Goods declaration

Appellate Tribunal Inland Revenue ('the Tribunal') set-aside the orders passed by the forums below against the importer (respondent)

Submission of the Applicant / Collectorate was that the Tribunal had ignored the information gathered from (purported) official website (www.icegate.gov.in) which provided the actual transactional value of the goods-in-question

Validity

Section 25-A of the Customs Act, 1969 ('the Act, 1969') confers a power to determine the customs value and starts with a non-obstante clause and provides that notwithstanding the provisions contained in S. 25 of the Act, 1969, the Collector of Customs on his own motion, or the Director of Customs Valuation [on his own motion or] on a reference made to him by any person [or an officer of Customs], may determine the customs value of any goods or category of goods imported into or exported out of Pakistan, after following the methods laid down in S. 25 of the Act, 1969, whichever is applicable

It is clear that the provision of S. 25A of the Act, 1969 would have an overriding effect while applying the values determined under it and it is only the methods of S. 25 of the Act, 1969 which are to be followed; but in no manner any assessment can be made under S.25 of the Act, 1969 when there is a Valuation Ruling under S. 25A of the Act, 1969 already in field

It is not understandable as to how the Applicant / Collectorate through a Show-Cause Notice had made an attempt to reassess the goods under S. 25 of the Act, 1969 by showing intention to accept transactional value of the goods in-question

Notwithstanding this, even the proviso in S. 25-A of the Act, 1969, whereby it is provided that where the value declared in a goods declaration or mentioned in the invoice retrieved from the consignment is higher than the value determined under subsection (1) of S.25-A of the Act, 1969, such higher value shall be the customs value as inserted by way of Finance Act, 2017, whereas, the present case was prior in time

Moreover, it was not a case where the transactional value was available with the department or the value mentioned in the invoice was retrieved from the consignment at the time of making any assessment under S. 25 of the Act, 1969

In the present case , the goods were already released pursuant to a statutory Valuation Ruling and therefore, any information gathered from the website pursuant to which an attempt had been made to make assessment by accepting the transactional value under S. 25 of the Act, 1969 could not be sustained

Admittedly, the Valuation Ruling-in-question was never amended pursuant to such information from the website

Notably, in the Show-Cause Notice there again were vague allegations, whereas, neither the values so made available from the website had been mentioned; nor respondents had been confronted with any such unit value independently, and in a generalized manner, the Show-Cause Notice had been issued

No reason to interfere with the order passed by the Tribunal was made out

Thus, the proposed question was answered in negative i.e. against the Applicant / Department and in favour of the Respondents / importers

Reference Applications were dismissed in limine, in circumstances.

Sound reasoning had been assigned by the Customs Appellate Tribunal to reject the classification determined by the applicant / Department inasmuch as the examination report relied upon by the applicant itself did not support their contention

Such determination of classification appeared to be correct and in accordance with the tariff headings ; HS code 8507.1020 can only be attracted when battery is a lead acid battery used for starting piston engine (normally called automotive battery)

Batteries-in-question were being used for automotive vehicles; they were not lead acid batteries; hence, could not be classified under HS Code 8507.1020 as contended by the applicant / Department

Goods were examined twice by the department and Examination Report clearly reflected that batteries were Automotive Calcium Premium Battery and not lead acid batteries which was the first pre-requisite of classifying it under HS Code 8507.1020

Not all automotive batteries were to be classified in this sub-heading; but only those which were lead acid batteries

First single dash headings (-) in 8507 i.e. 1000 was for lead acid batteries for starting piston engines; second single dash heading (-) in 8507 i.e. 2000 was for other types of lead acid batteries, whereas, thereafter nickel cadmium batteries (8507.3000), nickel iron batteries (8507.4000), nickel metal hydride batteries (8507.5000), lithium iron batteries (8507.6000), and lastly all other types of batteries were to be classified under 8507.8000

Therefore, no exception could be drawn to the finding of the Tribunal which was based on sound and lawful appreciation of the HS codes and its interpretation

Such interpretation of single dash (-) and double dash (

) headings and their bifurcation into sub-headings had been dealt with and interpreted keeping in view the General Rules of Interpretation notified by World Customs Organization (WCO)

Thus, the proposed question was answered in the affirmative i.e. against the applicant / Department and in favour of the respondent / importer

Reference Application, filed by Department, was dismissed.

