1989 PLP 1962 (CLC)

It is quite clear from the above that the import of the item, mentioned in annexure to the CGO were allowed free of customs duty in order to help modernization of the existing Cotton Textile Spinning and Weaving Industry in Pakistan but the exemption from payment of customs duty was linked with S.R.O. No.820(I)/1978, dated 29‑6‑1978. On 26‑6‑1980, the Central Government issued S.R.O.No.702(I)/1980 which superseded S.R.O. 820(1)/1978. No consequential amendment was made in the CGO until 4‑9‑1980. On 4‑9‑1980 the CGO was amended and in place of S.R.O. 820(1)/1978 SRO 702(1)/1980 was substituted. In spite of the fact that during the period from 26‑6‑1980 to 4‑9‑1980 SRO 820(1)/1978 stood superseded and substituted by SRO 702(1)/1980 and there was no consequential amendment in the CGO, the items mentioned in the annexure to CGO which were imported for modernization and balancing of Cotton Textile Units were allowed clearance from customs, without payment of customs duty in terms of the CGO. On 29‑5‑1986 the Central Government issued SRO 512(1)/1986 which superseded SRO 702(1)/1980. Once again no consequential amendment was made in the C.G.O. but it is admitted by the respondents m their counter‑affidavit filed in the case that until receipt of clarification from CBR which is dated 9‑4‑1987, items mentioned in he annexure to the CGO, imported for the purposes of modernization of existing cotton textile weaving spinning units were allowed clearance from customs without payment of duty as provided in the CGO. The clarification letter of CBR dated 9‑4‑1987 relied by the respondents is as follows:‑ "Government of Pakistan Central Board of Revenue. C.No.l(9)/Macs/78 Islamabad, the 9th April From:?? Mr. Muhammad Siddiq Second Secretary To: ????? The Collector of Customs (Appraisement) Customs House Karachi. Sub:???? Benefit of CGO 21/79 dated 10‑11‑1979 Clarification thereof. I am directed to refer to Customs House Letter No.SI/Mise. 1/4 DP/300/86‑VII dated 8‑11‑1986 on the above subject and to say that the matter has been examined in the Board. In this connection it is stated that C.G.O. 21/79 dated 10‑11‑1979 was issued on 10 November, 1979 to specify the items of modernization equipment for the Cotton Textile Industry to which the benefit of duty free import under SRO 320(1)/78 dated 29‑6‑1978 was extended. SRO 820(1)/78 dated 29‑6‑1978 was substituted by SRO 702(1)/78 dated 4th September, 1980. In the budget for the year 1986‑87 SRO 702(1)/80 dated 20‑8‑1980 has been replaced by SRO 512(1)/86 dated 29‑5‑1986 but no amendment to this effect has been made in CGO 21/79. This means that the benefit of duty free import of the modernization equipments on once only basis to Cotton Textile Industry was admissible under CGO 21/79 so long as SRO 702(1)/80 dated 26‑6‑1980 was in force i.e. prior to 29th May, 1986 and that the concessions of duty free import under CGO 21/79 was not admissible on and after 29‑5‑1986. (2)??????? It is, therefore requested that the demand for the recovery of Government dues may be issued immediately on the consignments of modernization equipments, if any, releases under duty free concession of CGO 21/79 dated 10‑11‑1979 and the amount realized from the parties under intimation to the Board. ? Sd/‑ ?(Muhammad Siddiqu) Second Secretary Tele: 827244 Dated: 8‑4‑1987."

