2016 P T D 1419
[Balochistan High Court]
Before Muhammad Ejaz Swati and Jamal Khan Mandokhail,
ZAHIR KHAN AND BROTHERS, ENGINEERING AND CONSTRUCTORS through
Partner
Versus
FEDERAL BOARD OF REVENUE through Member and 4 others
C.P. No.751 of 2014, decided on 9th November, 2015.
(a) Customs Act (IV of 1969) ---
----Ss. 25- D, 79, 80 & 193---Valuation ruling ---Importer was aggrieved of valuation ruling
whereby price declared by importer was found to be on lower side ---Validity ---Customs Office r
after examination, assessed duty and taxes leviable on goods imported, which was required to be
paid by the importer ---Such sort of assessment was in order of Customs Officer passed under S.
80 of Customs Act, 1969 on receipt of goods determined under S. 79 of Customs Act, 1969 by
the importer ---Order passed under S. 80 of Customs Act, 1969 was an appealable order whereas,
Valuation Ruling was required to be challenged under S.25- D of Customs Act, 1969--- Importer
had remedy under Ss. 193 & 25- D of Customs Act, 1969, by approaching concerned forum
available in the hierarchy under Customs law ---Constitutional Petition was dismissed in
circumstances.
2015 SCMR 630; 2006 PTD 909; Messrs Flying Board and Paper Products (Pvt.) Ltd. v.
Deputy Collector of Cust oms, Dry Port, Lahore 2006 SCMR 1648 = 2006 PTD 2354 and Syed
Arshad Ali and others v. Pakistan Telecommunication Company Ltd. and others 2008 SCMR
314 ref.
(b) Constitution of Pakistan ---
----Art. 199---Constitutional jurisdiction of High Court ---Scop e---Provision of Art. 199 of the
Constitution was not meant to short -circuit statutory proceedings ---High Court could exercise
such jurisdiction when it was found that order assailed was without jurisdiction or apparently
contrary to settled provisions of law or was likely to result in miscarriage of justice.
Qazi Ghulam Dastagir and Mirza Luqman for Petitioner.
Sher Shah Kasi, Deputy Attorney General along with Haji Azam Law Officer for
Respondents Nos. 1 to 4.
Mushtaq Ahmed Anjum for Respondent No.5.
Date of hearing: 29th September, 2015.
JUDGMENT
MUHAMMAD EJAZ SWATI, J. ---The petitioner/company imported a consignment of
Pre-stressed Steel Strand 15 mm Grade 270 consisting of 309 packages having gross weight
1000618 Kg, from China through Karachi vide IGM No. KEWB -165 dated 21st August 2014,
Index No. 41, Bill of lading No. KW1406- XGKA- 410 and transshipped to NLC Dry Port, Quetta
through TP No. KEAP -TP-371 dated 2nd September 2014 for clearance (hereinafter the
"consignment/goods in questi on"). The petitioner through his agent M/S Al -Quresh Enterprises,
Quetta has declared the custom value at the rate of US $ 430 per metric ton. The declared price
was found by the respondents on the lower side and the consignment in question had been
assessed by the Collector at the rate of 1.01/per Kg as per Valuation Ruling No. 370 dated 25th
August, 2011 as against the declared value of US $ 0.43 per Kg. The petitioner has disputed this
assessment value and requested that the consignment in question may be provisionally assessed
under section 81 of the Custom Act, 1969 (hereinafter the "Act, 1969"), which was not accepted
by the respondents under section 81 of the Act, 1969. The petitioner filed a Constitutional
Petition No. 676 of 2014 before this Court f or release of the consignment to the petitioner
provisionally as envisaged under section 81 of the Act, 1969.
2. The aforesaid Constitutional Petition was disposed of vide order dated 1st October 2014,
for provisionally release of the consignment in que stion subject to furnishing Bank guaranty of
differential amount,
3. In view of order of this Cruet, the consignment in question was released on 14th October,
2014 provisionally and the differential amount of duty and taxes were secured through Bank
guaranty issued by the respondent No.4.
