SANGERWAL COSMETICS VS The COLLECTOR (ADJUDICATION-I) MCC -ADJUDICATION-I, 2018 PTD-CUSTOMS-APPELLATE-TRIBUNAL-LAHORE 2305 (2017)

Customs Act (IV of 1969)---

----Ss. 25, 25-A, 32, 79-A & 194-A---Determination of customs value of goods---Mis-declaration---Department had blocked the consignment, after assessment on the basis of on-line-data obtained from exporting country's website showing excess value of goods as against the declared and assessed value---Department had claimed that value of goods was based on the value of same goods which were shipped to the exporter to another country---Importer contended that no value other than the one notified in Value Ruling No.866/2016 could apply to the consignment and department had no locus standi to impose any value which could not be directly ascertained as the transactional value---No evidence was available to show that goods were exchanged for the amount alleged and adjudicated as the value based on the department's information---Show-cause notice, had also been issued to the importer after the statutory limit of time under the Customs Act, 1969---No reason existed to uphold the impugned order, which was based on an unqualified premise, having no coverage or support of the relevant specific provision governing valuation of the imported goods.

Adeel Awan for Appellant.

Javed Hasan, P.A. and Muhammad Rahim, A.O. for Respondents.

Date of hearing: 20th March, 2017.

JUDGMENT

ZULFIQAR A. KAZMI, MEMBER, (TECHNICAL-I).---By this judgment we intend to dispose of the instant appeal filed by appellant, against Order-in-Original No.463/2016-17 dated 27.01.2017, passed by the Collector of Customs (Adjudication-I), Karachi.

2.Brief facts of the case on record are that the appellant filed Goods Declaration No.KAPW-HC-689-02-07-2016 and declared to contain Assorted Fragrance Set wet Body Spray 150 ml/0.99gm/72pcs/ 7.128kgs/Case X 1685 Cases = Approx N. W: 12010.68 Kgs (Brand Set wet) (our D.V. is US$ 1.55/Kg) (GD Assess as per under section 25-A V/R No.866 dated 06.06.2016 S. No.2 "F" category US$ 1.60/Kg) under PCT heading 3307.2000. They declared invoice value US$ -1.45 and paid taxes on valuation ruling US$ 1.60/Kg. The importer determined their liability of payment of applicable duty and taxes in terms of under section 79(I) of the Customs Act, 1969. The instant consignment was blocked by R&D for checking value aspect as the consignment was from India and online data of identical goods from India reflected higher value than the declared value by the appellant. Accordingly, efforts were made to confirm the actual value of the goods. Meanwhile, Messrs Clear Freight Services, who have filed IGM information of the subject consignment, was approached to provide shipping details of the consignment. The same provided complete shipping information from India of the instant consignment which reflected the value of the goods as US$63,233.65. The shipping bill No. 3200678 dated 10.06.2016 available on the provided documents was also confirmed from Government of India's official website of Customs i.e. Ice gate whereby it was also confirmed that the value available on the shipping documents is correct. The difference of assessed and found value comes to US$ 44016.05 (239.65%) and the importer has been found involved in deliberate concealment/mis-declaration of value of the instant consignment involving evasion of duty/taxes to the tune of Rs. 3,371,637/-. The offending value of the goods is works out to Rs. 66,20,563/-.

3.Accordingly, a Show-Cause Notice was served upon the appellant and case was adjudicated vide the impugned Order. Operative part of this order reads as under:--

"After going through record of the case, replies of both the sides and verbal arguments advanced during course of hearing. I am of the view that the case made against the importer, in view of the provisions of transaction value in the Valuation Ruling, is established. I, therefore, order for confiscation of the impugned imported goods. However, an option under section 181 of the Customs Act, 1969 is given to the respondent importer to redeem the confiscated goods on payment of redemption fine equal to 35% of the value of the offending goods(as determined by the department) in addition to payment of duty and taxes chargeable thereon under S.R.O. 499/09 dated 13.06.2009 as amended from time to time. I also impose a penalty of Rs.200,000/ - (Rupees Two Hundred Thousand Only) on the importer i.e. Messrs Sangerwal Cosmetics, Karachi."

4.Being aggrieved with this Order, the appellant had preferred this appeal on 02.02.2017, inter-alia, on the following grounds:--

i.That the appellant has imported the said consignment from its shipper in Dubai, U.A.E as per his normal course of business. There are number of evidences of import transactions of the same commodity at more or less same rates of transaction value. For that purpose, the relevant authority i.e. The Directorate General of Customs Valuation has determined the applicable customs values of the same product vide Valuation Ruling No. 866/20I6 dated 06.06.2016. Whereas, the consignment under import had already assessed at the higher value than the declared value as per the above-said Valuation Ruling. Therefore, the respondent No. 2 has no lawful authority to further enhance the transaction value of the same goods beyond the mandate provided vide the said ruling.

ii.That the appellant is not bound by law, by any stretch of imagination, to track the origin and the Invoice Values of the goods from its origin to all the way to his shipper. Hence, the allegation by the respondent Collectorates that the shipper has imported the said products from its origin at the higher invoice value, if any, has no lawful bearing on the import transaction between the appellant and its supplier.

