1995SCMR516 (PLP)

NASIM HASAN SHAH, J‑‑‑This order will dispose of Civil Appeal No. 189 of 1990 and Civil Appeal No.190 of 1990.

2. The facts, which form the background to these appeals are that the respondent‑firm M/s. Manzoor Brothers, Lahore, imported two consignments of hub‑spindles `of cycles against Import Licence No. A‑772829. dated 20‑10‑1982 issued for the parts and accessories of cycles under Item No. 452 0) of the Free List contained in Import Policy Order, 1982‑83.

3. No licence had been obtained by the respondents for the import of the cycle hub‑spindles alone. Although under Item No. 4520) of the Free List cycle hubs as complete units could be imported. The Customs Authorities were of the view that the respondents firm had contravened the provisions of section 16 of the Customs Act, 1969 read with section 3(i) of the Import and Export (Control) Act, 1950 and, therefore, it was liable to punishment under section 156 (1) (9) of the Customs Act, 1969 read with section 3(iii) of the Import and Export (Control) Act, 1950.

4. Accordingly, the respondent was given notices for showing cause why action should not be taken against it for this contravention. The respondent firm in reply to the show‑cause notices took up the plea that the Articles imported were covered by Item No. 4520) of the Free List. The Collector of Customs, however, held that the respondent was liable under section L56 (1) (9) of the Customs Act, 1969 and confiscated the goods, but permitted them to redeem the same against penalties, in addition to payment of duty and other taxes leviable on these two consignments.

5. Feeling aggrieved by the said two orders of adjudication, the respondent‑firm preferred two appeals before the Departmental Forums which succeeded to the extent that the redemption fine was subsequently reduced.

6. However, the respondents were not satisfied with these adjudications and filed two separate writ petitions in the Lahore High Court which were disposed of by a consolidated judgment dated 12‑6‑1989 in Writ Petition No. 72 of 1989. The learned Judge in the High Court accepted both the writ petitions observing, inter alia: "This accounts for the reason why the Customs Department after 1979 kept permitting the clearance of the individual parts of the cycle hubs without any objection. The sudden somersault taken by the Customs in respect of goods of the petitioner in 1983 and 1984 in the instant case on the basis of a ruling given by the Controller of Imports and Exports on 15‑8‑1983 cannot be permitted. The present goods were imported in March, 1983 and if at all the ruling of the Controller of Imports and Exports had to be applied, it should only have been in respect of imports made on or after 15‑8‑1983, which was the date of the ruling of the Controller. As such these two petitions were accepted.

7. The Customs Department felt aggrieved by the said orders dated 12‑6‑1989 and filed petitions for leave to appeal in this Court. It was submitted that the High Court erred in setting aside the petitioners' (now appellants) orders after having held that "strictly, cycle hubs would obviously refer to the complete unit, which includes the spindles. hub cones, hub nuts".

8. This Court hearing the petition for leave observed that effect had not been given by the High Court to this finding because it was influenced by the fact that the Customs Department during the period 1979‑82 permitted indiscriminately clearance of individual part'; constituting the complete hub unit without raising any objection that they were not importable under item No. 450) of the Import Policy Order, 1982‑83 and that the ruling given by the Controller of Imports and Exports on 15‑8‑1983 cannot be permitted to be applied to the goods which were imported on an earlier date viz. in March, 1983.

9. Leave was granted to consider whether the above considerations were sufficient to set aside the orders passed by the appellants after having held that "strictly cycle hubs would obviously refer to the complete unit, which includes the spindles, hub cones, hub nuts". 10: We have heard Sh. Maqbul Ahmad, learned standing counsel for the Federal Government in support of these appeals and Raja Mahmud Akhtar, learned counsel for the respondent‑firm.

11. We observe that the consistent practice of the Department, right from 1965 to 1983 was to treat individual parts of cycle hubs though not constituting the complete hub unit as covered by Item No. 45 (j) of the Import Policy Order. It was only on 15‑8‑1983 that the Deputy Collector of Customs became doubtful of this practice and called for ruling from the Controller of Import and Export in this connection. On the same day, the ruling sought for was given by the Controller of Imports and Exports on the following terms: "

2. The item Hub‑Spindles (Axles) is not covered by the import licence issued vide S. No. 452 of the Import Policy Order, 1982. The item, Hub‑Spindles (Axles) could not, therefore, be imported without the specific permission of the Chief Controller of Imports and Exports." Now this Court in Nazir Ahmad v. Pakistan (PLD 1970 SC 453) deprecated the practice of deviating from a course consistently followed by a Department for a long period. It was observed that: "Where the departmental practice has followed a course in the implementation of the relevant rule whether right or wrong, it will be extremely unfair to make a departure from it after a lapse of many years and to disturb rights that have been settled by a long and consistent course by the practice. This, to say the least, is bound to weaken the faith of the employees in the attitude and behaviour of the department. `As regards departmental constructions', that is to say, the construction which is placed in practice on the provisions of a statute or rules by the administrative authorities who are charged with the execution of the statute or the rules Crawford thus observes: `Where the executive construction has been followed for a long time an element of estoppel seems to be involved. Naturally, many rights will grow up in reliance upon the interpretation placed upon a statute by those, whose duty it is to execute it. Often grave injustices would result should the Courts reject the construction adopted by the executive authorities." In this case, the respondent firm had presented the Bills of Entry in one case on 20‑2‑1983 and in the other on 31‑5‑1983. The Policy ruling was given on 15th August, 1983. This ruling could not affect goods imported before 15‑8 1983. We, therefore, agree with the following observation of the High Court: "The present goods were imported in March 1983 and if at all the ruling of the Controller‑of Imports and Exports had to be applied, it should only have been in respect of imports made on or after 15‑8‑1983 which was the date of the ruling of the Controller. The application of the Controller's decision retrospectively on the case of the petitioner cannot be permitted, because the goods were imported by the petitioner around March 1983." No good ground for interference with the orders of the High Court has been made out. Accordingly, these appeals must be dismissed. No costs. AA./G‑480/S Appeals dismissed.