Collector of Customs and others
TK Oil Refinery Ltd. and 22 others,
MM Ruhul Amin CJ
Md. Tafazzul Islam J
Md. Abdul Matin J
Md. Abdul Aziz J
Collector of Customs and others…………..Appellants
TK Oil Refinery Ltd. and 22 others………..Respondents
May 14, 2009.
Case Referred To-
Mizanur Rahman’s case, 52 DLR (AD) 149.
Mahbubey Alam, Attorney-General, Naima Haider, Deputy Attorney-General and Nahid Yesmen, Deputy Attorney-General with him) instructed by Mvi. Md Wahidullah, Advocate-on-Record —For the Appellant (In all cases).
Fida M Kamal, Senior Advocate, instructed by ASM Khalequzzaman, Advocate-on-Record and Aftab Hossain, Advocate-on-Record—For the Respondent (In Civil Appeal Nos. 8, 9, 24).
Joynul Abedin, Senior Advocate, instructed by Zahirul Islam, Advocate-on-Record—For the Respondent (In Civil Appeal No. 11, 14, 18, 19).
Joynal Abedin, Senior Advocate, instructed by Syed M Rahman, Advocate-on-Record—For the Respondent fin Civil Appeal No. 30).
Not represented—Respondents (In Civil Appeal No. 10, 12, 13, 15, 16, 17, 20, 21, 22, 23, 25, 26, 27, 28, 29).
Civil Appeal Nos. 08-30 of 2002.
(From the judgment and order dated 18-8-1998 passed by the High Court Division in Writ Petition Nos.1704,2304, 2305,1935.1564,1172,1155,1536,1391, 1561, 1583, 2105, 1425, 1562, 2112, 1163. 1730, 1429, 1845, 2014, 2296, 2297, 2012 and 2015 of 1994).
Md. Tafazzul Islam J.- The above appeals, by leave, are directed against the common judgment and order dated 18-8-1998 of the High Court Division passed in Writ Petition Nos. 1704, 2304, 2305, 1935, 1564, 1172, 1155, 1536, 1391, 1561, 1583, 2105, 1425, 1562, 2112, 1163, 1730, 1429, 1845, 2014, 2296, 2297, 2012 and 2015 of 1994 making absolute the Rules obtained impugning the Circular dated 3-7-94 issued by the Controller, Customs Valuation Division, the respondent No.4, fixing the value of Crude Degummed Soybean Oil, CDSO, and also Crude Palm Oil, CPO, as shown in the above circular and also impugning the order, dated 28-11-94 and 29-11-94 issued by the appellant No. 1 imposing duty based on the enhanced value of US$ 574.50 per metric tonne in terms of the above Circular dated 3-7-94 in disregard of the invoice value.
2. The respondent in Civil Appeal No. 8 of 2002 filed Writ Petition No. 2304 of 1994 on the averments that they opened L/C dated 25-4-94 for import of 1000 metric tonnes of CDSO at the rate of US $ 443 per metric tonne C & F Chittagong as shown in the invoice and after arrival of the goods at Chittagong Port they, through their Clearing and Forwarding Agent, submitted bill of entry of 22-8-1994 for the purpose of assessment of customs duties and other taxes and charges on the basis of invoice value but the appellant No.1 directed the respondents to declare the value of the imported goods @ US$ 574 per metric tonne fixed as the indicative value of the goods by the Memo dated 3-7-1994 and also to show separately the freight paid for the purpose of assessment of customs duties.
3. The respondents in other appeals filed respective writ petitions challenging similar orders on the averments which are more or less similar.
