M. YASIN & CO. VS FEDERATION OF PAKISTAN, 2015 PTD-KARACHI-HIGH-COURT-SINDH 1607 (2015)

Import Policy Order, 2013---

----Para 9 (ii)(5)---Constitution of Pakistan, Art. 199---Constitutional petition---Post clearance use---Concrete mixer, import of---Petitioners imported old and used concrete transit mixture trucks as construction machinery, which were importable in terms of para 9 (ii)(5) of Import Policy Order, 2013, on fulfillment of certain conditions---Customs authorities withheld clearance of trucks in question on the ground that after clearance the same would be used as transport vehicle / trucks---Validity---Merely on presumption it could not be said at the stage of clearance that imported concrete mixers would not be used for such purposes and rather would be used as truck for transportation of goods---Law did not restrict any such usage and such apprehension was repelled---Petition was allowed in circumstances.

Messrs Baig Enterprises and Engineering and another v. Federation of Pakistan and others 2015 PTD 181 fol.

Mian Abdul Ghaffar for Petitioner.

Dilawar Hussain, Standing Counsel for Respondent No.1.

Ms. Masooda Siraj along with Ilyas Ahsan for Respondents Nos. 2 to 4.

Date of hearing: 15th January, 2015.

JUDGMENT

MUHAMMAD JUNAID GHAFFAR, J.---Through instant petition, the petitioner has impugned the unlawful detention of 4 Used Hino Concrete Transit Mixture Trucks imported by the petitioner, at the port since 22-4-2014 without issuance of any notice or assigning any reasons thereof and has also sought for directions to the respondents to release the lawfully imported Concrete Transit Mixer Trucks.

2.Briefly, the facts as stated in the memo. of petition are that the petitioner, is a duly licensed Constructer/Operator in category C5 by the Pakistan Engineering Council vide License No. 11817 which was valid till 31-12-2014, and has imported Old and Used construction machinery i.e. Used Hino Concrete Transit Mixture Trucks (hereinafter referred to as "Concrete Mixer") for its exclusive use in construction projects. The said Concrete Mixers are importable in terms of Para 9(ii) (5) of the Import Policy Order, 2013 on fulfillment of certain conditions. It has been further stated that the petitioner is in possession of requisite Pre-Shipment Inspection Certificate in terms of Import Policy Order, 2013, whereby it has been certified that the said Concrete Mixers are in good working condition and have a remaining productive life of 5 years and further certified that they are also compliant with Euro-II emission standards. It is further stated that the Goods Declarations in respect of the said Concrete Mixers have been filed by the petitioner since 22-4-2014, whereafter the petitioner has complied with all the requirements for the clearance of the same, however, respondents Nos.2 and 3 malafidely and without assigning any reason or issuing any show cause have withheld the clearance of all the Concrete Mixers on the pretext that the said Concrete Mixers do not fall for classification under HS Code 8705.4000 as it is apprehended that after clearance from the Port they will be used as Transport Vehicles / Trucks, which falls for classification under HS Code 8704.2299, hence are not importable freely in terms of the relevant provision of Import Policy Order, 2013. It has been stated that the petitioner is left with no option except to invoke the Constitutional jurisdiction of this Court under Article 199 of the Constitution as there is no other alternate and adequate remedy against the arbitrary action on the part of the public functionaries as referred to hereinabove.

3.Mr. Mian Abdul Ghaffar, learned Counsel for the petitioner at the very outset has contended that the controversy raised through instant petition has already been decided by this bench vide judgment dated 22-9-2014 in the case of Messrs Baig Enterprises and Engineering and another v. Federation of Pakistan and others (C.P. No. D-4353/2014 = 2015 PTD 181. whereby it has been held that the impugned action of the respondents is illegal and unlawful and the Concrete Mixers as presented are classifiable under HS Code 8705.4000 and are freely importable in terms of Import Policy Order, 2013 and shall be released accordingly. The learned Counsel for the petitioner has placed on record the copy of the judgment passed in CP No. D-4353/2014 in this regard.

