SONERI INTERNATIONAL VS COLLECTOR OF CUSTOM, 2015 PTD-KARACHI-HIGH-COURT-SINDH 902 (2014)

Customs Act (IV of 1969)---

----Ss. 25, 32, 32-A, 36, 156, 194-B, 195, 196 & 215---Determination of customs value---Mis-declaration---Acceptance of corrigendum of show-cause notice---Special Customs Reference---Importer imported two consignments, which were got cleared allegedly at very low value as compared to identical/similar goods imported from same destination by the other importers---Show-cause notice issued to the importer culminated into passing of order-in-original, whereby offence of misdeclaration of value, was found established---Appeal against order-in-original, was rejected, by Appellate Tribunal---Applicant contended that Appellate Tribunal, was not justified in accepting the corrigendum issued after about 2 months from issuance of show-cause notice; that Appellate Tribunal was not justified by holding that past and closed transaction could be re-opened after two years of final assessment; that though quantity of the goods imported by the applicant was different, but Appellate Tribunal held that quantity of identical goods was same which had resulted into substantial miscarriage of justice and that there was no mis-declaration for evasion of duty and taxes, which was correctly declared; and was determined by the concerned Duty Officer---Validity---Held, that no loss had been caused to the applicant, since impugned order had been passed within ambit of show-cause notice; applicant had the knowledge of the proposed action and Appellate Tribunal was justified in acceptance of the corrigendum; Appellate Tribunal had compared the vires of Ss.32 & 195 of Customs Act, 1969, and found that both were independent to each other; having different schemes and time limit, as such Customs Authorities were quite competent to reopen the case; sufficient documentary proof was made available before the Tribunal with regard to declaration of value of goods, non-raising of the objection at the stage of assessment of goods, the ground realities had not changed decision---Intentional less value declaration of the imported goods, and getting it cleared, amounted to evasion of duties and taxes, despite no charge of misdeclaration was levelled in the show-cause notice; when same was established by comparing the value of the similar goods declared by the other importers at the relevant time; there was no substance in the Reference, which was dismissed in circumstances.

Darvesh K. Mandhan for Applicant.

ORDER

SHAUKAT ALI MEMON, J.---The applicant being aggrieved by the Judgment of the Member Judicial, Customs Appellant Tribunal, Bench II, Karachi, in Customs Appeal No.K-665/2010 has filed this Special Customs Reference Application raising certain questions of law arising out of impugned Judgment reading as under:-

(1)Whether on the facts and circumstances of the case the learned Member Judicial Bench II was justified to accept the corrigendum No: SI/Misc/1501/09-11 dated 19th September, 2009 issued for the show-cause notice dated 27th July, 2009 when the corrigendum was served upon the applicant on 28-9-2009 under section 215 of the Customs Act, 1969.

(2)Whether on facts and circumstances of the case the learned Member Judicial Bench II erred in law to hold that the past and closed transaction could be reopened after two years of its final assessment and whether the order passed by the Member Judicial is contrary to the judgment reported as PTCL 2007 CL 2.

(3)Whether on facts and circumstances of the case the learned Member Judicial Bench II erred in law to hold that the impugned goods was assessed and released at a very low value as compared to value of similar identical goods when the appropriate officer had determined the value of the impugned goods at the time of making assessment and issue of comparison of transaction value with the identical goods was not raised at the stage of assessment of the goods.

(4)Whether on the facts and circumstances of the case the learned Member Judicial Bench II erred in law to hold that the quantity of the identical goods was same when on the contrary the quantity was much less than the quantity of the goods imported in the instant case.

(5)Whether on the facts and circumstances of the case the learned Member Judicial Bench, II erred in law to hold that the applicant misdeclared the value of the goods for evasion of the duty and taxes when on the contrary the value was correctly declared as US $ 1700 Per M/Ton which was determined by the appropriate officer as US $ 1800 Per M/Ton.

