DEPUTY COLLECTOR OF CUSTOMS, KARACHI VS COLLECTOR COLLECTORATE OF CUSTOMS, KARACHI, 2014 PTD-CUSTOMS-APPELLATE-TRIBUNAL-LAHORE 807 (2013)

Customs Act (IV of 1969)---

----S.25(5)---Customs Rules, 2001, Rr.117 & 118---Appeal to Appellate Tribunal---Imported textile accessories---Weight of goods found to be higher than the one declared in goods declaration---Re-assessment of goods on basis of lowest value on which identical goods had been imported during relevant period---Validity---Appellant failed to controvert impugned assessment, which did not suffer from any factual and legal infirmity---Tribunal dismissedappeal in circumstances.

Director, Directorate General of Intelligence and Investigations and others v. Messrs Al-Faiz Industries (Pvt.) Ltd. and others 2006 SCMR 129; 2002 SCMR 312; 2002 PTD 976; 2005 SCMR 492; 2007 PTD 361; 2010 SCMR 431; 2009 PTD 1507 and Messrs Shafique and Company v. Assistant Collector of Customs and 2 others 2008 PTD 1481 ref.

Nadeem Ahmed Mirza (Consultant) for Appellant.

Nemo for Respondents.

Date of hearing: 23rd January, 2013.

ORDER

GHULAM AHMED, MEMBER (TECHNICAL-II).---This order willdisposeof Customs Appeal No.K-403 of 2011, filed byCollectorof Customs, Karachi against Orders-in-Appeal No.4886 of 2010 dated 20-1-2011, passed by the Collector of Customs, (Appeals), Karachi.

2.Brief, facts of the case as stated in the impugned order are that the appellant imported a consignment containing textile accessories from China declaring total net weight of consignment as 8665 kgs at the declared value of US$ and sought release thereof through GD No.KAPR-HC-49042 dated 4-12-2007. However, the goods were examined and it was found that weight of the consignment was 22,840 kgs as against the declared weight of 8,665 kgs. The reported difference in weight was 163%. However, customs value of the goods was determined at US$ 21,010. The AIB had intercepted the consignment and re-examined the same to the extent of 100%. No discrepancy was pointed out in particular except confirming the earlier examination conducted by the shed staff. However, the AIB had proposed assessment at US$ 48566. The appellant strongly agitated the said proposed assessment and requested to review the same on the basis of valuation criterion claimed to be in respect of identical/similar of goods. The case was accordingly re-examined and the goods were finally assessed at the value of US$ 32445 on the basis of MIS Data (physical import evidences).

3.The Deputy Collector of Customs, MCCA-VI Model Customs Collectorate of Appraisement, Customs House Karachi, passed an assessment Order No.24/2010 dated 26-8-2010 as under:--

(i)Messrs H.H. Brothers, Lahore imported a consignment containing textile accessories from China declaring total net weight of consignment as 8665 Kgs at the declared value of US$ 8843videIGM No. 2107 dated 287-11-2007, Index No. 30and sought release thereof filing GD No.KAPRHC-49042 dated4-12-2007.

(ii)The goods were examined first and the shed staff had confirmed quantity and description. However, the shed staff pointed out that weight of consignment had been worked out to 22840 Kgs as against the declared weight of 8665 Kgs. The reported difference in weight was 163%. The goods were accordingly assessed to US$ 21010.

(iii)The AIB has intercepted the consignment and re-examined the same to the extent of 100%. No discrepancy was pointed out in particular except confirming the earlier examination conducted by the shed staff. However, AIB has proposed assessment at US$ 48566 and the Group has accordingly assessed the value as proposed by AIB. The importers strongly agitated the said assessment and requested to review the same on the basis of valuation criterion claimed being applied throughout in respect of identical/similar type of goods which was found to be on the lower side.

(iv)The case was accordingly re-examined in the light of importer's representation and the goods were finally assessed at the value of US$ 32445 on the basis of MIS Data (physical import evidences). The importers got the goods released on payment of duty and taxes on so assessed value.

(v)This assessment order issues in compliance of Hon' able FTO's recommendation in review Application No. 35/2010 in Complaint No. 39/KHI/CUST(22)/2008.

