MOBILE AUTOS VS DEPUTY COLLECTOR OF CUSTOMS
2019 P T D (Trib.) 317
[Customs Appellate Tribunal]
Before Muhammad Nadeem Qureshi, Member (Judicial-I)
Messrs MOBILE AUTOS
Versus
DEPUTY COLLECTOR OF CUSTOMS and another
Custom Appeal No.K-1273 of 2016, decided on 18/08/2018.
(a) Customs Act (IV of 1969)---
----Ss. 198 & 156---General Clauses Act (X of 1897), S. 24-A---Customs Rules, 2001, R. 435---S.R.O. No.499(I)/2009 dated: 13.06.2009---Power to weigh and examine goods---Examination of imported goods---Confiscation of goods---Application of judicial mind---Speaking order---Scope---Show-cause notice---Erroneous provision, invocation of---Effect---Appellant imported parts and accessories of motor vehicles---Appraiser opted for examination of the goods prior to assessment---Appraiser completed the assessment through which he changed the PCT Heading of all the items---Principal Appraiser termed the same as an act of mis-declaration and prepared contravention report---Weight of appellant's consignment was found to be 8570 kgs as against declared weight of 7325 kgs i.e. equivalent to 16.99 percent loss to the exchequer---Additional Collector of Customs (Adjudication) converted the contravention report into show-cause notice and ordered for confiscation of imported goods subject to redemption of those upon payment of fine and penalty in addition to determined value of duty and taxes---Validity---Additional Collector of Customs (Adjudication) issued show-cause notice in a very casual and perfunctory manner, without considering that it was a vital document, which should be prepared with utmost care after going through the provisions of Customs Act, 1969 and jurisdiction/powers vested upon him---Department invoked provisions of S. 33, Sales Tax Act, 1990 and S. 148, Income Tax Ordinance, 2001, which contained procedure for collection of advance income tax---Both the said sections were not charging sections for short paid/collected sales or income tax---Show-cause notice having been issued by invoking erroneous/irrelevant provisions was palpably illegal and without power/jurisdiction---Any superstructure built thereupon, no matter how strong it might be, had to crumble down---Appellate Tribunal vacated the show-cause notice and set aside the order passed thereon.
2003 PTD 1275; 2005 PTD 480; 2003 PTD 1593; 2002 MLD 130; 2002 MLD 180; PTCL 2001 CL 558; 1992 SCMR 1898; 2013 PTD 813; 2002 PTD 2457; PLD 1971 SC 61; PLD 1973 SC 236; PLD 1964 SC 536; 2001 SCMR 838; 2003 SCMR 1505; 2006 SCMR 129; PLD 1996 Kar. 68; 2006 PTD 978; PLD 1971 SC 184; 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; PLD 1995 SC (Pak) 272; PLD 1970 SC 158; PLD 1970 SC 173 1984 SCMR 1014 and 2012 PTD (Trib.) 619 ref.
(b) Customs Act (IV of 1969)---
----S. 25(2)(b)(iii) & First Sched.---Qanun-e-Shahadat (10 of 1984), Art. 117 & 121---Constitution of Pakistan, Arts. 13 & 18---Double taxation---Freedom of trade---Unit of measurement---Tare weight---Gross weight---Weight of packing, exclusion of---Cost of packing payable by importer---Burden of proof---Scope---Appellant imported parts and accessories of motor vehicles---Appraiser opted for examination of the goods prior to assessment---Appraiser completed the assessment through which he changed the PCT Heading of all the items---Principal Appraiser termed the same as an act of mis-declaration and prepared contravention report---Weight of appellant's consignment was found to be 8570 kgs as against declared weight of 7325 kgs i.e. equivalent to 16.99 percent loss to the exchequer---Additional Collector of Customs (Adjudication) converted the contravention report into show-cause notice and ordered for confiscation of imported goods subject to redemption of those upon payment of fine and penalty in addition to determined value of duty and taxes---Validity---Allegation of excess weight was worked out on the basis of self devised procedure by adding tare weight in the gross weight---Duty and taxes had to be levied on the unit of measurement (UOM) incorporated against each PCT Heading of the goods---Plea of department was that gross and tare weight had to be added in the net weight of goods and had to be construed as measurement (UOM) as notified against each PCT Heading---Department's interpretation was inapt and based on misconception of the UOM and in derogation to the First Schedule to the Customs Act, 1969---Contents of imported goods had to be weighed without packing, which was disposed of as trash after unwrapping---Duty and taxes had to be charged/collected on the goods actually imported for use/consumption of general public---Nevertheless, addition of cost of packing material in the value of imported goods had to be made only when it was confirmed that cost of packing was not included in the price of imported goods---Onus to prove that cost of packing was actually paid by importer was on the department and unless it was proved through tangible incriminating evidence, the cost of packing could not be added---Generation of such type of revenue was in derogation of provisions of S. 25, Customs Act, 1969 and Arts. 13 & 18 of the Constitution---Appellate Tribunal vacated the show-cause notice and set aside the order passed thereon.
