2023 P T D 1695
[Balochistan High Court]
Before Abdullah Baloch and Iqbal Ahmed Kasi, JJ
The DIRECTOR DIRECTORATE OF INTELLIGENCE AND INVESTIGATION
CUSTOMS FBR, QUETTA through Deputy Director and others
Versus
Messrs INTERNATIONAL BUSINESS HUB and others
Customs References Applications Nos.15 to 66 of 2023, decided on 31st May, 2023.
Customs Act (IV of 1969) ---
----Ss.25- A, 29 & 196--- Valuation of goods ---Jurisdiction ---Tare weight ---Determination ---
Release of goods ---Dispute was with regard to valuation of goods imported by respondents /
importers, after the same had been released to respondents / importers ---Validity ---Collector
and Director both were equally competent under S. 25- A of Customs Act, 1969, to determine
customs value independently of each other without being bound by each other's determination--- Rightful course of action was to have the conflict between the two customs
values resolved under S. 25- A (3) of Customs Act, 1969, by Director General Valuation,
which was not done by him on his own motion after the Collector endorsed copy of valuation
of goods imported to him ---It was Director General Valuation who was required to resolve
the conflict under S.25 -A(3) of Customs Act, 1969, but he did not opt to do so, thereby
validating Valuation Ruling of Collector, which was later / subsequent determination in time -
--Clearance of goods was made on declared value in accordance with the directions of Director General Valuation ---Proposed application of valuation ruling by Directorate of
Intelligence was not only unjustified but also tantamount to undermining exercise of statutory powers of Director General Valuation--- Application of percentage of tare weight on
goods which had already been cleared for home consumption was in violation of provision of S. 29 of Customs Act, 1969, which had restricted any amendment of any sort in Goods Declaration once the goods had been removed from customs area ---No amendment under S.
29 of Customs Act, 1969, in goods declaration which had been cleared could be made on the basis of presumptions ---High Court declined to interfere in judgment passed by Customs
Appellate Tribunal, as percentage of tare weight claimed by authorities was higher and excessive and that too without providing any reasoning of application of proposed percentage of 2% and 7% respectively--- Reference was dismissed, in circumstances.
Barrister Iftikhar Raza Khan for Appellant.
Date of hearing: 18th May, 2023.
ORDER
IQBAL AHMED KASI, J. ----Since Customs References Nos. 15 to 66 of 2023 are
arising out of the same Order -In-Original and judgment, therefore, are being disposed of
through this common order.
2. Through these references, applicant has challenged the legality/validity of the Order -
In-Original dated 04.02.2023 ('the impugned Order -In-Original') passed by the Collectorate
of Customs (Adjudication- I) Karachi ('the Adjudicating Authority') and judgment dated
22.11.2022 ('the impugned judgment') passed by the Custom Appellate Tribunal Bench- III,
Karachi ('the Appellate Tribunal).
3. The brief facts giving rise to the instant appeals are that the Directorate of
Intelligence and Investigation Customs, Quetta, upon receipt of an information that some
importers in connivance with their clearing agents are involved in huge mis -declaration in
value and weight of pistachio imported from Iran and are causing colossal loss to the Government Exchequer in terms of duty and taxes. A team of officers and officials was constituted to scrutinize the clearance data of Iranian origin pistachio and during scrutiny of records it transpired that the private respondents, imported and got cleared consignments of pistachio of Iranian origin at value US$ 1.32/kg as against value of US$ 2.97/kg after 15% discount given on the basis of difference of freight from Iran as determined vide Valuation Ruling No.1031/2017 dated 02.02.2017, issued by the Directorate General of Customs Valuation, Karachi and also got undue/abnormal favour in weight in terms of tare of cartons/bags.
4. The appellant filed a contravention case/application against the private respondents
for undervaluation and excessive tare weight on import of pistachio from Iran during the period 30.12.2019 till 06.01.2020 by the Directorate of (I&I), Quetta, before the
Adjudicating Authority, who after issuing Show -Cause Notices, and hearing the parties, vide
impugned Order -in-Original, held that the value assessed by Appraisement Collectorate i.e.
US$ 1.32/Kg was fair, but tare weight was undue / abnormal.
5. Being aggrieved of the Order -In-Original, passed by the Adjudicating Authority, the
appellants as well as private respondents, challenged the same before the Appellate Tribunal, who while disagreeing with the Order -in-Original, held that value assessed by Appraisement
Collectorate was fair and also that tare weight could not be ascertained at this stage since goods had already been cleared and were physically not present, hence these Customs References.
