2006 PLP 1876 (PTD)

UMAR ATA BANDIAL, J.

Learned counsel for the petitioner submits that the petitioner has imported goods whose declared value has been rejected by the respondents on the basis of a valuation ruling No.412,- dated 29-10-2005 issued by Directorate of Customs Valuation and PCA Karachi. Relying upon the provision of section 25 of the Customs Act, 1969 the petitioner has challenged the impugned rejection of the declared value by the Customs Authorities to be contrary to the express statutory provisions. The parawise comments by the respondents do not answer the crucial question about the limitation on their powers to reject declared value under section 25 of the Customs Act. The issue before the Court, therefore, is whether a pre-determined value attributed to the imported goods can form the basis of an assessment that rejects the declared value of such imported goods. The consensus of judicial authority is against such action being valid. Reference may be made to the judgment of this Court in Messrs S.T.B. International through Proprietor v. Collector of Customs, Lahore and 5 others (2006 PTD 232). Another extensive and elaborate consideration of the issue was done by the Hon'ble Sindh High Court in Messrs Pakistan Dry Battery Manufacturers Association through Vice-Chairman and another v. Federation of Pakistan through Secretary, Revenue Division, Islamabad and 9 others (2006 PTD 674). The relevant observations on the present question in that judgment are as follows:-- "Now, as noted above, there is judicial consensus that it is the function of the Customs Authorities to determine value of the imported consignment in terms of section. 25 of the Customs Act, 1969 and the rules made thereunder. There is no provision in the' Customs Act or its Rules where the Customs Authorities may make or have a fixed predetermined value of the imported consignment in the form of valuation advice issued by an Officer of the Customs Department. It matters not whether the valuation advice is made with inquiry or with the consent of the persons affected by the valuation. Apparently, the valuation advice goes contrary to the provision of section 25(1) of the Customs, Act, 1969 which provides that the transaction value to be customs value of imported good subject to the provisions of this section and the rules. If the transaction value as declared by the importer cannot be determined, the provisions of this section and rules provide an inbuilt mechanism for the Customs Authorities to determine the value of imported goods. Fixed valuation of the imported goods by way of valuation advice obtained by any means, cannot be made the basis for determining the value of imported goods each of which has to be dealt with and processed in accordance with section 25 of the Customs Act and the rules made thereunder." I, therefore, cannot, but reach conclusion that the valuation advice, dated 19-3-2005 which is the bone of contention between the parties may not be taken as conclusive evidence of valuation and final assessment be made of the imported dry battery cells by the Customs Authorities in accordance with the provision of section 25 of the Customs Act and rules after providing due opportunity to the importer to place material with regard to the value declared by it. There does not appear to be need for the Customs Authorities to review or revise valuation advice because it will be an exercise in futility as the reviewed or revised valuation advice again will not be the only basis for arriving at the valuation of the imported goods as its valuation still, will have to be made under section 25 of the Customs Act and the rules. This is the mandate of law which as to be fulfilled."

2. In the light of the legal position that is stated above, there is merit in this petition. It is, accordingly, held that the impugned valuation done by the respondent authorities on the basis of a valuation sending No.412, dated 29-10-2005 is violative of the method, means and procedure contemplated by section 25 of the Customs Act, 1969 and is, therefore, void and of no legal effect. The matter is, accordingly, remanded to the respondent, who shall reassess the imported goods in accordance with section 25 of the Act. Disposed of. M.B.A./S-96/L??????????????????????????????????????????????????????????????????????????????????? Order accordingly.