ZAHIR KHAN AND BROTHERS, ENGINEERING AND CONSTRUCTORS VS FEDERAL BOARD OF REVENUE, 2016 PTD-QUETTA-HIGH-COURT-BALOCHISTAN 1419 (2015)

(a) Customs Act (IV of 1969)---

----Ss. 25-D, 79, 80 & 193---Valuation ruling---Importer was aggrieved of valuation ruling whereby price declared by importer was found to be on lower side---Validity---Customs Officer after examination, assessed duty and taxes leviable on goods imported, which was required to be paid by the importer---Such sort of assessment was in order of Customs Officer passed under S. 80 of Customs Act, 1969 on receipt of goods determined under S. 79 of Customs Act, 1969 by the importer---Order passed under S. 80 of Customs Act, 1969 was an appealable order whereas, Valuation Ruling was required to be challenged under S.25-D of Customs Act, 1969---Importer had remedy under Ss. 193 & 25-D of Customs Act, 1969, by approaching concerned forum available in the hierarchy under Customs law---Constitutional Petition was dismissed in circumstances.

2015 SCMR 630; 2006 PTD 909; Messrs Flying Board and Paper Products (Pvt.) Ltd. v. Deputy Collector of Customs, Dry Port, Lahore 2006 SCMR 1648 = 2006 PTD 2354 and Syed Arshad Ali and others v. Pakistan Telecommunication Company Ltd. and others 2008 SCMR 314 ref.

(b) Constitution of Pakistan---

----Art. 199---Constitutional jurisdiction of High Court---Scope---Provision of Art. 199 of the Constitution was not meant to short-circuit statutory proceedings---High Court could exercise such jurisdiction when it was found that order assailed was without jurisdiction or apparently contrary to settled provisions of law or was likely to result in miscarriage of justice.

Qazi Ghulam Dastagir and Mirza Luqman for Petitioner.

Sher Shah Kasi, Deputy Attorney General along with Haji Azam Law Officer for Respondents Nos. 1 to 4.

Mushtaq Ahmed Anjum for Respondent No.5.

Date of hearing: 29th September, 2015.

JUDGMENT

MUHAMMAD EJAZ SWATI, J.---The petitioner/company imported a consignment of Pre-stressed Steel Strand 15 mm Grade 270 consisting of 309 packages having gross weight 1000618 Kg, from China through Karachi vide IGM No. KEWB-165 dated 21st August 2014, Index No. 41, Bill of lading No. KW1406-XGKA-410 and transshipped to NLC Dry Port, Quetta through TP No. KEAP-TP-371 dated 2nd September 2014 for clearance (hereinafter the "consignment/goods in question"). The petitioner through his agent M/S Al-Quresh Enterprises, Quetta has declared the custom value at the rate of US $ 430 per metric ton. The declared price was found by the respondents on the lower side and the consignment in question had been assessed by the Collector at the rate of 1.01/per Kg as per Valuation Ruling No. 370 dated 25th August, 2011 as against the declared value of US $ 0.43 per Kg. The petitioner has disputed this assessment value and requested that the consignment in question may be provisionally assessed under section 81 of the Custom Act, 1969 (hereinafter the "Act, 1969"), which was not accepted by the respondents under section 81 of the Act, 1969. The petitioner filed a Constitutional Petition No. 676 of 2014 before this Court for release of the consignment to the petitioner provisionally as envisaged under section 81 of the Act, 1969.

2.The aforesaid Constitutional Petition was disposed of vide order dated 1st October 2014, for provisionally release of the consignment in question subject to furnishing Bank guaranty of differential amount,

3.In view of order of this Cruet, the consignment in question was released on 14th October, 2014 provisionally and the differential amount of duty and taxes were secured through Bank guaranty issued by the respondent No.4.

4.It is the case of the petitioner that after provisionally release of the consignment, the respondent No.2 was required to first assess the goods/consignment in question under section 25 (1) of the Act, 1969 on the declared value as per commercial invoice submitted by the petitioner and in case any dispute arises, then he should complete the final assessment in sequential manner as provided under section 25(4), (5), (7), (8) or (9) of the Act, 1969 read with Custom Rules, 2001 (hereinafter the "Rules, 2001").

