PAK SUZUKI MOTORS CO. LTD. through Senior General Manager VS COLLECTOR OF CUSTOMS through Assistant Collector (Processing), Karachi, 2006 PTD-KARACHI-HIGH-COURT-SINDH 2237 (2006)

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

----S. 193(4)---Appellate Authority, order of---Essentials---Appellate Authority in exercise of quasi judicial function was required to decide appeal and not merely to dispose of the same---Such order must be a speaking order disclosing application of mind to the facts and law and reasons for every finding---Practice of dealing with an issue in a perfunctory manner and disposing of appeal by a slipshod order devoid of any reason---High Court strongly deprecated such practice---Principles.

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

----S. 25(3)---Customs Rules, 2001, R. 2(g), Expin. II---Relationship between buyer and seller in terms' of the rules---Expression "associated" used in R.2(g) of Customs Rules, 2001 while-defining expression "related persons"---Scope---Expression "associated" would not be taken as independent expression, but would be considered in the light of Explanation II to R.2(g) of Customs of Rules, 2001---Principles.

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

----Ss. 194 & 196---Reference to High Court---Question of fact not decided by Tribunal---Validity---Tribunal as a final fact-finding authority was obliged to consider such question---High Court in exercise of its advisory jurisdictions would not give any finding of fact for the first time in such a case.

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

----S. 25(3)(a)(b)---Interpretation of clauses (a) & (b) of S.25(3) of Customs Act, 1969---Use of word "or" in between such clauses made them disjunctive and/or not injunctive---Conditions specified in both such clauses not required to be satisfied simultaneously---Transaction value would be accepted for purpose of S.25(1) of Customs Act, 1969, if either of the .conditions specified in such clauses, was satisfied---Principles.

(e) Interpretation of statutes---

----Term used by legislature---Substitution of such term by any executive or judicial authority not warranted.

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

----S. 25(1)(3)---Customs Rules, 2001, R.2(g), Expin. II---Deduction of trade discount from price of imported goods---Validity---Exporter had allowed discount to applicant on importing 11280 vehicles in CKD kits---Exporter had not allowed discount to any other importer---Commercial level and quantity level of import made by applicant could not be compared with any other importer in Pakistan---Like would be compared with like, in such circumstances surrounding the sale of imported goods, discount allowed by exporter could not be treated on account of influence or due to relationship, but same was on account of commercial expediency and business consideration---Applicant was entitled to claim discount.

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

---S. 25(3)---Transaction value, determination of---Like would be compared with like.

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

---S. 32---Custom General Order No.12 of 2002, dated 15-6-2002, Para 44---Short-levy of duty, charge of---Issuance of show-cause notice pertaining to post import matter and passing order-in-original for recovery of short levied duty by Assistant Collector of, Customs---Validity---Such being a post importation case, only officers of Valuation Department could initiate action for recovery of government dues under S.32 of Customs Act, 1969---Order-in-original was without jurisdiction.

Aziz A. Shaikh and Khurram Shaikh for Applicant. Haider Iqbal Wahniwal for Respondent.

Dates of hearing: 25th April, 2005 and 26th April, 2006.

JUDGMENT

MUHAMMAD MUJEEBULLAH SIDDIQUI, J.---This reference application under section 196 of the Customs Act, 1969 is directed against the order, dated 1-6-2005 passed by the learned Customs, Excise and Sales Tax Appellate Tribunal Karachi Bench-II in Customs Appeal No.75 of 2005 (K-2).

The reference application was admitted to consider the following questions of law:--

(1) Whether the Customs, Excise and Sales Tax Appellate Tribunal has correctly interpreted and applied the provisions contained in section 25 of the Customs Act read with relevant rules contained in the Customs Rules, 2001?

(2) Whether the Customs and Sales Tax Appellate Tribunal has erred in holding that the order in original was with jurisdiction and in accordance with law?

