(On appeal from the judgment of High Court of Sindh, dated 5-6-2002 passed in C.P. No.414 of 2002).

Customs Act (IV of 1969)---

----S. 156(1)---Notification S.R.O. No.324(I)/99, dated 8-7-1999-- Constitution of Pakistan (1973), Art. 185(3)---Import of palm oil found to be inedible---Record showed that controversial question of fact relating to the. nature of oil, whether edible or inedible, was resolved by the High Court, in view of the test reports, wherein the imported oil was declared not fit for human consumption without further process and consequently, its classification as edible oil was unexceptional-- Laboratories reports showed that the subject oil in the form in which the same was imported was not eatable, therefore, the same would not fall in the definition of edible oil for availing the benefit of the notification under which concession in the payment of income-tax was allowed on the import of edible oil---Supreme Court, in the light of material available on the record, having not been able to find out any legal defect and .infirmity in the impugned judgment for interference, 'without taking any exception, upheld the verdict given by the High Court and dismissed the petition for leave to appeal.

M. Shaiq Usmani, Advocate Supreme Court and K. A. Wahab, Advocate-on-Record for Petitioners.

Raja M. Irshad, Dy. Attorney-General and M.S. Khattak, Advocate-on-Record for Respondents.

Date of hearing: 26th February, 2003.

JUDGMENT

MUHAMMAD NAWAZ ABBASI, J.---This petition under Article 185(3) of the Constitution of Islamic Republic of Pakistan, 1973 has been preferred against the judgment, dated 5-6-2002 passed by a Division Bench of the High Court of Sindh at Karachi in a, Constitutional petition.

2. The essential facts giving rise to this petition are that Messrs Batala Ghee Mills, petitioner herein, imported RBD Palm Oil from Indonesia. Initially the report on the samples of imported tail drawn by the concerned authorities was obtained from Customs House Laboratory and subsequently the samples were sent to HEJ Research Institute of Karachi and PCSIR for laboratory test. The Collector of Customs, Port Bin Qasim, on receipt of the reports of the above laboratories, issued show-cause notice to the petitioners under Customs Act, 1969 read with Import and Export Control Act, 1950 and in consequence thereto, vide order, dated. 10-3-2000 directed the confiscation of the imported oil under section 156(1) of the Customs Act, 1969. The Collector, however, allowed redemption of oil subject to the payment. of redemption fine and leviable duties and taxes with the condition that marketing of the oil would only be permissible on the issue of standard health certificate from the public analyst. The above order was assailed both by the Customs Authorities and the petitioners through separate appeals before the Customs, Excise and Sales Tax Appellate Tribunal, Karachi. The appeal of the Customs Department, was dismissed. whereas the appeal filed by the present petitioners was partly. allowed and the case was remanded to the Collector Customs for decision afresh, with the following direction:--

"In view of the aforestated circumstances and in order to ensure transparency as well, as fair and impartial justice we find it imperative to set aside the orders passed and remand the case to Collector for de novo consideration with the direction that while proceeding with the case afresh the learned Collector will ensure drawal of fresh samples in the presence of one of the trusted official of the Collectorate, the authorized representatives of the appellant, a representative of customs laboratory to be specifically deputed by Collector of Customs (Appraisement) and Mr. Iqbal Nanji of Messrs Manjo and Co. these samples will be drawn in accordance with the manner specified public notice 0.37 of 1995(A), dated 17-7-1995 and then taken to Customs House laboratory in which appellants have greater faith and tested for FFA as well as melting point the two most crucial aspects for determination of fitness for. human consumption in the presence of the same representatives as these tests take only couple of hours. Based on the results of the test a final decision will be taken by the Collector within four weeks after affording the appellant the opportunity of hearing".

3. The petitioners challenged the above order in the High Court of Sindh at Karachi through a custom appeal which was disposed of ,vide judgment, dated 30-5-2000 with the following observations:--

"(10) We are, therefore. of the opinion that the learned Tribunal acted in excess of its jurisdiction in passing the impugned order which was .,not germane to the controversy in the appeal preferred by the appellants. We, would, therefore, allow this appeal and set aside the impugned order. The conditions imposed by the order of the Collector in respect of marketing the imported goods as well as the directions of this Court to the effect that the blending, and sampling of the goods for the purpose of obtaining reports from the public analysis will be earned out under Customs supervision and wilt be strictly monitored would also remain operative. The redemption fine has already been paid and Mr. Usmani undertakes that he will not claim its remission or refund. The appeal stands disposed of accordingly.".

4. The respondents being dissatisfied with the judgment of the High Court passed in the custom appeal, preferred a petition for special leave to appeal before this Court which was disposed of vide judgment, dated 9-2-2001 as under:--

"Thus we are of the opinion that the High Court has rightly disposed of the appeals filed by the respondents leaving no scope for interference by this Court. Needless to observe that if at presentation of certificates from the Public Analyst the Collector Customs feels that the imported goods are not fit for human consumption he can make reference accordingly to the relevant authorities for taking action against them if the palm oil is sold in the market in violation of the Pure Food Ordinance. 1960.