4. It is the case of the petitioner that after provisionally release of the consignment, the
respondent No.2 was required to first assess the goods/consignment in question under section 25
(1) of the Act, 1969 on the declared value as per commercial invoice submitted by the petitioner
and in case any dispute arises, then he should complete the final assessment in sequential manner
as provided under section 25(4), (5), (7), (8) or (9) of the Act, 1969 read with Custom Rules,
2001 (hereinafter the "Rules, 2001").
5. Para wise comments filed on behalf of the respondents Nos. 1 to 3 and contested the
invoice value of the petitioner i.e. US $ 430/PMT on the ground of existing Valuation Ruling
No. 370 dated 25th August 2011, whereby the value of the goods in question was determined at
US $ 1010 metric ton under section 25(1) of the Act, 1969 by the Directorate General of
Customs Valuation Custom House Karachi. It is further stated that the importers through their
agent had fi led Goods Declaration (GD) No. 448 dated 9th September 2014 by itself calculating
duty and taxes on the value at the rate of US $ 1010 metric ton, calculated duty and taxes of
Rs.45,988,972/ - after observing the Valuation Ruling No. 370. The official respondents further
stated that the provisionally release of the consignment was allowed in the light of order of this
Court dated 1st October, 2014 passed in Constitutional Petition No.676 of 2014, therefore, in
existence of aforesaid Valuation Ruling, determi nation of custom value under the provisions of
section 25(1) and section 81 of the Act, 1969, is not applicable in view of section 25A of the Act,
1969.
6. The petitioner besides challenging the impugned Valuation Ruling No. 370 of 2011 dated
25th August 2011, also sought following relief: --
a. That rejecting declared transaction value and finalizing provisioned assessment in
slip short manners without exhausting methods prescribed under subsections (1) to (4), 5
6 or 9 of Section 25 of the Act read wit h Rules 113 to 117 of the Rules is Void, illegal,
without Jurisdiction and of no legal effect;
b. That finalizing the provisional assessment on the basis of a valuation ruling
No.370/2011 dated 25 -08-2011 issued in some other cases in year 2001 has lost its life
after expiry of Ninety days is inapplicable and rejection of declared transaction value
based on commercial invoice and remittance to exporter and in addition to this the
process adopted by respondent No.2 with the collusion of respondent No.5 for
determination of value of good is illegal, unlawful and without jurisdiction and liable to
be struck down with a direction to accept the declared value of the petitioner as there is
no material available with the respondents to make a doubt on declared va lue except a
valuation ruling which lost its life
c. Direction may please be issued to respondent No.2 to assess the goods on
declared value as there is no material on record to reject the declared value as per
commercial invoice and if so be then determine the valuation of the goods as per
procedure given in section 25(1) to (4) (5) (6) (7) (8) or (9) in (sic)
7. The learned counsel for the petitioner contended that after provisional release of
consignment in question under section 81 of the Act, 1969, the final value of the imported goods
is to be determined as per subsections (4), (5), (7);(8) or (9) of section 25 of the Act, 1969 read
with Rules, 2001 for the purpose of custom duties and taxes; that the method of custom value is
required to be applied in a sequential order; that without resorting to the provision ibid,
determination of such value on the basis of Valuation Ruling is without lawful authority; that the
custom valuation had been assessed by the respondents on the basis of letter dat ed 27th
September, 2014 and report dated 14th October 2014, but no notice and opportunity of being
heard has been provided to the petitioner, which is in disregard of natural justice and contrary to
section 24 of General Clauses Act; that in case of any di spute in respect of declaration of the
import valuation, the Assessing Officer as per Rule 109(3) of the Customs Rules, 2001, is
required to ask the importer to furnish further documents for explanation, but the mandatory
provision has also been violated b y the respondents; that the Commercial Invoice assessed by the
exporter and DD after payment of tax are admitted and authenticity of documents, but all the
documents had been ignored without assigning any valid reason; that in case of any dispute
related t o Customs duty / value arises, the complete mechanism has been provided under Section
25 of the Act, 1969, but all the provision of law and rules had been ignored; that the Valuation
Ruling of 2011 has been applied for assessing of the Customs value which was inapplicable after
90 days of its issuance. The learned counsel placed reliance on the judgments reported in 2015
SCMR 630 and 2006 PTD 909.