6. Learned counsel for the appellant contended that the learned Appellate Tribunal while
deciding the matter has placed reliance on values of pistachio determined by Appraisement Collectorate, vide its letter C.No.01- VAL(LVC)/2020 -15/26968 -74 dated 25.04.2017,
whereas, the values of pistachio had already been determined and notified vide Valuation Ruling No.1031/2017 dated 02.02.2017; that the Appellate Tribunal failed to appreciate the fact that dispute of value had never been referred for resolution to Di rector General of
Valuation, which is violation of Section 25D of the Customs Act, 1969 ('the Act of 1969'), which provides that in case of dispute of value determined by Collector of Customs and Director of Customs Valuation, the matter is to be referred to Director General of Valuation
through revision petition, within thirty days of determination of value; that the learned
Appellate Tribunal in its judgment relied on Section 29 of the Act of 1969 to disallow amendment in electronic Goods Declarations (GDs), post clearance to justify abnormal/undue tare weight on impugned consignments of pistachios, further, has mis -
constructed the law and travelled beyond the scope of impugned Show -Cause Notice and
Contravention Reports, which have invoked Section 32 of the Act of 1969, which has no
relevance, whatsoever, to Section 29 of the Act of 1969; that the Appellate Tribunal, wrongly
relied on the judgments of the Hon'ble Balochistan High Court in C.P. No.198/2021 and C.P. No.1062/2021, as the same were on totally different footings as compared to the instant case. Lastly, learned counsel for the appellant prayed that the instant Custom References may be allowed, the impugned judgment passed by the Appellate Tribunal Karachi dated 22.11.2022 and impugned Order -In-Original, passed by the Adjudicating Authority may please be set
aside and the application of Valuating Ruling No. 1031/2017, dated 02.02.2017, on imports of pistachio may be upheld along with indicated abnormal / undue tare weight and orders for recovery of short -levied duties and taxes may also be given.
7. We have heard the learned counsel for the appellant, perused the available record,
gone through the relevant provision of the Act the of 1969, as well as relevant notification and Valuation Rulings.
8. The main allegation contained in the show cause notices are of two types, which are
as under:
i) The respondents by declaring and getting assessment of pistachios with shell from
Iran @ US$ 1.32/kg had caused huge loss to the national exchequer in the form of
short payment of duties and taxes.
ii) The percentage of tare weight availed by the importers on consignments of pistachios up to 12% and up to 36% is clearly excessive and abnormal.
9. As far as the first part of the allegation contained in the show cause notices, is
concerned, prior to the instant consignments two other consignments were also declared @ 1.32/kg, but the same were detained by the Customs Intelligence, Quetta. The importers of above referred consignments, filed C.P. No. 198 of 2021, titled as M/s. Meerab Enterprises through authorized attorney v. the Federation of Pakistan, through Secretary Federal Board of Revenue and three others and another C.P. No.1062 of 2021, assailing the notification import valuation report No. 1031 of 2017, dated 02.02.2017, wherein, this Court, vide order dated 6th April, 2021, allowed the petition in the following manner:
"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, vide 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, Customs House Quetta, is declared void and of no legal effect. The respondent are directed to forthwith release the above imported consign ments of pistachio with shell (Iran Origin) in respect whereof the leviable
custom duty and taxes have already been paid by the petitioner. The adjudication proceeding pending before Deputy Commissioner (adjudicating Customs House) are
quashed."
10. The Directorate of I&I challenged the judgments of this Court in the Hon'ble Supreme
Court of Pakistan. The Apex Court, dismissed the CPLAs, filed by Directorate of I&I, vide
order dated 25.03.2022 (CPLA No.6075 of 2021 and CPLA No.3164 of 2021) inter alia as follows:
"The judgment of High Court is well reasoned, correctly interprets the relevant principles of law applies such principles to the facts and circumstances of the cases. We are not persuaded to take a view different from the one taken by the High Court. No ground for leave to appeal is made out. These petitions being without merit are accordingly dismissed."
11. For the purpose of settlement of valuation dispute revolving around determination of
customs Value under Section 25A by Collector, the two Questions of law i.e., 7 and 8 framed in the aforesaid CPLAs are pertinent which are reproduced herein below:
"Q7: Whether the Hon'ble Court Balochistan Quetta vide its impugned Order has erred in
law by not taking into account the matter of law that the value of pistachio of Iran origin, via land rout was already determined and such the subsequent Re -
determination of the value of same goods by Respondent No.2 is contrary to the spirit of Section 25A of the Customs Act, 1969?
Q8: Whether the Hon'ble High Court of Balochistan, Quetta, vide its impugned Order has
erred in law by not taking into account point of law that the Respondent No.2 has acted contrary to the provisions of law specially Section 25- A of the Customs Act,
1969 by re -determining the value of pistachios of Iran Origin, via land rout when the
value of the identical goods was already determined by the Directorate General of Valuation, Karachi which is specialized agency for the valuation determination?"