The relevant facts giving rise to this reference application are that the applicant Messrs Pak Suzuki Motors Co. Limited are the local manufacturers of the motor vehicles. During the period August, 1999 to September, 2000 the applicant imported 11280 CKD components of different models of vehicle from Suzuki Motors Company Japan. The goods were released under S.R.O. 502(I)/94. Subsequently during the audit conducted by the departmental officers it was found that special discount in the prices of CKD Kits/component part of various models at different rates were availed. This discount was neither shown in commercial invoice nor mentioned in pro forma invoice as per normal practice of the trade. On further security it was found that the discount availed was not found in worldwide catalogue confirming that the discount was admissible to all like, similar, identical importers of the identical are similar goods worldwide. A show-cause notice was therefore issued to the applicant by the Assistant Collector, Import Processing, Port Muhammad Bin Qasim on 15-8-2002 narrating the above facts. It was stated in the show-cause notice that according to clause (3) of section 25 of the Customs Act, 1969, read with para 8.35 of Chapter 8 to General Manual of the orders relating to the Customs and Tariff Laws, the value is to be considered as normal acceptable price provided all identical and similar goods are valued at same price at the same given time. It was observed that if the discount allowed by the supplier is admissible to all identical and similar goods then deduction from price is correct in law but however of it is not admissible to all importers and is given to some importer and denied to others then deduction of discount is not in accordance with law.

It was stated in the show-cause notice that an amount of Rs.36511000.00 in terms of customs duty and Rs.21124000.00 in terms of Sales Tax amounting to Rs.57635000.00 was found short levied in respect of the importers made by the applicants and they were called upon to show-cause as to why the aforesaid short levied amount should not be paid by them under subsection (3) of section 32 of the Customs Act, 1969.

The applicant furnished explanation to the effect that being associated with their principal (SMC) in joint venture, they were allowed trade discounts on import of large quantities of Suzuki vehicles in CKD condition and as such deduction from price is correct in law and is legally admissible under section 25 of the Customs Act, 1969. It was further stated that the objection to the discount was not sustainable because such discount were permissible to the industries concerned, engaged in progressive manufacture of vehicles by a written agreement and not to any other independent importer in Pakistan.

During the course of hearing before the Assistant Collector the appellant explained that they are the only importer of CKD Kits of passenger cars and light commercial vehicles as per terms of joint venture agreement with their principal Messrs Suzuki Motors Company Japan. They produced evidence also in support of their contention. It was further explained that the entire document and details pertaining to the import of CKD vehicles and spares were provided to audit team and that the CKD catalogue price list is made considering product specification agreed for Pakistan market which is planned after taking into conditions and prospectus of future localization. The worldwide catalogue prices are for spare parts only and contain comprehensive details of all parts manufactured by Suzuki Motors Corporation Japan, for all overseas and domestic models which should not be confused with CKD prices offered for local Assembly of vehicles. It was also stated that the documents which were presented to the appraisement department included Machine firm order which clearly reflect the element of trade discount. During the course of hearing the appellant also produced copies of the commercial , invoices, pro forma invoices, purchase orders and letter of credits, of pertaining to import of various models of the Suzuki vehicles.

The Assistant Collector formulated the following questions for consideration:--

(1) Whether or not the trade discount was mentioned in pro forma/ commercial invoices.

(2) Whether the trade discount is required to be added in the total value for the purpose of assessment.

While dealing with first question the Assistant Collector observed that though the discount is not specifically mentioned in the import invoices but it is mentioned in the relevant purchase orders. He further observed that the purchase order showed that the amount of "deleted parts" and "discount" was subtracted from the price of 100% CKD kits, for calculating net FB price or portion of CKD kits intended to be imported. This calculated net FOB price of portion of imported CKD kits was mentioned in pro forma invoice and commercial invoice, without referring to any element of discount. He ultimately held that the element of discount was neither shown in the pro forma invoices nor - mentioned in commercial invoices and hence was not included in the value taken for the assessment.

So far the second issue is concerned the Assistant Collector observed that in section 25 of the Customs Act, 1969 the value of kits is the transactional value i.e. the price actually paid or payable for the goods when sold for exports in Pakistan, if goods do not fall within any of the exceptions contained in clauses (a) to (d) to the proviso to subsection (1) of section 25. The exception given under the clause (d) to the proviso to section 25(1) is that the buyer and seller are not related to each other. He further observed that the law pertaining to related/ associated persons is provided in subsection (3) of section 25 of the Customs Act, 1969. According to the learned Assistant Collector this subsection comes to effect when case falls in exception contained in clause (d) to the proviso to subsection (1) of section 25 of the Customs Act, 1969. The clause (I)(b) of section 25(3) of the Customs Act, 1969 envisages the idea of test value which would be the transactional value in sales to unrelated buyers of identical or similar goods.

