NAYATEL (PVT.) LTD. VS APPELLATE TRIBUNAL CUSTOMS, ISLAMABAD
2019 P T D 288
[Islamabad High Court]
Before Athar Minallah, C.J. and Miangul Hassan Aurangzeb, J
Messrs NAYATEL (PVT.) LTD.
Versus
APPELLATE TRIBUNAL CUSTOMS, ISLAMABAD and others
Custom Reference No.8 of 2017, decided on 29/11/2018.
Customs Act (IV of 1969)---
----Ss. 196 & 194---Customs General Order No. 10 of 2001, Chapt. (ii)(v)---Customs Classification Committee---Ruling/opinion of Customs Classification Committee---Following of ruling of Customs Classification Committee by Customs Appellate Tribunal----Scope--- Where mandatory requirement of inviting importer or his representative for discussion before Customs Classification Committee had not been fulfilled and importer had not been invited for discussion or afforded opportunity of hearing before the Customs Classification Committee, and such Committee made ruling adverse to the importer's interest, then requirements of Customs General Order No. 10 of 2001 had not been fulfilled---Order of Appellate Tribunal based on such opinion / ruling of Customs Classification Committee was therefore liable to be set aside.
Ayyaz Shaukat and Malik Sardar Khan for Applicants
Adnan Haider Randhawa for Respondent No.2.
Dr. Farhat Zafar for Respondent No.4.
Date of hearing: 29th November, 2018.
JUDGMENT
MIANGUL HASSAN AURANGZEB, J.---Several questions of law, including the following question were framed by this Court in the instant custom reference:-
"Whether the learned Customs Appellate Tribunal was justified by following the classification ruling which was issued by respondent No.5 in the [applicant's] case but without giving an opportunity of hearing to the appellant, which is mandatory as per statute and for administration of justice?"
2.We are of the view that the answer to the said question would be sufficient as regards the disposal of the instant custom reference.
3.The record shows that the applicant had imported various consignments of Set Top Boxes from China and got them cleared through various GDs by classifying them under HS Code 8517.6950 at the rate of 10% customs duty. The view of the Collectorate of Customs was that the said items were classifiable under HS Code 8528.7290 attracting 20% and 25% customs duty. The position taken by the Collectorate of Customs was that the Set Top Boxes classified under PCT heading 85.17 were meant for gaining access to internet but the items imported by the applicant specifically provided TV viewing, including value added services, and therefore, the same had to be classified under HS Code 8528.7290.
4.At the applicant's instance, the matter was referred to the Classification Committee of the Collectorate of Customs Appraisement (East) Karachi for rendering a ruling/opinion. The ruling of the said Committee was adverse to the applicant's interests. It was ruled that the imported goods were classified under PCT heading 8528.7290.
5.Now it is an admitted position that the applicant was not afforded an opportunity of hearing by the said Committee before giving a ruling adverse to the applicant's interests.
6.Paragraph-2(v) of Chapter-II titled "Classification" of the Customs General Orders makes it obligatory upon the Classification Committee to invite the importer or its representative for discussion before a ruling is given. In this regard, the relevant paragraph of the letter dated 27.12.2014, is reproduced herein below:-
"2. The Classification Committee held its meeting on 1.12.2014 and 22.12.2014. It was observed that M/S PTCL had been claiming concession under PCT Heading 85.28 when this PCT Heading was included in the concessionary notification notified through SRO 575(I)/2004. Ever since the revocation of the aforesaid SRO, there was a departure from classification under PCT heading 85.28 to 85.17 with reference to the impugned item. Moreover, the incorrect classification by M/S PTCL was not only detected by the MCC, Islamabad but also the R&D Section of the MCC (Appraisement East) followed by the Directorate of Internal Audit, Karachi. Set Top Box under reference is not the one having capability to provide the internet services rather the Set Top Box is meant for Smart TV having capability to provide Television Cable Service provided through IP modem. Cable Television Streaming through the internet modem is converted into TV signals for display on TV sets. Basically the Set Top Box under reference is a sort of TV tuner converting electronic signals into video signals irrespective of source."
7.Learned counsel for the respondents did not dispute the fact that the applicant had not been invited for discussions or afforded an opportunity of hearing by the Classification Committee before a ruling adverse to the applicant's interests was given. Therefore, we are of the view that the Classification Committee while giving its ruling, which forms the basis of respondents Nos.1 to 3's orders, the requirements of paragraph-2(v) of Chapter-II titled "Classification" of the Customs General Orders had not been adhered to. On this ground alone, the orderpassed by respondent No.1 is rendered unlawful, and therefore, liable to be set-aside. We are of the view that the show-cause notice dated 29.02.2016 shall be deemed to be pending, and the Classification Committee may give its ruling after inviting the applicant or its representative for discussion in terms of paragraph-2(v) of Chapter-II titled "Classification" of the Customs General Orders. The reference stands answered in the above terms.
KMZ/144/IslOrder accordingly.