' This petition under Article 199 of the Constitution of Islamic Republic of Pakistan, 1973 calls in question circular, dated 6th of November. 1998 addressed by Secretary (Valuation), Central Board of Revenue, Government of the Punjab to the Collector of Customs (Preventive), Custom House, Karachi and Collector of Customs (Appraisement), Custom House, Lahore, which is in the following words:-- "I am directed to refer to the Board's letter of even number, dated 3-7-1996 (copy enclosed) and to say that the question whether or not 'royalty' is an integral part of the normal value has been examined by the Board. It is clarified that 'royalty' is an integral part of the value:
(i) Subsection (3)(b) of section 25 of the Customs Act, 1969, inter alia, reads: 'The normal price shall be determined on the assumption that it includes the value of the right to use the patent'.
(ii) The Form, vide para.3 (xi), prescribed in the Schedule to the Valuation (Imports) Rules, 1972 (S.R.O.199(I)72, dated 17-4-1972) include the charges, inter alia, on account. Of 'royalty or licence fee'.
(2) The pending cases of release against Indemnity Bond may be finalized accordingly. The amount of short levied duty and taxes in all such cases may be intimated to the Board."
2. The circumstances in which this dispute has arisen are that the petitioner is an importer of Cinematographic Films. The question arose as to whether the import duty is payable only on the value of the Cinematographic Films itself or also on the royalty paid by the importer. This matter for the first time was taken up by the Central Board of Revenue on 28th of August, 1953 and the Board issued a letter in which it was stated that the sales tax should be charged on the invoice value and no attempt should be made to ascertain the exhibition and distribution rights and no sales tax should be levied on such rights. Again on 29th of December, 1958 another letter was addressed by the Central Board of Revenue to the Collector of Valuation, Karachi which is to the same effect. The last in the series of these letters is letter, dated 3rd of July, 1996 in which it was directed that the consignments of Cinematographic Films may be cleared against indemnity bond for customs duty as chargeable on ' royalty' forming part of the value of those films and custom duty on the value excluding 'royalty' shall be charged as usual. By means of the impugned circular the Central Board of Revenue has now directed that while calculating the normal value of the imported Films the royalty should also be included.
3. I am not inclined to go into the contentions raised by the petitioners learned counsel and the reply given by the learned counsel for the respondents as I am of the view that the impugned circular issued by the Central Board of Revenue is without lawful authority for the simple reason that it is violative of proviso to section 223 of the Customs Act, 1969, according to which no order or direction can be given to the Central Board of Revenue and its subordinates so as to interfere with their quasi-judicial functions. The normal value of the imported goods has to be adjudged by the Custom Officers in terms of section 25 of the Customs Act, 1969 and they cannot be influenced by any decision made by the Central Board of Revenue inasmuch as admittedly the determination of the normal value in quasi-judicial functions of the Custom Officers. If any authority is needed reference is made to the case reported as Attock Cement Pakistan Ltd. v. Collector of Customs, Collectorate of Customs and Central Excise, Quetta and 4 others 1999 PTD 1892 and M.A. Rehman v.
Federation of Pakistan and others 1998 SCMR 691.
' In view of what has been discussed above this petition is allowed. The impugned circular issued by the Central Board of Revenue is declared to be without lawful authority and of no legal effect and the case is remitted to the Adjudicating Officers for determining the value of the Cinematographic Films imported by the petitioners, strictly in accordance with section 25 of the Customs Act, 1969 and without being influenced by the circular issued by the Central Board of Revenue. The petitioners of course shall be entitled to be given opportunity of being heard before the decision is made. There shall be no order as to costs.