Dispute with regard to fixing duty on the basis of Valuation Ruling was set aside by Customs Appellate Tribunal holding that the same were valid for 90 days only

Validity

Reliance could not be placed on a Valuation Ruling if unchallengeable transaction value posed by importer was supported by irrefutable trail of documents

In presence of S. 25 of Customs Act, 1969, non-obstante clause of S.25A of Customs Act, 1969, should be used minimalistically, only in exceptional circumstances, ensuring that no irreparable damage was inflicted by its use

Provisions of S.25A of Customs Act, 1969, could not be used customarily and for long stretch of time (e.g. 90 days)

Under the phrase "at or about the same time" even 90 days lifetime of Valuation Rulings was contrary to the spirit of the currency of trade (i.e., "time")

High Court answered the question framed by authorities in negative, i.e., against the department and in favor of the importers

Reference was dismissed, in circumstances.

Previously, in multiple appeals preferred by various importers, the Tribunal declared as illegal certain Valuation Ruling regarding tyres, to which (proceedings) the appellant was not a party

Appellant/importer, relying on said order/judgment, sought the same benefit but was denied

Stance of the respondents /Collectorate was that the appellant was not given benefit of the previous order passed by the Tribunal as the same was an order -in-personam and not in rem

Held, that the stance of the Department was misconceived as in said previous order the Tribunal, while setting aside Valuation Ruling, set forth a principle meaning thereby that the Valuation Ruling-in-question contained patent illegalities

Therefore, Valuation Ruling-in-question was set-aside in rem, setting a principle that, once it was set-aside declaring it illegal, the Valuation Ruling-in-question was to be deemed as "not in field" for everyone importing those category of goods

Valuation Ruling-in-question was set-aside in general

Admittedly, the goods of other importers, like the appellant, were being assessed on the declared transactional values of other importers , which tantamount to violation of the fundamental rights of the appellant since action of discriminatory treatment by the Collectorate had infringed his fundamental rights of equal protection of law guaranteed under the Constitution

Customs Appellate Tribunal set-aside impugned Order-in-Appeal against the appellant , and directed the respondents/Collectorate to finalize the assessment of the appellant on the same values as ordered by the Tribunal vide previous judgment relied upon by him (appellant)

Appeal filed by the importer, was allowed accordingly.

Authorities instead of imposing duty / taxes on the basis of self-assessment by declaring lower invoice value relied upon invoice retrieved from consignment

Customs Appellate Tribunal set aside the duties / tax imposed on importer on the basis of invoice retrieved from consignment

Validity

Cases where invoice was retrieved from any container, as per provision of S.25A of Customs Act, 1969, the value was to be taken as per the invoice retrieved form the consignment

Co-relation between retrieved invoice was to be kept into consideration with what importer and exporter had mentioned in the invoice

In case any invoice was retrieved, it was incumbent upon the authorities to substantiate their assessment by making confirmation from the shipper or to ascertain its market value or to examine the value declared by similar consignments

In absence of such parameters retrieved invoice would lose its significance when goods declaration and other documents produced by importer were found to be genuine and original and were backed by other necessary documents

In cases where retrieved invoice was found to be genuine and the goods declaration of importer was found to be fake then in such circumstances not only the importer was liable to be assessed on the basis of retrieved invoice but was also guilty of mis-declaration of imported consignment and concealment of material facts and in such situation provision of S.32 of Customs Act, 1969, were fully attracted

Authorities did not bring on record any cogent material to substantiate its assessment and failed to take into account the document furnished by importer and that those documents were not found to be fake and forged

High Court declined to interfere in the order passed by Customs Appellate Tribunal

Reference was dismissed, in circumstances.

