SUN TRADERS through Proprietor VS DEPUTY COLLECTOR CUSTOMS, FAISALABAD, 2008 PTD-LAHORE-HIGH-COURT-LAHORE 1594 (2008)

Customs Act (IV of 1969)---

----Ss. 25, 25-A(3), 25-D & 81---Constitution of Pakistan (1973), Art.199---Constitutional petition---Determination of customs value of goods---Provisional assessment of duty---Petitioner/importer, imported `Polypropylene Film' and sought its clearance---Detail of the description of goods in Column No.35 being different and ambiguous, Department sought. the laboratory examination of the goods---Customs Laboratory, reported that orientation of Polypropylene films could not be determined at the level of that laboratory, but same could be determined elsewhere for further classification---Nothing with absolute certainty, had so far been decided by the Authorities with regard to the valuation of the imported goods---Customs Test Laboratory had opined that the laboratory had no adequate facility to determine orientation of polypropylene film---Director General of Customs Valuation, in its letter advised Collector to finalize assessment on the basis of test reports to be obtained through some prominent laboratory---Law required that when a valuation was determined by the Collector of Customs or Director of Customs valuation etc. a review petition lay before the Director General under S.25-D of Customs Act, 1969 and an application lay to the Director. General under S.25-A(3) of Customs Act, 1969, in case of conflict in the customs valuation determined under subsection (1) of S.25-A of Customs Act, 1969---Petitioner had already moved various applications, but with no result---Director General of Customs Valuation was directed to proceed with the applications filed by the petitioner---Petitioner was paying demurrage and detention charges, further delay would be detrimental to the interest of the petitioner and also to Revenue---High Court directed that pending applications of the petitioner be decided as expeditiously as possible---Case of the petitioner, till the finalization of the valuation by the Director General, would fall under S.81 of the Customs Act, 1969---Department was directed to proceed in the matter under provisions of S.81 of Customs Act, 1969 for the provisional release of the goods.

Rehan Umer v. Collectorate of Customs and 2 others 2006 PTD 909 ref.

Mian Abdul Ghaffar for Petitioner.

Muhammad Nawaz Cheema for Respondents.

ORDER

SYED HAMID ALI SHAH, J.---This single order will dispose of Writ Petition No.2026 of 2008 titled "Messrs Sun Traders v. Deputy Collector Customs and others' and Writ Petition No. 2027 of 2008 titled "Messrs A.S. Enterprises v. Deputy Collector Customs and others", being on the identical questions of law.

2. Petitioner has imported Polypropylene film and sought it's clearance vide GD 727. Detail of the description of goods in Column No.35 was "Packing and Wrapping Material of Polypropylene", while the same goods were described as "Packing and Wrapping Material of Polypropylene Film in Rolls ranging from 20 to 30 Microns". The department sought the laboratory examination of the goods and the Customs Laboratory, Dry Port, Faisalabad observed that Polypropylene Films are classified into three categories on the basis of orientation of Polypropylene Molecules in the film. After describing the three categories, it was stated in the report that orientation of Polypropylene films cannot be determined at the level of Laboratory (Customs Laboratory, Dry Port, Faisalabad). The same may be determined elsewhere, if required so, for further classification. The Laboratory, however, opined that the material is transparent film of 28 Microns in thickness. The value of the imported goods was determined subsequent by the Director, Customs Valuation, where the importer and other stack holders attended the meeting. A meeting was also convened at Lahore and imported BOPP films, were left to be ascertained by the Clearance Collectorate, on the basis of test reports. BOPP films were categorized into 4 descriptions and their value was determined separately and the same were classified under different PCT Heads.

3. Petitioner sought clearance of the goods and the Collector through letter, dated 25-2-2007, addressed communication to the Director General of Customs Valuation, Karachi that "BOPP Films-Others" appearing against PCT heading 3920.2090 at S.R.No.4 of the valuation advice, has created ambiguity. The Director General was requested' to examine the issue and clarify this ambiguity. In response to letter, the Director of Directorate General, Customs Valuation addressed two communications; one bearing No.1/27/2008-II B, dated 10-3-2008 and the second bearing No. 1/27/2008/11/B/1684, dated 1-3-2008. In the former communication, Director General conveyed that Collector is advised to finalize the assessment in the light of their findings, derived from its reports, obtained through some prominent Laboratory. The latter communication, however, conveyed a contrary view and it was conveyed that entry at S.R. No.4, under the Heading "Description" shall be read as "Others" instead of "BOPP Films-Other" having it's value at US$ 2.28. Respondent No.2 followed the direction of Directorate General of Customs through letter, dated 13-12-2007, assessed the value of the goods at US$ 2.28. Petitioner has challenged the valuation through instant writ petition.