Learned Deputy Attorney General in rebuttal contended that the petitioner its Clearing Agent,
had filed GD N o.488, dated 9th September 2014 and calculated the duty and taxes on the value
@ US $ 1010/ metric -ton and chargeable taxes of Rs.45,988,972/ -; that importer himself
observed the Valuation Ruling No.370, dated 25th July 2011, therefore, as per section 25- A of
the Act,1969, he is bound by the same; that in existence of Valuation Ruling resorted to section
25(4) and section 81 of the Act, 1969 was not applicable, as the consignment was provisionally
released in the light of order of this Court (High Court); t hat the respondent No.2 acted in
accordance with law and the duty imposed after resorting to Directorate General of Customs
House Karachi; that the letter dated 22nd October 2014, was issued for encashment of bank
guarantee, as it was submitted for differe ntial amount and after finalization of valuation, no
question arises to keep bank guarantee remain intact.
8. We have heard the learned counsel for the parties and have gone through the record of the
case. We find that the petitioner had imported the consignment in question from China through
Karachi vide IGM No.KEWB -165, dated 21st August 2014, vide Index No.41, Bill of Lading
No.KW -1406- XGKA -416, Commercial Invoice No.HKGSEX -140604- CI, dated 10th July 2014,
the petitioner through Goods Declaration No.448, dated 9th September 2014, through his
authorized Clearing Agent Messrs Al -Quresh Enterprises has declared the Customs Value @ US
$ 430/ per metric -ton and classified under PCT Heading 731121090. The Collector / respondent
found the said value at lower s ide, therefore, he assessed consignment @ US $ 1.01 / per
kilogram, according to Valuation Ruling No.370, dated 25th August 2011, as against the
declared value of US $ 0.43 / per kg.
9. The petitioner disputed this value and vide letter dated 20th Septem ber 2014, requested
that his consignment be provisionally assessed under section 81 of the Act 1969. The relevant is
reproduced herein below: --
"We would like to inform you that we had imported PRESTRESSED STEEL STRAND
15:24 MM GRADE 270 and we had filed the GD through our Clearing Agent.
As we know that Assessment Value of PRESTRESSED STEEL STRAND 15.24 MM
GRADE 270 (wire) Custom Ruling @ US $---/ MT is very high and it is not acceptable
for us, so we will filled the reference against the ruling. In the meanwhile we want to
claiming consignment provisionally under section 81 of Custom Act, 1969, to avoid
heavy demurrage.
So we request you to kindly refer our case to Appraisement Department and we also
request under protest Provisionally Clearance our shipment under Section 81 of Custom.
Act, 1969 and cleared the consignment on our declared value US$ 430 / MT in GD, and
other total remaining assessment value/ amount Duty and Taxes as deposit in shape of
post dated cheque should be deposited as a securit y in shape of post dated cheque till
final decision of Appraisement Department.
We are further requested to you kindly release the consignment declared value against
pay order and difference duty taxes amount against post dated cheque.
We shall be than kful to you if you process on our request as soon as possible and oblige."
10. The contents of aforesaid letter indicate that from the inception, the petitioner was aware
that respondents declined the provisional release of consignment due to existing of Valuation
Ruling. The aforesaid letter further reveals that the petitioner objected the custom ruling and
clearly mentioned in the letter that "we will file reference against the ruling", however, to avoid
any demurrage, further requested for release of c onsignment under section 81 of the Act, 1969.
The respondent No.2 sought opinion from the respondent No. 6 Directorate General of Customs
Valuation Custom House, Karachi vide impugned letter dated 27th September 2014. The
relevant is reproduced as under: --
"The Goods Declaration No. 448, dated 09.09.2014 (Annex -A), has been filed by the
importer through his authorized clearing Agent, Messrs Al -Quresh Enterprises, Quetta.
