COLLECTOR OF CUSTOMS VS USMAN, 2015 PTD-CUSTOMS-APPELLATE-TRIBUNAL-LAHORE 1752 (2014)

Customs Act (IV of 1969)---

----Ss. 25, 25-A, 32 & 194-A---Assessment of value of imported goods---Value of the imported goods would be assessed on the basis of 90 days date prior to the import; or within 90 days after import of goods---Valuation advices issued on different dates would continue and survive to have validity for duration of 90 days from the bound to justify the failure to issue fresh advice; or to record reasons to maintain the existing valuation advice---Valuation ruling imposed, in circumstances, be recorded as valid for the period of 90 days from the date of issuance---No illegality or infirmity in the impugned order having been found, same was unexceptionable and well reasoned order---In absence of any reason to interfere in the impugned order-in-appeal, appeals were dismissed, in circumstances.

Agha Jamshed Ali, A.O. for Appellant.

Aqeel Ahmed for Respondents.

Date of hearing: 27th October, 2014.

JUDGMENT

CHAUDHRY MUHAMMAD TARIQ, CHAIRMAN.---These appeals have been directed against Order-in-Appeal Nos. 4731 to 4793 of 2010, dated 30-12-2010, passed by the Collector of Customs (Appeals), Karachi. Since issues in all the above appeals are identical, hence, all the above appeals are decided through this consolidated judgment.

2.Brief facts of the case are that the respondents (importers) imported a number of consignments of stainless steel sheets/coils of various descriptions such as 200-Series, 300-Series and 400-Series and cleared the same through more than one hundred (100) Goods Declaration (GDs). Subsequently, during the audit of the accounts of the respondents (importers) by the Directorate General of Post Clearance Audit, it discovered that the aforesaid consignments had been released on payment of less amount of duty/taxes inasmuch as the customs values mentioned in the valuation ruling No. Misc./25/2007-IV-A/371 dated 10-12-2007, as amended through valuation Ruling No.Misc/25/ 2007-1V-A/3711 dated 1-9-2008 (hereinafter the rulings), allegedly applicable to the impugned goods, had not been applied. Show-cause notices were accordingly issued to the respondents (importers) by Additional Deputy and Assistant Collectors of the Model Customs Collectorate of PaCCS for recovery of the allegedly short-levied amount in each case within the meaning of sections 32 and 32(3A) of the Customs Act, 1969 ("Act"), Sections 33 and 36 of the Sales Tax Act, 1990 and Section 148 of the Income Tax Ordinance, 2001. The cases were decided through five Orders-in-Original No.35/2010 (02 Manual Cases) dated 7-7-2010, passed by Assistant Collector of Customs, (made applicable to the cases covered under 02 show-cause notices), No.48/2010 dated 25-8-2010, passed by Assistant Collector of Customs (made applicable to the cases covered under 19 show-cause notices), No. 43/2010 (24 Manual Cases) dated 16-7-2010, passed by Deputy Collector of Customs (made applicable to the cases covered under 24 show-cause notices), No.47/2010 (3 Manual Cases) dated 25-8-2010, passed by Deputy Collector of Customs (made applicable to the cases covered under 2 show-cause notices), and No. 39/2010 (19 Manual Cases) dated 6-11-2010, passed by Additional Collector of Customs, Model Customs Collectorate of PaCCS, Karachi (made applicable to the cases covered under 16 show-cause notices). All the adjudicating officers held that the goods had been under-assessed and that the same were required to be re-assessed in accordance with the rulings. They passed identical orders in all the cases. The operative part of one such order dated 7-7-2010 is reproduced hereunder:--

