1994 PLP 1364 (CLC)

SALEEM AKHTAR, J.‑‑‑The petitioners are carrying on business of manufacture, sale and export of cotton yarn at its factory in Jauharabad, District Khoshab Punjab. For the purpose of balancing, modernising and replacement of its plant the petitioner obtained import licence for importing (i) 2 sets of Toyda High Speed Drawing Frames Model DYH 2. (ii) 2 sets Murata No. 7‑11 Type MACH Splicers Automatic Cone Winders. (iii) One set Extra Air Compressor for item No. (ii) above. The petitioner opened letter of credit on 30th September, 1985 and the goods were imported on 12th December, 1985. For clearing the said goods the petitioner filed bill of entry claiming total exemption from the whole of customs duty including exemption from Iqra Surcharge. Upon presentation of bill of entry the Appraising Officer allowed exemption from the whole of the customs duty in respect of machinery at items Nos. (i) and (iii) above but on 2 sets of Murata No. 7‑11 Type MACH Splicers Automatic Cone Winders 20% regulatory duty under S.R.O. 500 (1)/84, dated 14‑6‑1984 was levied. The petitioner has challenged the levy of this duty as unlawful and wholly without jurisdiction. The learned counsel for the petitioner has contended that Notification S.R.O. 500(1)/84 is a Notification under section 19 of the Customs Act under which no duty can be imposed and further that 20% ad valorem duty is chargeable under S.R.O. 532(1)/84, dated 14‑6‑1984 and is applicable only to those imports which enjoy exemption under the notifications listed in its table `B'. The exemption claimed by the petitioner is under S.R.O. 500 (1)/84 which does not find place in the table to S.R.O. 532(1)/84 and therefore 20% ad A valorem duty cannot be levied. The petitioner is claiming exemption under S.R.O. 500(1)/84 which came up for consideration in Saphire Textile Mills v. Collector of Customs Petition No. 594 of 1985 in which following observation was made: "Now question arises that as the proviso is applicable what duty will be payable. According to the learned counsel for the petitioners if the proviso is applicable then they are liable to two exemptions vu. (1) so much of the customs duties leviable thereon as are in excess of the aggregate of sum specified in column 3 of the table and (2) 20% ad velorem. According to the learned Deputy Attorney‑General the exemption will be from so much of the customs duties leviable which is in excess of the total of the duty specified in column 3 and 20% ad velorum. The petitioners wish to claim exemption from half of the duty and also from 20% ad velorem. The learned counsel for the petitioner further contended that as the proviso is not happily worded and has created ambiguity the benefit must go to the subject. A perusal of the notification will show that it is intended to grant exemption in respect of import of plant and machinery which is not manufactured locally and is to be used for purposes of initial installation, balancing, modernisation, replacement or extension. Accordingly on import of such plant and machinery only half of the customs duties leviable under the First Schedule to the Customs Act were to be charged. But if the machinery imported is manufactured locally, the exemption will be as contained in the proviso. If the interpretation placed by the petitioners' counsel is accepted then the imported machinery which is locally manufactured will be exempted from half of the duty leviable under the Customs Act and further exemption of 20% ad velorem shall also be granted. The petitioners thus claim double benefit on such machinery. The fact that the imported machinery which is not locally manufactured is granted exemption to the extent of half of the duty clearly indicates that the intention is to protect the local industries by not granting full exemption to such imported machinery which are locally manufactured. In that event how is it possible to grant larger exemption to imported machinery which are locally manufactured. The intention is to confer less benefit on such import. Considering from this point of view we agree that imported substitute machinery which are locally manufactured will be exempted from customs duties to the extent of the excess amount calculated by subtracting from the duty leviable under the Customs Act, the total of .(1) the sum specified in column 3 of the table to the notification and (2) 20% ad velorem. The excess amount so calculated will form the amount from which the petitioners will be exempted." Following this judgment we dismiss the petition. . H.B.T./S‑1043/K???????????????????????????????????????????????????????????????????????????????? Petition dismissed.