1992 PTD 593; 2003 PTD (Trib.) 928; 2010 PTD 1515 and 2009 PTD (Trib.) 2025 ref.
(c) Customs Act (IV of 1969)---
----S. 198---Customs Rules, 2001, R. 435---Constitution of Pakistan, Arts. 4 & 25---Power to weigh and examine goods---Examination of imported goods---Change of PCT Headings---Scope---Individuals to be dealt in accordance with law---Discrimination---Rule of precedence---Appellant imported parts and accessories of motor vehicles---Appraiser opted for examination of the goods prior to assessment---Appraiser completed the assessment through which he changed the PCT Heading of all the items---Principal Appraiser termed the same as an act of mis-declaration and prepared contravention report---Weight of appellant's consignment was found to be 8570 kgs as against declared weight of 7325 kgs i.e. equivalent to 16.99 percent loss to the exchequer---Additional Collector of Customs (Adjudication) converted the contravention report into show-cause notice and ordered for confiscation of imported goods subject to redemption of those upon payment of fine and penalty in addition to determined value of duty and taxes---Validity---Appellant imported body protectors, rubber mats accessories for motor cars, chrome shaded ornaments and plastic strip kits---Appraiser classified the goods under PCT Headings of body protector for vehicles and rubber mats sets, assorted chrome shaded ornaments and window visor---Department's classification was misconceived as goods found during examination were bonnet guards made of plastic and had to be pasted or fixed on the bumpers for decoration/beautification---Goods imported by appellant were not essential components of motor vehicles to be used/affixed for dedicated operation of its engine sans which a vehicle could not even start or run---Imported goods were made for protecting vehicle floor from dust/mud and were to be used for decoration/beautification and protection from sun/rain---Department had been assessing the goods under same heading as was declared by appellant---Department could not deviate from their own precedents for penalizing or lading extra duty and taxes in a solitary case---Issuance of show-cause notice while ignoring precedents was illegal and not permissible under the law---Department had given a differential treatment to the appellant which amounted to act of discrimination under Arts. 4 & 25 of the Constitution---Appellate Tribunal vacated the show-cause notice and set aside the order passed thereon.
2002 SCMR 312; 2009 PTD 1507; 2005 SCMR 492 and 2010 SCMR 431 foll.
Nadeem Ahmed Mirza for Appellant.
Ghulam Mustafa Kathia, A.O. for Respondents.
Date of hearing: 18th July, 2018.
JUDGMENT
MUHAMMAD NADEEM QURESHI, MEMBER (JUDICIAL-I).--Through this order, I intend to dispose off Appeal No. K-1273/2016 directed against the Order-in-Original No.530247 dated 03.06.2016 passed by the Additional Collector of Customs, (Adjudication-I), Customs House, Karachi.
