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C. A. No.155/LB of 2009, decided on 29th June, 2009.

----Ss.25 (1)(5)(6), 32(1), 32A(1)(a) & 156(1)(14)(14A)---Sales Tax Act (VII of 1990), S.3---Income Tax Ordinance (XLIX of 2001), S.148---Customs General Order, 12/2002 dated 15-06-2002, para. 44---Value of imported and exported goods---Post clearance audit---Clearance of "copper tube" imported from China---Department did not accept the declared value and alleged that importer and their authorized Clearing Agent with the connivance of Customs Staff got the value assessed on lower side while the much higher value evidence useable under S.25(5) and (6) of the Customs Act, 1969 was available in the computer database at or about the same time---Such act on the part of importer and their authorized Clearing Agent and Customs staff came within the purview of mis-declaration in terms of Ss.32(1), 32A(1)(a), (c) and (e) of the Customs Act, 1969, punishable under Ss.156(1)(14) and (14A) of the Customs Act, 1969---Differential amount of duty and taxes was recoverable under S.32(2) of the Customs Act, 1969 read with S.3 of the Sales Tax Act, 1990 and S.148 of the Income Tax Ordinance, 2001---Validity---Import processing authorities were not authorized to carry out post clearance audit and issue show-cause notices in terms of para-44 of Customs General Order 12/2002 dated 15-06-2002 as the same was binding upon the departmental authorities---Once the consignment was out of charge, it became past and closed transaction, so far as its value was concerned---If in applying the provisions of subsection (5) of S.25 of the Customs Act, 1969, there were two or more transaction values of identical goods that met all the requirements of subsection (5) and clauses (b), (d), (e) & (f) of subsection (13) of S.25 of the Customs Act, 1969, the customs value of the imported goods shall be the lowest transaction value and not the higher transaction value in term of Cl.(d) of subsection (5) of S.25 of the Customs Act, 1969---Original assessment was made on the basis of evidence, and as such applying the evidence of higher value at subsequent stage was unjustified and illegal--Evidence of higher value was also available with the department when the earlier assessment was made, which showed that the original assessment was rightly made by the assessing authorities 41 terms of S.25 (5)(d) of the Customs Act, 1969---Charge of collusion thus was not substantiated---None of the Assessing Officers was made party in the show-cause notice---No action against any customs officer was taken; officials/officers, who made original assessment, were still doing their job and just an explanation was called for---Such fact proved that department itself had accepted the assessment made by them---Appellant produced hundreds of GDs pertaining to customs ports of all over the country showing import of same goods at much lower value than the one assessed in the case of appellant---Show-cause notice and other documents showed that none of import documents was alleged to be false or forged---GDs were filed on the basis of import documents by the Custom House agents and in absence of allegation regarding falsity of the said documents, there was no justification for taking penal action against them---Appellant was singled out and no action against any other importer at any customs station, where the assessment was made much lower at the value assessed in case of appellant which tantamount to discrimination with the appellant---Appeals were accepted and the Order-in-Original as well as Order-in-Appeal were set aside by the Appellate Tribunal. Messrs Pak Suzuki Motors Company Ltd. v. Collector of Customs Karachi 2006 PTD 2237; Akhtar Hussain through Attorney v. Collector of Customs (Appraisement) Customs House Karachi and 3 others 2002 PTD 2090; Syed Muhammad Razi v. Collector of Customs (Appraisement) Customs House Karachi and 2 others 2003 PTD 2821; Messrs Sunny Traders through Proprietor v. Federation of Pakistan through Secretary, (Revenue Division-FBR), Islamabad and 4 others 2009 PTD 281; 2005 PTD (Trib.) 10; 2005 PTD (Trib.) 196 and 2006 PTD 2742 rel. Writ Petition No. 8400 of 2008, Writ Petitions Nos.15767 of 2008 and 15822 of 2008; Munsif Ali v. Ameer and 3 others PLD 1971 SC 124; Messrs Kamran Industries v. Collector Customs (Exports), Karachi and 4 others PLD 1996 Kar. 68; Messrs S.T. Enterprises through Proprietor v. Federation of Pakistan through Secretary (Revenue Division-FBR), Islamabad and 4 others 2008 PTD 467 and 2002 PTD 889 ref.

----Ss. 32 & 2(a)---Untrue statement, error, etc.---Final assessment---Issuance of show-cause notice---Validity---In cases of final assessment no show-cause notice could be issued unless the earlier assessment order was set aside by re-opening the case by the competent authority because the assessing officer was also an Adjudicating Authority in terms of S.2(a) of the Customs Act, 1969. 2002 PTD 889 rel.

----S.32(3-A)---Untrue statement, error, etc.---Verified documents---Imposition of penalty---Validity---Import was made against letters of credit and mostly the entire documents were duly verified by the Chamber of Commerce of the exporting country and Diplomatic Mission for Pakistan abroad---Department was at liberty to get these documents verified, if they doubted the same, but they did not do so---Such fact proved that the department did not doubt the authenticity of the documents---No justification was available for imposition of penalty, in cases of post clearance audit in term of S.32(3-A) of the Customs Act, 1969, more particularly, when there was no charge of presentation of false and fake documents or making un-true statement in the show-cause notice.

----S.25---Value of imported and exported goods---Exemption from payment of duty and taxes---Evidence of import made under exemption from payment of duty and taxes could not be made basis for enhancing the value of the goods imported on payment of duty and taxes at statutory rate. Mian Abdul Ghaffar for Appellant. Sultan Mehmood along with Amjad Bokhari and Ehteshamul Haq for Respondents. Date of hearing: 29th June, 2009.

