ASIA LUBRICANTS, KARACHI VS FEDERATION OF PAKISTAN
2005 P T D 950
[Karachi High Court]
Before S. Ahmed Sarwana and Muhammad Mujeebullah Siddiqi, JJ
ASIA LUBRICANTS, KARACHI
versus
FEDERATION OF PAKISTAN through Secretary, Revenue Division, Central Board of Revenue, Islamabad and another
C.P. No.D-713 of 2002, decided on /01/.
7th October, 2003. Central Excise Rules, 1944---
----R. 10---Constitution of Pakistan (1973), Art. 199---Constitutional petition---Issuance of letter demanding excise duty at specified rate---Validity---Case of department was of short levy of duty payable under R.10 of Central Excise Rules, 1944---Show-cause notice as required under R.10 had not been issued to assessee---Impugned decision conveyed through such letter was violative of mandatory requirement of issuance of show-cause notice---High Court accepted Constitutional petition while declaring impugned decision to be illegal, void and inoperative and directed department not to take any action in pursuance thereof.
Khalid Jawed Khan for Petitioner.
Ziaduddin Nasir, Standing Counsel for Respondent No.1
Raja Mohammad Iqbal for Respondent No.2.
ORDER
The Petitioner, a registered partnership, operating a blending plant under the Pakistan Petroleum Refining and Blending Rules, 1971, and manufacturing lubricating/hydraulic oil is aggrieved with the issuance of the letter, dated 6-4-2002 by the Superintendent, Sales Tax Central Excise (West) Baldia Circle whereby the Petitioner was informed that hydraulic oil comes under the Heading 2710.0099 and is liable to pay Central Excise Duty at 30 per cent ad valorem. The Superintendent based his decision on the order of the Collector of Customs, Sales Tax and Central Excise (Adjudication) Lahore vide order in original No.15 of 2001, dated 31-1-2001.
The contention of the Petitioner is that hydraulic oil manufactured by them is in fact lubricating oil and falls within PCT Headings 2710.0081, 2710.0082 and 2710.0083 depending upon its packing and this classification is being given to the Petitioner by the Sales Tax Officials for a very long period. Similar treatment is given to other manufacturers as well.
Respondent No.2 have filed their comments taking the plea that hydraulic oil does not fall within the purview of the lubricant oil and consequently falls within the PCT Heading 2710.0099 and is subject to payment of excise duty at 30 per cent.
We have heard Mr. Khalid Jawed Khan, learned counsel for the Petitioner, Mr. Raja M. Iqbal, learned counsel for Respondent No.2 and Mr. Ziaduddin Nasir, learned Standing Counsel. We are of the opinion that in the present circumstances of this case no finding isrequired by usonmerits.ThereasonbeingthataccordingtotheDepartmentitisacaseofshortlevyofdutyandconsequentlyisgovernedunder Rule 10 of the Central Excise Rules, 1944.ItisprovidedinRule 10 above that if by reason of any inadvertence, error or misconstruction, any duty or charge has not been levied or has been short levied or has been erroneously refunded, the person liable to pay any amount on that account shall be served with a notice within one year of the relevant date by an officer not below the rank of Superintendent requiring him to show cause why he should not pay the amount specified in the notice.
Admittedly, no show-cause notice has been issued by the Superintendent to the Petitioner as required under the above Rule. Consequentlytheimpugneddecisionconveyedthroughletter,dated6-4-2002isviolativeofthemandatoryrequirementfortheissueofthe show-causenoticeandisliabletoberejectedonthisscorealone.
Fortheforegoingreason,thedecisioncontainedintheletter,dated6-4-2004issuedbytheSuperintendent,SalesTaxCentral Excise (West) Baldia Circle is hereby declared to be illegal,void andinoperative. The Respondents are directed not to take any actioninpursuanceofthedecisionconveyedthroughthesaidletter.
The petition stands disposed of in the above terms along with the listed application. However, the Respondents shall be at liberty to initiate any action strictly in accordance with law.
S.A.K/A-165/KOrder accordingly.