Messrs COLONY TEXTILE MILLS LTD., MULTAN through Accountant VS COLLECTOR OF CUSTOMS (APPRAISEMENT), KARACHI, 2004 PTD-KARACHI-HIGH-COURT-SINDH 616 (2001)

Customs Act (IV of 1969)---

----S. 19---Exemption---S.R.O. exempting goods from levy of duty was withdrawn by a subsequent S.R.O.---Goods arrived when subsequent S.R.O. was effective---Held, importer could not claim exemption on import after withdrawal of earlier S.R.O.---Duty payable on imported goods would be in terms of subsequent S.R.O.

Messrs M.Y. Electronics Industries (Pvt.) Ltd. through Manager and others v. Government of Pakistan through Secretary Finance, Islamabad and others 1998 SCMR 1404 ref.

Miss Munawar Sultana for Plaintiffs.

Raja Muhammad Iqbal for Defendants.

ORDER

This order will dispose of the application filed by the plaintiff, importer of a complete textile machinery details whereof have been given in para. 10 of the plaint. Out of the said machineries, four set Murata Mach Coner arrived at Karachi Port as partial shipment on 25-10-2001. The defendants in terms of S.R.O. 139(I)/2001, dated 18-6-2001 assessed the duty at the rate of 5% on the consignment. Hence the present application on the ground that the plaintiff imported the machinery when S.R.O. 369(I)/2000, dated 17-6-2000 was in field, whereby such consignment was exempted for the custom duty in terms of section 19. Therefore, it has been argued before me that the action of the defendants by way of demand of 5% duty is contrary to the law and they may be restrained from collecting the same as the plaintiff imported machineries when the later S.R.O. was effective.

Learned counsel for the plaintiff has referred order passed by my learned brother Sarmad Jalal Osmany, J. on 13-8-2001, whereby the defendants were directed to clear the consignment subject to Bank guarantee for the amount do duty of 5%. The judgment, dated 3-8-2001 passed by Division Bench in C.P. D-4631 of 2001 was also referred, whereby the petitioner was allowed to secure the release of the goods upon furnishing appropriate bank guarantee to the extent of the amount claimed to the satisfaction of the concerned Collector of Customs. The learned counsel submitted that the plaintiff is ready to furnish the bank guarantee for the amount of duty.

Learned counsel for the defendants has vehemently opposed the application by contending that the S.R.O. 369(I)/2000, dated 17-6-2000 issued under section 19 exempting the machinery from the levy of duty has been withdrawn by the subsequent S.R.O. 439(I)/2001, dated 18-6-2001, whereunder 5% customs duty has been imposed on such machinery. He further contended that the provision of sections 30 and 31-A were examined by Supreme Court and the effect of withdrawal of the exemption was considered by the Supreme Court in case of Messrs M.Y. Electronics Industries (Pvt.) Ltd. through Manager and others v. Government of Pakistan through Secretary Finance, Islamabad and others (1998 SCMR 1404), in the following words:--

"The effect of insertion of section 31-A in the Customs Act is that when exemption from payment of customs duty granted by the Government under section 19 of the Act is withdrawn, then notwithstanding the fact that while exemption was enforced, the party had opened a letter of credit or concluded the goods would be that which might have become payable, as a result of withdrawal of the exemption. It is, therefore, quite clear that the right to claim exemption from customs duty under a notification issued under section 19 of the Act remains available to a party only as long as the exemption notification holds the field. However, as soon as the exemption notification is withdrawn, the payment of customs duty on the imported articles is to be determined in accordance with provisions of section 30 of the Act."

On examination of the plaintiff's case, on the basis of above dicta, the consignment arrived on 25-10-2001, when the S.R.O. No.439(I)/2001, dated 18-6-2001 was effective, whereas, S.R.O. 369(I)/2000, dated 17-6-2000 was withdrawn by the former S.R.O. Therefore, the duty payable on the goods imported after the said date viz. 18-6-2001 would be in terms of said S.R.O. The plaintiff cannot claim exemption on such import after the withdrawal of the earlier S.R.O. Consequently, the application in such circumstances, has no merits, the same is dismissed.

S.A.K./C-88/K Application dismissed.