4.Conversely, Mrs.Masooda Siraj Advocate duly assisted by Mr. Ilyas Ahsan, law officer, though not controverted such fact, however submits that the respondent / department has assailed the judgment of this Court dated 22-9-2014 as referred to herein above by filing C.P.L.A. No 328-K/2014 before the Hon'ble Supreme Court and vide order dated 17-10-2014, while issuing notices to the respondents, the Hon'ble Supreme Court has been pleased to direct the parties to maintain status quo. Therefore, per learned Counsel, since the matter is sub-judice before the Honorable Supreme Court, therefore, instead of deciding instant petition in terms of earlier judgment of this Court, the matter be adjourned sine-die and be taken up for hearing after decision by the Hon'ble Supreme Court in the above CPLA.

5.Insofar as the controversy raised through instant petition is concerned, admittedly there is no dispute to the effect that the same has already been decided by this bench vide judgment dated 22-9-2014 in the case of Baig Enterprises Supra. The only objection which has been raised on behalf of the respondents is that since the above judgment of this Court is under challenge before the Hon'ble Supreme Court, and the parties have been directed to maintain status quo, therefore instant petition may be disposed of on the basis of said judgment of this Court as referred to hereinabove. We have been informed by the learned Counsel for the parties that the said judgment has neither been suspended by the Hon'ble Supreme Court nor even any leave to appeal has been granted in the matter so far. In view of such admitted position, we are of the view that the order of the Hon'ble Supreme Court dated 17-10-2014 in C.P.No. 328-K/2014, whereby the parties have been directed to maintain status quo is only to the extent of implementation and or execution of the judgment passed by this Court, insofar as it relates to release of the consignment of the petitioner and does not amount to suspension of judgment dated 22-9-2014 passed by this Court in the case of Baig Enterprises Supra. Therefore we do not find any cogent reason not to extend the same benefit to the petitioner in the instant matter which has already been granted to the petitioner in the case of Baig Enterprises Supra. Accordingly, the objection raised in this regard by the learned Counsel for the respondents is misconceived and is hereby repelled as this bench is bound by its own judgment dated 22-9-2014 in the case of Baig Enterprises Supra, whereby we have already decided the controversy in favour of the petitioners and have held that the Concrete Mixers in question are classifiable under HS Code 8705.4000 and are importable in terms of Para 9(ii) (5) of the Import Policy Order, 2013.

6.It would be advantageous to refer to the relevant finding and the observations in respect of the controversy in hand, whereby, we have dealt with the same in our judgment dated 22-9-2014 in the aforesaid case and which read as under:--

9. From perusal of the above clarification, it appears that there is hardly any justification with regard to the apprehension or presumption on the part of respondents Nos.2 and 3, that Concrete Mixers in question, being modified or adapted version of the Vehicle/Mixer, after its release from Customs, would be used as Trucks for transportation of goods and not as specialized Vehicle i.e. Concrete Transit Mixer. It is pertinent to note that Ministry of Commerce, Government of Pakistan is the relevant final Regulatory Authority in so far as import status of an item is concerned. The Custom department (respondents Nos.2 and 3 in instant petition) are only there to regulate and implement such policy of the Federal Government, Notified from time to time through the Ministry of Commerce. In terms of section 3 of the Import and Exports (Control) Act, 1950 (XXXIX of 1950) it is the exclusive jurisdiction of the Federal Government to prohibit and or regulate the export and import of goods. The Customs authorities or for that matter FBR is not empowered to restrict or ban import or export of goods under the Customs Act, 1969 or the rules made there-under. Though the respondents Nos. 2 and 3 can exercise powers and jurisdiction in terms of section 16 of the Customs Act, 1969, however such jurisdiction can only be exercised, once the Federal Government prohibits or restricts importation and exportation of certain goods by issuing Notification in this regard. In this context reference can be made to the case of Pakistan through Secretary Finance, Islamabad and 5 others v. Aryan Petro Chemical Industries (Private) Limited, Peshawar and others reported in 2003 SCMR 370. The controversy in that case was that CBR in exercise of its rule making powers under section 219 of the Customs Act 1969 while notifying the Manufacturing In Bond Rules of 1997 through sub-rule (6) of Rule 15 had imposed restriction on the export of shopping bags and plastic sheets to any country by land route, consequently manufacturers / exporters could no more export their goods to Afghanistan by land route, which prior to such amendment were being regularly exported. The exporters had challenged the said Notification before the Honorable Peshawar High Court and the writ petitions filed by the exporters were allowed against which the Government filed Civil Petition for leave to appeal before the Honorable Supreme Court, and after conversion of CPLA into appeal, the Honorable Supreme Court dismissed the appeals filed by the Government and at Para 9 of the judgment the following observation was made:

