JEHANZAIB WAHLAH, MEMBER JUDICIAL-III.----Through this order, I dispose off Customs Appeal No.K- 445/2018 directed against the Order-in-Appeal No.967/2018 dated 1-3-2018 passed by Collector of Customs, Appeals, Karachi, (Respondent No.3), maintaining assessment orders dated 19.04.2017 passed by the Deputy Collector of Customs, Group-IV, MCC of Appraisement-East, Karachi.
2. Briefly fact of the lis are, the appellant is an importer of General Merchandiser of fragrances, he during the course of his business activities imported a consignment 2100kgs of fragrances from U.K. Upon receipt of shipping documents delivered those to clearing agent Messrs Universal Associates, Karachi for transmitting Goods Declaration (GD) with the MCC of Appraisement-East, under the provision of Section 79(I) of the Customs Act, 1969 (Act) and Rule 433 of Sub-Chapter III of Chapter XXI of the 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.852,662.00 on 19.10.2016 vide cash No.C-KAPE-007121. Consequent to which GD was numbered as KAPE-HC-50459- 19.10.2016. Upon appearance of which the Assessing Officer instead of passing assessment order under section 80 and Rule 438 of the Act/Rules on the basis of the declaration and uploaded documents forming part of that as defined in Section 2(kka) opted to get the goods examined first and proceed with after adducing his opinion/reason transmitted the GD to respondent No.2, who gave his assent and referred that to the Deputy Collector Examination, who onward marked that to the concerned examining official as per selection criteria devised by him. The goods during the course of examination conducted in exercise of the powers vested upon him under Section 198, in accordance with the Examination Manual, 1996 in compliance of the direction of the Board given in para 5 of the CGO 12/2002 dated 15.06.2002, with the assistance of terminal operator as contemplated in Rule 435 of the Rules. Report so prepared was uploaded in the reservoir of the GD, the Assessing Officer upon appearance of that on his workstation assessed the goods on declared value vide order dated 22.10.2016 while adducing remarks in the assessment note reading as "assessed as per declaration on the basis of data Goods Declaration. Detail information [KAPE-HC-20242- 11.08.2016] in the light of ER" and "assessed as per DV declaration in the light of ER" and forwarded the GD to Principal Appraiser, who disputed the declared/assessed value and opted to enhance the same in the absence of availability of any evidential invoice, to which the appellant agitated, consequent to which he recommended to respondent No.2 for completion of assessment of the GD provisionally as contemplated in Section 81 of the Act, after securing of differential amount of duty and taxes between the declared and devised criteria value amounting to Rs.92,032.00, which appellant furnished in the shape of pay orders bearing Nos. 03766107 dated 24.10.2016 and 8261500 dated 25.10.2016 amounting to Rs.90,032.00 and Rs.2000.00 respectively and the respondent No.2 accordingly passed order for provisional release vide dated 24.10.2016 and the inbuilt authority of the CCS passed clearance order under the provision of Section 83 and Rule 442. The respondent No.2, thereafter transmitted GD to the Assistant Director, Directorate General of Valuation (Respondent No.1) for determination of value in terms of clause 3(b) of SRO 494(1)/2007 dated 09.06.2007, in exercise of the powers vested upon him through SRO 495(1)/2007 dated 09.06.2007, who transmitted hearing message vide dated 13.01.2017 for appearance on 19.01.2017, on which date appellant submitted the relevant documents/literature. No communication whatsoever was received by the appellant with the exception of view message dated 19-4-2017, through which he was asked to pay an amount of Rs.560,266.00 and security- department was directed to en-cash the submitted pay order as security, on the strength of the order dated 19- 4-2017, wherein he finalized the assessment of the appellant goods by passing assessment order under Sections 80 and 81(5) of the Act with the application of value of US$. 15.41 kgs and 14.19 kgs respectively, while adducing remarks in the assessment note reading as "value finalized in view of the Valuation remarks: the message conveyed electronically to the Clearance Collectorate with the advised to finalize the assessment of mixture of Odoriferous substance: fragrance BZR 01 and Fragrance GLA15480 UK origin at US $.15.41/kg and US $. 14.19kg respectively." Since, the value was not in consonance with the provision of Section 25 and Chapter IX of Rules, the appellant forwarded representation dated 28.04.2017 to the Director, Directorate General of Valuation and dated 15.05.2017 to the Collector, MCC of Appraisement-East. Subsequent to that the representative of the appellant approached many of time to these authorities, but of no avail and appellant decided to assail the order before respondent No.3 through an appeal dated 23.10.2017, which he dismissed vide order dated 01.03.2018, on the premise of limitation, without considering the application for condonation and ignoring the settled proposition of law that against a void and ab-initio order, no limitation runs. Para 3 of the order is relevant, which is reproduced for easement/perusal.
