2014 PLP 1182 (PTD)

(i) The complaint was not filed by an aggrieved person as required under section 9(1) of the Ordinance; (ii) no valid authorization for representing the complainant was available with the advocate as the Vakalat Nama and the Affidavit contained cuttings; and (iii) the complaint involved determination of value in respect of which legal remedy of appeal was available in the Customs Act, 1969 (hereinafter referred to as the Act).

3. The parties were afforded opportunity of hearing on 2-12-2013, 11-12-2013, 1-1-2014 and 16-1-2014. During hearing, the AR contended that no Show-Cause Notice (SCN) was served on the complainant before issuance of Order-in-Original; that only one hearing notice was received but it allowed little time for making necessary preparations to defend the case in adjudicatory process at such a short notice. Besides, the goods were assessed and released on 16-1-2010 and impugned Order-in-Original was passed subsequently without quoting any section of the Act. The Customs authorities did not apply any relevant Valuation Ruling and that their request dated 8-6-2013 to reopen the case in terms of section 195 of the Act, in order to examine the legality and propriety of the impugned Order-in-Original was unlawfully turned down without observing due process. It was also contended that the Deputy Collector was not empowered under section 4 of the Act to work as Collector to decline request made to the Collector under section 195 of the Act. So, refusal to accept the complainant's request by the Deputy Collector fell outside his jurisdiction. The AR also contended that Order-in-Original did not mention section 32(3A) and its valuation issue could not be raised after release of imported goods.

4. Replying to the averments of the AR, the DR stated that the contention that SCN was not served on the complainant was factually incorrect as the complainant had replied vide his letter dated 2-4-2013 mentioning the short levied amount of duty and taxes, which clearly indicated that the complainant had picked up the amount from the SCN. He further said that a letter, addressed to Assistant Collector, Adjudication, Group-III dated 2-4-2013, was on record, wherein short levied amount of Rs.48,476.76 against CRN No. 1-HC-1266418 dated 5-1-2010 was mentioned. As the said amount was only mentioned in the SCN and not in the hearing notices dated 25-3-2013 and 27-2-2013, it was evident that the amount was picked up by the complainant for the SCN No.MCC/Misc/26/84-III/08/PT-III dated 26-12-2012. The computer printout containing the details of short levied amount had been annexed with the complaint. As this was a Customs document which was attached with SCN, it also proved that the SCN was received by the complainant. The DR also contended that the SCN was not time barred as it was issued on 26-12-2012 under sections 32 and 32(3A) where the time limit was 05 years.

5. Moreover, the DR contended that short levied amount could be recovered within 5 years from the date of detection as per section 32(5)(e) read with sections 32 and 32(3A) of the Act. It was further contended that action to reopen a case under section 195 of the Customs Act, 1969 was a prerogative of the Collector and the FBR. As the application of the complainant did not provide sufficient justification to reopen the case, the Deputy Collector informed the complainant, with the verbal approval of the Collector that the case did not merit reopening. "In such view of the facts there was no maladministration involved in this case" the DR said.

6. The complaint has been examined in the light of written and oral submissions of the parties and documents available on record. First of all, the jurisdiction related objection of the department needs to be addressed. The law requires complaints to be made by aggrieved person as per sections 9(1) and 10(1) of the Ordinance. The DR's contention that the complaint was not filed by an aggrieved person is not valid as the complaint is duly singed by the complainant and the Advocate who had a Vakalat Nama and an Affidavit issued by the complainant authorizing him to represent him. However, the Vakalat Nama in favour of the Advocate originally mentioned, the complainant name as 'Saniha Ashraf' which was crossed and replaced by the name 'Abdul Latif'. Similarly, the Affidavit originally carried the name of Mr. Hanif Chaudhry which was crossed and substituted by 'Latif Chaudhry' as a Director of the company.

7. The matter was referred to Mr. Sarfraz Bashir, President Sialkot Chamber of Commerce and Industry and son of late Chaudhry Bashir Ahmad after whose name the complainant company was founded. He telephonically confirmed that Affidavit and Vakalat Nama were genuinely signed by Mr. Abdul Latif, as Director of the Company. Mr. Younas, Advisor of the company also rang up to confirm the genuineness of the documents and Mr. Abdul Latif's signatures. In view of the confirmation, the Deptt's objection to cuttings/substitution of the names was not valid. The Deptt's objection that the complainant is not filed by an aggrieved person is also not maintainable in view of confirmation of Affidavit and Vakalat Nama as genuine.

8. The DR's contention that mention of the short-levied amount in a letter of the complainant and copy of the computer print out attached with the complaint were evidence of receipt of SCN by the complainant, do not constitute conclusive evidence of receipt of the SCN. The conclusive evidence would have been either postal receipt or courier service. So, the Customs should have produced such receipts if these were available with them to prove service of SCN in terms of section 215 of the Act. In absence of such a primary evidence, the contentions of the DR cannot be taken as a conclusive evidence of receipt of SCN by the complainant. It appears that the address of the complainant was not complete as 'Sialkot' is missing in the address. That is why the SCN did not reach the complainant.

9. As regards the DR's contention that rejection of the complainant's request for reopening the case was conveyed on verbal approval of the Collector, the noting portion of the Customs relevant file was perused. There was nothing on record to show that the Collector had examined the merits of the complainant's request for reopening the case and authorized its rejection. If merits of the request for reopening were verbally discussed with the Collector who had given verbal orders for its rejection, this fact should have been recorded in writing on the note sheet side of the relevant file as evidence. As the file was found silent in this regard, the Customs contention that the Collector had orally authorized its rejection is not tenable. How can the Collector give order, if the file does not show reference of the matter to him? And if the matter was personally discussed by any officer with the Collector, he should have recorded the discussion in writing and the verbal orders of the Collector on the note sheet side of the file. Does it not constitute inefficiency on the part of officer concerned?

10. Non-application of the Valuation Rulings at the time of appraisement is another failure of the appraisement staff. The appraisement system followed by the Appraisement Collectorates is based on self-assessment which is cross-checked by the Customs experts known as "Appraisers" to point out any deficiency in declarations made by the importers/clearing agents in order to forestall post clearance disputes of short-levies as is involved in this case. Application of Valuation Rulings is therefore, as much the obligation of importers/ clearing agents as that of the Appraisement Staff. If the Appraiser cannot detect non application of a Valuation Ruling in a Goods Declaration, how can the Appraisement staff detect evasions indulged in avoidance of Valuation Rulings? Findings:

11. In such view of the facts, acts of omission and commission by the Customs staff constitute maladministration in terms of section 2(3) of the Ordinance. Recommendations:

12. FBR to direct the Collector of Customs, MCC Appraisement (East):-- (i) to reopen the case to examine the propriety and legality of the Order-in-Original No.276/2013 dated 23-4-2013; (ii) to provide opportunity of hearing to the complainant and decide the matter, as per law; and (iii) report compliance within 45 days. JJK/24/FTO Order accordingly.