MUHAMMAD ARIF MOTON, MEMBER (JUDICIAL-II).-This order will dispose of Customs Appeal No.K-118/2009, filed by the appellant against Order-in-Appeals Nos. 847-848 of 2007, dated 15-1-2008 passed by the Collector of Customs, Sales Tax and Federal Excise (Appeals), Karachi.

2. Brief facts of the case are that the appellant had imported a number of consignments of Dai-ichi Energy Saving Lamps, from China during November, 2005 to Feb 2006. The importers opted for the electronic clearance of the goods in terms of section 79(1) of the Customs Act, 1969, and filed their Goods Declaration (GD) for clearance of the same as per their declaration. The declaration and self assessment made by the importers was checked in terms of section 80 of the Customs Act, 1969, in the light of customs value data of identical/similar imports and found that the above named importer had imported the goods at suppressed value. Further considering the facts that the importers failed to provide the detailed particulars regarding the way their transaction was completed and they also failed to submit the requisite information/documents, as envisaged under subsection (2) of section 25 of the Customs Act, 1969, that being so, there was no question to accept their declared value as customs value in terms of subsection (1) of section 25 of the Customs Act. 1969. It was also gathered that in case of the subject item (i.e. Energy Saver Lamps/bulbs) most of the time the assessments were made provisionally or the customs value determined under secondary methods of valuation that being so during me routine course of hearing of "Review Request" the importers were informed that the value of their consignments will also not be determined in terms of subsections (5) and (6) of section 25 of the Customs Act, 1969, and in fact value of their consignment would be determined in terms of subsection (7) read with subsections (9), (11) and (13(a)) of section 25 of the Customs Act, 1969. Instead of joining the exercise of subsection (7) of section 25 of the Customs Act, 1969, the importers requested for the release of their consignment provisionally under section 81 of Customs Act, 1969. The appellant also filed C.P. No.881 of 2006 in the Hon'ble High Court of Sindh. Their consignments were thereby provisionally released under section 81 of the Customs Act, 1969 and the Assistant Collector of Customs passed the Assessment Order dated 25-6-2007 in terms of Hon'ble High Courts' order dated 5-6-2007. The relevant extract is as follows:---

"From the foregoing factual and legal position it is clear that in the light of provisions of clause (f) of subsection (2) read with subsection (13(a)) of section 25 of the Customs Act, 1969, and Rules 107(a) and 121 of the Customs Rules, 2001 the importers have neither been able to substantiate that their declared value can be considered as Customs value in terms of subsection (1) of section 25 of the Custom Act, 1969, nor they have joined the exercise to determine the value under other secondary methods of valuation. Due to concealment of vital information from the customs it is clear, that their consignment can not be evaluated under subsection (1) of section 25 of the Customs Act, 1969. Further in the absence of any consignment where value was determined under subsection (1) of section 25 of the Customs Act, 1969, the value of the said consignment cannot be determined under subsections (5) and (6) of section 25 of the Customs Act, 1969, in terms of Rules 117 and 118 of the Customs Rules, 2001. Therefore, considering the market enquiry so conducted by the Valuation Department intermittently, for the said kind of goods and also considering the customs value data of the said goods in terms of Rule 107(a) read with subsection 13(a) of section 25 of the Customs Act, 1969, the value of the subject consignment is correctly determined US$ 1.64 in terms of subsection (9) read with subsections (7) and (13(a)) of section 25 of the Customs Act, 1969, further read with Rules 107(a) and 121 of the Customs Rules, 2001. As the information like raw material cost manufacturing cost etc. has also not been provided by the importer that being so, the determination of value in terms of subsection (8) of section 25 of Act, 1909 is also not practicable. Considering the principle of equity and to any discrimination in the light of Article 25 of the Constitution of Islamic Republic of Pakistan 1973, the consignment of other importers of same kind of goods were also shown to the importers during the course of hearing, the assessment so made above in line with the current assessment practice and within four corners of law.

The importers are directed to make the payment of amount of duties and taxes, as per final assessment, a 1.34/pc for 24W, already communicated to the importers on GDs for other specifications also through PACCS, within ten days from the date of issue of this order, failing which the assessed amount will be recovered along with surcharge, as envisaged in section 202A of the Customs Act, 1969.

This order is being issued in obedience of the honourable High Court of Sindh's order dated 5-62007, which was received in the Collectorate on 6-62007. The importers, if being aggrieved with this order may file an appeal under section 193(1) of the Customs Act, 1969, before the Collector of Customs (Appeal)."

4(sic). Appellant preferred an appeal against the above order before Collector (Appeals) who also upheld the assessment order. Hence the subject appeal on the following grounds:

(i) That the appellant protested against this arbitrary assessment and therefore failing to get any relief filed a Constitutional Petition No.881 of 2006 challenging the arbitrary increase in the declared value by the Customs Authorities without having any evidence contrary to the declared value of the appellant.

(ii) That the appellant in the petition emphasized that the amendment in section 25 of the Customs Act has enacted to remove the discretionary powers of the functionaries of the C.B.R. and the concept was now based on `Transaction Value' and unless proven by Customs Authorities that the transaction value was fraudulent and such an allegation supported by evidence of the same, the declared value must be accepted.

