2005 PLP 186 (PTD)

SABIHUDDIN AHMED, J.

In both these petitions orders of the Federal Government passed in revisional jurisdiction under the Customs Act, dated 9-1-1994 premised upon similar facts and identical questions of law have been called in question. Both the petitioners had imported different quantities of dioctyphthalat (DOP) from U.S.A. falling under Import Customs Tariff (I.C.T.) Heading 2917.3200 in bulk per the same vessel Stolt-Accord, which arrived in Karachi and general manifest was filed on April 3, 1991. At the time of arrival of the vessel assessment of the custom duties under section 25 of the Customs Act was required to be paid on the basis of the assessment of value undertaken by an international company of pre-shipment inspectors engaged in the business of pre-shipment inspection of goods known as COTECNA in terms of the Inspection and valuation of Imported Goods Rules 1990 (1990 Rule). The valuation made by COTECNA however, could be rejected if evidence of higher value was available with the Custom Authorities in terms of the proviso to Rule 9 of the said Rules.

2. In C.P. No. 520 of 1994 the relevant facts appear to be that upon arrival of the goods the petitioners filed Bills of Entry for in -bonding the goods which could the released after assessment and payment of duty. COTECNA submitted their prevailing price report (PP) showing the value of the goods as $ 800 per metric tonne. Duty was assessed on the basis of the aforesaid value which was paid and the goods were released. Subsequently however, a show-cause notice was issued on 28-9-1991 stating that the goods in question were liable to be assessed under section 25-B of the Customs Act at the import tariff price (ITP) of $ 1165 per metric tonne in terms of S.R.O. No. 252 (K.E./91), dated 14-7-1991. The petitioners were required to show why an amount of $ 7,672,221 should not be recovered from them. The petitioner contested the notice but the Deputy Controller of Custom Valuation maintained that there was short levy of the amount mentioned above. Appellate and revisional proceedings against the said order also failed.

3. The facts of C.P. No. 446 of 1994 are slightly different inasmuch as though. according to the invoice filed by the petitioner the goods were imported at the rate of US $ 900 per metric tonne, the duties were assessed at the rate of $ 800 in terms of the prevailing price report of COTECNA. Moreover while four ex-bond Bills of Entries covering the consignment of about 400 metric tonnes were filed on 8-4-1991 duty in respect whereof was assessed on 10-7-1991 and paid on the same date. As regards the remaining consignment of 645 metric tonnes such Bill of Entry was filed only on 31-7-1991 and duty was assessed and paid thereafter.

4. Basically Mr. Khalid Anwar appearing for the petitioner in C.P.No. 520 of 1994 argued that the 1990 Rules had been framed for the purpose of valuation of imported goods for the purpose of payment of custom duty. Where valuation had been duly made under those Rules and duties had been paid, the Respondents had no authority to claim payment on the basis of I.T.P. fixed under section 25-B of the Act as it stood at the relevant time. Indeed learned counsel was conscious of the fact that the aforesaid provision as it stood then given a more or less unfettered discretion to the CBR or an officer authorized by it to fix the value of dutiable goods through a notification in the official Gazette. Nevertheless, learned counsel contended that the notification referred to in the show-cause notice and the impugned order though purported to be dated 14th July, 1991 was only published in the Gazette on 5th August, 1991 and could not be given retrospective effect.

5. The contention indeed appears to be sound inasmuch as it is well-settled that notification imposing liabilities can never be given retrospective effect. Nevertheless, a question could arise whether it would become effective from the date of its issuance (which appears to be 14th July, 1991) or the date of its appearance in the official Gazette, dated 5th August, 1991. In support of his contention that the latter date would be operative learned counsel relied upon pronouncements of the Honourable Supreme Court in Province of East Pakistan v. Hassan Askari (PLD 1971 SC 82) and Muhammad Ishaq v. Chief Administrator Auqaf (PLD 1977 SC 639). In the first case it was urged that the mere production of a notification was sufficient proof of the fact that it had been published. Repelling the contention it was held that it was not only necessary to prove that the notification was inserted in the official Gazette but there' should also be proof that it was published in the manner usually adopted for publishing such documents. In the second case, their Lordships went so far as to hold that when proceedings could be preferred within 30 days of the publication of notification limitation would run only from the date when the notification was brought to the notice of the general public through its delivery to book depots. In any event we are clearly of the view that when a statute provides for exception to the general rules and allows impairment of rights of parties through executive action all conditions for its effectiveness must be strictly made and the I.T.P. under section 25-B could only become operative after the notification was duly published. Indeed when something different was considered expedient by the legislature, a specific provision by way of subsection (3) to section 25-B was added to stipulate that a notification would become effective from the date specified therein notwithstanding its, publication. However, this provision did not exist at the relevant time.

