Messrs ALI TRADE LINKERS, LAHORE VS FEDERATION OF PAKISTAN
2005 P T D 1164
[Karachi High Court]
Before Sabihuddin Ahmed and Khilji Arif Hussain, JJ
Messrs ALI TRADE LINKERS, LAHORE
versus
FEDERATION OF PAKISTAN through Secretary, Ministry of Finance Government of Pakistan, Islamabad and 4 others
Constitutional Petition No.D-1388 of 1995, heard on /01/.
27th January, 2005. Customs Act (IV of 1969)---
----Ss.25, 32 & 179---Constitution of Pakistan (1973), Art.199---Constitutional petition---Determination of Customs value of goods---Untrue statement---Power of adjudication---Scope---Normal price of the goods in terms of S.25, Customs Act, 1969 has to be the value of goods in the country from where the goods originated---Under S.32, Customs Act, 1969, whenever customs duty has been short levied, the person liable to pay any amount is to be served with a show-cause notice under S.32(2) and the appropriate officer is required to determine the amount of duty payable under S.32(4) of the Act---Function of appropriate officer under the said provisions have been assigned to Officers of Customs competent to adjudicatethecaseunderS. 179,CustomsAct, 1969,apartfromtheAssistantCollector,the Deputy Collector and the Controller of Valuation---Goods in the present case, having been released from the Lahore Dry Port, the Deputy Collector Appraisement at Karachi did not have jurisdiction to determine the matter---High Court observedthatmatterbeingmorethan10yearsold,itwouldbeentirely futile torequirethepetitionertoavailoftheremediesthathad become open tohimafterpassingoftheorderinrevision---Allthe orders of the department, passed in the case were declared by the High Court to be without lawful authority but left it open to the authorities to take appropriate action strictly in accordance with law.
Latif Brothers v. Government of Pakistan 1992 SCMR 1083 fol.
Shehzad Ahmad Corporation v. Federation of Pakistan C.P.D. No.817 of 2004 and Arif Javed and another v. Mumtaz Hussain Bhutto and others C.P.D. No.1751 of 1992 ref.
Mansoorul Arfin for Petitioner.
Faisal Arab, Standing Counselfor Respondent No.1.
Messrs Raja Muhammad Iqbal and Ahmed Khan Bugti for Respondent No.4.
Dates of hearing: 25th and 27th January, 2005.
JUDGMENT
SABIHUDDIN AHMED, J.---The brief facts leading to the filing of the above petition appear to be that the petitioner imported a consignment of 711 cases of nail polish remover of Spanish origin and classified it under PCT Heading 3507.1000 liable to 60% duty. The goods in question were presented for clearance at DryPortLahore. The customs officials enhanced the declared value of the goods by 100% and reclassified the goods under PCT Heading 3814.0000 chargeable with customs duty. According to the petitioner since the goods were of perishable nature they waived their legal rights and upon payment of the assessed customs duty and sales tax cleared the consignment from Dry Port Lahore in July, 1993 the whole of which was subsequently sold to one Sattar Chawala of Karachi.
2.It appears that when the goods in question were being brought to Karachi by the aforesaid Satter Chawala they were intercepted by the staff of the Directorate of Intelligence and Investigation Customs and Excise (Respondent No.5) on 1-8-1993 but could not be physically examined as the alleged owner Satter Chawala was unableto produce the key ofthecontainer. Healsofailedtodosothefollowingday and the goods are stated to have been seized by the respondent No.5 on 3-8-1993 under proper Mashirnama. Some samples were drawn and sent to Controller of Valuation who vide his letter, dated 30-8-1993 stated that the goods were classifiable as nail polish remover under PCT Heading No.3304.30 (and not 3814.00) and the normal price under section 25 was far in access of what had been declared by the petitioner.
3.Thereupon the Respondent No.4 issued show-cause notice, dated 26-10-1993 alleging inter alia misdeclaration under section 32 of the Customs Act and commission of offences under sections 16 and 156(1) of the Act. The petitioner submitted an explanation in writing whereupon a detailed interim order, dated 1-2-1994 was passed releasing the goods upon furnishing bank guarantee with respect to duty calculated on declared value plus 30% additional amount and Valuation Department to complete their enquiry within 45 days.
4.However, the direction to finalize the matter was neither complied with by the Directorate of Intelligence nor by the Valuation Department for more than 5 months, therefore, by final order,dated19-6-1994 the Respondent No.4 held that the declared value of Pounds 2.75 per carton containing 96 bottles was ridiculously low and in any event 100% enhancement by the Customs Authority was devoid of any valid basis. Accordingly the value of 0.45 Dollars per unit suggested by the Valuation Department was held to be correct. Moreover, a penalty of Rs.100,000 was imposedon the petitioner under clauses (9) and (14) of section 156(1) of the Customs Act. The above order was upheld in appeal by the Respondent No.3. It has been contended in the memo. ofpetition that the jurisdiction of the Respondent No.4 was also questioned in appeal but the appellate order makes no mention of the same.
5.The petitioner preferred a revision application against the appellate order. The revisional authority after narrating all the facts pertaining to the original and appellate proceedings in paras 1 to 4 of its order proceeded to record its own findings in paras 5 to 7. In para. 5 the petitioner s objection to the jurisdiction of the Respondent No.4 was repelled on the ground that they had submitted to the jurisdiction of the respondent No.4 who passed the order, dated 1-2-1994. In paras 6 and 7 however, it was held that respondent No.4 after having passed an order-in-original, dated 1-2-1994 could not review his earlier order and therefore, the subsequent order, dated 19-6-1994 was not legally sustainable. Accordingly the latter order was quashed and it was observed that the earlier order, dated 1-2-1994 held the field.