"From the record of the case, I observed the appeal is time barred by about one hundred fifty six (156) days; the impugned assessment was passed on 19.04.2017 and the appeal against the aforesaid order was required to be filed by 19.05.2017 (i.e. within 30 days) in terms of the time limit stipulated under section 193 of the Customs Act, 1969, whereas the same was filed on 23.10.2017. Thus, the appeal is time barred. No cogent reason have been given by the appellant to explain the delay in filing the appeal within the prescribed time period. Under the circumstances, I have no reason to condone the inordinate delay in filing the appeal. Therefore, the case is accordingly rejected as time barred"
3. The appellant 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 has been filed within the stipulated period of 30 days or not even to date by either of the respondents. However, representatives respondent No.1 vehemently defended the determination of value and of respondent No.2 assessment orders and appeal passed by respondents Nos.2 and 3 and prayed for maintenance of those, irrespective of apparent deficiencies /illegality.
4. Rival parties heard and case records perused and so the relied upon citations, on the strength of which following issues are framed for decision: i) Whether order passed by respondent No.3 is within time as per the enunciation of section 193A (3) of the Act? ii) Whether appeal filed before respondent No.3 by the appellant under section 193(1) against the assessment order passed by respondent No.2 under sections 80 and 81(5) of the Act was barred by time, in the presence of availability of representations forwarded by the appellant to the Director, Directorate General of Valuation and Collector of Customs, MCC of Appraisement-East, application for condonation of delay supported by affidavit? iii) Whether respondent No. 2 was empowered to opt for provisional assessment of the consignment under the provision of Section 81 of the Act in the absence of availability of invoice of higher value identical similar goods of the same origin of the period given in Section 107(a) of the Rules? iv) Whether Associations/Trade Bodies are empowered to give input in the determination of value of any goods including the goods, members of the said association imposed and as to whether respondent No.2 or his superiors are empowered to formulate a criterion value for the assessment of the imported goods in negation of the provisions of Sections 25 and 25A of the Act and Chapter IX of the Rules? v) Whether respondent No.1 determined the value of the appellant goods with the application of different subsections of Section 25 and Rules embodied in Chapter IX of the Act/Rules in sequential manner and as their essence and spirit and as per the law laid down by the Superior Judicial Fora in umpteenth judgments?
5. As regard to issue No. (i), it has been noted by me that respondent No.3 despite having predetermined decision in his mind of rejecting the appeal on limitation, failed to adhere the limitation available with him for passing order within the stipulated period of 120 days, expressed in section 193A(3) of the Act, which is fatal for the health of the instant case as failure to do so nullifies the order passed by him and by respondent No. 2, strict vigilance was warranted on his part, which he failed, the appeal was filed before him by the appellant 23.10.2017, in terms of Section 193A(3) of the Act an order against the filed appeal has to be passed by respondent No. 3 within 120 days without any exception i.e. on or before 20.02.2018 or within further extended period A of 60 days as contemplated in its proviso by the Respondent No 3, himself, upon availability of exceptional circumstances and recording of those after issuance of notice to the appellant as held by Hon'ble Supreme Court of Pakistan in reported judgment 2009 SCMR 1881, Khalid Mahmood v. Collector of Customs.
In the instant case, despite filing of appeal on 23.10.2017, the respondent No. 3 went into slumber and woke up on 01.03.2018, when the initial period of 120 days stands B lapsed without any extension either by him or Board as evident from the contents of order, which is silent. It is settled proposition of law that law helps the vigilant not the indolent. party who is not vigilant can only blame himself for the negligence committed by him and not the appellant/Board (2018 PTD 2270) Collector Central Excise and Sales Tax Mirpur v. Commissioner Inland Revenue and another). The order passed by him on 01.03.2018 is barred by time by 08 days. Therefore, is ID without power/jurisdiction, hence, void, ab-initio and not enforceable under law as held in the reported judgments 2017 PTD 1756 and 2017 SCMR 1427 Collector of Customs Sales Tax Gujranwala 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 Excise, Lahore and 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 Customs, 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. The issue No. (i) is answered in negative.
