2014 P T D 525

 
[Lahore High Court]
 
Before Shezada Mazhar, J
 
Messrs WASIM RADIO TRADERS through Proprietor
 
Versus
 
FEDERATION OF PAKISTAN through Secretary Revenue Division Islamabad and others
 
Writ Petitions Nos.31010 and 31013 of 2013, decided on 3rd December, 2013.
 
(a) Customs Act (IV of 1969)---
 
---S. 81---Customs Rules, 2001, R. 125---Constitution of Pakistan, Art.199---Constitutional
petition---"Declared value" and "value under the Valuation Rulings"---Distinction---Provisional
determination of liability---Non-release of consignment by the Customs Authorities---
Provisional release of goods---Scope---Customs Authorities refused to assess imported goods on
the basis of declared value and petitioners sought clearance of goods---Validity---Difference
between the "declared value" and "value under the Valuation Rulings" had to be secured by way
of bank guarantee to the satisfaction of the Collector concerned---Purpose of such provision was
not only to protect the revenue of the State but also to provide smooth flow of trade---Importer
had right for provisional release of his goods if the value of the imported goods being valued was
disputed.
 
(b) Customs Act (IV of 1969)---
 
---S. 25---Value of imported and exported goods, determination of---Scope---Customs
Authorities were bound to assess the imported goods and if authorities were not agreeable to the
declared value, then they were required to follow certain procedure and only after following said
procedure, they could proceed to assess the value of goods---Provisions of Customs Act, 1969
were "subject to the Customs Rules, 2001".
 
(c) Customs Act (IV of 1969)---
 
---Ss. 25-A & 25---Power to determine customs value---Scope---Collector as well as Director of
Customs Valuation had power to determine the customs value of any goods or category of goods
after following the method laid down in S. 25 of Customs Act, 1969 or whichever was
applicable---Customs Rules, 2001 were applicable to S.25-A of the Customs Act, 1969.
 
Mian Abdul Ghaffar for Petitioner.
 
Amir Hussain Cheema for Respondents.
 
ORDER
 
SHEZADA MAZHAR, J.---Through this single order, I intend to dispose of Writ
Petition No.31010 of 2013 and Writ Petition No.31013 of 2013 as in both these petition common
questions of law and facts are involved.
 
2. Through the present writ petition, the petitioners have challenged the non-release of their
consignments by the respondents/ Customs Authorities under section 81 of the Customs Act,
1969.
 
3. In Writ Petition No.31010 of 2013, the petitioner has imported consignment consisting of
Lead Acid Batteries and other items and in Writ Petition No.31013 of 2013, the petitioner has
imported consignment of household items. On arrival of goods, the petitioners sought clearance
thereof through goods declaration which was not assessed on the declared value by the
respondents and assessed on the basis of Valuation Ruling No.600 of 2013 dated 24-10-2013 in
Writ Petition No.31010 of 2013 and in Writ Petition No.31013 of 2013 Valuation Ruling No.576
of 2013 dated 30-8-2013. The said Valuation Rulings are already under challenge under section
25D of the Customs Act, 1969. The review applications under section 25-D have not been
decided, therefore, the petitioners made request for the release of their consignments under
section 81 of the Customs Act, 1969 read with Rule 125(2) of the Customs Rules, 2001, which
has not been accorded by the respondents and therefore, the present writ petitions have been
filed.
 
4. Submits that under section 81 of the Customs Act, 1969 where it is not possible for an
officer of customs during the checking of the goods declaration to satisfy himself about the
correctness of the assessment of the goods or to further inquiry then the respondents may order
that the duty on such goods be determined provisionally. Submits that according to section 81 of
the Customs Act, 1969 read with Rule 125 of the Customs Rules, 2001, in case of dispute
between the importer and the appropriate officer in respect of the value of the imported goods, it
is the legal right of the importer to claim provisional release of the goods under section 81 of the
Customs Act, 1969 but the said relief has been denied by the respondents.
 
5. On the other hand, learned counsel for the respondents/ department on Court's call
submits that the provision of section 81 of the Customs Act, 1969 is applicable for the Officer of
the Customs and not for the importers. The bare reading of section 81 of the Customs Act, 1969
reveals that if officer is in doubt regarding value of the imported goods, as the imported goods
required chemical test or further inquiry only then section 81 can be applied by the Officer of
Customs. Submits that Valuation Ruling is already applicable and in view of section 25A(2), it
is the duty of the importer to pay duty on the basis of said valuation ruling.
 
6. I have heard the arguments advanced by learned counsel for the parties and perused the
record as well as law on the point with the able assistance of the learned counsel for the parties.
 