He further observed that even in notional concept of value "BDV system of valuation" the value of imported goods shall be taken to be normal price, that is to say, the price which they would fetch on the date referred to in section 30 on a sale in open market between buyers and seller independent to each other.

After discussing the relevant law the learned Assistant Collector examined the contention of the appellant to the effect that being associated with principal Suzuki Motors Corporation Japan in a joint venture, they were allowed the trade discounts on import of large quantities of Suzuki vehicles in CKD condition and therefore, deduction of trade discount from the price was admissible under section 25 of the Customs Act, 1969 and that such discounts were permissible to the industrial concern engaged in progressive manufacturing of vehicles by a written agreement which were not allowed to any other independent importer in Pakistan.

The learned Assistant Collector proceeded on to examine whether discount was available to all other importers or was allowed specifically to the appellant only. He inferred that this discount was available to the appellant only which cannot be accepted as quantity discount in the absence of any quantity schedule agreed with the supplier. Consequent to this inference he concluded that the discount does not conform to the test value specified in subsection (3) of section 25. He held that the value of CKD vehicles imported by the appellant would be the transactional value in sale to unrelated buyers of identical or similar goods without any element of discount. He further held that the element of discount which was availed by the appellant only and not by any other importers was not admissible and the same was required to be added to the total customs value for assessment of CKD kits imported by the appellant. It was found that the charge of short levy of duty was established and accordingly the demand under section 32(2) of the Customs Act, 1969, based on the audit observation was to be enforced. He directed the appellant to make payment of total amount of Rs .57635000 .00.

The appellant feeling aggrieved preferred appeal before the Collector of the Customs (Appeals) on merits a well as on the point of jurisdiction vested in the Assistant Collector Customs, Import Processing, Port Qasim.

On the point of jurisdiction it was contended that prior to substitution of section 179 of the Customs Act by Finance Ordinance, 2000 it was provided that in cases involving confiscation of goods or imposition of penalty under the Customs Act, the jurisdiction and power of the officer of the Customs shall be as follows:--

(1) A Collector of Customs may deal with the cases where the value of the goods exceeds ten thousand rupees;

(2) An (Additional Collector) of Customs may deal with cases where the value of the goods does not exceed ten thousand rupees;

(3) An (Assistant Collector Or Deputy Collector) of Customs may deal with cases where the value of the goods does not exceed two thousand five hundred rupees.

Under section 179 inserted by Finance Ordinance, 2000, the jurisdiction and powers of Adjudication Officers of the Customs were confined to Collector, Additional Collector and Deputy Collector only. The section was again suistituted by Finance Act, 2002 and on 15-8-2002 when the show-cause notice was issued the power of Assistant Collector was confined to the matters relating to the duties and other Taxes not exceeding fifty thousand rupees. In this case the demand in the show-cause notice followed by the order-in-original passed by Assistant Collector involved Rs.57.635(M) and consequently the show-cause nonce and the order passed by the Assistant Collector was beyond his jurisdiction.

It was further contended that the order-in-original passed by the Assistant Collector was violative of the adjudicating scheme incorporated in the Customs Act by Finance Ordinance, 2000. It was urged that the officers of the Customs Valuation Department, were entrusted the power of adjudication under section 179 vide S.R.O. 203(I)/95 and therefore the Assistant Collector Import Processing, Port Qasim had no jurisdiction and on this count also the order-in-original was void.

The contentions on the point of admissibility of discount were reiterated.

The Collector of Customs (Appeals) dealt with the issue in very perfunctory manner and disposed of the appeal by a slipshod order devoid of any reasons. He observed that he has gone through the record, written as well as verbal submissions and has found the order-in-original to be a comprehensive and speaking order and covering both the factual as well as legal position of the case. With these observations he concluded that no cogent reason was found to interfere with the impugned order-in-original. The appeal was disposed of accordingly.

