Sales Tax Act (VII of 1990)‑‑‑

‑‑‑‑Ss. 13(1) & Sixth Sched., Item. No. 6‑‑‑Imported edible oil found in laboratory report to be unfit for human consumption and inedible without further process of refining‑‑‑Held: Such consignment on its import was not edible oil, thus, not exempt from levy of sales tax.

Batala Ghee Mills (Pvt.) Ltd. v. Collector of Customs and 2 others 2003 SCMR 1040 fol.

Mazhar Lari for Petitioner.

Raja M. Iqbal for Respondent No. 1.

S. Ziauddin Nasir, Standing Counsel.

Date of hearing: 2nd February, 2005.

JUDGMENT

KHILJI ARIF HUSSAIN, J.‑‑‑The petitioner seeks declaration that the consignment imported by him falling under PCT Heading No. 1513.1100 being edible oil and accordingly Sales Tax was not leviable on it under 6th Schedule of the Sales Tax Act, 1990. By an Agreement, dated 17‑2‑2001 petitioner imported 750/ Metric Tons of Crude Coconut Oil and on arrival of the same In Bond Bill of Entry was filed on 27‑3‑2001 in respect of the consignment in question describing the consignment covered under PCT Heading No.1513‑1100 and claimed exemption from Sales Tax in terms of Serial No. 6 of the 6th Schedule to the' Sales Tax Act, 1990. Before commencing discharge of the consignment, samples were drawn and sent to Customs Laboratory, who issued a Test Report No.102 of 2001, dated 29‑3‑2001 describing that the consignment is not fit for human consumption (inedible) but it may fit for human consumption after further refining. Respondent claimed 15% Sales Tax on the consignment treating the same as not edible at the time of import. On 12‑5‑2001, petitioner filed Ex‑bond Bill of Entry and claimed exemption of Sales Tax but the same was denied by the Mr. Mazhar Lari, learned counsel for the petitioner, contended that the petitioner entered into an Agreement with' foreign buyers for purchase of Crude Coconut Oil which consignment was dispatched under Letter of Credit which was established for the import of, same and petitioner submitted Bill of Entry on arrival of the consignment describing the goods covered under PCT Heading No. 1513.1100. Learned Advocate for the petitioner has drawn our attention to the list of edible products and Coconut Oil has been shown as one of such items.

On perusal of Test Memo, dated 29‑3‑2001, it appears that the consignment was described as Crude Coconut Oil however the same was found not fit for human consumption but it may be fit for human consumption after refining. From letter, dated 29‑5‑2001 addressed by Secretary, Sales Tax Government of Pakistan informing Collector Customs that the exemption of Sales Tax admissible on edible oil under Serial No.6 of the 6th Schedule of the Sales Tax Act, 1990 is available to all edible oil whether in crude or refined form.

It appears that only edible oil (excluding imported Palm Oil and Soyabean Oil) and Vegetable Ghee, Desi Ghee derived from milk falling under PCT Heading No.15.07, 15.08, 15.11, 15.12, 15.13, 15.14, 15.15 and 4.05 Were exempted from Sales Tax PCT Heading No. 15.13 describes the goods as Coconut (Copra), Palm Kenel or Babassu Oil and fractions thereof whether or not refined but not chemically modified as edible oil. Nothing has been placed on record to show that unrefined coconut oil is also fit for human consumption so as to bring consignment imported by the petitioner under PCT Heading No.15.13.

From the laboratory Report, it appears that the consignment imported by the petitioner had Acid Value of 8.28 mg/koh/g oil whereas crude vegetable (coconut oil) at 4 mg/koh/g oil and that of non‑virgin oil (refined/RBD) is of 0.6 mg/koh/g oil. In the Report, it is clearly mentioned that the sample drawn from the consignment was found not fit for the human consumption and inedible but it may be fit for human consumption after refining. Since the consignment on its import was not edible oil, the respondent had rightly demanded Sales Tax on it. In the case of Batala Ghee Mils (Pvt.) Ltd. v. Collector of Customs and 22 others 2003 SCMR 1040, imported RBD oil was declared not fit for human consumption and Customs Duty was levied on it. The Hon'ble Supreme Court upheld the decision of this Court and the, factual controversy whether the oil was edible or inedible was resolved on the basis of the test reports wherein imported oil was declared not fit for human consumption. Consequently, it was held to be inedible and consignee was directed to pay levied duties and sales tax, etc. Our attention has been drawn to the fact, all consignees who had imported crude coconut oil in bulk although claimed that their consignment fall under PCT Heading 1513.1100 but Sales Tax has been levied on their consignment.

For the foregoing reasons the petition has no merit and is accordingly dismissed.

S.A.K./M‑214/K ??????????????????????????????????????????????????????????????????????????????? Petition dismissed.