024-SLLR-SLLR-2010-V-2-WASANA-TRADING-LANLKA-PVT.-LTD-vs.-DIRECTOR-GENERAL-OF-CUSTOMS-AND-ANOTH.pdf

The goods that are declared and described as requiredunder Section 47 could be classified under differentcommodity H. S. Code. The H. S. Code is a classification of
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commodities into a nomenclature given under Schedule Aof Section 10 of the Customs Ordinance for the purpose ofdetermining the duty rate. The fact that the CUSDEC hasa column to enter the H. S. code does not mean that the H.
S.Code is designated for the declaration of goods requiredunder Section 47.
Entering a H. S. Code in the CUSDEC is not a simpleexpression of an existing fact such as the physical descrip-tion and characteristics of goods but it is an expression ofopinion of the importer, under which category his goods couldbe classified based on the interpretative principles whichwere laid down in ‘Guide to the Harmonized System of TariffNomenclature, the Tariff Guide and the explanatory notes.This is buttressed by the submissions of the learned SeniorState Counsel that the Customs Department itself has a unitin which the importer or any public could get a H.S. Coderuling for the purpose of entering the same in the CUSDEC.In cases where the customs officers are in doubt the rulingwas obtained from a Nomenclature Committee.
In the case of Mulaffer and Another v. M. B. DissanayakeP1The Bills of Entry were framed by the petitioners on the ba-sis that the goods imported by them came under HeadingNo. 64.05 and the duty payable was set out as Rs. 34,057/59.The Customs authorities however took a different view. Aletter dated 13th June, 1979 (annexure MX2”) signed on behalfof the respondent was sent to the petitioner informing himthat these goods are correctly classifiable under B.T.N. No.64.01 dutiable at Rs. 50/- per pair. The total duty payable onthis consignment is Rs. 240,000/-. According to the two billsof entry only a sum of Rs. 34,057/59 has been entered by youin column 10 of the said entries.
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You are hereby requested to take necessary action to paythe correct duty of Rs. 240,000/-, in respect of this consign-ment.
The 1st petitioner thereupon interviewed the respondentwith his Counsel and thereafter wrote the letter “X3” of28.6.79 requesting the respondent to refer the matter to theAttorney-General for his opinion, since a similar matter waspending before him, for his decision.
As no reply was received the Petitioner sought a writof mandamus and the court considered the relevant clas-sifications and held that the Petitioners (importers) hadcorrectly categorised the imported consignment under theheading dealing with parts of footwear and given the correctparticulars in the bill of entry.
The above facts and the decision reveal that theclassification of goods under H. S. Code is not an expressionof existing fact but an expression of opinion. It is importantto note that the declarant of the CUSDEC signs the CUSDECdeclaring that “I do hereby affirm that the particulars andthe values entered by me true and correct.” In view of thisdeclaration that the particulars given in the CUSDEC whetherit relates to the particulars of the goods or otherwise, it ismandatory that the declarant must have a firm believe thatwhat he has declared to the best of his knowledge is correct.When a declarant classified his goods (which goods werealready physically described in a different Column 2, Cage31) into one H. S. Code with the use of the interpretativeprinciples which were laid down in ‘Guide to the Harmo-nized System of Tariff Nomenclature, the tariff Guide and theexplanatory notes’ which he believes correct, the DirectorGeneral or for that matter any other person cannot force
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the declarant to enter a different H. S. Code in the CUSDECwhich the Director General or any other person believescorrect. Merely because the Director General of Customsdoes not agree with the classification of goods and the dutycalculation of the person submitting the CUSDEC he can-not refuse to accept the bill of entry or for that matter hecannot compel the person submitting the CUSDEC to cor-rect the CUSDEC to fall in line with the classification of theDirector General of Customs as condition precedent to acceptthe CUSDEC (bill of entry).
In Wijeyesekera and Co. Ltd. v. The Principal Collector ofCustomsf3) at 332 Gratiaen J. observed:
“Admittedly, the respondent is charged with a public dutyunder section 59 of the Customs Ordinance to accept inproper form a bill of entry tendered by an exporter andcontaining true particulars as to the quantity, value, etc.,of the intended consignment. It necessarily follows that toinsist upon the bill of entry being incorrectly filled up insuch a manner that, upon the face of the document, theexporter would be liable to pay a heavier export duty thanwas justly due, would amount to a refusal to perform apublic duty. In that event, a mandamus would clearlylie.”