4. Learned counsel for the petitioner submits that no doubt that there is a dispute and ambiguity with regard to the valuation of the imported goods and in such circumstances, the goods are required, under law, to be released provisionally on payment of the value declared and for differential amount, the matter is to be settled under section 81 of the Customs Act, 1969. Learned counsel supported this contention by referring to the case of "Rehan Umer v. Collectorate of Customs and two others" (2006 PTD 909). Learned counsel has emphasized that the imported goods are Polypropylene and not BOPP and the value of the imported consignment is not more than 90 cent, while its being appraised at a highly exorbitant value.

5. On the other hand, learned counsel for the Revenue has brought various samples of Polypropylene and explained that Polypropylene is in three categories, namely cast Polypropylene film, mono-axially oriented polypropylene film and bi-axially oriented polypropylene film. He demonstrated the physical properties of three categories of polypropylene films. After demonstration, he has submitted that instant imported material, is transparent Polypropylene, which according to him, is by-axially Plain Polypropylene. Learned counsel has submitted that the petitioner has moved this writ petition with mala fide intent to gain illegal advantage by mis-stating and suppressing the material facts related to the case in hand. While referring to GD, it was submitted that the goods have been described as "Polypropylene", but in invoice, packing list and bill of lading, the goods have been described as "packing and wrapping material of Polypropylene and/or polyester film in rolls ranging from 20 to 30 Microns". He went to argue that "Polypropylene film" and "Polyester film" are two different materials, having no nexus with each other. Former is classified under Head 39.20 while the latter is classified under Head 3920.6310. Learned counsel has submitted that after the latest letter, dated 10-3-2008, there is nothing left to be determined, as the Directorate General of the Customs Valuation has determined the valuation of the goods in question at US$ 2.28. He has referred to material, downloaded from Internet relating to the foreign exporter, which transpires that the manufacturer, who has exported goods to the petitioner, manufactures BOPP films only. He went through various documents and material to submit that the goods are being released on fake and fabricated documents. Writ Petition is based on incorrect information, it cannot proceed on merits and should be dismissed. Learned counsel has also placed on record "relevant material from the book "Plastic materials, Fourth Edition by J.A. Brydson".

6. After hearing both learned counsel, who have addressed lengthy arguments, I am of the opinion that nothing with absolute certainty, has so far been decided, by the respondents with regard to the valuation of the imported goods. Customs Test Laboratory, Faisalabad has opined that the Laboratory has no adequate facility to determine orientation of Polypropylene film. The Directorate General of Customs Valuation, in it's letter, dated 10-3-2008, advised Collector to finalize assessment on the basis of test reports to be obtained through some prominent Laboratory. The letter of the Collector addressed to Directorate General of Customs Valuation, dated 25-2-2008, reflects that valuation advice, has created ambiguity and needs clarification. Classification by the Directorate General through letter, dated 13-12-2007, where the goods, in 4 descriptions were classified, under different PCT Heading, were evaluated and the evaluation of "BOPP films and Other", was determined. Corrigendum simply speaks of the determination of the customs valuation at US$ 2.28 under "Others" instead of "BOPP films", without assigning the reasons of this determination. The law requires that when a valuation is determined by the Collector of Customs or Director Customs Valuation etc., a review petition lies before the Director General under section 25-D. Similarly, an application lies to the Director General under section 25-A(3), in case of conflict in the customs valuation determined under subsection (1) of section 25-A. The petitioner had already moved various applications, but with no result. In view of the pendency of the applications of the petitioner before the Director General, I am not inclined to further dilate upon the issue, except to direct the Director General of Customs Valuation, to proceed with the applications, treating them either under section 25-D as review or section 25-A(3) of the Customs Act, 1969. Petitioner is paying demurrage and detention charges. Further delay is detrimental to the interest of the petitioner and also to the Revenue.' Director General is, therefore, directed to decide the pending application of the petitioner as expeditiously as possible, but not later than three weeks from today. Needless to mention, while doing so, he will adhere to the provisions of section 24 of the General Clauses Act and will decide the matter through a speaking order.

7. There is no cavil that Collector Customs has himself observed that there is an ambiguity in the valuation, which requires determination. Letter, dated 10-3-2008 suggests the valuation of the goods (the imported consignment), on the basis of report of a prominent Laboratory. This exercise has not, as yet, been undertaken. A Division Bench of Sindh High Court in the case of "Rehan Umar v. Collector of Customs, Karachi and 2 others" (2006 PTD 909) has observed as under:--

"It is therefore, held that if the declared value in the Bill of Entry/goods declaration is not acceptable to the appropriate officer of the customs department and the value cannot be determined under the provisions of subsection (1) of section 25 and resort is to be made to the other methods provided in section 25 of the Customs Act, then the importer is entitled for the release of goods under section 81 of the Customs Act, by provisional determination of the liability. The release of goods in such manner is a matter of right of importer and not a matter of concession within the discretion of appropriate officer of the customs."

8. The case of the petitioner, till the finalization of the valuation by the Director General, falls under section 81 of the Customs Act. Respondent No.1 is, therefore, directed to proceed in the matter, under the aforementioned provision of law, for the provisional release of the goods.

9. This constitutional petition is disposed of as above.

H.B.T./S-42/LOrder accordingly.