9. The plain reading of the above provisions would show that the aim of giving the rule making power to CBR is to carry out the purpose of the above statutes through subordinate legislation. The Federal Government in exercise of powers under section 3 of Imports and Exports (Control) Act, 1950 (Act XXXIX of 1950), may by an order published in the official Gazette prohibit, restrict or otherwise control the import or export of goods of any specified description and regulate the same through licence system and subsection (3) of section 3 of ibid Act, provides that section 16 of the Customs Act, 1969 shall be given effect in respect of goods, the import and export of which has been prohibited or restricted. Thus the Federal Government has the sole authority to regulate import and export of goods and impose conditions for grant of import and export licence, issue orders for carrying out the purpose of Imports and Exports (Control) Act, 1950 and make laws for the import and export of goods across the borders whereas the function of CBR is to give effect to Customs Act, 1969, Sales Tax Act, 1990 and the Central Excise Act, 1944 in the light of policy of the Federal Government as contemplated by the Imports and Exports (Control) Act, 1950. There is clear distinction between the powers of the Federal Government under Imports and Exports (Control) Act, 1950 and the powers of CBR under the Customs Act, 1969, Sales Tax Act, 1990 and Central Excise Act, 1944. The framing of policy relating to the import and export of goods with or without any restriction is the executive function of the Federal Government and the Central Board of Revenue, subservient to the policies of Federal Government, may frame rules under the above referred statutes subject to the provisions of section 16 of Customs Act under which it is the prerogative of the Federal Government to prohibit or restrict the bringing into or taking out of Pakistan any goods by any route including the goods enumerated in 3rd Schedule to the Customs Act 1969. Under section 9 of the Customs Act, 1969 the CBR can declare the places as customs port, customs airport and land customs station for clearance of the goods to be imported or exported but is not empowered under said section or any other provision of law to restrict or prohibit the export or import of the goods through land route. (Emphasis supplied)

10. In the instant matter the Ministry of Commerce has categorically given its opinion in favour of the petitioner and there is no justifiable reason for not following such directions by respondents Nos. 2 and 3 as the objections being raised by them are based on presumptions and possibility of subsequent misuse of the Concrete Mixers by the petitioner. The Customs Authorities are required to make assessment of the goods on the basis of goods "as presented" and not on apprehension that subsequent to clearance, the goods would be put to some other use. The Ministry of Commerce has put certain restrictions insofar as import of Concrete Mixers is concerned, categorically in Para 9(ii) (5) of the Import Policy Order, 2013 which has been notified vide S.R.O. 193(I)/93 dated 8-3-2013 issued in exercise of powers conferred under subsection (1) of section 3 of the Imports and Exports (Control) Act, 1950 (XXXIX of 1950) and the petitioner has fulfilled such conditions. There is no other condition attached to importation of the goods in question and the petitioner is at liberty to seek clearance of the same and put it to use at his own sweet will. If the intention of the Federal Government would have been otherwise, there could have been imposition of any other condition being made applicable subsequent to the clearance of such Concrete Mixers, therefore, objection raised on behalf of the respondents Nos.2 and 3 to the effect that after clearance of the Transit Mixture Trucks, the same would be put to any other use, including transportation of goods, instead of being used as Concrete Transit Mixture Trucks is not sustainable, being premised on presumption and apprehension. Moreover, we may further observe that the respondents/department itself has been releasing similar vehicles under HS code 8705.4000 imported by various other Importers, without raising any objection and it appears that the petitioner has been discriminated by the respondents in the instant case. In fact in our view it is also immaterial in the given facts and circumstances of the instant case, that as to whether the imported Concrete Mixers are to be classified under HS Code 8704.2299 or 8705.4000 as firstly, the import of such Concrete Mixers has been permitted by the Federal Government under Para 9(ii)(5) of the Import Policy Order, 2013, by "description" and without putting in any restriction of HS Code, and secondly, when the regulating authority has itself issued a specific clarification/direction dated 14-3-2014 in the case of petitioner, then there is hardly any justification left with respondents Nos.2 and 3 to arrive at any other or different conclusion.

