2021 P T D 1764
[Balochistan High Court]
Before Naeem Akhtar Afghan and Zaheer ud Din Kakar, JJ
Messrs MEERAB ENTERPRISES, through Authorized Attorney
Versus
The FEDERATION OF PAKISTAN through Secretary Federal Board of Revenue and 3
others
C.P. No.198 of 2021, decided on 6th April, 2021.
Customs Act (IV of 1969) ---
----Ss.3A & 25A ---SRO No.486(I)/2007, dated: 09 -06-2007 ---Directorate General of
Intelligence and Investigation ---Power to determine the customs value ---Jurisdiction ---
Scope ---Petitioner import ed two consignments of pistachios with shell (Iran origin) via land
route in respect whereof Goods Declaration Forms were filled in for customs clearance ---
Unit value of the consignments was declared by the petitioner as 1.00 US$ per kg and it was
assessed by the Appraising Officer as 1.32 US$ per kg on the basis whereof leviable customs
duty and tax were paid by the petitioner ---Directorate of Intelligence and Investigation
Customs, before release of consignments, seized the consignments for alleged contra vention
of Ss.2(s), 15, 16, 18 & 32 of Customs Act, 1969 ---Validity ---Officers of Directorate of
Intelligence and Investigation Customs, in pursuance of Notification SRO No.486(I)/2007
dated: 09 -06-2007, could intercept the goods which were liable to confi scation due to mis -
declaration of description of goods or mis -declaration in respect of quality and quantity of
the goods resulting in loss of revenue but they could not intercept the goods due to non -
application or wrong application of a Valuation Ruling as it was not within their domain and
jurisdiction ---Constitutional petition was accepted and the seizure report was declared to be
void and of no legal effect.
Saadat Khan v. Federation of Pakistan 2014 PTD 1615; Shahzad Ahmed Corporation
v. Federation o f Pakistan 2005 PTD 23 and Civil Appeal No.20 of 2015 ref.
Barrister Asad Khan and Mirwais Bazai for Petitioner.
Ikhlaq Ahmed Shah assisted by Rana Afsar Law Officer Customs Quetta along with
Abid Hussain Additional Director Customs Intelligence, Amjad H ussain Rajpar Deputy
Director Customs Intelligence, Customs House Quetta, Ms. Eesha Rahim, Assistant Director
MCC (A&F), Quetta and Arshad Zubair Superintendent, MCC (A&F), Quetta for
Respondents.
ORDER
NAEEM AKHTAR AFGHAN, J. -----In the instant constitut ion petition, the
petitioner has claimed the following relief:
"It is, therefore, prayed of this Hon'ble Court that the instant petition be allowed, and
i Declare that the impugned Seizure -cum-Contravention Report No.V -
Seize/DCI/QA/57/2021 and No.V -Seiz/DCI/QA/58/2021, as well as the seizures
pursuant to which the same have been issued, by the Respondent No.3 and its officers
are unlawful illegal, mala fide and without any lawful jurisdiction.
ii Declare that the impugned Valuation Report No.103 1 of 2017 dated 02.02.2017 is
unlawful, illegal and ultra vires the Customs Act, 1969, and the Customs Rules, 2001,
and remains unfit for the purposes of assessment of any goods, including but not
limited to Pistachios (both Shelled and Unshelled) of Irani an origin imported via land
route.
iii. Declare that the assessment of customs value of Pistachios (both Shelled and
Unshelled) of Iranian origin imported via land route is liable to be carried out in terms
of Section 25 of the Customs Act, 1969.
iv. Decla re that the impugned Valuation Ruling No.1031 of 2017 dated 02.02.2017 is not
meant for the assessment of Pistachios (both Shelled and Unshelled) of Iranian origin
imported via land route, confirmed by the letters, Orders and Directives issued by the
Colle ctor of Customs, Quetta and the Directorate General of Customs Valuation.