This appeal has been directed against Order-in-Appeal No.1-36 of 2009, dated 14-1-2009, through which the learned Collector (Appeals), had dismissed the Order-in-Original No. 66 of 2008, dated 4-11-2008 passed by the learned Additional Collector, Customs (Adjudication), Lahore. In the concluding paragraph No.19, of the impugned Order-in-Appeal, the same had been made applicable mutatis mutandis on the 35 appeals being identical on legal and factual issues. By this judgment, the following 69 appeals filed by the importers and clearing agents, against the same Order-in-Appeal No.1-36 of 2009, dated 14-1-2009, having identical question of law and facts, shall be disposed of:--

2. The facts, giving rise to the appeal in hand, are that during the post clearance audit of Messrs A.A. Corporation, it was found that they filed G.D. No.15678, dated 3-4-2008, through their clearing agents Messrs Khawaja International, Lahore for clearance of "copper tube" imported from China declaring the value of 23.500 M.T. as US 63450.00 @ US 2700.00 per M.T.) and with connivance of Customs Staff, they got the value assessed at US 75200.00 (@ US 320.00 per M.T.) despite the fact that their declared value was not acceptable under section 25(1) and much higher value evidence useable under sections 25(5) and (6) was available in the computer database. This post clearance audit of the import of copper tube showed that customs value of much higher level was available in the computer data of clearance at or about the same time. Such goods were regularly imported by the Industrial consumers as well as by some commercial importers at the relevant time, which showed an overwhelmingly higher price as compared to the declared value. Beside, a comparison with the value of raw material of copper showed that value of the subject goods was declared much lower than the prevalent value of the raw material as evident from the London Metal Exchange (LME) value ranging between US 6779.00 per M.T. to US 6791.00 per M.T. in the period when invoice was issued for import of the said consignment. When the manufacturing cost including fuel cost, operating expenses, marketing, wastage and profit etc. were added to the raw material, the value was found to be much higher than the declared one, which proved that the declared value was based on fraudulently prepared documents meant to hoodwink the government exchequer. The declared value was, therefore, not found to be the transaction value under section 25(1) of the Customs Act, 1969. The actual assessable value has, however, been determined under section 25(5) and (6) of the Customs Act, 1969 read with Customs Valuation Rules, 2001" at US 208210 in the light of LDRY GD No.17404, dated 29-4-2008, wherein clearance of 19.897 M.T. of copper tube had taken place @ US 8860.00 per M.T. Thus, the importer Messrs A.A. Corporation, Lahore, in connivance with Messrs Khawaja International, Customs Clearing Agents, deprived the government of its legitimate revenue to the tune of Rs.41,10,396 (customs duty @ 15% Rs.12,79,156, sales tax @ 20% Rs.19,61,373, Income Tax @ 6% Rs.5,88,412, additional sales tax at the rate of 2% Rs.1,96,178 and FED @ 1% Rs.85,277). This act on the part of the importer and their authorized clearing agent and the Customs staff comes within the purview of misdeclaration in terms of sections 32(1), 32A(1)(a), (c) and (e) of the Customs Act, 1969, punishable under sections 156(1)(14) and (14A) ibid. the differential amount of duty and taxes was recoverable under section 32(2) of the Customs Act, 1969 read with section 3 of the Sales Tax Act, 1990 and section 148 of the Income Tax Ordinance, 2001. On the basis of above reported facts of Messrs A.A. Corporation and Messrs Khawaja International, Customs Clearing Agents were charged with the contravention of the provisions sections 32(1) and 32A(1)(a), (c) and (e) of the Customs Act, 1969, Punishable under section 156(1),(14) and (14A) ibid with amount recoverable under section 32(2) of the Customs Act,. 1969 read with section 3 of the Sales Tax Act, 1990 and section 148 of the Income Tax Ordinance, 2001 and were called upon to show cause as to why the evaded duty and taxes amounting to Rs.41,10,396 may not be recovered from them and as to why they may not be penalized under the aforesaid provisions of law. As a consequence of adjudication proceedings, the appellants were directed to deposit the above said evaded amount of duties and taxes as demanded in the show-cause notice. Furthermore, personal penalty of one time the value of the goods Rs.1,33,49,027 was imposed upon the importer and one and half time the" value of the goods Rs.2,00,23,541 was imposed upon the Customs Clearing Agents. Being aggrieved, the appellant went in appeal and the learned Collector (Appeals), dismissed the same. The name of the appellant is appearing at S.No.1 of the chart given in paragraph No.19, of the impugned Order- in-Appeal. Hence, this appeal. 3. The main grounds as urged in the memo. of appeal are:--

(a) That section 32 cannot be invoked in such cases being past and closed transaction as held by the Hon"ble Lahore High Court, Lahore vide judgment, dated 28-7-2008, passed Writ Petition No.8400 of 2008, in the case Messrs A. S. "International v. Collectorate of Customs, Model Customs Collectorate, Lahore, if there was no discrepancy, description, weight, quantity, classification, or any other particulars of the goods merely on the basis of valuation etc. It is an admitted fact that there was no discrepancy with regard to the description, weight, quantity, HS-Code or any other particular of the goods nor it was a charge against the appellant. Moreover, none of the documents was doubted or as the case may be proved as false. The remittance was made through banking channel by the appellant. Thus, it has wrongly been held by respondent No.3, that the ratio settled in the aforesaid judgment was not applicable in case of the appellant. The following observations of respondent No.3 were frivolous and baseless:--

Clause (a) of subsection (1) covers the words "any declaration" which if read with the expression "any matter of customs" appearing in the opening" sentence and the phrase "false in any particular" appearing in the last sentence of subsection (1) clearly covers value-related misdeclarations. Section 32A deals with "fiscal fraud". Its subsection (1) is like subsection (1) of section 32, normative-cum-definitional. Value-related misdeclaration is expressly covered under -clause (c) of sub-section (1) of section 32A. Joint reading of these two sections (their invoked provisions in particular) renders the judgment of the Hon"ble Lahore High Court in Writ Petition .No. 8400 of 2008 not relevant.