4.Being aggrieved and dissatisfied with the assessment order, the Importer preferred an appeal before the Collector of Custom Appeals Karachi, who vide Orders-in-Appeal No.4886/2010 dated 20-1-2011, decided the matter as under:--

"I have thoroughly examined the entire case record and given very careful consideration to the arguments advanced before me. It appears that the goods involved in this case have been assessed in terms of subsection (5) of section 25 of the Act. However, it is not clear whether the highest or the lowest of the values on which identical goods had been imported during the relevant period of 90 days was taken for assessment of the instant goods. As per clause (d) of subsection (5) of section 25 of the Act, only the lowest of the values on which identical goods had been imported during the relevant 90-day period could be taken for assessment of the impugned goods. I, therefore, order that the goods be assessed on thebasis of the lowest value on which identical goods had been imported during the relevant period subject to necessary adjustments. The impugned order is modified to the above extent only and the appeal is disposed of accordingly."

5.Being aggrieved and dissatisfied with the Order-in-Appeal No. 4846/2010 dated 20-1-2011, the Deputy Collector of Customs, Appraisement Karachi filed the instant appeal before this Tribunal on the grounds as under:--

(i)That the imported goods as of the respondent No. 2 are assessed on the basis of weighment, therefore, weighment of goods is rational to assess the liabilities against each declared item.

(ii)That the respondent No. 2 made true declaration of description and quantity as such was not proceeded with in terms of section 32 of the Customs Act, 1969 but grossly erred in declaring the correct weight of the consignment which is an essential ingredient for the assessment of duty and taxes, hence, technically and skillfully attempted to deprive the public exchequer from its legitimate revenue.

(iii)That after completion of Goods Declaration the respondent No.2 paid the assessed amount of duty and taxes and did not agitate or raised any objection at the time with regard to re-assessment of goods, meaning thereby that he was totally agreed with re-assessment carried out in line with section 25 read with section 80(3) of the Customs Act, 1969.

(iv)That the respondent No. 2, after seeking clearance of their imported consignment had tried to take refuge as against the re-assessment when goods came out of customs charge leaving behind no probability for its re-weighment in order to re-ascertain the weight thereof. The modus operandi of the respondent No. 2 is deliberated with a view to take refuge on any pretext with regard to re-assessment of value of imported goods. Needless to emphasis that such goods as of the respondent No. 2 are assessed on the basis of weight of each item which is basic criteria for the purpose.

(v)That the re-examination of goods in the hands of staff of Appraisement Intelligence Branch was to re-check the declared contents of imported consignment, who too, did not report any misdeclartion on account of description and quantity thereof but proposed enhancement of value taking in consideration the noteable difference between declared and ascertained weight of the imported goods. This was done for the sake of revenue of public exchequer which could be evaded by respondent No. 2 if difference in weighment of consignment is left undetected.

(vi)That the goods of respondent No. 2 were re-assessed strictly in line with the provisions of section 25 read with section 80(3) of the Customs Act, 1969 also considering thereby the available data of identical/similar goods.

(vii)That the learned respondent No. 1 grossly erred in construing that the basic criteria for assessment of goods as of the respondent No. 2 is 'weight' of each item or the overall weight of the consignment. The perusal of Goods Declaration will confirm the contention of the appellant.

(viii) That the respondent No. 2 willfully accepted the reassessed value and at no stage made any request for clearance of their goods in terms of section 81 of the Customs Act, 1969 which lend support to the contention of the appellant that respondent No. 2 was quite satisfied with the re-assessment carried out under section 80 (3) of the Customs Act, 1969.

(ix)That the respondent No. 2 has not been discriminated in any manner or has ever been deprived from his lawful rights, therefore, filing of appeal before the learned respondent No. 1 was having no merit at all.

(x)That the respondent No. 1 did not provide any opportunity to the appellant to place their view point as against the Memo of Appeal filed before him and decided the matter unilaterally, therefore, the appellant has been condemned un-heard which is gross violation of settled principles of natural justice.

(xi)In view of above submissions this honourable Tribunal is prayed

(a)Modifications allowed by the respondent No. 1 vide impugned Order-in-Appeal may please be declared as null and void;

(b)The re-assessment may kindly be declared as maintainable as the same has been done in accordance with the provisions of the Customs Act, 1969 and in line with available import data of similar/identical goods; and

(c)Grant of any other relief as deemed appropriate by this Honourable Tribunal.

6.The respondent importer has submitted Cross objection on the memo of appeal, as under:--

(a)That under subsection (2) of section 194A of the Customs Act, 1969 Collector of Customs is empowered to file an appeal or by an officer of Customs not below the rank of Assistant Collector so authorized in writing. To the contrary, the instant appeal has been filed by the Deputy Collector on his own without any authorization, which is mandatorily to be annexed with the appeal as evident from the authorization submitted with the Tribunal in Customs Appeals Nos. 1180/2011 and 1181/2011 and with the High Court of Sindh in Customs Reference Applications Nos. 145/2010 to 147/2010. Confirming that the instant appeal had been filed without any authorization, rendering the appeal not validly and legally filed as it is in contravention and violation of the mandatory provision of law. Such appeal deemed to be nullity having no legal existence.