"I have gone through the record of the case and arguments advanced by the learned counsel of the importers. It is an admitted fact that neither the importer, at the time of self-assessment in terms of section 79(1)(b) of the Customs Act, 1969, nor the customs authorities / PaCCS system at the time of assessment under section 80 of the Customs Act, 1969, have applied the customs value determined under section 25A(1) of the Act, which are/ were mandatory for assessment in terms of section 25A(2) of the Customs Act, 1969. It is clearly a case where duty / taxes were chargeable at the customs values determined under section 25A(1) of the Act, hence, it is case where short payment / assessment has been made, hence, duty and taxes are recoverable under sections 32(3) and 32(3A) of the Act. The respondent importers have no plausible rebuttal to the aforesaid legal position. The respondent importers are only taking refuge behind the Honorable High Courts Judgments, whereas not in a single Judgment, cited by the learned counsel the Honorable High Court has passed any orders to make the provision of section 25A of the Act, as redundant. The law is very laud and clear that in terms of section 25A(1) of the Act, in order to make the assessment uniform and transparent and to combat the group under-invoicing the Director (valuation) is empowered to determine the customs value of any class of goods and in terms of section 25A(2) of the Act, it is mandatory for the Government's assessing officers to collect the revenue as per customs value determined under section 25A(1) of the Act. In the presence of section 25A(2) and amended provision of section 25(10) of the Customs Act, 1969, the application of valuation methods in sequential order are no more mandatory. The arguments advanced by the learned counsel are devoid of any merit and against the provisions of law referred to above, hence, no force of law. The importers, are, therefore directed to make payment of short levied amount, as stated below, within 30 days hereof along with surcharge in terms of section 83(2) of the Act, failing which the short levied amount will be recovered in terms of section 202 of the Customs Act, 1969."

3.Feeling dissatisfied with the Order-in-Original, the appellants filed Appeals Nos. 4731 to 4793 before the Collector Customs Appeals Karachi, who accepted the appeals and set aside the Order-in-Original. Feeling dissatisfied with the impugned order, the Collector of Customs, Karachi has filed instant appeals before this Tribunal on the following grounds:--

(a)That the impugned Order-in-Appeal is without jurisdiction, illegal, discriminatory and a blessing for the unscrupulous importers who have a habit to inflict/loss to the government exchequer.

(b)That the appeal was filed after 30-days, thus, being time barred, hence, was not maintainable. This fact is confirmed from the memo of appeal, which was typed in August, 2010, date of receipt affixed on face of the appeals as "5-7-2010", which is even two days' earlier than the date of Order-in-Original. Further, deliberately no copy of fee payment challan was provided and interestingly the hearing notice was purportedly issued on 9-7-2010, hearing was fixed for 21-7-2010 but delivered to Custom House on 17-9-2010. It is strange that how hearing can be fixed in July, 2010, for an appeal which was even prepared and typed in August, 2010. Without prejudice to above, neither there was any application for the condonation of delay nor there is any order from the Collector (Appeals) for condonation of delay, thus, the respondent importers' appeal was also not maintainable, being time barred, in terms of Section 193 of the Customs Act, 1969.

(c)That the respondent importer had filed the time barred appeal without payment of demanded amount, therefore, in terms of Section 195-B of the Customs Act, 1969, the respondent importer's appeal was not maintainable. This position of law has already been accepted by the Collector (Appeals) vide Order-in-Appeal No.4933/2010 dated 27-10-2010, passed in an identical appeal, bearing No.Cus-1378/2010. Thus, the subject impugned order is not only illegal, without jurisdiction but also discriminatory in nature.

(d)That the Collector (Appeals) has erred in law to hold that the order-in-originals have been passed without jurisdiction. The provisions of Sections 26A, 32(3), 32(3A) and 80(3) of the Customs Act, 1969, clearly empowers the customs officers to recover the short levied amount within three years' from the date of clearance of goods, thus, the Collector (Appeal)'s observation about the jurisdiction of the customs officers to recover the short levied amount is totally incorrect, illegal and against the established practice.

