CARE IMPEX LAHORE VS DEPUTY COLLECTOR OF CUSTOMS, 2016 PTD-CUSTOMS-APPELLATE-TRIBUNAL-LAHORE 1580 (2015)

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

----S. 193A---Appeal, filing of---Limitation---Appellant filed appeal against the order of department---Department's contention was that appeal was barred by time---Validity---Perusal of memo. of appeal showed that an objection regarding limitation had been inscribed by the Department---Held, that appeal had to be filed after clearance of goods and not upon passing of the assessment order and delay was only of four days---Department neither raised objection at the time of filing of appeal nor during course of hearing---Appeal before the Tribunal was, therefore, within time and the same had to be decided on merit instead of technicalities.

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

----Ss. 193 & 193-A(3)---Order-in-appeal, passing of---Delay of 242 days---Appeal was filed on 6-5-2013---According to S. 193A(3) of Customs Act, 1969, an order had to be passed within 120 days from the date of filing of an appeal or within a further extended period of 60 days with reasons to be recorded for extension in writing---No extension was granted as per contents of order and Department passed an order after 362 days---Department's contention was that the appeal filed was barred by time---Held the order passed by Department was barred by time, without jurisdiction and could not be enforced under law---Appeal was allowed, accordingly.

Messrs Super Asia Muhammad Din Sons (Pvt.) Ltd., v. Collector of Sales Tax, Gujranwala 2008 PTD 60; Messrs Hanif Strawboard Factory v. Additional Collector (Adjudication) Customs, Sales Tax and Central, Excise Gujranwala 2008 PTD 578; Messrs Tanveer Weaving Mills v. Deputy Collector Sales Tax and 4 others 2009 PTD 762; Messrs Syed Bhai Lighting Limited, Lahore v. Collector of Sales Tax and Federal Excise, Lahore and 2 others 2009 PTD (Trib.) 1263; Leo Enterprises v. President of Pakistan and others 2009 PTD 1978; Innovative Impex, v. Collector of Customs, Sales Tax and Federal Excise (Appeal) 2010 PTD (Trib.) 1010; Fazal Ellahi v. Additional Collector of Customs, MCC of PaCCS 2011 PTD (Trib.) 79; Unique Wire Industries v. Additional Collector of Customs, MCC of PaCCS 2011 PTD (Trib.) 987; Kaka Traders v. Additional Collector of Post Clearance Audit 2011 PTD (Trib.)1146 and Pak Electron Ltd. v. Collector of Customs, Lahore and others 2012 PTD (Trib.) 1650 ref.

2009 PTD 1978 and 2009 PTD (Trib.) 1263 rel.

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

----Ss. 25 & 80---Customs Rules, 2001, Rr. 110 & 107(a)---Declared value of imported goods---Assessment---Section 80 of the Customs Act, 1969 and R.438 sub-chapter III of chapter XXI of the Customs Rules, 2001 envisaged that value can be determined by passing an assessment order in case the value declared was found to be tainted or false through tangible evidential invoice of identical goods of same period and country of origin---Nothing was available on record which depicted that declared value by importer was not fair within the meaning of S. 25(1) of the Customs Act, 1969 therefore, the assessment of goods had be to made on the basis of import value of imported goods available in the data maintained by Collectorate under R.110 of the period given in R.107(a) of Customs Rules, 2001---No assessment could be made in the absence of availability of evidential invoice which is supplied to the importer ---- Assessment note of Department was confusing as the same on the one hand stated that data of US $1.2/kg was not available, on the other hand the assessment was made on the basis of data of identical goods of US $0.75/kg---Department failed to mention the relevant goods declaration and assessment made by the Department was invalid being in complete derogation of S. 25 of Customs Act, 1969 and Valuation Rule embodied in Chapter IX of Customs Rules, 2001.

2012 PTD (Trib.) 1650 and Messrs Collector of Customs, Port Muhammad Bin Qasim v. Messrs Zymotic Diagnostic Intl., Faisalabad 2008 SCMR 438 rel.

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

----S. 25---Customs Rules, 2001 Ch. IX (Rr.107-125)---General Clauses Act (X of 1897), S.24-A---Speaking order---Appellate authority passed the order without rebutting the grounds of appeal in a slip-shod manner by stating that "the assessment officer was within his authority to reject the declared transaction value and to determine the customs value on the basis of the value of identical goods imported at or about the same time"---Validity---Appellate authority failed to examine the conditions for rejecting the declared value and assessing the goods on the basis of identical and similar goods, mentioned in S. 25 of the Customs Act, 1969 and Valuation Rule in Chapter IX of Customs Rules, 2001---Order of Appellate Authority was illegal, void, arbitrary, without the application of mind and a result of misuse of authority vested in public functionary.

