1990 PLP 874 (CLC)

AJMAL MIAN, CJ.‑‑The petitioners are importers of Refrigerators and Deep Freezers. They have imported Refrigerators and Deep Freezers. They f‑led Bill of Entries for the release of the same, but there seems to be controversy as to the method of measurement of the capacity of the Refrigerators and Deep Freezers for the purposes of assessing the customs duty. The petitioners have, therefore, filed the above petition and ‑have prayed for the following reliefs. "It is, therefore, prayed that this Hon'ble Court may be pleased to order and declare. (1) That the public Notice No.2 Anncx.'C' and the Circular Annex 'D' are illegal and without jurisdiction and cannot be applied contrary to the existing interpretation and practice. (2) That the petitioner may be allowed to clear his goods on the basis of actual storage capacity as certified by Pakistan Council of Scientific and Industrial Research after due process and physical scrutiny. (3) Be pleased to award appropriate costs: (4) Be pleased to award any other suitable relief. (5) Pending disposal of the Petition be pleased to stay the contitution of duty on the basis of new formula."

2. We had issued pre‑admission notice to the learned Dy. Attorney‑General through the Standing Counsel, in response to which Mr. Hussain Adil Khatri, learned Standing Counsel had, inter alia, appeared on 29‑5‑1980 and pointed out that the petitioners had not specified the Bill of Entries which they had filed for the release of the consignments, nor they had given the particulars about the said consignments. Thereupon Mr. Mohammad Nasim was directed to furnish the same. He has furnished photostat copies of about 22 Bills f Entries. The respondents have filed parawise comments refuting averments contained in the petition.

3. In support of the above petition Mr. Mohammad Nasim learned counsel for the petitioners, has vehemently contended that since the Central Board of Revenue in an appeal filed by another importer decided on 12‑7‑1988, has held that for the purpose of assessing the customs duty `net usable capacity' of the goods should be made basis which was the practice for the last number of years and not the `gross internal capacity', respondent No.2, i.e. Collector of Customs, has no power to provide different basis through the impugned public notice dated 15-1‑1989, Mr. Mohammad Nasim has further contended that even otherwise tile international practice is to assess the customs duty on the basis of 'net usable capacity' of a Refrigerator and a Deep Freezer and not `gross internal capacity'.

4. On the other hand Mr. Hussain Adil Khatri, learned Standing Counsel in reponse to the Court notice, has contended that in the aforesaid order the learned Member of the Central Board of Revenue had, inter alia, observed that the basis for assessment if the customs duty could not have been changed without putting the importers to notice and that since the importers were put to notice by respondent No.2, through the impugned public notice dated 15‑1‑1989: the petitioners cannot have any grievance. It was also contended by Mr.Hussain Adil Khatri that all the importers got their consignments cleared on the basis of the above `gross internal capacity' and even the petitioners got their about 501(; consignments released and, therefore, it Would not be just and proper to disturb above arrangement.

5. Adverting to the above first submission of Mr. Mohammad Nasim, learned counsel for the petitioners that "since the Central Board of Revenue in an appeal fled by another importer decided on 12‑7‑1988, has held that for the purpose of assessing the customs duty `net usable capacity of the goods should be made basis which was the practice for the last a number of years and not the `gross internal capacity' and respondent No.2, i.e. Collector of Customs, has no power to provide different basis through the impugned public notice dated 5‑1 1989", it may be observed that it may be advantageous to reproduce para.4 of the above order of the learned Member, Central Board of Revenue dated 12‑7‑1988 which reads as follows‑‑ "Examined the case record and the submissions made by the consultant. It is observed from the perusal of the documentary evidence including the previous Bs/E and literature produced by the appellants that the net usable capacity of the goods in question was declared by the appellants in accordance with the past practice of the Customs House and internationally accepted mode of calculating the net usable capacity of such type of goods. Besides in a number of similar cases cleared in the past the measurement committee had accepted the declared capacity of the goods imported by the appellants who happen to be a well‑reputed organization. It may be pointed out that in order to effect a change in the old practice regarding the ascertainment of the usable capacity of the goods in question, the Custom House is expected to issue a public notice for the information of the public in general and the commercial sector in particular as laid down in C.G.O. No.21/73, dated 23‑7‑1973 Issued by the Central Board of Revenue, but that Measure was not taken by the Customs House. As such the benefit of the provisions of the aforesaid C.G.C in respect (if past practice is given to the appellants who did not 'make any untrue statement. Therefore, the impugned order is set aside arid the subject goods are ordered to be assessed on the basis of declared net usable capacity. The Collector (Appraisement), Customs House, Karachi is however, directed to issue a public notice about the change in the old practice of calculating the usable capacity of the goods under reference within a fortnight of the issue of this order." After the above order respondent No.2 issued the above impugned notice on 15‑1‑1989 which reads as follows. "Public Notice No.2189 (A). An issue arose regarding the determination of the assessable capacity of Refrigerators and Deep Freezers as to whether the net usable capacity or gross capacity should be taken for this purpose. (2) The matter has been examined in detail in light of different catalogues/literature of foreign manufacturers and' by conducting physical examination of these goods. It is thus ascertained that 'gross internal capacity' will mean the maximum cubic content of the Food section of the cabinet in which no allowance is to be made for any internal litments such as evaporator units, tray and tray support etc. The internal measurements for assessment purposes will be determined as under. A. Refrigerators (I) Refrigerator section (less door) Height x Width x Depth. (2) Freezer Section (less door) Height x Width x Depth. Door (3) Refrigerator. Height x Width x Depth. (4) Freezer. (5) Total assessable capacity 1 + 2 + ~ + 4 Less the area occupied by the compressor inside the refrigerator section B. Deep Freezers. Horizontal/Chest type Height x Width x Depth = Total cacacity Vertical type. Total capacity to be ascertained as in the case of Refrigerators: It is, therefore, notified that the total capacity in litres so determined shall be charged to specific rate of duty per litre under the respective P.C.T. Heading. This procedure shall take effect from the date of issue of this notice." The above circular was followed by clarification dated 25‑2‑1989 which reads as follow. "Subject: Public notice 2/8<)‑(A) elated 15‑1‑1939‑‑‑Interpretation regarding. In pursuance of Public Notice No. 2/89‑(A) dated 15‑1‑1989 regarding the determination of the assessable capacity of Refrigerators and Deep Freezers a dispute has arisen regarding the inclusion of capacity of that portion of the door which projects into the main cabinet. It is clarified for the information of all concerned that while determining the assessable capacity in terms of Public Notice, allowance for the volume of that portion of the door which projects into the main cabinet will be given while measuring the main cabinet i.e. this space will be counted once only."

