1987 PLP 1642 (SCMR)

MUHAMMAD HALEEM, C.J.‑‑This judgment will dispose of the above appeals in which common questions of law arise as to the construction of the item "scrap iron" and the residual item in class VIII of the schedule to the West Pakistan Municipal Committees Octroi Rules, 1964, and further as to the competency of the writ petitions out of which these appeals arise on account of the failure of the appellants to seek redress under the rules. In all these appeals, the appellant is the BECO Agencies Limited, which is a private limited company and has its principal office of business at Lahore and its branch office at Karachi. In the course of its commercial activities, it imported iron and steel material including "scrap iron" from Europe and also from United States of America through shipments to Karachi Port. In Civil Appeal No. 251 of 1976, the appellant imported iron and steel re‑rollable and re‑meltable scrap against import licence and before the discharge of the goods from the Steamer s.s. "ATLANTIC MERMAID", the appellant in order to clear its goods so as to avoiv the payment of demurrage charges etc. wanted to ascertain the rate of octroi chargeable on this item and for this purpose wrote a letter to the Assistant Octroi Superintendent, KA.C., who conveyed that the octroi payable was at the rate of Rs.1.25 per maund. Considering that the rate of duty as conveyed was not chargeable in accordance with the schedule, the appellant challenged this order in the High Court through writ petition No. 261 of 1972. In Civil Appeal No.252 of 1976, against the import licence, the appellant imported iron and steel scrap for re‑rolling and re‑melting purpose describing it as "heavy melting ship scrap", "re‑rolling ship scrap plates" and "re‑rolling ship shafting scrap". Similar query was made from the Assistant Octroi Superintendent, K.M.C., who conveyed that for the first item Re.0.12 and for the other two Rs.1.25 were chargeable as octroi. In Civil Appeal No.253 of 1976, the goods of the description of iron and steel scrap arrived by s.s. TARBELA, and the octroi chargeable was indicated as under: "(1) Steel plates Rs.1.25 (Rerollable) PLT. (2) Beam (Rerollable) Re. 0.31 (3) Rails (used) Re.0.31" In Civil Appeal No. 254 of 1976,the appellant imported re‑rollable scrap against the import licence, which arrived at Karachi Port through two shipments during December, 1970 and January, 1971. The shipment which arrived in December was allowed to be cleared at the rate of Re.0.12 per maund while for the shipment which arrived in January, 1971, the duty sought to be levied was at Rs. 1.25 per maund. In all these cases there was no physical inspection of the goods, but the rate of levy was intimated on the basis of shipping documents. There was, therefore, no dispute that the goods did not conform to those mentioned in the import licences. They were also allowed to be cleared by the High Court on payment of octroi at the rate of Re.0.12 per maund and for the balance on furnishing a bank guarantee at the rate of Rs.1.31 per maund. The respondent's case in the High Court was that the words "scrap iron" referred to completely worn out iron which had no utility otherwise than for melting purposes and it was this scrap which for purposes of octroi fell in the category of "scrap iron", which did not include re‑rolling scrap as this classification included many usable items like plates, girders, bars etc. which were separately classified as item 1(c) under class VIII‑"Metals

" of the schedule, as duly noted from the shipping documents subject to a different rate irrespective of the consideration whether these were new or old. Again in para. 14 of the para‑wise comments, it was pleaded as under:‑‑ "On physical verification of the consignments referred to in this para. It is observed that iron and steel plates imported are not specified hence, the plaintiff has correctly been asked to pay octroi @ Rs.1.25 per maund as an unspecified item." Lastly, it was urged that if there was any doubt or dispute about the assessment of octroi, the aggrieved party could appeal to the Taxation Officer under Rule 48 of the West Pakistan Municipal Committees Appeal Rules, and this remedy not having been availed of the petition was not maintainable without exhausting the alternate remedy by way of an appeal. The High Court dismissed the writ petitions on the grounds: Firstly, that adequate and alternate remedy was available but it was not availed of; and, secondly, that the matter involved certain questions of facts which could only be properly determined by the Levying Authority, that is, the Karachi Municipal Corporation. The second reason emanates from the following observations of the High Court: "But another strong reason why the writ should not be issued, is that this case involves certain findings of fact. The details of the goods imported by the petitioners, and as given in the earlier part of this judgment, include such items as structural steel upto 50, heavy melting steel 60" x 24" and steel plates, beams and rails etc. This is specially so in the facts of the case relating to petition Nos. 261 of 1972 and 665 of 1973. It would require determination by the proper authority if these items fall under the category of re‑rollable scrap, or of re‑meltable scrap duly keeping in view their respective definition. In writ jurisdiction questions of fact are not allowed to be agitated." For the purpose of Octroi, the relevant extract from the schedule is as under:‑‑ "Class VIII‑‑Metals articles and metals machinery machines electric and scientific goods and vehicles. I. Iron. (a) Wrought and unwrought iron 0.25 (b) Scrap Iron. 0.12 (c) Iron beams, girders,, rails and other heavy materials made of iron used in the construction of building. 0.31

