1989 PLP 4551 (MLD)

Khalid Anwar for Petitioners. Abul Khair for Respondents. Date of hearing: 6th February, 1989. We propose to dispose of the above-noted two petitions filed under Article 199 of the Constitution by a common judgment as the points of law arid facts are indentical in both the petitions. The petitioners have challenged the orders of respondents Nos.l to 3 holding that the import of rubber tyres by the petitioners having cut-holes of 1 inch against import licence issued to them for import of rubber scraps amounted to contravention of the provisions of the Customs Act. The following facts relating to the above petitions may be stated here in brief. In C.P.No.D-1004 of 1987 the petitioner was granted import licence bearing No.A-797513 dated 29-4-1984 which was valid for imports upto 29-4-1985. This import licence granted to the petitioner permitted import of rubber scrap excluding rubber coated canvas scrap, rubber bolting scrap, uncut tyres and rubber sheets of secondary quality but including waste and parings of unhardened rubber waste and power. These items were shown at Serial No.262 of the Free List of the relevant Import Policy and corresponded to P.C.T. Classification No.40.04. The letter of credit in this case was established by the petitioner on 19-5-1984 and consignment comprising of 915 bundles of rubber tyres arrived at Karachi on 5-9-1984. The Bill of Entry was filed by the petitioner before the Customs Authorities on 29-9-1984 in which the petitioner had shown the classification of the goods imported by them under Heading No.40.04. The Deputy Collector of Customs (Appraisement) however, did not agree with the above classification of the goods and holding them as item falling under P.C.T. Heading No.40.11 ordered their confiscation under section 156(9)(1) of the Customs Act but gave option to petitioner to get the goods released on payment of redemption fine equal to the value of consignment. The petitioner challenged, the above order in appeal before the Collector of Customs but the same was' dismissed by order dated 1-4-1986. A further revision filed by the petitioner also failed which was dismissed on 29-3-1987. The petitioner then filed the above petition challenging the above orders of respondents Nos.1 to

3. In C.P.No.D-1097 of 1987 the petitioner was granted Import Licence bearing No.B-149275 dated 3-10-1984 which was valid for import upto 3-9-1985. The letter of credit was established in this case by the petitioner on 18-10-1984 and the shipment arrived at Karachi in or about February, 1985. The petitioner submitted their Bill of Entry for clearance of the above consignment claiming that the goods imported by them were covered under P.C.T.No.40.04 but this contention of the petitioner was not accepted by the Deputy Collector of Customs (Appraisement) who by his order dated 3-2-1986 held that the petitioner guilty of contravention of the provisions of Customs Act and accordingly ordered for confiscation of consignment under section 156 (9)(1) and (14) of the Customs Act. The petitioner was however allowed option to get the goods released upon the payment of redemption fine equal to the value of the goods. The petitioner challenged the above order of Deputy Collector of Customs before the Collector of Customs by way of appeal which was dismissed on 1-4-1986 and a further revision before the Board of Revenue also failed when it was dismissed on 26-9-1987. The petitioner finally filed the above petition to challenge the above order of the respondents Nos.1 to

3. The learned counsel for the petitioner, firstly contended that the import licence issued to the petitioner only prohibited import of uncut rubber tyres and, as such import of rubber tyres by the petitioner having cut-holes of one inch could not amount to contravention of the provisions of the Customs Act. Secondly, it is contended by the learned counsel for the petitioner that prior to the import of disputed consignment by the petitioners, Customs Authorities consistently is released consignments of rubber tyres having cut hole of one inch and above treating them as rubber scrap falling under P.T.C. Heading No.40.04. It is accordingly contended that in view of the consistent past practice followed by the department in this regard their decision not to allow clearance of the consignments of the petitioner under Heading No.40.04 was contrary to law and arbitrary. It is urged by the learned counsel that reliance of respondents on the circular of Central Board of Revenue bearing No.4(83)/SCC/86 dated 22-10-1986 which stated that only those rubber tyres could be treated as rubber scrap which have cut holes of 2 inches and more, in the cases of petitioner was misconceived as this circular could not be applied retrospectively so as to cover the goods imported prior to the date of above circular. In order to establish past practice on the part of Customs Authorities in treating the import of rubber tyres with cut holes of 1" and more as rubber scrap and allowing their release under classification No.40.04 the petitioners have relied in their petitions on an order in appeal passed by the Collector of Customs; Karachi, dated 31-3-1985 in which it is held that from December, 1983 to August, 1984 large number of consignments of rubber tyres having cut holes of 1" and more were treated as rubber scrap and were classified under Heading No.40.04. However, the copy of this order was not produced by the petitioners. Accordingly on 2-1-1989 when we heard these cases partly we directed the learned counsel for the petitioners as well as the department to produce before us the copy of the order of Collector of Customs dated 31-3-1985 and the circular of C.B.R. dated 22-10-1986. The learned counsel he petitioners have produced before us today the copies of the order of for the petitioners Collector of Customs Karachi dated 31-3-1985 passed in appeal No.AC-4/85-A as well as the Circular No.C.No.4(33)/SSCC/86 dated 22-10-1986. The genuineness of these documents is admitted by Mr. Abul Khair Ansari, the learned counsel for the respondents after consultation with Mr. Aftab Azim, the principal appraiser of Customs, Karachi, who is present in Court. From perusal of these documents it is quite clear that until issuance of Circular No.4(33)/SSCC/86 dated 22-10-1986 by the Central Board of Revenue which clarified that only used tyres having cut holes of 2 inches and above arc to he treated as bona fide scrap, the Customs Authorities consistently followed the practice of allowing release of imported used rubber lyres having cut holes of 1 inch and above and even tyres with holes irrespective of the size of holes, as rubber scrap. In view of this past practice followed by the department, the circular dated 22-10-1986 issued by the Central Board of Revenue and relied by the respondents could not affect the cases of petitioner who had admittedly imported the consignments of used rubber tyres without cut hole of 1" much prior to the issuance of above circular by the Central Board of Revenue. We accordingly hold that the consignments in dispute imported by the petitioners were qualified for release and clearance as rubber, scrap falling under classification No.40.04 on the has is of past practice followed by the Customs Department.??????????? We accordingly allow both the petitions and declare the or passed by the respondents as orders without lawful authority and of no legal effect. There will, however, be no order as to costs. M.Y.H./K-159/K Petitions allowed.