At this stage we would like to observe that there is no room for such stereotyped formula orders in exercise of quasi judicial function. We strongly deprecate such practice and expect that the C.B.R. shall take appropriate effective measures impressing upon the Collector (Appeals) that they are not supposed to merely dispose of the appeals but are required to decide the appeal, meaning thereby, that speaking orders. should be passed indicating the application of mind to the fact and law. Reasons should be recorded for every finding, otherwise the provision of appeal shall be rendered illusory and an exercise in futility. In short the Collector of Customs (Appeals) disposed of the appeal without deciding the question pertaining to the admissibility of discount claimed and the objection raised to the jurisdiction of the Assistant Collector.

The appellant feeling aggrieved preferred second appeal before the Customs, Excise and Sales Tax Appellate Tribunal Karachi Bench-II. The points raised before the two forums below were reiterated before the learned Tribunal.

The objection raised to the jurisdiction of the Assistant Collector was repelied for the reason that the contention was misconceived as the demand-cum-show cause notice was issued under section 32(3) of the Customs Act, wherein he is the appropriate and competent officer to do so.

It was further observed that notices under section 179(1) of the Customs Act are issued when the cases involving confiscation of goods or imposition of penalty are to be adjudicated upon. According to the learned Tribunal in this case a simple demand was raised. Had a penalty been imposed or had it been mentioned in the show-cause notice, the contention of the appellant would have carried weight and sustainable.

While dealing with the issue pertaining to the admissibility of the discount it was observed that if the buyers- and seller are related or associated, the transactional declared value would be accepted only under section 25(3) of the Customs Act if the importer is able to demonstrate that the relationship did not influence the price and that the value closely approximates to the transactional value reached between the independent buyers and the independent seller. It was further observed that in this case special discount in the prices of CKD kits/components of various models of different rates was availed which was neither shown in the commercial invoices nor mentioned in the pro forma invoices as per normal practice of the trade and further the discount availed is not found in worldwide catalogue confirming that the discount was admissible to all like, similar and identical importers of the identical or similar goods worldwide.

It was further observed that the effect of S.R.O. 203(I)/95 is that the officers of Valuation Department while scrutinizing the cases of valuation can issue show-cause notices to the contravening units and adjudicate after completion of legal formalities but it shall not take away the power of valuation from the appropriate officer of the Collectorate having the original jurisdiction. With these observations and findings the appeal was dismissed.

Being still dissatisfied this reference application has been filed soliciting opinion of this Court which has been admitted to consider the two questions referred to in the earlier part of this judgment.

We have heard Mr. Aziz A. Shaikh learned counsel for the appellant and Mr. Haider Iqbal Wahniwal learned counsel for the respondent.

So far the question of admissibility of. the discount is concerned Mr. Aziz A. Shaikh has contended that the learned Tribunal has blindly followed the interpretation placed by Assistant Collector in respect of the provisions contained in subsection (3) of section 25 of the Customs Act. He has submitted that the facts and law have not been considered in the right perspective and the provision of law contained in subsection (3) of section 25 have not been applied correctly to the facts obtaining in this case. He has pointed out that it is provided in subsection (3) that if the buyers and sellers are related in terms of the rules, the transaction value shall be accepted for the purpose 'of subsection (1), whenever the examination of the circumstances surrounding the sale of the imported goods as demonstrated by the importer indicate that the relationship did not influence the price or the importer demonstrates that such value closely approximate between the text value occurring at or about same time, the transaction value in sales to unrelated buyers of identical or similar goods for export to Pakistan. There is proviso to subsection (3) which has been totally ignored by all the forums below. It is stated in the proviso that in applying the test due account shall be taken of demonstrated differences in commercial levels, quantity levels. He has contended that it was urged time and again that the discount was allowed to the appellant by Suzuki Motors Japan because the appellant was importing large number of vehicles in CKD condition. The discount was allowed through agreement between the appellant and their principal in Japan as the appellant was a progressive manufacturer of vehicle and there was no other importer in the same categely in Pakistan. The learned Tribunal did not adhere to, the provision contained in section 25(3)(a) to the effect that examination of circumstances surrounding the sale of imported goods as demonstrated by the importer shall be considered and if it is demonstrated that the relationship did not influence the price, transaction value shall be accepted. The Assistant Collector as well as Tribunal have ignored this provision as, well as the provision contained in the proviso and have jumped to the provision contained in section 25(3)(b). He has further submitted that "expression" or has been used in between clauses (a) and (b) of subsection (3) which is indicative of the intention of legislature that the clauses (a) and (b) ale disjunctive and are not conjunctive,. meaning thereby, that, if either of the condition is satisfied the transaction value shall be accepted. He has contended that the commercial level and' quantity level of the imports made by the appellant being a progressive manufacturer have been ignored and the worldwide catalogue meant for spare parts has been erroneously compared with the imports of the appellant. It was explained that the worldwide catalogue is restricted to spare parts and cannot be compared with the imports made by the appellant, but the contention was not considered and the principle was ignored that like is to be compared with the like. He has maintained that since there is no comparable case in Pakistan therefore the appellant's case was required to be considered in the light of the provision contained in clause (a) of subsection (3), section 25 read with proviso, to wit, the circumstances surrounding the sale of imported goods by keeping the commercial level and quantity level of the imports made by the appellant being the progressive manufacturer. He contended that the appellant has fully demonstrated that it imported 11280 CKD components of different models vehicles and on account of such huge quantity of import the discount was allowed. It was not on account of any influence of relationship but on account of business and commercial consideration.