6. As regard to issue No. (ii), Upon perusal of the order passed by respondent No. 3 it has been observed that he rejected the appeal on the basis of formed opinion that respondent No. 2 on 19.04.2017, against which appeal had to be filed on or before 19.05.2017 as against on 23.10.2017, he completely lost sight of the fact that the respondent prior to passing assessment order as mandatory under law has not supplied the impugned valuation advice through which value of appellant goods was determined by the respondent No. 1 for his information and tendering objections as nothing is apparent about the veracity of either determination_of value or passing of assessment order from the adduced assessment notes. The appellant being aggrieved from the mode and manner of determination of value by respondent No.1 and passing of assessment order by respondent No. 2, forwarded self contained representations dated 28.04.2017 to the Director, Directorate General of Valuation and Collector of Customs, MCC of Appraisement-East, which remained unanswered till 25.09.2017, consequent to which he has no other option accept to challenge the vires of the determination of value by the respondent No.1 and assessment order passed by respondent No.2, before the respondent No. 3.
This confirm in unequivocal terms that the appellant was pursuing his case with the superiors of respondents Nos.1 and 2 for address of his grievances/redetermination of value in accordance with the mandate of law, time so consumed by the appellant deems to be excluded being continuation of the proceeding for determination of the period for filing appeal.
7. Even otherwise, no objection whatsoever has been raised by the office of the respondent No.3 on the filed appeal dated 23.10.2017, which contemplates that it was admitted for regular hearing as evident from the stamp on the front page containing no remarks, even of time barred. Therefore, it was mandated upon respondent No.3 to decide the appeal on merit. The said act of his would had been just and in consonance with the Article 10A (Fair Trial) of the Constitution of Islamic Republic of Pakistan. Even otherwise, it is principal of law that Appellate Authority have to examine the reason for delay sympathetically when admittedly representations of the appellant to the Director, Directorate General of Valuation and Collector of Customs Appraisement-East, were available with the memo. of appeal and so the application for condonation of delay supported by affidavit and the vital fact that respondent No.2 proceeded against the appellant ex-parte while passing assessment order/ adjudication proceeding, as held by ITAPTP in reported judgment 2010 PTD (Trib.) 1491, the case of the appellant is on the same footing as proceedings against him has been finalized by the respondents Nos.1 and 2 ex-parte and in isolation without adherence of due process of law, rendering it ab-initio, null and void. Similarly, in 2010 PTD (Trib.) 1359 it has been held that "Collector was bound to have condoned such delay for the sake of justice and fair play" and in 2012 PTD (Trib.) 637, it has been held that "the rules of procedure are enacted for fostering the ends of justice and preserving the rights rather than to stifle the dispensation of justice and, unless they are unsurmountable; ends of justice always out way the manner of practice and procedure". In the same judgment further held that "there is no doubt that the appeal filed before the First Appellate Forum was time barred by 127 days yet the higher Court has repeatedly held that the cases should be decided on merit instead on technical grounds and technicalities of law and fact should always be avoided and discouraged in order to do complete justice and to ensure that justice is not only done but also seen to have been done". The respondent No.2 in fact abused vested discretionary powers, which are to be invariably exercised for the benefit of tax payer and that also without evaluating the fact that the registered person/importer does not stand to gain , neither any thing nor a delay on his part give rise to or create a valuable right in favour of the Revenue- department and the judiciary is respected not on account of its power to legalized injustice under the garb of technicalities, but because, it is capable of removing injustice and the tax payer being citizen of Pakistan has a right under its Constitution to expect so. Whereas, the Hon'ble Lahore High Court held in reported judgment (2002 PTD 549) Laser Praxis Deplix Clinic Lahore v. Customs Central Excise and Sales Tax Appellate Tribunal held that delay in filing appeal of the litigant has to be condoned on the strength of the observation made in Controller of Land Acquisition v. Mst. Katiji and others [1987] 56 Tax 130 (S.C. India) by Mr. M.P. Thakkar, J.
Speaking for the Court favoured adjusted oriented approach by finding that (i) A litigant does not stands to benefit by lodging an appeal late. (ii) Refusing to condone delay can result in a meritorious matter being thrown out at the very threshold and cause of justice being defeated. As against this, when delay is condoned, the highest that can happened is that a cause would be decided on merits after hearing the parties. (iii) "Every day's delay must be explained" does not means that a pedantic approach should be made. Why not every hour's delay, every second's delay? The doctrine must be applied in a rational common sense and pragmatic manner.