5.Para wise comments filed on behalf of the respondents Nos. 1 to 3 and contested the invoice value of the petitioner i.e. US $ 430/PMT on the ground of existing Valuation Ruling No. 370 dated 25th August 2011, whereby the value of the goods in question was determined at US $ 1010 metric ton under section 25(1) of the Act, 1969 by the Directorate General of Customs Valuation Custom House Karachi. It is further stated that the importers through their agent had filed Goods Declaration (GD) No. 448 dated 9th September 2014 by itself calculating duty and taxes on the value at the rate of US $ 1010 metric ton, calculated duty and taxes of Rs.45,988,972/- after observing the Valuation Ruling No. 370. The official respondents further stated that the provisionally release of the consignment was allowed in the light of order of this Court dated 1st October, 2014 passed in Constitutional Petition No.676 of 2014, therefore, in existence of aforesaid Valuation Ruling, determination of custom value under the provisions of section 25(1) and section 81 of the Act, 1969, is not applicable in view of section 25A of the Act, 1969.

6.The petitioner besides challenging the impugned Valuation Ruling No. 370 of 2011 dated 25th August 2011, also sought following relief:--

a.That rejecting declared transaction value and finalizing provisioned assessment in slip short manners without exhausting methods prescribed under subsections (1) to (4), 5 6 or 9 of Section 25 of the Act read with Rules 113 to 117 of the Rules is Void, illegal, without Jurisdiction and of no legal effect;

b.That finalizing the provisional assessment on the basis of a valuation ruling No.370/2011 dated 25-08-2011 issued in some other cases in year 2001 has lost its life after expiry of Ninety days is inapplicable and rejection of declared transaction value based on commercial invoice and remittance to exporter and in addition to this the process adopted by respondent No.2 with the collusion of respondent No.5 for determination of value of good is illegal, unlawful and without jurisdiction and liable to be struck down with a direction to accept the declared value of the petitioner as there is no material available with the respondents to make a doubt on declared value except a valuation ruling which lost its life

c.Direction may please be issued to respondent No.2 to assess the goods on declared value as there is no material on record to reject the declared value as per commercial invoice and if so be then determine the valuation of the goods as per procedure given in section 25(1) to (4) (5) (6) (7) (8) or (9) in (sic)

7.The learned counsel for the petitioner contended that after provisional release of consignment in question under section 81 of the Act, 1969, the final value of the imported goods is to be determined as per subsections (4), (5), (7);(8) or (9) of section 25 of the Act, 1969 read with Rules, 2001 for the purpose of custom duties and taxes; that the method of custom value is required to be applied in a sequential order; that without resorting to the provision ibid, determination of such value on the basis of Valuation Ruling is without lawful authority; that the custom valuation had been assessed by the respondents on the basis of letter dated 27th September, 2014 and report dated 14th October 2014, but no notice and opportunity of being heard has been provided to the petitioner, which is in disregard of natural justice and contrary to section 24 of General Clauses Act; that in case of any dispute in respect of declaration of the import valuation, the Assessing Officer as per Rule 109(3) of the Customs Rules, 2001, is required to ask the importer to furnish further documents for explanation, but the mandatory provision has also been violated by the respondents; that the Commercial Invoice assessed by the exporter and DD after payment of tax are admitted and authenticity of documents, but all the documents had been ignored without assigning any valid reason; that in case of any dispute related to Customs duty / value arises, the complete mechanism has been provided under Section 25 of the Act, 1969, but all the provision of law and rules had been ignored; that the Valuation Ruling of 2011 has been applied for assessing of the Customs value which was inapplicable after 90 days of its issuance. The learned counsel placed reliance on the judgments reported in 2015 SCMR 630 and 2006 PTD 909.

Learned Deputy Attorney General in rebuttal contended that the petitioner its Clearing Agent, had filed GD No.488, dated 9th September 2014 and calculated the duty and taxes on the value @ US $ 1010/ metric-ton and chargeable taxes of Rs.45,988,972/-; that importer himself observed the Valuation Ruling No.370, dated 25th July 2011, therefore, as per section 25-A of the Act,1969, he is bound by the same; that in existence of Valuation Ruling resorted to section 25(4) and section 81 of the Act, 1969 was not applicable, as the consignment was provisionally released in the light of order of this Court (High Court); that the respondent No.2 acted in accordance with law and the duty imposed after resorting to Directorate General of Customs House Karachi; that the letter dated 22nd October 2014, was issued for encashment of bank guarantee, as it was submitted for differential amount and after finalization of valuation, no question arises to keep bank guarantee remain intact.