(b) That the aforesaid observations of respondent No.3, are even against the record. No doubt section 32A was invoked in the show-cause notice, but neither the liability was adjudged nor penalty was imposed under the said provision of law and the case was disposed of by respondent No.2 in terms of section 32 only. Respondent No.3 had no authority under the law to invoke the provision of section 32A at the appeal stage and that too without putting the said charge to the appellant by way of show-cause notice.

(c) That as regard relevancy of the judgment of the Hon"ble Lahore High Court, Lahore delivered in Writ Petition No.8400 of 2008 it is humbly pointed out that in the said case, certain goods were imported and the assessment was made at US .016 Doz. But subsequently a show-cause notice was issued that the assessable value should have been US 3.50 instead of US 0.16 and on that account it was alleged that the importer in that case had deprived the government of its legitimate revenue of Rs.2,84,009 which was recoverable from the importer under section 32 of the Customs Act, 1969 and Hon"ble Lahore High Court, Lahore vide

said judgment had held that section 32 cannot be invoked and the show-cause notice and subsequent proceedings were not lawful. It was held by the Hon"ble Lahore High Court, Lahore in the said case that section 32 cannot be invoked only on the basis of mere estimate, gossip, personal whims or feeling that the value could have been enhanced or it could fetch more taxes etc. because reopening of the earlier assessment would require reason to believe and no reason to suspect.

(d) That the issue involved in the aforesaid case was exactly the same as involved in this case and the law laid down by the Hon"ble Lahore High Court, Lahore was fully applicable and that the observations of respondent No.3 are void, illegal rather contemptuous.

(e) That in support of the aforesaid contention of the appellants, they had also cited two more judgments, dated 24-11-2008 passed in Writ Petitions Nos.15767 of 2008 and 15822 of 2008 in which in identical situation the show-cause notices were issued under section 32 of the Customs Act, 1969 on the allegation that the assessment was made at lower side, whereas the goods should have been assessed at higher value and on challenging the said action on the part of the Department, it was held by the Hon"ble Lahore High Court, Lahore that section 32 cannot be invoked in valuation cases once the goods are examined, assessed and out of charged unless and until it is proved that the description, quantity, weight, classification etc. were different. Respondent No.3 deliberately and intentionally had not mentioned of these two judgments in the impugned order although same were placed on record by the appellant. This shows the attitude and conduct of respondent No.3 towards the tax-payers as well as quasi judicial matters.

(f) That respondent No.3 has also ignored the order, dated 25-9-2008 passed by the Director General Customs Valuation Karachi in an identical case where the goods attracting regulatory duty were exported at US 400 M.T. and subsequently, it was alleged that the value should have been assessed at US 1710 M. T. and on filing review under section 25A(3) and 25D of the Customs Act, 1969, it was held that once the goods were out of charged, the matter would become past and closed transaction so far as the valuation thereof was concerned and section 32 could not be invoked in such cases, but respondent No.3 on frivolous reasons has ignored the said judgment without any legal justification.

(g) That the observation of respondent No.3 that the Importing Processing Officers and staff have jurisdiction and authority for formulating contravention report, issuance of show-cause notice and adjudging liability in valuation case and finding that neither para. 44 of the Customs General Order No. 12 of 2002, dated 15-6-2002, nor the judgment of the learned Division Bench of High Court of Sindh at Karachi in case of Messrs Pak Suzuki Motors Company Ltd. v. Collector of Customs Karachi (2006 PTD 2237) was applicable, are totally frivolous and baseless, because there is nothing to show that para.44 of Customs General Order 12 of 2002, dated 15-6-2002 was relating only to pending cases when S.R.O.203(I)/095, dated 14-3-1995 was issued by the Board. Had there been such situation, the Board would have not included the contents of the said notification in the CGO No.12 of 2002, dated 15-6-2002 and as such the verdict of the Hon"ble High Court of Sindh at Karachi in the aforesaid cases was fully applicable according to which the Import Processing Offices and staff would have no authority for carrying PCA and issuance of show-cause notice under section 32 of the Customs Act, 1969. The observation of respondent No.3 as contained in para.12 of the impugned order .being contradictory to the ratio settled by a Division Bench of the Hon"ble High Court of Sindh at Karachi are baseless, frivolous and misconceiving. It is further pointed out that respondent No.3, even otherwise, has no authority to comment on the judgment of the Hon"ble High Court of Sindh at Karachi delivered in its capacity as appellate authority under section 196 of the Customs Act, 1969, rather it was binding upon respondent No.3.

(h) That respondent No.3, while passing the impugned order, has also totally ignored the law laid down by the Hon"ble Supreme Court of Pakistan in the case of Munsif Ali v. Ameer and 3 others (PLD "1971 SC 124) and similar views taken by the learned Division Bench of Hon"ble High Court of Sindh at Karachi in the case of Messrs Kamran Industries v. Collector Customs (Exports), Karachi and 4 others (PLD 1996 Kar. 68). Since, the initial action on the part of Import Processing Officer and staff of formulating contravention report, in cases where the assessment had been made by them, was without jurisdiction, thus the subsequent proceedings would be void and illegal.

(i) That the observation of respondent No.3 that evidence of higher value regarding import of identical goods by industrial consumers, without payment of duty and taxes would be relevant, are also against the ethics, because the aspect of remittance of foreign exchange abroad would not be ruled out in such cases. The import made by the industrial consumers under concessionary notifications cannot be made basis for enhancement of value of goods imported by the commercial importer on payment of duty and other taxes at statutory rates.