2.Briefly facts of the lis are that the appellant during the course of his business activities imported a consignment of (i) 221 kgs body protector PCT heading 8708.9990 (ii) 1700 kgs rubber mats accessories for motor car PCT heading 4016.9990 (iii) 400 kgs of chrome shaded ornaments PCT heading 3926.4090 and (iv) 5000 kgs plastic strip kits PCT heading 3925.9000 @ US$. 1.10,0.465, 1.10 and 1.10/kgs respectively. Upon receipt of shipping documents he delivered those to his clearing agent Messrs Khurram Brothers, Karachi for transmitting online Goods Declaration (GD) under the provision of Section 79(1) of the Customs Act, 1969 (Act) and Rule 433 of Sub-Chapter III of Chapter XXI of Customs Rules, 2001 (Rules), which he did and as per pre-condition deposited upfront duty and taxes of Rs.396,975.00 on 30.04.2016. Consequent to which his GD was numbered KAPW-HC-208372-30.04.2016. Upon appearance of GD on the desktop, the Appraiser concerned opted for getting the examination of the goods prior to assessment in terms of the expressions of Section 198 and Rule 435 of the Act/Rules. The examiner concerned confirmed the declaration with the exception of forming opinion as per his own inapt understanding as (i) Bonnet Guard made of Plastic (Approx. 310 kgs), (ii) Car mat of 5 pieces set made of Rubber (Approx. 1840 Kgs) , (iii) Assorted type Chrome shaded cases of back light , side light etc. (Approx. 620 Kgs) and (iv) Window Viser of assorted types and shape (Approx 5800 kgs) having no nexus with the actual description and contents of the goods and posted that in the reservoir of the GD. On the strength of which the nominated Appraiser completed the assessment through which he changed the PCT of all the items as 8708.1020 and 8708.2931 as against transmitted against each item , on the value which is for some alien goods and transmitted the same to Principal Appraiser, who instead of rectifying the discrepancy, termed the same as an act of mis-declaration and prepared contravention report stating inter-alia that the appellant's mis-declared classification /weight which was found 8570 kgs as against declared of 7325 kgs i.e. excess by 1245 kgs equivalent to 16.99% for causing loss to the exchequer to the extent of Rs. 1,383,922.00, his said act is tantamount to contravention of Sections 32(1), (2) and 79(1) of the Act and Section 33 of the Sales Tax Act, 1990 and Section 148 of the Income Tax Ordinance, 2001, punishable under clause (14) of Section 156(1) of the Act read with S.R.O. 499(I)/2009 dated 13.06.2009 and routed that to the Deputy Collector of Customs, Group-VII, MCC of Appraisement-West , Custom House, Karachi (Respondent No. 1), who endorsed the same and referred to Additional Collector, Law, who approved that and transmitted it to the Collector of Customs, Adjudication-I, who upon receipt routed it to the Respondent No. 2, being the competent authority, who without even a slightest change converted the contravention report into show cause and transmitted on the home page appellant's on 17.05.2016. The appellant Consultant/ Advocates, controverted the allegation levelled therein through reply dated 21.05.2016 annexed with exhibits/evidences. The respondent No. 2 callously without considering the reply and the Exhibits passed order dated 03.06.2016 by simply reproducing the allegations levelled in the show-cause notice and copy pasting the reply and above all without substantiating/ rebutting the arguments and ordered confiscation of the appellant goods subject to redemption of those upon payment of 20% fine, penalty of Rs. 100,000.00 in addition to determined duty and taxes on the strength of erroneous PCT's and value. Paras 2 and 3 are relevant and are reproduced here-in-under:--
"2- I have gone through the case record and considered written/verbal arguments of the representative of the respondent. The impugned goods were declared in GD as (i) Body Protector under PCT heading 8708.9990, Rubber Mat Sets for Motor Car under PCT Heading 4016.9990 (iii) Assorted Chrome Shaded Ornaments under PCT 3926.4090 and (iv) Plastic Strip Kit for rain protection under PCT 3925.9000. Accordingly, clearance of the said generically described goods was sought under self assessment system. However, on physical examination the goods were actually found to be (i) Bonnet Guard classifiable under PCT Heading 8708.1020 (ii) Car Mats classifiable under PCT heading 8708.2931, (iii) Chrome Shaded Cases of back/side light classifiable under PCT 8708.2931 (iv) Window Viser , classifiable under PCT heading 8708.2931. Further , the weight of the consignment was also found to be 16.99% excess, which is much beyond the 5% tolerance allowed vide S.R.O. 499(I)/2009. It is evident that the respondent classified the imported goods meant for vehicle of Chapter 87 of the Tariff under wrong PCT heading and misdeclared the weight of the goods in an attempt to evade payment of correct/levialble duty and taxes."
"3- In view of the above, the charge of misdeclaration of PCT heading and weight levelled in the show-cause notice stand established. I, therefore, order for confiscation of the goods under Section 156(1) clause 14, read with Sections 32(1) (2) and 79(1) of the Customs Act, 1969. However, an option under Section 181 of the Customs Act, 1969 is given to the importer to redeem the confiscated goods on payment of 20%. Redemption fine i.e. Rs. 383,444/- (Rupees three hundred eighty three thousand four hundred and forty four only) in terms of S.R.O. 499(I)/2009 dated 13.06.2009 equivalent to the value of offending goods (as department), in addition to payment of duty and taxes chargeable thereon. I also impose a total penalty of Rs. 150,000/- (Rupees one hundred and fifty thousand) i.e. Rs. 100,000/- on the importer and Rs. 50,000/- on the clearing agent for violation of above mentioned provision of law."
