1991 PLP 25 (SCMR)

AJMAL MIAN, J.‑‑Leave to appeal is sought from the judgment dated 14‑9‑1989 passed by a Division Bench of the High Court of Sindh in Petition No.1644 of 1987 filed by the respondent, allowing the same and declaring that the tissues involved even though wet and impregnated remained tissues and did not become another commodity such as perfumery or toilet preparations in terms of Excise Tariff Item No.04.04 and, therefore, were not liable to be assessed under the above item.

2. The facts to be noted are that the respondent in or about 1982 installed a plant for manufacturing "wet tissues" upon receipt of four licences for "Sanitary Napkins and Wet Tissues", and "Tissue Paper and Wet Tissues". The respondent on or about 9‑8‑1984 addressed a letter to the Central Board of Revenue for seeking exemption from the Central Excise duty on their preparation "Wetty" (wet tissues). While the respondent's above representation was still pending, they received inter alia show‑cause notice dated 10‑10‑1984 from the Deputy Collector, Excise and Land Customs, Karachi, claiming Central Excise duty at 39% plus 7% Sales Tax. In response to the above show‑cause notice, respondent appeared before the Deputy Collector, Central Excise, who after hearing them by his order dated 2‑12‑1985, held that the disputed products were not "Tissue Papers", pure and simple, but the same were wet and perfumed of a kind normally used for the purpose of refreshing and as an alternative for perfume spray and, therefore, were liable to be assessed under Central Excise Tariff, Item No.04.04 of the Excise Tariff of the First Schedule to the Central Excises and Salt Act, 1944, hereinafter referred to as the Act. The respondents were directed to pay Rs.86,801 as the excise duty on the past products and Rs.5,000 as a penalty. Against the above order, the respondent filed an appeal which was dismissed by the Collector of Central Excise and Land Customs by this order dated 12‑3‑1986. The respondent's revision petition also met the same fate except that the amount of penalty was remitted by the Federal Government. Thereupon, respondent filed aforesaid writ petition which was allowed by a Division Bench in the above terms. The petitioners have, therefore, filed the above petition for leave to appeal.

3. We have heard Mr.Shahudul Haq, learned Standing Counsel for the petitioners, and Mr. Ali Akbar, learned A.O.R. appearing for the respondent. Before touching upon the merits of the above case, we may observe that the Federal Government under SRO No.555(1)/1989 dated 3‑6‑1989 issued under subsection (1) of section 12‑A of the Act, has provided the perfumed tissue papers under a separate entry under Item No.04.04‑F and provided 10% ad valorern excise duty in place of 39% which was claimed by the official petitioners. It is, therefore, evident that from the date of the above Notification there is no controversy as to the excise tariff item under which the perfumed tissue papers fall or as to the rate of excise duty payable. The present controversy relates to the period prior to the above Notification.

4. Adverting to the merits of the present case, it may be stated that the question before the High Court was, whether the goods in dispute fall under Excise Tariff Item No.04.04‑A or 04.04‑F, which read as follows:‑‑ S No Description of Goods Rate of Duty 04.04 Perfumery, cosmetics and Toilet Preparations‑ Perfumery, cosmetics and toilet preparations, all sorts, whether medicinal, medicated or otherwise, and whether or not perrumed: (A) Perfumery and odoriferous, all sorts, in liquid or spray form, including scents, solougnes, mists, deodorants, lavenders, toilet waters, anti‑perspirants, etc: (i) if retail price is legibly, prominently and indelibly printed 28% of the retail price. on each container, package, cover or outer wrapper. (ii) if not covered by clause (i) 00% ad val.' "(F) Perfumery, cosmetics and toiler preparations not otherwise specified, including room deodorizers, bath oils, after bath milk and preparation for bubble bath and foam bath etc: (i) if retail price is legibly, prominently and indelibly printed 28% of the retail price on each container, package, cover or outer wrapper, or on the article itself if it is marketed unpacked or unwrapped. (ii) if not covered by clause (i) 200% ad val."

5. The High Court recorded the following conclusion for the above controversy:‑‑ "

11. We regret to say that even sub‑heading `F does not cover `Wet tissues' in question. A well‑recognised principle of interpretation, applicable to fiscal laws, is that such laws, as and when the same come up for construction, must be strictly construed. Applying such principle of interpretation to the instant case, we find that the petitioner's goods do not fall under any of the categorisations, specific or general, in heading 04.04 in the First Schedule to the Central Excises and Salt Act 1944, which being the conclusion, such goods do not fall to be classified in terms thereof."

6. After having concluded as above and after having held that it was not necessary for the High Court to examine the above question any further as to under what heading the disputed item fell, it proceeded to examine the question whether the disputed goods fall under Excise Tariff Item No.07.01. In our view, the above exercise on the part of the High Court was futile as it was not required to record any finding as to the Excise Tariff Item under which the disputed goods fell. However, we are in agreement with the High Court that the goods in dispute do not fall under above Excise Tariff Item No.04.04 or 04.04‑A or 04.04‑F as the same are not covered by any of the items specified therein. The petition has, therefore, no merits. Leave is accordingly refused. A.A./D‑85/S Leave refused.