Customs Act (IV of 1969)---

----S.25-A---Constitution of Pakistan (1973), Art. 199---Constitutional petition---Power to take over the imported goods---Appropriate Officer, for the purpose of S.25-A, Customs Act, 1969 to order the take over of imported goods is Additional Collector of Customs and he is the only officer in the hierarchy of Customs Officials who could pass an order under. S.25-A of the Customs Act, 1969---Customs Authorities, in the present case, had not stated in their comments that any order was passed by the Additional Collector of Customs but the sole reliance had been placed on the notice issued by the Assistant Collector of Customs-- Validity---Notice in question was without jurisdiction and consequently, the entire proceedings, in the absence of any order by the appropriate officer, were without jurisdiction which were declared to be inoperative, null and void by the High Court---Importer yeas entitled to get the imported goods cleared in terms of S.25(1) of the Customs Act, 1969 on payment of Customs duty and taxes assessed by the Customs Officials at the declared value only and Customs Authorities were directed accordingly.

Khawaja Shamsul Islam for Petitioner.

Miss Masooda Siraj for Respondent No. 1.

Raja Muhammad Iqbal for Respondent. No.2.

M.G. Dastagir for Respondent No.3.

Syed Ziauddin Nasir, Standing Counsel for Respondent No.4.

Date of hearing; 25th September, 2003.

JUDGMENT

MUHAMMAD MUJEEBULLAH SIDDIQUI, J.----Succinctly stated the relevant facts giving rise to this petition are that, the petitioners imported two consignments from Russia comprising Secondary Cold Rolled Steel Sheets in Coils and Bundles at the declared market value of US $ 270 per metric- ton for CRC Steel Sheets and Coils. The vessel carrying the consignments arrived at Karachi Port on 7-7-2003 and on the same date IGM was allotted being No. 1075 of 2003. On arrival of consignments the petitioners filed bill of entry for bond and the necessary formalities were completed on the same day, after examination of the consignment. Group-V of the Respondent No.1 processed two bills of entry and provisionally assessed the same under section 81 of the Customs Act on the declared value but enhanced 1% bond charges in respect of CRC coils to the tune of US $ 300 P.M.T. Port charges were accumulating and therefore, the petitioner finding no other alternative placed the consignment in the Custom Bonded Warehouse. According to the facts given in the Memo of petition, the petitioner filed 29 ex-bond bills of entry on 18-7-2003 and 21-7-2003 and the officers under the Respondent No.1 allotted Index Nos.5 and 6 and Machine No.2690. However, the goods were not released and subsequently, the petitioner came to know that the officers under the administrative control of Respondent No.1. without issuance of any show-cause-notice to the petitioner and without furnishing any information, directly approached the Pakistan Steel Mills, vide its letter, dated 26-7-2003 and held negotiations on 29-7-2003, behind the back of petitioner. As a result of negotiations between the Respondent No.1 and the Chairman, Pakistan Steel Mills Corporation, a letter was issued by the respondent No.3, dated 1-8-2003, showing their willingness to purchase the consignment imported by the petitioner at the rate of US S 350 P.M.T. Thereafter, on 9-8-2003 a notice under section 25-A of the Customs Act 1969 was issued to the petitioner stating that the value of imported consignment declared by the petitioner was reportedly understated and there is an offer of these goods at US $ 350/MT which is substantially higher than the declared value and the offer is accompanied with a pay-order equal to 25 % of the total offered amount of the said consignment. The petitioner was called upon to get the goods cleared at offered value of US $ 350/MT within 7 days of the receipt of the notice, failing which the goods shall be taken under section 25-A (iii) of the Customs Act, 1969. Copy of this notice was sent for information to the Collector of Customs (Appraisement) Respondent No.1. Additional Collector of Customs (Appraisement), Chairman. Pakistan Steel Mill and the Clearing Agent. After receiving this notice the petitioner filed this petition. It is contended that the Respondent No. 1 was bound to give in writing to the petitioner the reasons for rejecting the price actually paid or payable for the goods and the reasons for rejecting the invoice value. It is further contended that under Rule 109(1) of the Customs Rules, 2001, where the appropriate officer has reason to doubt the truth or accuracy of the particulars or of documents produced in support of the declaration, such officer may ask the importer to provide further explanation, including documents or other evidence. Under sub-rule (3) of Rule 109, when the final decision is made, the appropriate officer shall communicate to the importer in writing his decision and the grounds therefor. The petitioner has submitted that neither any show cause notice was issued nor the appropriate customs officer informed in writing to the petitioner rejecting the transaction value as declared. It is further contended that since the consignment imported by the petitioner have already been examined at 100% and assessed the duty in terms of section 81 of Customs Act, 1969 therefore, the officers under respondent No. 1 are bound to release the consignments on final assessment of duty under section 80 of the Customs Act. It is further contended that the respondent No.4. C.B.R. has issued notification S.R.O. 487(1)/2003, dated 7-6-2003 prescribing the range of understated value of the goods to be taken over by the Customs in terms of section 25-A of the Customs Act, 1969. It is submitted .that the goods imported by the petitioner fall in the category of Tin plate specified at S. No. 11 in the notification and the range of understated value given is 30%. In the case of consignments forming subject-matter of this petition the understatement alleged is admittedly less than 30 % and therefore, the officer working under respondent No.1 could not take over the goods imported by the petitioner.

