SHAIKII SALIM ALI (PVT.) LTD. through Managing Director VS COLLECTOR OF CUSTOMS, LAHORE, 2009 PTD-LAHORE-HIGH-COURT-LAHORE 1274 (2009)

Customs Act (IV of 1969)---

----S. 16 Agricultural Pesticides Ordinance (II of 1971), S.4--Import of product as pesticide----Pesticide registration placed on record showed the generic name of the product and it was not established that the "trade name" of the product had been registered in the country of export as the requisite certificate to that effect had not been placed on record -Held, until the trade name of the manufacturer was registered in the country of manufacture, the product could not be imported as per the law---On account of any earlier permission of import, which had not been detected at the relevant time and was cleared for certain reasons, the department was not bound to necessarily follow the same footsteps and was to grant the import when it was not permissible under the law.

Oxford Dictionary; ICA No.375/2003; Government of Pakistan through Ministry of Finance and 3 others v. Manzoor Brothers 1995 SCMR 516; Messrs Dada Soap Factory Ltd. v. Pakistan through Secretary, Government of Pakistan, Ministry of Finance and 2 others PLD 1984 Kar. 302; Messrs Muhammad Anwar Muhammad Iqbal Brothers !Ad Karachi v. Collector of Customs and 3 others PLD 1976 Kar; 253; Syed Ghulam Ali Shah v. The State through A.D.M. and Tribunal, Sanghar PLD 1970 SC 253; Mst. Zahida Sattar and others v. Federation of Pakistan and others PLD 2002 SC 408 and Black's Law Dictionary Eighth Edition ref.

Mian Dilawar Mehmood for Appellant.

Sh.Ilzhar-ul-Haq and Ms. Yasmeen Sehgal, DAG, for Respondent.

Date of hearing: 1st April, 2009.

JUDGMENT

MIAN SAQIB NISAR, J.---This judgment shall dispose of the noted appeal (C.A. No.532 of 2003) as well as the connected Appeal No.536 of 2003, as both involve the common questions of law and facts and are filed against the same impugned order.

2. Briefly stated the facts as set out by the appellant are that it imported from China a freely importable pesticide (Aluminum Phosphide Tables 56%) with the brand name (see Para. No.2 of the appeal) of" 'Liang Le' weighing 33,300 Kgs and valuing US$ 69,624, and filed a Bill of Entry No.6,191, dated-62003 at CFS, NLC Dry Port, Lahore, but unfortunately the consignment was detained by the Customs Authorities on the ground that such is a banned item; in this regard, a show-cause notice was issued by the Collector Customs to the appellant on 22-7-2003 (Annex-A with the appeal); the reply was given thereto by the appellant (Annex--B with the appeal) and vide order dated 11-8-2003 the Collector declared the product to be banned and a penalty amounting to Rs.1,00,000 was also imposed upon the appellant and appeal under section 194--B of the Customs Act, 169 was filed by the appellant before the Customs, Excise and Sales Tax Appellate Tribunal; the appellate Tribunal partly accepted the appeal and ordered the release of the confiscated consignment against a redemption fine equal to 30% of the custom value and also quashed the penalty in this behalf, the operative part of the order reads as under:--

"The order for outright confiscation is not legally sustainable and is also a harsh order. Therefore, the consignment in question is allowed release to the appellant on payment of fine equal to 30% of the customs value in lieu of confiscation and in addition to payment of duty/taxes under the law. The imposition of penalty of Rs.100,000 is also considered harsh order and hence the penalty is remitted altogether."

Both the parties aggrieved of the above order, have come up in these appeals.

3. The learned counsel for the appellant states that original section 4 of the Agricultural Pesticides Ordinance, 1971 (Ordinance II of 1971) provides "no person shall import, manufacture, formulate, sell, offer for sale, hold in stock for sale or in any manner advertise any brand of pesticide which has not been registered in the manner hereinafter provided"; this law was, however, amended by the Agricultural Pesticides (Amendment) Act, 1992 (Act No. XIX of 1992) and section 4 was substituted as follows:--

"(4) No person shall import, manufacture, formulate, sell, offer for sale, hold any stock for sale or in any manner advertise any pesticide which has not been registered in the manner provided by this Act or the rules framed thereunder:

Provided that the Federal Government may, by notification in the official gazette direct that the pesticide specified in the notification and not having a trade name will be imported only by a class or classes of importers as specified; except a pesticide having a trade name and registered in the country of manufacture which may be imported without undergoing the registration process but subject to the conditions notified from time to time by the Federal Government."