The value of the said consignment has been declared @ US$ 430/ - PMT and classified
under PCT Heading 7312.1090. The importer has submitted the Commercial Invoice
(Annexure -B) showing/ substantiating the declared value and FTA Certificate (Annex -C)
for taking benefits extended vide S.R.O. 582(I)/2012, dated 01.06.2012 read with S.R.O.
659(I)/2007, DATED 3.06.2007.
However, the consignment in question has been assessed by the Collectorate @ $
1.01/per Kg as per Valuation Ruling No. 370 dated 25.08.2011, as against the declared
value of $ 0.43/per kg. The importer has disputed this assesse d value and is not willing to
pay duty and taxes on the assessed value. The importer has further requested that his
consignment be provisionally assessed under Section 81 of the Customs Act, 1969.
This Collectorate is of the view that since the Valuation Ruling No. 370 dated 25.08.2011
is in field prescribing value @ $ 1.01/per Kg, request of the importer for provisional
clearance cannot be accepted"
11. The respondent No.6, vide letter dated 14th October 2014, intimated the respondent No.2
that the Val uation Ruling No.370 of 2011 dated 25th August 2011, is in field and valid.
12. Pursuant to above, the request of the petitioner for provisionally release of the
consignment under section 81 of the Act, 1969, was declined, however, on filing of C.P. No. 676
of 2014, this Court vide order dated 1st October 2014 while disposing of the petition allowed the
provisional release of the consignment in question subject to furnishing bank guaranty of
differential amount, which was submitted by the petitioners and the consignment in question was
provisionally released on 14th October 2014.
13. The respondent No.3, vide letter dated 22nd October 2014, addressed to the respondent
No.4, intimated that the case of the petitioner has been finalized in view of Valuation Ruling No.
370/11 dated 25th August 2011, on the advice of Directorate General Customs Valuation Custom
House, Karachi and demanded pay order amounting to Rs.2,64,09,509/ - so that the Bank
guaranty could be discharged.
14. It appears that after issuance of the aforesaid letter, the instant petition has been filed. The
petitioner raised question that in existence of Valuation Ruling after 90 days of its issuance resort
to provision of section 25 of the Act, 1969, is mandatory and permissible. Section 25A , is pre -
determination of the custom values and such determination only applies in relation to goods
imported at the time when determination was issued, after years such Valuation Ruling is
inapplicable and it is the only section 25 of the Act, 1969, which is applicable. According to him,
the Valuation Ruling only applies for certain period and no more and this expression according
to him, has been defined in Rule 107 of Rules, 2001.
15. We find that under section 79 of the Act, 1969, the owner of importe d goods himself fills
a good declaration containing correct and complete bills of the valuation of the goods and the
duty, taxes and other charges payable thereon. Under section 80 of the Act, 1969, on receipt of
goods declaration under section 79 of the A ct, 1969, an officer of the Customs, if satisfies of the
correctness of import including the declaration submitted by the importer, then he will accept the
same. In case, the officer of Customs is not satisfied, then he may call for the relevant documents
and thereafter assess the custom value and on payment thereof, the goods shall be released.
Section 81 of the Act, 1969, further provides that when it is not possible for the officer of the
Custom that assessment of goods made under section 79 of the Act, 1969 are not satisfied or
goods required chemical or other test or further inquiry. An officer not below the rank of
Assistant Collector of Custom may order that the duty, taxes and other charges payable on such
goods be determined provisionally subject to furnishing Bank guaranty or pay order of a
scheduled Bank of differential amount, as determined by the concerned officer. Subsection (2) of
section 81 of the Act, 1969, provides that where any goods are imported to be cleared or
delivered on the basis of such provisional determination. Such amount, taxes and charges are
correctly payable on those goods, shall be determined within six months of the date of
provisional determination. Subsection (4) of section 81 of the Act, 1969, further provides that if
the provisional determination is not made within the period specified in subsection (2) of section
81 of the Act, 1969, the provisional determination shall in absence of any new evidence be
deemed to be the final determination. Under subsection (5) of section 81 of the Act, 1969, on
completion of final determination under subsections (3) and (4) of Section 81 of the Act, 1969,
the appropriate officer shall issue an order for adjustment, refund or release of the amount
determined as the case may be.