He has further pointed out that the expression `related' has been used by the legislature in clause (d) of the proviso to subsection (1) of section 25 and in subsection (3) of section 25. The expression `related' has not been defined in the Customs Act, 1969 but it is provided in subsection (3) that if the buyer and seller are related in terms of the

rules. The expression related persons has been defined in rule 2(g) of the Customs Rule 2001 as follows:

(g) "related person" means such persons only, if,

(i) They are officers or directors of one another's business;

(ii) They are legally recognized partners in business;

(iii) They are employer and employee;

(iv) One of them directly or indirectly controls the other;

(v) Both of them are directly or indirectly controlled by a third person;

(vi) Together they directly or indirectly control a third person; or

(vii) They are members of the same family; and (viii)Any person who directly or indirectly owns, controls or holds

(viii) five per cent or more of the outstanding voting stock or shares of business of both or each of such related person.

Explanation I.---The expression "person" also includes a legal person.

Explanation II.---Persons who are associated in the business of one another and? that one is the sole agent or sole distributor or sole concessionaire, however described, of the other, shall be deemed to be related for the purpose of these rules, if they fall within the criteria hereinbefore specified for related persons.

Explanation III.---One person shall be deemed to control another when the former is legally or operationally in possession to exercise restraint or direction over the other.

According to above definition the appellant being the sole concessionaire shall be deemed to be related to Suzuki Motors Corporation Japan, provided if it falls within the criteria specified for the related persons in the rule itself. The appellant does not fall in any of the criteria specified in the rule.

Dealing with second question for consideration, which is on the point of jurisdiction Mr. Aziz A. Shaikh has referred to the C.B.R. Notification No. S.R.O. 203(I)/95, dated 14th March, 1996 in supersession of its Notification No. S.R.O. 199(1)/82 appointing the officers of the Valuation Department specified in Column No.2/table given in the notification to be the officers of the Customs and to exercise the powers and discharge duties of the officers of the Customs and assigning them the function of the appropriate officer under the provision of the Customs Act. According to this notification the Assistant Controller of the Customs Valuation, Deputy Controller of the Customs Valuation and Controller of Customs valuation were appointed the officers of the customs inter alia for section 32 of the Customs Act.

Mr. Aziz A. Shaikh has further referred to Notification No. S.R.O. 448(I)/2000, dated 1st July, 2000 and S.R.O. 571(I)/2000, dated 16th of August, 2000. Both the notifications have been issued under section 179 of the Customs Act. Under the first notification the Adjudicating Officer is Collector of Customs, Sales Tax and Central Excise (Adjudication) Karachi-I in respect of Collector of Customs, Port Muhammad Bin Qasim Karachi with further provision that Adjudicating Officers of Collectorate of Customs, Sales Tax and Central Excise shall not adjudicate cases involving adjudication by the officer of Controller of Customs Valuation office and under the second S.R.O. it is specified that in such cases the Assistant Collector of the Customs shall adjudicate cases involving case the value of which does not exceed Rs.250,000.00 and to the imposition of penalty provided in the relevant provisions of the Customs Act, 1969.

On the basis of above S.R.Os. Mr. Aziz A. Shaikh submitted that the Assistant Collector of Customs (Import Processing) Port Bin Qasim who passed the original order had no jurisdiction and the matter was exclusively within the competence of the officer of the Valuation Department.