It is submitted that the product in question was imported after the change of law, thus on account of the above, the pesticide having a trade name "LIANG LE" and registered in China, the country of manufacture, could he imported. It is further argued that the words `trade name' as per Oxford Dictionary mean "a name by which a thing is called in a trade, a name given to a product, a name under which a business trades", therefore, as the product "Aluminum Phosphide" has been registered in China as mentioned above, therefore, it was not a banned item at all as per the amended provision of the Act. It is also argued that previously the appellant had imported the same item under the head 3808.1060 of the custom tariff, which was never objected to by the department; in this behalf, reference has been made to Annexures-I, J/1 and J/2 filed along with the appeal; besides, the Government of Punjab also imported 80500 Kgs containing 56% of the Aluminum Phosphide on 24-6-2004, resultantly the respondents are estopped from challenging the importability of the pesticide. The learned counsel has further submitted that the question as to whether this is an importable item came under consideration in I.C.A. No. 375 of 2003 and the Division Bench of this Court vide judgment, dated 22-6-2004 resolved the issue holding it to be importable under the head 3808.1060, therefore, on account of the above, the order of the Collector was stated to be illegal and without jurisdiction, resultantly it is prayed that by setting aside both the impugned orders, the goods be released to the appellant as per the Bill of Entry mentioned above. The learned counsel for the appellant also submits that the department is bound to follow its own practice as in this case, the Customs Department has been allowing the item to be importable, therefore, the different treatment cannot he meted to the appellant in the present consignment; reliance in this behalf has been placed upon Government of Pakistan through Ministry of Finance and 3 others v. Manzoor Brothers (1995 SCMR 516), Messrs Dada Soap Factory Ltd. v. Pakistan through Secretary, Government of Pakistan, Ministry of Finance and 2 others (PLD 1984 Karachi 302), Messrs Muhammad Anwar Muhammad Iqbal Brothers Ltd. Karachi v. Collector of Customs and 3 others (PLD 1976 Karachi 253) and Syed Ghulam Ali Shah v. The State through A.D.M. and Tribunal, Sanghar (PLD 1970 SC 253).

4. For the other appeal (C.A. No.536 of 2003) instituted by the department, a preliminary objection has been raised that it has been instituted by an unauthorized person; in this regard, it is submitted that under the provisions of section 196 read with section 169 of the Customs Act, 1969, the appeal could only be filed by the Collector, while in the instant case, it has been so done by the Deputy Collector, who had signed the memo. of appeal and the power of attorney', therefore, an unauthorized institution be straightaway rejected as per the judgment reported as Mst. Zahida Sattar and others v. Federation of Pakistan and others (PLD 2002 SC 408).

5. The learned counsel for the respondents concedes that the Ordinance It of 1971 was amended by the Act No.XIX of 1992 and it is the amended section 4, which shall apply to the import in question. It is however, submitted that proviso to section 4 enunciates that no person shall import etc if a pesticide has no trade name, the Federal Government by notification permits its import for a class or classes of the importers; the case of the appellant admittedly does not fall in this category; the second category which can be said to be a free import is for the pesticide which has a trade name and registered in the country of its manufacture; as in the case of the appellant, the pesticide imported by it has (i) no trade name (ii) is not registered in China, therefore, is not an importable time. In this behalf, the learned counsel has made reference to the Bill of Entry (along with some attached document), the Bill of landing and the Registration Certificate filed by the appellant, which according to him does not postulates the trade name of "Aluminium Phosphide", which is a generic name of the product.

