Central Excises Act (I of 1944)---

----Ss. 3-D, 4(2) & 12-A(1)---S.R.O. 4561)/96, dated 13-6-1996-- Excise duty, levy of---Lubricating oil sob in bulk---Not liable to payment of Excise duty under S.R.O. 456(I)96.

Punjab Petroleum Industries (Pvt.) 1,mited v. Collector, Central Excise Writ Petition No. 14312 of 2001 and Adam Lubricants Limited v. Federation of Pakistan and others Suit No. 84 r, of 2001 rel.

Mumtaz Yousaf for Petitioner.

K.N. Kohli, D.A.-G. for Respendea

Date of hearing: 19th November, 2001

JUDGMENT

AMANULLAH KHAN YASINZA, J.---The petitioner has sought the following relief:--

"It is, therefore, respectfully prayed4t this Hon'ble Court may be pleased to issue a writ in favour of the petitioner and declare:--

(a) That the act of respondents charging C,E.D. on bulk clearance of lubricating oil is without law authority, illegal and violative of the law as well as judgments of the Hon'ble Superior Courts.

(b) That the respondents may be directed to refund the Central Excise Duty which has already been charged from the petitioner on the bulk clearance since 1999 in accordance with the provisions of section 3-D of the Central Excises Act.

(c) That the respondents may be restrained from charging C.E.D. on the bulk clearance of lubricating oil in future.

(d) Any other relief in addition to the above, or in place thereof, may also be awarded which this Hon'bIe Court may deems fit and appropriate in the circumstances of the case."

The case of the petitioner is that the petitioner's company was established under the name and style of Messrs Balochistan Minerals and Oils Private Limited engaged in manufacturing of mobile oil and lubricating oil. The said items fall within the Headings Nos.2710.0081, 2710.0082 and 2710.0083 of the schedule of Customs, Act. Further added the lubricating oil produced by the company and supplied in bulk is exempted from the payment of Excise duty vide Notification No. S.R.O. No. 456(1)/96, dated 13-6-1996, which reads as follows:--

"Notification No. S.R.O. 456(1)/96, dated 13th June, 1996. In exercise of the powers conferred by subsection (1) of section 12A of the Central Excises Act, 1944 (I of 1994). read with section 4(2) thereof and in supersession of this Ministry's of this No.S.R.O., 546(1)/94, dated the 9th June, 1994, the Federal Government is pleaded to exempt:--

(i) The goods produced or manufactured in Pakistan and services provided or rendered specified in column (2) of the Table below and falling under the heading and sub-heading numbers of the First Schedule to the said Act specified in column (1) of the said Tale, from so much of the duties of excise as are in excess of the rates of duty specified in the corresponding entries in, column (3) of the said Table and;

(ii) .

Heading/subheadingDescription of goods and Rate of duty

numbers,.

W.P. Services.

No.14312/2091,

2710.0081

In packs not exceeding 10Ten per cent of the retail

litres.price or, seven rupees

and fifteen paisa per litre

whichever is higher.

2710.82In packs not exceedingTen per cent of the retail

litres.price of seven rupees

and fifteen paisa per litre, whichever is higher."

Perusal of the aforementioned notification clearly shows that lubricating oil is subject to payment of Excise duty, in packs not exceeding 10 litres or in packs exceeding 10 liters. However, the duty is not payable on bulk supplies.

Mr. Chaudhary Mumtaz Yousaf learned counsel for the petitioner contended that in the aforecited S.R.O., the petitioner's company is not liable to pay Customs Excise duty on lubricating oil sold in bulk. The learned counsel relied upon the following case-laws:--

(1) Writ Petition No. 14312 of 2001 passed by Lahore High Court, Lahore in case Punjab Petroleum Industries (Pvt.) Limited v. Collector Central Excise.

(2) Suit No.840 of 2001 passed by High Court of Sindh Karachi in Case Adam Lubricants Limited v. Federation of Pakistan and others.

In the above cited cases similar questions involved were decided and it was held that no customs duty is to be paid on lubricating oil produced in bulk.

Mr. K.N. Kohli, learned Deputy Attorney General vehemently opposed the petition and contended that lubricating oil is usually in packs not exceeding than 10 litres or to packs exceeding 10 litres.

We have heard the learned counsel for the parties and have perused the record minutely. We have gone through the aforecited S.R.O. which clearly exempts from Central Excise duty on lubricating oil sold in bulk,. The learned Deputy Attorney General could not give any satisfactory reply regarding S.R.O. and judgments passed by the Lahore High Court, Lahore and Sindh High Court.

In view of, the S.R.O. and judgments referred by the learned counsel for the petitioner, petition is allowed. It is held that the lubricating oil sold in bulk are not liable for payment of Central Excise duty under the S.R.O. No.456(1)/96 and the respondents are directed to make the determination of the amount of Central Excise duty which has already been recovered from the petitioner to refund the same to the petitioner's company. Parties are left to bear their own costs.

Petition disposed of in the above terms.

S.A.K./165/QOrder accordingly