6.The petitioner has called in question all the aforementioned orders including the last order in revision though it has beensomewhat difficult for us with all respects to comprehend the import of the aforesaid order and the petitioner s assumption to the effect that it purported to uphold the orders of the respondents Nos. 3 and 4. Ex facie the order in original, dated 1-2-1994 apart from being described as an interim order only records that a final order could be passed after valuation was effected and investigation report received. It was only through the final order, dated 19-6-1994 that the petitioner s liability was determined and penalty was imposed. This final order came to be questioned in appeal and was upheld therein. Once the final order was quashed by the revisional authority and the interim order was held to hold the field the order in appeal lost its efficacy and the petitioner s liability could only be determined upon the fulfilment of the requirements referred to in the interim order. Apparently the only course available to the petitioner was to await the result of a proper valuation and the investigation report and thereafter appear before the Respondent No.4 for getting his liability determined through a final order. In any event in the absence of any final order holding that he had misdeclared the value ofthe goods he could not be held liable to pay any additional amount by way of customs duty or pay a penalty. It is difficult to concede how he was aggrieved by the order in revision for the purpose of maintaining this petition.
7.Indeed the learned Additional Secretary exercising revisional powers on behalf of the Respondent No.1 was correct to the extent that the Customs Act does not confer any power of review upon an adjudicatingofficer. Nevertheless, as is evident both from the title and the concluding part of theinterim order in original, dated 1-2-1994 that it was merely an interim order and it is well-settled that an authority having the jurisdiction to pass a final order always possesses the power to pass an interim order. It might be possible to say that in the circumstances of the case it was not necessary or perhaps inappropriate to pass an interim order or a final opinion on some aspects of the matter should not have been recorded in such an order but the logical outcome could only be that the conclusions in the interim order ought to have been ignored or treated as subject to the final order that was eventually passed. However, when the respondent No.4 had expressly recorded in the interim order that a final order could be passed both in respect of the value as well as the charge of misdeclaration only after determination of value and a receipt of investigation report there could be no basis upon which the revisional authority could treat the interim order as the final order and quash the final order subsequently passed.
8.In any event Mr. Mansoor-ul-Arfin argued that the respondents proceeded against the petitioner on a premises entirelyunsustainable under the law. In this context he urged as follows:--
(i)Once the goods had been cleared by the authorities at the LahoreDryPort and the petitioner had obtained delivery upon payment of customs duties duly assessed the Directorate of Customs Intelligence had no jurisdiction whatsoever to investigate the matter afresh as regards the value of the goods.
(ii)That in any event the respondent No.4 being an officer of the Appraisement Collectorate Karachi had no territorial jurisdiction to adjudicate the matter.
(iii)That the value of the goods for the purposes of section 25 of the Customs Act could only be determined on the basis of the market value operating in the country of origin of the goods and not on local market enquiry asreferred to in the show-cause notice dated 26-10-1993.
9.With respect to the first contention learned counsel placed before us a detailed chart of the duties of intelligence officerwith reference to S.R.O. 388(I)/82 dated: 22nd April 1982 and squarely relied upon a recent pronouncement by a Division Bench of this Court comprising of Shabbir Ahmed and Majeebullah Siddiqui, JJ, in Shehzad Ahmed Corporation v. Federation of Pakistan (C.P.D. No.817/04) wherein it was held that the officers ofIntelligence Directorate could not be treated as appropriate Officers of Customs for the purpose of section 32 of the Customs Act. On the other hand Mr. Faisal Arab learned Standing Counsel referred to an earlierDivision Bench pronouncement,dated27-9-1992 in Arif Javed and another v. Mumtaz Hussain Bhutto and others (C.P. D. No.1751/92) where a different view seems to have been taken and it was held that the Intelligence Directorate had vast powers to require any person to furnish such information relating to goods as is necessaryinter alia for determining their value and the customs duty chargeable thereon. Nevertheless, in the circumstances, ofthe case we do not think it is necessary to pronounce upon thematter and would prefer to leave it open to be decided in an appropriate case.
10.The second and third contentions raised by the learned counsel however, appear to be indisputably correct as was candidly conceded by the learned Standing Counsel. Indeed it is well-settled that the normal price of the goods in terms of section 25 has to be the value of goods in the country from where the goods originated as was inter alia held bythe Honourable Supreme Court in Latif Brothers v. Government of Pakistan (1992 SCMR 1083). Moreover, under section 32 whenever customs duty has been short levied the person liable to pay any amount is to be servedwith a show-cause notice under subsection (2) and the appropriate officer is required to determine the amount of duty payable under subsection (4). The function of appropriate officer under these provisions have been assigned to officers of Customs competent to adjudicate the case under section 179 apart from the Assistant Collector, the Deputy Collector and the Controller of Valuation. Since goods in the present case had been cleared from the LahoreDryPort learned counsel seems to be correct in contending that the Deputy Collector Appraisement at Karachi did not have jurisdiction to determine the matter.
11.In viewoftheforegoingobviousinfirmitiesaswellasthefact that the matterismorethan10 yearsold,weareoftheviewthatit would be entirely futile to require the petitioners to avail of the remedies that had become open to him after passing of the order in revision. In the circumstances, we would declare all the orders of the Respondentspassed in this case to be without lawful authority but would leave it open to them to take appropriate action strictly in accordance with law.
M.B.A./A-178/KOrder accordingly.