16. From the perusal of aforesaid provisions of the Act, 1969, it is obvious that the importer
himself assessed the imported goods (section 79) by way of filing of goods declaration. Section
25 of the Act, 1969, authorizes an officer of the Customs Department to re ject the declared value
of the consignment imported in Pakistan and to assess the same as provided. Section 25 and
Custom Rules, 2001, lays down various modes, in which the Officers of the Customs are
required to proceed in determining or assessing the cus toms value of the consignment after
rejecting the declared value. Section 25A of the Act, 1969 permits predetermination of custom
value of any goods or category of goods imported into or exported out of Pakistan in terms as
mentioned herein below: --
"25A . Power to determine the customs value. ---(1) Notwithstanding the provisions
contained in section 25, the Collector of Customs on his own motion, or the Director of
Customs Valuation on his own motion or on a reference made to him by any person or an
offic er of Customs, may determine the customs value of any goods or category of goods
imported into or exported out of Pakistan, after following the methods laid down in
section 25, whichever is applicable.
(2) The Customs value determined under subsection (1) shall be the applicable
customs value for assessment of the relevant imported or exported goods.
(3) In case of any conflict in the customs value determined under subsection (1), the
Director -General of Customs Valuation shall determine the applicable customs value.
(4) the customs value determined under subsection (1) or, as the case may be, under
subsection (3), shall be applicable until and unless revised or rescinded by the competent
authority."
Subsection (4) of section 25A of the Act, 1969, provides that the custom value determined under
subsection (1) or as the case may be under subsection (3) shall be applicable under the law and
unless revised or rescinded by the competent authority. Section 25D of the Act, 1969 provides
remedy to the aggr ieved person against predetermination value made under section 25A of the
Act, 1969, which reads as under: --
"25D. Revision of the value determined.--- Where the customs value has been
determined under section 25A by the Collector of Customs or Director of Valuation the
revision petition may be filed before the Director -General of Valuation within thirty days
from the date of determination of customs value and any proceeding pending before any
court, authority or tribunal shall be referred to the Director -General for the decision."
Section 193 of the Act, 1969 provides remedy of appeal, by the aggrieved person against the
determination of the Customs Value, which reads as under: --
"(1) Any person including an officer of Customs aggrieved by any decision or order
passed under sections 33, 79, 80 and 179 by an officer of Customs below the rank of an
Additional Collector may prefer appeal to the Collector (Appeals) within thirty days of
the date of communication to him of such decision or order."
17. In the instant case, the consignment in question was assessed by the respondent
concerned, at the rate of US $ 1010/ per metric ton as per Valuation Ruling 370 dated 25th
August 2011 against the declared value of US $ 430/ - per metric ton and the consignment i n
question was provisionally release under section 81 of the Act, 1969 by the order of this Court in
C.P. No. 676 of 2014 dated 1st October 2014 and the differential amount of duty and taxes
according to declared value and assessed value have been secured in shape of Bank guaranty.