(b)Filing of appeal after lapse of 60 days from the date on which the order under section 193 of the Act was served on the appellant, the appeal would be barred by time. It will be deemed to have been properly filed when the memo. of appeal was signed and verified by the signatory with due authorization of the Collector, but the same was not done or intended to be done after lapse of 60 days, the appeal, would be barred by limitation notwithstanding the fact that it was filed within 60 days as envisaged by section 194-A of the Act. As this appeal would be deemed to have been validly and legally filed on the date on which the Deputy Collector, MCC of Appraisement signed and verified the memo. of appeal.

(c)That it is well settled principle of law that, if the law had prescribed method for doing of a thing in a particular manner such provision of law is to be followed in letter and spirit and achieving or attaining the objectives of performing or doing of a thing in a manner other than provided by law would not be permitted as declared in the landmark judgment of Director, Directorate General of Intelligence and Investigations and others v. MessrsAl-Faiz Industries (Pvt.) Ltd. and others reported as 2006 SCMR 129 wherein their lordship of the Supreme Court had observed as under:

"INTERPRETATION OF STATUTE"

"Each and every word appearing in a section is to be given effecttoandnowordistoberenderedasredundantorsurplus.

When the Legislature requires the doing of a thing in a particular manner then it is to be done in that manner and all other manners or modes of doing or performing that thing are barred.

If the doing of a thing is made lawful in a particular manner then doing of that thing in conflict with the manner prescribed will be unlawful as per maxim "Expression facitcessare taciturn"

(d)The Hon'ble Customs Appellate Tribunal in reported judgment 2011 PTD (Trib.) 2114 Collector of Customs Peshawar v. Collector of Customs Appeal Peshawar and another held as per law settled by the Apex Court that:

"Appeals purported to have been filed by Collector as the nomenclature of the petitioner appears a Collector of Customs but not singed or verified by him instead were singed or verified either by a Deputy Collector of Assistant Collector of Customs would also be deemed not to have been filed in accordance with law----Record demonstrated that no such authorization in writing was obtained from the Collector of Customs while filing the appeal."

(e)The allegation levelled in ground No.(ii) stood settled by the AIB that no misdeclaration in material particular was made by respondent No. 2 instead his declaration was correct and same was confirmed by the examination staff and as such there was no question of depriving the public exchequer from its legitimate revenue.

(f)The stance taken in ground No. (iii) stood refuted from the fact Nos. (h) to (j) of the instant cross objection and annexed letter of the consultant marked as Exhibit "B" to "D-3".

(g)The appellant was empowered to assess the respondent No. 2 goods only with the application of different subsections of section 25 of the Customs Act, 1969 in sequential manner in the absence of availability of evidential invoice of the same period and country (see expression of sub-rule (a) of rule 107 of the Customs Rules, 2001) which has to be supplied to the person effected as per mandated requirement of law, and even under the direction of the FBR given in para 78 of CGO 12/2002 dated15-6-2002.

(h)That the appellant cannot assessed the value of the appellant goods contrary to the evidence of clearance of MCC of Paces of the said product. Which has cleared the said items against different C.Rs. Nos. 1-HC-274886-220507, 281619-290507, 349578-070807, 405948-290907 and 507588-091208 imported from China on the values enumerated here-in-below.

(i)That the appellant totally ignored the provision of law and the available evidences of lowest value of import (not assessed) of identical/similar goods expressed in clause (d) of subsections (5) and (6) of the Customs Act, 1969, read with Rules 117 and 118 of Customs Rules, 2001 i.e. data maintained by PACCS under Rule 110 of Customs Rules, 2001, despite working under the regime of "one customs" and opted to assess respondent No. 2 goods to complete assessment unilaterally/arbitrarily prohibited under Rule 110 of Customs Rules, 2001. Reliance is placed on Order-in-Appeals Nos. 606 to 608 dated 16-8-2007, up-held by Customs Appellate Tribunal vide Order-in-Customs Appeals Nos. K-576 of 2007 to K-578 of 2007 Collector of Customs, MCC of Paces v. Feco Trading, Karachi, Order-in-Appeals Nos.3098/2009 (Asghar Brothers v. Additional Collector of Customs, MCC of Paces and reported judgment 2009 PTD (Trib.) 1926 and 2010 PTD (Trib.) 2432 Rendering the assessment suffer from legal infirmity, hence, void and ab-initio.