On the other hand, Mr. Haider Iqbal Wahniwal learned counsel for respondent has submitted that the Assistant Collector as well as Tribunal have rightly held that the discount claimed by the appellant was not admissible under section 25(3) of the Customs Act. He proceeded on to argue that it is the case of misdeclaration made by the appellant. It was pointed out to him that the show-cause notice was not issued under subsection (2) of section 32, which deals with the cases of mis?declaration or misstatement. The notice was issued under subsection (3) of section 32 which deals with the cases of non-levy or short levy of the customs duty by reason of inadvertence, error or misconstruction, with the assertion that the short levy was detected during the audit by the departmental officers, which situation is covered under subsection (3-A) of section 32. He was confronted with the proposition that the show-cause notice under section 32 is a jurisdiction notice, which should specifically contain the subsection under which the action is initiated. Mr. Haider Iqbal' Wahniwal insisted that it is neither a case of inadvertence, error or misconstruction envisaged under subsection (3) of section 32 nor it is a case of mere detection of short levy on account of audit conducted by the departmental officers but it is a case of mis?declaration. In view of this plea taken by him he was called upon to show as to how the proceedings can be initiated for misdeclaration without issuance of notice under subsection (2) of section 32 of the Customs Act, to which he had no answer.

So far the question of jurisdiction is concerned Mr. Haider Iqbal Wahniwal submitted that the notifications on which Mr. Aziz A. Shaikh has placed reliance were issued under section 179 of the Customs Act, which deals with power of adjudication in cases where the goods are liable to confiscation or penalty is imposed. In this case neither any notice was issued for confiscation of goods nor any penalty has been imposed but the show-cause notice was issued under section 32 and therefore the Assistant Collector. Import Processing, Port Muhammad Bin Qasim was fully competent to issue the show-cause notice and pass the order-in-original.

We have carefully considered the contentions raised by the learned Advocates for the parties, the material placed on record and the relevant provisions of law.

First, we will examine the question No.1 to ascertain whether the Customs, Excise and Sales Tax Appellate Tribunal (hereinafter referred to as the Tribunal) has correctly interpreted and applied the provision contained in section 25 of the Customs Act. A perusal of the Tribunal's order shows that with reference to the provision contained in section 25(3) of the Customs Act, 1969, it has observed that if the buyers and seller are related or associated, the transaction value declared would be accepted only under section 25(3) of the Act, if on the examination of the circumstances surrounding sale of the imported goods as demonstrated by the importer indicates that the relationship did not influence the price and the importer demonstrates that such value closely approximate to the transactional value reached between the independent buyer and the independent seller.

In the above observation, which is the basis of entire finding of the Tribunal, we find two inadvertent mistakes committed by the Tribunal. The first, is the observation with reference to subsection (3) of section 25 to the effect that if the buyers or seller are related or associated. The expression, "or associated" has not been used by the legislature either in clause (d) of the proviso to subsection (1) of section 25 or in subsection (3) of section 25. In clause (d) of proviso to subsection (1) of section 25 the expression used is, "where the buyer and seller are related". Likewise in subsection (3) of section 25 the expression used by the legislature is, "if the buyer and seller are related in terms of the rules". The expression associated has been used in explanation II to the definition contained in Rule 2(g) of the Customs Rule, 2001. It is provided in the explanation II that "persons who are associated in the business of one another and that one is the sole agent or sole distributor or sole concessionaire, however described of the other, shall be deemed to be related for the purpose of these rules, if they fall within the criteria hereinbefore specified for related person".

