Messrs QUETTA TEXTILE MILLS LTD., KARACHI VS GOVERNMENT OF PAKISTAN
2004 P T D 1934
[Karachi High Court]
Before Zahid Kurban Alvi and Muhammad Mujeebullah Siddiqui, JJ
Messrs QUETTA TEXTILE MILLS LTD., KARACHI
Versus
GOVERNMENT OF PAKISTAN through Additional Secretary, Ministry of Finance, Karachi and 2 others
Constitutional Petition No.D‑666 of 1991, decided on /01/.
th
September, 2001. (a) Customs Act (IV of 1969)‑‑‑
‑‑‑‑Ss. 19 & 33‑‑‑S.R.O. No. Nil (I)/87, dated 19‑11‑1987 ‑‑‑ S.R.O, 674(I)/80, dated 26‑6‑1980‑‑‑Constitution of Pakistan (1973)., Art. 199‑‑Constitutional petition ‑‑‑Refund of duty, claim for‑‑‑Authority admitted shipment of goods on 23‑9‑1987, but refused refund on the ground that mates receipt was issued on 1‑10‑1987‑‑Validity‑‑‑Date fixed under S.R.O. dated 19‑11‑1987 for opening of Letter of Credit was 12‑6‑1987 and for shipment of goods was 30‑9‑1987‑‑‑Letter of Credit had been established on 11‑6‑1987‑‑‑Sealed container was available on 14‑7‑1987, which had been sealed on 14‑9‑1987‑‑‑Loading had taken place on 16‑9‑1987‑‑‑Bill of Lading had been issued on 23‑9‑1987‑‑ Word "shipped" as used in S.R.O., dated 19‑11‑1987 in normal connotation would mean delivery of goods on board carrier meant for transportation‑‑‑All documents pertaining to shipment of goods had been issued before 30‑9‑1987 and goods were in physical custody of shipping company, thus, same would fall within ambit of word "shipped"‑‑‑Reliance on mates receipt, dated 1‑11‑1987 in such circumstances was unjustified‑‑‑High Court accepted Constitutional petition and ordered for payment of refund to petitioner by authority.
DADA Steel Mills v. Balochistan Government and another 1983 CLC 571 rel.
(b) Words and phrases‑‑‑
‑‑‑‑"Shipped"‑‑‑Connotation.
Chambers 21st Dictionary; Black's Law Dictionary; Words and Phrases Vol. XXXIX; Words & Phrases Vol. V and Stround' Judicial Dictionary (IVth Edn.) ref.
(c) Words and phrases‑‑‑
‑‑‑‑"Shipment"‑‑‑Connotation.
British Shipping Laws (Vol. V) at p. 36 and British Contract ref.
(d) Words and phrases‑‑‑
‑‑‑‑"Bill of Lading"‑‑‑Connotation.
Messrs Tar Muhammad Janoo & Co. v. Messrs Maldiyian National Corporation (Ceylon) Ltd. and another PLD 1969 Kar. 495 and Crescent Sugar Mills and Distelry Ltd. v. American Export Isbrandt Sen Inc. and others PLD 1983 Kar. 29 ref.
(e) Words and phrases‑‑‑
‑‑‑‑"Export"‑‑‑Meanings.
Chambers 21st Dictionary and Black's Law Dictionary ref.
(f) Customs Act (IV of 1969)‑‑‑
‑‑‑‑S. 33‑‑‑Constitution of Pakistan (1983), Art. 199‑‑‑Refund refused by authority, but not specifically claimed in Constitutional petition‑‑‑Effect‑ Where Court comes to conclusion that refund should be given to petitioner, then keeping in mind philosophy of multiplicity of proceedings, an order should be passed instead of issuing a direction for initiating separate proceedings for recovery.
DADA Steel Mills v. Balochistan Government and another 1983 CLC 571 fol.
I.H. Zaidi for Petitioner.
Raja Muhammad Iqbal for Respondent.
Date of hearing: 14th September, 2001.
JUDGMENT
ZAHID KURBAN ALVI, J.‑------This is a petition where the petitioner has prayed that the order‑in‑original, appeal and revision may be set aside.