(e) General Clauses Act (X of 1897)---

----S. 24-A---Orders of Court/Authority/Tribunal--- Essential ingredients---If any authority, Court or Tribunal gave a finding of fact which was not based on material available on record, the same becomes perverse and such finding of fact was violative of the established principles of appreciation of evidence on record which was not sustainable in law---Every judicial or quasi-judicial finding be based on reasons which contained the justification for the finding in the order itself.

2007 PTD 2500; 2004 PTD 1973; 2005 YLR 1719; 2003 PTD 777; 2003 PTD (Trib) 2369; 2002 MLD 357; 1983 CLC 2882; 2005 PTD 2519; 2005 PTD 1189; 2003 PTD 2369; PLD 1995 SC (Pak) 272; PLD 1970 SC 158; PLD 1970 SC 173; 1984 SCMR 1014 and 2012 PTD (Trib.) 619 rel.

Obayd Mirza and Mirza Muhammad Abeer Nadeem for Appellants.

S.M. Sohail for Respondent No.1.

Date of hearing: 6th January, 2015.

ORDER

ADNAN AHMED, MEMBER (JUDICIAL-II): Through this order, I intend to dispose off Appeal No. K-1607/2014 filed under Section 194-A of the Customs Act, 1969 against the order of the Collector of Customs (Appeals), Karachi (here-in-after to be referred as respondent No. 2) bearing No. 9190/2014 dated 05.09.2014 maintaining the Order-in-Original 01/2012 dated 21.04.2012 passed by Assistant Collector of Customs, MCC of Exports , Customs House, Karachi (here-in-after to be referred as respondent No.1).

2.Briefly, facts of the case are that the appellant imported a consignment of 49.218 M.T. of iron and steel grooved wire from China vide GD No. KCSI-HC-126913-21032013, the goods during the course of examination found in accordance with the declaration. Upon appearance on his desktop the appraiser passed assessment order with the determination of value @ US$. 1200.00 against which the appellant filed review with the Principle appraiser, in terms of Rule 441 of Customs Rules, 2001, which rejected the same consequent to which 2nd review was filed before the respondent No. 1, who reassessed the goods @ US$. 750/MT as against declared US$. 650/MT while observing in assessment note dated 02.04.2013.

"The relevant data have been checked and did not find any data of US$ 1.2. resultantly, the value was reviewed in the light of available data of identical goods."

3.The order was challenged before Respondent No.2 by the appellant vide Appeal No. Cus- 4902/2013/A-East, who rejected the appeal vide his order dated 10.09.2014 by observing in para 4:--

"I have examined the case record. The assessment officer was within his authority to reject the declared transaction value and to determine the customs value on the basis of value of identical goods imported at or about the same time. No illegality in the assessment order was found. The appeal is also barred by limitation."

4.The appellant M/s. Care Impex, Lahore has challenged the order of the respondent No. 2 by way of the instant appeal the consultants/advocates argued on the strength of the grounds incorporated in the memo of appeal and which are inter alia:--

(i)That the order under Subsection (3) of Section 193A has to be passed by the respondent No. 2 within 120 days from the date of filing of appeal or within further extended period of 60 days in terms of its proviso upon availability of exceptional circumstances and recording of those after issuance of notice to the tax payer as held by Hon'ble Supreme Court of Pakistan in reported judgment 2009 SCMR 1881, Khalid Mahmood v. Collector of Customs. In the instant case the appeal was filed on 06.05.2013 and the order should have been passed by the respondent No. 2 on or before 03.09.2013. To the contrary he passed order on 10.09.2014 after lapse of 362 days and to cover up the delay he took the plea that the appeal filed by the appellant before him is time barred, irrespective of the fact that the same is without substance as no objection was raised by the office of respondent No. 2 at the time of filing of appeal nor by the respondent No. 1 representative during the course of hearing before the respondent No. 2, resultant, the appeal is deems to be filed within time and has to be decided on merit, rejecting the appeal on the said pretext is without any substance and nullity to law. Hence hold no grounds instead renders the order so passed as well as assessment order passed by respondent without power/jurisdiction, hence void, ab initio and are not enforceable under law as held in the reported judgments 2008 PTD 60 M/s. Super Asia Muhammad Din Sons (Pvt.) Ltd. v. Collector of Sales Tax, Gujranwala and 2008 PTD 578, M/s. Hanif Strawboard Factory v. Additional Collector (Adjudication) Customs, Sales Tax and Central, Excise Gujranwala, 2009 PTD 762 M/s. Tanveer Weaving Mills v. Deputy Collector Sales Tax and 4 others 2009 PTD (Trib.) 1263, M/s. Syed Bhai Lighting Limited, Lahore v. Collector of Sales Tax and Federal Excise, Lahore and 2 others 2009 PTD 1978 Leo Enterprises v. President of Pakistan and others, 2010 PTD (Trib.) 1010 Innovative Impex, v. Collector of Customs, Sales Tax and Federal Excise (Appeal), 2011 PTD (Trib.) 79 Fazal Ellahi v. Additional Collector of Customs, MCC of PaCCS, 2011 PTD (Trib.) 987 Unique Wire Industries v. Additional Collector of Customs, MCC of PaCCS, 2011 PTD (Trib.)1146 Kaka Traders v. Additional Collector of Post Clearance Audit and 2012 PTD (Trib.) 1650 Pak Electron Ltd. v. Collector of Customs, Lahore and others.