(j) That respondent No.3 although mentioned in the impugned order that the appellant had relied upon data of 101 GDs relating to factual import of identical goods pertaining to Custom House Karachi, Port Muhammad Bin Qasim, Dry Port, Lahore, AFU Lahore, Dry Port Faisalabad, Dry Port Islambad and other parts showing that the same goods were being assessed and released at the value ranging in between US 0.1250 and US 3.500 per kg. But while passing the impugned order, he has totally ignored the same on the ground that "moreover, it is a settled principle of law that there is no equity in tax" which means the argument of discrimination cannot be passed upon in tax matters especially where responsibility is characteristically absolute and slowness or absence of action for similar departmental treatment to other delinquent importers/agents cannot be taken in argument to undermine or avoid the responsibility."

(k) That respondent No.3 has wrongly held that there is no equity in tax matters: In case this is accepted, for the sake of arguments, then the Department would be at liberty to asses the same item imported by their favourite importers at US 10.0 per unit, while in case of other importers they can fix the value of the same item at 100.00 per unit. Law does not permit this practice because all imports are required to be treated equally as they have to compete in the same market.

(l) That the observation of respondent No.3, that since Model Customs Collectorate, Lahore has already written to FBR vide letter, dated 17-9-2008, requesting therein that the Board may like to issue instructions to other Collectorate which may like to carry out similar exercise with a view to keep uniformity in import of copper tubing. It is humbly pointed out that the said letter was initiated on 17-9-2008, i.e., about 4 months before passing the impugned order and it was the duty of respondent No.3 to inquire as to whether any action was taken by the FBR and even in that case the answer would have been in negative. It. is humbly pointed out that respondent No.3; on such ague communication, cannot allow discrimination, which is not permissible under Article 25 of the Constitution of Islamic Republic of Pakistan.

(m) That respondent No.3, while dismissing the appeal of the appellant, has based his findings on the charges which were never put to the appellants nor the same were part of the show-cause notice and as such he travelled beyond the scope of the charges against the appellant. Had there been any such situation, the respondent No.3 would have issued show-cause notice to the appellants putting the said new charges enabling the appellants to meet the same. For the ease of this Hon"ble Tribunal, few last lines of para.13 of the impugned order are reproduced; "Even otherwise the appellants cannot press for disciplinary action against the customs staff because discipline management is an exclusive prerogative of the Customs department and possibility cannot be ruled out that the appellants (particularly clearing agents) being politically influent may have nightmarishly influenced the Customs staff pressing them to make nominal loading in the declared value. In such scenarios, the factor of intimidation against the lower staff of Customs department cannot be put aside altogether."

(n) That there was no evidence to establish that the assessment was made in collusion with the customs staff. The appellant presented true and correct documents, authenticity of which was never doubted by the respondent-Department. During adjudication and hearing of appeal, the copies of the contracts, proforma invoices, commercial invoices and other import documents duly authenticated by the diplomatic mission of both the countries were placed on record but the same have totally been ignored by respondents Nos.2 and 3, while passing the impugned orders.

(o) That respondent No.3, in the impugned order, has repeatedly mentioned of section 32-A, whereas neither any liability was adjudicated nor any penalty was imposed upon the appellant under the said provision of law. Respondent No.3 should have issued a fresh show-cause notice, if he was so conscious of the invocation of such provision of law, but in the absence thereof, his entire observation with regard to section 32-A is superfluous, frivolous, uncalled for and unsustainable under the law.

(p) That respondent No.3, in para-11 of the impugned order has observed that subsection (11) of confers unrestrictive rights to department to get satisfaction about the accuracy of the import documents, documentary or otherwise for customs valuation purposes and these rights are not confined to the time of clearance and that the same would continue to be available even after clearance, but he has lost sight that no such exercise was under taken by the PCA or respondent No.2 or by respondents No.3 himself. None of the documents, in spite of .repeated requests of the appellant, was got verified. There is nothing on record, even to suggest, that such and such documents presented by the appellant was false or doubtful and as such the aforesaid observation of respondent No.3 is misconceived and frivolous.

(q) That under the order impugned in the appeal before respondent No.3, the higher value was proposed under section 25(5) and (6) of the Customs Act, 1969, as indicated in para.3 of the show-cause notice, but, while passing the impugned order, respondent No.3 has held that the valuation was proposed in terms section 25(5) and not (6) at his own, which action on his part is illegal. Moreover, perusal of para.15 of the impugned order revealed that according to respondent No.3, penalties were imposed upon he appellant under Sr. No.1, 14 and 14A of the Table under section 156(1) of the Customs Act, 1969, whereas the penalties were imposed by respondent No.2, in the original order under section 156(1)(14) and there was no mention of Clause 14-A. Hence, the impugned order is also against the record of this case.

(r) That there was no charge against the appellant, that it was a case of "post clearance detection" as observed by respondent No.3. It is not understood from where respondent No.3 brought these new facts that the present case was of post clearance detection case, culminating from a seizure case made in respect of other consignment because neither any consignment was seized nor there was any charge against the appellant that it was a post clearance detection case. According to the department, it was case of PCA never initiated on the basis of seizure of any consignment.

(s) That as per clause (d) of subsection (5) of section 25 of the Customs Act, 1969, if, in applying the provision of said subsection, there are two or more transaction values of identical goods that meet all the requirements of the said subsection and clause (b), (d), (e) and (f) of subsection (13) of section 25 of the Customs Act, 1969, the customs value of the imported goods shall be the lowest transaction value and not the higher transaction value as mentioned in the show-cause notice which is against the mandatory provisions of law. Clause (d) of subsection (5) of section 25 of the Customs Act, 1969 read as under: --

(d) If, in applying the provisions of this subsection, there are two or more transaction values of identical goods that meet all the requirements of this subsection and clauses (b), (d), (e) and (f) of subsection (13), the customs value of the imported goods-shall be the lowest such transaction value, adjudged as necessary in accordance with clauses (b) and (c).