(6)Whether on the facts and circumstances of the case the learned Member Judicial Bench II erred in law to hold that the applicant misdeclared the value when no such charge of misdeclaration was levelled in the show-cause notice.

2.The brief facts of the case are that applicant had imported two consignments of Sodium Saccharin weighing 10,000 Kgs each from China which were got cleared allegedly at very low value as compared to identical/similar goods imported from same destination by the other importers. On post clearance audit conducted by Directorate General Post Clearance Audit, it was revealed that value for the identical goods available in the historical database for the relevant period of import for commercial contains, was higher than declared by the applicant as such value of the goods determined under sections 25(5) and 25(6) of Customs Act, 1969 had caused substantial loss of revenue to national exchequer amounting to Rs.10,12,579 in violation of provisions of section 32(3-A) of the Customs Act, 1969 punishable under the provisions of section 156(1) of the Customs Act, 1969. A show-cause notice dated 27-7-2009 was issued, which culminated into passing of an Order-in-Original No. 92 of 2009, whereby an offence of misdeclaration of value by applicant within the meaning of section 32(A) of Customs Act, 1969 and 36(2) of the Sales Tax Act, 1990 was found established. This order was challenged in Appeal before Collector (Appeal) Karachi which was rejected as such applicant filed an Appeal before the Customs Appellant Tribunal Karachi which too was dismissed giving rise to filing of the instant Special Reference.

3.Heard the leaned counsel for the applicant as none appeared from the respondent.

4.It is argued that learned Member Judicial Bench was not justified in accepting the corrigendum issued for show cause in particular when it was served upon the applicant on 28-9-2009. Next it is contended that learned Member Judicial Bench fell in error by holding that past and close transaction could be reopened after two years of final assessment which per learned counsel is contrary to a view in light of Judgment reported as PTCL 2007 CL-11 and in particular when no objection was raised at the stage of assessments of the goods before the relevant concerned officer at the time of assessment. It is further argued that although quantity of the goods imported by the applicant was different yet it is held by the learned Judicial Member that quantity of identical goods is same which has resulted into substantial miscarriage of justice. He next argued that there was no misdeclaration for evasion of duty and taxes which was correctly declared as US $ 1700 per metric ton and was determined by the concerned duty officer as US $ 1800 per metric ton, thus findings of the learned Member Judicial is misconceived when no charge of misdeclaration was levelled in the show-cause notice hence impugned Judgment is not sustainable.

5.So far arguments of the applicant's counsel, that no corrigendum was issued to the applicant but was issued to the clearing agent, the learned Member has taken note of it while referring the corrigendum dated 29-9-2009 and has held that no loss has been caused to the applicant since order has been passed within ambit of show-cause notice. We are in agreement with the learned Member that applicant was in knowledge of the-proposed action thus we find justification in acceptance of the corrigendum by learned Member Judicial dated 19-9-2009 for show-cause notice dated 27-7-2009.

6.About reopening of the case after two years of the assessment not treating it as past and close transaction, learned member has compared the wires of Section 32 and Section 195 of the Customs Act, 1969 and held that both are independent to each other having different schemes and time limits as such custom authorities were quite competent to reopen the case. We do not find reason to disturb the finding of learned Member after going through the provisions of both sections of Customs Act, 1969.

7.While going through the less declaration of value as compared to value of similar/identical goods imported from same source sufficient documentary proof was made available before learned Member therefore, despite non-raising of the objection at the stage of assessment of goods, the ground realities have not changed as such decision of learned Member is in accordance with aw.

8.The intentional less value declaration of the imported goods and getting it cleared amounts to evasion of duties and taxes despite no charges of misdeclaration levelled in the show-cause notice, when same is established by comparing the value of the similar goods declared by the other importers at the relevant time.

9.We do not find substance in the instant Reference which is accordingly dismissed along with listed application, with no orders as to costs.

HBT/S-2/SindhReference dismissed.