Provisional assessment of duty

2019 PTD 165 CUSTOMS-APPELLATE-TRIBUNAL-LAHORE Judicial Precedent

Ss. 19-A, 33 & 81Provisional assessment of dutyRefund

Consignment was declared to contain "cold rolled Steel Sheets and Coils in Secondary Quality" under PCT heading 7209.1610 at unit value of US $ 400 PMT

Subject goods were assessed provisionally at US $ 494 PMT by securing differential amount of duty and taxes in shape of post dated cheque, pending clarification of value from the Directorate General of Customs Valuation

Directorate General of Customs Valuation directed that contracts/LCs opened on or after 1.3.2009 up to 31.5.2009 could be assessed at US $ 345 PMT

Declared value of the importer at US $ 400 PMT was higher than the value determined by the Directorate General of Customs Valuation

Importer approached Securities Section of the Collector for release/refund of their Security (cheque), but security cheque was got en-cashed by the department on 21-6-2012 as the provisional assessment was made on 22-5-2009, and the time period of provisional assessment had expired much before the encashment of the cheque in question

Subsequently, the Collectorate directed the importer to furnish the documents in support of his refund claim, proving thereby that incidence of duty and taxes had not been passed on to the end consumer in terms of S.19-A read with S.33 of Customs Act, 1969

Importer instead of furnishing the same, contested the matter that S.19-A of Customs Act, 1969 was not applicable to his case as the differential amount of duty and taxes were secured provisionally

Adjudicating Officer vide order-in-original held that charges against the importer was proved

Appellate authority set aside the order of Adjudicating Officer

Validity

Appellant department had complicated case by getting cheque encashed perhaps in a drive for "earning" revenue

Department, instead of finalizing the provisional determination within six months, as required under S.81(2) of the Customs Act, 1969, after three years got encashed the post-dated cheque

Department was bound to finalize assessment by 21.11.2009 as the provisional assessment was done on 22.5.2009

Said final determination could have been done much before expiry of mandatory period of six months; as the Directorate General, Customs Valuation had decided the matter vide letter dated 13.6.2001 by advising the appellant department to assess the goods at value US $ 345 PMT

Department's failure to comply with mandatory provision of law was a serious omission

Directorate General Customs Valuation, had directed the department that two amounts were to be refunded/ returned to the importer; (i) difference between US $ 400 PMT and US $ 494 PMT (Post dated cheque); and (ii) difference between US $ 354 PMT and US $ 400 PMT

Importer had deposited duty and taxes as per declared value US $ 400 PMT

Said process should have been completed within few days/weeks of receiving advice from the Directorate General, Customs Valuation on

Department had attended the case, not only in the extremely non-professional manner, but had deprived the importer of his legitimate money for long 8 years for no fault of him, which was quite disturbing and detestable

Collector of Customs was directed to immediately return both the amounts to the importer without any loss of time.

2018 PTD 1903 CUSTOMS-APPELLATE-TRIBUNAL-LAHORE Judicial Precedent

Ss. 25, 25-A, 25-D & 81Customs Rules, 2001, R.107(a)Import of goodsDetermination of customs value of goodsProvisional assessment of dutyGoods in question, were imported depending on the category/quality of the goods

Local manufacturers of the said goods, approached the Officers of Directorate General Customs Valuation for enhancement of import value of said goods to protect their industry

Director General Valuation, with the active collaboration of local manufacturer; issued a Valuation Ruling and revised/enhanced the values with the pretext that the international prevailing prices of goods in question were on higher side

Directorate again re-determined the value of goods without proper consultation with the importers under another Ruling and enhanced the same accordingly

Said determination being not acceptable to the importers they filed revision petition before the Director General Valuation for consideration of their request and to allow clearance under S.81 of the Customs Act, 1969 till the order-in-revision

Director General Valuation, allowed the request of the importers for provisional release of goods, but re-determined the goods enhancing the value of goods

Director General Valuation under S.25-D of the Customs Act, 1969, could only deliberate with the value earlier determined in a Ruling issued by the Director Valuation under S.25-A of the Customs Act, 1969

Director General Valuation had no inherent power or jurisdiction to travel beyond his authority

Director General Valuation, was not authorized to re-determine or adjudicate the issue, which was never been assailed before him against any valuation ruling

