2008 PLP 1827 (PTD)

MUHAMMAD RAMZAN, MEMBR (TECHNICAL).

This judgment disposes of appeal No.44/CU/IB of 2008 filed by Messrs A to Z Trading Co., Naseem Market, 1st Floor, Bara Market Rawalpindi (hereinafter called the appellants) against the Order-in-Appeal No.90 of 2007, dated 28-11-2007 passed by the Collector of Customs, Sales Tax and Federal Excise (Appeals), Islamabad (hereinafter called the appellate authority).

2. The facts of the case according to the show-cause notice C. No. V.CUS. ADJ/ADC/ 139/2007/6456, dated 13-4-2007 are that the Deputy Director of Intelligence and Investigation, Customs and Excise, Islamabad received an information that the appellants had imported energy savers and got the same cleared at a lower value that fixed by the Directorate General of Customs, Valuation and P.C.A., Customs House, Karachi vide Valuation Ruling No.606, dated 14-6-2006 and value fixed for sales tax purposes by C.B.R. `vide S.R.O. 732(I) of 2006, dated 13-7-2007 by causing a huge revenue loss in violation of provisions of sections 25, 25A, 32(1)(2) of the Customs Act, 1969 and sections 3, 2(46)(d) and 6(1) of the Sales Tax Act, 1990 punishable under clauses (9) and (14) of section 156(1) of the Customs Act, 1969 and section 33(1)(5) of the Sales Tax Act, 1990. Additional Collector of Customs conducted the adjudication proceedings and upheld the allegations levelled in the show-cause notice through Order-in-Original No.28 of 2007, dated 21-7-2007. The appellants feeling aggrieved filed an appeal before the appellate authority who afforded opportunity of hearing to both the parties and rejected the appeal through the impugned Order-in-Appeal No.90 of 2007, dated 28-11-2007. The appellants again being aggrieved have filed this appeal mainly on the grounds that the impugned order is illegal, void and had been passed without applying independent judicial mind. It has been claimed that the appellants had imported energy savers from Dubai at the unit value of US $ 0.20 per piece as per commercial invoice and packing list both, dated 21-10-2006 and filed the Goods Declaration No.1494, dated 30-11-2006 declaring the invoice value as transaction value in terms of section 25(1) of the Customs Act, 1969 read with rule 113 of the Customs Rules, 2001. The Customs Authorities did not accept the invoice/transaction value declaration by the appellants and assessed the goods on the basis of evidence as per provision of section 25(5) of the Customs Act, 1969 @ US $ 0.47/pc for 11 watts, US $ 0.70/pc for 18 watts and US $ 0.84/pc for 23 watts on 14-11-2006 under the provisions of section 80 of the Customs Act, 1969. The Customs Authorities did no apply Valuation Ruling No.606, dated 14-6-2006 because of the simple reason that the Goods Declaration had been filed on 13-11-2006 and the valuation ruling being old by more than 90 days was not applicable because of the provisions of Rules 107-A of the Customs Rules, 2001. Moreover, this valuation ruling was patently wrong illegal because the same had been fixed without any reference from any concerned quarter and without applying the provisions of section 25 of the Customs Act, 1969 in the sequential order. The values through Valuation Ruling No.606, dated 14-6-2006 could also not be fixed under the provisions of section 25-A of the Customs Act, 1969 because the same was inserted and made applicable on a subsequent date i.e. 1-7-2006.

3. Main Abdul Ghaffar, Advocate appeared on behalf of the appellants and stated that the Honourable Lahore High Court through judgment in Writ Petition No.2415 of 2007 had set aside the Valuation Ruling No.606, dated 14-6-2006 in an identical case i.e., Writ Petition No.13516 of 2006 and therefore, the present appeal is to be accepted following the orders of the Honourable Lahore High Court. He further stated that the appellants had already requested the adjudicating authority as mentioned in para. 3 of the impugned Order-in-Original No.28 of 2007, dated 21-7-2007, that the matter may be held in abeyance till decision of the fate of Valuation Ruling No.606, dated 14-6-2006 by the Honourable Lahore High Court Lahore. The Advocate requested that the appeal may be accepted and the case may be remanded to Customs Authorities.