(f) That the audit team also ignored the crucial fact that the LME prices relate to the goods produced from "the "price raw material", whereas the goods imported by the appellant were made from "recycled raw material". There is lot of difference of quality and value in between the goods produced from "price raw material" and the one made from "recycled raw material". Moreover, the goods imported by the appellant were consisting of copper tube of maximum length of 50 feet, whereas the coils being imported by the industrial importers consisted of copper tubing of continuous process having length from 10000 to 11000 feet against the length of 50 feet imported by the appellants. This alone makes the position crystal clear that the evidences of industrial importers cannot be made basis for enhancement of value of the goods imported by the appellants.

(u) That the prices of the goods imported by the appellant, otherwise cannot be compared with the value of the goods imported by the industrial importers who were importing price quality, because they being manufacturer were quality conscious having no interest in the prices as they do not pay duty and taxes at statutory rate. Moreover, the industrial importers are importing inner grooved copper tube, which are expensive at least by US 2000 per M.T. as compared to the goods imported by the appellant. As earlier stated the import by the industrial importers and factory owners is looked after by their importer managers and other staff and that the same is made under concessionary notification and as such the question of over invoicing cannot be ruled out.

(v) That as against the above, the appellants being commercial importers were not much interested in quality. They are only interested in the price level because they have to sell goods in the open market in competition and as such normally they imported goods produced from recycled copper and scrap of copper as such goods were available in China at lower value by about 65% as compared to the same goods made from price quality raw material. It is further submitted that the value of the copper tube made from recycled copper and scrap of copper tube cannot be compared with the LME prices, which speaks of goods made from prime raw material.

(w) That, it is also not understood as to why certain commercial importers were singled out for making cases of misdeclaration of value, whereas large number of industrial and commercial importers who were regularly importing same goods at much lower value were ignored. It is pointed out that law does not permit pick and choose in order to damage the business and reputation of any person. The law requires that all importers whether industrial or commercial should be given equal treatment. The perusal of impugned order itself shows that the evidences of "quite a few other commercial importers" were made basis. Making basis of the import by "quite a few importers" and ignoring the import made by thousands of commercial importers from Karachi Customs Port and others Customs Stations also speaks much of the conduct of the respondents.

(x) That perusal of original order that the manufacturing cost including fuel cost, operating excess, marketing, wastage and profit etc. have been made basis for working out the price of the goods meaning thereby that the proposed assessed value has been ascertained in terms of subsection (9) of section 25 of the Customs Act, 1969 by the audit team which lost sight that at the relevant time, the sequential order in terms of subsection (10) was enforced. It was not the sweet will of the officers of Customs to pick and choose any method prescribed under section 25 of the Customs Act, 1969. All the methods were to be applied in sequential order. Subsection (9) can only be invoked in subsection (1), (5), (6), (7) and (8) stood exhausted and that too through proper exercise duly reflected on the record.

(y) That the import was made by the appellant against letters of credit. All the documents were duly authenticated being true and correct. None of the documents, was doubted. The assessment was made under section 80 of the Customs Act, 1969 by the appropriate Officer of Customs on the basis of evidential record and the consignments were out of charged. Thus, there was no reason on the part of the Department to allege that the appellant made any misdeclaration.

(z) That the import was made against proper contract. Correct and true transaction value, in terms of section 25(1) was declared by the appellant. Since, identical goods were being assessed and released by Lahore Dry Port and other Ports, even at lower value and as such the assessment in case of the appellant was finalized in terms of section 25(5) of the Customs Act, 1969.

(aa) That only few evidence of higher import value and that too by the industrial consumer under concessionary notifications cannot be made basis for making out case of misdeclaration of value more particularly when there are hundreds of evidences pertaining to customs port of all over the country showing import of same goods at much lower value than the one assessed in the case of appellant. As earlier stated that as per these evidences copper tube was being imported, assessed and released at the value ranging from US 1250 to US 3500 per M.T. there was no justification on the part of respondent No.2 or as the case may respondent No.3 to ignore these hundreds of evidences and pick and chose few evidences for making case against the appellant.

(bb) That the observation of respondent No.3 that if there is no precedent, it is easier to decide a given matter by creating a new and futuristic precedent because according to him despite being a source of judicial and quasi judicial wisdom, precedent in a way, imposed limitations and restriction on the visionary foresight of judicial of quasi judicial powers but while giving aforesaid finding he has misconstrued the words (unprecedented) particularly, when the case of the appellant was that in identical cases of PCA a nominal penalty of Rs.10,000 or as the case may be Rs.25,000 was always imposed in such cases.

(cc) That respondent No.3 was wrongly and illegally related the imposition of penalty with the reforms of Taxation System in Pakistan. According to him, during the recent few years, Taxation system in Pakistan has gone under unprecedented reforms aimed at a paving a transparent way for the taxpayers facilitation, but he has miserably failed to quote a single example of- any case in which such penalty was imposed in identical case during the last few years. The justification given by respondent No.3 is totally misconceived and frivolous.

(dd) That respondent No.3 has also failed to justify imposition of huge penalty in cases where "the GDs were failed under first appraisement system claming benefit of para-101-B of CGO 12 of 2002, dated 15-6-2002 under which no case of misdeclaration is to be made if any importer opts for such system. In support of aforesaid contention the judgments of learned Division Bench of Hon"ble High Court of Sindh at Karachi reported as (2002 PTD 2090) and (2003 PTD 2821) were relied and placed on record, but respondent No.3 did not utter a single word in this behalf.

(ee) That immediately the case was made out against the appellants as a result of PCA in terms of subsection 3(A) of section 32 of the Customs Act, 1969 and as such there was no justification either on the part of respondent No.2 to impose huge penalty upon the appellant. Respondents Nos.2 and 3 imposed penalty more than five hundred per cent of the amount of taxes involved in this case, which is neither justified nor fair.