Petitioners/importers were aggrieved of act of Customs authorities applying London Metal Bulletin (LMB) prices as existed on date of Bill of Lading instead of date of Registered Bank Contracts

Plea raised by petitioners was that Customs Authorities wrongly applied the methodology as petitioners had to pay duties and taxes at an exorbitant rate

Validity

Legislature specifically provided in S.25(10) of Customs Act, 1969, that S.25 (1), (5), (6), (7), (8) and (9) of Customs Act, 1969 had defined as to how customs value of imported goods was to be determined

Methods of customs valuation were required to be applied in a sequential order except reversal of order of S.25 (7) and (8) of Customs Act, 1969, at importer's, request, if so agreed by Customs Authorities

Customs value of imported goods were to be the transaction value i.e. price actually paid or payable for goods when sold for export to Pakistan

High Court set aside assessment made by Customs Authorities from Bill of Lading through LMB instead of date of Bank Registered Contract, as the same was ultra virus the S.25A of Customs Act, 1969

High Court declared that such valuation was without legal effect and directed that consignments of petitioner/importers were to be valued on declared value via Bank Registered Contract and petitioners / importers were only liable to pay duty, taxes etc. on such basis

High Court further declared that excessive pricing was anti-productive as it would fuel inflation as well as depletion of foreign reserves

Constitutional petition was allowed accordingly.

Customs Appellate Tribunal was the last fact finding authority, which had opined that respondent company submitted all required commercial documents including commercial invoice, packing list and bill of lading to customs authorities

Documents presented and relied upon by respondent company were admissible in terms of S.2(kka) of Customs Act, 1969

Customs Appellate Tribunal had given factual finding that examination report furnished by Examination Staff of Customs Department did not object to quantity of the items imported

Difference between authorities and respondent company was only with regard to the fact that whether parts imported were genuine or non-genuine

Such aspect according to the Tribunal was satisfactorily explained by respondent company

Price of items, as determined by Directorate General Valuation, was in consonance with rates as declared by respondent company in various documents furnished by them and in Good Declaration as well pertaining to non-genuine parts

High Court declined to interfere in findings of Customs Appellate Tribunal, as while exercising advisory jurisdiction, points of facts determined by Customs Appellate Tribunal could not be interfered with

Reference was dismissed in circumstances.

Customs authorities passed order of confiscation of vehicles in question on the plea that those were more than 5 years old and not importable in terms of Para 9(5) of Import Policy Order, 2016

Customs Appellate Tribunal set aside the order passed by authorities

Validity

Pre-shipment Certificate disclosed the model year as 2012, which was importable when goods declarations were filed

Vehicles were not older than five years at the time of import in terms of pre-shipment certificate

Challenge to such certificate as far as model year was concerned was a factual controversy which was not mandate of High Court under Reference jurisdiction under S.196 of Customs Act, 1969

No evidence of any nature was filed by authorities to disclose that manufacturer had disclosed year of its manufacture as other than 2012

Entering into such debate at reference stage was not permissible under law unless satisfactory evidence was available on record

Report relied upon by authorities was not of the manufacturer from Japan but was of a local assembler

In presence of requisite document, as required under Import Policy Order, 2016, letter of local assembler could only be an extraneous material

High Court declined to interfere in the order passed by Customs Appellate Tribunal as it had rightly not taken it into consideration

Reference was dismissed in circumstances.

If it was final determination or final assessment, there was no occasion of releasing of consignment on securing differential amount through Bank guarantee

Authorities did not ask for entire amount as was determined finally

Requirements of S.81 of Customs Act, 1969, were not complied with by authorities

High Court set aside notice issued by authorities to importer for re-validation of Bank guarantee as the same was of no effect

Constitutional petition was allowed accordingly.

Goods declaration forms are governed under S.79 of Customs Act, 1969, which is meant only for those goods, which on import are assessed for home consumption or warehouses or transhipment

Essential purpose of filing goods declaration form is to provide true particulars of goods for assessing and payment of liability of duties, taxes and other charges

Traders transporting goods under Afghan Pakistan Transit Trade Agreement to Afghanistan (APTTA) is required to file a goods declaration, the same is only filed for the purpose of determining nature of goods as to whether the same was in accordance with APTTA and protocol or any other instructions of Federal Government and not for the purpose of taxes and duties, as the same is not subject to impost of any local duties in view of clear immunity from taxation as provided under S.129 of Customs Act, 1969, and Afghan Pakistan Transit Trade Agreement.

