be treated as illegal, void arbitrary and a result of misuse of authority vested in public functionary. No room was available for such illegal, void and arbitrarily orders in any system of law. If any authority Court or Tribunal gave a finding of fact which was not based on material available on record was illegal arbitrarily without discussing and considering the material available on record it became perverse and a perverse finding of fact which is violative of the established principle of appreciation of evidence on record was not sustainable in law. The principle that every judicial or quasi-judicial finding should be based on reasons containing the justification for the finding in the order itself is an established principle of dispensation of justice. The order-in-review passed by respondent No. 2, is being in violation of basic principle of the goods governance and mandatory requirement of Section 24A of the General Clauses Act, is not only illegal and void but also not sustainable under law. The said position is also fortified by the judgments of Superior Courts reported as 2005 YLR 1019, 2007 PTD 2500, 2004 PTD 1973, 2005 YLR 1719, 2003 PTD 777, 2003 PTD (Trib) 2369, 2002 MLD 357, 1983 CLC 2882, 2005 PTD 2519, 2005 PTD 1189, PLD 1995 SC (Pak) 272, PLD 1970 SC 158, PLD 1970 SC 173, 1984 SCMR 1014 and 2012 PTD (Trib.)
619.
5. In order to settle the moot point involved in the instant case, the representative of the respondent No.1, was asked that as to whether it is correct that Snow Spray are imported in the condition narrated by the appellant?
Answer was in affirmative. He was further confronted with the query that in which condition these are sold in the local market? Answer was in tin container. Upon another query he stated that the seller only charge the price of the Snow filled therein? Not for the essential/non essential packing, in which that is filled. Finally, he was asked that as to whether any shop keeper/seller demanded any additional money being the cost of weight of packing material , used for filling snow or ever he paid himself any money for the said material at the time of purchasing Snow Spray? He replied in negative. I fail to comprehend the rationale adopted by the respondents and their subordinates, adding of weight of essential/non essential packing in the weight of the snow used for birthday party namely tin container, bags and cartons in the absence of availability of snow spray weighing to 9111.6 kgs and assessing those @ US $ 80/kg for creation of additional amount of duty and taxes of Rs.268,090.00. The duty and taxes on the tin container, bags and cartons could be levied, if declaration in regards to import of these have been made by the appellant separately under their respective PCT headings and on the value if determined by the Director, Directorate General of Valuation under the provision of Section 25A or with the application of identical /similar goods value available in the data reservoir maintained by PRAL under Rule 110 of the Rules. In the absence of no separate declaration for these had been made by the appellant, no duty and taxes are either to be deposited or can be charged. The respondents and his subordinate added the weight of aforesaid packing material in the weight of snow in derogation of the unit of measurement given in First Schedule to the Act, which speaks with clarity about the goods imported, which in the case of appellant is snow without any exception.
6. Notwithstanding to above, as regards to the line of arguments adopted by the representative of the respondents for justifying the addition of weight of essential/non essential packing in the weight of the imported goods that the weight of essential/non-essential packing is deemed to be part and parcel of the weight of the goods so imported and to be construed as UOM /quantity (contents) as mentioned against each PCT heading of First Schedule to the Act it is based on misconception and inapt interpretation of the UOM and in derogation to the First Schedule to the Act which speaks about the contents of the imported goods/items sans weight of essential/non-essential packing, which is disposed off, after unwrapping/using the contents of actual goods, as trash. Only the weight of imported goods matter and that is to be construed as goods, the weight of essential/non essential packing, cannot be considered through any figment of imagination as an integral part of the goods so imported. The duty and taxes has to be charged/collected on the goods actually imported for use/consumption by the general public. No provision of the Act, empowers the Officer of Customs to add the weight of essential/non essential packing, the vital element is its cost not weight and this is validated from the provision of Section 25 which speaks about determination of value of the "goods" and "category of the goods" and Section 25A speaks about "goods" and "class of goods" which means-the goods so imported and its quantity excluding the weight of essential/non essential packing, which is not for use instead "trash" which cannot be used as goods so imported through any stretch of imagination or definition available in reputed dictionaries of English language. Weight of essential/non- essential packing is immaterial. However, addition of cost of essential/non-essential packing material in the value of the imported goods is permitted in terms of Serial No. (iii) of clause (b) of subsection (2) of Section 25 of the Act. While determining the value of imported goods under the concept of "Transaction Value" within the meaning of Section 25(1) of the