NASIR ASLAM ZAHID, J.-The petitioner from, obtained an Import Licence for the import of Glazed Wall Tiles. The Import Licence gave the classification of the goods sought to be imported as under:- "69.08 Glazed ceramic flags and paving hearth or wall tiles, glazed ceramic mosaic cubes and like, whether or not on backing. 6908.9000- other."
According to the petitioner, the goods in question, which were imported from China and U.K., arrived at Karachi in July, 1989, and the petitioner filed Into Bond Bill-of-Entry dated 20.7.1989 in respect of the goods imported from China, and for the goods imported from U.K., they Filed Into Bond Bill-of-Entry dated 17.01.1990. In the said Bills-of-Entry, the petitioner declared the value of the goods as per invoice values. Thereafter, Ex-Bond Bills-of-Entry were filed for clearance of the said goods before the concerned Appraising Section in the Customs House, Karachi, where they were processed and, according to the petitioner, the concerned Appraiser recorded a note on the Bills- of-Entry which indicated that the goods were assessable to duty at the price as notified in the notification dated 6.11.1988 issued by the Central Board of Revenue under Section 25-B of the Customs Act, 1969, and the note was counter-signed by the Principal Appraiser, who approved the assessm ent according to the price notified in the aforesaid Notification. Accordingly, the Customs Authorities required the petitioner to pay duly on the basis of the value as fixed in the value as fixed in the aforesaid Notification 6.11.1988 issued under Section 25-B of the Customs Act. The petitioner recorded their explanation on the Bills-of-Entry that the assessment made by the Customs Authorities was not correct inasmuch as the goods imported by the petitioners were not covered by the description given in the said Notification and that the declared value as per invoices was the normal price on the basis of which the petitioners were liable to pay duty. The Customs Authorities, however, insisted on payment of duty on the basis of the price fixed in the aforesaid Notification.
The petitioners have challenged the assessment of the respondents demanding duty on goods on the basis of the price fixed in the Notification dated 6.11.1988 as illegal. We have heard Mr. Khalid Anwer, learned counsel for the petitioners and Mr. Nazar Akber, learned counsel for the Department.
2. The relevant Pakistan Customs Tariff (PCT) classification is as follows:- Heading Sub Hea- Description Statutory Rate of Conditi Unit(s) S.I.T.C, No. Ding No. Of Goods Rate of Sales on(s) of of Quan- Rev.5 Duty Tax Import tax 1 2 3 4 5 6 7 8 69.08 Glazed ceramic flags and paving, hearth or wall tiles, glazed ceramic mosaic cubes and the like whether or not on a eking.
6908.1000 Tiles, cubes and similar articles, whether or not rectangular, the largest surface area of which is capable of being enclosed in, a square the side of which is less than 7 cm 80% 12.5% adval. Kg/m2/ex 662.45 No. 6908.9000 Other 80% 12.5% ad va1. Kg/m2 \/ex 662.45 No.,, {{TABLE MISARRANGED}} The relevant Notification dated 6.11.1988 issued under section 25-B is as Follows:- S.R.O.150(KE)/88: In exercise of the powers conferred by clause(I) of the section 25 B of the Customs Act, 1969(IV of 1969), read with Central Board of Revenue's Notification 'No.610(I)/88, dated 30th June, 1988 and in supersession of this department's notification No.SRO 94(KE)/88 dated 20th September, 1988, (I), Controller of Customs Valuation, Custom House, Karachi, hereby fix the value of goods specified in column(3) of the table below and falling under heading number of the First Schedule to the Custom^ Act, 1969(IV of 1969), specified in column(2) of the said table, as specified in column(4) of the said table, for the purpose of levying Customs duties (tinder the Customs Act, 1969, or any other law for the time being in force.
Provided that the goods imported at value higher than specified in column(4) of the table below will be assessed on the declared value.
Table Heading number in Description of Value the First Schedule to goods the Customs Act, 1969
(1) (2) (3) (4)
6908.1000 Glazed Ceramic Tiles-White USS 12.5 per 6908.1000 Glazed square meter. Ceramic Tiles- Coloured/ printed USS 15 per square meter. {{TABLE MISARRANGED}} This notification shall have effect from 10th November, 1988 until other orders.