Deputy Collector of Customs, Intelligence Units, detained the goods of appellant on exit gate after their release by Clearance Collectorate and charged appellant for mis-declaration

Appellant had declared his goods to be falling under PCT Heading 3917.3990, whereas, Customs department was of the view that goods fell under PCT Heading 3922.9000

Validity

Perusal of goods declaration, examination report and images established that goods imported by appellant were flexible pipes and plastic joints

Goods imported by appellant were in no way similar to 'soap dishes, towel rails, tooth brush holders, toilet paper holders, towel hooks and similar articles for bathroom, toilets and kitchen' as opined by Customs authorities

Goods imported by appellant were not of the sort which were designed to be fixed permanently

Declared description and PCT of appellant's goods was correct in view of the expression of Sub-Chapter 17 of Chapter 39 of Pakistan Customs Tariff which read as 'Tubes pipes, hoses and fitting thereof (e.g. joints, elbows and flanges)'

Goods of appellant were of plastic, which without any exception fell under said Sub-Chapter

Classifying appellant's goods under PCT Heading 3922.9000 was nothing more but abuse of powers for causing loss and mental torture to the appellant without any cause or reason

Appeal was allowed.

Directorate General of Intelligence and Investigation detained the goods of importer at the exit gate after their release by Clearance Collectorate and charged the importer for mis-declaration

Validity

Section 195, Customs Act, 1969 empowered the Collector of Customs or Federal Board of Revenue (Board) to call for record of any order/decision passed by subordinate officer for determination of their legality or propriety, in case any illegality or impropriety was apparent, said authorities were empowered to re-open the same and pass a fresh order may deem fit after issuance of show-cause notice

Order passed by Collector or Board was appealable before Appellate Tribunal

Officials of Directorate General of Intelligence and Investigation were not empowered to initiate action of detention and seizure of imported goods for evasion or short payment of duty and taxes, as that would tantamount to reopening of assessment order under S.195, Customs Act, 1969

Detention of goods by Directorate General of Intelligence and Investigation and subsequent proceedings were held to be of no legal effect, as such void ab initio

Appeal was allowed.

No amendment under S.205, Customs Act, 1969 is allowed in the columns of the declared value, quantity or description after removal of the goods from the Customs for home consumption as contemplated in S. 79(1), Customs Act, 1969 after passing of valid assessment/clearance order under Ss.80 & 83, Customs Act, 1969 & Rr. 438 & 442 of Customs Rules, 2001 or after shipment of the exported goods through goods declaration for export transmitted under S. 130 & R. 444 after completion of codal formalities defined in S. 131 & R. 450 or wherein customs reference number is allotted to the goods declaration electronically.

Federal Board of Revenue is empowered to constitute a Committee or nominate an officer for the purposes of resolving disputes relating to classification of imported goods.

When there is no mala fide on the part of Customs Authorities nor there is any jurisdictional defect in decision/orders passed under S.80 of Customs Act, 1969, there is no justification to abandon and by-pass statutory forums and no suit can be filed before High Court while exercising jurisdiction and powers of a civil court.

Provisions of Ss. 79 and 80 of Customs Act, 1969 revealed that importer or his agent had to file goods declaration for release of goods on which Assessing Officer had to make an assessment and any claim made by an importer was subject to scrutiny by assessing officer who had been vested with unfettered powers to complete an assessment

Claim was subject to approval by a competent officer and where a competent authority granted or rejected the claim, no charge of fraud or otherwise could be linked to the Agent or to the principal, whose duty was to submit relevant documents for processing for release of consignment or application

Held, that Department which issued show-cause notice grossly misunderstood the scheme of operative mechanism of Ss. 32 & 80 of Customs Act, 1969

Liability of Clearing Agent during the course of clearance of consignment had to be evaluated under Ss.207, 208 and 209 of Customs Act, 1969 which indicated that an Agent represented his principal until and unless any direct evidence was attributed against him or when department was not able to prove any criminal intent on his part, he could not be penalized under general provisions of Customs Act, 1969 unless he violated the governing condition of his licence

Clearing Agent, in normal course of business, filed a bill based upon the documents and information provided by importer and he could not be presumed to be privy to any illegal arrangement, which importer might have intended in his mind

For such purpose some evidence of his direct involvement will have to be brought on record.

