AKHTAR HUSSAIN VS COLLECTOR OF CUSTOMS (APPRAISEMENT), CUSTOMS HOUSE, KARACHI, 2003 PTD-KARACHI-HIGH-COURT-SINDH 2090 (2003)

(a) Customs Act (IV of 1969)---

----Ss.32, 79, 219 & 223---Customs General Order 12 of 2002-- Amendment in the Bill of Entry is permissible under law---Importers in the present case, had opted for first appraisement and through C.G.O.12 of 2002, the CBR had instructed that the importers may not be charged for misdeclaration under S.32, Customs Act, 1969 where the importers had opted for first appraisement for the determination of correct description PCT heading and quantity of goods---Effect---Any administrative order, violative of the provisions contained in the statute was bad and invalid to the extent of inconsistency---Instructions issued by the C.B.R. under S.219, Customs Act, 1969 were binding on all the officers of the Customs employed in the execution of Customs Act, 1969 by virtue of provision contained in S.223 of the Customs Act, 1969---If, as in the present case, there was any conflict in the instructions issued by the CBR and the instructions/orders issued by the officer subordinate to the CBR, instructions/orders issued by the subordinate official were invalid and inoperative to the extent of the conflict.

(b) Customs Act (IV of 1969)---

----Ss.32 & 79---Standing Order 5 of 2002---Standing Order 9 of 2002-- Orders/Instructions contained in Para. B of Standing Order No.5 of 2002 and to the extent in Standing Order 9 of 2002 that, "henceforth no importer shall routinely be permitted examination of imported goods under the first proviso of S.79(1) of the Customs Act, 1969 and that "after filing of Bill of Entry" only machine number of set of document shall be entertained for the customs purpose by the Collectorate illegal, void, without jurisdiction and having no legal effect---Importers were bound under the law to allow amendment in the Bill of Entry and in the case of option given for first appraisement for the determination of correct description, PTC heading and quantity of goods, no importer shah be charged for misdeclaration under S.32, Customs Act, 1969.

Navin S. Merchant for Petitioner.

Syed Tariq Ali, Standing Counsel assisted by Dr. Tariq Hudda, Additional Collector for Respondents Nos. 1 and 2.

Wazir H. Rizvi for Respondent Nos.4.

Date of hearing: 28th January, 2003.

JUDGMENT

MUHAMMAD MUJEEBULLAH SIDDIQUI, J.---The petitioner has sought the following reliefs:

"This Hon'ble Court may be pleased to:

1. Declare that the Standing Order 9 dated 2-9-2002 and 5, dated 6-3-2002 issued by the respondent No.1 is in clear violation of sections 79, 205 and 29 and CGO 12 of 2002 is ab initio void, without jurisdiction and of no legal effect.

2. Declare that the letter dated 31-12-2002 issued by the Subordinate of the respondent No. 1 is incompetent and without lawful authority.

3. Declare that the act of respondents 1 and 2 in refusing the amendment and processing of the bill of entry dated 15-11-2002 in accordance with sections 79, 80 and 205 of the Customs Act, 1969 is illegal, mala fide, void, unjust, tainted with ulterior motive, without lawful authority and of no legal effect.

4. Direct the respondents to process bill of entry dated 15-11-2002 filed by the petitioner. and assess the goods according to the examination conducted by them on the request of the petitioner and allow clearance of the goods on payment of duties and taxes to be calculated on the basis of transaction value in terms of section 25(1) of Customs Act, 1969 immediately without any undue delay.

5. Permanently direct respondents, their subordinates and anyone acting on their behalf to refrain from taking any coercive action against the petitioner.

6. Direct the respondents 1 and 2 to issue delay and detention certificate as waiver of the demurrage, storage, container and other port charges as delay in clearance of goods is due to the fault of the respondents.

7. Direct the respondent No.4 to accept the delay detention certificate and waive the demurrage and other charges."

The facts giving rise to this petition are that the petitioner imported a consignment of Textile Fabric/Miscellaneous goods valuing US $ 54039, dated 1-11-2002. On arrival of goods, the petitioner filed bill of entry dated 15-11-2002, under first appraisement, seeking clearance of goods on payment of all the leviable dues in accordance with law. Copy of commercial invoice and bill of lading was also produced alongwith the bill of entry. While filing bill of entry, the petitioner made a request under proviso to section 79(1) of the Customs Act on the reverse of the bill of entry for carrying out 100% examination for determining of correct description, quantity, PCT Heading, Art/Part number etc. as follows:

"Declaration in respect of imported goods in term of section 79(1) read with section 32 further read with S.R.O. 1374(I)99 and CGO 10/99, we have made bills of entry according to available particulars from import documents. We do not possess full information in respect of description of type, category of goods, weight, quantity, origin and value, size/Art Number etc. to make a complete bill of entry. We do not -have knowledge or reason to believe that said documents of statement are false in any material particular. We opt for 100% examination of goods to determine the description and type/category of goods, weight, quantity, value, origin, PCT Heading Art/Part Number, assessment of value and levy of custom taxes. Whatever has been imported has been produced for 100% examination, levy of custom taxes and to amend bill of entry under the relevant provisions of Customs Act in good faith."