v. Direct the respondents/their officers to immediately release and give to the possession
of the petitioner the consignments bearing Goods Declaration No.QDRY -HC-6865
dated 4.2.2021 and QDRY -HC-6877 dated 4.2.2021, as well as the detained trucks
upon which such consignments are laden.
vi. Restrain the Respondents/their officers from taking any coercive action against the
petitioner on the basis of the impugned Valuation Ruling No.103 1 of 2017 dated
2.2.2017, the Seizure -cum-Contravention Report No.V -Seize/DCI/QA/57/2021 and
No.V -Seize/DCI/QA/58/2021, or otherwise in the context of the instant case.
vii. Grant any other relief deemed just and appropriate in the circumstances of the cas e.
viii. Grant order as to the costs of the petition".
2. The petition has been contested by the respondents Nos.2 and 3 by filing joint
parawise comments raising objections on the maintainability of the instant constitution
petition and on the ground that adjudication proceedings have already commenced before
Deputy Collector (Adjudication) Custom House, Quetta.
3. While supporting the petition, respondent No.4 has also submitted parawise
comments wherein respondent No.4 has contested the grounds agitated by respondents Nos.2
and 3 in their parawise comments.
4. Relevant facts of the case are that two consigtunents of Pistachios with shell (Iran
origin) were imported via land route by the petitioner in respect whereof Goods Declaration
(`GD') Form Nos. 6865 and 6877 were filled in for Customs clearance.
5. The GD No.6865 pertains to 1510 cartons of Pistachios with shell (Iran origin)
weighing 15100 kg and 200 bags of Pistachios with shell (Iran origin) weighing 9960 kg
while GD No.6877 pertains to Pistachios with shell (Iran origin) containing 2014 + 710
cartons total weighing 23146 kgs.
6. It reveals that the unit value of the above two consignments was declared by the
petitioner in GDs as 1.00 US$ per kg and it was assessed by the Appraising Officer of the
Collectorate of Customs Quetta as 1.32 US$ per kg on the basis whereof leviable custom
duty and taxes were paid by the petitioner.
7. After paying the leviable custom duty and taxes on the basis of 1.32 US$ per kg unit
value of the imported consignments and before release of the consignments from NLC Dry
Port Quetta, the same were seized by Directorate of Intelligence and Investigation Customs
Quetta at NLC Dry Port Quetta vide seizure report dated 07.02.2021 bearing signature of Mr.
Saleem Akhtar Jamali Intelligence Officer and Muhammad Zohaib Deputy Director for
alleged contravention of sections 2(s), 15, 16, 18 and 32(1&2) of the Customs Act, 1969
(hereinafter "the Act") read with SRO 566(I)/2005 dated 06.06.2005, SRO 499(I)/2009 dated
13.06.2009 read w ith section 3(1) of Import and Exports (Control) Act, 1950 punishable
under clauses 8, 14 and 89 of section 156(1) of the Act with the allegations that:
The petitioner in connivance with Customs Clearing Agent and Customs Appraising
Staff MCC Quetta did n ot consider the valuation Ruling No.1031 of 2017 dated 02.02.2017
in letter and spat and has caused huge loss to Government revenue/national exchequer to the
tune of Rs.2,501,037/ - excluding the paid custom duty and taxes,
Pistachios in shell has been dec lared and assessed at very low value,
MCC Quetta issued letter dated 03.12.2016 for determination of value of some Iran
origin commodities,
Valuation Ruling No.1307 of 2017 is in field since February 2017 for determining
value of Pistachios in shell,
Vide amendment in Finance Bill of 2019, the power to determine valuation of the
goods by the Collector (Collectorate of Customs) has been omitted in order to put an
end to mala fide practices going on at different border Dry Ports.
8. After hearing learned counsel for the petitioner, Mr. Ikhlaq Ahmed Shah, Advocate
representing the respondents, Rana Afsar Law Officer of Customs Department, Mr. Abid
Hussain Additional Director Customs Intelligence and Investigation, Mr. Amjad Hussain
Rajpar Deputy Director Cu stoms Intelligence and Investigation, Ms. Eesha Rahim Assistant
Director MCC (A&F) Quetta and Mr. Arshad Zubair Superintendent MCC (A&F) Quetta, we
have perused the available record and have gone through the relevant provisions of the Act
as well as releva nt Notifications and Valuation Rulings.
