INTERNATIONAL BUSINESS MANAGEMENT VS DIRECTOR, DIRECTORATE GENERAL OF CUSTOMS VALUATION, 2014 PTD-CUSTOMS-APPELLATE-TRIBUNAL-KARACHI 987 (2013)

Customs Act (IV of 1969)---

----Ss.25(1)(2)(5)(6), 25-A(1), 25D & 215---Valuation Ruling No.460/2012 dated 29-6-2012---Valuation Ruling No.482/2012 dated 24-10-2012---Determination of customs value of goods---Powers to determine the customs value---Determination of customs values of 'uncoated offset paper for writing, printing and photocopying' through Valuation Ruling No. 460/2012 dated 29-6-2012---Appellant contended that Valuation Ruling No. 460 of 2012 had been issued after application of methods under S.25(5) & (6) of the Customs Act, 1969 simultaneously which was not provided under the law---Validity---Section 25 of the Customs Act, 1969 provided for the determination of customs value of the goods imported and also a sequential methodology under its subsections to be followed in strict sense as all these methods were independent of each other---Controversies arising out of determination of value under subsection (2) of S.25 of the Customs Act, 1969 with application of methods in the sequential order prescribed thereunder, the interplay of valuation advice arrived under S.25A of the Customs Act, 1969 in juxtaposition with S.25 of the Customs Act, 1969---Provisions of S.25 of the Customs Act, 1969 were to be followed in sequential method---Each of subsections (1), (5), (6), (7), (8), and (9) of S.25 of the Customs Act, 1969 define law that the customs value of the imported goods was to be determined by the Customs, except reversal of the order of the subsections (7) and (8) at the importers request, if so agreed by the Collector of the Customs---Since all these subsections carry into themselves procedure independent of each other, thus no two methods could be applied simultaneously as it would lead to an inherent self contradiction---Application of both two methods in the ruling was in total negation of the legal provisions and non-adherence to the statutory provision ---Thing or act which was to be done in a particular manner as prescribed under the law had to be done in the same manner and not in any other manner---Valuation Ruling No.460 of 2012 dated 29-6-2012 lacked warrant of law and its issuance did not have any adherence with the statutory requirements and was also derogative to specific provisions of S.25 of the Customs Act, 1969, besides being not a speaking order in terms of S.24(A) of the General Clauses Act, 1897---Such ruling was declared without lawful authority, void and set aside accordingly---Order-in-review passed during the hierarchy of Customs was also infested with patent illegalities which was held to be null and void and accordingly set aside---Department was directed by the Tribunal to assess the goods of the appellant in accordance with the parameters of Ss.25 and 25-A of the Customs Act, 1969 whichever was deemed appropriate---Appeal was accepted by the Appellate Tribunal.

Messrs Toyo International Motorcycles v. Federation of Pakistan 2008 PTD 1494 and Saadia Jabbar v. Federation of Pakistan and Rehan Umar v. Collector of Customs 2006 PTD 909 rel.

Afzal Awan for Appellant.

Riaz Haider, P.A. for Respondents.

Date of hearing: 18th July, 2013.

ORDER

ADNAN AHMED, MEMBER (JUDICIAL-II).---This order will dispose of Customs Appeal No.K-489 of 2013 filed by the appellant against the Order-in-Review No.321 of 2013 dated 29-4-2013, passed by the Director General, Directorate General of Customs Valuation, Custom House, Karachi.

2.Brief facts of the case are that the customs values of 'uncoated offset paper for writing, printing and photocopying' were earlier determined through Valuation Ruling 460/2012 dated 29th June, 2012. Representation were received from stakeholders that the values determined through the above mentioned valuation ruling were not perfect aligned with prices of uncoated offset paper in the international expert markets. This prompts an inquiry for re-determination of customs vales of the goods in question. Valuation methods given in section 25 of the Customs Act, 1969 were examined to ascertain which method was applicable to the valuation issued in terms of section 25-A (1) of the Customs Act, 1969. Transactional Value Method provided in section 25(1) was found inapplicable because sufficient information with respect to adjustments to be made to the transactional value in terms of section 25(2) was not available. After examining all methods only Identical/Similar Goods Value Methods as provided in section 25(5) (6) of the Customs Act, 1969 were found to be applicable and was the methodology adopted to determine customs values for uncoated offset paper for writing, printing and photocopying in this case. Meetings were held by the Director, Directorate General Customs Valuation, Karachi with stakeholders to ascertain any new evidence of customs values of uncoated offset paper. Evidence furnished by the applicant/appellant of identical/similar goods value method was used to re-determine the customs values. The uncoated offset paper for writing, printing and photocopying of different origins hereinafter specified shall be re-assessed to duty/ taxes at the following customs values vide Valuation Ruling No.482/2012 dated 24-10-2012 was issued.

3.Being aggrieved from the subject Ruling which was assailed before the Director General of Customs Valuation, Karachi and filed Review Application, wherein the impugned Order was passed and rejected the Review Application of the appellant.

4.Being aggrieved and dissatisfied with the Order-in-Review No.32/2013 dated 29-4-2013, passed by the Director General of Customs Valuation, Karachi, the appellant filed the instant appeal before this Tribunal on the following grounds:--

(a)That the revision application bearing No. 968/2013 was filed before the respondent No. 2 within the statutory period of 30 days from the date of service of order decision under the mandate of section 215 of the Customs Act, 1969. However no proof of services was ever supplied or offered by the respondents.

