1. SAEEDUZZAMAN SIDDIQUI, J.-1. We propose to dispose of the above-mentioned two petitions by a common order, as the points of law involved therein are identical. The petitioner in the above cases, has challenged the orders of Customs Authorities levying and recovering extra amount of customs duty on two consignments of bamboos imported by it in November, 1982, from Thailand, as well as recovery of extra demurrage and additional extra demurrage by the Karachi Port Trust on the above consignments. Before dealing with the legal contentions raised in the cases, it is necessary to state here the following facts:
2. In Const} Petition No. 989/1987 the petitioner imported 501 bundles containing 48,225 pieces of raw and unprocessed bamboo having length of 7. Ft. Each. On arrival of the consignment the petitioner submitted bill of entry for clearance of the consignment under IGMNO. 2431 of 1982 dated 30th November, 1982 which was duly processed and the petitioner paid the assessed Customs Duty and other charges on 12th December, 1982, whereupon delivery order was issued to them.
2. From perusal of the copy of bill of entry it appears that the value of consignment declared by the petitioner was not accepted by the Customs Authorities which was enhanced. Const. Petition No. 992/1987 the petitioner imported 800 bundles containing 89,340 pieces of raw and unprocessed bamboo having length of 6-1/2 to 6 ft. Each. On arrival of the goods they submitted bill of entry for clearance of consignment which was duly processed and the assessed customs duty and other charges have deposited on the same date as in Const. Petition No. 989/1987, and, thereafter, delivery order was issued. The petitioner accordingly, presented the delivery orders and customs documents relating to the above-mentioned consignments of bamboos to Karachi Port Trust (Respondent No. 6) for obtaining delivery. However, in Const. Petition No. 989/1987, the petitioner was delivered only 342 bundles of bamboos out of the total quantity of 501 while in Const. Petition No. 992/1987 delivery was effected of only 621 bundles out of 800 bundles imported by the petitioner. The reason for this short delivery of consignments was disclosed by respondent No. 6, as the excess weight of the two consignments discovered upon actual weighment of goods and its comparison with the weight disclosed in the Bills of Lading and Bills of Entry. It may be mentioned here at this stage that according to Bills of Lading and Bills of Entry, the weight of the consignments in Const. Petition Nos. 989/1987 and 992/1987 were declared as 40,080 kg. And 64,000 kg.
3. Respectively while respondent No. 6 on actual weighment of consignments found excess of 16-1/2 tons and 17,668 kg. Respectively in the above consignments. Respondent No. 6, accordingly directed the petitioner to seek amendments in the bills of entry from the Customs regarding weight of consignments before asking for remaining quality of bamboo in the above consignments. The petitioner accordingly approached the Customs Authorities for correction of Bills of Entry and contended before them that they were not liable to pay any excess customs duty on account of increased weight, as the duty on imported bamboos was payable at 70% ad valorem on C&F value of the goods. The Customs Authorities however, did not agree with the contention of the petitioner and revised the value of the two consignments involved in Const. Petition Nos. 989 and 992 of 1987 on the basis of excess weight and charged Rs. 25,000 and Rs. 33,475 respectively by way of excess customs duty. The above-mentioned excess duty was charged from the petitioner on 4th April, 1983. After payment of the above excess amount of customs duty the petitioner approached the K.P.T, on 12th April, 1983 for the delivery of the balance consignment in the above cases which was given to them after realising the sum of Rs. 49,054 and Rs. 56,491 respectively as demurrage and detention charges for the period from 14th December, 1982 to 12th April, 1983. After obtaining delivery of balance consignments the petitioner approached the Customs Authorities as well as respondent No. 6 for refund of excess customs duty and demurrage charges respectively, and having failed to get relief in the hierarchy of department finally filed the above petitions on 15th September, 1987 in this Court challenging both, the levy of the excess customs duty by the Customs Department and the recovery of extra demurrage and additional extra demurrage charges by the K.P.T.
3. We have heard the learned counsel for the parties at length. The contention of the learned counsel for the petitioner is that customs duty on import of bamboos is prescribed in the Schedule @ 70% ad valorem and as such the weight of the bamboos had no relevancy for the purposes of assessm ent of customs duty. It is also contended by the petitioner's counsel that valuation of the goods fixed on the basis of weight of consignment is not sustainable in law. The learned counsel for Customs Department on the other hand contended that on account of discovery of excess weight of the two disputed consignments, their value, as declared by petitioner in the Bills of Entry, was liable to be revised and as such no exception could be taken to the revision of the value of the consignments by the Customs Authorities on the basis of actual weight of the goods. The learned counsel for the customs accordingly contended that the value of the consignments was accordingly enhanced by adding 25% of the freight for the excess weight, in the value of the consignments and on such enhanced value of the goods 70% ad valorem duty prescribed under the Customs Avi was charged. The learned counsel urged that the above formula adopted by the Customs Authorities for enhancement of the value of the consignments was based on a practice followed by Customs Authorities for a long time in respect of import of bamboos. It is true that where the value of imported goods declared by an importer in the Bill of Entry is not accepted by the Customs Authorities they are entitled to ascertain the value of the goods under Section 25 of the Customs Act, which reads as under:- "25. Value of imported and exported goods.--(l) The value of any imported goods shall be taken to be the normal price, that is to say, the price which they would fetch, on the date referred to in Section 30, on a sale in open market between a buyer and a seller independent of each other.