4. Mr. Imran Chaudhry, Deputy Collector/(D.R.) along with Agha Sabir, Senior Intelligence Office appeared on behalf of the respondents and stated that the appellants had declared value as US $ 0.20 for all categories of energy savers i.e. 11 watts, 18 watts and 23 watts was a deliberate .incorrect declaration as the same value cannot be the transaction value for energy savers of different watts. The representative of the respondents also claimed that the judgment of the Honourable Lahore High Court is not relevant to the instant case because of the reason that the judgment pertains to cases of other importers of different goods and the present case has never been a subject-matter of petition before the Honourable Lahore High Court. They also produced copy of S.R.O. No.732(I)/2006, dated 13th July, 2006 and claimed that the fixation of value by the Central Board of Revenue had not been challenged in the Honourable High Court .and therefore, the value fixed by the. C.B.R. in exercise of the powers conferred under the First Proviso to clause (46) of section 2 of the Sales Tax Act, 1990 were applicable in the instant case.

5. I have anxiously examined the record of the case and heard both the parties at length. It is an admitted fact that the appellants had made a request to the adjudicating authority as incorporated in para. 3 of the Order-in-Original No.28 of 2007, dated 21-7-2007 that the proceedings may be held in abeyance till decisions of the fate of Valuation Ruling No.606, dated 14-6-2006 by the Honourable Lahore High Court Lahore. The appellant have now produced a copy of judgment in Writ Petition No.2415 of 2007 also applicable in case of Writ Petition No.13516 of 2006 where under the appellants namely Friends Associates, Ferozepur Road, Lahore through its proprietor Chaudhry Ali Akbar had challenged the vires of Valuation Ruling No.606, dated 14-6-2006. The Honourable High Court in the said judgment has remanded back a large number of petitions through this order to the Customs Authorities with direction to re-appraise the value after adoption of the sequential order provided in section 25 and for issuance of fresh valuation advices, if need be, for the relevant period. The respondents have failed to advance any convincing arguments as to why this judgment of the Honourable High Court be, not followed in the instant appeal except that it has been claimed that the appellants in the instant appeal had not filed any writ petition before the Honourable High Court and the judgment in an identical case is not applicable to the present appeal as it was not a subject-matter of any petition. It is therefore, held that the impugned order to the extent of fixation of. value through Valuation Advice No.606, dated 14-6-2006 is not in consonance with the judgment of the Honourable High Court referred to above and is therefore, set aside as far as the fixation of values for the purposes of assessment of Customs Duties is concerned and the case is remanded back to the Director-General of Customs Valuation for de novo consideration and decision by strictly following the judgment of the Lahore High Court in Writ Petition No.2415 of 2007. As far as the levy of sales tax and consequential charging of withholding tax is concerned, the appellants had neither challenged the vires of S.R.O. No.732(I) of 2006, dated 13th July, 2006 before the Honourable Lahore High Court nor have made this notification a subject-matter of the instant appeal. Therefore, the C&F value prescribed under Notification No.S.R.O. No.732(I) of 2006, dated 13-7-2006 were admittedly applicable in the case of appellants and their appeal against the levy of sales tax and withholding tax under the impugned orders is found to be without any merit and is rejected accordingly.

6. In view of above stated discussion and findings, the appeal is accepted only to the extent of levy of Customs Duties under the impugned order by following the Valuation Ruling No.606, dated 14-6-2006 and the case is remanded to Director-General Customs Valuation, Karachi for de novo fixation of value or issuance of a fresh valuation advice in the light of the judgment of the Honourable High Court Lahore referred to above. The rest of the impugned order is upheld.

7. Announced.

8. Parties may be informed accordingly. C.M.A./73/Tax(Trib.) Order accordingly.