Valuation ruling valid until revised, Supreme Court rules

The Supreme Court has ruled that a customs Valuation Ruling issued under Section 25A of the Customs Act, 1969 remains the applicable value for assessing imported goods until the competent authority revises or rescinds it. The judgment settles a dispute over whether a ruling loses force after 90 days under Rule 107(a) of the Customs Rules, 2001.

The three-member bench, headed by Chief Justice of Pakistan Yahya Afridi, set aside a Sindh High Court judgment dated 16 November 2022. Justice Muhammad Shafi Siddiqui, who authored the decision, wrote that the High Court had wrongly treated the expiry of 90 days as decisive for a Valuation Ruling's continued application.

According to the judgment, an amendment to Rule 107(a) made through SRO 564(I)/2017 states expressly that where a Valuation Ruling issued under Section 25A exists, it shall remain in force unless rescinded, modified or replaced by a new Valuation Ruling. The 90-day period, the court explained, concerns only the age of valuation data used in determining customs value, not the period for which a determination under Section 25A remains operative.

The court said Section 25A(4) addresses that question directly: the customs value determined under subsection (1), or under a subsequent determination, remains applicable until and unless revised or rescinded by the competent authority.

The court explained that Section 25A creates a mechanism for predetermining customs value within the wider valuation framework of Section 25. Subsection (1) requires the applicable methods under Section 25 to be followed, subsection (2) gives legal effect to the value determined, and subsection (4) governs how long that value continues to apply.

In the case at hand, Valuation Ruling No 874 of 2016, dated 22 June 2016, was in force at the time the goods were assessed, the judgment stated. No material on record showed that the ruling had been revised or rescinded before those assessments. The tribunal and the High Court, the court said, had erred by directing assessment under Section 25(1) merely because 90 days had elapsed since the ruling's issuance.