KARACHI: A two-member bench of the Sindh High Court (SHC) dismissed all special customs reference applications filed by Collector of Customs against M/s Najuddin Ahmed & Co and others challenging the order passed by the customs appellate tribunal regarding mis-declaration. A details judgment released on Feb 08, 2021, Justice Muhammad Junaid Ghaffar & Justice Agha Faisal had heard these applications.
According to the judgment, “we have also noted that the Valuation Ruling No. 827/2006 dated 15.11.2006 in question is though titled as a Valuation Ruling; but in fact, is a Valuation Advice pertaining to a consignment imported by M/s Elite Chemicals Karachi imported on 20.04.2006 i.e. much prior to the import in question. Moreover, such a Valuation Advice is only relatable to the specific consignment for which the advice had been sought by the respective Collectorate from the Valuation Department and cannot be treated as a statutory Valuation Ruling in terms of section 25-A of the Act.
Therefore, even if there was a Valuation Advice in field; it was not strictly applicable on the Respondents imports coming into Pakistan much subsequent to the period for which the Valuation Advice was issued and that too for a specific consignment as per the details mentioned therein.
Moreover, and without prejudice, it is also settled proposition of law that a Valuation Advice (and not a Valuation Ruling) is nothing but an advice which has no binding effect, whereas, it is not to be taken as a conclusive evidence while making assessment ofgoods4; and reliance upon the valuation advice simpliciter is not a valid basis of assessment of the value of imported goods within the framework of section 25 of the Act5; hence, after releasing the consignments without any objection as to the values so declared, merely on the basis of a valuation advice of 2006, which was already in field and appears to have been discarded by the assessing officer, it was not justified to issue a show cause notice on such basis”.
Another side, counsel for the collector of customs had argued that respondents have imported various consignments of Hexahydrothymol and filed Home Consumption SCRA Nos. 156 to 167/2016 Page 3 of 7 Goods Declarations, claiming assessment under HS Code 2915.3990 and all such Goods Declarations were processed and were out of charged by releasing the goods in question. Thereafter, Show Cause Notices were issued under s.32 of the Act to the Respondents on the ground that the item in question consists of Menthol which is to be assessed at a much higher value; hence, a case of mis-declaration is made out. The relevant and operating part of the Show Cause Notice reads as under:- “The instant import consists of Menthol i.e. Hexahydro Thymol which is being assessed @ US $ 20.45/Kg as per Valuation Advice No. 829/2006 dated 15.11.2006.
On post importation scrutiny of documents, it revealed that apart from the facts narrated above, importers tried to escape the actual valuation by declaring chemical winked and the goods could be released at lower value than the actual one. This mis-declaration is therefore, resulted in short recovery of Rs. 354470/- (i.e. customs duty Rs. 59938/- sales tax Rs. 188802/- and income tax Rs. 86849/- additional sales tax Rs. 18881/- which is recoverable in this case.” 5. According to the contents of the Show Cause Notice as above, it appears that the Applicant’s case is that Menthol is to be assessed @ US$ 20.45/Kg pursuant to some Valuation Ruling as against declared value, and therefore, the Respondents are liable for to pay the short levied amount in question. The said Show Cause Notices were decided by the Adjudicating authority and were challenged in customs appellate tribunal which set aside orders of the adjudicating authority.