With above observations, the petitions stand dismissed."

5. Earlier, the petitioners by way of filing a Constitutional petition in the High Court of Sindh, sought release of goods in terms of the order in original, dated 10-3-2000 passed by .the Collector Customs, which was disposed of by the High Court vide order, dated 18-4-2002 in the following terms:--

"In the circumstances, we are constrained to declare that the direction contained in the letter, dated -15-3-2000 is of no legal effect. However, since the question of danger to public life is involved, we expect the Appellate Tribunal to decide the Appeal at the earliest. Accordingly, the order of the Customs would have full effect provided that the blending and sampling for the purpose of obtaining of report from the Public Analyst will be carried out under Customs supervision and may be monitored strictly. This however, is subject to any other order that may be passed by the Appellate Tribunal.

The petition stands disposed of alongwith all pending applications."

6. The petitioners obtained delivery of a part of the consignment in terms of customs original order, dated 10-3-2000 passed by the Collector of Customs by paying income-tax at the rate of 3 % which would be subject to the determination of the nature of subject oil and the rate of income-tax payable.. Subsequently, on the disposal of the petition by this Court on the subject, the petitioners approached the Customs Authorities for lifting of the balance quantity of 700 metric tons of oil and the Collector Customs at Port Bin Qasim Karachi, respondent herein, directed the petitioners to make payment of income tax at the rate of 6 per cent on the total consignment and also the less deposit of income-tax paid on the delivery of goods already obtained. The petitioners filed an application under Article 204 of the Constitution of Islamic Republic of Pakistan, 1973 read with sections 3 and 4 of the Contempt of Court Act, 1976 in the High Court of Sindh at Karachi seeking direction for release of 700 metric Ns of oil in terms of the order, dated 18-4-2002 passed by the High Court and for initiating proceedings against the respondents for contempt of the Court. This application came up for hearing before a Division Bench of the High Court of Sindh at Karachi and the learned Judge of the Division Bench while disposing of tile same through the impugned judgment made the following observations:--

"The incidences of levy of duties and other charges are attracted on the basis of description of the consignment at the time of import and not after it is processed, refined or modified as such exercise would tend to change the nature and description of the goods and they might fall under different PCT heading. Even the clarification, dated 19-4-2002 issued by the Income Tax Department was to the effect that rate of 6% Income Tax has been relaxed in case of Industrial undertaking importing Edible Oil as raw material on which tax was deductible @ 3 % as per Clause (6-A) of Part II of 2nd Schedule to the Income Tax Ordinance, 1979."

7. Learned counsel for the petitioners has contended that the controversy between the parties with regard to the classification of subject oil had already been settled, therefore, the verdict given by a Division Bench of the High Court of Sindh at Karachi in a Constitutional petition and in the custom appeal' which was further upheld by this Court in C.P. No.288-K of 2000 etc. vide judgment, dated 9-2-2001, the imported oil was edible and the concession in the payment of income-tax was available to the petitioners under S.R.O. No.324(I)/99, dated 8th July, 1999, as amended by Finance Act, 2000. Learned counsel argued that the learned. Division Bench of the High Court was not supposed to reopen the past and closed transaction and make classification of goods afresh in the contempt proceedings and argued with vehemence that the High Court in departure to the verdict, given in its earlier judgments, while re-adjudicating the matter held that the subject oil was inedible palm oil which would not be covered by the notification in question.

8. Learned Deputy Attorney General, on the other hand, has argued that the High Court in the light of reports, and other material available on record, including the verdict given by the departmental authorities observed that the subject oil being not fit for .human consumption was inedible and this finding on the pure question of fact relating to the nature of oil being based on sound, evidence would not be challengeable before this Court.

9. We having gone through the judgments under discussion and the material placed on record, find that the controversial question of fact relating to the nature of oil, edible or inedible, was resolved by the High Court in view of the test reports wherein the imported oil was declared not fit for human consumption without further process and consequently, its classification as edible oil was unexceptional. The perusal of the laboratories reports would show that the subject oil in the form in which it was imported was not eatable therefore, the same would not fall in the definition of edible oil for availing the benefit of the notification under which concession in the payment of Income-tax was allowed on the /import of edible oil. The High Court in its earlier judgment has not expressly or impliedly decided the question of the application of the notification in question on the import of raw palm oil and we while keeping in view the definition of edible.. and inedible oil and having dilated upon the issue in detail in the light of material available on record with the help of learned counsel for the parties, have not been able to find out any legal defect and infirmity in the impugned judgment for interference of this Court. Consequently, we without taking any exception uphold the verdict given by the High Court and dismissed this petition. Leave is refused.

M.B.A./B-94/SCPetition dismissed.