2000 PLP 1989 (MLD)

17. preheaters. Not being manufacture locally. However, cyclone, risir pipe central Tubes Calciner Casing, Distribution Boxes, Clean out parts, Air lances Door are being manufactured locally.

18. Pheumatic Kiln seal.

19. Rotary Kiln system.

20. Magnetic separators.

21. Metal dectector.

22. Change over gate:

23. Belt weigher.

24. Roler Press type.

25. Air Separator Not being manufactured locally. However, items like‑ Rotors, Liner, Caring Sugqart and AC drives are local supplies.

26. Rottary Compressors.

27. Packing machine. Not being manufactured locally. However, work table, hopper plateforms screw conveyor, Diverting pipe, packers, vibrating screens, level indicators, Rotary feeder, Discharge belts/roller ways Bag Clearner, Broken Bag Discharger Telescropic chute Drive units, Motorised pulleys, Conveyors belt, and idlers of the parts of this machine are being manufactured locally.

28. Siggal cables.

29. Termination kits.

30. Junction Boxes.

31. Compressors.

32. Flam Detector.

33. Process instruments.

34. Fan. Not being manufactured locally. However, following components/parts shown against respective type of fans are being manufactured locally. Fans (large ones like kiln and coller ID, EP and separator fan) Fans (Dust Collector) Rotor assembly, base frames, guards, Inlet vane controller actulators, Vibration pads, spuncones, bearings/housings, V‑Belts and pulleys. Fans (Clinker Rotor assembly, casing, base Collector frame Guards, Inlet vane controller actulators, vibration pads spun ..... (not legible).

2. A copy of IPB's O.M. No.IPB/IMPL/Maple Leaf Cement/Exp/94, dated 31 st March, 1994, is forwarded herewith for further necessary action in the matter. (Sd.) (S. Zahid Hussain Shah), Section Officer. Mr. Ali Muhammad Sheikh, Secretary (Mach). Central Board of Revenue, Islamabad. Copy forwarded for information to Mr. Muhammad Hanif, Managing Director, M/s. Maple Leaf Cement Factory Ltd., 42‑Lawrance Road, Lahore. (Sd.) (S. Zahid Hussain Shah), Section Officer.

9. It is also useful to reproduce the contents of letter, dated 15‑5‑1994 addressed by the Ministry 'of Commerce to all Banks with a copy to the Secretary Customs, Central Board of Revenue which reads as under:‑‑ "No.24(2)/94‑IMP.I, Government of Pakistan, Ministry of Commerce. Islamabad, the 15th May, 1994. All Banks SUBJECT: IMPORT OF CEMENT MACHINERY Dear Sir, The ECC of the Cabinet in its meeting held on 28th June, 1993 had directed that Cement and Sugar Plants shall be importable without any NOC. However, plant and equipment manufactured locally will not be importable. The Standing Committee set up by the ECC of the Cabinet identified parts and machinery of Cement plants which are locally manufactured and will not be importable. A copy of the said list is enclosed which will be operative up to 31‑12‑1994 and would be applicable to the cases of initial installations, BMR and Expansion also. Banks are requested to consult this list before opening of L.Cs. for import of Cement Plant and equipment etc. Yours faithfully (Sd.) Encl: As above. (Muhammad Ashraf Khan), Deputy Secretary. Copy alongwith a list for necessary action to:‑‑ (1) Secretary Customs, Central Board of Revenue, Islamabad. (2) Vice‑Chairman, Export Promotion Bureau, Karachi. (3) Ministry of Industries and Production, (Industries Wing), (Mr. S. Zahid Hussain Shah, SO), Islamabad with reference to their No.3(34)/92‑Dev.Il (Vol.II), dated 11‑4‑1994. (Sd.) (Muhammad Ashraf Khan), Deputy Secretary."

10. As already noted above, the memorandum, dated 21‑4‑1994 was addressed to the Central Board of Revenue with a copy to the petitioner. The said Board did not at any stage object to the contents of the aforesaid letter which clearly shows at least tacit consent of the Central Board of Revenue. It is also apparent from the letter, dated 15‑5‑1994 that the question of local manufacture of the machinery and plant was considered by the Standing Committee set up by the Economic Coordination Committee of the Cabinet. This letter, dated 15‑5‑1994 was addressed by the Ministry of Commerce to all the Banks. A copy of this letter/memorandum was marked to the Central Board of Revenue which did not, however, object to it. It was on the basis of these letters that the petitioner had entered into contract and established letters of credit. If the Central Board of Revenue had any objection it should have been raised at that stage.

11. The learned counsel for the respondents has contended that the representations made by the Ministry of Industries and Production and Commerce have no validity inasmuch as the question as to whether the machinery was locally manufactured or not, could only be decided by the Central Board of Revenue.

12. This contention of the learned counsel cannot be accepted; firstly, for the reason that in the matter relating to production of local machinery the Ministry of Industries and Production as well as Commerce were relevant Authorities and secondly, that no procedure for determination of the question as to whether or not the goods were being locally manufactured has been specified in the two notifications nor the Authority for that purpose had been, specified and lastly, the Ministry of Industries had addressed memorandum dated 21‑4‑1994 to the effect that the aforesaid machinery was not being locally manufactured. The Ministry of Commerce also sent a copy of the letter, dated 15‑5‑1994 to the respondent‑Board but again no objection was raised to it. If the Central Board of Revenue was of the view that the machinery in question was being locally manufactured, it should have objected to it at that time. It is the case of the petitioner that on the basis of the memorandum and letters that the machinery was not being locally manufactured, the petitioner had planned and had imported and installed the machinery and if the petitioner had known that they had to pay import duty on the same, the petitioner would not have gone for expansion of its existing unit and installation of the machinery.

