SADAQAT & BROTHERS, PESHAWAR VS DEPUTY COLLECTOR OF CUSTOMS, PESHAWAR, 2011 PTD-CUSTOMS-APPELLATE-TRIBUNAL-PESHAWAR 2881 (2011)

Customs Act (IV of 1969)---

----Ss. 194-A, 193, 25-D, 25 & 80---Valuation---Review---Review application filed before the Directorate General of Customs Valuation was rejected---Appeal against such order was filed before Collector of Customs (Appeals), who returned the appeal with the direction to file an appeal before Customs Appellate Tribunal---Department contended that instructions by Collector (Appeals) were administrative in nature and were not appealable---Validity---Case had been decided by the Director General of Customs Valuation in terms of S.25-D of the Customs Act, 1969, but directions to the appellants to file appeal before the Appellate Tribunal was not correct as at the time of issuance of such directions, S.194-A of the Customs Act, 1969; was not amended and at that time valuation advice, ruling issued by the Director Valuation were appealable before Director General of Valuation---Orders of the Director General Valuation however, were not appealable before the Appellate Tribunal and such order had been made appeal-able before Appellate Tribunal by virtue of amendment in S.194-A of the Customs Act, 1969, through Finance Act, 2010---Similarly, at the time of issuance of review order, present order was not appealable before the Appellate Tribunal---Provisional assessment having been finalized, Director General Valuation had correctly advised the appellant that assessment order had attained finality and was appealable under S.193 of the Customs Act, 1969---Assessment having been completed by the Assistant Collector of Customs in terms of S.80 of the Customs Act, 1969, appellants should have filed appeal before Collector (Appeals), which they did , but the orders/instructions issued by the Collector (Appeals) were not proper and relevant and according to spirit of S.193 of the Customs Act, 1969---Appellants had not been properly heard and the case of final assessment had not been considered; and requirements of natural justice had not been fulfilled---Case was referred back to the Collector (Appeals) by the Appellate Tribunal with directions to give the appellants an opportunity for proper hearing and decide the case pertaining to final assessment on the merits of the case.

Customs Appeal No. Cus.88/PB of 2008 ref.

Isaac Ali Qazi for Appellant.

Hussain Muhammad, Superintendent and Naseer Khan, D.S. for Respondents.

Date of hearing: 15th June, 2011.

JUDGMENT

SHER NAWAZ, MEMBER (TECHNICAL).---This appeal has been filed by Messrs Sadaqat and Brothers, Peshawar, (hereinafter called as the appellants) against Order C.No.Cus-141/2010/619, dated 4-5-2010, passed by the Collector of Customs (Appeals), Customs House, Peshawar, against Final Assessment Order C.No.PDRY-HC-2910/2008/1446, dated 23-10-2008, passed by the Deputy Collector of Customs, Dry-Port, Peshawar, read with Director General Customs Valuation Order-in-Review No.126 of 2008, dated 25-11-2009, under section 25-B of the Customs Act, 1969.

2. Brief facts of the case are that the appellants had filed GD No.2910, dated 21-4-2008, through Messrs Attock Enterprises Customs Clearing Agency, Peshawar, for the clearance of "Brake Shoe Set" for different vehicles imported from Taiwan of DK Brand. Subsequently, the Director General of Customs Valuation and PCA, Custom House, Karachi had issued Valuation Advice under section 25-A of the Customs Act, 1969, for Auto-parts of Toyota brand vehicles vide letter No.Misc./01/2007-Auto-parts/2122, dated 14-4-2008. The imported goods being Taiwan origin other than Toyota brand were assessed @ 1.02 per KG in the light of para-04 of the cited ruling and proportionate price difference of 40% was maintained. The appellants agitated the so-fixed value and produced evidence @ Rs.0.67 per set, and requested for provisional assessment under section 81 of the Customs Act, 1969. Accordingly, the same were assessed provisionally by depositing duty and taxes ? US$ 0.67 per set being the evidential value in cash and the differential amount of duty/taxes calculated @ US$ 1.02 per KG i.e., Rs.685180 were secured through Bank Guarantee No. 3, dated 13-5-2008.

3. Aggrieved of the above said assessment order, the appellants filed review application before the Directorate General of Customs Valuation, Custom House, Karachi, who vide his Order-in-Review No.126 of 2008, dated 25-11-2009, under section 25-D of the Customs Act, 1969, rejected the review application of the appellants.

