AUTOCRAFT through Proprietor VS DEPUTY COLLECTOR OF CUSTOMS, 2009 PTD-LAHORE-HIGH-COURT-LAHORE 244 (2008)

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

----S. 25---Constitution of Pakistan (1973), Art.199---Constitutional petition---Determination of customs value of goods---Where the value declared by the importer was less than the value of the raw material used in the product, the importer having come to the High Court with unclean hands, was not entitled to any favour.

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

----S. 25---Constitution of Pakistan (1973), Art.199---Constitutional petition---Determination of customs value of goods---Provisional valuation---Such valuation can neither deprive the department nor the assessee for adopting lower or a higher value---No estoppel was available in tax proceedings especially when the importer had made the payment under protest for getting his goods released as an interim arrangement---Provisional settlement is subject to the final decision.

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

----S. 25---Constitution of Pakistan (1973), Art.199---Constitutional petition---Determination of customs value of goods---Rejection of declared value by the customs department---Scope---Principles.

The department is at liberty to reject the declared value where it has got reason to believe that the same is not correctly declared. However, it cannot proceed beyond the prescribed procedure under S.25 of the Act. It may be true that the section 25(10), after amendment therein, has brought slight change in procedure, but it cannot be accepted that it has granted any unlimited or unbridled powers to the assessing authorities for adopting the value. Moreover, the valuation ruling, which has been held to be an unlawful, cannot be applied for determining the value of any consignment. Department was directed to. determine the value as per law and rules after issuance of notices to the importer within one month from the communication of present order to him.

Mian Abdul Ghaffar and Malik Muhammad Arshad for Petitioner.

Ehsan Ullah Cheema with Ahmad Kamal, Deputy Collector.

ORDER

KHAWAJA FAROOQ SAEED, J.---This writ petition has been filed by an importer who subsequently uses the said items in manufacturing of the parts of the motorcycles. The items imported by him are statedly' covered under IORC issued by Engineering Development Board (EDB). The consignment, which he has now imported as per his claim, comprises of the parts used for manufacturing shock observer and its import value is US$ 6870.00. The petitioner filed its GD on 16-4-2008, which was subsequently amended as inadvertently weight had wrongly been mentioned. The petitioner's consignment was examined and it was proposed, to be assessed on the basis of the valuation ruling, dated 27-9-2006. On pointing out by the petitioner that the said valuation ruling is for complete shock observer and it has been set aside by this Court vide judgment, dated 24-4-2008 passed in W.P. 12773/06, the respondent No.6 issued another valuation ruling, dated 19-5-2008, which was again not accepted and was challenged. The consignment of the petitioner, therefore, was assessed at US$ 13740 against the declared value, however, on an objection the same was revised and the value was reappraised at US$ 12324.10 on the basis of revised valuation invoice, dated 19-5-2008. However, even after the said re-appraisement the consignment was not released and the same was kept under the instructions of respondent Nos. 3 and 5, who want the assessment on the basis of valuation ruling, dated 27-9-2006. The petitioner has now inter alia challenged the same on the basis of the argument that the said valuation ruling has already been held as unlawful, besides that the same is in respect of complete shock observers. Since the petitioner has imported certain parts of the shock observer, hence, even otherwise the same is not applicable. So far as the determination of the nature of the .times is concerned it is a factual controversy. Such issues should better be decided by the Customs Authorities at their end. However, since it is not being denied, that the valuation ruling, dated 27-9-2006 has been set aside by this Court, there is no question of its application on the items imported by the present writ petitioner. Learned Legal Advisor is fully justified in pointing out that the value declared is less than the value of the. raw material used in this highly technical product, hence, the petitioner in his opinion having come to the Court with unclean hands is not entitled to any favour. He also brought on record certain documents to support departmental claim with regard to the nature of the item, which is ignored for the reasons of our comments above. His argument that the petitioner has accepted the clearance of his goods at a much higher figure than one declared by him also cannot be used against the petitioner. Suffice will be to say that provisional valuation can neither deprive the department nor be assessee for adopting lower or a higher value. There is no estoppel in tax proceedings especially when the petitioner has made the payment under protest for getting his goods released as an interim arrangement. This is obviously a provisional settlement and is subject to the final decision of this Court.

2. His further arguments that the valuation is not being adopted on the basis of valuation ruling, is also repelled by the learned counsel for the petitioner by pointing out from the G.D. itself, that the same speaks of the valuatior ruling in unequivocal terms.

3. I have heard both sides and have also perused the record. The department is obviously at liberty to reject the declared value where it has got reason to believe that the same is not correctly declared. However, it cannot proceed beyond the prescribed procedure under section 25. It may be true that the section 25(10), after amendment therein, has brought slight change in procedure, but it cannot be accepted that it has granted any unlimited or unbridled powers to the assessing authorities for adopting the value. Moreover, the valuation ruling, which has been held to be an unlawful, cannot be applied for determining the value of any consignment. In view thereof, determination of the value of the consignment under discussion is set aside, the concerned respondents are directed to determine the value as per law and rules after issuance of notices to the petitioner within one month from the communication of this order to him. This obviously means acceptance of the writ petition in the manners mentioned herein above.

M.B.A./A-168/LPetition accepted.