(j)That the assessment/determination of the respondent No. 2 goods value by the appellant and his subordinate is manifestly capricious and based on erroneous and forced construction of law and beside loudly speak about a differential treatment, not permitted under law. Hence, the assessment is nullity/bad in law/discriminatory. Reliance is placed on reported judgments2002 SCMR 312, 2002 PTD 976, 2005 SCMR 492, 2007 PTD 361, 2010 SCMR 431and 2009 PTD 1507.

(k)That as regards the stance of the appellant taken in the grounds that the respondent No. 2 has not objected to the valuation and rather had paid duty and taxes willfully is misconceived as evident from the fact that the letters resting with the appellants and annexed with the cross objection as exhibits "B" to D - D3" speak with clarity and loudly about the protest and objection. Irrespective of that, it is appropriate for the respondent No. 2 to submit that he can assert his right that his imported goods value has to be assessed in accordance with the legal requirement at any time i.e. even clearance of the goods. Any mistaken belief as to amount paid will not precluded the respondent No. 2 for asserting such legal right, despite of the fact whether he agitated at the time of assessment or not or paid duty and taxes voluntary as held by the Lahore High Court in its reported judgment 2008 PTD 1481 (Messrs Shafique and Company v. Assistant Collector of Customs and 2 others) their lordships of High Court observed that:--

Learned counsel for the Department, states that the petitioner was contributory in the whole matter. This assertion is made on the grounds that the payment of the enhanced amount of fiscal levies on the basis of the higher value assessed by the Customs Department was made voluntarily and without protest. This contention does not have much force because the petitioner is entitled to all remedies under law. Even if it is, for a moment conceded the he made payment voluntarily, he can at any time, assert his right to be assessed in accordance with legal requirement, any mistaken belief as to the amount payable will not preclude the petitioner from asserting such legal right."

6.The appellant submitted their comments on cross objection filed by the respondents which are reproduced as under:-

(A)The respondent No. 2 imported a consignment consisting Textile Accessories from China covered under JGM No. 2107, dated 28-11-2007, Index No. 30 and sought clearance of imported goods through filing of Goods Declaration No. KAPR-HC-d 49042, dated 4-12-2007.

(B)That upon examination by the shed staff the declared description of each item was confirmed, however, weight of consignment was reported as 22,840 Kg (examination) report endorsed on the reverse of the aforesaid Goods Declaration in relied upon) instead of declared weight of 8,665 Kg. The reported difference in weight came to 163%, whereas, goods were assessed at US$ 21,010. Subsequently, consignment under reference was intercepted by the staff of Appraisement Intelligence Branch and was 100% examined which did not yield any discrepancy in the earlier examination conducted by the shed staff. However, it was proposed that the goods may be assessed at US$ 48566 accordingly, goods were assessed as per value proposed by the staff of Appraisement Intelligence Branch. Since, there was no mis-declaration with regard to description of goods, therefore, the department did not proceed against the respondent No. 2 in terms of section 32 of the Customs Act, 1969. Accordingly, the goods were re-assessed under section 25 read with section 80(3) of the Customs Act, 1969, Goods Declaration was completed and handed over to the respondent No. 2 who without raising any objection thereof deposited Rs. 5,19,026 on account of duty and taxes.

(C)In the meantime, the respondent No. 2 invoked the jurisdiction of Honourable FTO by lodging of Complaint in terms of section 2(3) (ii) of the FTO Ordinance, 2000. Accordingly, Para-wise comments vis-a-vis contents of the aforesaid Complaint were submitted before the Honourable FTO dated14-5-2010 were conveyed to MCC Appraisement through the Secretary, Revenue Division, Islamabad by the Advisor (I&M), Federal Tax Ombudsman Secretariat, Islamabad vide letter No.11238-K/10- Impl, dated 18-5-2010. In compliance of order passed by the Honourable Federal Tax Ombudsman, an inquiry was conducted and eventually an inquiry Report was submitted to the Federal Board of Revenue, Islamabad. Later on, the respondent No. 2 preferred a Review Application before the Honourable FTO against which Para-wise Comments were filed accordingly.