13. As regards the legal position, the view taken by the Peshawar High Court in the case of Lucky Cement has already been reproduced above. In addition thereto the principle of promissory estoppel has been explained by the Supreme Court of Pakistan in the case of M/s. Army Welfare Sugar Mills Ltd. v. Federation of Pakistan and others (1992 SCMR 1652) where the legal position regarding the principle of promissory estoppel has been summarized.

14. Ch. Muhammad Hussain, learned counsel for the respondents next maintained that as‑ the Central Board of Revenue had vide Customs General Order No.17, dated 13‑10‑1994 made the position clear that the machinery' and plant were being manufactured in Pakistan, the petitioner could not claim that it had acted on the representation that the machinery was not manufactured in the country. In this respect it may be noted that this position is belied by the Central Board of Revenue's letter, dated 25‑4‑1995 which reads as under:‑‑ Government of Pakistan Central Board of Revenue Islamabad the 25th April, 1995. From : Muhammad Sulaiman, Secretary To. The Collector of Customs (Appraisement)/(Preventive) Customs House, Karachi. The Collector of Customs, Customs House, Nabha Road, Lahore The Collector of Customs and Central Excise, Multan, Hyderabad, Quetta, Faisalabad, Gujranwala, Peshawar and Rawalpindi. SUBJECT:‑LOCALLY MANUFACTURED MACHINERY‑‑CEMENT PLANT. I am directed to refer to the subject noted above and to enclose herewith lists of locally manufactured goods confirmed by State Engineering Corporation for six units mentioned below:‑‑ (1) M/s. Lucky Cement Ltd. dated 11‑7‑1994 (2) M/s. Saadi Cement Ltd. dated 10‑7‑1994 . and 23‑7‑1994 (3) Hattar Cement Ltd. dated 13‑7‑1994 (4) Khushab Cement Ltd. dated 13‑7‑1994 (5) Panjkoh Cement Ltd. dated 13‑7‑1994 (6) Kohat Cement Ltd. dated 13‑2‑1995 (2) For each unit there are two lists as List L‑I and List L‑Il. List L‑1 indicates the machinery/components locally manufactured and List L‑II shows parts/components manufactured locally in the column of local scope of supply. (3) You are requested to initiate necessary action for realization of the Government dues immediately on the components/machinery/parts mentioned as locally manufactured of the aforesaid units. Further orders will also follow. (4) The Board's letter issued after February, 1994, forwarding Ministry of Industries and Board of investment's letters stating that these are' not locally manufactured are hereby withdrawn as on re‑checking the above listed items have been confirmed to be locally manufactured. (Sd.) (MUHAMMAD SULAIMAN), CHIEF (CUSTOMS TARIFF).

15. From the above it is clear that the Central Board of Revenue had l itself conceded that some parts of the machinery were being manufactured locally while other parts were not being manufactured here. Therefore, obviously the Customs General Order issued by the Central Board of Revenue had no effect. Furthermore, the determination that the goods were being manufactured locally by the Central Board of Revenue could only be A arrived at after a factual inquiry with which the concerned persons should have been associated. (See Suhail Jute Mills Ltd. and others v. Federation of Pakistan and others (PLD 1991 SC 329).

16. Be that as it may, the rights which vested in the petitioner on having entered into a firm contract with the foreign supplier could not be taken away by issuing a Notification or Customs General Order. The petitioner had entered into firm contract with the seller before CGO No. 17 of 1994 was issued and the vested rights which had accrued to the petitioner could not have been taken away by an executive fiat. It was so held by the Supreme Court of Pakistan in Al‑Samrez Enterprises v. The Federation of Pakistan (1986 SCMR 1917), M/s. M.Y. Electronics Industries (Pvt.) Ltd. v. Government of Pakistan and others (1998 SCMR 1404) and Collector of Customs and others v. Ravi Spinning Ltd. and others (1999 SCMR 412). It may be mentioned that the provisions of section 31‑A have rightly not been relied upon by the learned counsel for the respondents as the dispute in the present case is not with respect to the withdrawal of exemption but only as to whether or not the goods were being locally manufactured.

17. It now remains to dispose of the objections raised by the learned counsel for the respondents that the petition was not maintainable as it is directed against issuance of a show‑cause notice and no order detrimental to the interest of the petitioner has been passed. This contention of the learned counsel cannot prevail firstly for the reasons that it is by now well‑settled 8 that the Constitutional petition can be maintained against issuance of a show cause notice. If any authority is needed reference may be made to Edulji Dinshaw Limited v. Income Tax Officer (PLD 1990 SC 399), Gatron Industries Ltd. v. Government of Pakistan (1999 SCMR 1072), Attock Cement Pakistan v. Collector of Customs, Collectorate of Customs and Central Excise, Quetta and others (1999 PTD 1892), Ghazi Fabrics International Limited, Gulberg‑111, Lahore v. Water and Power Development Authority, Lahore and others (PLD 2000 Lahore 349). Furthermore, the question, involved in this petition is as to whether doctrine of promissory estoppel has application in the present case. For that reason too the petition can be maintained directly. In this respect reference may be made to M/s. Jullan Hoshang Dinshaw Trust and others v. Income Tax Officer and others (1992 SCMR 250), M/s. Central Insurance Co. and others v. The Central Board of Revenue; Islamabad and others (1993 SCMR 1232), Collector of Customs v. M/s. S.M. Ahmad & Company (Pvt.) Ltd., Islamabad (1999 SCMR 138) and Maple Leaf Cement Factory Limited v. Federation of Pakistan and others (1999 PTD 3907). In view of above, this petition is allowed and the notice, dated 4‑12‑1999 issued by the Central Board of Revenue is declared to be without D any lawful authority and of no legal effect. No order as to costs. Q.M.H./M.A.K./M‑296/L Petition allowed.