Section 47 provides that such person (the importer) shallpay any duties and dues which may be payable upon thegoods mentioned in such entry. This provision clearlyshows that the self declaration of the classification of goods(H. S. Code) and the corresponding duty calculated andentered in the CUSDEC by the importer has no significanceas he has to pay duties and dues which may be payableupon the goods mentioned in such entry. The duties and
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dues that are payable on the goods mentioned in thatentry has to be determined by the Director General ofCustoms according to the Schedule published under Section10. If the Director General of Customs disagrees with the HSCode and the duty calculated and entered in the CUSDEC by thedeclarant he could make a determination (on the descriptionof the goods and/or by examining the goods) giving thecorrect classification of the goods with the reference of HSCode and the duty payable by the importer (declarant) andcould demand and levy such duty on the article at the rate orrates so specified.
The Director General of Customs cannot direct theimporter to accept the classification what he consider iscorrect without giving a hearing and without considering thedocuments of the declarant that made the declarant to forman opinion that the goods fall into a particular classification(HS Code). Even if a determination is made by the DirectorGeneral of Customs after giving a hearing that the HSCode is different from the HS Code given in the CUSDE thedeclarant cannot be asked to correct the CUSDEC to includethe HS Code as determined by the Director General of Customs(for the reasons stated above) but declarant/importer mayby an order of the Director General of Customs asked to paythe duty corresponding to the HS Code determined by theDirector General of Customs.
This Court presided by (Sripavan J) made the followinginterim order on 28.10.2005;
“Court issued an interim relief directing the 1st to 7lhRespondent to accept the duty difference between thecategorizations claimed by the Petitioner and the catego-
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rizations claimed by the customs authorities by way of an
irrevocable bank guarantee acceptable to the customs.
Upon furnishing the required bank guarantee on thedifference in the duty, the 1st to 7th Respondents are directedto release the vehicle.”
The customs authorities acted in total disregard ofthis order, submitted in their objection at paragraph 17 asfollows;
“That. your lordships court has made an order on28.10.2005, ordering the release of the vehicle and directingthe Petitioner to pay the difference between the amountclaimed by the Petitioner as correct, and that claimed by theCustoms Department. However, the Petitioner did not makethe relevant declaration in order to clear the said vehicle.Without a CUSDEC being completed imported goods cannotbe cleared.”
The position of the Respondents is that the Petitionershould correct the H. S. Code in the CUSDEC to make theCUSDEC complete for the Respondent to accept the same. Asdiscussed above the Petitioner cannot be asked to sign andsubmit a CUSDEC declaring that “I do hereby affirm that theparticulars and the values entered by me true and correct”which in his opinion contains a wrong H. S. Code.
In this instant case the Director General of Customs hasrefused to accept the bill of entry (CUSDEC) for the reasonthat he is not agreeing with the classification of goods madeby the declarant. It is a right and a legal requirement for theimporter to submit a bill of entry (CUSDEC) as provided bySection 47 and it is a legal duty on the part of the DirectorGeneral of Customs to accept a bill of entry (CUSDEC) that
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is in conformity with section 47. The classification of goodsunder Schedule A of Section 10 of the Customs Ordinanceand the corresponding duty chargeable to the said goods arematters for the Director General of Customs as discussedabove.
In Ratnayake and others v. C. D. Perera and othersat 456 Sharvananda, J. with Victor Perera, J. and Colin -Thome, J. agreeing held;
“The general rule of Mandaus is that its function is tocompel a public authority to do its duty. The essence ofMandamus is that it is a command issued by the superiorCourt for the performance of public legal duty. Whereofficials have a public duty to perform and have refusedto perform, Mandamus will lie to secure the performanceof the public duty, in the performance of which theapplicant has sufficient legal interest.”
For the aforesaid reasons this Court issues a mandamusdirecting the 1st Respondent to accept the CUSDEC submittedby the Petitioner, copies of which are marked and filed in thisapplication as X3(ii) and X3(iii) and if the 1st Respondent isnot agreeable to the classification of the goods (H.S. Code)and the corresponding duty declared by the Petitioners the 1stRespondent after giving a hearing to the Petitioner determinethe correct classification of the goods and the correspond-ing duty payable by the Petitioner and could make an orderto that effect. The application for the writ of mandamus isallowed with cost of Rs. 30,000/-payable by the 1st Respondentto the Petitioner.
application allowed.