Customs Act (IV of 1969)‑‑‑

‑‑‑‑S. 21‑‑‑Notification S.R.O. 400(I)/97, dated 31‑5‑1997‑‑‑Notification S.R.O. 435(I)/2001, dated 18‑6‑2001‑‑‑Constitution of Pakistan (1973), Art. 199‑‑‑Constitutional petition‑‑‑Exemption from customs duty‑‑ Factual inquiry‑‑‑Technical aspect of equipment‑‑‑Locally manufactured parts‑‑‑Compatibility with imported equipment‑‑‑Dispute was with regard .to import. of equipment for oil exploration project‑‑‑Components which could not be locally manufactured were exempted from import duty‑‑ Engineering Development Board had decided that the disputed components could be locally manufactured, therefore, such components were not exempted under the Notification S.R.O. 400(I)/97, dated 31‑5‑1997 and Notification, S.R.O. 435(I)/2001, dated 18‑6‑2001‑‑‑Plea raised by the importer was that the locally manufactured components were not compatible with the imported equipment and the Board had not provided opportunity of hearing to the importer‑‑‑Validity‑‑‑High Court in exercise of Constitutional jurisdiction would not enter into disputed questions of fact and more so when the technicalities of manufacturing of equipment was involved‑‑‑Law had itself created a forum for determining the disputed question about the status of imported equipment‑‑‑Importer had submitted to such forum and after elaborate determination of all relevant aspects, the Board had decided against the importer‑‑‑Function of Engineering Development Board was only to determine the question as to whether the equipment imported was being locally manufactured or not‑‑‑Board was not supposed to determine the compatibility or suitability of the imported equipment with that of the equipment manufactured locally‑‑‑Law did not make any provision for determi nation of compatibility or suitability‑‑‑Engineering Development Board had examined and gone through the material placed by the importer and had also provided him opportunity of hearing and thereafter had passed the order‑‑‑Such order did not suffer from any illegality requiring interference by High Court in Constitutional jurisdiction‑‑‑Petition was dismissed in circumstances.

Sohail Jute Mills Ltd. v. Federation of Pakistan PLD 1991 SC 329; Messrs Gulshan Weaving Mills Ltd. Lahore v. Collector of Customs, Lahore PTCL 1999 (CL) 186; Abdul Rehman Yusuf Mapara v. Collector of Customs 1988 MLD 795; Messrs Globe Textile Mills Ltd. v. Central Board of Revenue, Islamabad 1989 CLC 1962 and Messrs Arshad & Company v. Capital Development Authority, Islamabad 2000 SCMR 1557 ref.

Dr. Amjad Hussain Bukhari for Petitioner.

S. Mehmood Alam Rizvi, Standing Counsel for Respondent No. 1.

Akhtar Hussain For Respondent No.5.

Date of hearing: 16th May, 2003.

JUDGMENT

GULZAR AHMED, J.‑‑‑The petitioner was awarded contract, sated 14‑9‑2001 for construction of sub‑stations alongwith battery houses inclusive of modular buildings by Alston a British Oil and Gas Company engaged in development of oil and gas at Bhit Exploration in Kirthar Petroleum Concession Area in Pakistan. The contract also envisaged import and supply of certain equipment. It is stated by the petitioner that L ASMO Oil Pakistan Company is subsidiary of Alston and LASMO through its letter, dated 3‑12‑2001 requested respondent No.4 for issuance of import authorization in favour of the petitioner and that such letter also mentioned the equipments for which import authorization was sought. On the basis of the letter of LASMO, the petitioner through its letter, dated 14‑1‑2002. approached respondent No.4 for issuance of import authorization and declared that such equipment are not manufactured locally in Pakistan. It is alleged that respondent No.4 vide its letter, dated 29‑1‑2002 conveyed its no objection to the respondent No.2 for the import of the equipments. The petitioner imported all the equipments between 13‑12‑2001 and 27‑5‑2002. It is alleged that imports of the equipments by the petitioner was exempt from levy of Custom duty under Notification. S.R.O. 400(I)/97, dated 31‑5‑1997 and S.R.O. 435(I)/2001, dated 18‑6‑2001 and thus the petitioner requested the respondent No.2 for such exemption certificate. The respondent No.2 issued a provisional certificate, dated 20‑6‑2002 for the clearance of the imported equipments on the condition that the petitioner shall furnish bank guarantees and that the certificate shall automatically stand withdrawn in case it is found at any stage that the raw material and components imported are also being locally manufactured and hit by relevant C.G.O. The petitioner deposited the bank guarantee in favour of respondent No.5. The petitioner then requested the respondent No.2 for the release of the said bank guarantee, The respondent No.2 referred the matter to respondent No.3 the Engineering Development Board (EDB) for opinion about local manufacturing status of equipments imported by the petitioner. The respondent No.3 gave opinion that some of the items imported by the petitioner can be locally manufactured in Pakistan and petitioner is not entitled to grant of exemption. The petitioner thereafter wrote number of letters to the respondent No.3 with supporting material for determination by the respondent No.3 about the local manufacturing status of the imported items. It is alleged that the respondent No.3 without considering the material produced by the petitioner and without hearing the petitioner and without reasons passed order, dated 19‑3‑2003, deciding the status of some of the items as manufactured locally. The petitioner is aggrieved by this order of the respondent No.3 and has impugned the same in this Constitution petition. Notices were issued to the respondents. Respondent Nos. 2 and 5 have filed counter affidavit as well as their parawise comments to the petitioner. Respondent No.3 has also placed on record its parawise comments. Petitioner has filed rejoinder/objections to the parawise comments of respondent Nos.2, 3 & 5.