3The appellant filed the appeal on the basis of grounds enumerated therein, the consultant/advocates on the date of hearing argued the case strictly in accordance with those. No cross objection under subsection (4) of Section 194A of the Act has been filed within the stipulated period of 30 days by the respondent No. 1, instead comments , which are not in any manner qualify memo of cross objection , deemed to be termed as cross appeal filed under subsection (3) by the department as expressed in subsection (4) of Section 194A of the Act. Therefore, these are to be considered merely as opinion, having no binding force on the memo of appeal. These are accordingly placed on record of the case for perusal and consideration.
4.Rival parties heard and case record perused in addition with the relied upon citations. I am indebted to inscribe that respondent No. 2 issued show-cause notice in very casual and perfunctory manner, without considering that it is a vital basic document, which should be prepared with utmost care after going through the provision of the Acts/Ordinance, and the jurisdiction/powers vested upon him, evident from the fact that in the show-cause notice he invoked the provision of Section 33 of the Sales Tax Act, 1990, without realizing that it pertains to penal clauses to be invoked on the contravention of the respective provisions of the Sales Tax Act, 1990 , it is synonymous to Section 156(1) of the Act, Section 148 of the Income Tax Ordinance, 2001 has also been invoked , which contains procedure for collection of advance income tax on the imported goods by the authorities defined in subsection (9) ibid on the value determined under different subsections of Section 25 of the Act in sequential manner. Both of these Sections are not charging section for short paid/collected Sales/Income Tax, proceeding for which have to be initiated under the provision of Section 11 of the Sales Tax Act, 1990 and 162(1) of the Income Tax Ordinance, 2001 by Officer of Inland Revenue of competent jurisdiction , powers to whom has been delegated by the Board through a notification and by the Commissioner of Income Tax as contemplated in Section 11 of the Sales Tax Act, 1990 and Income Tax Ordinance, 2001. Now it is well settled principle of law that if show-cause notice is being issued with invoking of erroneous/ irrelevant provision of the Act/Ordinance, and by a not authorized officer , which is evident from the instant case that being Officer of Customs respondent No. 2 invoked the provision of the Sales Tax Act, and Income Tax Ordinance, astonishingly, which are even also not relevant, in usurpation of powers of the Officer of Inland Revenue/ Commissioner of Income Tax. Renders the show-cause notice/impugned order-in-original palpably illegal being without power/jurisdiction. Hence, void and ab-initio and as such coram non judice. Any super structure built thereupon, no matter how strong it may be has to crumble down as held by Superior Judicial Fora in umpteenth reported judgments, holding field from the 2003 PTD 1275, 2005 PTD 480, 2003 PTD 1593, 2002 MLD 130, 2002 MLD 180, PTCL 2001 CL 558, 1992 SCMR 1898, 2013 PTD 813. 2002 PTD 2457, PLD 1971 Supreme Court 61, PLD 1973 Supreme Court 236 , PLD 1964 SC 536, 2001 SCMR 838 , 2003 SCMR 1505, 2006 SCMR 129, PLD 1996 Karachi 68, 2006 PTD 978 and PLD 1971 Supreme Court 184.