9. The Notification No.SRO 486(I)/2007 dated 09.06.2007 with Table, issued by
Government of Pakistan (Revenue Division) Central Board of Revenue in exercise of powers
conferred by 3(E) and 4 of the Act in supersessio n of Notification No.SRO.39(I) of 2005
dated 06.01.2005, authorizes the Officers of the Directorate General, Intelligence and
Investigation, Central Board of Revenue (Specified in column No.2 of the Table) to exercise
powers and discharge the duties of the Officers of Customs under specific provisions of the
Act the specified in column No.3 of the Table) and to invoke all the specified provisions
within the Act and Rules made thereunder if so warranted within the area of their respective
jurisdiction.
10. The above Notification does not authorize the Officers of the Directorate General,
Intelligence and Investigation Central Board of Revenue to exercise powers under sections
2(s), 15, 16, 18 and 32 (1 and 2) and under clauses 8, 14 and 89 of section 156(1) o f the Act
on the basis whereof seizure report dated 07.02.2021 was prepared.
11. It reveals that in GD Nos.6865 and 6877, the petitioner declared the unit value of the
imported Pistachios with shell (Iran origin) for paying custom duty and taxes as 1.00 US $ per
kg.
In exercise of powers under section 80 of the Act, the Customs Appraisement Staff
MCC Quetta assessed the unit value of the imported Pistachios with shell (Iran origin) for
levying custom duty and taxes as 1.32 US$ per kg.
12. Section 25 of the Act deals with valuation of the imported consignments on case to
case basis while section 25 -A of the Act pertains to the valuation of the imported or exported
goods as determined by the Directorate General of Customs Valuation.
13. According to Valuation Ruling No.1031 of 2017 dated 02.02.2017 issued by
Government of Pakistan Directorate General of Customs Valuation, Custom House Karachi
under section 25 -A of the Act, Pistachios with shell of (Iran origin) has to be assessed for
payment of Custom duty and taxes as 3.50 US$ per kg if imported by sea and if the same is
imported by land route, 15% margin in value is admissible which makes the assessed unit
value as 2.97 US$ per kg.
14. Admittedly, till 30.07.2019, Directorate General of Customs Valuation, Cust om
House Karachi as well as the Collector Customs in their respective Collectorate had the
authority to issue Valuation Rulings under section 25 -A of the Act.
In pursuance of powers conferred by section 25 -A of the Act, keeping in view the
hardships of th e importers in Balochistan and after consultation with the Directorate General
of Valuation, Custom House Karachi, the Collector (Collectorate of Customs) Custom House
Quetta issued Valuation Ruling dated 25.04.2017 whereby the unit value of the imported
Pistachios for assessment of custom duty and taxes was assessed as 1.2 US$ per kg.
15. Vide amendment in Finance Bill of 2019, the power to issue Valuation Ruling for the
imported/exported goods for assessment of custom duty and taxes by the Collectors
(Collectorate of Customs) was omitted.
16. Vide order dated 16.04.2019, the Collector MCC (Appraisement) Custom House
Quetta rescinded the Valuation Ruling dated 25.04.2017 issued by the Collector (Collectorate
of Customs) Custom House Quetta with stipulat ion that new unit value for Pistachios
imported via land route from Iran shall be decided by the Directorate General of Customs
Valuation, Custom House Karachi in consultation with all the stakeholders /importers of the
said items in terms of section 25 -A of the Act.
17. Instead of issuing directions to apply Valuation Ruling No.1031 of 2017 dated
02.02.2017 for the imported goods from Iran via land route, the Directorate General of
Customs Valuation, Custom House Karachi wrote letter dated 17.04.2019 to th e Collector of
Customs (Appraisement) Quetta which reads as follows:
"Subject: Assessment of goods imported via land route.
