This case relates to the validity of a Valuation Advice under section 25-A in the light of the provisions of section 25 and the Rules.
In the instant case, the value of the imported goods was determined under a Valuation Ruling issued under section 25-A of the Act. However Petitioner was aggrieved of the valuation made by the Customs Officials on the basis of the Valuation Ruling as aforesaid. The Petitioner therefore filed a writ petition and challenged the Valuation Ruling issued under section 25 (7) (deductive method) on the grounds of non-compliance with statutory provisions and discrimination.
The Court accepted the writ petition while relying on one of its earlier judgments which held that:
Therefore there is no reason for this Court to agree with the learned Legal Adviser that the compliance has been made as was legally required. The advice speaks of non-acceptance of the transportable value of the identical and similar goods for the reason that the quality of the product is different but however it has not mentioned what convinced the authority to adopt deductive valuation method for preparation of the said ruling. As already said, it should have been based upon proper discussion and reference to the value of the said items. Neither the unit price has been mentioned nor its retail price in the market has been identified. The method in fact is again the same repetition as was being done earlier except that the nomenclature of the method is now being referred. There is therefore no reason for this Court to agree with the respondents counsel that the advice is valid, lawful and applicable on the facts of this case.
PTCL 2010 CL 868 (SHC) COLLECTOR OF CUSTOMS v M/S CHINA NATIONAL WATER RESOURCES
The question that came up for discussion in this case was that is it permissible under section 25 of the Act that the price of any imported good can be determined on the mere opinion (in this case Ambassador of Pakistan in Japan) of a person.
The respondent had imported 8 units of Mitsubishi Dump Truck in CBU condition from Japan. On arrival of the consignment, the respondent filed bill of entry alongwith general declaration for home consumption and declared the unit value of the Dump Truck to be 4,970,000 Japanese Yen. Department however was not agreed with the value declared and therefore provisional assessment under section 81 by adding value of 15% was made. The matter was then referred to the Director General Valuation. The Director General on the basis of a letter from the Embassy of Pakistan in Japan advised valuation per unit of Japanese 6,000,000. The respondent was called upon to pay an amount of Rs. 4,240,636 within seven days. The respondent however contested the assessment made on the mere opinion of the Ambassador of Pakistan in Japan but failed to convince the Customs authorities of his contention. He was however successful before the Tribunal. The matter went up to the High Court.
The High Court relied upon its earlier Judgment on this point i.e. Abdul Aziz Ayoob versus Assistant Collector of Customs (PTCL 1990 CL 1041) in which it was held:
This brings us to the next question whether the basis which was adopted by the customs to determine the price of the imported goods was contrary to law. As seen above, learned Counsel has placed reliance on Collector of Central Excise and Land Customs v. Imdad Ali 1969 SCMR 708 in which case for various reasons detailed in the Judgment the Supreme Court declined to uphold reliance on a certificate issued by the relevant Embassy of Pakistan as regards the price of the imported commodity. We would straightaway record that such basis as a rule suffers from serious infirmity and should be avoided. Where such a letter or certificate is relied upon the Embassy concerned should be asked as opined in the Supreme Court Judgment to attach a price list or certificates from the traders or their own certified assessment in the relevant country wasand short of this the version of the Embassy should not be accepted.
PTCL 2007 CL 199 (SC) M/s Flying Board v. Deputy Collector of Customs
The issue dealt with in this case is whether an importer can take benefit of the falling prices in so far assessment under section 25 is concerned.
The Appellants imported 21 consignments on the declared value of $500 each. Pre-Shipment Inspection Company however determined the value at $ 510.05. In the meantime there was news that the international prices of the consignments had been depreciating considerably in prices in the international markets. The Appellants approached the High Court for relief. The High Court vide an interim order dated 25-11-1996 allowed the provisional release of goods at $350 plus 10% of the declared market value. However Deputy Collector Customs vide order dated 22-02-2002 directed appellant to clear the consignment at the invoice value of the goods at $ 510.05 per metric ton. The Appellant preferred an appeal without success to the Collector of Customs. Thereafter appeals made to the High Court were also dismissed.
The issue before the Supreme Court was whether under the provisions of section 25, the Appellant could claim to have its goods cleared below the declared invoice value. The Supreme Court held:
The appellant having imported the 21 consignments at the declared price of $ 500per metric ton could not claim to be assessed at the lower prices of $350/370 per metric ton. The appellant having imported the 21 consignments at the declared price of $500 per metric ton could not claim to be assessed at a lower price even if it had succeeded to establish that prices had gone down after purchase of the above consignments.
PTCL 2006 CL 499 (LHC) M/s Sohrab Global Marketing versus Deputy Collector Customs
This case deals with the issue of issuing frequent Valuation Advices and not resorting to the provisions of section 25 for the valuation of goods.
The Petitioner imported goods which were not valued at the declared value but under a Valuation Advice dated 19-03-2005. Aggrieved with the valuation made under the valuation advice and not under the declared value, the Petitioner approached the High Court through writ petition.
The High Court held that it is the duty of the Customs Officials to assess value under the provisions of section 25 of the Customs Act taking into consideration various factors mentioned therein. The High Court held that indeed the custom officials were in breach of the aforesaid duty when they determine value according to a Valuation Advice. The High Court also questioned the unlimited power of the custom official to take resort to section 25-A while ignoring completely the provisions of section 25.