2. Briefly the facts of the case are that the petitioner received an order for export of Yarn from Japan. The contract was entered into and letter of credit was opened. The total of quantity of 96,000 Lbs (240 bales) of 100 PCT grey cotton carded yarn CD 21/1, was shipped under shipped bill, dated 10‑9‑1987. The export duty at the rate of Rs.5 per kg., was paid. Based upon S.R.O. dated nil (1)/87, dated 19‑11‑1987 the petitioner claimed refund. S.R.O. in fact amended S.R.O. 674(1)/80, dated 26‑6‑1980 it would be pertinent to reproduce the said S.R.O.:
GOVERNMENT OF PAKISTAN MINISTRY OF FINANCE, ISLAMABAD, THE 19TH NOVEMBER, 1987.
NOTIFICATION
(CUSTOMS)
S.R.O.__________(I)/87. In exercise of the powers conferred by section 19 of the Customs. Act, 1969 (IV of 1969) the Federal Government is pleased to direct that the following further amendment shall be made in this Ministry's Notice No.S.R.O. 674/(1)/80, dated 26th June, 1980, namely:‑‑
"Provided that cotton yarn in respect of which irrevocable letters of credit for export were established from the country to which it was to be exported and which have not been amended in respect of quantity and opening date, shall be exempted‑
From the whole of the customs‑duties chargeable thereon if such letters of credit were established before the 12th June, 1987 and such cotton yarn was shipped before 30th September, 1987; and
(ii)From so much of the customs‑duties chargeable thereon as are in excess of Rs.5.00 per K.G. if such letters of credit were established before the 22nd September, 1987 and such cotton yarn has been or is, exported before 31st December, 1987.
(AITEZAUDDIN AHMED)
ADDITIONAL SECRETARY"
3. An application for refund was made which was rejected as according to the competent authority the shipment was made or the goods were exported after the date mentioned to the S.R.O. An order‑in -original was passed whereafter an appeal was filed and ultimately the matter went up to revision stage and it has resulted in this petition being filed.
We have heard the learned counsel for the petitioner and the counsel for the respondent No.2. No one has appeared for the respondent No. 1.
4. The crux of whole case is that the S.R.O., dated 19‑11‑1987 in para. deals with two important dates. The first one is 12th June, 1987, which is applicable to the opening of letter of credit before that date: The A second one is 30‑9‑1987 before which date the goods are supposed to be shipped. If both these dates are kept in mind then the benefit of exemption would be available to the exporters.
5. The learned counsel appearing on behalf of the petitioner pointed out to Annexure `A', which is a copy of letter of credit. It clearly shows that the letter of credit was established before 12th June, 1987. In fact the date shown is 11th June, 1987 on the top left hand side. Now we come to the second portion of para. 1 of the S.R.O. Once again according to the counsel for the petitioner shipping bill was B registered vide Customs Machine No.22181, dated 10‑9‑1987 on Export General Manifest No. 1413 of 1987. Sealed container was available on 14‑7‑1987. This container was sealed by the central excise customs on 14‑9‑1987 loading took place on 16‑9‑1987 Bill of Lading No. 13 was issued on 23‑9‑1987. In fact all documentary evidence pertaining to ‑shipment of the goods were before the crucial date of 30‑9‑1987.
6. The Customs Authorities have used the word "exported" and not "shipped". This word was used by them in the notice and order‑in -original. In the order‑in‑original they admitted that the goods were shipped on 23‑9‑1987. However according to them they were exported vide mates receipts No.14/87, dated 1‑10‑1987. The refund was refused Only on the sole ground that the mates receipt was issued on 1‑10‑1987.
This was followed up with the order, of appeal where the collector's (appeal) has taken the stand that the goods were shipped on 1‑10‑1987
7. Even the Additional Secretary while passing the order in revision again has relied on the so‑called mates receipt and has again used the word export. This is why the revision was also rejected.
8. We have scrutinized the documents that have been produced which are all the shipping documents. All of them have been issued before the cut of date. In fact the bill of lading has a rubber stamp showing clearly that the goods were shipped on board on 23‑9‑1987. We D have not been able to appreciate or understand how come the mates receipt has been relied upon when all other documents have been issued prior to 30‑9‑1987. The word used in the S.R.O. is "shipped". The word in its normal connotation means the delivery of goods on board carrier meant of transportation. The shipment was held to have been made by placing goods on board vessel bound for the intended destination. It is well settled that once the goods‑are handed over to the carrier and/or the local agent for shipment then they are out of the custody of the exporter. On the issuance of bill of lading the carrier takes full responsibility of the shipment and the custody of the goods are transferred. In fact the printed paragraph on the top of the bill of lading clearly used is "shipped in good order and condition".
