Appeal C.A. No.1380/LB of 2005, decided on 2nd May, 2006. Versus Appeal C.A. No.1380/LB of 2005, decided on 2nd May, 2006.
SAEED AKHTAR (MEMBER TECHNICAL).--- This appeal is directed against Order-in-Original No.26 of 2005 passed by the learned Collector Customs, Sales Tax and Federal Excise (Appeals), Lahore issued vide C.No.V-Cus-App/ 145/2005/637, dated 29-10-2005 where-under the appeal of Messrs Naafi Agro (Pvt.) Ltd., Circular Road, Lahore against assessment order C. No. V-Cus/Miscellaneous/206(I)/ 2004/1075, dated 5-7-2005 was dismissed upholding the assessment order whereunder the appellant was directed to deposit an amount of Rs.3,13,678 short assessed on the import of Cocoa Powder from China.
2. Brief facts of the case are that Messrs Naafi Agro (Pvt.) Ltd., Circular Road, Lahore imported a consignment of Cocoa Powder and filed Goods Declaration No.294, dated 26-8-2004 through Customs Clearing Agent Messrs Khawaja International declaring the value @ US $ 0.72/Kg. The goods after examination were assessed provisionally @ US $ 1.69/Kg and the case was referred to the Controller of Customs, Valuation, Karachi for the determination of value. The appellant deposited duties and taxes at the declared value and furnished indemnity bond for the differential amount of duties and taxes pending finalization of assessment. The Customs Authorities on receipt of valuation advice vide Letter No.1/78/2004-IA/2969, dated 28-5-2005, finalized the assessment @ US $ 1.40/Kg and issued final assessment order vide C. No. V. Cus/Misc/206(I)/2004/075, dated 5-7-2005 and directed the appellant (then respondent) to deposit an amount of Rs.3,13,678 short assessed at the time of clearance of goods. The appellant feeling aggrieved with the assessment order, dated 5-7-2005 filed appeal before the learned Collector (Appeals). The learned Collector (Appeals) after considering the contentions of parties dismissed the appeal confirming the assessment order against which the present appeal under section 194-A of the Customs Act, 1969 has been filed before this Tribunal.
3. The main contentions of learned counsel for the appellant in the memo of appeal were as under:--
(1) That the appellant, imported a consignment of National Cocoa Powder NL01 weighing 16000/kgs at the unit value of US $ 0.725/Kg of the total value of US $ 11600 against letter of credit established on the basis of proper contract, dated 23-6-2004 direct from manufacturer in China seeking assessment on the basis of transactional value in terms of section 25(1) of the Customs Act, 1969 read with Chapter-IX of the Customs Rules, 2001 notified vide S.R.O. 450(I)/2001, dated 18-6-2001.
(2) That on filing bill of entry, transactional value was not accepted and it was enhanced to US $ 1.69/Kg provisionally without any legal justification and the appellant was directed to pay duties and taxes in cash on the declared value and furnish Indemnity Bond for the differential amount of duties and taxes pending finalization of assessment. Since, the consignment was lying at the port therefore, the appellant paid duties and taxes and furnished Indemnity Bond accordingly. After the lapse of one year without affording opportunity of hearing to the importer a final assessment order @ US $ 1.40/Kg, dated 5-7-2005 was issued on the basis of valuation information received from the office of Controller of Customs Valuation, Karachi vide Letter No.1/78/2004-IA/2969, dated 28-5-2005.
(3) That on receipt of impugned Final Assessment Order the Customs Authorities were approached for furnishing the basis of final assessment order and according to the information received assessment was finalized on the basis of valuation data supplied by the office of Controller of Customs Valuation. The scrutiny of information has revealed that identical/similar goods were released at different values i.e. US $ 140, 130, 107, 130, 130, 1.10/kg etc. etc. The detailed scrutiny of the information/data supplied by the Customs Authority further revealed that some of the values in the data were provisional values. The said data did not contain the transactional value of the identical goods and as such no assessment can be finalized on the basis of provisional values or the values other than the transactional value.
(4) That aggrieved by the final assessment order, dated 5-7-2005, appellant filed appeal before the learned Collector (Appeals) who rejected the appeal without considering the legal as well as factual submissions made by the appellant. The learned Collector (Appeals) was under legal obligation to discuss each and every issue raised before him and give findings on issues but he dismissed the appeal without considering the contentions of the counsel for the appellant.
(5) It is settled law that while making assessment on the basis of evidence the transactional value of identical or similar goods is to be taken and not the assessed value. It is submitted that the data received vide letter, dated 28-5-2005 from the office of Controller of Customs Valuation contained values ranging from US $ 1.07/Kg to US $ 1.40/Kg and in some cases goods were assessed provisionally. The respondent therefore, was not justified to apply the highest value to the goods of appellant. He should have applied the minimum value mentioned in the said data provided by the Customs Valuation. Moreover, no grading has been mentioned in the said data of the imported goods as the goods in question carry different grades and there are different values for different grades.
