Messrs ROSE COLOR LABORATORIES AND NAYAB NO.(1) (PVT.) LTD. through Director VS GOVERNMENT OF PAKISTAN through Customs Excise and Sales Tax Appellate Tribunal, Karachi
2006 P T D 1245
[Karachi High Court]
Before Muhammad Mujeebullah Siddiqui and Sajjad Ali Shah, JJ
Messrs ROSE COLOR LABORATORIES AND NAYAB NO.(1) (PVT.) LTD. through Director
Versus
GOVERNMENT OF PAKISTAN through Customs Excise and Sales Tax Appellate Tribunal, Karachi and another
Spl. Customs Appeal No. 5 of 2001, decided on 07/03/2006.
Customs Act (IV of 1969)---
----Ss.19 & 196---Notification S.R.O. 1284(I)/1990, dated 13-12-1990---Exemption in import duty---Conditions imposed by notification---Importer sought exemption on import of film processor and printer processor under the provisions of Notification S.R.O. 1284(I)/1990, dated 13-12-1990---Authorities denied benefit of the Notification on the ground that importer did not obtain industrial licence from CCI&E and machinery was classifiable under PCT Heading---Validity---For the purposes of availing exemption, machinery should be one which was not locally manufactured and operated by power of any description as was. for use in any industrial process---Apparatus and equipment imported were operated by power for installation in a Colour Photo Processing Laboratory which was an approved industrial unit---Such apparatus and equipment were entitled to exemption in accordance with Notification S.R.O. 1284(I)/1990, dated 13-12-1990---Authorities failed to point out any provision in the Notification which required an importer to obtain industrial licence from CCI&E and/or that the machinery classifiable under any PCT Heading would not be entitled to exemption---Appeal was allowed in circumstances.
Zamiruddin Ahmed for Appellant.
Raja Muhammad Iqbal for Respondents.
Date of hearing: 7th March, 2006.
JUDGMENT
SAJJAD ALI SHAH, J.---This appeal against the order of the Customs, Excise and Sales Tax Appellate Tribunal, dated 23-10-2003, was admitted to regular hearing by this Court on 20-4-2001, to consider the following questions of law:
"Whether the learned Tribunal committed an error of law in falling to treat the equipment for the use in photographs Laboratory of the appellant as "Plant and Machinery" qualifying exemption from Customs under S.R.O. 1284(I)/1990."
The facts giving rise to the present appeal are that the appellant on import of film processor and printer processor claimed exemption under Notification No. S.R.O. 1284(I)/90, dated 13-12-1990 (hereinafter referred to as "Said Notification") claiming it to be plant and machinery to be used in an Industrial Process. The appellants were not extended the benefit of said Notification giving rise to filing of a constitutional petition before this Court which petition was allowed and the case was remanded to the Collector to decide the case of the appellant on merits. The Collector after hearing the appellant rejected his claim on the ground that the apparatus and equipment imported by the appellant does not fall within the ambit of plant and machinery as envisaged in the said "Notification". The appellant thereafter filed an appeal before the Customs Excise and Sales Tax Appellate Tribunal which was also rejected vide impugned order.
The learned counsel for the appellant has contended that there is nothing in the "Said Notification" to exclude the apparatus and equipment imported by the appellant from the ambit of the machinery as envisaged in the "Said Notification". The learned counsel has invited our attention to the "Said Notification" and has contended that the Federal Government has exempted such plant and machinery which is not manufactured locally and is imported during the period commencing from 1st December, 1990 and ending on 3rd June, 1995, for setting up of new units and for expansion, balancing, modernization and replacement of existing units. The learned counsel has further contended that the machinery has been defined in the said Notification in following terms:-
"Machinery operated by power of any description such as used in any industrial process including mining and extraction of timber".
He has further invited our attention to the Certificate issued by the Directorate of Industries, Commerce, Labour and Mineral Development Azad Government of State of Jammu and Kashmir, Muzaffarabad, which described the Colour Photo Processing Laboratory as an approved industrial unit. The learned counsel further contended that since the apparatus and equipment imported are to be used in an industrial process therefore, the appellant were wrongly denied the benefit of the said Notification.
In response the learned counsel for the Respondent has contended that the apparatus and machinery imported by the appellant is used for printing Eid Cards, greeting cards and is used for commercial purposes, therefore, the appellant were rightly refused the benefit of the "Said Notification". It was further contended by the learned counsel that the benefit can only be extended to those plant and machinery which has been imported after obtaining industrial licence from CCI&E and since the appellant has not obtained the said licence therefore, the benefit of "Said Notification" could not be extended. It was lastly contended that. since the imported apparatus and equipment is separately classified under PCT Heading 9010, therefore, the apparatus and equipment is not entitled to exemption under the "Said Notification".
We have heard, the arguments of the learned counsel for the respective parties and have perused the record as placed before us. A perusal of the notification reveals that the plant and machinery which are not manufactured locally and imported between 1st December, 1990 to 30th June, 1995 for setting up of new units and for expansion or balancing, modernization and replacement of existing units are exempt if installed in specified areas upon fulfilling certain terms and conditions.
The machinery has been defined in the said Notification for the purposes of exemption in the following terms:--
(i) Machinery operated by power of any description such as is used in any industrial process including mining and extraction of timber.
(ii) Apparatus and appliances, including metering and testing apparatus and appliances specially adapted for use in conjunction with machinery specified in item specified in item (1) above.
(iii) Power generating plant for operating item (1) above;
(iv) Mechanical and electrical control and transmission gear adapted for use in item (1) above; and
(v) Component parts of machinery as specified in items (i), (ii), (iii) and (iv) above, identifiable as for use in or with such machinery.
A perusal of the definition of machinery as reproduced above, reveals that for the purposes of availing exemption a machinery should be one which is not locally manufactured operated by power of any description as is for the use in any industrial process. Since the apparatus and equipment imported by the appellant are operated by power for installation in a Colour Photo Processing Laboratory which is an approved Industrial Unit, therefore, the apparatus and equipment is entitled for the exemption in accordance with the said Notification.
The learned counsel for the Respondent has failed to point out any provision in the said Notification which requires an importer to obtain an industrial licence from CCI&E and or that the machinery classifiable under any PCT heading would not be entitled to exemption.
For the foregoing reasons we had allowed this appeal vide short order, dated 2-3-2006, by holding that the learned Tribunal committed error of law in failing to treat the equipment imported by the appellant for use in the Photography Laboratory as plant and machinery qualifying exemption from payment of whole of the custom duty, surcharge and Sales Tax under S.R.O. 1284(I)/90. These are the detailed reasons in support thereof.
M.H./R-11/K?????????????????????????????????????????????????????????????????????????????????????? Appeal allowed.