KARACHI: The Sindh High Court ordered the Customs authorities to immediately release imported consignment withheld after completion of Goods Declaration (GD) and payment of all duties and taxes under the garb of unilateral change of PCT Heading instead of the PCT Heading specifically earmarked for the goods.
The court issued the order while hearing a constitutional petition filed by M/S Rajwani Denim Mills, through Advocate Raja Nawaz. The petitioner had prayed the court to declare the impugned action of the Collector of Customs-East and the Deputy Collector (Research & Development) Department of withholding goods after completion of GD and payment of all duties and taxes under the garb of unilateral change of PCT Heading to 5402.6900 titled “Others” for Spendex Yarn Lycra instead of PCT Heading 5402-4410 specifically earmarked for it.
The petitioner also prayed the court to declare that his consignments do fall in PCT Heading 5402-4410 and such established and consistent practice should be followed. The petitioner further prayed the court to declare that any change of classification and interpretation having been followed consistently due to established past practice cannot be changed with retrospective effect and can only operate as prospectively after duly notifying the same through a public notice in terms of CGO 12/2002 dated 15.6.2002 and the same cannot effect past and closed transaction as valuable vested rights have already accrued in favour of the petitioner.
The petitioner submitted that he is a 100 percent oriented project and is engaged in manufacturing and sale of denim fabrics and Jeans. According to the petitioner, he imported a consignment of “Lycra” 40D Air Covered with 200D Black and the same was assessed in PCT Heading 5402-4410 bearing zero rated duty. After the submission of GD along with all the particulars and information the goods were examined by the staff concerned of the port and was referred to the Group.
The Customs authorities changed the Import Value from $ 2.80 per kilogram to $ 10.00 per kilogram depicting a three-and-half fold revision which was unfair. The petitioner said that he paid all the duties and taxes, including Additional Duty at the rate of $ 10 per kilogram. The consignment was released on the 15th of last month but when petitioner’s representatives approached the Port concerned ,the R7D department (East) withheld the consignment without any reason and without raising any objection in writing, which is unprecedented.
The petitioner submitted that he approached the Collector of Customs (East) but no order was passed for the release of the consignment. He further submitted that it has been verbally informed that the consignment contain POLY as well and the said action has been taken on the representation of Poly Manufacturer Association who are manufacturing local poly with zero rated duty while China Poly has 10 per cent duty. The petitioner submitted that the said action has been taken to get monopoly of local Poly manufacturers at the cost of the petitioner and other manufacturers of denim fabrics who are using Chinese Spendex Yarn and Lycra of various nature which may or may not contain poly.
The petitioner submitted that not only the withheld consignment has been charged with impugned 10 percent additional duty but the same is also being demanded on the four other 100 percent export oriented project (without any poly) consignments imported by him earlier. The court directing the petitioner to deposit differential amount of duty and taxes before the Nazir of the Court through pay order/bank guarantee, who shall issue Certificate, where after, the respondents
will immediately release the subject consignment and adjourned the hearing
of the case till October 29.