7. Under section 25 of the Customs Act, 1969, authorities are bound to assess the imported
goods under sections 25(1), however, if they are not agreed to the declared value they are
required to follow certain procedure and only after following the procedure, they can proceed to
assess the value of the goods under sections 25(5), (6),(7) (8) or (9) of Customs Act, 1969. All
these subsections clearly state that these provisions are "subject to the rules" and rules are as
mentioned in the Customs Rules, 2001".
 
8. Section 25-A grants power to the Collector as well as Director of Customs Valuation to
determine the custom value of any goods or category of goods after following the method laid
down in section 25 of Customs Act, 1969 which ever is applicable. Therefore, by reference of
section 25 in section 25A makes the Customs Rules, 2001 even applicable to section 25A. The
Customs Rules,2001 includes Rule 125 of the Customs Rules, 2001, which states as under:--
 
125. Dispute settlement.---(1) In case of dispute between the importer and the appropriate
officer in respect of the value of the goods being valued, the same shall be resolved in
consistence with the relevant provisions of the Customs Act, 1969 (IV of 1969)
 
(2) Nothing contained in this Chapter shall bar the claim of the importer for provisional
release of goods under section 81 of the Act or claim of the customs to assess the goods under
section 80 of the Act read with section 25 thereof.
 
9. The above rule clearly shows that in case there is dispute between the importer and
appropriate officer in respect of the value of the imported goods being valued, the importers can
seek provisional release of his goods under section 81 of the Act. Section 81 of the Customs Act,
1969 states as under:--
 
Provisional determination of liability.---(1) Where it is not possible for an officer of
Customs during the checking of the goods declaration to satisfy himself of the correctness of the
assessment of the goods made under section 79, for reasons that the goods require chemical or
other test or a further inquiry, an officer, not below the rank of Assistant Collector of Customs,
may order that the duty, taxes and other charges payable on such goods, be determined
provisionally:
 
Provided that the importer, save in the case of goods entered for warehousing, pays such
additional amount on the basis of provisional assessment or furnishes bank guarantees [or pay
order] of a scheduled bank along with an indemnity bond for the payment thereof as the said
officer deems indemnity bond for the payment thereof as the said officer deems sufficient to
meet the likely differential between the final determination of duty over the amount determined
provisionally:
 
Provided further that there shall be no provisional assessment under this section if no
differential amount of duty and tax is paid or secured against bank guarantee [or pay order].
 
[(2) Where any goods are allowed to be cleared or delivered on the basis of such
provisional determination, the amount of duty, taxes and charges correctly payable on those
goods shall be determined within six months of the date of provisional determination:
 
Provided that the Collector of Customs or, as the case may be, Director of Valuation, may
in circumstances of exceptional nature and after recording such circumstances, extend the period
for final determination which shall in no case exceed ninety days
 
[Provided further that any period, during which the proceedings are adjourned on account
of a stay order or for want of clarifications from the Board or the time taken through
adjournment by the importer, shall be excluded for the computation of aforesaid periods.]
 
(3) On completion of final determination, the amount already paid or guaranteed shall be
adjusted against the amount payable on the basis of final determination, and the difference
between the two amounts shall be paid forthwith to or by the importer, as the case may be.
 
(4) If the final determination is not made within the period specified in subsection (2), the
provisional determination shall, in the absence of any new evidence, be deemed to be the final
determination.
 
Explanation.---Provisional assessment means the amount of duties and taxes paid or
secured against bank guarantee [pay order.]
 
[(5) On completion of final determination under subsection (3) or (4), the appropriate
officer shall issue an order for adjustment, refund or recovery of amount determined, as the case
may be.]
 
9. The bare reading of section 81 of the Customs Act, 1969 read with Rule 125 of the
Customs Rules, 2001 clearly shows that in case of dispute with regard to the value of imported
goods, or any other dispute which requires further enquiry, the importer has the right to get his
goods released under section 81 of the Customs Act, 1969.
 
10. The purpose of these provisions is not only to protect the revenue of the State but also
provide smooth flow of trade. If the interpretation given by the learned counsel for the
respondents/ department is accepted it will result that the importers will left at the mercy of the
Customs Authorities which cannot be the intention of the legislatures.
 
11. Therefore, whenever there is a dispute between the importer and the appropriate officer
of custom with regard to the value of imported goods the importer have a right to get his goods
cleared provisionally under section 81 of the Custom Act, 1969.
 
12. In the present case, there is a dispute between the importer and appropriate officer of
customs regarding value, therefore, importer for the release of their goods under section 81 of the
Customs Act, 1969, on payment of duty and taxes on the declared value whereas difference
between the declared value and the value under Valuation Rulings has to be secured by way of
bank guarantee to the satisfaction of the Collector concerned.
 
With these observations, the instant petition stands disposed of.
 
AG/W-13/L Order accordingly.