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DG Customs Valuation disposes of revision petition of M/s Hansika Enterprises, others

DG Customs Valuation disposes of revision petition of M/s Hansika Enterprises, others

KARACHI: Director General Customs Valuation Syed Tanveer Ahmed issues Order in Revision No. 255/2016 under section 25-D of the Customs Act, 1969 against Valuation Ruling No.849/2016 dated 06-05-2016

The revision petition was filed by M/s Hansika Enterprises and Others under section 25-D of the Customs Act, 1969 against customs value determined vide Valuation Ruling No.849/2016 dated 06-05-2016 issued under Section 25-A of the Customs Act, 1969.

The applicant being active importer has been importing shampoos of various brands from China, UAE and other countries continuously without any hindrance and or any allegation of under invoicing and mis-declaration.

The Director Valuation has issued valuation ruling No.849/2016 dated 06.05.2016, Superseding valuation ruling No.814/2016, ostensibly under Section 25A of the Customs Act, 1969, illegally and in violation of Section 25A and Superior courts judgments pronounced in a number of cases.

The impugned valuation ruling has enhanced the values of shampoos unilaterally and illegally. To the dismay of the applicant, the impugned valuation ruling has fixed the customs values at $1.1 per kg illegally and unilaterally. It is pertinent to mention here that as per the Superseded valuation ruling No.814/2016, the value of the shampoos imported by the applicant was determined at USS 0.9 per kg and the determination of the value was made after giving hearing to all the stakeholders and the same was accepted to all stakeholders including the local manufacturers. However, the impugned valuation ruling No. 849/2016 dated 06.05.2016 has been issued in violation of Section 25A of the 1969 Act and it was issued unilaterally and without hearing the stakeholders. The method adopted in determining the impugned VR is in utter violation of under Section 25 and 25A of the Customs Act, 1969, and as interpreted in Sadia Jabar case as well as in Goodwill Traders case reported in 2014 PTD 176.

After the issuance of impugned valuation ruling, there has been a considerable decline in the import of shampoos. This would result in rampant increase in smuggling of perfumes to Pakistan from various routes.

The impugned valuation ruling appears to have been issued on the basis of international prices gathered from internet sources, which is in utter violation of under Section 25 and 25A of the Customs Act, 1969 and Customs Rules, 2001 and Superior courts judgments pronounced in a number of cases.

The petitioner also quoted some of the judgments of the Higher Judiciary concluded that the Valuation Ruling is ultra vires section 25A. One obvious reason for this is that it states, at the end, that “if the declared/invoice value is higher the same shall be applied”. In other words, the values determined by the Valuation Ruling are minimum customs values. This is flatly contrary to Rule 110 (iv) and hence to subsection (9) of section 25.” and requested to revise the impugned valuation ruling keeping in view above characteristics and issue the fresh Valuation ruling and release its consignment at the declare value.

Director General Customs Valuation Syed Tanveer Ahmed in his order stated that, the case record and written as well as verbal submissions of the petitioners were examined in detail. The petitioner in their review application dated 30.6.2016 under Section 25-D of the Customs Act 1969, stated that they are aggrieved with the customs value determined for shampoos of various brands at US$1.10/Kg, under C-Category Brands vide Valuation Ruling 849/2016 dated 06.05.2016. They also objected the revision of previous Valuation Ruling 814/2016 dated 28.01.2016 and termed the act of revision of the valuation ruling as illegal and in violation of provisions of section 25-A of the Customs Act 1969.

As regards the legality of the process of revision of Valuation Ruling 814/2016 is concerned it is noted that there were number of review petitions filed by importers against the said valuation ruling. Moreover, the honorable High Court of Sindh at Karachi vide orders dated 10-11-2015 in constitutional petition No. D-6918/2015 directed that in cases where the valuation ruling is more than 90 days old and an importer has approached Director Valuation in terms of Para 21 of the Judgment in the case of Sadia Jabbar Supra, fresh consignments of such importers shall be allowed provisional release in terms of Section 81 of the Customs Act, 1969. Since 90 days were passed to Valuation Ruling 813/2016 and a number of representations were received from commercial importers and multi-national companies regarding values determined in the valuation ruling, hence an exercise was initiated to re-determine the customs value of the items under reference. Hence question of illegal or violation of law does not arise at all.

With reference to their grievance for customs value determined for shampoos at US$1.10/Kg respectively, under C-Category Brands vide Valuation Ruling 849/2016 dated 06.05.2016, perusal of the said ruling reflects that custom value of the items were determined in three categories i.e. High price brands in A-Category, Medium price brands in B- Category and low end brands in C- Category. The petitioner’s brands are already placed in low end brands. The applications of customs Values so determined are not restricted to the petitioner only but are applicable to all imports throughout Pakistan without any exception.

The Director General Customs Valuation also stated that, I have deliberated on the case record as well as Verbal and written arguments put forth by the petitioners and the respondent department. The respondent department submitted that the valuation ruling was correctly and lawfully revised after giving hearing opportunity to all stake holders/ importers. The inputs during meeting from the participants to determine the customs value and place the goods/brands in accordance to their value i.e. high value, medium value and low end brands were taken into consideration. The department further stated that all valuation methods from Sub- Section (1) to (8) Were properly exhausted Sequentially to address the valuation issue in hand and reasons for rejection of the same have also been clearly mentioned in the ruling. Consequently, the impugned valuation ruling was issued under Section 25 (9) of the Customs Act, 1969 after examining the import data, on line prices from international websites and by analyzing all the gathered information.

Director General Customs Valuation Syed Tanveer Ahmed said that in view of above, I have inferred that customs values have been determined on reasonable and Sound basis after giving fair opportunity to the stake holders, in accordance with the law. The Valuation Ruling 849/2016 dated 06.05.2016, is therefore upheld and revision petition is rejected.