(ii)The respondent No. 1 was empowered to assess the appellant 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, read with para 78 of CGO 12/2002 dated 15.06.2002.

(iii)That the respondents Nos. 1 and 2 totally ignored the provision of law and the fact that no evidence of import identical to appellant goods is available and the assessment order was passed on the basis of alien value, rendering the same as well as order-in-appeal to be based on unilateral/arbitrary value not permitted under Rule 110 of Chapter IX of Customs Rules, 2001.

(iv)The declared value of the appellant is fair as the import has been made against registered sale contract, which cannot be summarily rejected unless the respondent No. 1 had proved that it is through incriminating evidence that it is tainted, fake or suppressed by supplying evidential invoice of the same product of the same country expressed in Rule 107 (a) of the Customs Rules, 2001, while quoting the law laid down by the Superior Judicial Fora in umpteenth reported judgments and likewise the respondent No. 2 to quote the respective goods declaration for substantiating his opinion for maintaining the assessment order nothing is on record rendering the assessment order and order-in-appeal not enforceable under law and as such void and ab initio.

(v)The appellant carves his right to add any fresh grounds at the time of hearing beside placing any valid incriminating evidence/ documents.

5.No cross objection under subsection (4) of Section 194A has been filed by the respondent within the period specified therein not till the date of hearing. Instead after hearing the respondent representative delivered the comments in the office, although same are not admissible under law but for the sake of justice and fairplay are reproduced here-in-below to the extent of rebuttal on grounds of the appellant:--

(a)That the contention of the appellant that no objection in respect of filing of the appeal being time barred was raised is incorrect, keeping in view that learned Collector (Appeals) being the competent authority has duly addressed the time limitation in his Order-in-Appeal No. 9201/2014 dated 10.09.2014 and rejected the same on this point along with the view that the Assessment Officer has rejected the declared transaction value on the basis of evidences of higher value on which the identical goods imported at or about the same time by the other similar importers.

(b)That the contention of the appellant is incorrect even mis-leading the provision of Section 25 of the Act, the perusal of subsection (10) of the Section 25 clearly reveals that the methods of Customs Valuation (may or may not) be applied in sequential order. As such the assessment made by the Assessing Officer is within the provisions of law.

(c)That the contention of appellant is incorrect keeping in view that the assessment was made on the basis of value of identical goods imported at about the same time, hence there is no illegality in the assessment order it is however, respectfully submitted that the appeal filed by the appellant before Learned Collector (Appeals) time barred by limitation in the light of aforestated position the appeal filed before this Hon'ble forum is also liable to be dismissed.

(d)That it is respectfully submitted that every 'declared value' cannot be accepted as Payble transaction value to be considered as customs value for levy of duties/taxes. It is also pertinent to mention here that nowhere in section 25 of the Customs Act, the word "declared value" has been treated as customs value and it was neither the intention of the legislature nor there is any settled law that every declared value is ought to be accepted as customs value for the assessment purposes rather under subsection (i) of section 25 of the Act, the payable transaction value is to be accepted as customs value on the following conditions provided there is no "valuation Ruling " of section 25-A of the Act.

i)Subject to subsequent subsection of section 25 and rules (i.e. chapter IC of the Customs Rules, 2001)

ii)That the value paid by an importer must be in agreement with the payable" value in the market of similar kind of goods.