(1) All articles, made of iron and 1.25 steel not specified elsewhere" The limited meaning given to the word "scrap iron" mentioned in clause 1(b) ‑of the Schedule was merely referable to worn out iron which had no utility otherwise than for melting purposes, was disputed before us by the learned counsel for the appellant as according to him it included both re‑rollable and re‑meltable scrap in the absence of any word of qualification to denote that sense. Clauses (a), (b), (c) and (1) occur under the heading 'Iron' which is the genus and those mentioned in the clauses are the species of the genus‑‑"iron", category‑wise. The ordinary dictionary meaning of the word "scrap" is "discarded metal suitable only for reprocessing" ‑‑Collins Concise English Dictionary, page

672. In Encyclopaedia Britannica, Volume 20, "scrap metal" is mentioned as of two distinct kinds; "old scrap" is metal that has been discarded after use and is returned to the metallurgical industry for reprocessing; "new scrap" is "metal from manufacturing operations that has not been used in an end‑product and is, therefore, still in the process of manufacture", and "metals produced from scrap usually are known as secondary metals as distinguished from primary metals, which are produced directly from ores". "Scrap" as an adjective is defined in the Law Lexicon by Venkataramaiya, 2nd Edition, Volume 3, page 2176, as "in the form of fragments, pieces, odds and ends, or left‑overs, used and disciended." This meaning is lifted from the Webster's Dictionary and referred to in Commissioner of Sales‑tax v. Bharat Iron and Brass Foundries, (1971) 28 S.T.C.

455. In the Oxford English Dictionary, Volume IX, page 263, "scrap iron" is defined to mean "remnants of metal produced in cutting up or casting". "Scrap metal" in the Pakistan Customs Tariff is classified under the head No. 73.03 and the description given there under is "waste and scrap metal of iron or steel". This classification has the same nomenclature as that of "scrap iron" although the word "waste" is lumped with it. In Civil Appeal No. 254 of 1976, the import licence was issued for iron and steel re‑rollable scrap and that the length of each piece was not to exceed 36" and the invoice also conformed to it. In Civil Appeal No. 251, the import licence issued was for iron and steel scrap for re‑melting and re‑rolling and there is no dispute that the invoice did not conform to the description of the items imported. In Civil Appeal No. 252 and Civil Appeal No. 253, goods imported were of the kind mentioned in Civil Appeal No. 251 of 1976. The description of the scrap iron and steel imported conform to the description of iron and steel re‑rollable scrap given in the Notification No. PISC(2)/861/66, dated 3rd June, 1968, as "steel mill rejects like ingot, bloom, slab and billet crop ends, deformed rejects from reheating furnaces, scrap from continuous rolling mills. End ,cuttings of sheets and plates whether pieces or rolled strips in widths not exceeding 3/4", rejected, misrolled and old pitted shafting in pieces, old girders and plate pieces, scrap from ships. Again "scrap iron" is categorised as re‑rollable and re‑meltable for the purposes of sale in Pakistan in the Notification issued by the Central Government bearing No. PISO(2)/456/56‑II dated 14th November, 1968.The categorization indicates the re‑processes of the scrap iron before it can be put into use, and standing by itself it will include both categories, that is, re‑rollable and re‑ meltable scrap. The contents of the two notifications also highlight the meaning of the word "scrap iron" and the goods imported under the licence had to conform to the description. given in the notification and for the purposes of Pakistan Customs Tariff had to fall under item 73.03 denoting the classification "waste and scrap metal of iron or steel." Such being the case, both the dictionary meaning of the word "scrap iron" and that understood in trade usage indicate the wider meaning of the word "scrap" as both re‑rollable and re‑meltable as implying its re‑processing. Since the word "scrap iron" is separately classified for octroi, we do not see how this item could fall under clause 1(1) of the Schedule which relates to "all articles, made of iron and steel not specified elsewhere." The words "not specified elsewhere" exclude the application of this residuary item, which is an arithmetic remainder. In this view of the matter, the "scrap iron" could not be levied to octroi at the rate of Rs.1.25 per maund, but at the rate of Re.0.12. An argument feebly raised was that the goods comprised of "scrap iron" could fall under clause (c), but for that there had to be a physical verification of the goods imported with a view to its classification as usable in the construction of buildings. However, upon the material on record, it cannot be said that the scrap iron was usable as imported, and if there had been a finding to that effect then that would have been a question of fact which could not have been agitated before us. Thus, in the absence of any physical verification, the learned counsel for the respondent was constrained to admit that the Octroi Clerk assessed the scrap iron following a principle of classification of goods, and that, therefore, there was no factual controversy to be resolved. Despite this concession, the learned counsel for the respondent insisted that the scrap iron was usable without re‑melting or re‑rolling according to which classification they were covered by clause 1(1) of the Schedule. This submission appears to us to be of no value as in the absence of a finding of fact it could not be pressed into service. The High Court has held the petition to be premature as before the assessment of goods to octroi there had to be a physical verification as to the classification of imported goods qua the category to which they belonged under the heading 'Iron'. That stage, however, is not available as on account of the admission of the learned counsel fur the respondent, and the further fact that the goods were otherwise allowed to be cleared and used without any physical verification. In the result, and for the reasons given above, we would allow the appeals and set aside the impugned judgment of the High Court and the demand for the octroi at the rate of Rs.1.25 per maund. There will be no order as to costs. K.B.A./B‑15/S Appeals accepted.