(iv) When substantial justice and technical consideration are pitted against each other, the cause of substantial justice reserved to be preferred for the other side cannot claim to have vested right in injustice being done because of a non deliberate delay. (v) There is no presumption that delay is occasioned deliberately, or on account of culpable negligence, or on account of mala fides a litigant does not stand to benefit by resorting to delay. In fact he runs a serious risk. (vi) It must be grasped that judiciary is respected not on account of its powers to legalized un-justice on technical ground but because it is capable of removing un-justice and is expected to do so" The respondent No.2 through rejection of appeals of the appellants as time barred, not only gave harsh and unjust treatment. Instead, additionally gave differential treatment, which is tantamount to discrimination and barred under Articles 4 and 25 of the Constitution despite standing on the same pedestal as other importers, whose appeals were decided on merit, without touching the aspect of limitation, validating that he has no urge, will, passion and ability to decide the case/dispute put before him on merit. For arriving on the said just conclusion, I derived assistance from 1986 SCMR 962 Rehmat Bibi and others v. Punno Khan and others, 1996 SCMR 2296 Syed Haji Abdul Wahid and another v. Syed Sirajuddin and PLD 1976 37 Ali Muhammad v. Hussain Bux and another, wherein, the Hon'ble Judges of the Supreme Court of Pakistan "On the question of limitation, referred to a number of decision of Apex Court and held that if an order is without jurisdiction and void then it needs not to be formally set aside. In Yousuf Ali v. Muhammad Aslam Zia and others in reported judgment PLD 1958 SC (Pak.) 104 (1) it was said by this Court "Where the legislature clothes an order with finality, it always assume that the order which it declares to be final is within the power of the authority making it and no party can plead as final and order made in excess of powers of the authority making it, in the eyes of law, such order being void and non existent". In PLD 1965 SC 68 Ch. Altaf Hussain and others v. The Chief Settlement Commissioner (2) it was said that an order without jurisdiction is a nullity in law and it does not require to be set aside formally. Again in PLD 1967 SC 294 Syed Ali Abbass and others v. Vishan Singh and others (3) it was observed that where an authority has passed an order in excess of jurisdiction, the petitioner cannot be refused relief and penalized for not throwing himself again by way of revision or review on the mercy of the authority who were responsible for such excess this being the rule firmly established, the dismissal of writ petition by the learned single judge on finding that the appeal before the Additional Settlement Commissioner was barred by time and in dismissing it he had acted with jurisdiction was not warranted in law." The Hon'ble High Court of Sindh in adherence of the ratio decidendi held in reported judgment 2002 PTD 87 FOP v.
Metropolitan Steel Corporation held that "when a Court or a Tribunal assume jurisdiction not vested, its order is void and nullity to law and no limitation runs against a void order" Therefore, now it's a legal fiction that no limitation runs against a void and ab-initio order, akin to the assessment order passed in the appellant case by respondent No.2 without providing opportunity of hearing, which is in negation of the maxim audi alterunt partem. Hence, i.e. without lawful authority and as such not enforceable under law being abinitio, null and void and as such coranz non judice. The issue No. (ii) is answered in negative.
8. As regard to issue No.(iii). For opting for provisional assessment of the imported goods under the provision of Section 81(1) of the Act for release of the goods for determination of fair value within the meaning of section 25 of the Act with the application of its different subsection in sequential manner subsequent to release. It is a pre- requisite condition that the officer exercising the power should and must have evidential invoice of higher value of the identical/similar goods imported from the same country of origin and within the period enunciated in Rule 107(a) of the Rules, that should not be also based on stray evidence, rather on the said value many of the importers were importing the goods, and which is not acceptable to the importer for varied reasons, the authority defined in subsection 81(1), which in the instant case is respondent No.2 empowered to exercise the power vested upon him. In the absence of availability of any evidence, recourse to the provisional assessment could not be made merely on assumption/presumption or opinion that the value of the goods so imported does not seems to be fair. Such provisional assessment is otherwise, nullity in the eyes of law and as such of no legal effect as held by their lordship of High Court in the reported judgment 2006 PTD 909 Rehan Umar v. Collector of Customs, that "The officer of the Customs be allowed to make provisional determination by the ad hoc enhancement over the declared value. This intern has 03 implications.