2. The learned counsel for the petitioner contended before us that mere fact that C.B.R. failed to amend the C.G.O. after issuance of S.R.O. 512(1)/86 by the Central Government, could not affect their right, to claim exemption from custom duty on the import of items mentioned in the Annexure to the CGO, as firstly, the right claimed by the petitioner was not under any notification (SRO) issued by the Central Government under section 19 of the Customs Act, and secondly, the failure to amend the CGO after the issuance of S.R.O. 512(1)/86, did not amount to repeal or withdrawal of the C.G.O. It is also contended by the learned counsel that in so far the CGO was not withdrawn by the CBR the same is to be read with necessary adoptation and in place of S.R.O. No.702(1)/80 mentioned in the C.G.O., S.R.O. 512(1)/86 which replaced the former, should be read on the principles of interpretation contained in Section 8 of the General Clauses Act. The contentions of the learned counsel are not without force. Power to grant exemption from payment of whole or part of customs duty prescribed under the Schedule to the Customs Act, 1969, hereinafter to be referred as the Act only, is available both to the Federal Government as well as to the Board. The Central Government in exercise of its power under Section 19 of the Act, by virtue of a notification in the official Gazette, and subject to such conditions, limitations or restrictions, if any, as it thinks fit to impose, is competent to exempt on the imported goods the whole or part of customs duty chargeable thereon. Similarly under Section 20 of the Act the Board, in circumstances of exceptional nature, in an individual case after recording such circumstances and subject to such conditions, limitation or restrictions, if any, as it thinks fit to impose, exempt any goods from payment of the whole or part of the customs duties payable thereon. In the like manner, the Board under Section 21 of the Act, is authorised, subject to such conditions, limitations or restrictions as it thinks ft to impose, in certain general cases as may be prescribed by rules or in the particular cases by special order, to allow delivery of imported goods without payment of whole or any part of customs duty chargeable or allow repayment of whole or part of the . customs duties already paid, on such goods. We are, therefore, of the view that the CGO under consideration in the case was issued by the Board in exercise of its power under Section 21 of the Act and as such unless and until it was withdrawn the exemption from payment of customs duty available under it continue, subject to compliance of other conditions laid down in the C.G.O. It is an admitted position in the case that the petitioner before importing the card conversion assembly, complied with all the conditions prescribed in the C.G.O. The only objection raised by the custom department at the time of clearance of goods was that Notification No.702(1)/80 which was mentioned in the C.G.O. was replaced by S.R.O. No.512(I)/86 dated 29‑5‑1986 and as there was no consequential amendment in the CGO the goods could not be cleared without payment of customs duty. The total exemption from payment of customs duty on import of card conversion assembly for modernization of existing cotton textile unit on once only basis was made available in terms of the C.G.O. It is significant that in the CGO as originally issued, SRO 820(1)/78 was mentioned for the purposes of exemption from customs duty but this SRO makes no reference to the items which are mentioned in the CGO as exempted from customs duty. I Similarly SRO No.702(I)/80 which was subsequently issued superseding SRO 820(1)/78, also makes no reference to items mentioned in the CGO which were exempted from payment of customs duty. It is, therefore, quite obvious that exemption from payment of customs duty on the items mentioned in Annexure to the CGO was admissible under the CGO and not under SRO 820(1)/78 or SRO 702(1)/80 which were mentioned in the CGO for Tariff purposes only.

3. The learned counsel for the petitioner, accordingly, contended before us that on the general principle of interpretation contained in Section 8 of the General Clauses Act, we should read the CGO after super session of SRO 702(1)/80 by SR0.512(1)/86, with necessary adoptation, namely, in place of SRO No.702(1)/80 in the CGO we should read SRO 512(1)/86 as the latter SRO had substituted the previous one. In support of his contention that the general principle of interpretation contained in Section 8 of the General Clauses Act are applicable in the present case the learned counsel referred to the cases of Mistranand v. State AIR 1968 All. 204, Advance Insurance Company v. Gurdasmal AIR 1969 Delhi

330. The learned counsel has also referred to the case of N.S. Thread Co. v. James Chadwick and Bros. AIR 1953 SC

357. The last mentioned case decided by the Indian Supreme Court was referred with approval in the case of Muhammad Ameer v. Federation of Pakistan PLD 1977 Lah. 1086. In the Lahore case applying the rule of interpretation contained in Section 8 of the General Clauses Act the Court held that in Rule 10‑A Part‑111, of Chapter IV‑J of High Court Rules and Order Volume V for the words "appeals filed under the Letters Patent" should be read as "appeals filed under Law Reforms Ordinance, 1972", as the latter mentioned enactment repealed and re‑enacted with modification the Letters Patent.

4. After going through the case‑law cited by the learned counsel for the petitioner we are of the view that the above principles of interpretation applied equally in the present case. As it is not contended before us that the CGO has been repealed or withdrawn we are of the view that after supersession of SRO 702(1)/80 by SRO 512(1)/86, the CGO is to read as incorporating S.R.O. 512(1)/86 in place of 702(1)/80 as the former has repealed the latter. We are, therefore, of the view that the exemption from payment of customs duty granted under the CGO on import of card conversion assembly was available to the petitioner. We accordingly declare the demand of the Customs authorities, for payment of customs duty on the card conversion assembly imported by the petitioner ‑ under BMR Scheme, as wholly without jurisdiction and lawful authority.

5. The petitioner has submitted a bank guarantee at the time of clearance of the consignment, this bank guarantee shall stand discharged after two months from today. AA./G‑129/K????????????????????????? Petition accepted.