The point which the Tribunal failed to notice is that the expression associated has not been used as an independent expression in the statute itself which appears to be the impression of the Tribunal. The observation of the Tribunal that if the buyer and seller are related or associated, indicates that the Tribunal was of the view that the legislature has used two different expressions, to wit, "related" or "associated". This impression of the Tribunal is not correct and appears to be the result of non-application of the mind to the provision contained in subsections (1) and (3) of section 25 of the Customs Act. In fact the expression associated has been used in the rules while defining expression, "related person" for the reason that in subsection (3) it is provided that if the buyer and seller are related in terms of the rules. Thus while considering the expression associated it is not be taken as independent expression but as the expression used in the definition of the related persons and has to be considered in the light of the explanation, which provides that a person associated in the business of another shall be deemed to be related if such association falls within the criteria specified in the definition of the related persons. There is no finding by the Assistant Collector, Collector (Appeals) or Tribunal on the point as to within which criteria specified in Rule 2(g) of the Customs Rules, 2001 the appellant falls. It was for the appropriate officer of the Customs or for the Tribunal to decide this question of fact and since this question of fact has not been decided, therefore, we will not give any opinion on this question of fact for the reason that in exercise of the advisory jurisdiction under section 196 of the Customs Act this Court shall not give any finding of the fact for the first time. We would merely observe that the Tribunal is the final fact finding authority, and it was for the Tribunal to consider that under which criteria specified Rule 2(g) of the Customs Rules, 2001 the appellant was associated in the business of Suzuki Motors Corporation Japan and consequently was related person D within connotation of the expression used in subsections (1) and (3) of section 25 of the Customs Act.

The second mistake of law which we find in the observation of the Tribunal is that while considering subsection (3) of section 25 of the Customs Act, it has been observed that under this provision the importer is required to demonstrate that in the circumstances surrounding the sale of imported goods the relationship did not influence the price 4nd the importer demonstrates that such value closely approximate to the transactional value reached between the independent buyer and independent seller. Here again the Tribunal has not applied its mind to the expression used in subsection (3) of section 25 of the Customs Act. A perusal of this provision shows that in clause (a) of subsection (3), it is provided "that the examination of the circumstances surrounding the sale of imported goods as demonstrated by the importer, indicate that the relationship did not influence the price; or (b) the importer demonstrates that such value closely approximates between the following test values occurring at or about the same time. In between clauses (a) and (b) the legislature has used the expression "or" which indicates that the clauses (a) and (b) are disjunctive and or not conjunctive, meaning thereby, that either of the condition is satisfied the transaction value shall be accepted for the purpose of subsection (1). However, with the use of expression, "and" by the Tribunal the entire complexion of the law is changed. With the use of word "and", the Tribunal has read clauses (a) and (b) as conjunctive, meaning thereby, that both the clauses are to be read together and both the conditions specified in the two clauses are to be satisfied at the same time. By substitution of expression "or", with the expression, "and", the Tribunal has changed the entire complexion of law. Substitution of any expression used by the legislature by any executive or judicial authority is not warranted under the principles of interpretation of the statutes.

For the foregoing reason, it is held that the Tribunal fell in serious error in interpreting the law contained in subsections (1) and (3) of section 25 of the Customs Act by inserting the expression, "or associated" in the law and likewise by substituting the expression "or" with "and". When examined in the proper context of law we find that if either of the condition specified in clause (a) or clause (b) of sub-section (3) of section 25 is satisfied the transaction value of the imported goods shall be accepted. In the present case, we find that the circumstances surrounding the sale of imported goods as. demonstrated by the importer (appellant) is that more than 11,000 vehicles in CKD Kits were imported and consequently the discount was allowed to the appellant by the exporters. Suzuki Motors Corporation Japan which was not allowed to any other ordinary importer. The commercial level and quantity level of the import mad by the appellant cannot be compared with any ether importer in Pakistan. For this reason also the Tribunal was not justifying in comparing the case of the appellant with any other importer in Pakistan. We find substance in the contention of Mr. Aziz A. Shaikh that like is to be compared with like. It is fully demonstrated that there is no other importer in Pakistan who has imported the identical or similar goods in the close proximity of the commercial or quantity level of the importer, made by the appellant. It is therefore held that the appellant fully demonstrated that the circumstances surrounding the sale of the imported goods were such, that the discount allowed by the exporter could not be treated on account of influence due to relationship j but it was on account of commercial expediency and business consideration. Consequent to the above finding the question No.1 is answered in terms that the learned Tribunal has not correctly interpreted the relevant provisions of section 25 of the Customs Act and has not properly applied the provisions contained in the said section and the relevant rules, to the facts of the present case. The appellant is held to be entitled to claim the discount and reduce the same for the purpose of declaring customs valuation of the imported consignment.

