SYED SARDAR HUSSAIN SHAH, CHAIRMAN/MEMBER (JUDICIAL).--- By this judgment we intend to dispose of the instant appeals filed by appellants, against Order-in-Original No. 209/2016- 17 dated 26.12.2016, Order-in- Original No. 211/2016-17 dated 27.12.2016, Order-in-Original No. 430/2016-17 dated 29.12.2016, Order-in-Original No. 206/2016-17 dated 24.11.2016, Order-in-Original No. 207/2016-17 dated 05.12.2016, Order-in-Original No. 179/2016-17 dated 17.10.2016, Order-i n-Original No. 496516/2016 dated 21.03.2016, Order-in-Original No. 182/2016-17 dated 24.10.2016, Order- in-Original No. 212/2016-17 dated 03.01.2017, Order-in-Original No. 233/2016-17 dated 28.04.2017, Order-in -Original No. 210/2016-17 dated 27.12.2016 and Order-in-Original No. 166/2016-17 dated 07.11.2016 passed by Collector of Customs (Adjudication-II) and Additional Collector of Customs, (Adjudication-I/II), Karachi. All appeals have identical issues of law and facts and are therefore being heard, dealt with and disposed of simultaneously through this common order in the light of judgment of the Hon'ble High Court of Sindh in Customs Reference No.157/2008 (S.M. Naqi son of Syed Muhammad Hussain, Karachi v.
Collector of Customs (Adjudication-I) and others, Karachi ).
2. Since, these twelve (12) appeals are based on similar fads and question of law, therefore, it is needless to reproduce facts of each case separately , hence for reference the fact of Appeal No. K-07/2017, are taken into consideration for decision, wherein, facts of the case are that, it was reported by the Directorate of Post Clearance Audit (PCA), Custom House, Karachi vide Contravention Report with their letter No. PCA 4290/2016-Audit-B/1 1922 dated 05.04.2016 are that M/s. Standard Enterprises Faisalabad has imported declared to be "Tyres and Tubes, with or without Flaps of different Brands" of Indian origin under different sub-heads of PCT heading 4011 through Model Customs Collectorate of Appraisement (East), Karachi. In these cases, the assessment of goods was made, as per Valuation Ruing applicable at the time of import. However , in pursuance of an information that group under invoicing was being carried out by the importers, the matter was investigated taking into consideration the official website (www .icegate.gov .in) named as "ICE GATE-e COMMERCE Portal Central Board of Excise and Customs".
Since the hill of ladings enclosed with the CDs in the online WeBOC System mentio n the shipping' bill numbers and dates filed with Indian Customs for export of impugned goods to Pakistan, therefore, the container numbers and FOB value mentioned therein in Indian Rupees after addition of Freight element and conversion into US$, retrieved from the aforesaid Indian Official Website, were matched with the corresponding particulars mentioned in the Good Declarations filed in Pakistan which revea led that the container numbers matched, but the export price of the goods declared to the Indian Customs was on much higher side. It is relevant to add that transaction value is the value, which has been actually paid or is payable in terms of Section 25 of the Custom. Act, 1969, required for computation of Customs Duty and other taxes. Therefore, the transaction value of the subject imports is the value declared to Indian Customs at the time of exports of subject consignments. In the subject case, FOB value in Indian rupees as is available on the above-mentioned portal was added with freight element, as required under Section 25 subsection (2)(a) of the Customs Act. 1969, calculated in US$ and in Pak Rupees (PKR), which clearly revealed that under invoicing was being done and correct information regardin g transaction value had been suppressed by filing Goods Declarations at lower values than the actual transaction value paid by the importers in Pakistan to the exporter in India. Therefore, an amount of Rs.65,348,388/- (Customs Duty amounting to Rs.21,263,471/-Regulatory Duty amounting to Rs.377,048/-, Sales Tax amounting to Rs.27,751,812/-, Additional Sale Tax amounting to Rs.4,940,689/- and W/H Income Tax amounting to Rs.11,015,367/-) had been short paid/evaded by the importer on account of the aforesaid under-invoicing.
3. The Collector of Customs (Adjudication -II) decided the case vide impugned Order-in-Original No. 209/2016-17.
Operative part of the impugned Order is as under; "...... In the light of the foregoing and evidence of transaction value of impugned goods submitted by the department, the charges levelled in the show-cause notice stand established. Messrs Standard Enterprise (Pvt.)
Ltd. Faisalabad are directed to pay Rs.65,348,388/- (Customs Duty amounting to Rs.21,263,471/- Regulatory Duty amounting to Rs.377,048/-, Sales Tax amounting to Rs.27,751,812/-, Additional Sales Tax amounting to Rs.4,940,689/- and W/H Income Tax amounting to Rs.11,015,367/- into gove rnment treasury . A penalty of Rs.2,000,000/- (Rupees Two Millions only) is imposed on the importer M/s. Standard Enterprise (Pvt.) Ltd. (NTN 0688605-1), Office Nos. 1, 2, 4th, Floor , Legacy Tower , Koh-i-Noor City, Faisalabad in terms of clause (14) of subsection (1) of section 156 of the Custo ms Act, 1969. The Directorate / Collectorate shall proceed to recover the default surcharges (to be calculated at the time of payment as per section 34 of the Sales Tax Act, 1990) strictly in accordance with law ."
4. Being aggrieved with this order , these appeals have been filed, inter alia, on the grounds given in the appeals and placed on record. Respondents also submitted the parawise comments, which are placed on record.