First introduction of ad-hoc assessment which concept is alien to law of customs. Secondly, piece meal determination of duty and taxes and the assessment, for which there is no room in custom law. Thirdly, in the absence of evidence and in anticipation of inquiry, such course is anathema to justice and cannot be allowed by any judicial forum" and in the case of Collector of Customs v. Pak Arab Refinery reported as 2010 PTD 900, it has been held "Release of imported goods provisionally after obtaining post dated cheques from importer in respect of difference of duty and taxes between declared value and provisionally determined customs duty in absence of any cogent documentary evidence in support of enhancement of declared value ---Power given to customs officer under section 81(1) of the Customs Act, 1969 was not an arbitrary, whimsical or mechanical one, but same had to be exercised with due diligence and application of mind and his order of provisional assessment must be reasoned ---Provisional assessment made in such manner for being beyond competence of authority was set aside in circumstance". Therefore, I hold that respondent No.2 was not within his right to opt for the provisional assessment of the imported goods in the absence of availability of tangible evidence, nullifying the veracity of the declared value of the appellant imported fragrance and that also merely on the basis of devised criterion value having no warrant of law. The issue No. (iii) is answered in negative.
9. As regard to issue No.(iv) from the perusal of the file No.642/KAPE/Gr-II/2016 maintained by the respondent No.1 for the purpose of the assessment of the imported fragrance, I have observed that the entire exercise was under taken by the respondent No.2 and his superiors on the strength of the complaint forwarded by Pakistan Chemical Dyes Merchant Association (PCDMA), whose members desire fixation of abnormal value by the Customs, rendering general importers in a position to import those and monopoly of their members imported products remains intact in the local market and every buyer has to buy fragrances from them. No action was warranted under law upon receipt of complaint as either provision of Sections 25 and 25A of the Act expresses that in determination of value assistance of manufacturer of the goods in question or their respective Associations/ Trade Bodies or Chambers be sought. The determination of value under Sections 25 and 25A have no nexus whatsoever with the prices of local manufactured goods or on the suggested value by the Associations/ Trade Bodies or Chambers. None of these have mandate to approach either Director, Directorate General Valuation/Collector of Customs, for determination of value of any imported goods on higher value, for benefitting their members or for creating monopoly. If a manufacturer is of the view that the goods imported commercially by the importer is causing injury to his business, he can approach National Tariff Commission
(NTC) for imposition of Anti-Dumping Duty (ADD), likewise Associations/ Trade Bodies or Chambers or their effected members can thwart the import of the goods, if imported on under invoiced value, by making an offer to the Customs Authority for acquiring of the those on the price which he considered to be transaction/fair value as, on which duty and taxes should be levied/collected by the Customs, as expressed in Section 25C of the Act.
Article 18 of the Constitution of the Islamic Republic of Pakistan, 1973 guarantees freedom of trade, business or profession and sub-clause (b) restricts regulation of Trade, Commerce or Industry for safe guarding the interest of the citizen through healthy and free competition. By entertaining complaint or request of the association, the respondent No. 2/his superiors considered the same as an opportunity to act in negation of the Article VII on valuation of WTO, Sections 25, 25A and Chapter IX of the Act/Rules and formulated some criterion value for assessment of the imported fragrances. This act/ attitude negated level playing field for maintaining healthy and fair competition, instead became instrumental in creating monopoly by infringement of fundamental rights of commercial importer, which the appellant is. This is not permissible under any circumstances being in derogation of Article 18 of the Constitution and law laid down in the reported judgments AIR 1954 SC 747, AIR 1963 SC 1811, AIR 1970 SC 1453, AIR 1971 SC 1017, PLD 2005 SC 193. Hence, seeking assistance from manufacturer or the Associations/Trade Bodies or Chambers for determination of value of any imported goods or class of goods is nullity in law and as such not tenable as held in reported judgment 2005 PTD 21 Yousuf Enterprises v. Collector, 2006 PTD 674 Pakistan Dry Battery Manufacturer Association v. FOP and 9 others, 2019 PTD 301 Director General Valuation and another v. Al-Amin Cera, Karachi.