4. Aggrieved of the above order, the appellants went in appeal before the Collector of Customs (Appeals), Peshawar, who vide his administrative order vide C.No.Cus-141/2010/619, dated 4-5-2010, returned the appeal of the appellants with the direction to file an appeal before the Customs Appellate Tribunal, Peshawar. Hence the present appeal filed by the appellants to this Tribunal on the following grounds:--

(a)? that the impugned order against the appellants is erred both in law and facts, hence not sustainable in the eyes of law;

(b)? that impugned order is based on conjectures and surmises, hence, not maintainable;

(c)? that assessment of the appellant brake shoes set other than on declared value (US$ 0.55 per unit) or evidentiary value (US$ 0.67 per unit) is highly misconceived, thus, not sustainable in the eyes of law, thus, denied;

(d)? that without prejudice Valuation Advice dated 29-5-2008, is not applicable to the GD No, 2910 dated 21-4-2008 as at the time of filing of GD, the Valuation Ruling was not in the field, hence, it cannot be applied retrospectively;

(e)? that without prejudice to the merit of the Valuation Ruling dated 29-5-2008, there is a period gap of about 5 weeks between import and valuation ruling, hence, because of this glaring period difference, the said Valuation Ruling cannot be applied;

(f)?? that without prejudice to above vide Valuation Ruling dated 14-4-2008, the values of above S. Nos.87, (Hilux Shoe Kit), 96 (Hiace Shoe Kit) and 105 (Coaster Shoe Kit) are US$ 1.70, 1.50 and 1.50, therefore, suggestion of US$ 2.10/kg, in view of item listed in packing list are unjustified;

(g)? that without prejudice the petitioner imported shoes, kits are for low priced small vehicles, therefore, the application of S.Nos.87, 96 and 105 of Valuation Ruling, dated 14-4-2008, is not applicable to the appellant imported brake shoes;

(h)? that under the circumstances, there is no other valuation except the valuation declared at the most evidentiary value US$ 0.67 per unit be accepted;

(i)?? that it is humbly submitted that Valuation Ruling dated 14-4-2008, glaringly admits that these were not made on the basis of any evidence rather on empirical analysis of certain evidences of Japan origin, thus, the consignment which was assessed on the basis of evidence of identical goods, can not be subject to any valuation advice which stipulated the valuation on the basis of conjectures and surmises;

(j)?? that in the first' instance, the Valuation Advice is not a gazette notification or a law itself rather it is an executive order which is advisory in nature provide guidance to the assessing officer so as to carry out uniform assessment through out the' country, therefore, it becomes binding not from the day of signing it rather it becomes operative on the authorities with prospective effect i.e. from the day onward on which it has been received;

(k)? that appellant submits that section 25 of the Customs Act, 1969, provide a very clear methodology of the customs valuation to be determined, the duty and taxes, thus keeping in view the representation filed by the association was an exact picture, hence, the respondent has correctly charged duty and taxes which also endorsed by the competent customs officer, therefore, the alleged show cause notice is required to be vacated;

(l)?? that assessed duty and other taxes were paid by the appellant and the customs allowed clearance of the goods from the customs area by making the same out of Custom charge thereby making the assessment a closed transaction which cannot be reopened specially when there is no evidence of higher value available on customs' record of previous imports equal to the ones used against the appellants in the impugned orders;

(m) that there is no such documentary evidence retrieved from customs data base that imports into Pakistan of identical/similar goods was never made by any one during the period of six months prior to importation of the goods by the appellant on such a higher value as was determined by the department against the appellant. Application of such higher values, apart from being illegal, is also discriminatory and specific to the appellant. Therefore, such discriminatory action taken against the appellants cannot be allowed;

(n)? that it has been alleged that appellant misdeclared value of their imports in order to evade customs duty and other taxes. To substantiate this claim, it was necessary for department to prove that the appellant made payments over and above the declared value to the exporter. They have not been able to provide any evidence to this effect. In the absence of such evidence the allegation of misdeclaration of value cannot be made against the appellants;

(o)? that in case of doubt that value of goods declared by an importer does not represent the correct transaction value within the meaning of section 25 of the Customs Act, 1969, the customs is authorized to determine the transaction value of such goods by applying secondary methods of valuation in a sequential order as specified in the aforesaid section of the Customs Act, 1969, and the rules made thereunder. In the sequential order it has first to take into account value of identical goods imported into Pakistan. If the transaction value cannot be determined under this method, the customs, could consider value of similar goods imported into Pakistan and determine the transaction value of the disputed goods in terms of Rule 110 of the Customs Valuation Rules, 2001, notified under S.R.O.450(I)/2001, or follow the other methods of valuation as given in section 25 of the aforesaid Act. But the customs are not mandated under section 25 of the Customs Act, 1969, or - the rules made thereunder to obtain documents at the back of the importer showing manipulated and fictitious values by resorting to methods other than those prescribed by law as was adopted in the instant case;

(p)? that there is no evidence that identical/similar goods had been imported into Pakistan by other importers at or about the same values which are made the basis of the appellants against the appellant; and

(q)? that officer of Customs working under F.B.R. are bound under section 223 of the Customs Act, 1969, to follow the orders of F.B.R. Through the Customs General Order No.10/1974 C.B.R. has issued standing instructions to the officers of customs that ..., it is the duty of the prosecution to produce all the witnesses and documents before the adjudicating officer is presence of the party concerned. Without this the proper hearing is not given and there is violation of principle of natural justices." Non production of the witnesses to testify correctness of these documents and signatures, if any, on these documents has rendered the authenticity of these documents on which the department has erected their case as worthless pieces of paper having no evidential value.

