1994 PLP 1995 (SCMR)

(On appeal from the judgment dated 10‑5‑1992 of the Lahore High Court, Lahore passed in Writ Petition No. 1317 of 1974). ‑‑‑‑Ss. 3(4) & 37‑‑‑Constitution of Pakistan (1973), Art. 185(3)‑‑‑Levy and collection of duties on production capacity‑‑‑Validity‑‑‑Respondent (Sugar Mill) having opted to pay duty on its production capacity, Government by notification dated 10‑3‑1973 fixing production capacity of respondent (Sugar Mill) at 30,400 tons per year‑‑‑Committee subsequently constituted by Central Board of Revenue, however, assessed production capacity of respondent at 22,800 tons per year‑‑‑High Court in its Constitutional petition found that production capacity of respondent had been rightly fixed at 22,800 tons per year on the basis of decision of the said Committee‑‑‑Leave to appeal was granted to consider correctness of High Court's decision in the fight of pleas raised by the petitioners inter alia that the decision of the said committee was not relevant as constitution of such committee was not contemplated by the relevant statute and the production capacity of the mill was previously admitted by the respondent (Mill) to be same as originally fixed by Government i.e. 30,400 tons‑‑‑Order of High Court would remain suspended during pendency of appeal. Faqir Muhammad Khokhar, Deputy Attorney‑General instructed by Ch. Muhammad Aslam Chatha, Advocate‑on‑Record for Petitioners. S.M. Zafar, Senior Advocate and Zahid Hussain, Advocate instructed by Ch. M. Aslam, Advocate‑on‑Record for Respondents. Date of hearing: 6th December, 1993. NASIM HASAN SHAH, C.J: ‑‑This is a petition for leave to appeal against the order dated 10th May, 1992 passed in Writ Petition No. 1317 of 1974.

2. The relevant facts briefly stated are that the Central Board of Revenue with prior approval of the Federal Government, in exercise of the powers conferred by section 3(4) of the Central Excises and Salt Act, 1944 read with section 37, thereof, framed the rules for the levy and collection of duties on the production capacity of plants and machinery of the factories manufacturing sugar, in lieu of the duty leviable on sugar under section 3(1) of the said Act.

3. Since the respondent Sugar Mills opted to pay duty on its production capacity. The Government by Notification No. SRO‑329(1)/73 dated 10‑3‑1973 fixed the production capacity of the United Sugar Mills Ltd., at 30,400 tons per year under section 3(4) of the Central Excises and Salt Act, 1944 read with section 37 thereof. This was confirmed on 13‑6‑1974 by the Standing Tribunal Production Capacity, Lahore. The Central Board of Revenue, Islamabad took the view that crushing capacity of respondent Mill at the relevant time was 2,000 tons per day, and found that the duty should be levied on the respondent‑Mills on the production capacity at 30,400 tons per year.

4. This determination was challenged by the respondent before the High Court who held that the production capacity of the Mills should have been assessed at 22,800 tons per year and not 30,400 tons per year because the Committee constituted by the Central Board of Revenue had confirmed that the production capacity of the Mills was Rs.22,800 tons per year. It is submitted on behalf of the petitioner that the report of the Committee constituted by the Central Board of Revenue was not relevant as there was no provision in the Act and the Production Capacity (Sugar) Rules for constitution of such Committee. The findings of this Committee fixing excisable Capacity, the sugar production of the Mill as 22,800 tons, has no legal basis. On the other hand the production capacity of the respondent‑Mills fixed as 30,400 tons per year was fixed keeping in view the principle enunciated under section 3 of the Act, the Excise Duty on Production Capacity (Sugar) Rules and the production of the respondent‑Mill. In this connection it was pointed out that the respondent in his application to the P.I.C.I.C. (Pakistan Industrial Credit Investment Corporation) for getting foreign currency loan had confirmed the above production capacity and the counsel of the respondent‑Mills had also contended before the Standing Tribunal (Production Capacity) that the plant has a crushing capacity of 1,500 to 2000 tons per day". Moreover the manufacturer of this plant and machinery had its Crushing Capacity of 2,000 tons of sugarcane per day. Taking into all the above factors, the production capacity of the respondent had been rightly fixed as 30,400 tons per year.

5. These submissions require consideration. Leave is granted. The impugned order of the High Court dated 10th May, 1992 shall remain suspended during the pendency of the appeal. A.A./C‑135/S Leave granted