The request was allowed and the entry was marked as, "under first appraisement" by the competent Custom officer and goods were examined. A report of such examination appears on the reverse of the bill of entry.

Subsequent to the filing of bill of entry by the petitioner, he was informed by the supplier abroad, that while clearing invoice dated 16-11-2002, his staff missed certain items and wrongly indicated the value as US $18817, whereas shipment contained same quantity of all items mentioned in the Performa Invoice dated 1-11-2002, valuing US $ 54039 vide letter dated 27-11-2002. The supplier abroad also provided a supplementary invoice dated 25-11-2002 for items, which was not mentioned earlier for commercial invoice.

The petitioner immediately wrote a letter, dated 28-11-2002 to the respondent No.2, to allow the amendment in the bill of entry under section 205 of the Customs Act, 1969, in accordance with the supplementary invoice, which is in conformity with the proforma invoice/contract. The respondent No.2 refused verbally to amend, process and clear the goods. The petitioner thereafter addressed as many as seven letters, seeking amendment in the bill of entry and clearance of the goods for home consumption on payment of duties and taxes leviable under the law but no heed was paid. Ultimately, the respondent No.2 rejected the request vide letter, dated 30-12-2002 for the reason that the request was not in accordance with the Standing Orders 5 of 2002 dated 29-2-2002 and 9 of 2002 dated 6-3-2002.

The impugned direction contained in Standing Order 5 of 2002, issued by respondent No. 1, reads as follows:

"Henceforth, the description and the quantity declared on the bill of entry at the time of its filing at the Customer Service Centre shall be deemed to be final; anything found at the time of physical examination of the goods contrary to the declared description and quantity shall constitute an offence under the Customs Act, 1969. "

The Standing Order 9 of 2002 reads as follows:

"STANDING ORDER No.9 OF 2002

SUB-EXAMINATION AND ASSESSMENT OF IMPORTED GOODS

In continuation of earlier orders/instructions issued on the above subject from time to time, it is brought to the notice of all concerned that henceforth, no importer shall be routinely permitted examination of imported goods under the first proviso of subsection (1) of section 79 of the Customs Act, 1969. It has been earlier ordered vide Standing Order No.5 of 2002, dated 6-3-2002 that the importer shall make a full and complete declaration on the bill of entry in respect of imported goods including description, trade name, brand name, specifications, art number, part number, quantity, value, mode of packing, origin etc. It is further ordered that invoice and packing list containing every detail of the imported goods, shall be presented at the SCS Counter alongwith bill of entry. At the time of manifestation of the bill of entry at the CSC the invoice and packing list shall also be machine numbered alongwith the bill of entry. Thereafter, only the machine numbered set of documents shall be entertained for customs purposes by this Collectorate.

2. Any wilful misdeclaration or under-declaration on this account with the intention of causing injury to the Revenue shall be proceeded under section 32(2) of the Customs Act, 1969."

The contention of the petitioner is that the above Standing Orders to the extent of directions pertaining to amendment in the bill of entry are violative of the provision contained in the Customs Act, 1969, and are further violative of the instructions issued by the Central Board of Revenue (C.B.R.), which have binding effect on the respondents, Nos. 1 and 2. The petitioner has specifically contended that the refusal to accept request for amendment in bill of entry on the basis of Standings Orders 5 and 9 of 2002, is violative of the provisions contained in section 205 read with section 29 of the Customs Act, 1969 and the instructions contained in CGO 12 of 2002, issued by the C.B.R.

We have heard Mrs. Navin S. Merchant, learned counsel for the petitioner, Mr. Syed Tariq Ali, Standing Counsel, assisted by Dr. Tariq Hudda, Additional Collector for respondents Nos. 1 and 2 and Mr. Wazir H. Rizvi, learned counsel for the respondent No.4.

Learned counsel for the petitioner has reiterated the contentions raised in the petition, while learned Standing Counsel and learned Additional Collector have submitted that Standing Orders, 5 and 9 of 2002 have been issued in order to check and control the mal-practice on the part of importers.