(e)That the Collector (Appeals) has also erred in law to observe that since the assessment made by the assessing officer has attained finality and in terms of Section 195 of the Customs Act, 1969, the demand can only be raised after re-opening of the case by the Collector. The Collector (Appeal)'s observation is totally against the amended provisions of law. First of all the amended provision of section 80 of the Customs Act, 1969, allows the assessing officers to re-assess the goods even after clearance of the goods from their charge, thus, the Collector (Appeal)'s observation about the 'past and close' of the assessment is incorrect. Secondly, the provisions of Section 195 of the Customs Act, 1969, have no over-riding effect on Section 32 of the Customs Act, 1969. This position is confirmed from the periods stipulated in Sections 195 and 32 of the Customs Act, 1969 respectively. The provisions of Section 32 of the Customs Act, 1969, can be invoked within three years or five years, as the case may be, whereas the provision of Section 195 of the Customs Act, 1969, can only be invoked within two years thus, it is clear that how it is possible to invoke the provisions of Section 195 of the Customs Act, 1969, if a demand for short levied amount is to be raised after two years. This sole position of the statue is confirming that the provisions of Section 195 of the Customs Act, 1969, has no relevancy on the provisions of Sections 32 and 80 of the Customs Act, 1969. Thirdly, the provisions of Section 195 of the Customs Act, 1969, is discretionary in nature and it `may' only be invoked sparingly at discretion by the Collector on the matters pertaining to the adjudicated case of Section 179 of the Customs Act, 1969. If the observation of the Collector (Appeal) is accepted then the self-assessments made under Section 79(1) of the Customs Act, 1969, would also can not be checked / re-assessed in terms of amended Section 80 of the Customs Act, 1969, without re-opening by the Collector under Section 195 of the Customs Act, 1969. The assessment / re-assessment is a procedural act and any decision in this regard can not be termed as 'past and closed' final order. In the presence of sections 32, 32A and 80(3) of the Customs Act, 1969, no assessment can be termed as past and closed transaction till next five years.

and has prayed that appeals be accepted, impugned Order-in-Appeal be set aside and the Order-in-Original be restored.

4.Conversely, learned counsel appearing on behalf of respondents not only controverted the arguments of appellants side but also prayed that the impugned order be maintained and appeals be dismissed.

5.Arguments heard, record perused.

6.Perusal of record highlight a number of grounds which were taken by the appellant in the memo. of their appeals filed by the Department but while arguing the appeal, the departmental representative constraint his arguments in relation to the provisions of Section 195 of the Customs Act, 1969 and contended that demand can only be raised after reopening of the case by the Collector. The departmental representative further contended that provisions of Section 195 of the Customs Act, 1969 have not overriding effect upon Section 32 of the Act. He further added that within a period of five years, the provision of Section 32 of the Act can be invoked but all other legal objections raised by the respondent side remained un-rebutted because the departmental representative could not answer those legal objections.

7.There is no ambiguity in the law that value of the imported goods would be assessed on the basis of 90 days data prior to the import or within 90 days after import of the goods. The parameter for the assessment of the customs value has been defined under Rule 107(a) of the Customs Rules, 2001. The appellant applied the valuation ruling which was issued on 10-12-2007, and was reviewed on 1-9-2008, despite the fact that the impugned goods were imported much after the expiry of impugned ruling.

8.There is no second opinion that the valuation advices issued on different dates continue and survive to have validity for duration of 90 days from the date of their issuance, thereafter, the valuation authorities are duty bound to justify the failure to issue fresh advice or to record reasons to maintain the existing valuation advice. The valuation ruling imposed, therefore, ordinarily be recorded as valid for the period of 90 days from the date of issuance.

9.The main question regarding the period of validity of the valuation advice under Section 25(v) and (vi) of the Act, read with Rule 107(a) and Rule 121 of the Rules has been elaborately dealt with by the Superior Courts.

10.As discussed above, this Tribunal do not find any illegality or infirmity in the impugned order which is unexceptional and well reasoned order. Therefore, no reason to interfere in the impugned Order-in-Appeal. All the appeals are dismissed being without merit.

11.Announced.

HBT/143/Tax(Trib.)Appeals dismissed.