Department was alleged to show some material to justify the observations caused and imposed by the Director General of Valuation in the impugned order-in-revision

Legal lacunae of such type and such disclosures, would discredit the impugned action

Impugned order-in-revision, ruling and its perfunctory and sketchy revision by the Director General, were devoid of the attributes which were declared without lawful authority, void and illegal and were set aside to the extent of importers/appellants, only

Department was further directed to re-asses the impugned goods of the importers in accordance with the value as declared in terms of S.25(1)(5)(d) of Customs Act, 1969, read with R.107(a) of Customs Rules, 2001

Appeals were allowed in such terms, in circumstances.

2018 PTD 422 CUSTOMS-APPELLATE-TRIBUNAL-LAHORE Judicial Precedent

Ss. 25, 79, 80 & 81SRO No.494(I)/2007, dated 9-6-2007Provisional assessment of duty

Issue was 'whether denial of completing the assessment of the appellant/importer's consignment under the provisions of S.81 of the Customs Act, 1969 by the Collector of Customs and Assistant Collector of Customs was in consonance with the expression of said section and the settled law

Section 81 of the Customs Act, 1969, expressed that where it was not possible for the officer of Customs during the checking of goods declaration to satisfy himself of the correctness of the assessment of the goods made under S.79 of the Customs Act, 1969 for reason that the goods required chemical or other test or a further inquiry, an officer not below the rank of Assistant Collector Customs, could order the duty, taxes and other charges payable on such goods provisionally

Law was silent on the point as to what was meant by "provisional determination" and how it was to be made

In the present case provisional determination of value could have been made while securing differential amount of duty, taxes and other charges between the value of identical goods available in Data and payable on the value on which Adjudicating Authority desired to assess subject to finalization upon issuance of valuation advice by the Directorate General of Valuation under the provisions of S.25 of the Customs Act, 1969; in that manner the interest of revenue was fully protected and no undue harassment would be caused to the importer

Purpose of Ss.25 & 81 of the Customs Act, 1969 was to protect the State Revenue in a manner that the Trade and Industry was allowed to run smoothly

Collector of Customs, had not been vested with powers under any provision of the Customs Act, 1969 or any other law to ignore the requirement of the S.81 of the Customs Act, 1969 nor could interpret in accordance with ones whims and wishes

Issuance of direction to Adjudicating Authority to adhere to the provisions of S.81 and complete the assessment of the importer's consignment after securing pay order between the differential amount

Denying completion of goods declaration of the importer by the Adjudicating Authority and direction of the Collector of Customs to Adjudicating Authority not to exercise the powers vested in him under S.81 of the Customs Act, 1969, were patently illegal and without lawful authority/jurisdiction being a derogation of express provisions of S.81 of the Customs Act, 1969

Direction of Collector of Customs, was ab initio void, in circumstances

Issue was answered in the negative

Assessment order passed by Adjudicating Authority and order-in-appeal, which suffered from grave legal infirmities, were declared to be illegal, null and void and against the norms of justice.

2017 PTD 2265 CUSTOMS-APPELLATE-TRIBUNAL-LAHORE Judicial Precedent

Ss. 25 & 81(3)Customs value of goodsDeterminationProvisional assessment of duty

Goods were imported vide declaration at the rate of unit value of US $ 2.5000; assessment was made at the rate of unit value of US $ 3.5000

Assessment was finalized and appeal against said assessment was dismissed

Validity

Goods were assessed provisionally on 15-7-2015 under S.81(3) of the Customs Act, 1969 and finalization of that assessment was to be done legally within six months from the date of provisional assessment

Contention of department was that finalization was done on 23-1-2016 and not by the cut-off date of 15-1-2016, for the reason that matter was under finalization with the Directorate of Valuation

Said order was upheld to the effect that "final assessment" having been made within the stipulated time on the ground that importer had been duly informed

Said assumption had no basis as legally requisite determination of value under S.25 of the Customs Act, 1969 had not been made within the statutory limitation of time

Fact remained established that finalization of assessment in the case was barred by 16 days

Impugned assessment and order, were not lawful and not supported by the relevant statutory provisions

Appeal was allowed and impugned order was set aside as not legally maintainable.