I.T. IMPEX VS DEPUTY DIRECTOR, 2017 PTD-CUSTOMS-APPELLATE-TRIBUNAL-LAHORE 2265 (2017)

Customs Act (IV of 1969)---

----Ss. 25 & 81(3)---Customs value of goods---Determination---Provisional assessment of duty---Goods were imported vide declaration at the rate of unit value of US $ 2.5000; assessment was made at the rate of unit value of US $ 3.5000---Assessment was finalized and appeal against said assessment was dismissed---Validity---Goods were assessed provisionally on 15-7-2015 under S.81(3) of the Customs Act, 1969 and finalization of that assessment was to be done legally within six months from the date of provisional assessment---Contention of department was that finalization was done on 23-1-2016 and not by the cut-off date of 15-1-2016, for the reason that matter was under finalization with the Directorate of Valuation---Said order was upheld to the effect that "final assessment" having been made within the stipulated time on the ground that importer had been duly informed---Said assumption had no basis as legally requisite determination of value under S.25 of the Customs Act, 1969 had not been made within the statutory limitation of time---Fact remained established that finalization of assessment in the case was barred by 16 days---Impugned assessment and order, were not lawful and not supported by the relevant statutory provisions---Appeal was allowed and impugned order was set aside as not legally maintainable.

Case-law referred.

Nadeem Mirza for Appellant.

None for Respondents.

Date of hearing: 8th February, 2017.

JUDGMENT

ZULFIQAR A. KAZMI, MEMBER (TECHNICAL-I).---This judgment will dispose of Customs Appeals Nos. K-1214/2016 and K-1215/ 2016 filed by the appellants against the Order-in-Appeals Nos. 538 to 539/2016 dated 10.05.2016, passed by Collector of Customs (Appeals), Karachi. Both these appeals have identical issues of law and facts and are thus being heard, dealt with and disposed of simultaneously through this single consolidated judgment in the light of judgment of the Hon'ble High Court of Sindh in Customs Reference No.157/2008 (S.M. Naqi son of Syed Muhammad Hussain, Karachi v. Collector of Customs (Adjudication-I) and others, Karachi).

2.Briefly, facts of the case are that the appellant imported Ceramic Tiles from Iran vide Goods Declaration No. KAPE-HC-4477 dated 09.07.2015 at the declared rate of unit value of US$ 2.5000 whereas the same were assessed at the rate of unit value of US$3.5000.

3.Assessment of goods was finalized by the respondent and appeal filed by the appellant under section 193 of the Customs Act was dismissed vide the impugned in the following words:--

"I have examined the case record. The appellants state that the goods were assessed on provisional basis on 15.07.2015 and as such the case was required to be finalized by 15.01.2016, whereas as per assessment notes the case was completed on 23.01.2016, as such the finalization of case being beyond the permissible time is liable to be set aside. The assessment notes show that the matter was finalized in the light of letter by Director Valuation. The letter No. 1/09/2015-V dated 07.01.2016 show that the present appellants were given opportunity of hearing on 22.09.2015 which they did not avail. The GD log report also shows that valuation was completed in the system on 07.01.2016. I therefore hold the appellants were aware of assessment by the Directorate General of Valuation and also about the finalization of value in the system. The appellants are just trying to take undue advantage of the time lag appearing in the assessment notes. I do not find merit in the appeal. The assessment is upheld."

4.Being aggrieved, the appellant have filed this appeal on 31.05.2016, inter-alia, on the following grounds:--

i.The order passed by the respondent No. 3 is bad in law and based on mala fide and this stood validated from the fact that he inscribed certain observation in para 3, having no nexus with the observation of the respondent No. 2 available in the assessment order dated 23.01.2016. No notice whatsoever was received by the appellant from the office of the either respondent No. 1 nor Director, Directorate General of Valuation, stood validated from the record of the case. The respondent No. 3 used magic glasses for searching in the assessment order, which is not visible to the appellant that valuation was completed in the system on 07.01.2016 and appellant was aware of the said fact. This is observation is completely absurd and proves that the respondent No. 3 failed to act independently and fairly, instead as an officer of Executive Collectorate.

ii.That the respondent No. 2 or his subordinate were available with no cause or reason for completing the assessment of appellant goods under the provision of section 81(1) of the Customs Act, 1969, when the evidence of identical transaction value as expressed in subsection (5) of section 25 of the Customs Act, 1969 were available in the data.

iii.That contrary to the above preposition of law, the respondent No. 1 and his subordinate ignored the said evidences and opted to assess appellant goods provisionally while adding certain tentative or ad hoc amount, in the absence of any tangible evidence of the said products. Such addition and provisional assessment has been declared nullity in the eyes of law by the Superior Courts in their umpteenth reported judgments. Detail deliberation has been made by their lordship of High Court in the reported judgment 2006 PTD 909 Rehan Umar v. Collector of Customs.

