COLLECTOR OF CUSTOMS and another VS SHAHNAWAZ ENTERPRISES, KARACHI
2007 P T D 1213
[Supreme Court of Pakistan]
Present: Rana Bhagwandas and Saiyed Saeed Ashhad, JJ
COLLECTOR OF CUSTOMS and another
Versus
SHAHNAWAZ ENTERPRISES, KARACHI
C.P.As. Nos.305-K and 306-K of 2005.
Customs Act (IV of 1969)---
----S. 25---Import of teak-wood roughly squared, Teak-wood posts and Teak-wood squares---Value of such wood, determination of---Such wood would fall within Pakistan Customs Tariff (P.C.T.) Heading 4403.1010, and thus, would not be liable to customs duty under P.C.T. Heading 4407.2110.
Abdul Saeed Khan Ghori, Advocate-on-Record for Petitioners.
Navin Merchant, Advocate Supreme Court and A. Aziz Khan Advocate-on-Record for Respondents
.
JUDGMENT
RANA BHAGWANDAS, J.---This judgment shall dispose of aforesaid two identical petitions arising out of judgment dated 10-2-2005 passed by a Division Bench of the Sindh High Court allowing two identical constitutional petitions filed by respondent Enterprise.
2. Respondent by way of two separate writ petitions prayed for the following reliefs in respect of a consignment of 175 Cotons Teak-wood roughly squared. Maked quality size 10" UP x 10" UP and 10 feet and UP in length and teak posts size 6/9" x 6/9" and 10 feet and UP from Messrs Myaar Timber Enterprises Yangon, Union of Mayamnar Burma. In the other petition the quantity of consignment is said to be 225 C/tons:--
"(a) Declare that the teak wood roughly squared and teak wood posts imported by the petitioner fall under the PCT Heading 4403.1010.
(b) Declare that the petitioner is not liable to pay customs duty.
(c) Direct the respondent release the said goods duty free.
(d) Direct. the respondent not to make any demand of customs duty in relation to the said goods and/or take any other coercive action against the petitioner."
3. Case of the respondents before the High Court appears to be that, at the time of import and submissions of bill of entry, they were not liable to pay any customs duty since the teak-wood square had been placed in the free list of the Import Policy for many years, including the Import Policy for the year 1993-94, the consignments were shipped on 29-9-1993 and 31-10-1993 respectively and arrived at the port of Karachi on 28-10-1993 and 24-11-1993 respectively. On arrival of consignments, they filed 10 bills of entries in C.P. No.305 of 2005 and 7 bills of entries in C.P. No.306 of 2005, which were finalized by the Customs Authorities. It was contended that the Customs Authorities were illegally, unauthorisedly and with mala fide intent and in order to harass the respondent refusing to release the goods duty free and were demanding 80% Customs duty on the pretext that the goods fell under Pakistan Customs Tariff heading 4407.2110 instead of 4403.1010. Respondent agitated that for many years teak wood roughly squared and teak-wood posts imported by them as well as other importers had been released under PCT Heading 4403.1010 and the customs duty varied from year to year. For instance, in the year 1992-93 customs duty for the import of teak-wood roughly squared, teak-wood posts and teak-wood squares under PCT Heading 4403.1010 was at the rate of 90% ad valorem. Further in the Import Policy for the year 1993-94 no customs duty was leviable on the import of such goods under the aforesaid PCT Heading. According to the respondent no objection was ever raised at any time in the past that the goods imported by them or other importers did not fall under the said PCT Heading. It was averred that ITP valuation of teak-wood squares, teak-wood posts and teak-wood square ends had also been shown under the PCT Heading 4403.1010 in the Notification dated 28-7-1993 issued by the Government of Pakistan, Controller of Customs Evaluation, Custom House, Karachi and published in the Gazette of Pakistan dated 3-8-1993, which proved the past practice of the Customs Authorities in classifying teak-wood square, teak-wood posts and teak-wood square ends under PCT Heading 4403.1010 as correct. It was complained that all of a sudden, in order to harass them, new stand had been adopted to the effect that the correct classification should be PCT 4407.2110 merely because no exemption had been granted under the said heading.