12. The gist of above two points of law as to whether the Directorate is authorized to re -
determine the custom value of goods once it has been determined by the Director Valuation? We are constrained to observe that the head of Directorate of I&I is utterly clueless and positively ignorant of provisions of Section 25- A, which otherwise are pretty plan and
straightforward. Nowhere does Section 25- A, vest preference of Director Valuation over
Collector. Neither do the provisions of Section 25- A prohibits re -determination of Customs
Value of goods either by Collector or Director. Both the officers are equally competent under Section 25- A to determine Customs value independently of each other without being bound
by each other's determination. The rightful course of action was to have the conflict between the two Customs values resolved under subsection (3) of Section 25 -A by DG, Valuation
which was not done by the DG Valuation on his own motion after Collector Quetta endorsed copy of Valuation of Pistachios dated 25.04.2017 to him. It was the DG Valuation who was
required to resolve the conflict under Section 25- A(3) but he did not opt to do so, thereby,
validating Collector's VRs dated 25.04.2017, being later / subsequent determination in time. Since it is well established fact that clearance of Pistachios at MCC Quetta was being made on the declared value in accordance with the directions of DG Valuation, the proposed application of the Valuation Ruling No.1031/2017 dated 02.02.2017, by the Directorate of Intelligence of Quetta, is not only highly unjustified, but also tantamount to undermining the
exercise of statuary powers by DG Valuation.
13. It is worthwhile to mention here that the appellant assailed the findings of
adjudicating authority before the Appellate Tribunal which was also dismissed through the
impugned judgment, but the Customs not filed any appeal before this Court, thus, in view of the above forging reasons, we are of the firm view that the findings of Adjudicating Authority and Customs Appellate Tribunal are legal and no interference is required by this Court.
14. As far as the second allegation contained in the Show -Cause Notice is concerned.
Critical perusal of the observation made by the Adjudicating Authority in the finding would reveal that he has admitted that no basis, whatsoever, has been provided by the Directorate for calculating the tare weight of the consignments in question, we noted that the findings of adjudicating officer in holding claiming 12% and 36% tare weight as excessive and abnormal, is not based on any concrete evidence, but mere presumption. The adjudicating authority has miserably failed to divulge any criteria to verify the tare weight of the impugned consignments and application of the tare weight as 2% and 7% without any evidence in this regard is neither justified nor acceptable. Further, application of percentage of tare weight on goods which have already been cleared from home consumption is a clear violation of provision of Section 29 of the Act of 1969, which restricts any amendment of any sort in GDs, once the goods have been removed from the Customs area. The provision of Section 29 of the Act, 1969 are very much clear and no amendment in GDs which have been cleared from home consumption could be made on the basis of presumption that percentage of tare weight claimed by the appellant were higher and excessive and that too without providing any reasoning of application of the purposed percentage of 2% and 7%
respectively.
15. We also observed that the adjudicating authority has travelled beyond the scope of
Show -Cause Notices by writing a letter bearing No.V -8(593)CUS/Adj/2021/17506- 8, dated
12.01.2022, to determine the weight of some other similar consignments for verification of tare weight of impugned goods. It is settled principle of law that the facts of one case can be applied to another case, especially in the circumstances when the Collectorate had already submitted that tare weight varies from consignment to consignment and the tare weight of future consignment could not be applied to such consignments which have already been released from home consumption.
16. The learned Appellate Tribunal well discussed all the facts and the relevant laws,
therefore, we are of the considered view that the findings of the Appellate Tribunal are based on settled law and facts and there is no room to interfere in the same.
Thus, in view of the above, the Customs Reference Nos. 15 to 66 of 2023 are
dismissed in limine.
MH/147/Bal. Reference 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.
Related judgments
Burden of Proof in case of non custom paid vehicle
PLJ 2009 Quetta 76 (DB) · Balochistan High Court · 2009
Messrs World Trade Enterprises, Customs C&F Agents and others V. Customs Appellate Tribunal Bench-I and others,
PTD 2017 1472 · Balochistan High Court · 2017
Collector of Customs, through Additional Collector of Customs V. Messrs Haji Ballow Khan and another,
PTD 2015 1080 · Balochistan High Court · 2015
Commissioner Inland Revenue Zone-II, Regional Tax Office, Quetta V. Deenar Industries (Pvt.) Ltd. and another,
PTD 2026 329 · Balochistan High Court · 2026
Collector, Model Customs Collectorate, Custom House, Gawadar at Gaddani V. Messrs Byco Petroleum Pakistan Limited and another,
PTD 2025 112 · Balochistan High Court · 2025