5. Record of the case has been carefully examined and the argument put forth by the appellants and respondents have been duly considered. The cases of the Appellants are that they have imported consignment of "Tyres and Tubes, with or without Flaps of different Brands" of Indian origin, which were allowed release after passing of Clearance Orders under section 83 and Rule 442 of the Act/Rules by the competent authority prescribed therein on the strength of valid Assessment Orders passed by the Authority defined in Section 2(a) under Section 80 and Rule 438 of the Act/Rules for levy of duty and taxes with the application of value determined by the Director , Directorate General of Valuation under the provision of Section 25A of the Act, in exercise of the powers vested upon them through SRO 371(1)/2002 dated 15.06.2002. Subsequently the Directorate General of Post Clearance Audit conducted Audit under section 26(2) and thereafter framed contravention report on the basis of information gathered from the Indian official Website "Icegate e-Commerce Portal Central Boar d of Excise and Customs.' which revealed that the export price of the goods declared to the Indian Customs is on much higher side. They further argue that even the Valuation Ruling specifically mentions that where the actua l payable transactional value is higher than the value as determined in the Valuation Ruling such transactional value shall be taken for the purpose of assessment of duty and taxes. The respondents calculated value of the imported consignments by adding element of freight in the FOB value declared in Indian rupee as is available on the aforestated Indian Official Website and thereafter , the said value was converted into US dollars.
6. The stance of the appellants as explained by their learned counsel is that they made assessment of duty and taxes in the light of prevailing Valuation Ruling which arc issued/determined after detailed deliberations with all relevant stakeholders and also after considering the prevailing international prices, therefore the transactional values declared by the importers are rejected and assessment is made on the basis of the Valuation Ruling. The, system of valuation ruling is widely in place for assessment purposes in order to ensure uniformity in the valuation and to avoid undue discretion. So many consignments are daily cleared by customs by following these valuation rulings ignoring the lower values declared in GDs. Accordingly , the goods were released by the Collectorate without raising any objection. Further Section 25-A of the Customs Act, 1969 whereunder the aforestated Valuation Ruling was issued, starts with Non-Obstante clause which means the said provision of law has over-riding effect over section 25 (which mentions about the transactional value) ibid. The counsel for the appellants further stated that after Valuation Ruling is issued under section 25A, the next relevant provision of law is section 25-D and cannot be reversed to section 25. The learned counsel also invited attention towards Disclaimer of Icegate. They emphasized, that neither section 25 of the Customs Act, 1969 nor section 25-A ibid mention, about the Icegate. Further , the Indian Customs has not certified the value given on their Website. According to the Counsel, the exporters in general, inflate value of their goods to obtain some legal benefit like rebate etc. The Counsels added that values given on Indian Website (Icegate) do not carry any legal sanctity . They added that tad it been so, the Directorate General of Customs Valuation, could have revised its values upward as given in the Valuation Ruling No.659/2014 dated 29.03.2014.
7. We are not inclined to endorse the arguments of the respondent Department. The goods of the appellant were not self-assessed goods under section 79 of the Customs Act, 1969 as stated but instead were released after passing of valid Assessment/Release Orders under the provision of Sections 80 and 83 and Rules 438 and 422 of the Act/Rules for levy of duty and taxes on the basis of Valuation Ruling No.659/2014 dated 29.03.2014 determined by Director , Directorate General of Valuation under . Section 25A of the Act, as the goods on which Valuation Ruling is applicable can never be auto-cleared by the WeBOC module by virtue of having no programming in this regards.
We subscribe to the arguments of the learned Counsel of the appellants that there is no legal sanctity of the Indian official Website. There argument carries weight as section 25-A of the Customs Act, 1969 whereby the aforementioned Valuation Ruling has been issued, opens with Non-Obstante clause meaning thereby that it over- rides section 25 of the said Act. We find tremendous weight in the arguments of the learned counsel of the appellants that if the respondent departme nt was so convinced about the legality and validity of the Indian Website, they could have requested the Directorat e General of Valuation, Karachi to revisit Valuation Ruling No. 659/2014 dated 29.03.2014 in the light of value available on Icegate. We are afraid that we are not in agreement with the respondents in regards to the alleged misdeclaration of value as the value available on the website lcegate cannot be construed as declaration of the appellant upon examination of the definition in Section 2(kka) of the. Act, the charge of misdeclaration could only be levelled, on the basis of direct evidence, namely evidential invoice of the same country of the period given in Rule 107(a) of the Rule as Ordered in Paras 78 and 101 of CGO 12/2002 dated 15.06.2002 and Clause (d) of SRO 499(1)/2009 dated 13.06.2009. The Custom Appeal No. 837 of 2016 vide GD No. KAPE-HC-90657-04-01-2016, containing Polyester Plain Cringle Chiffon Fabric, whereas all aforesaid mentioned appeals pertaining to Tyres and Tubes.
8. In view of the above circumstances, we allow these appeals and set aside the impugned Orders-in-Original No. 209/2016-17 dated E 26.12.2016, Order-in-Original No. 211/2016-17 dated 27.12.2016, Order-in-Original No. 430/2016-17 dated 29.12.2016, Order-in-Original No. 206/2016-17 dated 24.11.2016, Order-in-Original No. 207/2016-17 dated 05.12.2016, Order-in-Original No. 179/2016-17 dated 17.10.2016, Order-in-Original No. 4965 16/2016 dated 21.03.2016, Order-in-Original No. 182/2016-17 dated 24.10.2016, Order-in-Original No. 212/2016- 17 dated 03.01.2017, Order-in-Original No. 233/2016-17 dated 28.04.2017, Order-in-Original No. 210/2016-17 dated 27.12.2016 and Order-in-Original No. 166/2016-17 dated 07.11.2016 along with issuance of delay detention certificate where applicable.