4. Counter-affidavit of Dr. S.M. Tariq Huda, Assistant Director, Customs Appraisement (Law) was filed on behalf of the petitioners denying various averments in an evasive manner. It was claimed that the goods imported by the respondent were liable to customs duty at the rate of 80% ad valorem since these were classifiable under PCT Heading 4407.2110. Without denying the respondent's express contention with regard to the goods having been released in the past under PCT Heading 4403.1010 and that under the Import Policy for the year 1993-94 no customs duty was leviable and that no objection was ever raised with regard to import of roughly swan teak-wood falling under PCT 4403.1010, it was claimed that any error or inadvertence in the past could not acquire the force of law if the same amounted to jeopardize the Federal Revenue. Referring to section 32(2) of the Customs Act, 1969 it was claimed that any duty or charge that had not been levied or short levied by reason of inadvertence error or misconception could be recovered within a specific period. It was clarified that since there was difference in the statutory rate of duty in PCT heading, therefore, no objection was ever raised.
5. During the pendency of the petitions before the High Court, before the customs duty could be finally assessed or the-respondents be called upon to pay the same, on the motion of the respondents vide order, dated 25-8- 1994 they were permitted to get their goods released upon deposit of disputed amount. In the ultimate analysis, Division Bench of the High Court declared the goods in dispute to fall under PCT Heading 4403.1010, therefore, not liable to customs duty under PCT Heading 4407.2110. Accordingly, the respondents were entitled to withdraw the amount deposited by them in Court. It is as against this judgment that present petitions are directed for leave to appeal.
6. We have heard Mr. Abdul Samad Khan Ghori, learned Advocate-on-Record for petitioners and Mrs. Navin Merchant, learned Advocate Supreme Court for Respondent at length and gone through the record.
7. Mr. Ghori, instead of pointing out the apparent distinction between the goods-falling under two different PCT headings vehemently contended that the High Court was not competent to determine the disputed questions of fact in exercise of its constitutional jurisdiction. Learned counsel argued that Customs Authorities were the best Judge to determine as to the classification of goods and PCT heading, under which they would fall and as to how much customs duty was payable thereon. Mr. Ghori, heavily relied upon judgment reported as Collector of Customs v. New Electronics PLD 1994 SC 363. In the reported case, leave to appeal was granted to consider the question as to whether the President of Pakistan could issue validly Finance Ordinance (XXII of 1988) re-enacting the provision of Finance Ordinance (II of 1988), which was issued on 26-6-1988 and, inter alia incorporated section 25-B in the Customs Act, 1969 which was to expire on 26-10-1988 and whether the valuations fixed pursuant to the provisions of section 25-B through the various notification were to expire on the expiry of the Ordinance or were to continue in view of re-enactment of Finance Ordinance(II of 1988), through Finance Ordinance XXII of 1988. By majority opinion the rationale and Philosophy for the view that the President and the Governor cannot re-enact an expired Ordinance was highlighted. In the backdrop of the constitutional petition, challenging the validity of valuations fixed for various items of goods under section 25-B of Customs Act, it was held that reasonableness of the various valuations fixed for various items of goods could not be the subject-matter of an enquiry in exercise of constitutional jurisdiction for the reasons that such controversy required thorough factual probe into the matter on the basis of material to be brought on record by the parties. Mr. Ghori, however, did not virtually highlight the rationale for the goods being classifiable under PCT Heading 4407.2110 as agitated by the Customs Authorities for levy of 80% ad valorem duty. We, therefore, find no merit in the submission that the High Court could not examine the merits of petition under its constitutional jurisdiction.
8. Conversely, learned counsel for the respondents vociferously submitted that the question of determination of disputed facts did not arise at all in the petition before the High Court, as the nature of goods was expressly declared in the invoices as well as bill of entry. With reference to the letters of credit, established for the import of goods,
learned counsel invited our attention to the precedent reported as Collector of Customs v. S.M. Ahmed & Co. (Pvt.) Ltd. 1999 SCMR 138 a judgment by Full Bench of this Court expressing the view that classification of good was not always pure question of fact and same being mixed question of fact and law, High Court was possessed of jurisdiction of adjudicate upon such question in constitutional jurisdiction. On merits of the appeal, this Court upheld the judgment of the High Court expressing the view that on the basis of material on record the wood imported by respondent fell under PCT Heading 4403 instead of 4407, this finding was maintained by this Court.
9. On a plain glance at the import documents, including the bills of Entry in both the cases, conclusion arrived at by the High Court is perfectly justified and does not suffer from any error of fact or of law. We are, therefore, in no manner of doubt to hold that the High Court rightly allowed the writ petitions, which would hold the field being consistent with the law declared by this Court in the earlier cases..
10. Since the question of law raised before this Court stands already clinched by this Court in S.M. Ahmed's case (supra) there is no ground for grant of leave in these petitions, which are devoid of any merit and substance. These are accordingly dismissed and leave to appeal refused.
S.A.K./C-5/SCLeave refuse