WASIM RADIO TRADERS VS FEDERATION OF PAKISTAN through Secretary Revenue Division Islamabad, 2014 PTD-LAHORE-HIGH-COURT-LAHORE 525 (2013)

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

---S. 81---Customs Rules, 2001, R. 125---Constitution of Pakistan, Art.199---Constitutional petition---"Declared value" and "value under the Valuation Rulings"---Distinction---Provisional determination of liability---Non-release of consignment by the Customs Authorities---Provisional release of goods---Scope---Customs Authorities refused to assess imported goods on the basis of declared value and petitioners sought clearance of goods---Validity---Difference between the "declared value" and "value under the Valuation Rulings" had to be secured by way of bank guarantee to the satisfaction of the Collector concerned---Purpose of such provision was not only to protect the revenue of the State but also to provide smooth flow of trade---Importer had right for provisional release of his goods if the value of the imported goods being valued was disputed.

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

---S. 25---Value of imported and exported goods, determination of---Scope---Customs Authorities were bound to assess the imported goods and if authorities were not agreeable to the declared value, then they were required to follow certain procedure and only after following said procedure, they could proceed to assess the value of goods---Provisions of Customs Act, 1969 were "subject to the Customs Rules, 2001".

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

---Ss. 25-A & 25---Power to determine customs value---Scope---Collector as well as Director of Customs Valuation had power to determine the customs value of any goods or category of goods after following the method laid down in S. 25 of Customs Act, 1969 or whichever was applicable---Customs Rules, 2001 were applicable to S.25-A of the Customs Act, 1969.

Mian Abdul Ghaffar for Petitioner.

Amir Hussain Cheema for Respondents.

ORDER

SHEZADA MAZHAR, J.---Through this single order, I intend to dispose of Writ Petition No.31010 of 2013 and Writ Petition No.31013 of 2013 as in both these petition common questions of law and facts are involved.

2.Through the present writ petition, the petitioners have challenged the non-release of their consignments by the respondents/ Customs Authorities under section 81 of the Customs Act, 1969.

3.In Writ Petition No.31010 of 2013, the petitioner has imported consignment consisting of Lead Acid Batteries and other items and in Writ Petition No.31013 of 2013, the petitioner has imported consignment of household items. On arrival of goods, the petitioners sought clearance thereof through goods declaration which was not assessed on the declared value by the respondents and assessed on the basis of Valuation Ruling No.600 of 2013 dated 24-10-2013 in Writ Petition No.31010 of 2013 and in Writ Petition No.31013 of 2013 Valuation Ruling No.576 of 2013 dated 30-8-2013. The said Valuation Rulings are already under challenge under section 25D of the Customs Act, 1969. The review applications under section 25-D have not been decided, therefore, the petitioners made request for the release of their consignments under section 81 of the Customs Act, 1969 read with Rule 125(2) of the Customs Rules, 2001, which has not been accorded by the respondents and therefore, the present writ petitions have been filed.

4.Submits that under section 81 of the Customs Act, 1969 where it is not possible for an officer of customs during the checking of the goods declaration to satisfy himself about the correctness of the assessment of the goods or to further inquiry then the respondents may order that the duty on such goods be determined provisionally. Submits that according to section 81 of the Customs Act, 1969 read with Rule 125 of the Customs Rules, 2001, in case of dispute between the importer and the appropriate officer in respect of the value of the imported goods, it is the legal right of the importer to claim provisional release of the goods under section 81 of the Customs Act, 1969 but the said relief has been denied by the respondents.

5.On the other hand, learned counsel for the respondents/ department on Court's call submits that the provision of section 81 of the Customs Act, 1969 is applicable for the Officer of the Customs and not for the importers. The bare reading of section 81 of the Customs Act, 1969 reveals that if officer is in doubt regarding value of the imported goods, as the imported goods required chemical test or further inquiry only then section 81 can be applied by the Officer of Customs. Submits that Valuation Ruling is already applicable and in view of section 25A(2), it is the duty of the importer to pay duty on the basis of said valuation ruling.

6.I have heard the arguments advanced by learned counsel for the parties and perused the record as well as law on the point with the able assistance of the learned counsel for the parties.

7.Under section 25 of the Customs Act, 1969, authorities are bound to assess the imported goods under sections 25(1), however, if they are not agreed to the declared value they are required to follow certain procedure and only after following the procedure, they can proceed to assess the value of the goods under sections 25(5), (6),(7) (8) or (9) of Customs Act, 1969. All these subsections clearly state that these provisions are "subject to the rules" and rules are as mentioned in the Customs Rules, 2001".

