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Customs Appeal No.1466/LB of 2008, decided on 25th August, 2009.

---S.18(2)---S.R.O. 482(I)/2007 dated 9-2-2007---Goods dutiable---Regulatory duty---Past and closed transaction---Regulatory duty was imposed @ 25% on export of unwrought lead, lead waste and scrap and its articles---Information was received that goods were being exported at highly under-invoiced value in order to evade the regulatory duty---scrutiny of record revealed that exporters evaded huge amount of duty by misdeclaring FOB value of Lead Ingots---Adjudication proceedings culminated in passing of order-in-original against which appeal was filed before First Appellate Authority, who had accepted the appeal by setting aside order-in-original---Validity---In the absence of valuation advices on the basis of which demand for payment of regulatory duty was created were. set aside---Demand was not according to law, advices being illegal---Adjudication proceedings and subsequent demand raised in respect of past exports were arbitrary, void and without any legal effect as no final value had been determined and exports in question had attained the status of past and closed transactions and had become legally exported---No objection was ever raised by the department at the time of filing of shipping bills---Subsequent determination of value will have no nexus with the past transactions---Appeal of the department was rejected having no merits and order passed by the First Appellant Authority was upheld by the Appellate Tribunal.

----S.18(2)-Past and closed transaction---Once a consignment was out of the charge after due consideration of relevant documents it becomes a past and closed transaction to the extent of value and thus the entire action taken by the department was illegal and without jurisdiction.Ehsan Ullah Cheema for Appellant. Malik Muhammad Arshad for Respondent. Date of hearing: 20th August, 2009.

This appeal is directed against Order-in-Appeal No.193-210(2008 dated 31-10-2008, passed by the learned Collector (Appeals), Lahore. 2. Brief facts of the case are that the Federal Government vide S.R.O. 482(I)12007 dated 9-6-2007 imposed RD Q 25% on the export of unwrought lead, lead waste and scrap and its articles and the Collector of Customs, Lahore had received an information that the goods were being exported from Dryport, Lahore at highly under-invoiced value in order to evade the regulatory duty. During the scrutiny of the record, it revealed that the exporters had filed GD for the export of 28.195 M. Ton of lead ingots declaring values as per details given in paras. 3 and 4 of the impugned order and thus evaded the huge amount of government duty amounting to Rs.966,269 by mis-declaring FOB value of Lead Ingots. The adjudication proceedings culminated in the passing of the order-inoriginal against which the appellant filed an appeal before the Collector (Appeals) Lahore, who had accepted the appeal by setting aside the order-in-original. Being aggrieved by the impugned order, the Customs department had filed the present appeal before this Tribunal. 3. The learned counsel for the appellant argued that the appellate authority has badly erred in determining this matter that the respondent has never filed Review Petition dated 25-9-2008 before the Director General Customs Valuation, Karachi as, a result of which the customs valuation rulings passed by Director Customs Valuation, Karachi were set aside. He further argued that the afore-said valuation was in the field when the export of the subject consignments were allowed by the department and if the said valuation was not applied the national exchequer would have been deprived from the legitimate revenue. He argued that the respondent had voluntarily deposited an amount of Rs.361283 thus the appellant was now estopped by law to agitate the matter on technical grounds. He further argued that the matter has not become past and closed transaction or invalid for invoking the provisions of section 32 of the Customs Act, 1969 on account of obtaining assessment orders by collusion, mis-representation and fraud. The matter is still pending before the Director Customs Valuation, Karachi for reconsideration and issuance of fresh ruling so as to resolve the controversy involved in this matter under the law. 4. The learned counsel for the respondent contended that the impugned order is legal, valid and having been passed by the concerned authority after applying its judicious mind and after considering the law laid down by the superior Courts of the country. The learned counsel for the respondent contended that no mis-declaration had been made by the respondents at the time of filing GDs and the said allegation is misconceived and not based on facts as the respondent exported lead ingots obtained from battery scrap which had not 100% purity. The value and weight of exported goods was correct and true, which was 100% examined by the customs, staff and the weight was found in accordance with the declaration made by the respondent. He further contended that the respondent exported the subject goods at the unit value of US 400 PMT and paid regulatory duty on the said value. He contended that according to valuation advice dated 2-7-2007 and revised advice dated 25-7-2007 the minimum export value was fixed at current LME price as per shipment dates less 10% from current LME price and thus the respondent by under-invoicing the export of lead ingots evaded the amount of regulatory duty was not correct. He contended that both the above valuation advices were set aside by the Honourable Sindh High Court Karachi vide judgment dated 5-3-2008 passed in CP No.2557 of 2007 and the matter was referred to Directorate General of Customs Valuation, Karachi therefore, demanding differential amount of RD on the valuation advices which were set aside by the Honourable High Court was illegal, unjustified and without lawful authority. 5. I have heard the arguments of both the sides at some length and have perused the record available on the file. Without going into the details of the case, it is sufficient to say that in the absence of both valuation advices dated 2-7-2007 and 25-7-2007 on the basis of which the demand for payment of RD was created were set aside by the Honourable High Court of Sindh, Karachi vide order dated 5-3-2008. What was the demand of RD. against the respondent Therefore, the said demand of RD is not according to law as the Honourable High Court declared the afore-said advices illegal vide their order referred to above. Thus any adjudication proceedings and the subsequent demand raised in respect of past exports are arbitrary, void and without any legal effect as no final value has so far been determined and those exports have attained the status of past and closed transactions have become legally exported. No objection was ever raised by the appellant department at the time of filing of the shipping bills by the respondent thus subsequent determination of value will have no nexus with the past transactions. In a case the Honourable Lahore High Court also held that once a consignment is out of charge after due consideration of relevant c documents it becomes a past and closed transaction to the extent of value and thus the entire action taken by the appellant department is illegal and without jurisdiction. 6. For the foregoing reasons, the appeal is rejected having no merits in it and. the impugned order passed by the learned Collector (Appeals) Lahore is upheld. Parties be informed by UMS or through registered post AD. 7. This judgment shall also apply to Customs Appeals Nos.1467/LB/2008, 1468/LB/2008, 1469/LB/2008, 1470/LB/2008, 1471/LB/2008, 1472/LB/2008 and 1473/LB/2008 filed against Messrs Irfan Engineering Industries, Gujranwala, Customs Appeals Nos.1474/LB/2008, 1475/LB/2008, 1476/LB/2008, 1477/LB/2008 and 1478/LB/2008 filed against Messrs H.A. Traders, Gujranwala 7 others and Customs Appeals Nos.1479/LB/2008 and 1480/LB/2008 filed against Messrs Tariq Brothers, Gujranwala and Customs Appeals Nos. 1481/LB/ 2008, 1482/LB/2008 and 1483/LB/2008 filed by the appellant department against Messrs Incore International Gujranwala, having identical facts and points of law. C.M.A./161/Tax(Trib.) Appeal rejected.

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