8.We have heard the learned counsel for the parties and have gone through the record of the case. We find that the petitioner had imported the consignment in question from China through Karachi vide IGM No.KEWB-165, dated 21st August 2014, vide Index No.41, Bill of Lading No.KW-1406-XGKA-416, Commercial Invoice No.HKGSEX-140604-CI, dated 10th July 2014, the petitioner through Goods Declaration No.448, dated 9th September 2014, through his authorized Clearing Agent Messrs Al-Quresh Enterprises has declared the Customs Value @ US $ 430/ per metric-ton and classified under PCT Heading 731121090. The Collector / respondent found the said value at lower side, therefore, he assessed consignment @ US $ 1.01 / per kilogram, according to Valuation Ruling No.370, dated 25th August 2011, as against the declared value of US $ 0.43 / per kg.

9.The petitioner disputed this value and vide letter dated 20th September 2014, requested that his consignment be provisionally assessed under section 81 of the Act 1969. The relevant is reproduced herein below:--

"We would like to inform you that we had imported PRESTRESSED STEEL STRAND 15:24 MM GRADE 270 and we had filed the GD through our Clearing Agent.

As we know that Assessment Value of PRESTRESSED STEEL STRAND 15.24 MM GRADE 270 (wire) Custom Ruling @ US $---/ MT is very high and it is not acceptable for us, so we will filled the reference against the ruling. In the meanwhile we want to claiming consignment provisionally under section 81 of Custom Act, 1969, to avoid heavy demurrage.

So we request you to kindly refer our case to Appraisement Department and we also request under protest Provisionally Clearance our shipment under Section 81 of Custom. Act, 1969 and cleared the consignment on our declared value US$ 430 / MT in GD, and other total remaining assessment value/ amount Duty and Taxes as deposit in shape of post dated cheque should be deposited as a security in shape of post dated cheque till final decision of Appraisement Department.

We are further requested to you kindly release the consignment declared value against pay order and difference duty taxes amount against post dated cheque.

We shall be thankful to you if you process on our request as soon as possible and oblige."

10.The contents of aforesaid letter indicate that from the inception, the petitioner was aware that respondents declined the provisional release of consignment due to existing of Valuation Ruling. The aforesaid letter further reveals that the petitioner objected the custom ruling and clearly mentioned in the letter that "we will file reference against the ruling", however, to avoid any demurrage, further requested for release of consignment under section 81 of the Act, 1969. The respondent No.2 sought opinion from the respondent No. 6 Directorate General of Customs Valuation Custom House, Karachi vide impugned letter dated 27th September 2014. The relevant is reproduced as under:--

"The Goods Declaration No. 448, dated 09.09.2014 (Annex-A), has been filed by the importer through his authorized clearing Agent, Messrs Al-Quresh Enterprises, Quetta. The value of the said consignment has been declared @ US$ 430/- PMT and classified under PCT Heading 7312.1090. The importer has submitted the Commercial Invoice (Annexure-B) showing/ substantiating the declared value and FTA Certificate (Annex-C) for taking benefits extended vide S.R.O. 582(I)/2012, dated 01.06.2012 read with S.R.O. 659(I)/2007, DATED 3.06.2007.

However, the consignment in question has been assessed by the Collectorate @ $ 1.01/per Kg as per Valuation Ruling No. 370 dated 25.08.2011, as against the declared value of $ 0.43/per kg. The importer has disputed this assessed value and is not willing to pay duty and taxes on the assessed value. The importer has further requested that his consignment be provisionally assessed under Section 81 of the Customs Act, 1969.

This Collectorate is of the view that since the Valuation Ruling No. 370 dated 25.08.2011 is in field prescribing value @ $ 1.01/per Kg, request of the importer for provisional clearance cannot be accepted"

11.The respondent No.6, vide letter dated 14th October 2014, intimated the respondent No.2 that the Valuation Ruling No.370 of 2011 dated 25th August 2011, is in field and valid.

12.Pursuant to above, the request of the petitioner for provisionally release of the consignment under section 81 of the Act, 1969, was declined, however, on filing of C.P. No. 676 of 2014, this Court vide order dated 1st October 2014 while disposing of the petition allowed the provisional release of the consignment in question subject to furnishing bank guaranty of differential amount, which was submitted by the petitioners and the consignment in question was provisionally released on 14th October 2014.

13.The respondent No.3, vide letter dated 22nd October 2014, addressed to the respondent No.4, intimated that the case of the petitioner has been finalized in view of Valuation Ruling No. 370/11 dated 25th August 2011, on the advice of Directorate General Customs Valuation Custom House, Karachi and demanded pay order amounting to Rs.2,64,09,509/- so that the Bank guaranty could be discharged.

