KARACHI: The Sindh High Court (SHC) on Friday ruled that Pakistan Customs is liable to allow the provisional release of consignments by securing differential amount of duty and taxes in the shape of pay order or bank guarantee.
A division bench comprising Justice Sajjad Ali Shah and Junaid Ghaffar issued a detailed verdict on the matter involving Pakistan Customs’ powers to provisionally release imported consignments.
The court directed that in case a valuation ruling is more than 90 days old and an importer has questioned its validity and approached the Director Valuation Customs, the consignment of such importer shall be provisionally released in terms of Section 81 of the Customs Act 1969 by securing differential amount of duty and taxes in the shape of pay order or bank guarantee.
It ruled that in case where a proper application for revision of a valuation ruling has been filed by an importer in terms of Section 25-D of the Act before Director General Valuation and is pending disposal, the consignment of the importer at his request shall be released after securing differential amount of duty and taxes.
The judgment authored by Justice Junaid came on the petition filed by Dr Danish Jahangir who moved the court, arguing that the Customs Appellate Tribunal on March 13, 3014 had set aside the Valuation Ruling 583/2013, despite that it is still being used for assessment of imported uncharged magnets. He also impugned the blocking of his user ID on non-payment of financial liabilities on his earlier consignments.
The court had ordered the customs department to assess petitioner’s consignment in terms of Section 25 and 25-D of the Act. When its order was flouted, it ordered the personal appearance of the Collector of Customs East and Director Valuation Customs.
Manzoor Memon, director valuation conceded that despite having been annulled, the ruling in question was not updated in the computer system and therefore it was still operative in the field. He added as soon as this matter was brought to his knowledge, the system was updated and the ruling is no more being applied.
The judges observed in the judgment that “we have been noticing on daily basis that a number of petitions are being filed before this court simply seeking provisional release of consignments, especially on the ground that the representation for reviewing the valuation ruling, which has been in the field for more than 90 days, is not being decided, and secondly, where the ruling has been challenged under Section 25-D of the Act before DG Valuation through a proper review application is pending.”
“In both situation, neither the concerned collector nor DG Valuation or Director Valuation are entertaining the request for provisional release as contemplated under Section 81 of the Customs Act, 1969 and having left with no option/remedy, the importers are approaching this court for seeking release of their consignments.”
The judges noted that Director Valuation when confronted showed his adamantine attitude and contended that he cannot exercise powers under section 81 of the Act for allowing provisional release on the ground that although such valuation rulings are more than 90 days old since they have been issued correctly by him under Section 25-A of the Act and therefore in his opinion the valuation rates have been correctly determined.
“This response has been tendered by him in respect of valuation ruling in which the application for revision of the ruling is made to his office on the ground that 90 days of the period had lapsed since issuance of the ruling. Insofar the second category of cases is concerned, whereby the ruling has been challenged under Section 25-D, according to him such powers are to be exercised by the DG Valuation and not by him.”
They observed that it is also kept in mind that the cost of doing business is increasing day by day and especially in the cases of delay at the port, the storage/demurrage charges and container rent charges accumulate on daily basis and every passing day increases the liability of importers whereas delay and detention certificates, even if issued, have also lost their efficacy, as they are not being accepted by the port authorities and numerous petitions in that regard are already pending before this court.
“It must be kept in mind that such refusal to allow provisional release of the consignment is resulting in unwarranted litigation, which ultimately is burdening the exchequer in the shape of payments to advocates for no justifiable reasons as such petitions are being disposed of by us on the first date of hearing after notices by ordering provisional release of consignments, which in our view, should be done by the department itself.”