ONO passed by Collector,Adjudication, Quetta set aside:
KARACHI: Deciding three appeals involving common issues, Special Customs Appellate Tribunal at Karachi has allowed the appeals while setting aside Order in Original (ONO) passed by Collector of Customs (Adjudication), Quetta in respect of Nylon Rope.
According to details, Directorate of Intelligence & Investigations-Customs, Multan detained two trailers on 15-9-2020 at 2215 hrs near Shershah Toll Plaza, Multan loaded with 49.5 Metric tons of Nylon Rope (PCT Heading 5607.4900). The GDs showed that these were cleared from Customs House, Taftan. During investigations it was found that since 2018, Nylon Rope imported from Iran was being cleared under PCT Heading 5607.4900 in WeBOC system at US $ 0.18 to 0.20 per Kilogram on the value assessed by the assessing officers at MCC (Appraisement & Facilitation) Quetta.
It was the case of I&I that “even the custom value of its basic material i.e Polyamide (Nylon/Nylon Chips) whose minium value being declared and assessed since Augustr 2018 is US $ 1.6/Kg” and even if the cost of manufacturing, other incidental cost expenses are deducted, there is no justification for assessment at the rate of US $ 0.18 to 0.20? Kg and that revenue recovered at this “absurd assessment” even do not cover the cost of smuggling.
The detecting collectorate scrutinized the data and found that as many as 407 GDs were cleared during 28-8-2018 to 19-9-2020 from Taftan and total quantity cleared is 8,717,408 Kilograms.
A contravention report was forwarded to the Collector Customs Adjudication, Quetta which passed an ONO 58/2021 dated 18-2-2021. As no one from the respondent importers appeared before the Collector Adjudication, it was decided and 34 importers were held guilty of violating Section 16, 18 & 32 of the Customs Act 1969 and recovery was ordered. The task was assigned to MCC Appraisment & Facilitation Quetta in coordination with detecting agency. The said Ono was assailed in these three identical appeals.
One of the main points in appeal was that value of Nylon Rope of Iranian origin has been determined and it is decided on trends at border point and LVC (Local Valuation Committee) fixes such valuation at relevant point of time.
The appellants/respondents also maintained that Nylon Rope from Iran is not odf superior quality and is used for “local pacaking, tightening purpose”.
The official respondent/Appellant MCC (Appraisement & Facilitation, Quetta) further maintained that they were clearing the consignment under facility of “Border Trade” or Barter Trade and therefore invoices or banking instruments were not required.
The tribunal after examining the arguments from both sides in detail relied on a recent judgment of Balochistan High Court which has held in CP 198/2021 that till 30-7-2019 Directorate General of Custom Valuation, Custom House Karachi as well as Collector Customs in their respective Collectorate had the authority to issue Valuation Ruling under section 25-A of the Act.
The Special Customs Appellate Tribunal ordered that Tax authorities are not supposed to collect tax from the persons that is not due to the State under the law in any event. The Directorate General of I&I – FBR is well advised to focus more on cases in its area of specific jurisdiction and not to overrun the jurisdiction of other formations. In areas of parallel/redundant jurisdiction the role of Custom intelligence at best is to act as a supporting arm of the clearance Collectorate and other field formations and not as an overbearing entity constantly breathing down their neck and in the process hamper the smooth operation and day to day handling of import and export cargo.
The tribunal also said that instead of action against importers the best step could be that Custom Value of Nylon Rope of Iranian origin would have been determined in exercise of statutory powers conferred under section 25-A, rescinding the previous one.