Mr. Amjad H. Bokhari learned counsel for the petitioner has contended that equipments imported by the petitioner were exempt from levy of Custom duty under S.R.O. 400(I)/97, dated 31‑5‑1997 as the imported equipments were for oil exploration project. He further contended that the equipments imported by the petitioner were not being locally manufactured and the respondent No.3 by the impugned order while deciding the status of some of the imported equipments as being locally manufactured has not considered the material produced by the petitioner to show that such equipments were not being locally manufactured. He has further contended that no opportunity of hearing was given to the petitioner by the respondent No.3 before passing of the impugned order. He has relied upon Sohail Jute Mills Ltd. v. Federation of Pakistan, PLD 1991 SC 329; Messrs Gulshan Weaving Mills Ltd. Lahore v. Collector of Customs, Lahore PTCL 1999 (CL) 186, Abdul Rehman Yusuf Mapara v. Collector of Customs, 1988 MLD 795, and Messrs Globe Textile Mills Ltd. v. Central Board of Revenue, Islamabad 1989 CLC 1962. Mr. Akhtar Hussain learned counsel for the respondent No.5 has contended that the petitioner was allowed to import the relevant equipment under S.R.O. 435(I)/2001, dated 18‑6‑2001 which was conditional and subject to final determination by Engineering Development Board regarding the manufacturing status of the imported equipment. He has stated that the matter was referred to the Engineering Development Board who provided all opportunity to the petitioner to produce full information regarding the imported equipments. The information produced by the petitioner was referred to relevant industry of each equipment for information of local manufacturing status and it was found that some of the equipment imported by the petitioner were being locally manufactured. He further contended that in arriving at the impugned decision, the respondent No. 3 has not only considered all material produced by the petitioner but has also provided to the petitioner opportunity of personal hearing. He stated that the present petition is misconceived and not maintainable and relied upon Messrs Arshad and Company v. Capital Development Authority, Islamabad, 2000 SCMR 1557. Mr. S. Mahmood Alam Rizvi Standing Counsel for the respondent No.1 has adopted the arguments of Mr. Akhtar Hussain.

We have considered the arguments of the learned counsel and have gone through the record.

It is not disputed between the parties that Notification S.R.O. 400(I)/97, dated 31‑5‑1997 and Notification S.R.O. 435(I)/2001, dated 18‑6‑2001 granted exemption from levy of Custom duty on equipments as are not manufactured locally if imported by exploration and productions Companies including O.G.D.C. and their contractors and sub‑contactors and service companies for the projects. S.R.O. 400(I)/97 in its para 10 provide that in the event of dispute whether any item, is entitled to the exemption under this notification, the item/consignment will be immediately released by the Collector of Customs against a corporate guarantee from the company. A subsequent certificate from the relevant regulatory authority that the item is covered under this notification shall be given due consideration by the Collector of Customs or the Central Board of Revenue as the case may be towards finally resolving the disputes. Similarly S.R.O. 435(I)/2001, contains explanation that for the purpose of this notification the expression "not produced or manufactured locally" shall mean the goods which are not included in the list of locally manufactured goods specified in the General Order issued by the Central Board of Revenue or certified as such by the Indigenization Committee of Engineering Development Board. It should be clarified that the respondent No.4 while granting no objection for import of equipments by the petitioner has attached the following rider in its letter, dated 29‑1‑2002 annexure `E' to the petitioner:‑‑

"(2) The admissibility of the import of components by Interglobe Engineering Services will however, be determined by Chief (Survey), C.B.R. in accordance with the aforementioned S.R.O. and C.G.O. 7/98."