(iii) That the said petition was disposed of by the honourable High Court vide an order dated September 8, 2006 whereby the Customs Authorities were directed to provide the appellant an opportunity to be heard before the matter was to be decided by passing a speaking order. The honourable Court further emphasized that before passing any new order the adjudicating authority must keep in mind the law laid down by the honourable High Court in the case of Rehan timer, 2006 PTD 909.

(iv) That the respondent did not abide by the Order of the honourable High Court and tried to cash the post dated cheques, furnished by the appellant under section 81, before finalizing the assessment. The appellant subsequently stopped payment.

(v) That the appellant stopping payment on the cheques was made grounds for the respondent refusing to accept post dated cheques for release of other pending consignments. The appellant subsequently filed Constitutional Petition No.792 of 2007.

(vi) That it is respectfully submitted that no evidence was supplied by the respondent and instead a frivolous letter was written calling upon the respondent to supply the entire record of his imports.

(vii) That if the respondent was not clear in his mind about the task being entrusted to him he ought to have sought clarification from the Hon'ble Court however the manner in which the respondent has acted amounts sitting as a court of appeal over the order passed in Rehan Umer's case and falls in the ambit of contempt of court. It is respectfully submitted that an adjudicating officer has flouted the law to please his superior.

(viii) That without prejudice to what has been stated above, it is submitter that the Assistant Collector acting as an adjudicating offices totally ignored the fact that the arbitrary increase in declared value has been made at the dictates of multi-national companies in Pakistan and the procedure for fixation of value as provided under section 25 of the Customs Act has not been followed.

(ix) That the respondent totally ignored the guidelines given by the Division Bench of the honourable High Court in Shoaib Khan's case wherein the Honorable High Court has laid down guidelines for the application of section 25 of the Customs Act.

(x) That the Valuation Advice dated October 5, 2006 has no legal sanctity as in the past the honourable High Court has struck down such letters. Such letter, is without any lawful authority, illegal, baseless and devoid of any logic or substance. The price mentioned in the said letter has been concocted, fabricated and enhanced in ignorance of section 25 of the Customs Act and provisions of section 25(7) have been invoked arbitrarily without affording the appellant with en opportunity to be heard.

(xi) That it is respectfully submitted that no basis for evaluation and determination as stated in the Assessment Order No.MCC-LA W-21-2007 dated June 25, 2007 was provided to the appellant despite numerous requests asking for the same. No details were provided by the Customs Authorities as to the manner or method used to conduct the market inquiry and arrive at the price mentioned in the Assessment Order.

(xii) That it is further respectfully submitted that the Customs Authorities vide Valuation Ruling No.Misc./5212007-. VI1AJ801120 dated February 9, 2008 reduced the price determined by the Assessment Order by 30%. It is hereby respectfully submitted that the Valuation Ruling clearly shows that the attitude of the Assessing Officer was biased and the order so passed was done with malice to injure the good name and reputation of the appellant as it would be impossible to justify a reduction in the price evaluated considering the global price increase in energy saver light bulbs.

(xiii) That the respondent failed to appreciate that section 25 does not allow the-department to fix the price by issuing such Valuation Advices. The learned Assistant Collector failed to appreciate that valuation advice is to be obtained by the assessing authority if so requested by the importer to resolve the dispute or where the transaction value can not be ascertained otherwise the assessment has to made in terms of section 25 on the basis of the declared value or evidentiary value if any available with the assessing authority in respect of identical goods from the same - country of origin for the maximum quantity available and must not be determined on the basis of price offered for the purchase of a single unit from the local market as conducted by the Customs Authorities in the present matter.

(xiv) That it is respectfully submitted that the local price increase was a direct reflection of an increase in global prices of energy saver light bulbs during the year and a half and the respondent's declared value of energy saver light bulbs increased by 60% during the same period.

(xv) That the respondent failed to appreciate that there is not an iota of evidence to suggest that Transaction Value on the basis of which the appellant has declared its value is fraudulent or the parties to the transaction are related in any manner. In the absence of any such evidence the value declared by the appellant must be accepted. The adjudicating officer had nothing before him to support the impugned order. The impugned order has been passed with mala fide intentions and motives in bad faith.

(xvi) That the Collector ought to have considered that the respondents being government functionaries and a revenue collecting agency are bound to follow the provisions of the Customs Act in letter and spirit and the declared value of the appellant cannot be ignored or enhanced.

(xvii) That the Collector ought to have considered that the valuation was not completed or finalized by the Customs Authorities for eighteen (18) months after the said order-in-original was issued and this ground alone is sufficient for granting him the relief he seeks from this honourable Court. Without prejudice to the respondent or the Customs Authorities the appellant did furnish them with a `Certificate of Pricing' which was rejected by the Customs Authorities.

(xviii) That the learned Assistant Collector failed to appreciate that neither any reasoning nor any justification has been given for not believing the Declared Value of the appellant and accepting the value suggested by some complainant whose identity and credentials are doubtful.