14.It appears that after issuance of the aforesaid letter, the instant petition has been filed. The petitioner raised question that in existence of Valuation Ruling after 90 days of its issuance resort to provision of section 25 of the Act, 1969, is mandatory and permissible. Section 25A, is pre-determination of the custom values and such determination only applies in relation to goods imported at the time when determination was issued, after years such Valuation Ruling is inapplicable and it is the only section 25 of the Act, 1969, which is applicable. According to him, the Valuation Ruling only applies for certain period and no more and this expression according to him, has been defined in Rule 107 of Rules, 2001.

15.We find that under section 79 of the Act, 1969, the owner of imported goods himself fills a good declaration containing correct and complete bills of the valuation of the goods and the duty, taxes and other charges payable thereon. Under section 80 of the Act, 1969, on receipt of goods declaration under section 79 of the Act, 1969, an officer of the Customs, if satisfies of the correctness of import including the declaration submitted by the importer, then he will accept the same. In case, the officer of Customs is not satisfied, then he may call for the relevant documents and thereafter assess the custom value and on payment thereof, the goods shall be released. Section 81 of the Act, 1969, further provides that when it is not possible for the officer of the Custom that assessment of goods made under section 79 of the Act, 1969 are not satisfied or goods required chemical or other test or further inquiry. An officer not below the rank of Assistant Collector of Custom may order that the duty, taxes and other charges payable on such goods be determined provisionally subject to furnishing Bank guaranty or pay order of a scheduled Bank of differential amount, as determined by the concerned officer. Subsection (2) of section 81 of the Act, 1969, provides that where any goods are imported to be cleared or delivered on the basis of such provisional determination. Such amount, taxes and charges are correctly payable on those goods, shall be determined within six months of the date of provisional determination. Subsection (4) of section 81 of the Act, 1969, further provides that if the provisional determination is not made within the period specified in subsection (2) of section 81 of the Act, 1969, the provisional determination shall in absence of any new evidence be deemed to be the final determination. Under subsection (5) of section 81 of the Act, 1969, on completion of final determination under subsections (3) and (4) of Section 81 of the Act, 1969, the appropriate officer shall issue an order for adjustment, refund or release of the amount determined as the case may be.

16.From the perusal of aforesaid provisions of the Act, 1969, it is obvious that the importer himself assessed the imported goods (section 79) by way of filing of goods declaration. Section 25 of the Act, 1969, authorizes an officer of the Customs Department to reject the declared value of the consignment imported in Pakistan and to assess the same as provided. Section 25 and Custom Rules, 2001, lays down various modes, in which the Officers of the Customs are required to proceed in determining or assessing the customs value of the consignment after rejecting the declared value. Section 25A of the Act, 1969 permits predetermination of custom value of any goods or category of goods imported into or exported out of Pakistan in terms as mentioned herein below:--

"25A. Power to determine the customs value.---(1) Notwithstanding the provisions contained in section 25, 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 section 25, whichever is applicable.

(2)The Customs value determined under subsection (1) shall be the applicable customs value for assessment of the relevant imported or exported goods.

(3)In case of any conflict in the customs value determined under subsection (1), the Director-General of Customs Valuation shall determine the applicable customs value.

(4)the customs value determined under subsection (1) or, as the case may be, under subsection (3), shall be applicable until and unless revised or rescinded by the competent authority."

Subsection (4) of section 25A of the Act, 1969, provides that the custom value determined under subsection (1) or as the case may be under subsection (3) shall be applicable under the law and unless revised or rescinded by the competent authority. Section 25D of the Act, 1969 provides remedy to the aggrieved person against predetermination value made under section 25A of the Act, 1969, which reads as under:--

"25D. Revision of the value determined.---Where the customs value has been determined under section 25A by the Collector of Customs or Director of Valuation the revision petition may be filed before the Director-General of Valuation within thirty days from the date of determination of customs value and any proceeding pending before any court, authority or tribunal shall be referred to the Director-General for the decision."

Section 193 of the Act, 1969 provides remedy of appeal, by the aggrieved person against the determination of the Customs Value, which reads as under:--

"(1) Any person including an officer of Customs aggrieved by any decision or order passed under sections 33, 79, 80 and 179 by an officer of Customs below the rank of an Additional Collector may prefer appeal to the Collector (Appeals) within thirty days of the date of communication to him of such decision or order."