9. The word used in the S.R.O. is "shipped" and the word used in the orders is "exported". Perhaps the confusion has arisen due to the two paras of the S.R.O." In para. 1 the shipment has to be effected before 30‑9‑1987 and in para. 2 the goods have to be exported before 31‑12‑1987. As the provision of para. 1 is being invoked therefore, the Appellate and the Revisional Authority should have appreciated that to avail the benefit of the exemption, goods had to be shipped before 30‑9‑1987. Prima facie a bill of lading is supposed to be a document confirming the acceptance of the goods by the carrier for shipment. Once the bill of lading is issued the responsibility of the goods transfers to the carrier and shipment has commenced as the goods are no longer in the physical custody of the exporter. All the documents mentioned in the petition and annexed to the petition show clearly that the goods were handed over to the carriers much before the cut of date of 30‑9‑1987.
10. In the case of Messrs Tar Muhammad Janoo and Co. v. Messrs Maldiyian National Corporation (Ceylon) Ltd. and another (PLD 1969 Karachi 495) the question had been raised with regard to the weight of the goods shown in the bill of lading. Whilst dealing with this matter at length and also looking at the several case‑laws which were available on the subject it was observed that bill of lading being a prima facie evidence of the receipt by the carrier by the goods it would be therefore, apparent that once a bill of lading is issued the documents reflect that the goods are with the carrier. Simliar view was expressed in the Crescent Sugar Mills and Distelry Ltd. v. American Export Isbrandt Sen Inc. and others (PLD 1983 Kar. 29).
11. The word export has been defined in the Chambers 21st Dictionary. It means to send or take the things etc., to another Country especially for sale. In the same Dictionary ship or shipped has been defined as dispatch to, send or transport by ship.
12. In Black's Law Dictionary export has been defined as products manufactured in one country then shipped and sold in another. In the same Dictionary shipped has been defined as the delivery of the goods to the carrier and the issuance of bill of lading therefor, the transportation of goods. Similar definition has been given to the word ship as well as shipping.
13. Words and Phrases Volume XXXIX defines the word "shipped" and. "shipped in goods order and condition". Once again the definition shows that once the goods are received by the shipping company then it is construed to be in the process of shipment.
14. In the book Words and Phrases Volume V word "shipped" has been defined. It is to indicate that the goods or consignment has been put on board within a particular date and if it is a process of continuously putting the goods on board then shipped would mean the completion of that process. If the goods are shipped within a certain time then it would be construed as a shipment of that month. In a reported case it was observed that if the goods were to be shipped during the months of March and April and if the goods were loaded on board (the vessel) before the 31st March then it would be construed to be shipped. Definition of "shipped in good order and condition" has also been given as well as shipped for exportation. In all the other various definitions there is no doubt that once the goods are handed over in the custody of the shipping company it would be considered to be shipped.
15. It is further confirmed by Stroud's Judicial Dictionary (IVth Edition) wherein shipped has been defined as to put on board (vessel).
16. In the British Shipping Laws (Volume V) at paragraph 36 whilst discussing the meaning of shipment in a reported case the question that had come was whether a shipment had been made within a specified time as provided in the contract. It was argued in that case that the customs of trade in America meant that shipment would mean loading on railroad cars or loading on cars at the saw mills from which the timber then moved to the ship and ultimately transported to its destination. However, in the English Contract "shipment" means the actual putting p on board ship. It would be apparent from this analogy that in the present case the goods were put on board much before 30th September, 1987.
17. There is, therefore, no doubt in our minds that the goods were in the physical custody of the shipping company and as such would fall within the ambit of the word "shipped". The reliance, therefore, if any, by the respondent on the mates receipt which is dated 1‑10‑1987 seems unjustified when the entire lot of evidence clearly shows that the goods having gone through the exercise of a customs checking and the sealing and de‑sealing at the port were handed over to the carrier much before the cut of date.
18. The petition, therefore, is allowed and the amounts by way of refund is to be paid to the petitioner by the respondents. Whilst ordering S for refund we would be relying on a decision given in the case of DADA Steel Mills v. Balochistan Government and another (1983 CLC 571) where a Division Bench of High Court headed by Abdul Hayee Kureshi, Actg. Chief Justice, (as his lordship then was) had observed that even where refund is not specifically claimed but where the Court comes to a conclusion that the refund should be given to the petitioner then keeping in mind the philosophy of multiplicity of proceedings an order should be passed instead of a direction to be issued for initiating separate proceedings for recovery.
S.A.K./Q‑42/KPetition accepted