5.It has been observed by me that the allegation of excess weight of 1245 kgs equivalent to 16.99% is also without any substance , being worked out on the basis of self devised procedure by the respondents of allowing of tare weight from the gross weight . The fact of matter is that in a consignment there exist two weights (i) net and (ii) gross weight, there exist no concept of tare, the duty and taxes has to be levied on the UOM incorporated against each PCT heading of the goods in First Schedule to the Act on the goods actually imported for home consumption sans the weight of material used for essential/non essential packing, which can/ought not to be considered as goods through any stretch of imagination/definition , unless those are imported as goods. I fail to digest the rationale of disallowing the actual declared difference between gross and declared weight by the respondents, instead to the extent of tare and that also in accordance to their own whims and wishes , having no sanction of law. This manifest illegality has been noted by me, from the evidential GDs annexed by appellant as exhibits "O" to "O4" at pages 50-65 of the memo of appeal, in which the officials posed at the terminal invariably allowed tare weight on 20" container 600 to 1400 kgs and on 40" container 1500 to 1800 kgs detail of which is reproduced here-in-under:--
| GD No/Dated | Size of Container | Tare Allowed |
| KAPW-HC-215159-09052016 | 20" | 1134 Kgs |
| KAPW-HC-217275-11052016 | 20" | 1100 Kgs |
| KAPW-HC-218645-13052016 | 20" | 1400 Kgs |
| KAPW-HC-210307-03052016 | 40" | 1500 Kgs |
| KAPW-HC-215018-09052016 | 20" | 1786 Kgs |
That in negation of the existing practice the officials posted at KICT allowed tare weight to the appellant despite being his goods identical to the other importers to the extent of 600 kgs only. This discriminatory/differential treatment resulted in excess weight of 1245 kgs, which otherwise would had been not more than 7540 kgs after allowing 1700 approximate from the found gross weight of 9240 kgs and the excess weight would had not been more than 215 kgs, which had been 2.94% , within the permissible limit of 5% in terms of SRO 499(I)/2009 dated 13.06.2009. This act of the official of KICT on one hand is instrumental in framing of contravention report not warranted under law and on the other hand charging of extra duty and taxes, without supplying the goods so imported for home consumption, duty and taxes could only be levied on the imported goods declared in the GD, not on the non existent goods . This type of levy of duty and taxes is not permissible in any civilized society.
6.Irrespective of the above deliberation on the factual aspect of weight of the case and practice adopted by the respondent in determination of weight of the imported goods. It has been observed that the respondent No. 1 and his subordinate added the difference of gross and tare weight of the packing in the net weight of the imported goods in derogation of the unit of measurement (UOM) notified in First Schedule to the Act , which speaks with clarity about the unit of the goods imported which in the case of appellant are decoration/protective items , precisely to be termed as accessories to be used in motorcar and akin to that vehicle , not auto parts in any manner/definition without any exception. The agony of the appellant does not ends here, evident from the fact that the subordinate of the respondent No. 1 framed contravention report and forwarded to respondent No. 2 with the allegation that the weight of the goods is found 7540 kgs i.e. excess by 1245 kgs which is equivalent to 16.99% despite not. The respondent No.2 without going through the documents forming the basis of declaration and examination report transmitted show-cause notice in mechanical manner, when the appellant consultant/advocates, controverted the allegations, successfully, he ignored those in addition with the question of powers/jurisdiction and passed the slip shot and bald order , through which he held the charges as levelled in the show-cause notice established. I am flabbergasted to note that he does not took pain to confront the respondent No. 1 and his subordinate that under what provision of law weight of packing has been added in the actual/net weight of the goods and to the fact that whether it is just and proper and legal to charge duty and taxes in the absence of availability of the goods to the extent of added weight , apparently which are non existent. In the absence of answer to the said query the impugned order would not had been passed by him, which he did and caused hardship and financial losses beside multiplication of the mental torture to the appellant.