The petitioner has inter alia sought declaration that the impugned enhancement of the value by the respondent No.1 to the tune of US $ 350 is contrary to law and violative of section 25(1) of the Customs Act, 1969. Further declaration is sought to the effect that the letter, dated 26-7-2003 addressed to Pakistan Steel Mills by respondent No.1 for enhancement of declared value is illegal. The petitioner has also sought declaration that he is entitled to pay duty in terms of section 25(1) of the Customs Act, 1969 on the declared US $ 270 P.M.T. only and that the notice under section 25-A of the Customs Act 1969, dated 9-8-2003 is illegal and void ab initio.

The Assistant Collector of Customs Appraisement-(Law) has filed the comments on behalf of the respondents stating therein that the declared value of the petitioner cannot be considered as transactional value. It is further stated that the declared value was found understated as the respondent received higher offer to the extent of approximately 30%. It is alleged that Messrs Pakistan Steel offered to purchase the consignment at higher value and therefore, the respondents processed the case as per procedure laid down in section 25-A of the Customs Act, 1969 and the respondents issued notice, dated 9-8-2003, produced by the petitioner alongwith the petition. The respondents have further contended that the petitioner is at liberty to get the goods declared at the offered value or to handover the possession of their goods on the declared value + 5 % of the declared value. They have further taken plea that the petitioner has placed reliance on Notification S.R.O. 487(1) of 2003, dated 7-6-2003, but under rule 4 thereof, the appropriate officer, under section 25-A is empowered to proceed in respect of any goods or classes of goods. The respondents have maintained that they have acted in accordance with the law and consequently, the petition is liable to be dismissed.

We have heard Mr. Khawaja Shamsul Islam, learned counsel for the petitioner, Miss Masooda Siraj learned counsel for the respondent No. 1, Raja Muhammad Iqbal learned counsel for respondent No.2, Mr. M.G. Dastagir, learned counsel for respondent No.3 and Syed Ziauddin Nasir. Standing Counsel for the Federation of Pakistan.

