P L D 1989 Karachi 617 (PLP)

(iii) The engines are fitted with a head lamp, which is a specific requirement for a tractor, being a vehicle for its operation during night time and no industrial engine requires head lamps. (iv) These engines have built-in cooling system as against other engines meant for cooling the engines from outside storage tanks. (v) The Chief Controller of Imports and Exports has categorically held that these engines were meant for tractors. (vi) The primary use of these engines should have been taken into consideration while assessing them to duty. (vii) The Customs House had been assessing these engines under P. C . T . 84.06 C as engines for tractors but they departed from their previous practice in respect of these cases.

6. On the other hand it was pleaded on behalf of respondents that the structure of engines in dispute is such that it could be put to other use as well, and consequently the respondents were justified in classifying them under Heading 84.05 FO 20 "other engines."

7. The real question which falls for determination in these petitions is whether the engines imported by petitioners were "tractor engines" classifiable under Heading 84.06 C read with Heading 87.01 C 0 1, or were engines classifiable under Heading 84.06 FO 20" other engines."

8. A perusal of Pakistan Customs Tariff (PCT) Schedule shows that Heading 84.06 is sub-divided into seven sub-heads, viz, PCT Heading Description Rate of Duty 84.06 Internal comubs- tion piston engines. A. Aircraft engines 40% ad-valorem. B. Parts of aircraft engines. 40%-ad- valorem. C. Engines for propel- 40%. ad-valorem-or ling vehicles of the rate appli- Ch. 87. cable to the vehicle- in which the engine would be- fitted. which- ever is- higher. D. Out board marine engines 40% ad-valorem. E. Marine propulsion 40% ad-valorem. engines other than out board. F. Other engines. 01 complete horizon- 85% ad-valorem. tal slow speed oil engines upto and including 50 HP and high speed oil engines upto and including 20 HP. 02 others. 40% ad-valorem. G . Parts of the engines of subheading C to F. Sub-heads 84.6A to 84.6 E cover engines for specific uses, e.g., engines for aircrafts, engines for vehicles, marine engines, etc. It will be manifestly clear from these classifications that the engines which do not fall under any sub-head from 84.6A to 84.6 E, would be classified under this residuary sub-head 84.6 F. The Chief Controller of Imports and Exports had expressly described these engines as tractor engines vide (Annexure P/12), and where the goods for the purpose of import were treated as tractor engines, A there was no legal justification for the respondents to treat them as "other engines" and classify them under a residuary sub-heading. There was again no justification to brush aside the certificates issued by Chinese suppliers, Chinese Commercial Consul and Chinese National Machinery Import and Export Corporation who had confirmed that these engines were exclusively meant for tractor DONG FENG-12. The advertisements made by Pakistan Tractor Corporation Ltd. , a semi-Government organization about tractor DONG FENG-12, further support the stand taken by the petitioners.

8. Note 5 of Chapter 84 of I.T.C. Schedule of 1981, further provides:- "A machine which is used for more than one purpose is, for the purposes of classification, to be treated as if its principal purpose were its sole purpose." Again as observed in Dunlop India Ltd. v. Union of India and others, reported in A I R 1977 S C 597, the meanings given to articles in .a fiscal statute must be as people in trade and commerce, conversant with the subject, generally treated and understand them in the usual, course. But once an article is classified and put under a distinct entry, the basis of the C1assifiCdtiou is not open to question. '

9. Admittedly, the Customs authorities in the past had classified B these engines under P.C.T. Heading 84.06 C, read with Heading 87.01-001 as part of agricultural tractors. It is, therefore, a case of discrimination.

10. For all these reasons, there is good deal of force in the contentions raised by learned counsel for petitioners in para.

5. The, prime use of the engines is to be taken into consideration for the purpose of classification as per Note 5 of Chapter 84 of I.T.C.4C Schedule of 1981 and not any improvised, imaginary and adopted use. We would, therefore, quash the impugned orders passed in all) the five petitions shown in para 4 above. We also declare that the tractor engines imported by the petitioners were classifiable under Head 84.06 C, read with Heading 87.01-001 at the material time. The, petitioners are thus- entitled to the refund of excess duty and sales I tax realised from them without any legal authority. The petitions are accepted, but the parties are left to bear their own costs. M.B.A. /P-108/ K Petitions accepted.