THAL LTD. VS FEDERATION OF PAKISTAN, 2017 PTD-KARACHI-HIGH-COURT-SINDH 1683 (2017)

Customs Act (IV of 1969)---

----S. 18(1)(a)---S.R.O. No. 558(I)/2004, dated 1-7-2004---SRO No.585(I)/2012, dated 1-6-2012---Exemption from customs duty---Petitioners were importers of jute fiber and they were aggrieved of imposing customs duty on their goods---Plea raised by petitioners was that import of jute fiber was exempted from customs duty---Validity---Exporting country was a SAARC country as well as LDC, imports of jute and other textile bast fibers or raw or retted therefrom enjoyed 100% concession from payment of customs duties in accordance with Notifications S.R.O. No.558(I)/2004, dated 1-7-2004 read with S.R.O. No.585(I) /2012, dated 1-6-2012---No customs duty could be charged from petitioners importing goods falling under PCT headings 5303.1000, 5303.1010, 5303.1020 and 5303.1090 from the exporting country (being SAARC and LDC) till exemption granting S.R.O. No.585(I)/2012 dated 1-6-2912 was in field---Constitutional petition was allowed in circumstances.

Ali Almani and Samiullah Khan for Petitioners (in C.Ps. Nos. D-6067, 6089 and 6969/2016).

Muhammad Rehan-Attorney of Petitioner (in C.P. No. D-6615/ 2016 in person).

Mrs. Fozia Rasheed and Sohail Muzaffar for Respondent No.3.

Kafeel Ahmed Abbasi Advocate for Respondent No.6.

Ghulam Shabbir Baloch, Standing Counsel.

Date of hearing: 8th February, 2017.

JUDGMENT

ZULFIQAR AHMAD KHAN, J.---These petitions arise in identical circumstances where the Respondents (mainly Customs Authorities) have denied concession to the Petitioners mode available to them through S.R.O. 558(I)/2004 read with S.R.O. 585(I)/2012 in terms of which, per Petitioners' counsel contention raw jute imported by the Petitioners from Bangladesh is exempted from the payment of customs duty.

Petitioners who are members of Pakistan Jute Mills Association (PJMA) have been importing raw jute from Bangladesh over the years. Giving by way of historical imposition of the customs duties on the import of raw jute, the learned counsel submitted that between the years 2001-2002 these goods were imported under PCT heading 5303.1000 and customs duty at the rate of 10% were charged thereon, however, between the years 2002-2004 the said PCT heading was sub-divided into 5303.1010, 5303.1020 and 5303.1090 and customs duty was charged at a rate of 5%. However in the years 2004-2007, pursuant to S.R.O. No.558(I)/2004, these goods imported from Bangladesh (as a SAARC country) were granted blanket exemption under the relevant PCT heading 5303.1000, however for other (non SAARC) countries, these goods under the above referred three sub-headings were still charged customs duty at the rate of 5%. Between the years 2007-2014, government on its own motion granted exemption to goods imported under the above referred three categories from the payment of customs duties, which situation was changed between the year 2014-15 when 1% customs duty was levied, while under SRO 558(I)/2004 at Serial 976 "Jute and other textile bast fibres, raw or netted" falling in the category of PCT heading 5303.1000 was declared 100% customs duty free if being imported from SAARC countries, however, the Customs authorities charged these goods at the rate of 1% (which was increased in the year 2015 to 2% and in 2016-17 to 3%) and the importers paid the said customs duty under protest, however, they remain in communication with the relevant authorities to seek clarification that goods imported from Bangladesh under PCT heading 5303.1000 were exempted from the payment of customs duty in terms of S.R.O. No.558(I)/2004. A clarification in this regard was issued by the Ministry of Commerce on 02.02.2015, notwithstanding, a clarification from the Board of Revenue in terms of letter dated 27.10.2001 was already issued which while placing reliance on S.R.O. 374(I)/2000 declared goods falling under PCT heading sub-heading 5303.1010 to be covered by the PCT heading 5303.1000.