Mr. Khawaja Shamsul Islam, has, submitted that notwithstanding, the non-observance of procedure provided in law for determination of value for the imported goods, the entire proceedings in the present case, are without jurisdiction and are consequently null and void. Elaborating his contention he has submitted that by virtue of the Notification S.R.O. 371(1)/2002, dated 15-6-2002 issued by the C.B.R. in exercise of tile powers conferred by clause (b) of section 2 of the Customs Act, the functions of appropriate officer for the purpose of section 25-A of the Customs Act, has been assigned to Additional Collector of Customs. He has submitted that in the present case, the sole notice issued to the petitioner, is, dated 9-8-2003 which has been issued by the Assistant Collector of Customs, Group-V, Appraisement Collectorate, Customs House Karachi and the respondents have in their comments placed reliance on the said notice. He has drawn our attention to para. 9 of the parawise comments filed on behalf of respondents wherein it is specifically stated as follows:--

"In the aforesaid situation respondent processed the case as per procedure laid down under section 25-A of the Customs Act, 1969. Respondent issued Notice vide No. SI/MISC306/03-V, dated 9-8-2003 (Annexed-`B') to the petitioner under sec tion 25-A(II) ibid."

Mr. Khawaja Shamsul Islam has vehemently argued that an action without jurisdiction is void ab initio and is liable to be struck down.

Miss Masooda Siraj, learned counsel for the respondent No.1, was not able to rebut the contention that under S.R.O. referred to above, appropriate officer is Additional Collector of Customs for the purpose of section 25-A and the Assistant Collector of Customs who issued the impugned notice, dated 9-8-2003, is not an appropriate officer within the contemplation of, section 25-A of the Customs Act, read with section 2(b). She however; attempted to argue that the Additional Collector was throughout associated with the proceedings and was informed of the impugned notice, dated 9-8-2003 therefore, the proceedings under section 25-A have been initiated with the consent of Additional Collector of Customs. We are not impressed with the contention, for the reason that when Additional Collector has been appointed as appropriate officer for the purpose of section 25-A of the Customs Act, he is the only officer empowered under the law to initiate the proceedings and pass all the orders for the purpose of section 25-A. Mr. M.G. Dastagir, learned counsel for the respondent No.3, was asked by the Court to assist on this point being a senior counsel and he candidly stated that the Notification S.R.O. 371(1)/2003, dated 15-6-2002 is very clear to the effect that the functions of appropriate officer for the purpose of section. 25-A has been assigned to Additional Collector of Customs only.

So far, Mr. Raja Muhammad Iqbal, learned counsel for the respondent No.2, is concerned, his sole contention is that the respondent No.2 is not a necessary party. Mr. Ziauddin Nasir, learned Standing Counsel adopted the arguments addressed by Miss Masooda Siraj.

We have carefully considered the contentions raised by the advocates for the parties and we have no scintilla of doubt in our mind that, for the purpose of section 25-A, the appropriate officer is Additional Collector of Customs and he is the only officer in the hierarchy of Custom Officials who could pass an order under section 25-A. The respondents have not stated in their comments that, any order was passed by the Additional Collector of Customs and the sole reliance has been placed on the notice, dated 9-8-2003 issued by the Assistant Collector of Customs. In these circumstances, we do not find any difficulty in holding that the impugned notice, dated 9-8-2003 is without jurisdiction and consequently, the entire proceedings in the absence of an order by the appropriate officer are without jurisdiction which are hereby declared to be inoperative, null and void.

Other points raised by Mr. Shamsul Islam, are not required to be deliberated upon in this judgment and shall be considered in some other appropriate case. Consequent, to the declaration that; the impugned notice, dated 9-8,2003, is without jurisdiction and void ab initio, the petition is allowed and it is further declared that, the petitioner is entitled to get the imported goods cleared in terms of section 25(1) of the Customs Act, 1969, on payment of custom duty and taxes assessed by the Custom officials at the declared value of US & 270 P.M.T. only. The respondents are directed to release the goods imported by the petitioner on payment of custom duty and taxes as directed above. The parties are left to bear their own cost.

After hearing learned advocates for the parties on 25-9-2003, the petition was allowed by a short order. These are the detailed reasons in support thereof.

M.B.A./S-338/KPetition allowed.