iii.That the assessment of transaction value is to be determined within the ambit of section 25 of the Customs Act, 1969, and the Valuation Rules made there-under. There is no authority provided under the Customs Act, 1969 or the Customs Rules, 2001 to refer the Icegate website as proof of evidence of transaction value. The respondents failed to provide the lawful authority, under which, they are empowered to frustrate the valuation under the mandate of section 25 ibid. (i.e. as per Valuation Ruling) and to allege the value on the basis of Icegate website details.

iv.That, for the sake of argument, it is pertinent to mention that the Icegate website prominently disclaim that 'the contents of website do not constitute legal or professional advice and carry no legal force. The purpose of the website is to enhance, public access to information on rates of duties and other compliance requirements for Customs clearance of goods. The website is strictly meant for general guidance.' However, the respondent Collectorates consider the details on said website superior to the Customs Act, 1969 and Customs Rules, 2001, and get strength and empowerment to frustrate the legal dictates under Customs Act, 1969 vide Valuation Ruling No. 866/2016.

v.That, further, the act of `container hold' on the computer system by the respondent is grossly unlawful, arbitrary and without lawful authority. Reliance is being placed on the reported judgment of M/s. Qazi CNG, which provides that 'Once the G. D. is assigned to gate out, there is no control of Collectorate over the goods and releasing is sole matter between importer and terminal operator'. However, an unlawful conduct is being practiced abruptly by the respondent Coilectorates in clear defiance to the legal dictates by the superior Courts. In the instant case, the G.D. was allowed released/ Gate out after assessment as per Valuation Ruling, however, still the goods were 'hold' by the respondent in its gross hypocrisy manner.

vi.That the allegations and methodology, adopted in the instant matter is contrary to the law and provisions of section 25 and against the guide-tines, given by the Hon'ble High Court of Sindh, Karachi, in its hallmark judgment reported as PTCL 2014 CL. 37 (Sadia Jabbar v. POP), therefore, impugned Order-in-Original is ab-initio arbitrary, void, illegal and without jurisdiction, hence, of no legal effect.

vii.That the impugned Order-in-Original has been passed by the respondent No. 1, on the basis of in-admissible and illegible piece of evidences which have no nexus with the case of appellant by any stretch of imagination. Whereas, reference to Icegate website is grossly prohibited method for determination of customs values as the same is being practiced without lawful authority/justification.

viii.That the impugned Order-in-Original has been passed under arbitrary manner and without giving without any consideration to the arguments advanced before him and evidences placed on record. While passing impugned Order-in-Original, the violation of provisions of sections 25 of the Customs Act, 1969 as well as violations of valuation rules prescribed in Customs Rules, 2001, as apparent from the record on part of respondents Nos. 1 and 2 have been deliberately ignored by preferring departmental favoritism.

5.Hearing opportunities were provided to the appellant and respondent on 14.02.2017, 28.02.2017, 09.03.2017 and the case was finally heard on 20.03.2017 when Mr. Adeel Awan, Advocate, appeared for the appellant. He reiterated the contents of appeal. On 20.03.2017 the appellant relied on the point of limitation as required under section 168 subsection (2) of the Customs Act, 1969 as well as on the point that whether the respondent has jurisdiction and access to document and declarations whatever been declared prior to be filing of subject GD in Pakistan or the claim established on the basis of any website are admissible under the law. Respondent on that point strongly agitated and stressed that they retrieved the document from the agent with relation to the same set of documents and invoice along with bill of lading under which the subject goods are valued and re-added the import from where these are shipped into Pakistan. These document witness the whole activity under which R&D department made the seizure that with regard to delay of statute period under Section 168(2) of the Customs Act, 1969.

6.Record is perused and the arguments heard. The respondent had blocked the consignment after assessment and based on an 'evidence' found from on-line-data from India showing value of the goods US$ 63233.65 as against the declared and assessed value as per Valuation Ruling No. 866/2016 dated 06.06.2016. The respondent claims this evidence as being for the same goods which were shipped to the exporter in UAE from India and hence these goods valued 240% more the value on which the same were assessed by Customs on import in Pakistan. Against this stance, the appellant contends that no value other than the one notified in VR No. 866/2016 can apply on the impugned goods for the reasons that:--

i.value given and confirmed by the shipper in UAE is exactly the one that has been declared and the same is also as per the said V.R.;

ii.tracking goods' origin and transaction upto the shipper abroad has no legal basis;

iii.Icegate information has no legal or over-riding status in terms of the provisions of Section 25 or 25A of the Customs Act, 1969. The said Indian website also has a disclaimer to the effect that its contents do not constitute any legal or professional advice or legal force.

7.Having examined the provisions of Sections 25 and 25A of the Act we have reasons to believe that respondent have no legal locus standi to impose any value which cannot be directly ascertained as the transactional value. There is no evidence to show that goods were exchanged for the amount alleged and adjudged as the value based on the respondent's information. Further, the Show-Cause Notice had also been issued after the statutory limit of time under the Customs Act, 1969. In view the legal position and facts before us we find no reason to uphold the impugned order, which is based on an unqualified premise, having no coverage or support of the relevant specific provisions governing valuation of the imported goods. The appeal hence, succeeds and the same is hereby allowed.

8.Judgment passed and announced accordingly.

HBT/31/Tax(Trib.) Appeal accepted.