(ff) That the present case is of its own nature. This is the first case in the history of Customs where such a huge penalties have been imposed upon importer. It is pointed out that there would be no case of any customs port through the country, where the penalty of one time value of the goods was imposed upon the importer. There was no justification at all of imposition of penalty upon the appellant because admittedly the case was made against them as a result of PCA.

(gg) That the reasons behind taking such a harsh action in this case was that during the pendency of the adjudication proceedings, a criminal case F.I.R. No. 65/08, dated 13-10-2008 "under section 32(1), (2), 32-A(1), 156(1), (14), (14A), 82, 157 and 178 of the Customs Act, 1969 was registered against clearing agent of appellant namely Khawaja Shahid Hamid for misdeclaration in respect of a consignment subject matter of G.D. No.3697, dated 19-9-2008 and that he was arrested and sent to jail. His arrest was due to some grudge between him and customs staff. He is still behind the bars. Due to the said reason a huge penalty has been imposed upon the appellant without any justification. 4. Arguments were heard. The learned counsel, Mian Abdul Ghaffar, Mr. Akhtar Ali, Shahzada Mazhar and Mr. Waseem Ahmad Advocates, appearing on behalf of the appellants, besides reiterating the grounds mentioned in the memo. of appeal, have contended that the port authorities, who had earlier carried out final assessment of the goods under section 80 of the Customs Act 1969, cannot conduct post clearance audit and issue show-cause notices as it is the sole domain of the Valuation Department as per para. 44 of CGO 12 of 2002, dated 15-6-2002, which, according to learned counsel, was binding upon the customs functionaries in terms of section 223 of the Customs Act, 1969. He referred cases "Syed Muhammad Razi v. Collector of Customs (Appraisement) Customs House Karachi and 2 others (2003 PTD,2821)" and "Akhtar Hussain through Attorney v. "Collector of Customs (Appraisement) Customs House Karachi and 3 others (2003 PTD 2090)". As regards post clearance audit by the import processing port authorities he relied upon a case of Pak Suzuki Motors Co. Ltd. through Senior General Manager (Corporate Playing and Logistic), Karachi (2006 PTD 2237). The learned counsel further argued that once the consignment is out of charged, it becomes past and closed transaction so far as valuation thereof is concerned. Such cases cannot be re-opened unless the declaration with regard to the physical description of the goods, quantity, weight and classification is found incorrect. In this behalf the learned counsel referred to unreported judgment, dated 28-7-2008 passed in the case of Messrs A.S. International through Proprietor Shahzad Aslam son of Muhammad Aslam, 24-E Plastic Power Market, Shah Alam Market Lahore and another v. Collector of Customs, Model Customs Collectorate, Lahore and another (Writ Petition No.8400/2008)". They also relied upon ,"Messrs Sunny Traders through Proprietor v. Federation of Pakistan through Secretary, (Revenue Division-FBR), Islamabad and 4 others (2009 PTD 281)" and "Messrs S.T. Enterprises through Proprietor v. Federation of Pakistan through its Secretary (Revenue Division-FBR), Islamabad and 4 others (2008 PTD 467)". They further relied upon an order, dated 25-9-2008 of the Director. General of Customs Valuation, Custom House Karachi. The learned counsel further contended that the GDs were processed under 1st appraisement system and the assessment was made by the Customs Authorities after examination of the goods and as such the question of mis-declaration in such situation does not arise. He further stated that since it was final assessment, thus invoking of section 32 in such cases was not legal because, had there been any irregularity in the assessment, the matter should have been examined by the competent authority under section 195 of the Customs Act, 1969. They referred to the case reported as 2002 PTD 889 in which the Karachi Bench of this Tribunal held that "in cases of final assessment no show-cause notice can be issued unless the earlier assessment order is set aside by re-opening the case by the competent authority because the Assessing Officer is also an Adjudicating Authority in terms of section 2(a) of the Customs Act, 1969". The learned counsel appearing on behalf of the appellants further argued that the collusion is always in between the importer/his Custom House agents and the customs official. According to them no action, whatsoever, was taken against the customs officers/officials who earlier carried out assessment. They went on saying that even some of the customs officials, who carried out post clearance audit and prepared contravention report, had also made assessment in these cases. According to them, had there been any collusion of the appellant with the customs officials, they would have also been charged in the show-cause notice along with the importers and their Custom House agents. They further stated that there is no evidence, at all to establish that there was any collusion of the appellants with the customs staff in these cases. According to them, there was even no charge in the show-cause notice that any document which included contract, pro forma invoice, letter of credit, commercial invoice, packing list; bill of lading or as the case may be declaration made on GD was false are fake. They further stated that in all the cases, the import was made against letters of credit and mostly the entire documents were duly verified by the Chamber of Commerce of the exporting country and Diplomatic Mission for Pakistan abroad. They further stated that the appellants from the day one had been requesting the department to get their documents verified, if they doubted the same. They further contended that there was no difference in physical description of the goods, quantity, weight and classification thereof. The learned counsel further referred to more than 100 GDs filed by different industrial and other importers under which the identical goods were assessed and cleared during the relevant period at the value ranging from US 600.00 per M.T. to US 3800.00 per M.T. They further argued that the appellants produced all these evidences at the lower forum, but the same were totally brushed aside without assigning any cogent reason. The learned counsel rebutted the argument of the learned counsel appearing on behalf of department that the show-cause notices were issued on the basis of higher evidences and LME basis on the ground that in applying one or more evidences for making assessment, the lowest one Is to be applied under clause (d) of subsection (5) of section 25 of the Customs Act, 1969. They further, argued that the original assessment was also made on the basis of evidences of factual import of identical goods and as such the instance of the department that they had higher evidences is frivolous and misconceived. The learned counsel further argued that the evidences of import made under exemption from payment of duty and taxes cannot be made basis for enhancing the value of the goods imported on payment of duty and taxes at statutory rate. They also rebutted the allegation of intimation mentioned by the learned Collector (Appeals) as according to him there was no such charge in the show-cause notice. They further stated that the learned Collector (Appeals) has repeatedly mentioned section 32-A of the Customs Act, 1969, whereas no penal action was taken by the Adjudicating Authority under the said provision of law against the appellants and as such invocation of said provision was unjustified. The learned counsel for the appellant further argued that at the one hand the case was made on the basis of post clearance audit in term of section (3A), while on the other hand subsections (1) and (2) of section 32 have been invoked which, according to him, is not sustainable under the law. They further argued that there was no justification "for imposition of penalty in cases of post clearance audit in terms of section 32(3A) of the Customs Act, 1969 more particularly when there was no charge of presentation of false and fake documents or making untrue statement in the show-cause notice. The learned counsel further argued that the evidences pertaining to the import by the industrial units cannot be made basis for enhancement of value, because the length of the copper tube imported by the appellants was maximum of 50 feet, while the industrial importers imported rolls measuring in length from 10000 to 11000 feet. The learned counsel further argued that he copper tube imported by the appellant was made of recycled raw material which always attracts lower value. The learned counsel also referred to a letter of MCC, Lahore, dated 17-9-2008 addressed to Member (Customs), FBR, Islamabad in which the request was made to initiate similar action in respect of the evidences placed on record by the appellants, but till date no action, whatsoever, has been taken by any Collectorate throughout the country and the appellant was singled out which is discrimination. They went on saying that so much so no reply was even received from FBR to the aforesaid letter. The learned counsel further argued that the Custom House agent had filed GDs on the basis of correct and true documents delivered to them by the appellant and as such taking penal action against them was totally unjustified. In this behalf they referred cases reported as (2005 PTD (Trib.) 10), (2005 PTD (Trib.) 196) and (2006 PTD 2742). 5. The learned counsel for the department and the departmental representatives defended the impugned orders and rebutted the arguments put by the learned counsel for the appellants. They argued that each and every assessment has been made on the basis of G.D. indicating higher value. Further argued that the GDs presented and referred by the appellants have no nexus, with the present case. It was further argued that the explanation of the customs officials/officers were called for. They further argued that the appellants have evaded duty and taxes with the connivance of the clearing agents and the customs staff. The department also filed parawise comments. They submitted that there is no bar to invoke section 32 of the Customs Act, 1969. Further the facts of Writ Petition No.8400 of 2008 have been found irrelevant by the Appellate Authority vide para.12 of the impugned Order-in-Appeal No.136 of 2009. They further submitted that the appellants were charged with the contravention of section 32 and as well as 32-A of the Customs Act, 1969 in the show-cause notice. Accordingly, in Order-in-Original they were directed to pay evaded amount of duty and taxes as pointed out in the show-cause notice. Furthermore, that the Adjudicating Authority imposed penalty under section 156(1) clause 14A of the Customs Act, 1969, hence the appellate authority has very much legally upheld the order-in-original. They further submitted that para.44 of the Custom General Order No.12 of 2002 deals with liquidation of" pendency of valuation "cases lying with the Valuation Department. The referred judgment is not relevant in this case. They further submitted that in legal terms, even if the import has taken place under concessionary notifications, it does not exclude such imports from the definition of the evidential data under section 25(5) and (6) of the Customs Act, 1969. Further submitted that the referred data of 101 GDs by the appellants was not applicable, because it was even lower as compared to the price of raw material. They further submitted that the reliance of LME has been made only for initiating this case. Further, a composition of the finished product (without conceding that it makes any difference in the subject case) cannot be verified in the absence of any mill test certificate as discussed in the order-in-original. They lastly submitted that the penalty has been imposed strictly within the ambit of the penal provisions of Customs Act, 1969. There is no bar of imposing penalty beyond the quantum mentioned in the clauses of section 156(1) of the Customs Act, 1969. Further the penalty has to match the gravity of the offence. 6. We have heard the learned counsel appearing on behalf of the appellant as well as the department and perused the record. So far as the argument of the learned counsel for the appellant that the import processing authorities were not authorized to carry out post clearance audit and issue show-cause notices in term of para.44 of Custom General Order No.12 of 2002, dated 15-6-2002, the controversy stood resolved in the case of "Pak Suzuki Motors Co. Ltd. through Senior General manager (Corporate Playing and Logistic), Karachi (2006 PTD 2237), in which their Lordships have observed as under:--