In order to appreciate the contentions raised by learned counsel for the petitioner, it would be appropriate to reproduce sections 79 and 205 of Customs Act, 1969 as well as the relevant instructions contained in CGO 12 of 2002.

"79. Entry for home-consumption or warehousing. The owner of any imported goods shall make entry of such goods for home- consumption or warehousing or for any other approved purpose by delivering to the appropriate officer a bill of entry thereof in such form and manner and containing such particulars as the Board may direct:

Provided that, if the owner makes subscribes a declaration before the appropriate officer to the effect that he is unable, for want of full information, to make a complete entry of any goods, then the said officer (may subject to the conditions prescribed by the Collector) permit him, previous to the entry thereof, to examine the goods in the presence of an officer of customs or to deposit such goods in a public warehouse appointed under section 12 without warehousing the same, pending the production of such information.'

2. A bill of entry under subsection (1) may be presented at any time before or after the delivery of the manifest.

3. If an officer not below the rank of Additional Collector of Customs) is satisfied that the rate of customs-duty is not adversely affected and that there was no intention to defraud, he may in exceptional circumstances and for reasons to be recorded in writing permit substitution of a bill of entry for home-consumption for a bill of entry for warehousing or vice versa.

4. An officer of Customs not below the rank of Assistant Collector or Deputy Collector of Customs may in case of goods requiring immediate release allow release- thereof prior to presentation of a bill of entry and subject to such conditions and restrictions as may be prescribed by the Board".

"205. Amendment of documents. Except in, the case provided for .by sections 29, 45, 53 and 88 an officer of customs not below the rank of an Assistant Collector of Customs may, in this discretion, upon payment of a fee of five rupees, authorise any document, after it has been presented at the customs-house, to be amended".

CGO 12 of 2002

"(b) Question of taking cognizance of misdeclaration of description, value and PCT headings.

For invoking provisions of misdeclaration under section 32 of the Customs Act, 1969 prima facie, a element of "mens rea" should be present i.e. there should be an, attempt of willful and deliberate false declaration. The importers may not be charged for misdeclaration under section 32 of the Customs Act, 1969, in the following situation:

(i) Where an importer makes a correct declaration on bill of entry or opts for 1st appraisement for determination of correct description. PCT heading and quantity of goods;

(ii) When a consignment is found to contain goods of description other than the one declared falling under separate PCT heading but chargeable to same rate of duty;

(iii) Whether the description of goods is as per declaration but incorrect PCT heading has been mentioned in the bill of entry no misdeclaration case under section 32 of the Customs Act, 1969 be made out provided there is no change in the rate of customs duty as a result of ascertained PCT heading".

The learned Standing Counsel, Mr. Syed Tariq Ali and learned Additional Collector are not able to deny that the amendment in the bill of entry is permissible under the law. They have not denied that the petitioner opted for first appraisement and that under CGO 12 of 2002, the C.B.R. has instructed that the importers may not be charged for misdeclaration under section 32 of the Customs Act, 1969, where importer opts for first appraisement for the determination of correct description PCT heading and quantity of goods.

In the above circumstances, no detailed discussion is required for deciding the point in issue. It is established principle that any administrative order, violative of the provisions contained in the statute is bad and invalid to the extent of inconsistency. It is also undeniable proposition of law that instructions issued by the C.B.R. under section 219 of the Customs Act, 1969, are binding on all the officers of the customs employed in the execution of Customs Act by virtue of provision contained in section 223 of the Customs Act. If there is any conflict in the: instructions issued by the C. B. R. and the instructions/orders issued by the Officer subordinate to the C.B.R., that the instructions/orders issued by the subordinate official are invalid-and inoperative to the extent of conflict.

For the foregoing reasons, it is held that the orders /instructions contained in para. "B" of Standing Order 5 of 2002 and to the extent in Standing Order 9 of 2002 that, "henceforth no importer shall routinely be permitted examination of imported goods under the first proviso of subsection (1) of section 79 of the Customs Act, 1969", and that, "after filing of bill of entry "only machine number of set of document shall be entertained for the custom purpose by this Collectorate" are illegal void, without jurisdiction and having no legal effect. It is further declared that respondents Nos. 1 and 2 are bound under the law to allow amendment in the bill of entry and that in the case of option given for first appraisement for the determination of correct description, PTC heading, quantity of goods, no importer shall be charged for misdeclaration under section 32 of the Customs Act, 1969.

Consequently, the above petition is allowed as prayed.

Since the imported goods are perishable, therefore, respondent No. 1 and 2 are directed to finalize the entire process. The petition is allowed.

M.B.A./A-464/KPetition allowed.