SYED SARDAR HUSSAIN SHAH CHAIRMAN/MEMBER (JUDICIAL).- -- Messrs Mani Enterprises, Peshawar (appellant herein) have filed this appeal against the Order-in-Appeals Nos.121-122/2018 dated 10.05.2018, passed by the Collector of Customs (Appeals), Peshawar , whereby he dismissed the appeal.
2. Briefly stated the facts necessary for decision of this appeal are that the appel lant imported Glass Beads from China and got it cleared from Model Customs Collectorate, Peshawar during the period 2015-16 vide Goods Declaration No.3363 dated 19.03.2015 without applying the value determined under valuation Ruling No.412/2012 dated 13,01.2012. Consequently , the subject goods were assessed at lower value i.e., US $ 1.57 kg. as against the value determined under Section 25-A of the Customs Act, 1969 i.e., US $11.81 kgs. Audit Observation No.15/2016- 17 dated 21.10.2016 in terms of Section 26 of the Customs Act, 1969 was issued to the importer to clarify the above discrepancy . However , the importer did not provide any verbal/written reply . Thus the appellant had committed an offence as defined in Section 32(1) of the Customs Act, 1969, Sections 3, 6 and 11 of the Sales Tax Act, 1990 and Section 148 of Income Tax Ordinance, 2001, punishable under section 156(1) clause (14) of the Customs Act, 1969, Sections 33 and 34 of the Sales Tax Act, 1990 and Sections 182(5) (10b) and (14) of the Income Tax Ordinance, 2001.
3. Subsequently , on completion of the requisite formalities, a Show-Cause Notice C.No.V - CUS/DC/Adj/266/2017/1082 dated 24.07.2017 was issued to the appellant and the Deputy Collector of Customs (Adjudication), Islamabad, vide Order-in-O riginal No.219 of 2017 dated 27.09.2017 ordered for recovery of evaded amount of duty/taxes to the tune of Rs.66,241/- in terms of Section 202 of the Customs Act, 1969 read with Customs Rules, 2001, notified vide SRO.450(I)/2001 dated 18.06.2001 and also imposed a penalty of Rs.25,000/- in terms of Section 156(1)(14) of Customs Act, 1969.
4. Aggrieved of the above order , the appellant filed appeal before the Collector of Customs (Appeals), Peshawar , who vide Order-in-Appeal Nos.121-122/2018 dated 10.05.2018, dismissed appeal. Hence the instant appeal.
5. Both the parties heard and record perused.
6. The case of the appellant is that he has filed proper/correct GD before the assessment officer who assessed it accordingly and thereafter , released the goods of the importer/appellant on payment of duty and taxes and final assessment order was passed by the appropriate officer of the customs in this case. The Customs authorities after audit objection issued a show-cause notic e to the appellant in the year 2017 and alleged that the goods at that time were not assessed in accordance with law and rules. The show-cause notice issued to the importer/appellant is for the commission of offence under Section 32(1) of the Customs Act, 1969. Section 32(1) of the Customs Act, 1969 is reproduced as under-- "32. False statement, error , etc.- (1) If any person, in connection with any matter of customs,- (a) makes or signs or causes to be made or signed, or delivers or causes to be delivered to an officer of customs any declaration notice, certificate or other document what soever , or (b) makes any statement in answer to any question put to him by an officer of customs which he is required by or under this Act to answer , [or] [(c) submits any false statement or document electronically through automa ted clearance system regarding any matter of Customs.] [knowing or having reason to believe that such document or statement is false] in any material particular , he shall be guilty of an offence under this section."
7. As per record of the case, the appellant filed GD wherein he mentioned two declaration of goods from each consignment and correct particulars of the goods, which supported by Commercial Invoices and Bill of Lading etc. Section 79 of the Customs Act, 1969 is reproduced as under:-
79. Declaration and assessment for home consumption or warehousing for transshipment] (1) The owner of any imported goods shall make entry of such goods for home consumption or warehousing [or transshipment] or for any other approved purposes, within fifteen days of the arrival of the goods, by,- (a) filing a true declaration of goods, giving therein complete and correct particulars of such goods, duly supported by commercial invoice, bill of lading or airway bill, packing list or any other document required for clearance of such goods in such form and manner as the Board may prescribe; and (b) assessing and paying his liability of duty, taxes and other charges thereon, in case of a registered user of the Customs Computerized System: [Provided that if, in case of used goods, before filing of goods declaration, the owner makes a request to an officer of customs not below the rank of an Additional Collector that he is unable, for want of full information, to make a correct and complete declaration of the goods, then such officer subject to such conditions as he may deem fit, may permit the owner to examine the goods and thereafter make entry of such goods by filing a goods declaration after having assessed and paid his liabilities of duties, taxes and other charges] Provided further that no goods declaration shall be filed prior to ten days of the expected time of arrival of the vessel.] Explanation. - For the purposes of this clause, the assessment and paying of duty, taxes and other charges in respect of transshipment shall be at the port of destination.