7.Notwithstanding to above, as regards to the line of arguments adopted by the representative of the respondents for justifying the proceedings that difference of gross and tare weight has to be added in the net weight of the goods, being part and parcel of those and to be construed as UOM /quantity (contents) as notified against each PCT heading of First Schedule to the Act. It is based on misconception and inapt interpretation of the abbreviation UOM and in derogation to the First Schedule to the Act which speaks about the contents of the imported goods/items sans weight of packing, which is disposed off, after unwrapping/using the contents of actual goods, as trash. Only the weight of imported goods matters and that is to be construed as the quantity of the goods, weight of packing, cannot be considered through any figment of imagination as an integral part of the goods so imported. The duty and taxes has to be charged/collected on the goods actually imported for use/consumption of general public. No provision of the Act, empowers the Officer of Customs to add the difference of gross and tare weight of the packing. The vital element is its cost not weight and this is validated from the provision of Section 25 which speaks about determination of value of the "goods" and "category of the goods" and Section 25A speaks about "goods" and "class of goods" which means the goods so imported and its quantity excluding the weight of packing, which is not for use instead "trash" and cannot be construed as imported goods through any stretch of imagination or definition available in reputed dictionaries of english language. Weight of packing is immaterial. Nevertheless, addition of cost of packing material in the value of the imported goods had to be made as defined in Serial No. (iii) of clause (b) of subsection (2) of Section 25 of the Act. While determining the value of imported goods under the concept of "Transaction Value" within the meaning of Section 25(1) of the Act, only then, when it is confirmed that the exporter has incurred that, but has not included that in the price actually paid or payable of the imported goods. This means that the onus to prove that the cost of packing whether for labour or packing is not included by the exporter, rests on the shoulders of the Officer of Customs in terms of Articles 117 and 121 of Qanun-e-Shahadat (10 of 1984), unless it is not proved through tangible incriminating evidence, the cost whether for labour or packing material is not permitted to be added under law. The representative of the respondents also laid emphasis on Serial No. (ii) of Clause (b) of subsection (2) of Section 25 of the Act, which read as "the cost of container which are treated as being one for customs purpose with the goods in question" . This is in consonance with the illustration made in Rule 5(a) of General Rules of Interpretation (GIR), i.e. for the purpose of classification and valuation items listed therein or akin to those are to be treated as integral part of the goods so imported e.g. "Camera Cases Musical Instrument Cases, Gun Cases, Drawing Instrument Cases, Necklace Cases and similar containers specifically shaped or fitted to contain specific article or set of article, suitable for long term used as presented with the article for which they are intended, shall be classified with such articles when of a kind normally sold therein. This Rule does not, however apply to the container which give the whole its essential Character." In contrast the goods imported by the appellant are not in any manner akin to those, resultant, stand excluded from Serial No. (ii) of Clause (b) of subsection (2) of Section 25 ibid. However, when against any imported item a ruling is in field issued by Director, Directorate General of Valuation under Section 25A of the Act, for levy of custom duty, he determine those to the extent of unit as given in the respective applicable PCT of First Schedule on C&F basis , meaning thereby in the said custom value every single element/expense is taken into consideration by him i.e. "cost" not "weight" which is immaterial due to the fact that the packing material or akin receptacle, in which goods or item/products are packed are to be thrown after use of the contents in the garbage bin as trash. In the instant case the item so imported are subject to assessment for levy of duty and taxes either with the application of valuation ruling or identical/similar value available in data reservoir maintained by the PRAL under Rule 110 of the period given in Rule 107(a) of the Rules on the net weight of the goods sans weight of the packing material, which cannot be made part of assessable weight, if i.e. allowed to be added, being in derogation of the norms of business, WTO Agreement on Valuation and provision of Section 25 of the Act. No commodity is sold without its packing and while a seller offering the goods for sale includes the incidental charges in its final cost. In juxtaposition an importer/buyer will also not lift the imported goods without its packing. The value of packing is in fact inbuilt in the custom value determined under different subsections of section 25 of the Act in sequential manner. Even otherwise, valuation determined under section 25A could not be further saddled in the name of weight of packing, by virtue of the fact that it is not supported by warrant of law. If it allowed as opined by the respondents for generating revenue for the exchequer on that weight containing no goods in terms of the respective PCT heading of the First Schedule , it is nullity being not supported by warrant of law. Duty and taxes could only be realized/recovered on the net weight/contents of the imported goods. Packing cannot be construed as goods by any mean and as defined in Section 25 and First Schedule to the Act, without supplying the goods declared in GD transmitted under the Provision of Section 79(1) and Rule 433 of the Act/Rules . This type of generation of revenue is in derogation of the provision of Section 25 of the Act, and Articles 13 and 18 of Constitution of Islamic Republic of Pakistan, beside tantamount to double taxation not permitted under the Act /Constitution of Pakistan or of the world as evident from the law laid down by the Superior Judicial Fora in reported judgments 1992 PTD 593, 2003 PTD (Trib.) 928, 2010 PTD 1515 and 2009 PTD (Trib.) 2025. (Emphasis Supplied)