17.In the instant case, the consignment in question was assessed by the respondent concerned, at the rate of US $ 1010/ per metric ton as per Valuation Ruling 370 dated 25th August 2011 against the declared value of US $ 430/- per metric ton and the consignment in question was provisionally release under section 81 of the Act, 1969 by the order of this Court in C.P. No. 676 of 2014 dated 1st October 2014 and the differential amount of duty and taxes according to declared value and assessed value have been secured in shape of Bank guaranty. The argument of the learned counsel for the petitioner that when the consignment in question has been released under section 81 of the Act, 1969, it is mandatory and it requires the respondents to follow the principal method of determining the custom value under subsections (4), (5), (7), (8) or (9) of section 25 read with Custom Rules, 2001 in sequential order. He further added that the Valuation Ruling in question under section 25A is not intended to be a substitute of section 25 of the Act, 1969 nor can it be resorted to. This contention has been considered in the light of documents appended along with the petition. The declared value of the petitioner was not accepted by the respondents in view of Valuation Ruling No. 370 and request of the petitioner for provisionally clearance was also declined by the Collectorate vide letter dated 27th September 2014 and determined the customs value on the basis of Valuation Ruling in question in terms of section 25A of the Act, 1969, which according to subsection (4) of section 25A of the Act, 1969, would be applicable unless revised or rescinded by the competent authority. The provisions of section 81 of the Act, 1969, is not attracted in the instant case, as the consignment in question was released on the provisional assessment made in view of order passed by this Court in C.P. No. 676 of 2014. In this context, reference is to be made to the case of Messrs Flying Board and Paper Products (Pvt.) Ltd. v. Deputy Collector of Customs, Dry Port, Lahore 2006 SCMR 1648 = 2000 PTD 2354, wherein the Hon'ble Supreme Court of Pakistan observed as under:--

"Provision of section 81 of the Customs Act, 1969 requiring finalization of provisional assessment of the duty within six months was not attracted in these cases as the goods were released on the provisional assessment made in pursuance of an interim order passed by learned High Court pending decision."

18.The further contention of the learned counsel for the petitioner in the instant case to set aside the impugned letters and Custom Ruling, is not tenable, as under Article 175(2) of the Constitution of the Islamic Republic of Pakistan, 1973, "No Court shall have any jurisdiction save as is or may be conferred on it by the Constitution or by or under any law".

19.The specific provision under section 193 of the Act, provide for an appeal against the Custom Value assessed under section 80 of the Act, whereas, section 25D of the Act, 1969, provides for filing revision/ review before the Director General of Valuation against the custom value determination made under section 25A of the Act, 1969 by the Collectorate of Customs or Director of Valuation. The petitioner instead of availing the aforesaid remedy has filed the present petition, which is barred under the aforesaid provision of law. Reference in this context is to be made to the case of Syed Arshad Ali and others v. Pakistan Telecommunication Company Limited and others, 2008 SCMR 314, wherein the Hon'ble Supreme Court of Pakistan held as under:--

"It is we-recognized that if a right has been conferred by a statute and a complete mechanism has been provided for enforcement thereof, there could hardly be any occasion to invoke the applicability of fundamental rights. The jurisdiction of the High Court will be patently barred under Article 212 of the of the Constitution of Islamic Republic of Pakistan, in view of the specific forum provided for redressal of the grievances of the petitioners, even if the order proposed to be challenged may have been passed in whatsoever circumstances viz. mala fide, coram non judice or without jurisdiction. This principle has been laid down in the case of I.A. Sharwani and others v. Government of Pakistan through Secretary, Finance Division, Islamabad and others 1991 SCMR 1041. Besides it is also well-settled proposition of law that writ jurisdiction could not be exercised where equally efficacious remedy is available."

20.The respondent No.2, after examination, assessed the duty and taxes leviable on the goods imported, which is required to be paid by the importer. This sort of assessment is an order of the Custom Officer passed under section 80 of the Act, 1969 on the receipt of goods determined under section 79 of the Act, 1969 by the importer. The order passed under section 80, is an appealable order, whereas the Valuation Ruling is required to be challenged under section 25D of the Act, 1969. The petitioner had alternate and efficacious remedy under sections 193, 25(D) of the Act, 1969 by approaching the concerned forum available in the hierarchy of Customs law. Article 199 of the Constitution is not meant to short-circuit the statutory proceedings. The Court may exercise such jurisdiction when it is found that the order impugned was without jurisdiction or apparently contrary to settled provisions of law or was likely to result in miscarriage of justice.

In view of the above, the Constitutional Petition No. 751 of 2014, is dismissed. However, the time spent in the instant petition would not be hurdle for the petitioner, if to adopts the available alternate remedy.

MH/15/BalPetition dismissed.