(b)That period from the day of signing of impugned valuation ruling till the filing of the review application works out 30 day or lesser. It is matter of record and judicially noticeable that the Valuation Roiling 460/2012 was signed as on 29-6-2012, 29 and 30-6-2013 were close days same if was served was after 1-7-2012.

(c)That the review application was delivered to the respondent No.2 as on 28-7-2012 via Courier Delivery because it was Saturday and close day of the respondents. The next day 29-7-2012 was Sunday. The next working day was 30-7-2012 on the day the review application was acknowledged by respondents within limitation.

(d)That the valuation ruling 460/2012 was unwarranted by facts and law and there was no import data as referred to or relied upon for judgment and fixation of valuation during the crucial period. The said data does never exist because it was never supplied even repeat requests were made to the respondents.

(e)That during the pendency of the said review application the respondent No. 1 revised his earlier judgment given in VR-460/2012 through VR-482/2012, which fortified the grounds undertaken by the appellant in his review application and was entitled for relief.

5.The respondent department has submitted their para-wise comments which are summarized as under:--

(1)That the section 215 of the Customs Act, 1969, do refer to any order or decision passed or any summons or notice issued. The Valuation Ruling under section 25A of the Customs Act, 1969, or being issued after issuing notices of meeting to all stakeholders. Record of the case reveals that the appellant Messrs International Business Management, Karachi was also served notice of meeting and accordingly, they were appeared in the scheduled meetings. All stakeholders including appellant was shown exercise for the purpose of the determination of customs values under section 25A of the Customs Act, 1969, thoroughly. Though the valuation ruling No.460/2012, dated 29-6-2012, was revised and fresh valuation Ruling No.482/2012, dated 24-10-2012, was issued but the appellant have not substantiated that the points raised in their review application were correct. The review application was time barred. Moreover, the appellant have failed to provide the import related documents to verify truth and accuracy of transaction value as declared by the applicant in terms of section 25(1) of the Customs Act, 1969.

(2)That the review application was filed on 30-7-2012, against Valuation Ruling No.460/2012, dated 29-6-2012, which was beyond 30 days and this could not be entertained under section 25D of the Customs Act, 1969. Since, the appellant had appeared for the all meetings while exercise for the determination of customs value under section 25A of the Customs Act, 1969 was carried out, so it is evident that it was in the knowledge of the appellant that the Valuation Ruling was issued on 29-6-2012.

(3)That the review application was not only rejected on the ground of being time barred but also the appellant had fail to provide the requisite import documents which could form the truth and accuracy of their transaction value under section 25(1) of the Customs Act, 1969.

6.The case was fixed for hearing on 18-7-2013. Mr. M. Afzal Awan, Advocate is appeared on behalf of the appellant and Mr. Riaz Haider P.A., is appeared on behalf of the respondents.

7.We have examined the case record and given due consideration to the oral arguments put forth before us. The main contention of the advocate for appellant is that the impugned Valuation Ruling 460 of 2012 has been issued after application of methods under section 25(5) and (6) of the Customs Act, 1969 simultaneously which is not provided under the law. We observe that section 25 of the Customs Act, 1969 provides for the determination of customs value of the goods imported and also a sequential methodology under its subsections to be followed strict sense as all these methods are independent of each other. The controversies arising out of the determination of value under subsection (2) of section 25 of the Customs Act, 1969 with application of methods in the sequential order prescribed thereunder, the interplay of valuation advice arrived under section 25A in juxtaposition with section 25 of the Act, ibid and as well as its sancrocity has now largely been settled by the superior judicial fora in their pronouncements. In this regard, reliance is placed upon judgments in case of Messrs Toyo International Motorcycles v. Federation of Pakistan reported as 2008 PTD 1494, Constitutional Petition No.2673 of 2009 in case of Saadia Jabbar v. Federation of Pakistan and Rehan Umar v. Collector of Customs reported as 2006 PTD 909. The provisions of section 25 of the Customs Act, ibid., are to be followed in sequential method. Each of the subsections (1), (5), (6), 7), (8) and (9) of section 25 of the Act define law the customs value of the imported goods is to be determined by the Customs, except reversal of the order of the subsections (7) and (8) at the importers request, if so agreed by the Collector of the Customs. Since all these subsections carry into themselves procedure independent of each other, thus no two methods can be applied simultaneously as it would lead to an inherent self contradiction. The application of both two methods in the impugned ruling is in total negation of the legal provisions and non-adherence to the statutory provision. A thing or act which is to be done in a particular manner as prescribed under the law has to be done in the same manner and not in any other manner.

8.The other moot issue as has been noticed is that the appellant have not been provided with the evidence and data relied upon during the hearing proceedings under section 25D of the Act, ibid.

9.In view of the foregoing discussion, we hold that the impugned Valuation Ruling 460 of 2012 dated 29-6-2012 lacks warrant of law and its issuance does not have any adherence with the statutory requirements and also derogative to specific provisions of section 25 of the Customs Act, 1969, besides being not a speaking order in terms of section 24(A) of General Clauses Act, 1897, hence; is declared without lawful authority, void and set aside accordingly. The impugned order-in-review passed during the hierarchy of the Customs is also infested with patent illegalities which is to held to be null and void and accordingly set aside. Under the circumstance, the respondent is directed to assess the goods of the appellant in accordance with the parameters of the sections 25 and 25(A) of the Customs Act, 1969 whichever is deemed appropriate. The appeal is allowed as no order to cost.

10.Order passed accordingly.

CMA/145/Tax(Trib.)Appeal accepted.