That first of all, it is proved from record that similar kind of goods were cleared by the similarly placed importers at the higher customs values , thus it would be a discrimination with the similarly placed importers. If the goods of the appellant are to be assessed to duty/taxes at lower value. It is also respectfully submitted that in the cases, where the importers failed to substantiate their declared value as true payable transaction value, in normal course , after considering the methods of valuation the relevant method of section 25 of the Act, is ought to be applied and the goods of the importers are assessed on the basis of the prevailing international /local market prices and 90 days available date of similar kind of goods maintained in terms of section 25(13) (a) of the Act read with Rules 107(a), 110, 111 and 121 of the Customs Rules, 2001 and in the instant case the assessment is made within the provision of Section 25 of the Act.

6.Rival parties heard and case record perused.

7.Prior to dilating upon the merit of the case, it is advantageous to decide the issue of time barred of the appeal filed before respondent No. 2. Upon perusal of the memo. of appeal filed with respondent No. 2 and are available as Appendix L at pages 22 to 25 of appeal book, it has been observed that no objection in this regards has been inscribed by the office of respondent No.2. Hence, the filed appeal before him deems to be within time. Therefore, the respondent No. 2 was having no reason to form opinion regarding limitation by virtue of the fact that an importer files appeal after clearance of the goods not upon passing of the Assessment Order, if he does so, the respondent's Collectorate would not allow the clearance of goods till the decision in the appeal by the respondent No. 2. Even otherwise, the delay is for only 04 days, which he could had ignored or condoned as has been done in many other cases of similar nature. The said fact has not been controverted by representative of respondent No. 1 during the course of hearing. This lays to rest the observation of time barred. Notwithstanding, the appeal before the Tribunal is within time therefore as such has to be decided on merit instead of technicalities.

8.The appeal before the respondent No. 2 was filed on 06.05.2013 and an order under the proviso of subsection (3) of Section 193A of the Customs Act, 1969 should had been passed within 120 days from the date of filing of appeal i.e. on or before 03.09.2013 or within a further extended period of 60 days during the initial period of 120 days with reason to be recorded for extension in writing after serving a notice to the person concerned as per law laid down by the Hon'ble Supreme Court of Pakistan in reported judgment 2009 SCMR 1881 Khalid Mehmood v. Collector of Customs. No extension was granted by the respondent No. 3 prior to the expiry of initial period of 120 days and this is evident from order, which is completely silent in this regard. He passed the order after 362 days and to cover up the delay in passing the order as per mandated provision of the Act opined in the order that the appeal filed before him is barred by time, which he could had ignored in the light of expression of the proviso of Section 193(1) of the Customs Act, 1969. Rendering the order passed by him hopelessly barred by time by 242 days. Therefore, without powers/jurisdiction cannot be enforced under law. As held in reported judgments 2008 PTD 60 , 2008 PTD 578 , 2009 PTD 762, 2009 PTD (Trib.) 1263, 2009 PTD 1978, 2010 PTD (Trib.) 1010, 2011 PTD (Trib.) 79, 2011 PTD (Trib.) 987, 2011 PTD (Trib.) 1146 and 2012 PTD (Trib.) 1650.

9.The value of the imported goods can be determined by the competent authority at the time of passing assessment order under Section 80 of the Customs Act, 1969 and Rule 438 of Sub-Chapter (III) of Chapter XXI of the Customs Rules, 2001 in case the value declared is found to be tainted or false through tangible evidential invoice of the identical goods of the same period and country of origin. Nothing is available on record validating the stance of the respondents that the declared value of the appellant was not fair and as such was not transaction value within the meaning of Section 25(1) of the Customs Act, 1969. Therefore, the assessment of the consignment in question had to be made by the respondent No. 1 on the basis of the import value of identical goods available in the data maintained by Collectorate under Rule 110 of the period given in Rule 107(a) of Customs Rules, 2001. The import value of the appellant imported "Iron and Steel Grooved Wire" falling under PCT 7217.1000 was not available in the data and this stood validated from his assessment note, reading as "the relevant data has been checked and did not find any data of US$. 1.2/kg. Resultantly, the value was reviewed in the light of available data of identical goods". The note of the respondent No. 1 is confusing as it on one hand says that data of US$. 1.2/kg is not available, and on other hand he made the assessment on the basis of data of identical goods, which according to him US$. 0.75/kg, but in support of his opinion failed to mention the relevant goods declaration, confirming that he made unilateral/arbitrary assessment in nullity to Rule 110 ibid. No assessment could be made in the absence of availability of evidential invoice, which has to be shown/supplied to the importer as directed by the Board in para 78 of CGO 12/2002 dated 15.06.2002. The respondent No.1 stretched the provision of the Act and Rules and Regulation framed there-under in accordance with his wishes and completed the assessment nullity to law despite non availability of tangible evidence in the shape of evidential invoice and data of the identical goods showing that the said goods of the China Origin had been imported by other importers @ US$. 0.75/kg. Resultant the assessment so made is not valid being in derogation of the provision of Section 25 of the Customs Act, 1969 and Valuation Rule embodied in Chapter IX of Customs Rules, 2001 and the law laid down by the Hon'ble Supreme Court of Pakistan in reported judgment 2008 SCMR 438 Messrs Collector of Customs , Port Muhammad Bin Qasim Messrs Zymotic Diagnostic Intl., Faisalabad.