5. On the date of hearing i.e. 15-6-2011, Mr. Isaac Ali Qazi, Advocate appeared for the appellants while the department was represented by Mr. Hussain Muhammad, Superintendent along with Mr. Naseer Khan, D.S. The learned counsel for the appellants repeated the same position as stated in his memo. of appeal and prayed that since the learned Collector (Appeals), has issued instructions vide C.No.Cus-141/2010/619, dated 4-5-2010, directing them to file and appeal before the Customs Appellate Tribunal, Peshawar, therefore, they have filed appeal before this Tribunal. The D.R. however, opposed his contention and prayed that the learned Collector (Appeals)'s, instructions issued vide the aforesaid letter are administrative in nature, therefore, it is not an appealable case. To a question as to whether an appeal could be filed against any such instructions issued by the learned Collector (Appeals), as these instructions have not been issued in terms of section 193 of the Customs Act, 1969, and that under section 194-A of the Customs Act, 1969, only such orders are appealable before the Tribunal, which have been issued by the learned Collector (Appeals), in terms of section 193 of the Customs Act, 1969. The learned counsel referred to the judgment by this Tribunal in Customs Appeal No.Cus.88/PB/2008, dated 3-3-2009, where in similar case the appeal was admitted by this Tribunal.

6. We have heard both the sides and also gone through the record of the case. The learned Collector (Appeals), vide his letter dated 4-5-2010, directed the present appellants as under:-

"(2). On perusal of the case record, it has been observed that the case has been decided by the Director General of Customs Valuation, Custom House, Karachi vide Order in Review under section 25-D of the Customs Act, 1969, No.126 of 2008, dated 25-11-2009, wherein the review application has been rejected.

(3) In the Finance Bill 2007, after section 25-D has been inserted which is reproduced below:-

"25-D. Review of the value determined.---Where the customs value has been determined by the Collector of Customs or Director of Valuation or any other authority competent to do so, a review application shall lie before the Director-General of Valuation and any proceeding pending .before any court, authority or tribunal shall forthwith abate."

(4) The appeal is returned to the appellant to file an appeal before the Customs Appellate Tribunal Peshawar."

7. From perusal of the said letter of the learned Collector (Appeals), it has correctly been pointed out in para-2 of the said letter that the case has been decided by Director General of Customs Valuation in terms of section 25-D of the Customs Act, 1969, vide Order No.126/2008, dated 25-11-2009, but directing the appellants vide Para-4 of the said letter/order to file an appeal before the Appellate Tribunal, Peshawar, is not correct. At the time of issuance of this letter/order by the learned Collector (Appeals), no amendment was made in section 194-A of the Customs Act, 1969, and at that time valuation advice, ruling issued by the Director Valuation were appeal-able before the Director General of Valuation, but the orders of the Director General Valuation were not appealable before this Tribunal. The orders of the Director General Valuation have been made appealable before the Tribunal by virtue of amendment in section 194-A of the Customs Act, 1969, through Finance Act, 2010 (XVI of 2010) accented on 13-6-2010, reported as PTD 2010 Statute 288. Similarly, at the time of issuance of the review order issued vide 126/2008, dated 25-11-2009, this order was not appealable before this Tribunal on account of reasons stated above. In the instant case, since the provisional assessment was finalized, therefore, Director General Valuation has correctly advised the appellant vide sub-para (ii) of para (4) of the order dated 24-11-2009, that the assessment order has since attained finality, therefore, it is appealable under section 193 of the Customs Act, 1969. Section 193 of the Customs Act, 1969, states as under:-

"193. Appeals to Collector (Appeals). ---Any person other than an officer of customs aggrieved by any decision or order passed under sections 79, 80 and 179 of this Act by an officer of customs not below the rank of an Assistant Collector may prefer appeal to the Collector (Appeals) within thirty days of the date of communication to him of such decision or order"

8. Keeping this thing in view that assessment had been completed by the Assistant Collector of Customs in terms of section 80 of the Customs Act, 1969, therefore, the appellant should have filed appeal before the learned Collector (Appeals), which they did, but the learned Collector (Appeals), issued orders/instructions vide his letter dated 4-5-2010, which are not proper and relevant and according to the spirit of section 193 of the Customs Act, 1969. We, therefore, keeping in view that the appellants have not been properly heard and the case of final assessment has not been considered, are of the considered opinion that the requirement of natural justice have not been fulfilled. We accordingly refer back the case of the learned Collector (Appeals), with the direction to give the appellants an opportunity of proper hearing and decide the case pertaining to the final assessment on the merits of the case. The case is disposed off accordingly.

9. This judgment consists of six (06) pages and each page bears the official seal and signature of the author of this judgment.

10. Announced.

C. M. A.1226/Tax(Trib.)????????????????????????????????????????????????????????????????????? Order accordingly.