Order or decision passed or taken by subordinate officer could only be corrected in revisional power and not under S. 32 of Customs Act, 1969

For adjudication of a case through issuance of show-cause notice, proof of mis-declaration had to be prima facie present in the first instance if allegation of mis-declaration was to be leveled against importer in terms of S. 32 of Customs Act, 1969 through issuance of show-cause notice by officer of original jurisdiction

When consignments were released on the basis of commercial documents and physical examination by Examining and Assessing Officers then charges subsequently levelled against importer under S. 32 & S. 32(3A) of Customs Act, 1969 were unsubstantiated, once the goods had left customs/port area.

According to S.26A of Customs Act, 1969, Department was empowered to conduct audit of imported consignment/goods declaration within three years from the date of clearance as expressed in S.32(3)(A) of Customs Act, 1969

In the present case, date of clearance of goods as referred in show-cause notice was 26-7-2000 and audit of the aforesaid goods was conducted in year 2011 on the strength of which show-cause notice were issued i.e. after ten years of date of clearance

Such show-cause notice was issued in derogation of S.32(3A) of Customs Act, 1969 rendering the audit, preparation of audit observation of contravention report, show-cause notice and order-in-original in negation of S.32(3A) of Customs Act, 1969

All such actions were time barred and not enforceable under law

Impugned order was set aside in circumstances.

Contention of importer was that consignment which had already been cleared by officials of Collector of Appraisement after completion of all codal formalities from Port/terminal as defined in S.9 of Customs Act, 1969 were lawful and legal and stood ousted from the act of "smuggling" and fell within the domain of prescribed duties of officials of Collector of Appraisement

Validity

Upon passing of assessment order under S.80 of Customs Act, 1969 and R.438 of Customs Rules, 2001 and thereafter passing of clearance order under S.83 of Customs Act, 1969 and R.442 of Customs Rules, 2001 by authority defined in S.2(a) of Customs Act, 1969 and SRO No.371(I)/2001 dated 15-6-2001, it could not be disturbed by any authority including officials of department for preparing contravention report and connected proceedings therewith

Only recourse left for officials of department was to challenge the said orders before Collector of Customs (Appeals) under S.193 of Customs Act, 1969 which empowered the Directorate General of Investigations in terms of SRO No.586(I)/2007 dated 9-6-2007 to file appeals

When the right of appeal had been accorded by legislature under provision of S.193 of Customs Act, 1969, provision of S.195 of Customs Act, 1969 was un-operational and could not be exercised even by authority defined therein.

Authorities after scrutiny declared that importer had mis-declared and goods were different from those mentioned in goods declaration

Assessing officer confiscated the goods and penalty was also imposed upon importer

Order-in-original was maintained by Collector (Appeals) as well as by Customs Appellate Tribunal

Validity

Importer in terms of S. 79(1) of Customs Act, 1969, was duty bound to file true declaration of goods, giving therein complete and correct particulars of such goods, duly supported by commercial invoice, bill of lading or airway bill, packing list or any other document required for clearance of such goods in such form and manner as prescribed

Format of goods declaration was already prescribed for such declaration by the Board

Importer was required to make complete and true declaration and if for some reason she was not sure about description of goods imported, there was no compulsion on importer to claim assessment of entire consignment against a particular serial number of valuation ruling

If importer was of the view that valuation ruling was not specifically clear and was ambiguous, then she was herself duty bound not to claim assessment against any specific serial number of ruling, which was only applicable in respect of specific goods

Order-in-original was correctly passed against importer and her act was fully covered under S. 32 of Customs Act, 1969

Questions raised in reference were answered against importer and in favour of authorities and order passed by Appellate Tribunal was maintained

Reference was dismissed in circumstances.

Question raised by importer could not be decided as it involved a factual controversy, which High Court could not look into in its Constitutional jurisdiction

Question that as to whether goods in question were for "ground handling equipment" or not was to be determined by Adjudicating Collectorate and before such factual determination was done, question of interpreting applicability of restricted list of Import Policy Order, 2013, could not be decided

Petition was dismissed in circumstances.