4. The common contentions of the respondents in the above writ petitions were that the above circular and orders (a) are contrary to the provisions of Customs Act, (b) the impugned orders made by the Customs authority in different Nathies for the purpose of assessment of customs duties were arbitrary (c) there was no objective basis of fixation of the value of CDSO and CPO, imported by the respondents for the purpose of assessment of customs duties (d) the customs officials acted illegally in giving direction to the respondents to declare value at a value which the authorities fixed at their level without notifying the same in the Gazette, (e) the National Board of Revenue, the appellant No. 2, as well as customs officials, are not legally authorised to fix value of a particular imported merchandise in advance for the purpose of assessment of customs duties, (f) the appellant No. 2 as well as the customs officials acted in a colourable manner in fixing the value in advance for the purpose of assessment of customs duties which in other way was nothing but the tariff value and, as such, the value so fixed, having not been notified in the official Gazette, the action of the customs authority of taking the predetermined value as per circular dated 3-7-94 is illegal; (g) there being no law authorising the appellant No. 2 as well as customs officials to fix value of any imported merchandise as indicative value in advance for the purpose of assessment of customs duties, the action of the appellants in making direction to the respondents to declare the said indicative value is violative of Article 31 of the Constitution.
5. The appellants filed affidavits-in-opposition in some of the writ petitions, which were used in all the writ petitions, contending that by the SRO dated 9-6-1994, the tariff value on CDSO and CPO were deleted and even after the deletion of the tariff value the customs authority, in the absence of tariff value, was competent to fix normal price of the imported goods prevalent in the national and international markets under section 25(1) of the Customs Act and in fixing the normal value by the Tax Assessing Agency and the price shown in the invoice was not binding upon the said agency and the said circular dated 3-7-94 is an internal communication and the Customs Authority, being empowered by the provisions of section 25(1) of the Act. has fixed the normal price in advance; it is not correct that the current price of CDSO ranged from US$ 438 to 442 per metric tonne and for the purpose of determination of normal price of CDSO and CPO the appellants through their agencies, particularly through Bangladesh Embassy in Malaysia, collected price of CDSO which was at US$ 574 per metric tonne and taking into consideration the international market price and the interest of the importers, business communities and consumers, the Customs authorities fixed the indicative value of CDSO at US$ 575 per metric tonne and that when the bills of entry were submitted there was no tariff value and accordingly, the appellants did not commit any illegality in giving the directions to the respondents to declare the value of CDSO and CPO as mentioned in the order made on the body of the bills of entry; the object of fixing the price through the Circular dated 3-7-1994 was to prevent under invoicing of the value of the imported goods and accordingly, in fixing the price circulated by the Circular dated 3-7-94 the appellants acted quite fairly and reasonably in exercise of their statutory power; further, it is also not correct that the respondents were not aware of the above Circular dated 3-7-94 as they, against the above circular, made representations to the appellant No. 2 for reconsidering the value of CDSO and CPO so fixed and they in their above representations admitted that they imported some quantity of CDSO at the rate of US$ 580/585 per metric tonne and, as such, it was very much clear that the price fixed by the appellant No. 2 was the prevalent price of the CDSO and CPO in the international market; the association of the respondents also had dialogue with the appellants in connection with the fixing of the price of the imported goods and they, by their letter dated 16-7-94, represented to the appellant No. 2 to reconsider the matter of lowering the value of CDSO and CPO as shown in the Circular of 3-7-94 and to allow the respondents to take delivery of the oil imported by them on assessment of customs duty on the basis of tariff value in respect of imports where letters of credit were opened prior to the deletion of the tariff value.
6. The respondents filed affidavit-in-reply contending that the Government is not competent to fix any price like the indicative price and whatever price is fixed by the Government for the purpose of assessment of customs duties the same is required to be notified through official Gazette; the price that has been fixed as indicative value by Circular dated 3-7-94 has no nexus to the international market price of the CDSO and CPO; the Circular dated 3-7-94 being merely internal communication has no legal sanction for assessment of customs duties at a rate different from the invoice value or at a value higher than the prevalent tariff value; the appellants have obtained the price of CDSO from the countries which are not regular exporting countries and, as such, fixation of the price on the basis thereof cannot be considered as a dependable basis; the respondents imported the CDSO and CPO at a price which was quoted by their exporter and the appellants have not obtained the price of CDSO and CPO prevalent in the countries like Brazil and Argentina where-from the respondents imported the CDSO and CPO and, as such, the price that has been relied upon in the fixation of price of CDSO and CPO as circulated through the Circular dated 3-7-94 has no nexus and bearing in the matter of fixation of the value of CDSO and CPO imported by the respondents; further, the respondents opened the letter of credit prior to the fixation of the indicative value and, as such, indicative value fixed subsequent to the opening of letters of credit is in no way applicable to the matter of assessment of customs duties of the oil imported by the respondents.