Without prejudice to the above, it is submitted that even if it is proved that the product has the trade name which was registered in China, yet it was only importable as per prescribed rules and conditions which were notified by the Federal Government from time to time; in this behalf, reference has been made to the Agricultural Pesticides Rules, 1973 and Rule 9-A thereof, which relate to the import of pesticides (products) which have no trade name as in case of Aluminum Phosphide. It is further argued that according to sub-rule (5) of Rule 9-A, in the case of imports of pesticides registered in the country of manufacture, in addition to the conditions specified in sub-rule (1) to sub-rule (4), the importer shall comply with the conditions specified in Form-17 and shall, for the purpose of verification of qualify of pesticides, submit the documentary proof of the pesticide's registration in the country of manufacture; but this has not been so given by the appellant; besides, as per Form-17, quite a particulars and information have to be inscribed and provided .by the appellant, which were not so given; even in the Bill of Entry filed by the appellant, in column No.3, generic name "Aluminum Phosphide" has been written without there being any trade name of the item (however, the learned counsel for the appellant has drawn our attention to the second page of the Bill of Entry in which the name of the item is given as "Liang Le" and according to him Aluminum Phosphide 56% is not trade name of the item). It is further argued that according to the Bill of Entry filed by the appellant, in column No.4 under the head "P.C.T. No." the product has been itemized as 3808. 1060 of the tariff, whereas in the packing list, item is specified as 3808.1090, this is the position in the shipping invoice and also bill of landing; as per the Import Policy Order certain items are restricted from being imported and item No.3808.1090 is a prohibited one and it is mentioned in column No.4 of the Policy, which reads "In accordance with the provisions of Agricultural Pesticides Ordinance, 1971 (II of 1971) and rules framed thereunder excluding those not covered by the provisions of the said Ordinance", so on this account too as the item in question was not importable, resultantly the orders of the Collector declaring it to be so and upheld in appeal are valid and justified in law.

It is also argued that vide letter, dated 30-6-2003, the Director (Technical) for Plant Protection Adviser and Director General addressed to the Assistant Collector of Customs, Container Freight Station, NLC, Dry Port, Thokar Niaz Baig, Lahore has mentioned "The subject pesticides namely Aluminum Phosphide imported by Messrs Sheikh Sateen' Ali (Pvt.) Lid., Lahore has not been permitted under the aforesaid legislation and hence cannot be imported in Pakistan. Therefore, the firm is not authorized to import Aluminum Phosphide."

In paragraph No.7, it is further mentioned "It may be pertinent to inform that release of the subject consignment would be in violation of the Agricultural Pesticides Ordinance 1971 read with Agriculture Pesticides (Amendment) Acts 1992 and 1997 and the rules framed thereunder. Any responsible for release of the subject consignment would be prosecuted under the aforesaid legislation".

Further in a letter, dated 6-9-2003 by the Deputy Director (Reg.) for Plant Protection Advisor and Director General, Government of Pakistan, it was conveyed to the Deputy Collector Customs, CFS Thokar Niaz, Baig, Lahore that "Therefore, the firm is not authorized to import AIP and its import is contravention of the AOP 1971 read with AP(A) Acts, 1992 and 1997. The importers are liable to punishment under the said legislation leading to 3 years of imprisonment".

On account of the above, the learned counsel submits that no mala fide or illegal act can be imputed to the respondents for the assailed action as the department in fact has saved the appellant from being prosecuted under the law for having imported a banned item.

6. As regards the cross appeal (C.A. No.536/2003) is concerned, it is stated that as per the amendment prescribed in the law of 2005, the item in question is now importable thus, the instant appeal has become infructuous.

7. Mian Dilawar Mehmood, the learned counsel for the appellant, in rebuttal, at the very outset, has stated that the letters, to which reference has been made by the respondents' counsel, are inter se two government departments and the appellant had never been confronted to explain its position; besides, these are not part of the record and have been provided to the Court at random (luring the arguments.

Replying to the question raised by the respondents' side about the trade policy, it is stated that the appellant had categorically mentioned in the Bill of Entry the number of the item as 3808. 1060 and this is not a banned item as per the same; it may be on account of some clerical or ministerial lapse that in the bill of landing, packing etc., the other number 1090 has appeared, but this was never the item which was imported by the appellant. It is lastly submitted that all the forums below have ignored that the law has been comprehensively amended in the year, 1992 (relevant period) and the word "brand" has been omitted, therefore, brand name would have no relevance and it is the trade name which shall be germane for determination whether the item is importable or not. In rebuttal it has been mentioned that the letter, dated 9-7 2003 addressed to the appellant by the Government of Pakistan Ministry of Commerce clinches the matter when it states that:-

"-------------and to state that the provisions reflected in the Import Trade and Procedure Order, read with the provisions of Agricultural Pesticides Ordinance, 1971 replaced by Agricultural Pesticides Act, 1992 allow import of Aluminum Phosphide (fumigant) tablets 56% which though not registered in Pakistan under the provisions of' the Agricultural Pesticides Ordinance, 1971 are permissible for import if registered in the country of origin as provided in section 4 of the Agricultural Pesticides Act of 1992."