8.The classification of appellant imported body protector for vehicles under PCT heading 8708.1020 and rubber mats sets, assorted chrome shaded ornaments and window viser under PCT heading 8708.2931 are incorrect/misconceived being irrelevant, evident from the main heading of 87.08 "Parts and accessories of motor vehicle of heading 87.01 to 8705 i.e. "Bumpers and Parts thereof". The goods found during the examination are bonnet guards made of plastic and these had to be just pasted or fixed on the bumpers for decoration/ beautification and therefore cannot be construed either bumper or its parts through any definition/interpretation available in the renowned dictionaries , i.e. "an amount or section , which, when combined with others, makes up the whole of something or something less than the whole , a portion; that which along with other makes up, has made up, or may at some time make up, a whole; a constituent; a component ; a member; or organ; an equal quantity; and equal or nearly equal division etc. or that which is less than all , which when combined constitute a whole. Likewise the second main heading of 87.08 read as "Other parts and accessories of bodies (including cab)" goods imported/found in the examination were car mats of rubber, assorted type of chrome shaded cases of back light and side light etc. and window visers, are neither "other parts or accessories of bodies', as evident from its meaning available in reputable dictionaries i.e. the thing which can be added to something else in order to make it more useful, versatile or attractive or additional; subsidiary, present along with something more important; adventitious, contributing; aiding or something added for more convenience or usefulness". Meaning thereby that these are not essential components of the motor vehicle to be used/affixed for dedicate operation of its engine sans which a vehicle could not even start or run, rather these are for protecting vehicle floor from the dust/mud and to be used for decoration/beautification and from the protection of sun/rain. These cannot be termed through any standard/definition and interpretation either other parts and accessories of bodies of vehicle, thus stands ousted from the said PCT and for that reason the respondent and his subordinate were/are assessing said goods in the past and even todate under the declared PCT heading by the appellant, validated from the copies of the GDs bearing No. KAPW-HC-82839-10.11.2015 and KAPW-HC-118609 dated 30.12.2015 annexed by the appellant in the memo of appeal as Exhibit "Q" & "R" at pages 67-70. It is settled law that the department cannot made deviation from their own precedence for penalizing or lading extra duty and taxes in a solitary case and this has been held in reported judgment PLD 1977 Lahore 1392 Nazir Ahmed Tajdin v. Deputy Collector of Customs, Lahore and 2 others, while allowing the Petition No. 585 of 1977 on 23.07.1977 and "Custom Authorities are supposed to adhere to their own precedent in administering taxing Statute". Issuing show-cause notice in the case of appellant while ignoring precedence is illegal and not permissible under law. Respondent while doing so also gave a differential treatment to the appellant attracting the act of discrimination barred under Articles 4 and 25 of Constitution of Islamic Republic of Pakistan and the law laid down by Superior Judicial Fora, reference is placed to the reported judgment 2002 SCMR 312 and 2009 PTD 1507 the Hon'ble Superior Courts "there exist no power to target incidence of tax in such a way that similarly placed person be dealt not only this similarly, but discriminatingly". Whereas, in reported judgment 2005 SCMR 492 the Hon'ble Supreme Court held that "A facility allowed to some one and denied to other is discrimination". The Apex Court further held in reported judgment 2010 SCMR 431 that:--
"doctrine of equality, as contained in Art. 25 of the constitution, enshrine golden rules of Islam and states that every citizen, no matter how high so ever, must be accorded equal treatment with similarly situated persons---State may classify persons and objects for the purpose of legislation and make laws applicable only to persons or objects within a class---In fact all legislations involve some kind of classification whereby some people acquire rights or suffer disabilities whereas others do not---What however, is prohibited under principle of reasonable classification, is legislation favouring some within a class and unduly burdening others---Basic rule for exercise of such discretion and reasonable classification is that all persons laced in similar circumstances must be treated alike and reasonable classification must be based on reasonable grounds in given set of circumstances but the same in any case must not offend spirit of Art. 25 of the Constitution."
