DG Customs Valuation rejects review petition for revising customs values of sugar/chocolate confectionary

KARACHI: The Directorate General of Customs Valuation has rejected a review petition praying suspension of Valuation ruling No.625/2013, which determines customs values of toffees and candies.

One M/s AFU International prayed before the Revision Authority to order that the determination of value of levy of sales tax and income tax on the imported goods vide Valuation Ruling No.625/2013 is without power/jurisdiction.

It was brought to the notice of Directorate general of Customs Valuation that toffee/candies and sugar confectionary was being imported at under invoiced values, causing loss of revenue to government exchequer. This prompted an exercise to determine the fair customs values for imported toffees, candies and sugar confectionary.

The valuation ruling was issued after giving due opportunity to all the stakeholders which was attended by the stakeholders. The prices worked out on the basis of market enquiry conducted independently and those provided by the importer came to $3.85/KG and $4.0 /KG respectively which was much higher than the determined value.

However, due consideration was given to the miscellaneous expenses and the prices arrived by wok back method was further discounts.

The importer submitted that the determined value at the rate of 2.15/KG, which is nullity to the actual cost of the goods.

The Directorate general noted that the subject ruling has been challenged with particular reference to the valuation of compound chocolate from Turkey determined at $2.15/KG that the customs value determined in the impugned ruling is nullity to the actual cost of the imported goods contracted with the seller for bulk import and supported their statement with the import and other documents; the decision was held without following sequential method of valuation as provided under the rules.

The department’s rebuttal is based upon the findings of enquiry conducted under section 25(7) of the Customs Act, 1969. Otherwise for the inapplicability of preliminary methods of valuation, it has been asserted that due to non-availability of sufficient information and absence of competitive import evidences, these methods were held in-valid for application in this case. Resultantly reliance was made upon the deductive method and as per findings of enquiry under section 25(7) of the Act, customs value was fairly determined in accordance with law.

The DG notes in order-in-original that the revision petition lacks merit and the same is rejected accordingly.

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