Customs Act (IV of 1969)‑‑‑

‑‑‑S.25(1)‑‑‑Establishment of Office of Federal Tax Ombudsman Ordinance (XXXV of 2000), S.9‑‑‑S.R.O. No.1108(I)/94, dated 4‑12‑1994‑‑‑Clean report of finding (CRF)‑‑‑Normal price‑‑‑Assessment of value at 10% loading on declared value‑‑‑Complainant/importer contended that declared value was discarded without providing any widentiary invoice and also no evidence was available for raising the declared value by 10%‑‑‑Validity‑‑‑In order to establish that the value of imported goods being determined, at a figure other than the declared value, by the Customs Authorities, was the "normal price" the‑onus to be discharged by them was to place on record authentic documentary evidence to support the finding that around the relevant date, such goods were fetching the same price in the open international market on sale between a buyer and seller who were independent of each other‑‑‑Burden of proving that the declared value was not normal, lies on the Customs Authorities‑‑‑Where the declared value was' rejected, the Customs Authorities while determining the value, must confront the importer with the material available with them‑‑‑Failure to do so, renders the valuation so determined illegal‑‑Determination of value, in the present case, suffered from illegality as at no stage, the complainant was confronted with the evidence the Customs Authorities had in their possession and relied upon for rejecting the declared value ‑‑‑In spite of consent order passed by the High Court, the proper and legal course as provided by law was not followed and maladministration .was committed by the Customs Authorities‑‑‑Federal Tax Ombudsman recommended that the relevant authority to assess the value after confronting the complainant with the evidence relied upon for rejecting the declared value and pass order for refund if it was found due on such determination of value.

Muhammad Aslam for the Complainant.

Zulfiqar Ch., Deputy Collector, Customs and Ms. Tayyeba Kayyani, Assistant Collector, Customs for Respondent.

DECISION/FINDINGS

The facts in brief are that on 4‑12‑1996, the complainant imported Flat File Size 8" , 10" , 12" and Drill Straight Shank Twist- Drill from China for a declared value of US$ 22,430 and filed Bill of Entry for Bond No.00848. The authorities rejecting the declared value determined higher value. The complainant ex‑bonded the consignment which were assessed at higher value. According to written reply of the Collector Customs, such valuation was based upon Clean Report of Finding (CRF) issued by COTECNA, a Pre‑inspection Company (PIC), who were appointed in terms of S. R. O. No.1108(I)/94, dated 4‑12‑1994. The complainant then approached the High Court, through a writ petition, and goods were released in pursuance of the interim order of the Court dated 21‑12‑1996. Later on 17‑6‑1998, the Court directed, by consent of the parties that the Department shall decide the dispute under section 25 of the Customs Act read with all relevant provisions of law. The Department re‑assessed the value at 10% loading on declared value and refunded the amount of Rs.164,979 and Rs.94,045 after about four years. The complainant contending that the assessment was not legal, claims refund.

2. According to written reply of the Collector, the assessable value, in compliance with the orders of the High Court was calculated after 10% loading as against the value contained in CRF issued by Messrs COTECNA that was based on enquiry and verification of the imported goods in the country of original and as this value was higher than the invoice value, it was clear that the declared value was very much on the lower side. The claim of complainant for further sanction of refund by way of slashing down 10% loading, according to Collector, is not maintainable because the said loading so maintained was expressive of the valuation standards postulated in section 25 of the Customs Act, 1969.

3. The complainant moved an application with the Assistant Collector on 15‑2‑2001 contending that declared value was discarded without providing any Evidential Invoice supporting his action. Complainant further stated in his application that it was evident from the Note Sheets of the file that no evidence was available in computer for raising the declared value by 10% . Copies of application and subsequent reminders were endorsed to higher authorities. However, no action was taken except a letter issued by AC (R&R) on 11‑6‑2001 to Assistant Collector G‑I, II, III, IV, to look into the matter personally and expedite action/reply. As no response was received the complainant addressed letter dated 17‑7‑2001 to Additional Collector Customs, Moghalpura Dry Port, Lahore, to which no response was received. Value of imported goods for the purposes of charging Customs Duty is normally determined under section 25 of the Customs Act, 1969. Subsection (1) provides that such value shall be taken to be the "normal price" that such goods would fetch on the date referred to in section 30 on a sale in open international market between a buyer and a seller independent of each other.

4. Thus, in order to establish that the value of imported goods being determined, at a figure other than the declared value, by the Customs Authorities, is the "normal price" the onus to be discharged by them is to place on record authentic documentary evidence to support the finding that around the relevant date, such goods were fetching the same price in the open international market on sale between a buyer and seller who were independent of each other.

5. It is well‑settled that the burden of proving that the declared value is not normal, lies on the Customs Authorities. Where the declared value is rejected, the Customs Authorities while determining the value, must confront the importer with the material available with them. Failure to do so, renders the valuation so determined illegal. In such cases, the superior Courts in a string of decision have remanded the case for de novo consideration. In this case, the determination of value suffers from the same illegality as at no stage, the complainant was confronted with the evidence the Customs Authorities had in their possession and relied upon for rejecting the declared value. In spite of consent order passed by the High Court, the proper and legal course as provided by law was not followed. The Customs Authorities have committed maladministration. It is recommended that:

(i) the relevant authority to assess the value after confronting the complaint with the evidence relied upon for rejecting the declared value and pass order for refund if it is found due on such determination of value.

(ii) the order be passed within 45 days.'

(iii) Compliance be reported up to 7‑2‑2002.

C.M.A./M.A.K./378/FTO

Order accordingly.