7. The High Court Division, after hearing, made the Rules absolute.
8. Mr. Mahbubey Alam, the learned Attorney-General appearing for the appellants in support of the leave granting order, submitted that though the appellants could not substantiate assessment on the basis of indicative value as not being contemplated under the Customs Act, but in terms of the provisions of section 25(1) of the Customs Act in case of disagreement with the invoice value the authority was entitled to determine the normal price of the imported goods and the High Court Division erred in law in not giving direction to assess the customs duties and other taxes on the basis of normal price to be determined in accordance with law considering the prevalent market price at the country of origin with an opportunity to the importers to produce any paper or documents in support of their invoice values, inasmuch as the provisions of section 30 of the Customs Act are applicable in respect of both the value as well as rate of duty to any imported goods on the date on which bill of entry is presented under section 79 of the Act and, as such, the direction of the High Court Division to make assessment on the basis of the prevalent tariff value on the date of opening of letter of credit, which stood deleted long before the date of filing of the bill of entry, instead of assessment of normal value of the import is not sustainable and the finding of the High Court Division that the respondents by opening of letter of credit when tariff value was prevalent, acquired a vested right of assessment on the basis of tariff, is contrary to the principles as laid down in Mizanur Rahman’s case, 52 DLR (AD) 149 and further, the Government has authority to determine the normal prices and realise duty thereon at the rate prevailing on the date of submission of the bill of entry.
9. The learned Counsel for the respondents submitted that section 25 of the Customs Act, 1969 does not authorise the appellants to issue the circular dated 3-7-1994 and the same has been issued arbitrarily and without lawful authority as section 25 envisages determination of normal value under section 25(1) or fixation of tariff value by notifying through Gazette under section 25(7) and does not provide for determination of any “indicative value” as done in the present case and the appellants did not also make an attempt to determine normal value under section 25(1) of the Act based on any authentic contemporary evidence upon notifying the importer; further, since the points as raised in the leave stage had not been taken before the Court below, the appellants cannot raise such new points now; after the bills of entry were presented considerable time has already elapsed in the meantime and, as such, the prayer of the appellants made at this belated stage to allow them to determine normal value of the goods would amount to giving the appellants highest latitude though they, all along, acted in violation of law and tried to extract money from the respondents by fixing “indicative value” which is a foreign and unknown terminology; the invoice value/C & F value of the goods imported by the respondents being US$ 354 per metric tonne, the customs duty and other taxes thereon should be assessed on the basis of invoice value since there was no tariff value on the date of presentation of the bills of entry; the Circular dated 3-7-1994 and orders dated 28-11-1994 and 29-11-94 have been made without lawful authority, inasmuch as the value sought to be fixed for assessment of customs duties and other taxes on the said imported goods is arbitrary and without lawful authority and there is no authority conferred by section 25 to determine any ‘indicative value’ by a circular as has been done in the present case and section 25 of the Customs Act did not authorise the appellants to issue the impugned circular, inasmuch as section 25 only authorises to fix tariff value to be determined and fixed by Gazette notification under section 25(7) and does not provide for any authority to determine the value of imported goods by any circular.