10. The respondent No.2/subordinates are empowered to determine the value of the imported goods under the provision of Section 25 of the Act, while applying the same in sequential manner, only in case, wherein it was felt that declared value least commensurate the actual transaction value and for that un-refutable tangible evidence of the evidence in the shape of invoice of the similar goods of the country of origin and of the period given in Rule 107(a) of the Rules is available with them and compliance to the Rule 109(3) of the Rules has been made. In the absence of availability of these, no occasion is available or empowers respondent No. 2/subordinates to dispute the declared value, which is deems to be transaction value within the meaning of Section 25(1) of the Act. Section 25A empowers Collector of Customs and Director, Directorate General of Valuation to determine value of any goods or class of goods and issue ruling for application, for levy of duty and taxes on his own motion or on a reference made to him by any person or an officer of Custom. Instead of adopting the devised procedure, the Collector of Customs, ordered respondent No.2 to devise a criteria for reaching at value on which fragrances imported by commercial importer be assessed, in compliance respondent No. 2 carried out the desired exercise in file No. 642/KAPE/Gr.II/2016, recommending assessment of the goods under discussion at US$. 10/kg and that was applied across the board by all the Clearance Collectorate by considering the same akin to the Valuation Ruling. Neither respondent No.2 nor his superior are empowered to either devise a criteria and then enforce the same for levying duty and taxes on the importing goods, being in derogation of Section 25A of the Act and direction of the Board issued 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. 2 is empowered to issue either guideline/criteria or value data base (VDB) verbally or through letter/circular as the same stands 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 Adjudication-PaCCS, Karachi that "The Act of issuance of Guidance fixing the price is in the absence 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 nullity in the eyes of law. Hence, this Tribunal hold the Guideline dated 13.05.2011 as ab-initio void and of no legal effect and no assessment can be made of the imported goods under Section 80 and Rule 438 of the Act/Rules" and in 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 stands 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 circulating criterian value, the respondent No.2 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/Direct, Directorate General of Valuation was withdrawn with the introduction of transaction value under the WTO Valuation Agreement, rendering the criterian value arrived at US$. 10 in file No. 642/KAPE/Gr.II/2016 as of no legal effect and as such void and ab-initio."
Rendering the provisional assessment order passed by the respondent No.2 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 Section 25(5), (6) and 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. The issue No. (iv) is answered in negative.
11. As regard to issue No.(v). The determination of value of any imported goods or class of goods has to be made by respondent No.1 with the application of Section 25 and Valuation Rules embodied in Chapter IX of the Act/Rules. In the instant case upon receipt of online message for hearing, the appellant representative furnished relevant documents with respondent No.1 for determination of fair value of his imported concentrates in terms of clause 3(b) of SRO 494(1)/2007 dated 09.06.2007 in exercise of the powers vested upon him through SRO 495(1)/2007 dated 09.06.2007. Forthwith, it was incumbent upon respondent No. 1 to determine the value of the appellant goods strictly under the provision of Section 25 of the Act, to be followed in sequential manner baring certain exceptional cases where massive group under invoices is rampant. However, resort to subsequent method is not permissible without exhausting the sequence indicated in section 25 as it would annihilate and terminate the spirit and essence of the transaction value which in the first instance has to be established as colorable and tainted. It is also to be noted that the insertion of words "may" or "may not" instead of " are required to" in subsection (13) of Section 25 of the Act, through Finance Ordinance, 2007 does not give a free hand to customs administrations to maneuver the provisions of Section 25 ibid. for making those in-effective and redundant. Discretion has to be exercised judicially based on reason, rationale and fair play. It is specifically provided by the legislature in subsection (10) of Section 25 that subsections (1)(5)(6)(7)(8)(9) define how the customs value of the imported goods is to be determined by the defined authority methods of custom valuation are normally required to be applied in a sequential order except reversal of the order of subsections (7) and (8) at the importer's, request, if so agreed by the Collector of Customs. This aspect has been examined countless times by the Superior Judicial Fora and held that the Provision of Section 25 of the Customs Act, 1969 has to be followed in sequential manner without any exception, reference is placed to reported/unreported judgments listed below:-
(i) 2006 PTD 909 Rehan Umer v. Collector of Customs Karachi,
(ii) 2008 PTD 1494 Messrs Toyo International Motorcycle v. Federation of Pakistan and 3 others
(iii) 2008 PTD 1250 Najam Impex Lhr v. Assistant Collector of Customs, Karachi and others,
(iv) 2013 PTD 825 Faco Trading Company v. Members Customs, Federal Board of Revenue and others
(v) 2018 PTD 1746 Sadia Jabar v. Directorate General of Valuation, Karachi and others
(vi) 2014 PTD 176 Goodwill Traders, Karachi v. FOP.