This brings us to the second question pertaining to the jurisdiction of Assistant Collector, Import Processing Port Muhammad Bin Qasim to issue the show-cause notice and pass the order-in-original. The learned counsel for the appellant has placed reliance on the Notification S.R.O. 203(I)/95, dated 14th March, 1998 appointing the officers of Valuation Department as the appropriate officer of the Customs for the purpose of section 32 of the Customs Act, contending that the Assistant Collector, Import Processing, had no jurisdiction to issue the show-cause notice pertaining to post import matter and pass order-in-original for recovery of short levied amount under section 32 of the Customs Act. The sole contention of Mr. Haider Iqbal Wahniwal is that the notifications on which Mr. Aziz A. Shaikh has placed reliance have been issued under section 179 of the Customs Act which deal with the power. of adjudication in cases where the goods are liable to confiscation or penalty is to be imposed. According to him the show-cause notice was issued under section 32 of the Customs Act and therefore the notifications on which Mr. Aziz A. Shaikh has placed reliance are not relevant.

The contention of Mr. Haider Iqbal Wahniwal is partly correct to the extent of S.R.Os. 448(1)/2000, dated 1st July, 2000 and S.R.O. 571(1)/2000, dated 16-8-2000. Both the notifications have been issued in exercise of powers conferred by section 179 of the Customs Act. However, the plea is not correct so far Notification No.S.R.O. 203(I)/95, dated 14-3-1995 is concerned, as it was issued in exercise of the powers conferred by clause (d) of section 3 of the Customs Act (As is stood at the relevant time and corresponds to clause (g) of section 3, as substituted by Finance Act, 1996) read with clause (b) of section 2 and the proviso to section 4 thereof. Through this notification the officers of the Valuation Department have been specifically conferred the jurisdiction and powers for the purpose of section 32 of the Customs Act along with several other sections as well. The determination of this question does not require any lengthy discussion for the simple reason that in para 44 of Customs General Order No.12 of 2002 updated till 2006, it is provided as follows:--

(44) Exercise of powers under sections 32 and 202 of the Customs Act, 1969 by officers of Customs Valuation Department.---In order to expeditiously settle pending cases of valuation by the Customs Valuation Department, General Board of Revenue has issued Notification vide S.R.O. 203(1)/95, dated 14th March, 1995 which declare Assistant Controllers, Deputy Controllers, Deputy Controllers and the Controller, Valuation Department as the authorized officers under section 32 of the Customs Act for the purpose of taking action for the recovery of the Government dues. It has been decided that in post importation cases the officers of Valuation Department would initiate action for recovery of Government dues.

(2) The appropriate officer of the Customs Valuation Department on post importation based evidence available in Valuation Department may issue a show-cause notice under section 32 of the Customs Act, 1969 giving full details of the cases such as evidential invoice. Test Report of other evidences contradicting the value declared. After considering the arguments and evidences provided by the importer in his support of and after giving an opportunity to him to be heard in person the officer issuing the show-cause notice should decide the cases judiciously and appropriately.

(3) If the importer is not satisfied with the orders passed or decision taken by an officer of the Valuation Department he may file an appeal before the appellate Tribunal as provided under the relevant provisions of the Customs Act, 1969.

The Customs General Order No.12 of 2002 was issued on 15th June, 2002 after scrutiny of the existing Customs General Order by the Board of the Revenue, 500 CGOs were found to be redundant and the remaining nearly 200 were recast into single document. This CGO has been amended from time to time upto the year, 2006 but the above para has been left intact. The show-cause notice in this case was issued on 15-8-2002.

We are of the opinion that para 44 of CGO 12 of 2002, is very clear and fully supports the contention of Mr. Aziz A. Shaikh. We are persuaded to agree with the submission and consequently hold that the Assistant Collector, Importer processing, Port Muhammad Bin Qasim who issued the show-cause notice under section 32 and passed the order in original had no jurisdiction. It was clearly a post importation case and therefore the officers of the Valuation Department could initiate action for recovery of the government dues under section 32 of the Customs Act. The Tribunal has fallen in error in holding that the order-in-original was with jurisdiction. The question No.2 is answered accordingly.

The reference application is allowed in terms of the answers to the two questions formulated arising out of the order of the Tribunal. The Tribunal's order stands modified accordingly.

A copy of this judgment under the seal of the Court be sent to the Customs Excise and Sales Tax Appellate Tribunal, Karachi Bench-II.

S.A.K./P-21/K??????????????????????????????????????????????????????????????????????????????????????????????? Reference allowed.