1988 PLP 995 (MLD)

MUHAMMAD ZAHOORUL HAQ, J.‑‑In all these petitions a common point has been raised by the petitioners that articles in question viz. Building board imported by them between 1975 to 1979 are covered by heading Ex.48.09 of Pakistan Customs Tariff which is liable to customs duty at a concessionary rate w and that the same were not liable to customs duty under heading 44.18 P.C.T. which is in respect of reconstituted wood and imposes a higher rate of duty than the one under heading Ex.48.09 P.C.T. The importers had been allowed to clear the goods after payment of the duty which was admitted by them to be payable plus on their furnishing a bank guarantee to the extent of the amount due. The bank guarantee was subject to the test to be carried on by the laboratories in respect of articles. The controversy has in fact centred round the position as to whether the building board or straw board or mill board imported by the petitioners were made out of vegetable fibre or they were made of reconstituted wood. A number of test reports have been filed in this regard by the petitioners. Report dated 21 -4‑1976 from P.C.S. & I.R. addressed to the respondent No. 2 shows that. The building board from Bangladesh showed compressed fragments of fibres of vegetable origin and that the board is made of ligno‑cellulosic material of vegetable origin sheared to fibrous state by compressing with the organic binders. It was further pointed out in that report that it cannot be considered as reconstituted wood. Another report from Central Testing Laboratories dated 14‑1‑1977 addressed to the same respondent shows that the sample of building board contained vegetable fibre and the sample was found to be composed of vegetable fibre reduced to a fibrous state. The petitioners also relied upon classification of hard board by Collector of Customs dated 6‑I1‑1975 where it was stated that in the light of test report the hard board in question was made from such fibre of wood which had not attained the stage of pulp and, therefore, the article was classifiable under Ex.48.09, Another report dated 4‑11‑1975, which was a test carried out by Mr. Abdul Basit, Chemical Assistant, showed that the hard sheet consisted of wood fibre i.e.. fibre of vegetable origin pressed together with the help of Urea Formaldehyde resin. But this report was countermand by the report of the Chemical Examiner which stated that the sample was in the form of sheet composed of wood chips agglomerated with synthetic resin and it is not a building board composed of vegetable fibre i.e. wood or vegetable material reduced to fibrous state. It was also asserted by the Chemical Examiner that his report supersedes the previous test report which stands cancelled meaning thereby that the report of Chemical Assistant Mr. Abdul Basit dated 4‑11‑1975 was treated as cancelled. The matter had been argued at length by the counsel of both parties but on' our pointing out that relevant report of 21‑6‑1977 has not been produced before us, Mr. A.H. Farooqui, counsel of the Customs Department produced the same and this report shows that the board of Bangladesh and Korean origin is made of ligno‑cellulosic material of vegetable origin sheared to fibrous state and it is further asserted in the first para 6f that report that this board cannot be considered as reconstituted wood technically. That report is based on British Standards Institution and American Society for the Testing of Materials. But at the end it is stated in that report of P.C.S. & I.R. dated 21‑6‑1977 that their remarks on analytical results when judged in the light of explanatory notes volume 2 Brussel's Nomenclature, these boards will be considered as a reconstituted wood as described under heading Ex. 44.18. But thereafter it is added in the same report that the Brussel's Nomenclature is not their standard reference. Mr. Farooqui had also produced for our perusal report from Central Testing Laboratories dated 3‑9‑1977 which is addressed to Deputy Collector of Customs where it is definitely stated that the building board cannot be said to be reconstituted wood as reconstitution means bringing the product to the nature and quality of the parent material i.e. the wood itself which is not a fact in that case. In the conclusion it was stated in that report that the product was neither reconstituted wood nor chips agglomerated by binders synthetic or otherwise. The report continued to say that rather it is made from vegetable fibre which has been reduced to fibrous state. Mr. Farooqui had also produced alongwith counter‑affidavit of respondent Brussel's Nomenclature letter dated 1‑2‑1978 from Customs Cooperation Council Brussels where it was stated that the sample sent to them of the hard board was rigid and those samples meet criteria for particle board and are classifiable in heading 44.18. The reasons were also given in that report. ,Mr. S. Mamnoon Hasab had submitted that there was a conflict in the various opinions which had been obtained by the respondents themselves and that the petitioners had also obtained the reports from Dr.R.F. Milton and Partners of, London which showed that the articles in question were made of vegetable fibres. And that unless‑and until all these reports had been seen and analysed and the petitioners had been given an opportunity to make their submission m respect of the same, the Customs Authorities were completely, unjustified in asking for i encashment of the bank guarantee. The submission appears to be prima facie justified and the matter requires a serious examination from the Customs Authorities without which the encashment of the bank guarantee submitted by the petitioners does not appear to be called for. We, therefore, declare the letters issued by the respondent No.2 asking for encashment of the bank guarantees as without lawful authority without there having been a proper adjudication of the case by the relevant Customs Authorities after notice to the petitioners. Consequently the matter will go back to the. respondent No.2 for the purposes to make a fresh ascertainment as to whether the articles were covered by heading Ex.48.09 or 44.18, after giving notice to the petitioners and giving them an opportunity to make their submissions and prove their contentions. Mr. Farooqui had submitted that some of the petitioners had filed their appeals but since the letters of encashment are being set aside and declared to be of no effect, therefore, the matter will go before the respondent No.2 and thereafter the parties can resort to the remedies provided to them in law. These petitions stand disposed of. M.Y.H./2525/K Petition accepted.