KARACHI: The Customs Appellate Tribunal in Karachi has set aside a valuation ruling that fixed customs values for imported perfumes, eau de toilette and eau de cologne, and ordered the customs valuation directorate to redo the exercise.
In a judgment announced Monday, Tribunal Bench-III set aside Valuation Ruling No. 2094/2026, dated June 24, 2026, and Order-in-Revision No. 40/2026, dated Aug. 27, 2026, which had modified it. The judgment was authored by Dr. Tahir Qureshi, technical member, and signed by judicial member Mazhar Ali Ghallu.
The appeal was filed by M/s HIM Associates of Lahore against the Director General of Customs Valuation and the Directorate General of Customs (Valuation) in Karachi.
The ruling had sorted perfumes into nine categories, A+ through H, based on retail price ranges, and assigned each a customs value per liter. The Tribunal noted that the values were about 100% to 300% higher than those in the earlier Ruling No. 1840/2024, dated Jan. 12, 2024.
The Tribunal found that the record did not sufficiently disclose the price observations, the criteria used to select representative retail prices, or the deductions and calculations used to arrive at the values. It also said the Director General’s revisions, which lowered the category values, were not accompanied by a disclosed methodology.
The bench did not reject the directorate’s overall approach. It accepted that categorizing goods by variant can be more accurate than brand-level valuation, and that retail prices can be used in a deductive valuation. It also said a large increase in values is not unlawful solely because of its size. But it held that the authority must support its conclusions with disclosed evidence and reasoning.
The Tribunal questioned how the department arrived at separate values for thousands of brands. The appellant told the bench that more than 30% of the listed brands were discontinued or no longer available.
The department had argued that Section 25(10) of the Customs Act, 1969, allows valuation methods to be applied sequentially or otherwise, and that the values were derived under the fallback provision in Section 25(9). The Tribunal said that whether a method is permitted and whether it was lawfully applied are separate questions.
The Director of Customs (Valuation) must now conduct a fresh exercise under Section 25A of the act, using the methods set out in Section 25, after hearing the stakeholders. Until a new ruling is issued, customs collectorates will assess the goods under Section 25.
Advocates Shahzad Ali, Mir Meher Dil and Tayyaba and consultant Faisal Ghani appeared for the appellant. Valuation Officer Faisal Aziz appeared for the respondents. The hearing was held Sept. 10. The judgment is subject to any further appeal.