Act, only then when it is confirmed that the importer has incurred that but has not included those in the price actually paid or payable of the imported goods. This means that the onus to prove that the cost of packing whether for labour or essential/non essential packing material is not included by the exporter, rests on the shoulders of the Officer of Customs in terms of Articles 117 and 121 of Qanun-e-Shahadat (10 of 1984), unless it is not proved through tangible incriminating evidence, the cost whether for labour or essential/non essential packing material is not permitted to be added under law. The representative of the respondents also laid emphasis on Serial No. (ii) of Clause (b) of subsection (2) of Section 25 of the Act, which read as "the cost of container which are treated as being me for customs purpose with the goods in question". This is in consonance with the illustration made in Rule 5(a) of General Rules of Interpretation, i.e. for the purpose of classification and valuation items listed therein or akin to those are to be treated as integral part of the goods so imported. To the contrary, the goods imported by the appellant are not in any manner akin to those, resultant, stand excluded from Serial No. (ii) of Clause (b) of subsection (2) of Section 25 ibid. Notwithstanding, when against any imported item a ruling is in field issued by Director, Directorate General of Valuation under section 25A of the Act, for levy of customs duty, he determine those to the extent of unit as given in the respective applicable PCT of First Schedule on C&F basis, meaning thereby in the said custom value every single element/expense is taken into consideration by him i.e. "cost" not "weight" which is immaterial due to the fact that the essential/non essential packing or akin receptacle, in which goods or item products are packed or filled are to be thrown after use of the contents in the garbage bin as trash. In the instant case the item so imported namely blades is subject to assessment for levy of duty and taxes with the application of identical similar value as contemplated in Section 25(5)(6) and Rules 117 and 118 of the Act/Rules maintained by the PRAL under Rule 110 of the period given in Rule 107(a) of the Rules, on the net contents of the goods as weight of essential/non essential packing cannot be made part and parcel of assessable weight, if i.e. allowed to be added, being in derogation of the norms of business, WTO Agreement on Valuation and provision of Section of the Act, above all "extortion' . No commodity is sold without its essential packing and while a seller offering the goods for sale includes the incidental charges in its final cost. In juxtaposition an importer/buyer will also not lift the imported goods without its essential packing.
The value of essential/non essential packing is in fact inbuilt in the custom value determined under section 25A of the Act, after following the method laid down in Section 25 ibid. Therefore, valuation determined under section 25A could not be further saddled in the name of weight of essential/non essential packing. It is apparent that the value of identical/similar goods is on C&F basis of the net contents of the goods so imported, in which addition of weight of essential/non essential packing is not supported by warrant of law. If it allowed as opined by the respondents for generating revenue for the exchequer on that weight containing no goods. In terms of the respective PCT Heading of the First Schedule, duty and taxes can only be recovered on the net contents of the imported goods. Essential/non-essential packing cannot be construed as goods by any mean and as defined in Section 25 and First Schedule to the Act, without supplying the goods equivalent to the added weight, in addition to the imported goods declared in GD transmitted under the Provision of Section 79(1) and Rule 433 of the Act/Rules. In the instant case, the respondents desires to collect duty and taxes of Rs.
268,090.00 on 9111.6 kgs valuing to US$ 7289.28 on the weight of essential/nonessential packing in the absence of availability of snow equivalent to the said weight. This type of generation of revenue is in derogation of the provision of Section 25 of the Act, and Article 13 of Constitution of Islamic Republic of Pakistan and without any exception is "extortion" and to be construed as double taxation not permitted under the Act /Constitution of Pakistan and even of the world and the law laid down in reported judgment 1992 PTD 593, 2003 PTD {Trib.) 928, 2010 PTD 1515 and 2009 PTD (Trib.) 2025 (Emphasis Supplied).
7. For the foregoing deliberation/observation and in the light of prescribed law laid down by the Superior Judicial Fora and in adherence of the ratio decidendi, I, allow the appeal and set aside the order passed by the forum below within the hierarchy of customs hold that the appellants have been dragged needlessly in the litigation in the absence of any wrong doing or misdeclaration within the meaning of Section 32 of the Act and allow the appeal and the show-cause notice providing the basis thereof for impugned order are hereby vacated /set-aside with no order as to costs. The respondent No. 1 is ordered to issue delay and detention certificate as contemplated in Section 14A(2) of the Act in duplicate to the appellant No. 1 for submission with the Shipping Company and Terminal for refund of paid accumulated container detention/rental and terminal demurrage/storage charges for obtaining delivery after issuance of interim order by this Tribunal.
8.Order passed and announced accordingly.