"We are of the opinion that para.44 of Custom General Order No.12 of 2002, is very dear and fully supports the contention of Mr. Aziz A. Sheikh. We are persuaded to agree with the submission and consequently hold that the Assistant Collector, Import processing, Port Muhammad Bin Qasim who issued the show-cause notice under section 32 and passed the Order-in-Original had no jurisdiction. It was clearly a post importation case and therefore the officers of the Valuation Department could initiate action for recovery of the government dues under section 32 of the Customs Act. The Tribunal has fallen in error in holding that the order-in-original was with jurisdiction". 7. The aforesaid judgment was delivered by the learned Division Bench of the Hon"ble High Court of Sindh at Karachi in Customs Reference under section 196 of the Customs Act, 1969 and it was never assailed by the Department in appeal. When confronted, the learned counsel for the department replied in negative. In other words, this judgment of the Hon"ble High Court of Sindh at Karachi had attained the finality and as such it becomes binding upon this Tribunal too. 8. Moreover, Custom General Order No. 12 of 2002, dated 15-6-2002 is also binding upon the departmental authorities as held in cases Akhtar Hussain (Supra) (2003 PTD 2090) and Syed Muhammad Razi (2003 PTD 2821). The contention of the learned counsel for the appellant that once the consignment is out of charged, it becomes past and closed transaction, so far as its value is concerned, is convincing one. In this behalf, we place reliance on the case of Messrs S.T. Enterprises (Supra), in which it was held that:--