(xix) That any doubts over the Declared Value and/or Value could have been confirmed from the Pakistan Customs Computerized System (PaCCS). A pre-requisite for clearing goods using the mode by an importer must be made electronically through a local bank.

(xx) That the learned Assistant Collector failed to appreciate that the Department has no lawful authority to fix the price of any imported item unless it has in its possession evidence of higher price of the same period and even then the price cannot be enhanced unless and until it is proved that a relationship exists between the exporter and importer. Therefore, the letter dated October 5, 2006 is illegal, without jurisdiction and has no legal sanctity. The prices suggested in the letter therefore cannot be made the basis for disregarding the Declared Value of the petitioners imports and, therefore, such letters are liable to be struck down.

(xxi) That the learned Assistant Collector ought to have held that the manner in which the letter dated October 6, 2006 renders the provisions of section 25 of the Customs Act redundant is violative of the law and therefore liable to be struck down ab initio. It appears that the impugned order has been passed in ignorance of the law.

(xxii) That the impugned order passed by the respondent is therefore illegal, against the relevant law, rules, regulations and based on an incorrect application of mind and interpretation of the same.

(xxiii) That the impugned order is a poor attempt to nullify the effect of Rehan Umer's case which is still in the field. The impugned order amounts to belittling and contempt of the Superior Judicial forum.

(xxiv) That the assessment of the payable amount has not been done in accordance with the law and nothing is on record to show/ substantiate/authenticate and support it. The impugned order is a result of lack of knowledge of the law.

5. The departmental representatives during the course of hearing conducted on 12-12-2009, 21-12-2009 and 6-1-2010 argued the case and read the assessment order dated 25-6-2007 thereby supporting their verbal and written depositions.

COUNTER SUBMISSIONS ON BEHALF OF THE RESPONDENTS FILED ON 29-9-2008.

(i) That the appellants approached this honourable Court with unclean hands and false statements. As evident from the contents of para. (1) of the assessment order, impugned by the appellant, the respondents followed the guide lines provided by the honourable 11igh Court of Sindh in the cases of Rehan timer and Shoaib Khan, cited by the appellants.

(ii) It is respectfully submitted that nowhere in section 25 of the Customs Act, 1969, it has been stated that every declared value is to be accepted for the assessment purposes and rather the provision of subsection (1) of section 25 of the Customs Act, 1969, asking for the acceptance of a payable transaction value (which is not in this case) as customs value on the following conditions:

(iii) subject to subsequent subsections of section 25 and rules (i.e. Chapter-IX of the Customs Rules, 2001).

(iv) that the value paid by an importer must he in agreement with the "payable" value in the market of similar kind of goods.

That first of all it is proved from the record of the case that no information or corroborative documents were provided and the appellant have failed to provide any corroborative documents i.e. L/C, etc, to prove the transaction of even suppresses declared value. Thus, the appellants have failed substantiate their "paid" value.

(4) That secondly, the Appropriate Officer, by virtue of powers conferred under subsection (11) of section 25 of the Customs Act, 1969, shall have a right to satisfy himself whether the "paid" value is true "payable" transaction value to be considered as customs value for assessment purposes. For this purpose apart from other information/documents, as requisitioned by the customs the importer is duty bound to provide the information about the price adjustments, along with corroborative documents, as envisaged in subsection (2) of section 25 of the Customs Act, 1969. Admittedly in the instant case the appellants have failed to provide the said information/ documents thus, in terms of clause (t) of section 25(2) of the Customs Act, 1969, there is no question to accept the declared value as customs value in terms of section 25(1) of the Customs Act, 1969. The record and circumstances of the case proving that the customs value of the appellant's consignment can not be determined on the basis of their declared value.

(5) That thirdly, the words "subject to the provisions of this section and rules, appeared in section 25(1) of the Customs Act, 1969, have a great importance while accepting any transaction value as customs value. These words clearly confirm that even if an importer proves his declared value as truly paid transaction value in that case too the acceptance of the said value as customs value is subject to comparison with the 90 days' data of the customs values in terms of Rule 107 of the Customs Rules, 2001. If the said declared value is not in agreement with Rule 107's data then the same can not be accepted as payable transaction customs value.

(6) That the determination of customs value for assessment purposes is subject to all subsections (25) of the Customs Act 1969 and the Rules thereof (Chapter-IX of the Customs Rules, 2001). Once an evidence of determined customs value, proving that the imported goods are of higher value, comes to notice, as it happened in the subject case, the credibility of the value declared by an importer ceases to exist and then other methods of valuation for the determination of the customs value of imported goods become available to the customs authorities. This is the position which emerges after plain reading of whole provisions of section 25 of the Customs Act, 1969, in totality, as well as the Rules made thereunder. The record confirms that the appellant approached this honourable Tribunal with only one motive to get their goods reassessed at their suppressed declared value.

(7) That in the presence of the evidential Goods Declaration (G.D.) of higher customs value the re-assessment of the imported consignments are invariably made accordingly under section 80 of the Customs Act, 1969 read with subsection (11) of section 25 ibid. Thus, any deviation, as claimed by the appellant, would hit the rights of the respondents to determine the value of the imported goods in the light of subsection (11) read with subsec