8.Section 25-A grants power to the Collector as well as Director of Customs Valuation to determine the custom value of any goods or category of goods after following the method laid down in section 25 of Customs Act, 1969 which ever is applicable. Therefore, by reference of section 25 in section 25A makes the Customs Rules, 2001 even applicable to section 25A. The Customs Rules,2001 includes Rule 125 of the Customs Rules, 2001, which states as under:--

125. Dispute settlement.---(1) In case of dispute between the importer and the appropriate officer in respect of the value of the goods being valued, the same shall be resolved in consistence with the relevant provisions of the Customs Act, 1969 (IV of 1969)

(2)Nothing contained in this Chapter shall bar the claim of the importer for provisional release of goods under section 81 of the Act or claim of the customs to assess the goods under section 80 of the Act read with section 25 thereof.

9.The above rule clearly shows that in case there is dispute between the importer and appropriate officer in respect of the value of the imported goods being valued, the importers can seek provisional release of his goods under section 81 of the Act. Section 81 of the Customs Act, 1969 states as under:--

Provisional determination of liability.---(1) Where it is not possible for an officer of Customs during the checking of the goods declaration to satisfy himself of the correctness of the assessment of the goods made under section 79, for reasons that the goods require chemical or other test or a further inquiry, an officer, not below the rank of Assistant Collector of Customs, may order that the duty, taxes and other charges payable on such goods, be determined provisionally:

Provided that the importer, save in the case of goods entered for warehousing, pays such additional amount on the basis of provisional assessment or furnishes bank guarantees [or pay order] of a scheduled bank along with an indemnity bond for the payment thereof as the said officer deems indemnity bond for the payment thereof as the said officer deems sufficient to meet the likely differential between the final determination of duty over the amount determined provisionally:

Provided further that there shall be no provisional assessment under this section if no differential amount of duty and tax is paid or secured against bank guarantee [or pay order].

[(2) Where any goods are allowed to be cleared or delivered on the basis of such provisional determination, the amount of duty, taxes and charges correctly payable on those goods shall be determined within six months of the date of provisional determination:

Provided that the Collector of Customs or, as the case may be, Director of Valuation, may in circumstances of exceptional nature and after recording such circumstances, extend the period for final determination which shall in no case exceed ninety days

[Provided further that any period, during which the proceedings are adjourned on account of a stay order or for want of clarifications from the Board or the time taken through adjournment by the importer, shall be excluded for the computation of aforesaid periods.]

(3)On completion of final determination, the amount already paid or guaranteed shall be adjusted against the amount payable on the basis of final determination, and the difference between the two amounts shall be paid forthwith to or by the importer, as the case may be.

(4)If the final determination is not made within the period specified in subsection (2), the provisional determination shall, in the absence of any new evidence, be deemed to be the final determination.

Explanation.---Provisional assessment means the amount of duties and taxes paid or secured against bank guarantee [pay order.]

[(5) On completion of final determination under subsection (3) or (4), the appropriate officer shall issue an order for adjustment, refund or recovery of amount determined, as the case may be.]

9.The bare reading of section 81 of the Customs Act, 1969 read with Rule 125 of the Customs Rules, 2001 clearly shows that in case of dispute with regard to the value of imported goods, or any other dispute which requires further enquiry, the importer has the right to get his goods released under section 81 of the Customs Act, 1969.

10.The purpose of these provisions is not only to protect the revenue of the State but also provide smooth flow of trade. If the interpretation given by the learned counsel for the respondents/ department is accepted it will result that the importers will left at the mercy of the Customs Authorities which cannot be the intention of the legislatures.

11.Therefore, whenever there is a dispute between the importer and the appropriate officer of custom with regard to the value of imported goods the importer have a right to get his goods cleared provisionally under section 81 of the Custom Act, 1969.

12.In the present case, there is a dispute between the importer and appropriate officer of customs regarding value, therefore, importer for the release of their goods under section 81 of the Customs Act, 1969, on payment of duty and taxes on the declared value whereas difference between the declared value and the value under Valuation Rulings has to be secured by way of bank guarantee to the satisfaction of the Collector concerned.

With these observations, the instant petition stands disposed of.

AG/W-13/LOrder accordingly.