COLLECTOR OF CUSTOMS PORT MUHAMMAD DIN QASIM VS ZYMOTIC DIAGNOSTIC INTERNATIONAL, FAISALABAD, 2007 PTD-SUPREME-COURT 2623 (2005)

(On appeal from the order, dated 25-2-2004 passed by High Court of Sindh at Karachi in Special Customs Appeal No. 5 of 2004).

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

----S. 25---Assessment of imported goods---Assessing Officer, authority of---Scope---Officer of customs department is authorized under S.25 of Customs Act, 1969, to reject declared value of consignment imported in Pakistan and to asses the same.

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

----S. 25---Declared value of imported goods, rejection of---Principles---For rejecting or refusing to accept value declared by consignee in respect of imported goods, concerned officer is required to give cogent, plausible and satisfactory reasons for non-acceptance of declared value and rejection .thereof, cannot' proceed on whims or desire of officer of Customs department---Assessing Officer is required to point out some flaw or defect or such circumstances which create doubt with regard to veracity and correctness of declared value or that same had been under invoiced---In determining or assessing fair value or normal price of such imported consignment, concerned officer is under obligation to take into consideration all necessary factors and circumstances enumerated in S.25 of Customs Act, 1969, for such determination and assessment.

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

----Ss.16, 25 & 31(1)(2)---Constitution of Pakistan (1973), Art.185(3)---Assessment of imported goods---Declared value, rejection of---Collector of Customs, on allegation of misdeclaration, ordered confiscation of goods allowing importer to redeem the same on payment of 50% fine equal to amount of duty and taxes---Customs, Excise and Sales Tax Appellate Tribunal allowed appeal. filed by importer and set aside the order passed by Collector Customs, which order was maintained by High Court---Validity---Nothing was available on record to indicate that Customs Department had secured or had attempted to secure invoices from other importers who had imported identical or similar consignment in Pakistan with a view to show that price declared by such other importers greatly varied from price declared by importer---In absence of such an exercise, action in rejecting declared value of consignment would amount to an arbitrary and capricious exercise---Resort to S.25(7) of Customs Act, 1969, was to be made only when Customs Officer, who had to make assessment or determination of fair or normal value of consignment, was of the view that the same could not be determined in view of impossibility of procuring evidence---Order of Collector Customs was silent in such regard which was an important factor for drawing an inference that no such attempt was made before passing. the. order---Customs officer dealing with the case proceeded in a perfunctory, whimsical and arbitrary manner and Customs, ExciseSales Tax Appellate Tribunal was justified in setting aside the same---High Court also did not commit any illegality or infirmity in accepting order of the Tribunal and dismissing Constitutional petition filed by authorities---Supreme Court declined to interfere with judgment passed by High Court---Leave to appeal was refused.

Akhlaq Ahmed Siddiqui, Advocate-On-Record for Petitioner.

Nemo for Respondent.

ORDER

SAIYED SAEED ASHHAD, J.---This petition for leave to appeal has been filed against the judgment of High Court of Sindh, dated 25-2-2004 in Special Customs Appeal No.6 of 2004.

2. The brief facts of the case are available from the material on record are that respondent imported HCG Kit for Hepatitis (HCV) from China and declared value of US$ 100 which was assailed at 101. It was found that the goods were under invoiced for which a show-cause notice was issued to the respondent. The case was contested by the respondent during the adjudication proceedings, which was decided by the Collector of Customs vide order, dated 16-12-2002. Vide this order the declared value of Rs.3,86,041.50 of the consignment was rejected and the same was .assessed under section 25(7) of Customs Act, 1969 at Rs. 1,62,38,000 which if had gone undetected would have resulted in huge loss of money to the exchequer.

3. On the above facts the Collector of Customs found the respondent to be guilty of deliberate and wilful misdeclaration of the value with a view to evade Government revenue thus contravening the provisions of sections 16 and 31(i}(2) of the Customs Act, 1969 read with section 3(1) of the Imports and Exports (Control) Act, 1950. The petitioner ordered confiscation of goods allowing the importer to redeem the same on payment of 50% fine equal to the amount of duty and taxes sought to be evaded together with payment of taxes leviable thereon. A penalty of Rs. 1,00,000 was also imposed.

4. This order was assailed by way of appeal before the Customs, Excise and Saps Tax Appellate Tribunal who vide its order, dated 27-1-2003 allowed the appeal and set aside the order of the Collector Customs. The petitioner being aggrieved and dissatisfied with the order of the Customs Appellate Tribunal assailed the same before the Sindh High Court in Special Customs Appeal No.6 of 2004 which was dismissed as stated above, hence this petition for leave to appeal.

5. We have heard the argument of Mr. Akhlaq Ahmad Siddiqui learned Advocate-on-Record for the petitioner.

6. Section 25 of the Customs Act authorizes an officer of the Customs Department to reject the declared value of a consignment imported in Pakistan and to assess the same. Section 25 lays down various modes in which the officials of the Customs Department are required to proceed in determining or assessing the value of the consignment after rejecting her declared value: However, for rejecting or refusing to accept the value declared by a consignee in respect of imported goods, the concerned officer is required to give cogent, plausible and satisfactory reasons for non-acceptance of the declared value and rejection thereof which cannot proceed on the whims or desire of the officer of the customs. He is required to point out some flaw or defect or such circumstances which create doubt with regard to the veracity and correctness of the declared value or that the same had been under invoiced. Similarly in determining or assessing the fair value or normal price of .such imported consignment the concerned officer is under an obligation to take into consideration all the necessary factors and circumstances enumerated in section 25 of the Customs Act for such determination and assessment. From a perusal of order of the Collector of Customs it transpires that neither satisfactory and convincing grounds for not accepting the declared value of the imported consignment were given nor the factors and grounds necessarily required to betaken into consideration for determining the fair or normal value of imported consignment were adhered to. The Customs Officer was required to obtain identity of the country of origin of the consignment. Thereafter attempt should have been made to find out the prevailing price of the consignment in the country of the origin. There is nothing on record to indicate that the Customs Department had secured or had attempted to secure invoices from other importers who had imported identical or similar consignment in Pakistan with a view to show that the price declared by such other importers greatly varied from the price declared by the respondent. In absence of such an exercise action in rejecting the declared value of consignment would amount to an arbitrary and capricious exercise. Resort to subsection (7) of section 25 of the Customs Act is to be made only when the Customs Officer who has to make assessment or determination of the fair or normal value of the consignment is of the view that the same cannot be determined otherwise in view of impossibility of procuring evidence as referred to above. The order of the Collector of Customs is absolutely silent in this regard which is an important factor for drawing an interference that no such attempt was made before passing the order. The Customs Officer dealing with the case proceeded in a perfunctory, whimsical and arbitrary manner and the Customs, Excise, Sales Tax Appellate Tribunal was justified in setting aside the same. The High Court also did not commit any illegality or infirmity in accepting the order of the Tribunal and dismissing the Constitutional petition filed by the petitioner.

For the foregoing facts, discussion and reasons this petition for leave to appeal is found to be without any substance. Accordingly it is dismissed and leave to appeal is refused.

M.H./C-29/SCPetition dismissed.