(6) That besides above, for rejecting transactional value, a mandatory notice as required under section 25(4) of the Customs Act, 1969 was to be given to the appellant before rejecting the declared value. Since, no hearing has taken place before finalization of the assessment therefore, the appellant was deprived of its right to explain his position before the passing of final order. In view of above, the entire exercise on the part of respondent is illegal.
(7) That the appellant provided to the concerned authorities of Customs, invoice, transactional value and packing list duly authenticated by the Embassy of Pakistan in Beijing (China). It was also authenticated by the Chamber of Commerce of the exporting country. There was therefore, no justification with the respondent to reject the transactional value declared by the appellant. That even otherwise the value of the goods was assessed in violation of mandatory provisions of sub-section (5)(d) of section 25 of the Customs Act, 1969. The respondents were under legal obligation to apply lowest transaction value of the identical goods as required under the law. The learned counsel requested that the appeal against the impugned order may be accepted.
4. The respondents were represented by Ms. Zeba Hayee learned D.R. who in response to the contentions of learned counsel could not produce any evidence of transactional value of import of similar or identical goods. The learned D.R. contended that the value has been revised on the basis of valuation data provided by the office of Controller of Customs Valuation.
5. We have heard the contentions of both the sides and perused the appeal file available before us. The scrutiny of the case record has revealed that the imported goods Cocoa Powder was initially assessed provisionally @ US $ 1.69/Kg against the declared value of US $ 0.72/Kg. However, provisional release was allowed on the declared value securing the differential amount with the Indemnity Bond and the case was referred to the office of Controller of Customs. Valuation who vide its letter, dated 28-5-2005 forwarded valuation data to the Collectorate of Customs for taking necessary action in the case. The Customs Authorities considering the information available in the valuation data finalized assessment @ US $ 1.40/Kg and issued a final assessment order, dated 5-7-2005 against which an appeal was filed before the learned Collector (Appeals) who dismissed the appeal on the plea that the value was finalized on the basis of valuation data made available by the office of Controller of Customs Valuation and the appellant does not have any evidential data to substantiate their case. The learned counsel for the appellant in the memo of appeal has raised many issues and contended that the finalization of assessment by the Customs Authorities was illegal and the learned Collector (Appeals) has dismissed his appeal without application of open mind and passed a non-speaking order without taking care of the issues raised in the appeal. We after considering the contentions of the parties, have observed that the contentions of the learned counsel were not properly addressed in the order-in-appeal and the case was summarily dismissed. The learned counsel in his memo of appeal has raised different issues which were required to be addressed before giving the final judgment. The imported goods were provisionally assessed at the US $ 1.69/kg without any justification as no evidence of actual import of goods was available with customs. The goods were allowed to release on the declared value securing differential amount through Indemnity Bond. The appellant was not afforded opportunity of hearing before finalization of assessment and ex parte final assessment order was issued confirming the assessment at US $ 1.40/Kg. The finalization of assessment without affording opportunity of hearing is not in accordance with the law. The basis of assessment was valuation data furnished by the Controller of Customs Valuation vide its letter, dated 28-5-2005 wherein some of the values given in data were provisional values. The values of identical/similar goods provided by the Controller Valuation ranged between US $ 1.10 to 1.40/kg and the Customs Authorities have taken highest value for assessment purposes ignoring all the lower values without any justifica tion. No evidence of actual import/transactional value was confronted to the appellant before finalization of provisional assessment. The imported goods Cocoa Powder is imported in different grades and qualities while in the evidential data which, formed basis for the finalization of assessment, no grades were given. It is pertinent to point out that the value of goods varies according to grade and quality. The application of highest value as available in the evidential data is therefore not justified. The appellant provided copies of invoice and packing list authenticated by Embassy of Pakistan Beijing. The appellant also produced import documents authenticated by the Chamber of Commerce of the exporting country but these documents were not considered by the Customs Authorities before finalization of assessment. We have observed that the customs authorities failed to follow all the steps required to be taken for the finalization of value under section 25 of the Customs Act, 1969, read with Chapter-IX of the Customs Rules, 2001 notified vide S.R.O. 450(I)/2001, dated 18-6-2001. The learned counsel contended that the learned Collector (Appeals) has not considered the contentions of appellant and dismissed the appeal without justification.
6. The learned counsel at the time of hearing contended that the points raised by him in the memo of appeal were also raised before the learned Collector (Appeals) but these were summarily dismissed without any legal justification therefore the appeal may be accepted as previous orders passed by the Customs Authorities including the Collector (Appeals) are not in accordance with the law. We after considering the contentions of the parties find force in the contentions of learned counsel for the appellant. Since the contentions of the learned counsel were not properly examined at the appropriate level, therefore, the impugned orders are set aside and the case is remanded to the learned Collector (Appeals) for reconsideration and fresh decision on merit after affording opportunity of hearing to both the parties.
7. The appeal stands disposed of as above.
C.M.A./159/Tax (Trib.) Case remanded.