3. The case of the petitioner is that the goods imported by the petitioners are not covered by the aforesaid Notification as the Notification refers to heading 6908.1000 of PCJ (I).e. Tiles the largest surface area of which is capable of being enclosed in a square the side of which is less than 7 c.m., whereas the petitioners had imported tiles much bigger than the titles covered by the aforesaid PTC classification No.6908.1000. As observed, according to the petitioner, they had imported goods which are covered by PCT heading No.6908.9000. Parawise comments had been called from the Department before the petition was admitted to regular hearing. In the parawsie comments filed by the Department, the stand taken, is that the goods imported by the petitioners have been correctly assessed as per description given in the ITP Notification dated 6.11.1988. Customs have not set up any case that the goods imported by the petitioner did not fall under PCT Sub heading 6908.9000. It is further the stand of the Department in the parawise comments, re-affirmed by Mr. Nazar Akber, learned counsel for the Department that PCT classification has nothing to do with the value/ITP since the value/ITP is fixed for goods whereas PTC classification is no bearing on fixation of value as it is meant for determination of correct classification for the levy of correct rate of Customs duty and other charges, and that the Notification of ITP is meant for fixing the value of the goods under Section 25-B of the Customs Act 1969. According to Mr. Nazar Akber, the goods imported by the petitioners were wall tiles and were .Assessed and value correctly under the said Notification. It is further submitted that the ITP is fixed by the Government of Pakistan/Controller of Valuation and Collector of Customs is not competent to modify the ITP.
4. The question requiring consideration in this petition is whether the aforesaid Notification dated 6.11.1988 was applicable to the goods imported by the petitioners. In this connection, reference may be made to section 25(1) and section 25 B of the Customs Act 1969 which read as follows:- "25. Value of imported and exported goods. (1) 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.
25-B Fixation of value far imports and exports. (1) Notwithstanding anything contained in section 25, the Board or such officer as authorised by the Board in this behalf may, from time to time, by notification in the official Gazette, for the purposes of levying customs duties under this Act or any other law for the time being in force, fix-the value of the goods specified in the First Schedule and the Second Schedule to this Act, at such rates as it may deem fit and subject to such conditions or limitations as it may impose.
(2) Different values may be fixed for different classes or descriptions of the same type of goods.
5. From Section 25 of the Customs Act, it follows that for purposes of levy of customs duty, the value of any imported goods is taken to be the normal price (I).e. The price which the goods would fetch on the specified date (determined under section 30) on a sale in open market between a buyer and a seller independent of each other. Same yard stick is applied for the purpose of assessing the value of any exported goods under section 25. However, by section 5 of the Finance Act, 1988 (VI of 1988), Section 25 B was inserted in the Customs Act (reproduced earlier) and, under this new provision, power has been conferred on the Central Board of Revenue to fix the value of the goods by notification in the Official Gazette for the purpose of levying Customs duty under the Customs Act or any other law for the time being in force and this power is "notwithstanding the provision contained in Section 25". If, therefore, a notification has been issued by the Central Board of Revenue under Section 25-B fixing the value of any type of goods, the Customs Authorities are then required to value such imported or exported goods accordingly and no exercise can be undertaken for assessing the vale of the goods under Section 25, as Section 25-B is "notwithstanding anything contained in Section 25'. If, however, no price is fixed by any notification under Section 25-B in respect of any type of imported or exported goods and such goods are imported or exported, value for purposes of Customs duty is assessed under the formula specified in Section 25 of the Act.
6. In the Notification No.S.R.O. 150 (KE)/88 dated 6.11.1988 relied upon by the Department, the Central Board of Revenue has fixed the value of glazed ceramic tiles (white) at U.S.$ 12.5 per square meter and for glazed ceramic tiles (coloured/printed) at USS 15 per square meter. But, in the said Notification, the sub-heading number in the First Schedule to the Customs Ac! 1969 (PCT) is also given. For both categories of tiles (I).e. White as well as coloured/printed, the sub-heading number given in the notification is 6908.1000.
Mr. Nazar Akbar, learned counsel for the Department, had argued that PCT classification/heading has nothing to do with the value/ITP. This submission is generally correct as PCT classification specifies the rate of duty payable on goods whereas ITP is the value on which duty is assessed.
