KARACHI: The Director General of the Directorate General Customs Valuation Samaira Nazir Khan has rejected a Review Petition through Order in Revision No.111 /2015 under section 25-D of the Customs Act, 1969 against Amendment to Valuation Ruling No.717/2012 dated 11-02-2015.
These revision petitions were filed under section 25-D of the Customs Act, 1969 against Customs Value determined for Iron and Steel HRC, CRC & GP Secondary Quality vide Valuation Ruling No.717/2015 dated 11-2-2015 issued under section 25-A of the Customs Act, 1969 inter alia on the following grounds, as reproduced below;
M/s International Steels Ltd.
- “Being seriously aggrieved with the determination of Customs Value of “SECONDARY QUALITY” HRC, CRC and GP under Section 25A of the Customs Act 1969 vide Valuation Ruling No.717/2015 Dated: 11.2.2015, we beg to most respectfully file this Review Petition under Section 25D of Customs Act, 1969.
- Firstly, it is submitted that the learned Director Valuation has not taken into consideration our detail representation.
- Secondly, this measure of 15% discount on Prices of Prime quality CR (72.09) and GP (72.10) is completely negates the impact of Regulatory Duty levied by Federal Board of Revenue vide SRO No.18/2015 Dated: 14.01.2015.
Thirdly, the difference between Prime and Secondary flat rolled products may please be decided @ 7%. We would like to bring in your kind notice that Pakistan Steel Mills which is a government institution also offers their secondary quality Coils @ 1% to 7% maximum discount over prime quality which may please be considered.
Fourthly, in a similar case the Directorate of customs valuation has already decided in Valuation Ruling No. Misc/13/2006-IVA dated 04.2.2010 that the difference between prime and secondary quality is ranging from 1% to 2%. It would be advantageous to quote the relevant Para 4 of the above valuation ruling “In order to determine prices of secondary quality ETP/TFS it would be appropriate that weighted average value of prime quality goods imported by reliable importer i.e. M/s Karim Containers for past 90 days is taken as benchmark and justifiable discount is allowed thereon. Although industry standard appears to be discount of 1% or 2% in this case 5% discount on customs value of prime quality can be allowed”.
Order
The instant Revision Petitions (Nos.159/2015 by M/s International Steel and No. 161/2015 by M/s Aisha Steel Mills Ltd) were filed against Valuation Ruling No.717/2015 dated 11.2.2015. These were initially fixed for hearing on 2.3.2015, which was jointly attended bythe importers’ representatives namely Mr. Mumtaz Ali Consultant along with Mr. Taufiq Chinoy M.D. International Steels Ltd and Mr Tahir Iqbal, CFO; Mr Khurram Abbas of Aisha Steels Mills Ltd. In Valuation Ruling No. 717/2015 dated 11.2.2015 the values of secondary quality HRC, CRC and GP sheets have been linked with values given in LMB (London Metal Bulletin) of the prime quality sheets with a discount of 15%. This discount has been allowed on account of being secondary quality.
In her order Director General Customs Valuation Samaira Nazir Khan stated that she had examined the petitioners’ arguments as well as the Department’s submission in the light of facts of the case on record. The petitioners are local manufacturers of these sheets and have agitated against the determination mainly on following grounds;
* Parameters laid down under section 25-A were not followed.* Discount of 15% on account of being secondary quality is too high and the sale of such sheets by the local manufacturers indicates that this percentage is high. The local manufacturers not only supplied these items in Pakistan but have also exported to other countries.* There are international standards; these sheets are made according to these standards only. No standard indicate that this high discount can be allowed.
The petitioners referred to international standards for different types of sheet but they all relate to prime quality sheets. There is no standard which indicate specifications of secondary quality sheets, therefore, exact discount on account of the sheet being secondary quality cannot be precisely determined.
The Departmental Representative also brought in my knowledge that the tariffs in prime and secondary quality sheets are very different and secondary quality sheets are subjected to Customs duty at twice the rate of prime quality sheets and that local manufacturers are trying to make the landed cost of secondary quality sheet higher than prime quality sheet. The DR, however,admitted that while determining customs values, no consideration to tariffs was given and values were determined solely on the basis of investigations and proceedings by the Department as indicated in the Valuation Ruling.
. In view of the foregoing position, I am led to conclude that the impugned ruling is reflective of reasonably sound and valid basis of determination. It was issued after due process and in consideration of the inputs given by different stakeholders. The exercise so conducted in this regard shows valid application of laws and convincing reasons have been given as reproduced above to justify issuance of the Ruling. The impugned Valuation Ruling No.717 dated 11.2.2015 is held to be issued in accordance with law and prescribed procedure and the same is, therefore, upheld and the petition is hereby rejected.