9.It has also be noted that the calculation of said to be anticipated loss to the exchequer has been calculated by the respondent No. 1 and his subordinate on the basis of value determined by Director, Director General of Valuation under the provision of Section 25A of the Act, bearing No. 661/2014 dated 29.08.2014 and assessed value as against import of the identical /similar goods available in the data reservoir maintained by the PRAL in terms of Rule 110 of the period given in Rule 107(a) of the Rules . These values are meant for application for levy of duty and taxes at the time of passing assessment orders under Section 80 and Rule 438 of the Act/Rules, not for calculating loss of revenue/charging for mis-declaration of value, for which evidential invoice of the identical/similar goods of the same origin and period of another importer is required, which is a direct evidence in terms of para 78 of CGO 12/2002 dated 15.06.2002 and clause (d) of S.R.O. 499(I)/2009 dated 13.06.2009 in the absence of availability of direct evidence, determination of loss of revenue/charging of mis-declaration for value is of no legal effect, being based on arbitrary/unilateral value and nullity to Rule 110 of the Rules as held by this Tribunal in 2014 PTD 190 Shoaib Tayyab International v. Additional Collector of Customs, Adjudication-II . Amazingly, despite of the above illegality, none of the values are applicable on the imported goods of the appellant , when it is proved that these are neither "Bumpers and Parts" thereof nor "Other parts and accessories of bodies (including cab)" falling under PCT 8708.1020 and 8708.2931 , instead US$. 1.50/kg on which the respondent No. 1 and its subordinates are assessing these type of goods without any exception, if ever they ventured beyond the said value, the respective Collector intervene and ordered to assess the goods on the said value. For reference reliance is placed on GD No. KAPE-HC-51994 dated 16.12.2013 which was assessed with the application for valuation ruling and after issuance of autographic order of Collector dated 10.01.2014 reading as "auto accessories should not be considered as auto parts therefore, in the opinion of undersigned the goods defined/considered as auto accessories shall/should be assessed at the previous criteria of US$. 1.50/kg (China). It is pointed out that it should also be decided which goods are considered as auto accessories" and letter dated 08.07.2014 in GD No. KAPE-HC-112685 dated 11.06.2014, assessed at US$ 1.50/Kg as against assessed on fictitious value on the autographic order of the Additional Collector on the letter, read as "Goods may be assessed as per data in the absence of VR or accessories (auto) at US$ 1.50/Kg." Similarly in GD No. KAPW-HC-5704 dated 10.07.2017, the Additional Collector ordered vide dated 19.07.2017 "to assess the GD as per available data of 90 days @ 1.5/kg and put up detailed working after clearance of this GD, based on constituent material, also obtained data of passed 12 months where group has been assessing @ 1.5 kg A/W names of Assessing Officer, the GDs were reassessed prior to clearance under Section 80(3) of the Act @ US$. 1.50/kg and GDs No. KAPE-HC-23732 dated 01.09.2014 , KAPW-HC-38004 dated 08.09.2014, KAPE-HC-112885 dated 11.06.2014, KAPW-HC-68942-17.10.2015 KAPW-HC-82838 dated 10.11.2015 and KAPW-HC-110816 dated 17.11.2015, which were assessed for duty and taxes for the identical/similar goods @ 1.50/kg out-rightly without raising any objection or with the application of the values applied in the case of the appellant. Therefore, principally and legally appellant goods ought to be assessed @ US$. 1.50/kg without any exception and any duty and taxes levied and paid by the appellant, were neither leviable /payable under law and needs to be refunded without any objection in accordance with the norms of fair play and justice.
10.The order passed by the respondent No. 2 is unique in nature and cannot be considered a valid order through any stretch of imagination, validated from the fact that no rebuttal whatsoever has been given by him on the deliberation made by the appellant consultant/ advocates in reply to the show-cause notice dated 21.05.2015 and the evidences supplied. Rendering, it void order being passed without application of judicial mind and confirm that it suffer from lack of courage to do justice without fear and favour. Rendering it biased, suffers from the vice of self interest or tardy , indolent and incompetent and shows that respondent No. 2 has no urge , will , passion and ability to decide the case/dispute put before him for decision. In principle, it is a perfunctory, sketchy, slipshod, bald and devoid of any reason and did not conform to the mandated requirement of section 24-A of the General Clauses Act, 1897 and this stood further validated from the operative part of order confirming it is based on the version of Officials of respondent No. 1. Orders which did not contains rebuttal on the ground advanced and decision/judgments relied upon by the appellant and not containing substantial reasons shows it has not been passed on objective consideration, always be 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 orders 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 order-in-review passed by respondent No. 2, is being in violation of basic principle of the goods 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, PLD 1995 SC (Pak) 272, PLD 1970 SC 158, PLD 1970 SC 173, 1984 SCMR 1014 and 2012 PTD (Trib.) 619.
11.What has been discussed hereinabove, particularly the interpretation of law, legal propositions and observations made thereon and to follow the ratio decidendi observed by the Superior Courts, I hereby vacate the impugned show-cause notice, and set aside the order passed thereon, during the hierarchy of the customs being illegal, void and ab-initio, appeal is accordingly allowed with no order as to cost.
12.Judgment passed and announced accordingly.
SA/75/Tax(Trib.)Appeal allowed.