iv.That the respondent No. 2 was duty bound to adhere the procedure laid down by the Board for passing assessment order for finalization of the value. It is beneficial for the appellant to state that the procedure for finalizing assessment of the goods released provisionally is given in subsection (3) of Section 81 of the Customs Act, 1969 read with direction contained in para 66 of CGO 12/2002 dated 15.06.2002 i.e. after determination of value by the respondent No. 1 and receipt of that by the respondent No. 2 to transmit the finding of the respondent No. 1 to the appellant for perusal and dispute.

v.That it was mandated upon the respondent No. 2 to adhere the order of the FBR in terms of Section 223 of the Customs Act, 1969. To the contrary, he ignored the same and no communication either electronically or manually was communicated/forwarded to appellant in accordance with the direction containing in para 66 and this stood validated from the assessment order dated 23.01.2016 containing not a single word to the said effect or the objection of the appellant, which he would had submitted if the respondent No. 2 had forwarded him the letter of the respondent No. 1 containing determination of value. The order so passed is therefore in derogation of the provision of para 66, natural justice and fair play, rendering the assessment order nullity to law and as such non existent being passed in vacuum, hence without lawful authority and as such void and ab-initio.

vi.Irrespective of the above legal flaws, it is submitted that an assessment order under sections 80, 81(5) of the Customs Act, 1969 has to be passed within 06 months as expressed in section 81(2) of the Customs Act, 1969. To the contrary, the order has been passed on 23.01.2016. when it should had been passed on or before 12.01.2016 i.e. within 06 months from the date of provisional assessment which was 16.07.2015, rendering the same barred by time by 13 days and as such it is without power/jurisdiction and cannot be enforced under law.

vii.That since no determination of value has been made to this date as per essence and spirit of section 25 of the Customs Act, 1969 and law laid down by the Superior Judicial Fora, the assessment made on the strength of the said letter by the respondent No. 1 and beside barred by time, resultant, the declared value of the appellant goods stood final under Section 81(4) by virtue of lapse of period given in subsection (2) of Section 81 of the Customs Act, 1969 and the order passed by respondent No. 1 is of no legal effect, hence ab-initio void and stood validated from the judgments of the Hon'ble High Court of Pakistan reported as 2005 PTD 1968, Trade International v. Deputy Collector of Customs, 2007 PTD 2119 S. Fazal Ellahi and Sons v. Deputy Collector of Customs and others, 2008 PTD 1587 Clover Pakistan Ltd. v. FOP and others, 2010 PTD 900 Collector of Customs, MCC of Appraisement v. Pak Arab Refinery, PTCL 2011 CL 575 Sus Motors (Pvt.) Ltd. v. FOP, 2011 PTD 2851 Messrs Crescent Art Fabric v. Assistant Collector and Customs and 4 others and 2856 Trend International v. Deputy Collector, Dry Port, Multan and 4 others, 2006 PTD 1276 Dewaan Farooq Motors Ltd., Karachi v. Customs Excise and Sales Tax Appellate Tribunal, 2005 PTD 2116 Collector of Customs (Appraisement) v. Auto Mobile Corporation of Pakistan and 2004 PTD 795 Messrs Farooq Woolen Mills, Gujranwala v. Collector of Customs, Dry Port, Sambrial and others, 2012 PTD 980 Dawlance Electronic (Pvt.) Ltd. v. Collector of Customs, Karachi and 2014 PTD 438 Salman Tin Merchant v. Collector of Customs, Karachi.

5.Five opportunities of hearings were notified for 18.10.2016, 01.11.2016, 08.12.2016, 11.01.2017 and finally on 08.02.2017 when Mr. Nadeem Mirza, Consultant, appeared. He reiterated the contents of appeal and prayed for setting aside the impugned assessment as Appellate Orders passed in this case on the basis of the grounds given in their appeal. He cited various judgments of Higher Courts and read out extensively the relevant provisions of Customs Act, 1969, the rules and CGO. Nobody had appeared to represent MCC-East, Karachi.

6.Record has been perused and arguments putforth by the appellant have been duly considered. It is observed that the impugned goods were assessed provisionally on 15.07.2015 under section 81(3) of the Customs Act, 1969 and finalization of this assessment was to be done within six months from the date of provisional assessment. This is an undisputed legal position mandated in the statute. The respondent contend that needful finalization was done on 23.01.2016 and not by the cut-off date of 15.01.2016 due to the reason that matter was under finalization with the Directorate of Valuation and the appellants' was aware of this fact. The impugned Order has upheld this 'final assessment' as having been done within the stipulated time on the ground that the appellant was duly informed. This assumption finds no basis as legally speaking and as correctly pointed out by the appellant, requisite determination of value under section 25 has not been made within the statutory limitation of time. This fact remains established as finalization of assessment in this case is barred by 16 days. This being so, the impugned assessment and the Order are not lawfully supported by the statutory provisions involved in this case. The appeal having substance and merit is, therefore, allowed and the impugned Order is consequently set aside as not legally maintainable.

7.Judgement passed and announced accordingly.

HBT/60/Tax(Trib.) Appeal allowed.