2008 PLP 1676 (PTD)

(ii) There was no delay in determination of value. After examination the goods were assessed on 22-2-2008, complainants filed review request on 23-2-2008 to the Principal Appraiser and to the Deputy Collector who after hearing the complainants' representative conveyed the decision electronically on the same date but they failed to lift the cargo till 28-2-2008. (iii) The respondent has acted within the ambit of law, a few days were spent in examination owing to improper stacking of the goods. (iv) Under section 80 of the Customs Act, the respondents have every right of check the declaration and payment of duty and taxes by importer. As the self-assessment made by the complainants was not in accordance with law, the goods were re-assessed in terms of section 80(3) ibid. (v) There was no delay on the part of the respondents, legitimate revenue was collected from the importer and the contents of the complaint are wrong and incorrect. If the respondents' action was considered unlawful, the complainants should have taken action under sections 25A(3), 25D and 193 of the Customs Act. (vi) As per PACCS record, and the request for second review, the decision taken by the Deputy Collector, was electronically transmitted to the complainants' inbox at 5-48 p.m. on 23-2-2008, and 28-2-2008 was the actually the date on which they had taken the printout of the message. (vii) The allegations against the officials of PACCS Collectorate were incorrect and the complaint was liable to be dismissed.

8. Messrs Karachi International Container Terminal (KICT) stated that the complaint was barred under section 9 of the Establishment of the Federal Tax Ombudsman Ordinance, 2000, because the agency was neither a Government Department nor collecting any tax on behalf of the Government. The complainants did not disclose any act of omission on the part of the KICT which could be termed as maladministration as defined under subsection (3) of section 2 of the Federal Tax Ombudsman Ordinance and may be disposed of under Regulation No.23(i), (ii) and (iv) of the Federal Tax Ombudsman Investigation and Disposal of Complaint's Regulations.

9. KICT further stated that (i) Complainants have stated that the delay in assessment and release of consignment was caused by the Collector of Customs and no maladministration has been attributed to the KICT. (ii) The President of Pakistan has decided that there was no law which obligated the port authorities to waive demurrage charges on the recommendations of the customs, KICT is working under the implementation agreement with the KPT to provide modern, efficient, competitive and non-discriminatory container handling services at Karachi Port for the shipping lines, the shippers, the consignees and other port users in a manner consistent with the requirements of the shipping trade. It was requested that the complaint against the KICT be dismissed.

10. During the hearing of the complaint, the learned counsel stated that the Goods Declaration was filed and duty and taxes were paid on the declared value on 9-2-2008 but the customs did not allow release of the goods. On the basis of Valuation Advice, dated 26-1-2008 already available with the Collectorate, the goods was assessed on 23-2-2008 and released on 28-2-2008. The assessment had been made on enhanced value i.e. the value determined by the Valuation Directorate under section 25A of the Customs Act. The learned counsel stated that the Valuation Ruling was illegal.

11. He argued that the declared value should have been accepted under subsection (1) of section 25 of the Customs Act but the Customs authorities did not examine the declared value under this subsection. Additionally, he argued, the Valuation Directorate did not determine the value after following the method as laid down under section 25 of the Act. He further stated that the Collector of Customs assessed the goods at the value of $2.5/kg while another valuation of $1.40/kg was also determined by the Valuation Department. It gave another ruling on 15-3-2008 under which the value was determined at $1.40/kg.

12. The learned counsel stated that the since the assessment was made at a much higher value, the complainants were entitled to refund of duty and taxes in excess of the duty and taxes assessable on the basis of declared value; secondly, the customs officials delayed the assessment unnecessarily with the result that the goods remained stored in the port area; thirdly, since the KICT works as a Terminal Operator under a Customs' license, it cannot release the goods without the direction of the Customs and if delay takes place they have no authority to recover demurrage charges from the importer. The goods were released only when the Customs so ordered, KICT had no right to recover the demurrage charges. Since the assessment was done by the Customs without valid reasons and legal basis the demurrage charges should be borne by the Customs.

13. The Deputy Collector of Customs replied that after the filing of GD on 9-2-2008 it was electronically sent to the examination staff the same day and the examination report was received electronically on 22-2-2008. He stated that he did not have the details about off loading of the container and its de-stuffing by the Customs staff and the reasons it took 13 days for the shed staff to carry out the examination and send the report.

14. He further stated that the Appraiser completed the assessment on the basis of the available value on 22-2-2008, the first and second review applications were made to the Principal Appraiser and the Deputy Collector same day who upheld the valuation and assessment was thus finalized on 23-2-2008. The differential of duty and taxes was paid by the importer on 28-2-2008 and clearance obtained. In spite of the fact that it took about 13 days for the shed staff to examine the goods and send the examination report, the Deputy Collector of Customs stated that delay did not take place due to the Customs staff.

15. The Deputy Director of Customs Valuation stated that the Collector of Customs had taken up the matter with the Directorate of Valuation on 3-12-2007 about the under-invoicing of Toys and furnished comprehensive information about the cost of the components' materials and fair values of Toys of different categories importer from different origins. Based on the report of the Collector of Customs and detailed investigation was taken in the hand and the representatives of the FPCCI, KCCI and other stakeholders were invited for meeting with the Valuation Department to sort out the matter. At this stage the importers' Association did not come forward and their opinions were not available. After completing the exercise 'the valuation Directorate issued Valuation Advice on 26-1-2008 under which the Plastic Toys Hand-operated were valued $3/kg and Battery-operated Toys at $3.50/kg imported from China/UAE.

16. Subsequently, after reconsideration on the request of the Associations from Lahore and Karachi, the values of Toys imported from China were determined at $ 1.40/kg to $1.70/kg for Hand-operated Toys, and $ 2/kg for Battery operated Toys. This Advice was circulated on 15-3-2008. The complainants did not approach the Valuation Department at any stage. With regard to this particular import, the matter was between the Collector of Customs add the importer and the Valuation Directorate was not involved in the individual assessment of consignments.

17. The contents of the complaint, the comments of the Deputy Director of Customs Valuation and Deputy Collector of Customs, PACCS, and statements made at the time of hearing have been examined. It transpires from the facts of the case that the values of Battery-operated Toys and Hand-operated Toys were determined by the Valuation Department taking into consideration the data of past assessments and cost of raw materials, and after discussion with the representatives of the KCCI and FPCI and other stakeholders. Valuation Advice was issued under section 25A of the Customs Act. The values of imports from China were revised on the representations of the Importers' Associations and under the direction of the Federal Board of Revenue. The Valuation Directorate has determined the assessable values, in accordance with law and the Collector has stated that the assessment has to be made in accordance with the Valuation Advices issued from time to time. The allegation of maladministration against the Valuation and Customs Departments is not established. However, the complainants have the option to file a review application before the Directorate-General of Customs Valuation under section 25D of the Customs Act. No satisfactory explanation has been given about 13 or 14 days taken by the Shed staff in the examination of goods. The protest of the importer for payment of Rs.25,650 to KICT for port/demurrage charges is justified.

18. It is recommended that the Federal Board of Revenue direct- (i) the Directorate-General of Customs Valuation to examine the review application and, after hearing the importer, decide the same on merits within thirty days of its receipt; (ii) the Collector of Customs to investigate into the reasons of delay of 14 days in the examination of consignment by the shed staff. (iii) In case the delay took place because of the customs examination, the Collector of Customs may take up the matter with the KICT to refund the excess amount of charges recovered from the importer. (iv) Action taken on-(i)(ii) and (iii) be reported to this office within forty-five days. C.M.A./53/FTO Order accordingly.