8. Thereafter , it was the duty of the customs officers to specify himself regarding the correctness of the particulars of the imported goods including declaration and assessment under Section 80 of the Customs Act, 1969, which is reproduced as under:-
80. Checking of goods declaration by the Customs.- (1) On the receipt of goods declaration under section 79, an officer of Customs shall satisfy himself regarding the correctness of the particulars of imports, including declaration, assessment, and in case of the Customs Computerized System, payment of duty, taxes and other charges thereon. (2) An officer of Customs may examine any goods that he may deem necessary at any time after the import of the goods into the country and may requisition relevant documents, as and when and in the manner deemed appropriate, during or after release of the goods by Customs; (3) If during the checking of goods declaration, it is found that any statement in such declaration or document or any information so furnished is not correct in respect of any matter relating to the assessment, the goods shall, without prejudice to any other action which may be taken under this Act, be reassessed to duty [taxes and other charges levied thereon]. (4) In case of the Customs Computerized System, goods may be examined [and assessed] only on the basis of computerized selectivity criteria. (5) The Collector may, however , either condone the examination or defer the examination of imported goods or class of goods and cause it to be performed at a designated place as he deems fit and proper either on the request of the importer or otherwise.]
9. Section 32 can only be applied on the basis of the document delivered, furnished by the importer or the statement given by him before Customs Authorities. The language of this section can only be applied on the basis of the "document delivered, furnished by the importer or the statement given by him before the Customs Authorities. Whether a valuation advice in any form can be considered as a document furnished by or a reply in answer to a query raised by the Custom s Authorities -by the importer , does not need much to discuss. One may argue that the said valuation ruling having been prepared under section 25 by virtue of section 25-A subsection (2) is an applicable customs value for assessment of the relevant imported and exported goods, but, whether the same can be used subsequently after the consignment is out of charge by applying section 32 apparently does not find support from the aforementioned language.
10. Section 32, also is not being unders tood in its true spirit. One must understa nd that it has been inserted to correct an error, modify an assessment and to recover the refund issued inadvertently . This obviously means review or correction of the error in a finalized matter . Once a consignment is out of charge after due consideration of relevant facts it becomes a past and closed transaction to the extent of its value etc. The same, therefore, should not be invoked only on the basis of the mere estimate, gossips, personal whims or feelings that the value could have been enhanced or it could fetch more taxes etc. The opening of an appraisement for the purposes of re- valuation of an earlier estimate or adopted figure would require 'reason to believe' and not 'reasons to suspect'. For example, if one subsequently , finds that the description of the imported goods was different, H.S. Code applied was wrong as a result of mis-representing or the number of items mentioned in GD and accepted by the Department incorrectly , etc., nobody will have any objection on the application of provisions of section 32. However , if one feels that more revenue could have been generated and thus invokes the provisions of section 32, this Court will not agree to the said understanding. In this case, reference to a judgment reported in 2006 PTD 2237 is quite relevant.
The valuation ruling cannot be considered a piece of evidence unless the same is based upon sound footings.
However , on the basis of a valuation ruling, the provisions of section 32 cannot be invoked.
11. The valuation ruling in question has been introduced vide VR No.412/2012 dated 13.01.2012. This valuation ruling is for 90 days as defined in para(a) of paragraph No.107 of Chapter 9 of valuation sub- para-1 read with subsection (5) of section 25 of the Customs Act, 1969. The said valuation rules were amended vide SRO.564(I)/2017 dated 01.07.2017 where in in its para 8, it is stated that "except in cases where Valuation Rulings issued under section 25-A exist, the Valuation Ruling shall remain in field unless rescinded, modified or replaced with a new Valuation Ruling" . These amendments have been brought in July, 2017 while the GD in question was of 2015 and this notification of 1st July , 2017 has no retrospective ef fect.
12. In view of the above discussion, I allow this appeal and set aside the judgmen ts of the lower fora in Order-in- Appeals Nos.121-122/2018 dated 10.05.2018. The appeal stands disposed of.