Taking us to the root of the problem, the learned counsel drew our attention to Pakistan Customs Tariff Volume-I, 18th Edition for the year 2002-2003 where certain amendments were made under Chapter 53 where the main PCT heading 53.03 included "Jute and other textile bast fibres (excluding flax, true hemp and ramle), raw or processed but not spun; low and wastes of these fibres (including yarn waste and garneted stock)" and while giving the description thereunder of "Jute and other textile bast fibres, raw or retted", failed to mention the appropriate PCT heading of 5303.1000, however, sub-headings 5303.1010 for "Jute cutting", 5303.1020 for "Jute waste" and 5303.1090 for "other" products were included. Since the heading "Jute and other textile bust fibres, raw or retted", was not given any specific heading number, which caused confusion in interpreting the same description which under S.R.O. 558(I)/2004 and S.R.O. 585(I)/2012 which referred these goods to fall under PCT heading 5303.1000 and in terms of which, goods imported from SAARC and LDCs were given complete customs duties exemption. This anomaly seemingly caused the Respondent to impose the prevalent customs duties even on the petitioners' goods imported from SAARC/LDCs, for which in fact no customs duty was payable.

Learned Counsel for the Petitioners further drew our attention to the Comments dated 17.01.2017 filed by the Respondent No.5 where the Respondents have admitted under paragraph-1, as well as, on the Ground (A) of the petition that the Petitioners' goods (jute) are covered for exemption and concession of customs duties under Section 18(1)(a) of the Customs Act, if importing from LDCs or SAARC countries.

Faced with this straightforward case of some blatant anomaly in terms of which PCT heading of 5303.1000 was not mentioned at the appropriate place in the Pakistan Customs Tariff of the year 2002-2003, the learned counsel appearing for the Respondent (Customs) contended that Government had absolute power under section 18 of the Customs Act, 1969 to withdraw any concession or to change the rate of customs duty charged: which obviously is neither impugned in the instant petitions nor is in question before us.

Court at this juncture abundantly made clear that the Customs authorities power under Section 18 as to the imposition or withdraw of any concession are not challenged in terms of these petitions, but as long as any concessions are available, which in these cases are embodied in the form of S.R.O. 558(I)/2004 and 585(I)/2012 where Jute and other textile bast fibres raw are retted are to be charged at 0% customs duty coupled with the fact that the absence of sub-heading 5303.1000 from the Tariff having been clarified by the FBR's letter dated 27.10.2001 affirming that goods falling under then existing PCT heading 5303.1010 when imported from SAARC countries are considered to be available under PCT Code 5303.1000 as it covers erstwhile sub-heading 5305.1010 coupled with the fact that under the standardized PCT heading convention, a sub-heading starting with single dash (-) is always construed to mean the afore-number PCT heading followed by (.1000) which was the case clearly shown under Chapter-53 of the Finance Ordinance, 2001 and when there is no doubt that Bangladesh is a SAARC country as well as an LDC, imports of Jute and other textile bast fibres or raw or retted therefrom enjoy 100% concession from the payment of customs duties in accordance with S.R.O. 558(I)/2004 dated 01.07.2004 read with S.R.O. 585(I)/2012 dated 01.06.2012 thus no customs duties could be charged from the Petitioners importing goods falling under PCT heading 5303.1000, 5303.1010. 5303.1020 and 5303.1090 from Bangladesh (being a SAARC and an LDC) till the exemption granting S.R.O. 585(I)/2012 dated 01.06.2012 is in the field.

Counsel for the Petitioners at this juncture prayed that the duties paid by the Petitioners under protest be reimbursed to them. In the given circumstances when the duties were paid on the jute imported by the Petitioners from Bangladesh under protest on which no duties were payable, the prayer appears to justified, however, when there is no relevant material on the record nor the Petitioners have detailed the duties paid we accordingly leave this matter to the discretion of the petitioners to consider and pursue the remedy in accordance with law.

These are the reasons for the short order, whereby, we allowed these petitions in the earlier part of the day.

MH/T-7/Sindh Petition allowed.