(2) The normal price .Of any imported goods shall be determined on the following assumptions, namely:-
(a) that the goods brought by sea or land are treated as having been delivered to the buyer at the port or place of importation, as the case may be, and that goods brought by air are treated as having been delivered to the buyer at the airport or place where they are unloaded in Pakistan or, if the aircraft first lands in Pakistan at some other airport or place without unloading the goods, at such other airport or place;
(b) that the seller will bear freight, insurance, commission and all other costs, charges and expenses incidental to the sale and the delivery of the goods at that port, airport or place which will be included in the normal price;
(c) that the buyer will bear any duties or taxes applicable in Pakistan which will not be included in the normal price.
(3) Where the imported goods to be valued:-
(a) are manufactured in accordance with the patented invention or are goods to which any protected design has been applied; or
(b) are imported under a foreign trade mark or are imported for sale, other disposal or use (whether or not after further manufacture ) under a foreign trade mark.
4. The normal price shall be determined on the assumption that it includes the value of the right to use the patent, design or trade mark in respect of the goods.
(4) The value of any exported goods shall be taken to be the normal, price that is to say, the price which they would fetch, at the prescribed time, on a sale in open market for exportation to the country to which the goods are consigned between a seller and a buyer independent of each other.
5. Explanation.-For the purposes of this sub-section, the expression "prescribed time" shall mean the time when the bill of export is delivered under Section 131 or, when export of the goods is allowed without a bill of export or in anticipation of the delivery of a bill of export, the time when export of the goods commences.
(5) The normal price of any exported goods shall be determined on the following assumptions, namely:--
(a) that the goods are treated as having been delivered to the buyer on board the conveyance in which they are to be exported; and
(b) that the seller will bear all packing, commission, transport, loading and all other costs, charges and expenses (including any export duty which may be chargeable) incidental to the sale and to the delivery of the goods on board the conveyance in which they are to be exported and which will be included in the normal price.
(6) Where the exported goods to be valued-
(a) are manufactured in accordance with any patented invention or are goods to which any protected design has been applied; or
(b) are exported for sale, disposal or use under a Pakistan trade mark or are exported for sale, other disposal or use (whether or not after further manufacture) under a Pakistan trade mark, the normal price shall be determined on the assumption that it includes the value of the right to use the patent, design or trade mark in respect of the goods.
6. Explanation /.-A sale in open market between a buyer and a seller independent of each other pre- supposes-
(a) that the price is the sole consideration; and
(b) that the price is not influenced by any commercial, financial or other relationship, whether by contract or otherwise between the seller and person associated in business with him and the buyer or any person associated in business with him other than the relationship created by the sale itself;
(c) that no part of the proceeds of any subsequent resale; other disposal or use of the goods will accrue, either directly or indirectly, to the seller or any person associated in business with him.
7. Explanation II.-Two persons shall, be deemed to be associated in business with one another if, whether directly or indirectly, either of them has any interest in the business or property of the other or both have a common interest in any business or property or some third person has an interest in the business or property or both of them."
8. We are here concerned only with those provisions of Section 25 ibid which relate to the determination of the value of the imported goods. A careful reading of sub-sections (1) and (2) of Section 25 of the Act will show that the above formula adopted by the Customs Authorities in determining the value of the imported bamboos by adding 25% of the freight in the value of the goods has no nexus with the guidelines provided in Section 25 of the Act and as such the same cannot be upheld. We, accordingly, declare the value of bamboos determined by the Customs Authorities ait the time of recovery of additional customs duty on the above basis as illegal and without jurisdiction. However, we leave it open to the Customs Authorities, if they so choose, to redetermine the value of goods in accordance with the law after hearing the petitioner.