6. From the above‑quoted para. 4 of the order of the learned Member of the Central Board of Revenue, it is evident that the order of the Collector (Appraisement) Customs was set aside on the ground that the importers were not put to notice as to the change of the method of measurement of the capacity of the Refrigerators and Deep Freezers. After that the above notice and clarification were issued. Admittedly the petitioners have imported the consigments in question after they were told that the method of measurement (if the capacity would be what has been given in the above circulars dated 15‑1‑1989 and dated. A 25‑2‑1989. We would not like to adjudicate upon the question, whether respondent No.2 is competent to adopt the above new method of measurement or not, as we are of the view that the petitioners should agitate this question before the forums provided under the Customs Act before approaching this Court. The above question may need the expert's evidence.

7. Mr. Mohammad Nasim has referred to some case‑law on the point that a departmental practice cannot be deviated from and that a subordinate functionary cannot ignore the order of its appellate forum. It will suffice to observe that the view of the superior Courts is that a Department may deviate from its previous practice provided it puts the affected persons to notice in advance. It is true that a subordinate functionary is bound by the order of an! appellate authority. However, in the instant case the appellate authority in the aforesaid appellate order which was passed not in the case of the petitioners but in the case of some other party, itself has observed that the above practice could be deviated provided the importers are put to notice which has been done, and therefore, the above order has not been violated.

8. Adverting to the second submission of Mr. Mohammad Nasim, learned counsel for the petitioners that "even otherwise the international practice is to assess the customs duty on the basis of 'net usable capacity' of a Refrigerator and a Deep Freezer and not 'gross internal capacity' it may be observed that as already observed here in above we arc of the view that the question, whether the method of measurement of the capacity of the Refrigerators and Deep Freezers adopted by respondent No.2 is legal or not, first is to be agitated before the, forums provided under the Customs Act. The petitioner would be at liberty to canvass that the international practice is to assess the Customs duty on the bass of `net usable capacity' and not `gross usable capacity'. They could even produce the evidence before competent Court on this point.

9. We are inclined to subscribe to the submission of Mr. Hussain, Adil Khatri that it will not be just and proper to interfere with the working of the respondent Department at this stage as other importers have already paid the customs duty on the above basis and even the petitioners have cleared sonic of their consignments on the above basis. The petitioners in their letter dated 31‑1 1989 appreciated the issuance of aforesaid public circular dated 15‑1‑1989 and requested for clarification which was done by respondent No.2 by the aforesaid second circular dated 25‑2‑1989. It my be pertinent to reproduce para and the relevant portion of para. 2 of the petitioners' above letter which reads as follows: "(1) As far as the C.G.O. is concerned, it can be termed as a perfect and a precise document with no ambiguity of any kind because it is absolutely comprehensive and descriptive order, as regards the procedure of the measurement of capacity of Refrigerator is concerned but unfortunately the concerned officers having misconcieved the directives of the order have unlawfully stopped release of the goods from 15‑1‑1989 as they rind themselves confused as how to implement the C.G.O. (2) The importers tried to resolve the anomaly at the lower level therefore, we met the A.O. and P.A. of the A.I.B., after discussions and measurement of a sample Refrigerator in accordance with the directives of C.G.O. the A.I.B. Officials were convinced that the existing; practice of measuring Refrigerators in fact conforms to the directives of the C.G.0. dated 15‑1‑1989." We are, therefore, of the view that at this stage the petitioners have no cause for riling the above petition. They may first exhaust the remedies provided under the relevant law before approaching this Court. We, therefore, dismiss the above petition in limine. M.Y.H/T‑65/K Petition dismissed