8. We have heard the learned counsel for the parties. Undoubtedly, the proposition of import of the product in question is governed by the proviso of section 4 as amended through the Act XIX of 1992. As per this amendment, the word `brand name' has been changed to `trade name' with the condition that such trade name is registered in the country of manufacture. Thus, it is to he seen, what is the trade name of the product and whether it has been registered in China. According to the learned counsel for the appellant, the `trade name' means "a name by which a thing is called in a trade, a name given to a product, a name under which a business trades". This word has been defined by the Black's Law Dictionary Eighth Edition to mean "a name, style, or symbol used to distinguish a company, partnership, or business (as opposed to a product or service); the name under which a business operates; A trade name is a means of identifying a business--or its products or services--to establish goodwill. It symbolizes the business's reputation".

As against the above, according to the same Dictionary, the brand name means "A name or symbol used by a seller or manufacturer to identify goods or services and to distinguish them from competitors' goods or services; the term used colloquially in business and industry to refer to a corporate or product name, a business image, or a mark, regardless of whether it may legally qualify as a trade mark".

According to the Trade Marks Ordinance, 2001, "trade names" means 'names used by a person to denote his trade or calling and includes firm's and companies' names".

9. In the order-in-original, dated 11-8-2003 passed by the Collector, it has been held:-

"In the said certificate against the entry of 'Trade name there has been mentioned "56% Aluminum Phosphide Tablet" which is generic name of the subject goods. There is no reference to the trade name in this certificate. Therefore, this certificate does not fulfil the requirement of Proviso to section 4 of the Agricultural Pesticides Ordinance 1971 (II Of 1971) which specifically stipulates that Pesticides of specific trade name registered abroad would be imported without undergoing the registration process in Pakistan but subject to the conditions notified from time to time by the Federal Government. This clearly demonstrates that the Pesticides of Trade name "LIANG LE" have not been registered in the Country of Origin/Export and the subject goods have been imported in breach of the conditionalities of Sr. No.25 of Appendix-D to the Import Trade and Procedure Ordinance 1971 (II of 1971) as amended by Acts 1992 and 1997 further read with Rules framed thereunder. The said provisions of the law stipulate that the importers are required to obtain certificate of Registration of Pesticides registered abroad in the prescribed format of Form-17 from the concerned quarters of Ministry of Food. Agriculture and Livestock."

And the above order, as mentioned earlier, has been upheld by the Appellate Tribunal. In this regard we find expedient to examine the various documents to which reference has been made by both the sides. In the Bill of Entry in column No.3 with the caption "Description of Goods Including Technical Or Trade Names" it is mentioned to be "Aluminum Phosphide"; this to our mind is the generic name and not the trade name as defined by the Dictionary meaning mentioned above, so as to identify the name, style or symbol used to distinguish as a product being manufactured by a particular company etc., rather in the Progress Record of Entry attached to the Bill of Entry, the brand name mentioned is "Liang Le". In the Test Memo, which is to be filed along with the Bill of Entry to be filled by the Importer's Clearing Agent, there is no mention of the trade name; the goods have again been described to be "Aluminum Phosphide Tables 56%. In the Challan Form pertaining to the deposit of Rs.25000 towards the registration fee of the pesticides by the appellant, the product has been mentioned to be "Aluminium Phosphide Tables 56%". In the Certificate produced by the appellant which according to it, is the Certificate of Registration as required under proviso to section 4 of the Ordinance II of 1971, the brand name is mentioned to be "LIANG LE". From the Certificate for Pesticide Registration placed by the appellant bearing No.PD 84121-9, the trade name of the product is mentioned as "56% Aluminum Phosphide Tablet". It is thus, not established that the "trade name" of the product has been proved to be registered in China as the requisite certificate to that effect has not been placed on the record. We do not find ourselves in agreement with the learned counsel for the appellant that in fact Aluminium Phosphide 56% is the trade name of the product as in our view it is a generic name and thus, until the trade name of the manufacture was registered in the country of manufacture, the goods could not be imported as per the law. We are also not convinced that on account of any earlier permission of import, which has not been detected at the relevant time-arid was cleared for certain reasons, the department is bound to necessarily follow the same footsteps and is to grant the import when it was not permissible under the law.

In the light of above, we do not find any error in the impugned orders calling for interference in these appeals, which are hereby dismissed.

M.B.A./S-113/LAppeals dismissed.