COLLECTOR OF CUSTOMS VS MAPLE LEAF CEMENT FACTORY LTD., 2012 PTD-SUPREME-COURT 541 (2011)

Customs Act (IV of 1969)---

----Ss.19 & 193---Machinery for Cement Plant imported pursuant to S.R.O. No.484(I)/94, dated 14-5-1992 exempting same from customs duty for not being locallymanufactured---Show-cause notice issued by Authority demanding customs duty on such machinery alleging the same being manufactured locally---Revenue's plea before Supreme Court was that if respondent was prepared to file reply to such notice by raising pleas available to him under law, Authority would have decided same accordingly---Supreme Court set aside impugned judgment of the High Court and directed the appellant to file reply to such notice within specified time, and in case of failure to do so, Authority would proceed against him in accordance with law.

IzharulHaq,Sr.Advocate Supreme Court for Appellants (in C.As. 1946 of 2000 and 1307 of 2001).

Raja Muhammad Iqbal, Advocate Supreme Court for Appellants (in C.As. 1258 of 2000 and 1307 of 2001).

M. Bilal, Sr. Advocate Supreme Court for Appellants (in C.As. 1258 of 2000 and 1307of 2001).

Ch. Aitzaz Ahsan, Sr. Advocate Supreme Court for Appellants (in C.A. 1802 of 2005).

Mehmood A. Sheikh, Advocate-on-Record for Appellants (in C.A. 1946 of 2000)

Gohar Ali Khan, Advocate Supreme Court for Appellants (in C.A. 1802 of 2005).

Salman Akram Raja, Advocate Supreme Court for Respondent (in C.A. 1946 of 2000).

Khawaja Muhammad Farooq, Sr. Advocate Supreme Court for Respondents (in C.A. 1258 of 2000).

Salman Aslam Butt, Advocate Supreme Court for Respondents (in C.A.1307 of 2001)

Raja Muhammad Iqbal, Advocate Supreme Court for Respondents (in C.A. 1802 of 2005).

Akhtar Ali Mahmud, Advocate Supreme Court for Respondents (in C.A. 1802 of 2005).

Sharif-ud-Din Pirzada, Advocate Supreme Court for Respondents (in C.A. 1307 of 2001)

Date of hearing: 21st December, 2011.

JUDGMENT

TASSADUQ HUSSAIN JILLANI, J.---This judgment shall dispose of the afore-referred appeals as the issues raised in all these appeals have nexus.

2.Facts giving rise to the instant appeals briefly stated arethatthe Federal Board of Revenue in terms of S.R.O. No.484(I)/92, dated 14-5-1992 and some other relevant notifications/letters exempted plants and machinery notmanufacturedlocallyandimportedgoodsfromthepaymentofcustomsdutiesduringtheperiodcommencingfrom1-12-1990 and ending on 30-6-1995. The State Engineering Corporation through its letter dated 26-1-1995 informed the Ministry about the imported machinery/plant which was being manufactured locally. Pursuant to the said letter, the Ministry issued a directive on 15-5-1994 to the effect that on the import of those items, the exemption from duties and taxes would not be available. Customs General Order No.17 of 84 dated 31-12-1984 was issued wherein the locally manufactured goods/ items were listed. The importers who were liable to pay tax in terms of the aforementioned letter/directive/list were issued show-cause notices for the payment of duties and taxes.

3.In Civil Appeal No.1946 of 2000, respondent-Maple Leaf Cement Factory Limited challenged the show-cause notice before Lahore High Court, Lahore in a Writ Petition No.6794 of 2000 which was allowed on 28-7-2000. The said judgment was challenged before this Court by filing the instant appeal. In Civil Appeal No.1258 of 2000 afore-referred directive was challenged before the learned High Court of SindhatKarachiinC.P. No.1244 of 1997whichwasallowedon18-5-2000 on the basis of a judgment passed by the learned Peshawar High Court in Writ Petition No.583 of 1995 (MessrsLucky Cement Limited v. Central Board of Revenue and 7 others). In Civil Appeal No.1307 of 2001 MessrsD.G. Khan Cement challenged the show-cause noticethroughWrit Petition No.11359 of 1999 whichwasallowedon2-2-2001 by the learned Lahore High Court. In Civil Appeal No.1802 of 2005 the show-cause notice was challenged by Best Way Cement Limited through Writ Petition No.2139 of 1996 which was dismissed by the learned Lahore High Court vide judgment dated 15-8-2001 on the ground that the Government have the power to levy the taxes on the goods and plants subject matter of the said appeals.

4.Learned counsel for the appellant/Customs Department submitted that in all the afore-referred appeals leave was granted and similar issues/points framed for determination by this Court in Civil Appeal No.1945 of 2000 wherein this Court has found that the Constitutional petition against issuance of show-cause notice was not tenable; that persons aggrieved had remedies available to them by approaching the Customs Authorities and that the learned High Court exercising Constitutional jurisdiction under Article 199 of the Constitution could not enter into the domain which raised questions of fact entailing factual inquiry and that this Court may decide these appeals on similar terms.

5.Learned counsel for the respondents in Civil Appeals No.1946 of 2000, 1258 of 2000 and 1307 of 2001 and learned counsel for appellant in Civil Appeal No 1802 of 2005 submitted that they had imported the machinery/plants pursuant to the said S.R.Os. and other relevant notifications/letters issued by the Federal Board of Revenue; that there was a certificate, issued by the competent institution to the effect that the machinery/plant in question was not locally manufactured; that the Government/Federal Board of Revenue is bound by the promise held out to them in terms of the afore-referred notifications/letters exempting the goods in question from levy customs duties and in the aforementioned circumstances the issuance of show-cause notices was not called for.

6.Mr. Izharul Haq Sheikh, learned counsel for the Customs Department (in C.As. Nos.1946 of 2000 and 1307 of 2001) on Court's query submitted that notwithstanding the afore-referred submissions made by him if the respondents are prepared to give reply to the show-cause notices issued to them with regard to the goods/plants subject matter of these appeals raising the pleas available to them under the law and the Competent Authority shall decide the same as mandated in law, uninfluenced by the judgment of the learned High Court.

7.Learned counsel for the respondents in Civil Appeals Nos. 1946 of 2000, 1258 of 2000 and 1307 of 2001 and for the appellants in C.A. No.1802 of 2005 submit that they have no objection if these appeals are disposed of in terms of the statement made by the learned counsel for the Customs Department and they will raise all the pleas available to them before the Competent Forum/Authority.

8.In view of the fair stand taken by the learned counsel for both the parties, these appeals are partly allowed, the impugned judgments passed in all these appeals are set aside, all the respondents in Civil Appeals Nos.1946 of 2000, 1258 of 2000 and 1307 of 2001 and appellant in Civil Appeal No.1802 of 2005 shall file their respective replies to the show-cause notices issued to them subject matter of these appeals within twenty days from today and the Competent Authority shall decide the matter within sixty days but not later than 7-3-2012. Needless to observe that if anyone does not submit the reply within the afore-referred period, it would be open for the Competent Authority to proceed as mandated in law.

S.A.K./C-3/SCOrder accordingly.