Nevertheless, while issuing a notification fixing the value under Section 25-B, the goods have to be described and while describing the goods heading number of PCT is given and as such PCT heading in the notification becomes relevant. In the notification in question issued under Section 25-B, sub heading number of PCT against both types of tiles has been given as "908.1000" and as such reference has to be made to the said sub heading to ascertain identify the goods that- are covered by the said Notification under section 25-B.
The description of the main heading under PCT is no doubt as follows:- "69.08 Glazed ceramic flags and paving, hearth or wall tiles; glazed ceramic mosaic, cubes and the like, whether or not on a backing."
But under this heading, there are two sub headings one is 6908.1000, which is mentioned in the Notification issued on 6.11.1988 under section 25-B, and the second sub heading is 6908.9000, which refers to "other". If the intention was to fix the value under Section 25-B of all types of glazed ceramic tile under main heading 69.08, then, either reference had been made only to the main heading (I).e, 6908 or both sub headings (I).e. 6908.1000 as well as 6908.9000 would have been mentioned but that is not so as the only sub heading mentioned in the notification is 6908.1000.
Now, as observed, heading 6908.1000 refers to glazed ceramic tiles "the largest surface area of which is capable of being enclosed in a square the side of which is less than 7 cm." If, therefore, the side of any tile exceeds the aforesaid size of 7 cm, such tile will be covered by the sub heading "6908.9000 Other" of PCT."
Mr. Khalid Anwer has placed on record a copy of Notification dated 27.7.1991 of the Government of Pakistan, Controller of Customs Valuation, Customs House, Karachi, issued under Section 25-B of the Customs Act, 1969,. Fixing the value of different types of goods and, in this Notification, value of the glazed tiles has been fixed not only in respect of goods under PCT sub heading 6908.1000 but also under sub heading 6908.9000. As this Notification dated 27.7.1991 has been issued after the Bills-of-Entry had been filed and the goods also cleared, the Notification cannot be relied upon by the Department for valuing the goods in. Question which are the subject matter of the present Constitution Petition and this was not controverted by Mr. Nazar Akber. This Notification dated 27.7.1991 also confirms that the earlier Notification dated 6.11.1988 did not fix the value of glazed tiles falling under sub heading 6908.9000.
7. The decision of the Customs Authorities in applying the said Notification published on 26.11.1988 to the goods in question was, therefore, illegal, and, in the absence of any applicable notification under section 25-B, the Customs Authorities were required to assess the value under section 25 of the Customs Act, 1969. This petition is allowed to the extent that it is declared that the assessment of the petitioner's aforesaid goods under Notification No.SRO 150(KB)/88 dated 6.11.1988 is without lawful authority and of no legal effect.
8. We may refer to a contention raised by Mr. Nazar Akbar learned counsel for the department that this constitutional petition was not competent as the petitioner had alternate remedies of appeal and revision, which were not resorted by them. In the facts of this case, we are not inclined to dismiss this petition specifically for the reason that the question involved" here was the applicability or otherwise of the notification dated 6.11.1988 on which the department had already taken the decision that the notification was applicable and resort to appeal or revision would have been a futile effect.
9. During the pendency of this Constitutional Petition, by order dated 30.5.1990, the following consent order disposing off the application for interim relief was passed:- "This is application for interim relief. By consent of the counsel present, we direct that subject goods be released subject to the deposit in cash of admitted amount and furnishing of bank guarantee of the disputed amount with 14% mark up to the satisfaction of the Collector of Customs, who is respondent No.(I)"
The Bank guarantee furnished by the petitioner is hereby discharged.
10. In the present case, as the Notification dated 6.11.1988 fixing the value of glazed tiles under Section 25-B of the Customs Act was not applicable, the Customs Authorities were required to assess the value of the goods imported by the petitioner under Section 25 of the Customs Act. This has not been done as the Customs Authorities had wrongly applied the aforesaid Notification for fixing the value of the imported goods. In the circumstances, the exercise of assessing the value under Section 25 is still to be carried out. The Customs Authorities are directed to assess the value the aforesaid goods under Section 25 within three months from today after hearing the petitioner and thereafter take further action if required.
There will be no order as to costs. revisions by the competent authorities. Therefore, it is advisable to consult the official sources or legal professionals for the most up-to-date and accurate information.