The argument of the learned counsel for the petitioner that when the consignment in question has
been released under section 81 of the Act, 1969, it is mandatory and it requires the respondents
to follow the principal method of determining the custom value under subsections (4), (5), (7),
(8) or (9) of section 25 read with Custom Rules, 2001 in sequential order. He further added that
the Valuation Ruling in question under section 25A is not intended to be a substitute of section
25 of the Act, 1969 nor can it be resorted to. This contention has been considered in the light of
documents appended along with the petition. The declared value of the petitioner was not
accepted by the respondents in view of Valuation Ruling No. 370 and r equest of the petitioner
for provisionally clearance was also declined by the Collectorate vide letter dated 27th
September 2014 and determined the customs value on the basis of Valuation Ruling in question
in terms of section 25A of the Act, 1969, which a ccording to subsection (4) of section 25A of the
Act, 1969, would be applicable unless revised or rescinded by the competent authority. The
provisions of section 81 of the Act, 1969, is not attracted in the instant case, as the consignment
in question was released on the provisional assessment made in view of order passed by this
Court in C.P. No. 676 of 2014. In this context, reference is to be made to the case of Messrs
Flying Board and Paper Products (Pvt.) Ltd. v. Deputy Collector of Customs, Dry Port, Lahore
2006 SCMR 1648 = 2000 PTD 2354, wherein the Hon'ble Supreme Court of Pakistan observed
as under: --
"Provision of section 81 of the Customs Act, 1969 requiring finalization of provisional
assessment of the duty within six months was not attracted i n these cases as the goods
were released on the provisional assessment made in pursuance of an interim order
passed by learned High Court pending decision."
18. The further contention of the learned counsel for the petitioner in the instant case to set
aside the impugned letters and Custom Ruling, is not tenable, as under Article 175(2) of the
Constitution of the Islamic Republic of Pakistan, 1973, "No Court shall have any jurisdiction
save as is or may be conferred on it by the Constitution or by or unde r any law".
19. The specific provision under section 193 of the Act, provide for an appeal against the
Custom Value assessed under section 80 of the Act, whereas, section 25D of the Act, 1969,
provides for filing revision/ review before the Director Gene ral of Valuation against the custom
value determination made under section 25A of the Act, 1969 by the Collectorate of Customs or
Director of Valuation. The petitioner instead of availing the aforesaid remedy has filed the
present petition, which is barred under the aforesaid provision of law. Reference in this context is
to be made to the case of Syed Arshad Ali and others v. Pakistan Telecommunication Company
Limited and others, 2008 SCMR 314, wherein the Hon'ble Supreme Court of Pakistan held as
under: --
"It is we -recognized that if a right has been conferred by a statute and a complete
mechanism has been provided for enforcement thereof, there could hardly be any
occasion to invoke the applicability of fundamental rights. The jurisdiction of the High
Court will be patently barred under Article 212 of the of the Constitution of Islamic
Republic of Pakistan, in view of the specific forum provided for redressal of the
grievances of the petitioners, even if the order proposed to be challenged may have been
passed in whatsoever circumstances viz. mala fide, coram non judice or without
jurisdiction. This principle has been laid down in the case of I.A. Sharwani and others v.
Government of Pakistan through Secretary, Finance Division, Islamabad and others 1991
SCMR 1041. Besides it is also well -settled proposition of law that writ jurisdiction could
not be exercised where equally efficacious remedy is available."
20. The respondent No.2, after examination, assessed the duty and taxes leviable on the
goods imported, which is required to be paid by the importer. This sort of assessment is an order
of the Custom Officer passed under section 80 of the Act, 1969 on the receipt of goods
determined under section 79 of the Act, 1969 by the importer. The order passed under section 80,
is an appealable order, whereas the Valuation Ruling is required to be challenged under section
25D of the Act, 1969. The petitioner had alternate and efficacious remedy under sections 193,
25(D) of the Act, 1969 by approaching the concerned forum available in the hierarchy of
Customs law. Article 199 of the Constitution is not meant to short -circuit the statutory
proceedings. The Court may exercise such jurisdiction when it is found that the order impugned
was without jurisdiction or appar ently contrary to settled provisions of law or was likely to result
in miscarriage of justice.
In view of the above, the Constitutional Petition No. 751 of 2014, is dismissed. However,
the time spent in the instant petition would not be hurdle for the petitioner, if to adopts the
available alternate remedy.
MH/15/Bal Petition dismissed.This judgment is reproduced from a publicly available source for informational purposes and does not constitute legal advice. If you believe this listing contains an error,
let us know.