6. Raja Muhammad Iqbal learned counsel for Revenue Authorities however, placed before us an earlier Notification No.216 (KE/91) purportedly issued on 22nd May, 1991, whereby the I.T.P of the same goods was also fixed at US $ 1165 per metric tonne. This Notification was published in the Gazette, dated 4th July, 1991 and was operative on the date the goods were ex-bonded. Learned counsel argued that in any event since the petitioners were liable to pay duty exactly at the same rate, it would be highly unjust and contrary to public Interest to interfere in the exercise of Constitutional jurisdiction merely on the ground that a wrong notification was mentioned in the impugned order. To this extent we are inclined to agree with learned counsel for the respondent.

7. Mr. Khalid Anwar however, responded by contending that the petitioner had applied for ex-bonding of goods on May 29, 1991 and were ready and willing to pay all duties and taxes upon assessment. Nevertheless, the respondents unduly delayed such assessment and could not be allowed to claim a premium over their own negligence. Indeed under the 1990 Rules, assessments were to be made on the basis o: valuation contained in the PPR issued by the COTECNA unless evidence of higher value was available with the Custom Authorities. Therefore, in case such evidence existed the Custom Authorities were required to bring it to the notice of the petitioner and make an assessment after giving him an opportunity to rebut the same. There could be absolutely no-justification for delaying assessment, which had to be made almost mechanically. Indeed we find a great deal of force in the contention of the learned counsel for the petitioners and are clearly of the view that the I.T.P. determined under section 25-B could not apply to consignments regarding which Bills of Entry for ex-bonding were filed long before publications of the notifications.

8. Raja Muhammad Iqbal then appeared to contend that even if the valuation under section 25-B was inapplicable there was sufficient evidence available with the Custom Authorities to show that the purchase price for assessment of duty under section 25 was much higher than the one contained in the report of COTECNA and duty could be assessed at such value under the 1990 Rules. In the first instance-tins contention may not be strictly relevant inasmuch as the petitioners were required to pay duty in terms of I.T.P. determined under section 25-B and not on the basis of evidence of higher import price under 1990 Rules. In any event under the Rules assessment is to be made on the basis of valuation made by COTECNA provided evidence as to higher value is available. It is well-settled that a proviso is in the nature of an exception to the general rules and ought to be strictly construed. Moreover the rule 'making authority has circumscribed the authority of Custom officers by using the words "evidence". It may therefore, not be sufficient to-discard the P.P.R. merely on the basis of the opinion or best judgment of such` officers. This pre-supposes existence of some tangible material, to indicate a higher value, and an opportunity to the party against whom it is proposed to be used to rebut it. Even principles of natural justice require that when an action detrimental to the rights of a party in deviation of normal requirements based on evidence is to be taken such party must be given an opportunity of confronting that evidence. Admittedly this was not done. It may be added that the material claimed to be considered by the Respondents consists of declared value of goods by various importers representing a high degree of difference and- one cannot overlook that not merely under invoicing but also over invoicing is resorted to for different ulterior motives. Therefore, the, above Contention must also fail.

9. For the aforesaid reasons, we came to the conclusion that they goods in respect whereof ex-bonding Bills of Entry were filed by the petitioners before actual publication and the gazette containing I.T.P. fixed under section 25-B of the Custom Act on 4th July, 1991 were liable to duty only at the rate assessed in the P.P.R. of COTECNA in respect to the consignments. In C.P. No. 446 of 1994 where such Bills of Entry were filed after the publication in the gazette, duties would be payable at the rates specified therein. These are our reasons for passing the short order, dated 27-8-2004. S.A.K./T-14/K Order accordingly.