11. In the case of Elga Controls (Supra) the Hon'ble Lahore High Court in a somewhat similar matter had the occasion to dilate upon the issue and the consequences arising out of a situation wherein it was apprehended by the respondents that after clearance of the Specialized Vehicles, the same would be put to any other use. The department in that case had alleged that the petitioner in that case, subsequent to clearance from Customs had converted "Spraying Lorries" into Truck Chassis frame fitted with engine and cab, and such Trucks as converted by the petitioner, were not importable under the Import Policy Order, 2008. The precise allegation of the department in that case was to the effect that the petitioner had declared at the time of import, such Trucks to be as "Spraying Lorries" as a specialized vehicle, whereas after clearance of the same, they had converted these "Spraying Lorries" into Truck chassis frame fitted with engine and cab. The matter came up for hearing before a learned Single Judge of the Lahore High Court and after examining the entire import policy and relevant provisions thereof, the learned Single Judge of the Lahore High Court came to the conclusion as under:--

"The sprinklers Lorries like Hino, which the petitioners have imported, are classified under PCT Heading 8705-9000. The truck mounted on chassis with Cab, falls under PCT Heading 8706-0000. The Customs duty in the former case is more than the import of vehicle under the latter heading. An importer has to pay additional taxes and duties in spraying system for which the tax is separately leviable. The element of evasion of customs duty and taxes is, therefore, not involved. The only advantage, which an importer can take in the import of spraying lorry is that 5 years old truck due ban as per appendix " C " of the Import Policy Order, 2008-2009, is not importable while the spraying lorry of the same age, under the prevalent import policy, can be imported. There is no concession regarding charge and levy of duties and taxes on the import there is no prohibition or restriction or ban under the Import Policy Order 2008-09 for conversion of the vehicles into any other shape like truck, bus or a trailer. Various Collectorates in their communications addressed to Federal Board of Revenue, had submitted the fact. Even the Director of Directorate General Intelligence and Investigation in his letter dated 17-6-2009 admits that conditions for non-transferability or modification/alteration in its original and use have not been imposed and such conditions are required to be imposed like dump trucks to avoid misuse of the Import Policy Order. The dump trucks after their import are not transferable for a period of 10 years after clearance from the Customs. No such ban or prohibition has been imposed under the existing policy, for the conversion of sprinkler lorry into commercial truck etc, therefore, such vehicles are not liable to be seized or detained on the plea of conversion/modification."

12. We are respectfully in agreement with the decision of the learned Single Judge of Lahore High Court in the above case, as we are of the view that merely on presumption it cannot be said at the stage of clearance, that the imported Concrete Mixers would not be used for such purposes, and rather would be used as Truck for transportation of goods. Even otherwise, in our opinion, the law does not restrict any such usage and such apprehension has also been repelled as above by the Lahore High Court in the aforesaid case.

7.In view of hereinabove discussion, we are of the view that since the controversy raised through instant petition has already been decided by us vide judgment dated 22-9-2014 in the case of Baig Enterprises Supra, whereas the said judgment, though assailed before the Hon'ble Supreme Court, has neither been suspended nor any leave to appeal has so far been granted by the Hon'ble Supreme Court, hence, we are bound by our own judgment and would allow instant petition by following the judgment dated 22-9-2014 as referred to hereinabove. Moreover, declining the relief to the petitioners in similar terms as extended by this Court to other petitioners on identical facts and the legal issues in the case of Messrs Baig Enterprises and Engineering (supra), would amount to discrimination. Accordingly, we had allowed instant petition vide short order dated 15-1-2015 in the following terms.

"For reasons to be recorded later on and in view of the judgment dated 22-9-2014 passed by this bench in case of Messrs Baig Enterprise and Engineering and another v. Federation of Pakistan and others in C.P. No.D-4353 of 2014 = 2015 PTD 181 instant petition is allowed."

8.The above are the reasons in support thereof.

MH/M-10/SindhPetition allowed.