"(8) Section 32 also is not being understood in its true spirit. One must understand that it has been inserted to correct an error, modify an assessment and to recover the refund issued inadvertently. This obviously means review or correction of the error in a finalized matter. Once a consignment is out of charged after due consideration of relevant facts, it becomes a past and closed transaction to the extent of its value etc. The same, therefore, should not be invoked only on the basis of the mere estimate, gossips, personal whims or feelings that the value could have been enhanced or it could fetch more taxes etc. The re-opening of an appraisement for the purposes of re-valuation of an earlier estimate or adopted figure would require reason to believe and not reason to suspect. For example, if one subsequently, finds that the description of the imported goods was different, H.S. Code applied was wrong, as a result of misrepresentation or the number of items mentioned in GD and accepted by the Department were incorrect etc., nobody will have any objection on the application of provisions of section 32. However, if one feels that more revenue could have been generated and thus, invokes the provision of section 32, this Court will not agree to the said understanding". 9. Similar views were taken by the Hon"ble Lahore High Court Lahore in unreported case "Messrs A.S. Enterprises, and Messrs Sunny Traders reported as (2009 PTD 281)". Director-General of the Customs Valuation, Custom House Karachi vide order, dated 25-9-2008 passed in Review Application No.DG(V)Val-Rev/67/2007, had also followed the law laid .down in the aforesaid cases, so far as the invocation of section 32 of the Customs Act, 1969 in valuation cases was concerned. The learned counsel has rightly pointed out that, if in applying the provisions of subsection (5), there are two or more transaction values of identical goods that meet all the requirements of this subsection and clause (b), (d), (e) and (f) of subsection (13) of section 25 of the Customs Act, 1969, the customs value of the imported goods shall be the lowest transaction value and not the higher transaction value in term of clause (d) of subsection (5) which reads as under:-

(d) If, in applying the provisions of this subsection, there are two or more transaction values of identical goods that meet all the requirements of this subsection and clauses (b), (d), (e) and (f) of subsection (13), the customs value of the imported goods shall be the lowest such transaction value, adjusted as necessary in accordance with clauses (b) and (c). 10. The perusal of the record shows that the original assessment was also made on the basis of evidences, and as such applying the evidences of higher value at subsequent stage is unjustified and illegal. Moreover, these evidences of higher value were also available with the department when the earlier assessment was made. This shows that the original assessment was rightly made by the assessing authorities in terms of section 25 (5)(d) of the Customs Act, 1969. The contention of the learned counsel for the appellant that the charge of collusion is not substantiated also carries weight. None of the Assessing Officers was made party in the show-cause notice. The learned counsel appearing on behalf of the Department also failed to show if any action against any -customs officer was taken in this behalf. The officials/officers, who made original assessment, are still doing their job. Just an explanation was called for. This fact proves that the Department, itself, had accepted the assessment made by them. The appellant produced hundreds of GDs pertaining to customs port of all over the country showing import of same goods at much lower value than the one assessed in the case of appellant. The learned counsel for the department when confronted with the evidences of lower value referred to by the appellant was unable to controvert the same. The perusal of the snow-cause notice and other documents shows that none of the import documents was alleged to be false or forged. Moreover, the GDs were filed on the basis of import documents by the Custom House agents and in the absence of allegation regarding falsity of the said documents, there was no justification for taking penal action against them. The judgments reported as 2005 PTD (Trib.) 10, 2005 PTD (Trib.) 196 and 2006 PTD 2742 are squarely applicable in this behalf. The contention of the learned counsel for the appellant that the appellant was singled out and no action against any other importer at any customs station, where the assessment was made much lower at the value assessed in case of appellants also merits consideration as it also tentamounts discrimination with the appellant. 11. The learned counsel for the appellant argued that the goods of the appellant were made of recycled raw material and that length of the pipes was very short. This argument might be correct, but it cannot be considered at this belated stage, because neither the goods nor their representative samples are available. 12. The learned counsel further contended that since it was final assessment, thus invoking of section 32 in such case was not legal because, had there been any irregularity in the assessment, the matter should have been examined by the competent authority under section 195 of the Customs Act, 1969. We do agree with judgment given in the case reported as 2002 PTD 889 by the Karachi Bench of this Tribunal that "in cases of final assessment no show-cause notice can be issued unless the earlier assessment order is set aside by re-opening the case by the competent authority because the Assessing Officer is also an Adjudicating Authority in terms of section 2(a) of the Customs Act, 1969". 13. The learned counsel contended that in all the cases, the import was made against letters of credit and mostly the entire documents were duly verified by the Chamber of Commerce of the exporting country and Diplomatic Mission for Pakistan abroad. He further stated that the appellant from the day one had been requesting the Department to get their documents verified. The Department was at liberty to get these documents verified, if they doubted the same, but they did not do so. This fact proves that the Department did not doubt the authenticity of the documents. Thus, there was no justification for imposition of penalty, in cases of post clearance audit in term of section 32(3A) of the Customs Act, 1969, more particularly, when there was no charge of presentation of false and fake documents or making untrue statement in the show-cause notice. 14. The learned counsel for the appellant argued that the evidences m of import made under exemption from payment of duty and taxes cannot be made basis for enhancing the value of the goods imported on payment of duty and taxes at statutory rate. This contention carries weight, therefore, we do agree with the learned counsel for the appellant. 15. With this discussion, all the appeals are accepted and the impugned orders in original as well as Order-in-Appeal are set aside. C. M.A./96/Tax(Trib.) Appeals accepted.

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