Please refer to MCC (Appraisement) Quetta's orders dated 16.04.2019 withdrawing
Valuation Ruling pertaining to goods imported via l and routes from Afghanistan and
Iran.
2. A mechanism is being devised to determine values of such items by the Director of
Valuation, Karachi in consultation with MCC (Appraisement) Quetta and the
members of local Valuation Committee which is expected to become available in the
near future. Meanwhile, it is advised to allow clearance of goods in terms of Section
25 of the Customs Act, 1969 (wherever applicable) including the use past 90 days
data".
18. It reveals that despite writing letters dated 15.06.20 19, 02.7.2019 and 04.01.2021, in
exercise of powers conferred under section 25 -A of the Act, the Directorate General of
Customs Valuation, Custom House, Karachi has not yet determined the unit price of the
Pistachios with shell (Iran origin) imported via l and route and according to the above
referred letter dated 17.04.2019 written by the Directorate General of Customs Valuation,
Custom House Karachi, the clearance of goods imported from Afghanistan and Iran via land
route has to be allowed in terms of sect ion 25 of the Act including the use of past 90 days
data.
19. In view of the above, the seizure of the imported consignments of Pistachios with
shell (Iran origin) of the petitioner by the Directorate of Intelligence and Investigation
Custom House Quetta a t NLC Dry Port Quetta in pursuance of Notification
No.SRO.486(I)/2007 dated 09.06.2007 on the pretext of non -applying Valuation Ruling
No.1031 of 2017 dated 02.02.2017 by the Customs Appraisement Staff MCC Quetta is held
illegal and unwarranted.
20. In pur suance of Notification No.SRO 486(I)/2007 dated 09.06.2007, the officers of
Directorate of Intelligence and Investigation Customs can intercept the goods which are
liable to confiscation due to mis -declaration of description of goods or mis -declaration in
respect of quality and quantity of the goods resulting in loss of revenue but they cannot
intercept the goods due to non -application or wrong application of a Valuation Ruling as it is
not within their domain and jurisdiction.
Reference in this regard is made to the case of Saadat Khan v. Federation of Pakistan,
2014 PTD 1615.
21. If the officers of the Directorate of Intelligence and Investigation Customs have any
information about wrong appraisal made by the staff of Customs Appraisement Department
and a re of the view that the appraisement officials are in collusion with the importer, they
can pass on the information to the senior officers in the hierarchy of appraisement for the
purpose of initiating proceedings under section 32 of the Act as the senior officers in the
hierarchy of appraisement can exercise all the powers and discharge all the duties conferred
or imposed upon any officer subordinate to them as provided under section 4 of the Act.
Reference in this regard is made to the judgment dated 30. 04.2014 passed by Sindh
High Court Karachi in the case of Shahzad Ahmed Corporation v. Federation of Pakistan,
2005 PTD 23, which has also been upheld by the Hon'ble Supreme Court vide order dated
31.01.2019 passed in Civil Appeal No.20/2015 which was file d by the Director, Directorate
General of Intelligence and Investigation FBR, Karachi.
For the above reasons, the constitution petition is accepted. The seizure of Pistachios
with shell (Iran origin) imported by the petitioner via land route from Iran vid e GD No.6865
(1510 cartons weighing 15100 kg plus 200 bags weighing 9960 kg) and GD No.6877 (2014
cartons plus 701 cartons total weighing 23146 kg) by the Directorate of Intelligence and
Investigation, Custom House Quetta is declared void and of no legal e ffect. The respondents
are directed to forthwith release the above imported consignments of Pistachios with shell
(Iran origin) in respect whereof the leviable custom duty and taxes have, already been paid
by the petitioner. The adjudication proceedings pe nding before Deputy Collector
(Adjudication) Custom House Quetta are quashed.
The above are the reasons of our short order dated 22.03.2021.
SA/90/Bal. Petition allowed.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.