In the cited judgments the question under consideration was as to how the section 25 of the Act is to be applied by the Director General of Valuation/Collector of Customs for determining the value of the imported and exported goods for issuance of ruling under Section 25-A(1) of the Act.
12. The established principle of interpretation of the tax law is that the plain language of the law is to be applied.
A bare perusal of section 25 shows that it is specifically provided in subsection (1) of Section 25 that the customs value of the imported goods, subject to the Provisions of this Section and Rules shall be the transaction value i.e. the price actually paid or payable for the goods when sold for export to Pakistan. Th' detailed guidelines in this behalf are given in subsections (1), (2), (3), (4) and Rules 107 to 116 of Rules. The provisions contained in Section 25(1) to (4) and Rules 107 to 116 contain primary methods of valuation and in the first instance the primary method of valuation is required to be adopted in each case of the valuation of the imported consignment which is mandatory. Thus, it is very important requirement of law that before resorting to the method provided in subsection (5) the customs officials shall make an exercise in accordance with the provisions contained in subsections (1) to (4) of section 25 and if thereafter they find that the customs value of the imported goods cannot be determined under the provisions of subsection (1) they shall resort to the method provided in subsection (5) and not otherwise. It shall be an exercise duly reflecting on the record so that the appellate forums may examine whether the mandatory requirement of law has been carried out or not. I am fortified in my views in this behalf with the provisions contained in sub-rule (3) of Rule 109 which provides that "when a final decision is made, the appropriate officer shall communicate to the importer in writing his decision and the grounds therefor." In addition to the specific provisions contained in subsection (10) of section 25 to the effect that the methods of customs valuation are required to be applied in a sequential order, I find that it is provided in subsection (6) that, if the customs value of the imported goods cannot be determined under the provisions of subsection (5) the method provided in sub section (7) shall be resorted to and similar provisions are contained in subsections (7), (8) and (9). For the said reason, it is held that different method of valuation provided in section 25 of the Act/Rules are required to be applied in a sequential order and without visible exercise reflected on record no resort can be made to secondary method of valuation. In this case, the respondent No.1, conveyed online message dated 19.04.2017 to respondent No.2 with the advise to finalized the assessment of fragrance BZRO1 and BLA16015480 of UK origin @ US $ 15.41 and 14.19/kg respectively, the message in question is silent in regards to the adopted mechanism and under which subsection of section 25 of the Act, these values were determined, referring of which is mandatory, copy of the advise so prepared ought to be supplied to the importers (appellant), which was not intentionally supplied, due to the reason that no legal footing was apparent from the determined value, instead were in derogation of clause (iii) of Rule 110 of the Rules, prohibiting determination of value arbitrarily or fictitiously. The value is so determined by the respondent No.1 qualifies the determination arbitrarily/fictitiously. Further validated from the fact that no tangible un-refutable evidence has been either transmitted or annexed in support of determined value nor minutes of conducted exercise has been placed on the record of the Tribunal for substantiating that the said exercise was carried out as per the provision of the Act/Rules prior to issuance of impugned Valuation Advice, the veracity of the determined value of the appellant imported concentrate also stands negated from the fact, that despite of receipt of copy of the appeal along with notice from the Tribunal, respondent No. 1 failed to prefer cross objections on the memo. of appeal within 30 days as per the contemplation of Section 194A(4) of the Act, not even todate, non controverting the grounds of appeal and the affidavit in support of the appeal through counter affidavit is tantamount to validation of the averment made by the appellant by default and deposition made by and on behalf of the appellant in the memo of appeal and affidavit are therefore, deems to be true and correct and no controversy is left behind in regards to the fact of the case. Non submission of counter affidavit whether by will or default forfeit the respondent No.1 right to deny assertion made in the affidavit and this has been held by the Superior Judicial Fora in umpteenth reported judgments. I therefore, hold without any reservation that the value of the appellant goods determined by respondent No. 1 are without any exception arbitrary/unilateral, such determination is prohibited under Rule 110 of the Rules and the principle/dictum laid down in the matter of valuation by the Apex Court and which are holding field firmly. Hence, ab-initio, null and void and of no legal effect. The issue No. (v) is answered in negative.
13. 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, hereby set aside the, orders passed by respondents Nos.2 and 3 in totality being illegal, void and ab-initio, appeal is accordingly allowed with no order as to cost.
14. Judgment passed and announced accordingly.