10. As it appears, the High Court Division made the Rules absolute holding that a reading of the provisions of section 25(1)(2)(3) and section 30(1) of the Customs Act show that the Customs Authority is authorised to assess customs duties of imported goods at the value prevalent on the date when the bill of entry is presented for assessment of customs duties but, in the present case, the Customs authority fixed the indicative value for the purpose of assessment of customs duties of the imported CDSO and CPO imported by the respondents long before the presentation of the bill of entry and accordingly, “indicative value”, that has been fixed by the circular dated 3-7-94, cannot be considered to have been fixed in the light of the provisions of section 25(1)(2) and (3) of the Customs Act and that in terms of the above section the Customs Authority, in appropriate cases, no doubt, is competent to fix normal value of imported goods upon rejection of the invoice value or the declared value but in such a case the Customs authority would be required to notify importers informing them that the Customs authority is not accepting the invoice value or declared value as the basis for the purpose of assessment of customs duty and is going to fix the normal price of the imported goods for the assessment of customs duties and the customs authority would also be required to afford an opportunity to the importers to place their cases, if any, in support of their claim that the invoice value, in fact, is the normal price of the imported merchandise for the purpose of assessment of customs duties or that as against the invoice/ declared value of the imported goods the customs authority is going to tax the normal price of the goods for the purpose of assessment of customs duties but, in the instant case, that has not been done by the customs authority and the Customs authority fixed, through internal circular, certain prices of CDSO and CPO for the purpose of assessment of customs duties terming the same as “indicative value” but under the Customs Act, the revenue realising Authority or the Customs Authority is authorised to fix tariff value under section 25(7) of the Act at a prior date through Gazette notification for the purpose of assessment of customs duties and the indicative value that has been fixed later on and circulated through Circular dated 3-7-94 was admittedly not notified in the official Gazette; the learned Attorney-General submitted that the fixation of normal value in every case of imports upon notifying the individual importer would be an impossible task and, as such, for the sake of convenience, the revenue authority has fixed the value of the imported merchandise at a prior date through the Circular dated 3-7-94 for making the same as the basis for assessment of the customs duties in disregard of the invoice value, but the above submission cannot be accepted because in fixing the citizen with the liability of payment of tax, the concerned authority is required by strict compliance of law authorising it to fix a citizen with the liability of payment of tax and the plea of impossibility of fixation of the normal value of the imported merchandise in the case of each individual importer upon hearing him or that upon affording him an opportunity to place his case, if any, in support of the invoice value, cannot be accepted and the respondents, under the law, cannot be allowed to resort to the practice of pre-fixation of the value of the imported goods for assessment of customs duties in that the Government or any other agency authorised by the delegated legislation cannot act in a manner which is not authorised or provided in the law or by the law; further, the affidavit of the appellant does not show that price to the CDSO and CPO at which those were sold by the countries wherefrom import was made by the respondents, being not taken into consideration at the time of fixing the “indicative value”, the statement of the appellants in Annexure-2 to the affidavit-in-opposition to the effect that the price of CDSO in the international market at the relevant time was at about US$ 580/585 per metric tonne and, in that state of the matter, the appellants were quite correct in fixing the value of the goods in question at the amount circulated through the Circular dated 3-7-94, cannot be accepted and in no way it can be said that the invoice value of the respective imports did not reflect the value prevalent in the international market and, be that as it may, the fact remains that appellants, by law or under the law, are not authorised by an internal circular to fix any value like indicative value of any imported merchandise in advance for the purpose of assessment of customs duties. The High Court also did not accept the submissions of the learned Attorney-General that, in terms of the principle laid down in PLD 1988 Karachi 99, the matter of assessment of customs duties of the goods in question be sent back to the customs authority for making assessment after hearing the respondents as the facts of the above case are quite distinguishable from the facts of the instant cases.
11. As it appears, at the conclusion, the High Court Division directed that the customs authority is to assess the customs duties of the goods in respect of which the letters of credit were opened prior to the deletion of the tariff value by the SRO dated 9-6-1994 on the basis of tariff value prevalent at the time of opening of letters of credit and in other cases taking the invoice value but the above order of the High Court Division to the extent that “in other cases taking the invoice value” is modified to the extent, that if the invoice value as shown by the respondents are not acceptable to them the Customs Authority will be at liberty to fix normal price in terms of the provisions of section 25(1) of the Customs Act in accordance with law and then assess customs duty and other duties on the basis of normal price so fixed.
All the appeals are dismissed with the observation as made above.
Source: 62 DLR (AD) (2010) 217