RECORDER REPORT

ISLAMABAD: The Directorate General of Customs Valuation Karachi has revised valuation ruling of networking and other equipment of different brands for accurate assessment of customs duty on the import of such equipment.

In this regard, the directorate has issued Order-in Revision to revise customs values on the import of such networking equipment.

Sources said that the DG has revised the ruling of networking and other equipment of Zenda and TPL brand. The values of TPL brand was fixed much on lower side and has been increased from 100-300 percent by DG valuation after hearing an appeal of Zenda brand. Though Zenda also requested to decrease the values of their products as per values of TPL but instead of decreasing values of Zenda brand the values of TPL were increased manifold.

According to the order issued by the directorate, the revision petition was filed under section 25-D of the Customs Act, 1969 against customs value determined vide Valuation Ruling No.774/2015 dated 01-12-2015 issued under section 25-A of the Customs Act, 1969.

The petitioner is a regular importer of Networking Equipment's from China. The petitioners being aggrieved and dissatisfied with the Valuation Ruling No. 774/2015 DATED 01-12-2015, preferred to file Revision Petition with the DG.

Brief facts of the case are that a case of provisional assessment referred by MCC-Appraisement (East), Karachi in the light of letter of Directorate General Intelligence and Investigation-FBR, Karachi, an exercise to determine the customs values of the Networking Equipments under section 25A was initiated. It was taken into account that the customs values should be determined after covering maximum items of networking equipments.

It was also observed that difference prices of Networking Equipments were being declared by their importers and there was no uniformity in their assessment. Different practices were being adopted by the clearance Collectorates while assessing them. It was also observed that huge under invoicing is being made in the import of the said equipments. In order to bring uniformity in assessment of the Networking Equipments by all clearance Collectorates, it was found essential to issue Valuation Ruling in this regard, based on available data, international prices as well as prices in the local market.

In his order, Syed Tanvir Ahmad Director General Customs Valuation Karachi has deliberated on the case record as well as verbal and written submission put forth by the petitioners and respondents department. The petitioners submitted that TP Link brands are well known and popular, their products are more costly in market, the vital specification of TP Link is missing. The determined customs values of TP Link brand vide impugned valuation ruling is lesser rather than Tenda brand.

They further stated that during the exercise for determination of valuation ruling, the petitioner was totally ignored and neither called for meeting nor his suggestion were sought, which is in stark contradiction to the order of the High Court of Sindh, Karachi vide CP-D No.1300/2015 dated 05-05-2015. They contended that the contents of Valuation Ruling do not show the method of calculation and same has not been incorporated in impugned valuation ruling showing cost of profit, sales/purchase of importer, whole seller/dealers, retailers etc. They contended that the values of Tenda brand and TP Link are almost same in the market but the Tenda brand values have been fixed much on higher side than TPL brand. The petitioner furnished price list of both brands of Tenda and TP Link and requested for inserting in valuation ruling for future.

Conversely, the respondent department initiated the exercise for determination of customs values of Net Working Equipment under section 25-A on a reference forwarded by MCC Appraisement (East) in the light of letter No.Appg-19/DCI/R&A/TP Link/2015/3910 dated 02-06-2015 of Directorate General Intelligence and Investigation-FBR, Karachi. The Networking Equipments were being cleared on different prices and there was no uniformity in their assessment. In this regard, meeting with stakeholders were fixed on 21-10-2015 and 23-11-2015. They were asked to furnish their selling price list and sales tax invoices on the final date of meeting i.e. 23-11-2015 but they all failed to furnish the same. All valuation methods under sub-section (1) to (7) as prescribed under section 25 of the Customs Act, 1969 were exhausted sequentially. Consequently, customs values were determined under section 25(7) of the Customs Act, 1969 vide Ruling No.774/2015 dated 08-12-2015.

Meetings were fixed with all stakeholders belonging to Tenda and TP Link brands on 12-07-2016, 18-07-2016 and 19-07-2016. Market survey was conducted at different times. Initially the Tenda launched complaint and requested that prices of TPL have been fixed 200 - 300 percent lower than Tenda whereas their products are similar in the market with almost same price. Later TPL was also called. They stated that their values are correct and that values of Tenda may be brought down. After seeing their interest the Tenda also joined and changed stance and stated that instead of increasing values of TPL, their values may be brought down. At initial stage M/s Tenda submitted some examples regarding comparison of values of Tenda and TP Link.

However, the Directorate General of Customs Valuation conducted its own market inquiry. The market inquiry showed that the values are much higher. M/s Tenda and TP Link did not agree to the prices and insisted on prices which are given by the team jointly which is much lower than market prices. Keeping above in view, customs values are re-determined on the basis of market inquiry, the order added.