9. The other controversy involved in these cases is, with regard to the recovery of extra and additional extra demurrage charges by the Karachi Port Trust (respondent No. 6) on the above imported consignment of bamboos. It is contended by the learned counsel for the petitioner that the petitioner was not liable to pay any amount of extra demurrage or additional extra demurrage charges to the K.P.T, in the above cases, as the delivery was not delayed on account of any lapse on the part of the petitioner but the same was the result of the arbitrary direction of respondent No. 6 to get the bills of entry amended from Customs, before asking for delivery of the remaining part of the consignments. The learned counsel for the K.P.T, on the other hand, contended that the K.P.T, could not give the delivery of these consignments to the petitioner as their weight declared in the bills of entry and bills of lading was found much less than their actual weight which was discovered upon weighment of the two consignments by the K.P.T, at the time of delivery. It is accordingly contended that unless these discrepancies in weight were removed by the Customs Authorities the delivery of the consignment could not be given to the petitioner. The learned counsel for the K.P.T, in this connection relied upon Bye-laws Nos. 41 and 42 framed under Section 52 of the K.P.T. Act, which read as follows:-- "41. If there be any informality in the Bill of lading or delivery order, or the bill of lading or delivery order be wanting, delivery may be made on application, made in writing, showing the circumstances, and enclosing any documents which will show the title to the goods, but in no case will removal be permitted unless, and until the applicant engages to indemnify the Board by bond or otherwise, as may be directed (vide Form of Bond Appendix 'A').
42. If the bill of lading or delivery order be at variance with the manifest as to the original consignee, the removal of the goods shall not be permitted until the discrepancy is satisfactorily explained to the satisfaction of the Wharfage Officer."
10. A reading of the above Bye-laws, relied upon by the learned counsel for the K.P.T, will show, that under Bye-law No. 41 if the K.P.T, discovers any informality in the bill of lading or delivery order is wanting, then the consignment may be delivered on the application of consignee showing the circumstances and enclosing document which will show his title to the goods and upon execution of an indemnity bond in the prescribed form, indemnifying the Board. Similarly, under Byelaw No. 42, if the bill of lading or the delivery order is found to be at variance with the manifest as to the original consignee, the removal of goods is not to be permitted unless the discrepancy is satisfactorily explained to the satisfaction of the Wharfage Officer. The learned counsel for the K.P.T, admitted before us that in the present cases the bills of lading and delivery orders were not at variance with the manifest and there was also no informality in the Bills of Lading or delivery orders.
11. In these circumstances, neither Bye-law 41 nor Bye-law 42 was attracted in the present cases. The K.P.T, was at best entitled to extra storage charges on account of excess weight which, it is admitted, has been paid. We are, therefore, of the view that the action of the K.P.T, in the above cases in directing the petitioner to seek amendments of Bills of Entry before asking for delivery of the balance goods was wholly without jurisdiction.
12. It is an admitted position in the above cases that the charges for extra demurrage and additional extra demurrage were recovered from the petitioner by K.P.T, on account of delay in taking the delivery of the consignments. The petitioner had produced a delay and detention certificate dated 2nd April, 1983 from the Customs Authorities in this regard in which it was recommended that the period commencing from 18th January to 28th March, 1983, may be condoned, as it was spent by the petitioner in the proceedings before the Customs Authorities. In this connection, the learned counsel for the K.P.T, relying upon Instruction No. 98 contained in the K.P.T. Manual, contended that even if the detention certificate issued by Customs Authorities is accepted, the petitioner will not be entitled to exclusion of entire period from 14th December, 1982 to 14th April, 1988. Instruction 98 relied on by the- counsel for K.P.T, is as follows:-- "98.~(a) If the delay in clearance of the goods is on account of unavoidable .Requirements of Customs, for the assessm ent of the goods the customs on completion of such formalities will issue the Delay Certificate to the Importer. The certificate will be issued to the importer under the Principal Appraiser's signature on application from the Importer. The Delay Certificate will entitle the Importer to a concession in the levy of storage charges. The charges will be levied at the basic rate of 0.60 paisas per ton per day on the whole for the entire period specified in the Delay Certificate and three working days thereafter. Thereafter the normal rates of storage will apply. The holding charge of Rs. 2 per ton will be payable. A note regarding its issue is made by the customs on the relative Bill of Entry showing the number and date of the Delay Certificate. The Gate Supervisor will accordingly record a note in brief on the reverse of the Delay Certificate and shall obtain Deputy Traffic Manager's approval thereon. Thereafter the Gate Supervisor will affix the stamp bearing the following endorsement on the reverse of the Wharfage Entry."
13. We may mention here that the certificate relied upon by the petitioner as well as learned counsel for respondent has no relevance in the present case, as in our view, the delay in the taking of delivery was not occasioned on account of any unavoidable requirement of customs but on account of an arbitrary and illegal direction given by the K.P.T, in the circumstances of the case to petitioner to seek amendment of Bills of Entry from the Customs Authorities before taking delivery of the consignments. We accordingly hold that the recovery of extra demurrage and additional extra demurrage by the K.P.T, was without lawful authority and of no legal effect.
14. There will, however, be no order as to costs in the circumstances of the case.