The above quoted para refers to S.R.O. 435(I)/2001, dated 18‑2‑2001.

Now it appears that dispute arose between the petitioner and the respondents as to the local manufacturing status of the equipments imported by the petitioner. The petitioner furnished the bank guarantee and got the equipment released and thereafter the petitioner approached the respondent No. 2, C.B.R., for granting of exemption certificate and N.O.C. for release of bank guarantee. The respondent No.2 pursuant to the explanation contained in S.R.O. No.435(I)/2001, referred the matter for the opinion and necessary certification by the respondent No.3 that is the Engineering Development Board. The petitioner submitted to the respondent No.3 and placed before it necessary material to demonstrate that the equipment imported by it are not being manufactured locally. It appears that the respondent No.3 provided full opportunity to the petitioner to substantiate its point of view and has also given personal hearing to the petitioner. The respondent No.3 in the course of enquiry has obtained information from local manufacturers which information was confronted by the petitioner. Copies of information and material procured by the respondent No.3 for the purpose of enquiry in the matter are attached with parawise comments of the respondent No.3. After considering all relevant aspect of the matter, the respondent No.3 appears to have passed the order finding that some of the equipments imported by the petitioner are manufactured locally. The petitioner has placed reliance on the case of Sohail Jute Mills Ltd. (Supra) in which vires of levy of surcharge and Iqra surcharge was challenged and further exemption from levy of Custom duty was sought on the ground that at the time of making of contract for import of machinery, it was not manufactured locally. The Hon'ble Supreme Court while holding levy of surcharge and Iqra Surcharge legal remanded some of the cases to the departmental authorities for making of factual enquiry as to whether at the relevant time the machinery imported were being manufactured locally as no such enquiry was conducted. In the case of Messrs Globe, Textile Mills Ltd. (Supra) the question was whether the CGO issued by the Central Board of Revenue under section 21 of the Customs Act mentioning items which were exempt from payments of Customs duty was not withdrawn due to replacement of S.R.O. mentioned in C.G.O. In the case of Abdul Rehman Yusuf Mapara (Supra) the matte was with regard to encashment of bank guarantee by the Customs Authority without giving opportunity of hearing that the imported item by the petitioner was liable to concessionary rate of Customs duty under relevant P.C.T. heading. The case of Messrs Gulshan Weaving Mills Ltd. (Supra) is a decision of the Customs, Excise and Sales Tax Appellate Tribunal Lahore which too is distinguishable from the present case as in that case, no determination was made about the local fabrication of humidification plant and thus the matter was remanded.

As stated above, the respondent No.3 has considered all relevant aspect after providing full opportunity of hearing to the petitioner and has reached conclusion that some of the equipments by the petitioner were also being locally manufactured. Both the learned counsel appearing for the petitioner and respondent No.5 have argued that about the technical aspects of the imported equipments in as much as the petitioner's counsel has contended that the locally manufactured equipment are not compatible to the imported equipments. Insofar as the argument with regard to the technical aspect of the matter is concerned, it is well established law that the High Court in exercise of its writ jurisdiction will not enter into disputed questions of fact and more so where in the present case the technicalities of manufacturing of equipment is involved. The law has itself created a forum that of respondent No.3 for determining the disputed question about the status of imported equipments by the petitioner and to such forum the petitioner has submitted and after elaborate determination of all relevant aspects, the respondent No.3 as a statutory forum has decided the question by the impugned order. The function of respondent No.3 was only to determine the question as to whether the equipment imported by the petitioner were being manufactured locally or not. It was none of the function of the respondent No.3 to determine the compatibility or suitability of the imported equipment of petitioner with that of equipments manufactured locally. The law did not make any provision for the determination of compatibility or suitability. We are satisfied that the respondent No.3 has examined and gone through the material placed by the petitioner and has also provided opportunity of hearing and thereafter has passed the impugned order. Learned counsel for the petitioner has not been able to show that the impugned order suffers from any illegality requiring interference by this Court in writ jurisdiction. Resultantly the petition fails and is accordingly dismissed alongwith C.M.A. No. 1209 of 2003.

M.H./I‑86/KPetition dismissed.