"Declared value of imported goods: For rejecting or refusing to accept value declared by consignee in respect of imported goods concerned officer is required to give cogent, plausible and satisfactory reason for non acceptance of declared value and rejection thereof cannot proceed on whims or desire of officer of customs department----Assessing officer is required to point out some flaw or defect or such circumstances which create doubt with regard to veracity and correctness of declared value or that same had been under invoiced... similarly, in determining or assessing the fair value or normal price of such imported consignment, concerned officer is under obligation to take into consideration all necessary factors and circumstance enumerated in S. 25 of Customs Act, for such determination of assessment. From perusal of the order of Collector of Customs, it transpired that neither satisfactory or convincing ground for not accepting the declared value of the imported consignment were given nor the factors and grounds necessarily required to be taken into consideration for determining the fair or normal value of the imported consignment were adhered to. The Customs Officer was required to obtained identity of the country of origin of the consignment. Thereafter attempt should had been made to find out the prevailing price of the consignment in the country of origin. There is nothing on record to indicate that the customs Department had secured or had attempted to secure invoices from other importers who had imported identical or similar consignment in Pakistan with a view to show that the price declared by such other importer greatly varied from the price declared by the respondent. In the absence of such an exercise action in rejecting the declared value of the consignment would amounts to an arbitrary and capricious exercise."

10.The order passed by the respondent No. 2 shows that it has not been passed with the application of mind and provision of the Act. Instead is a non speaking order and did not conform to the mandated requirement of S.24-A of the General Clauses Act, 1897 and this stood validated from the fact that no rebuttal on the grounds of Appeal No.K-4902/2013/A-East filed with him has been given and opted to pass a slip short order while stating that the "assessment officer" was within his authority to reject the declared transaction value and to determine the customs value on the basis of the value of identical goods imported at or about the same time." But failed to opine that what are the conditionality enunciated in Section 25 of the Customs Act, 1969 and Valuation Rule in Chapter IX of Customs Rules, 2001 for rejecting the declared value and assessing the goods on the basis of identical and similar goods, which are as deliberated by me in para 8 supra and in the judgment referred therein. Such type of orders are deems to be always treated as illegal, void arbitrary and a result of misuse of authority vested in public functionary. No room was available for such illegal, void and arbitrarily order in any system of law. If any authority Court or Tribunal gave a finding of fact which was not based on material available on record was illegal arbitrarily without discussing and considering the material available on record it became perverse and a perverse finding of fact which is violative of the established principle of appreciation of evidence on record was not sustainable in law. The principle that every judicial or quasi-judicial finding should be based on reasons containing the justification for the finding in the order itself is an established principle of dispensation of justice. The Adjudication/Appellate orders are being violation of basic principle of the good governance and mandatory requirement of Section 24A of the General Clauses Act, is not only illegal and void but also not sustainable under law. The said position is also fortified by the judgments of Superior Courts reported as 2005 YLR 1019, 2007 PTD 2500, 2004 PTD 1973, 2005 YLR 1719, 2003 PTD 777, 2003 PTD (Trib) 2369, 2002 MLD 357, 1983 CLC 2882, 2005 PTD 2519, 2005 PTD 1189, 2003 PTD 2369, PLD 1995 SC (Pak) 272, PLD 1970 SC 158, PLD 1970 SC 173, 1984 SCMR 1014 and 2012 PTD (Trib.) 619.

11.In view of the above submission, the order passed by the hierarchy below suffers from inherent legal deficiency/infirmity and are therefore declared void and ab-initio and hereby set aside and appeal is allowed.

RR/51/Tax(Trib.)Appeal allowed.