(D)After the proceedings conducted before the Honourable FTO and complying the order thereto, final Assessment Order No. SI/MISC/OFFICE/24/2010-VI, dated 26-8-2011 was passed by the appellant which was appealed before the learned respondent No. 1 who has passed the impugned Order-in-Appeal which is deemed unjust, unilateral and arbitrary, hence, this

PARA WISE COMMENTS ON GROUNDS:

(i)Denied. It is respectfully submitted that the Deputy Collector has authorized by the Collector of Customs MCC Appraisement in writing under section 194-A of the Customs Act, 1969 for filing of appeal before Honourable Appellate Tribunal against the order of Collector (Appeal) in policy file No. SIIMISC/14/2008-Law(A) (copy enclosed).

(ii)Denied, it is respectfully submitted that the Order of Collector Appeal was served on 22-1-2011 under section 193 of the Customs Act, 1969 and appeal was filedbytheappellanton18-3-2011 within prescribed time under the Customs Act, 1969.

(iii)That the imported goods as of the respondent No. 2 are assessed on the basis of weighment, therefore, weightment of goods is rational to assess the liabilities against each declared item.

(iv)That the respondent No. 2 made true declaration of description and quantity as such was not proceeded with in terms of section 32 of the Customs Act, 1969 but grossly erred in declaring the correct weight of the consignment which is an essential ingredient for the assessment of duty and taxes, hence, technically and skillfully attempted to deprive the public exchequer from its legitimate revenue.

(v)That after completion of Goods Declaration the respondent No.2 paid the assessed amount of duty and taxes and did not agitate or raised any objection at the time with regard to re-assessment of goods, meaning thereby that he was totally agreed with re-assessment carried out in line with section 25 read with section 80(3) of the Customs Act, 1969.

(vi)That the respondent No. 2, after seeking clearance of their imported consignment had tried to take refuge as against the re-assessment hen(sic) goods came out of customs charge leaving behind no probability for its re-weighment in order to re-ascertain the weight thereof. The modus operandi of the respondent No.2 is deliberated with a view to take refuge on any pretext with regard to re-assessment of value of imported goods. Needless to emphasis that such goods as of the respondent No.2 are assessed on the basis of weight of each item which is basic criteria for the purpose.

(vii)That the re-examination of goods in the hands of staff of Appraisement Intelligence Branch was to re-check the declared contents of imported consignment, who too, did not report any mis-declaration on account of description and quantity thereof but proposed enhancement of value taking in consideration the noteable difference between declared and ascertained weight of the imported goods. This was done for the sake of revenue of public exchequer which could be evaded by respondent No. 2 if different in weighment of consignment is left undetected.

(viii) That the learned respondent No. 1 grossly erred in construing that the basic criteria for assessment of goods as of the respondent No. 2 is "weight" of each item or the overall weight of the consignment. The perusal of Goods Declaration will confirm the contention of the appellant.

(ix)That the respondent No.2 will fully accepted the re-assessed value and at no stage made any request for clearance of their goods in terms of section 81 of the Customs Act, 1969 which lend support to the contention of the appellant that respondent No.2 was quite satisfied with the re-assessment carried out under section 80(3) of the Customs Act, 1969.

(x)That the respondent No. 2 has not been discriminated in any manner or has ever been deprived from his lawful rights, therefore, filing of appeal before the learned respondent No.1 was having no merit at all.

(xi)That the respondent No. 1 did not provide any opportunity to the appellant to place their view point as against the Memo of Appeal filed before him and decide the matter unilaterally, therefore, the appellant has been condemned un-heard which is grossly violation of settled principles of natural justice.

That, prima-facie, the submissions made by the answering appellant are in their favour in accordance with the law and the balance of convenience is also in their favour.

7.Case record examined and heard the rival parties. The appellant have assailed the order of respondent No.1 that it failed to appreciate that assessment of the impugned goods is made on the basis of weight of each item or the overall weight of the consignment. The impugned order has been passed without taking into consideration the arguments of the appellant in the memo. of appeal. As per record, respondent No.1 has ordered re-assessment of the impugned goods on the basis of the lowest value on which identical goods had been imported during the relevant period in terms of clause (d) subsection (5) of section 25 of the Customs Act, 1969 read with Rules 117 and 118 of the Customs Rules, 2001. The appellant both during the hearing proceedings as well as grounds of appeal and prayer in memo. of appeal have failed to come up with any comment or argument to controvert this above moot point in issue. Rather the arguments are reiteration of what has been presented and expressed before at the appeal stage. The order of the respondent No.1 is in accordance with the legal provisions of section 25 of the Customs Act, 1969 and does not lack any factual and legal impropriety, and therefore need not any interference. This being so, the appeal is disallowed as no order to cost.

8.Order passed accordingly.

SAK/131/Tax(Trib.)Appeal dismissed.