ANM TRADING COMPANY through Messrs Nadeem & Company, Karachi VS SECRETARY, REVENUE DIVISION, ISLAMABAD, 2011 PTD-FEDERAL-TAX-OMBUDSMAN-PAKISTAN 1181 (2010)

Customs Act (IV of 1969)---

----Ss. 25-D & 81(2)---Establishment of Office of Federal Tax Ombudsman Ordinance (XXXV of 2000), Ss.2(3), 9 & 10---Revision of determined value---Provisional determination of liability---Issue involved in the complaint was whether, or not final determination of the provisional assessment was made under S.81(1) of Customs Act, 1969 within the prescribed time limit of six months, extendable by 90 days under S.81(2) of Customs Act, 1969---Final determination was made and communicated to the complainants within time---If the complainants would invoke the provisions of S.25-D of the Customs Act, 1969 and file a review application., the time taken by the Director General to dispose of the review had got nothing to do with the limitation provided under S.81 of Customs Act, 1969---Review filed, having not been pursued by the representative of the complainants had become infructuous--Final determination of value/assessment was held to have been made and communicated within time limit prescribed under S.81(2) of Customs Act, 1969---No violation of time limit prescribed under S.81(2) of Customs Act, 1969 was involved in the case, in circumstances---Order accordingly.

Justice (Retd.) Muhammad Nadir Khan, Advisor, Dealing Officer.

Nadeem Ahmed Mirza, Consultant, Authorized Representative.

Muhammad Raza, Deputy Collector Customs (Appraisement), Departmental Representative.

FINDINGS/RECOMMENDATIONS

DR. MUHAMMAD SHOAIB SUDDLE, FEDERAL TAX OMBUDSMAN---The Complainant imported 99720 Kg of standard wire of dia 9.53mm and 12.7mm of ASTM-A416-1998 Grade 270 @ US$ 400 MT/C&F Karachi from China against letter of credit No. ILC 152300851007 dated 11-12-2007. On arrival of the consignment, the Clearing Agent of the complainant transmitted on line GD through NIFT on the basis of import documents. The Customs assigned it GD number KAPR-HC-62912 dated 18-6-2008 and Mr. Anjum Barakzai, Assessing Officer along with Mr. S.A. Junejo, Appraiser examined the consignment arid submitted the report that the goods were found in accordance with declaration. The GD was referred to the nominated Apprising Officer (AO) for completion of assessment of leviable duties and taxes. A copy each of the contract and the letter of credit was also provided. The AO observed that the value was not correct, and so the goods were assessed at higher value @ US$ 630/MT. As the consignment was under demurrage, option was exercised for provisional clearance under section 81 of the Act. On asking by the Deputy Director of Directorate General of Valuation for supply of documents, the Clearing Agent of the Complainant submitted copies of Contract, LC, Commercial Invoice, Mill Test Certificate, and Trade Samples of goods. Thereafter, the Complainant received letter No.V-52/2008-III dated 21-7-2008 issued by the Assistant Collector of Customs Appraisement-III that as the Directorate General of Valuation had issued ruling No.1/13/2008-1 VA/3128 dated 19-7-2008 for US$ 929/MT, the Customs had finalized value under Section 81 of the Customs Act, 1969, and the Complainant was required to pay further amount of Rs.887,442 in addition to the amount of post-dated cheque of Rs.668,455.

Subsequently, however, a corrigendum was issued wherein the value of the goods was reduced from US$ 929/MT to US$ 717.41/MT. The payable amount of customs duties and taxes was accordingly reduced.

2. According to AR, his case was to be finalized on or before 13-3-2009 as the section 81(2) of the Custom Act. Thus he has requested as follows:--

(i)The declared value of the Complainant consignment stood final after the expiry of stipulated period of nine months in terms of subsection (4) of Section 81 of the Customs Act, 1969.

(ii)Withdraw letter No.V-52/2008-III dated 21-7-2008 and corrigendum dated 26-7-2008 for encashment of deposited PDC and payment of additional amount of Rs.262,936.00.

(iii)Return the post dated cheque bearing No. CB-0675314 for Rs.668,455.00 and the submitted indemnity bond after :cancellation.

(iv)Any other relief fit and adequate may also be granted.

3. The complaint was sent for comments to the Customs through Secretary Revenue Division under section 10(4) of the FTO Ordinance, 2000. The Model Customs Collectorate of Appraisement (MCC Appraisement) filed para-wise comments wherein preliminary objection with regard to the jurisdiction of the office of Federal Tax Ombudsman (FTO) was raised on two grounds, firstly that the Complainant had not exhausted the legal remedies of appeal and revision under the relevant legislation, and, secondly, that the case pertained to determination of value/assessment of the imported goods which fell outside the FTO jurisdiction.

4. The Customs further informed that the post-dated cheque submitted by the sComplainant to secure the provisionally assessed duties on presentation for encashment was returned with the endorsement "insufficient funds". The Customs further contended that the available evidential material clearly revealed that the goods were under-invoiced and so the Directorate General of Valuation determined the assessable value higher than the declared level. According to the Customs, the assessment was finalized within the stipulated period as evident from Letter No.V-52/2008-III dated 21-7-2008. On the basis of these submissions, the Customs prayed for dismissal of the complaint.

5. Copy of the parawise comments was provided to the complainant for filing of rejoinder. However no rejoinder was filed. The matter was thus fixed for hearing on 20-4-2010.

6. During the hearing, the parties mainly reiterated the averments of their written pleadings. In addition, the AR cited certain earlier findings/decisions made by this office as well as the judgments passed by the Hon'ble High Courts of Karachi and Lahore and the orders passed on the representations made to the President of Pakistan under section 32 of the FTO Ordinance, 2000, in support of his contentions. The DR, however, contended that the time limit prescribed under section 81(2) related to final determination of the provisional assessment made under section 81(1) not to the review by the Director General Valuation under section 25-D of the Act.

7. Before going into the merits of the case the legal objection raised by the Customs with regard to the jurisdiction of FTO Office needs to be examined. It is obvious that the Complainant has not approached FTO Office for determination or assessment of the value of goods or payable taxes and duty, but whether 'due process' has been observed, and if not whether any maladministration is involved in the process of making the final determination of value. The objection raised by the Customs is therefore, found to be irrelevant and of no legal value. The grievance of the Complainant revolves around what he feels non compliance of mandatory legal provisions of the Customs Act, 1969.

8. As to merits of the case, it is observed that the critical issue involved in the complaint is whether or not the final determination of the provisional assessment was made under section 81(1) within the prescribed time limit of six months extendable by 90 days under section 81(2). According to the Customs, the final determination was made and communicated to the Complainants within time vide Letter No.V-52/2008-III dated 21-7-2008 and corrigendum dated 26-7-2008 which were both within the prescribed time limit. If the Complainant invokes the provisions of section 25-D of the Customs Act, 1969, and files a review application before Director General Valuation, the time taken by the Director General to dispose of the review has got nothing to do with the limitation provided under section 81 of the Customs Act. Incidentally, the review filed before the Director General Valuation was apparently not pursued by the AR, and so it became infructuous.

Findings:

9. In view of the aforesaid discussion, the final determination of value/assessment is held to have been made and communicated within the time limit prescribed under section 81(2) of the Customs Act, 1969. Therefore, no violation of time limit prescribed under section 81(2) ibid is involved in this case. It is also clear that the time limit prescribed under section 81(2) ibid does not relate to any review by the Director General Valuation under section 25-D. The compliant is therefore dismissed being without merit.

H.B.T./112/FTOCompliant dismissed.