1994 PLP 262 (SCMR)

(b) West Pakistan Municipal Committees (Octroi) Rules, 1964‑‑‑ ‑‑‑‑R.2 (m)‑‑‑Lahore Municipal Corporation Notification No. 7810/1986 dated 16‑11‑1978; Serial Nos. 62, 66 & 145‑‑‑Octroi duty payable on articles listed against serial No. 62 was Rs. 8.00 per hundred kilogram while such duty livable against serial No. 66 was Rs. 150 per hundred kilogram‑‑‑Appellant importing his articles viz. asbestos fiber sheets in the area of Lahore Municipal Corporation claiming that his such articles fell in Serial No. 66 and not 62‑‑ Justification‑‑‑Asbestos was not a metal but a mineral (fibre)‑‑‑Pure 100 per cent asbestos fibre sheets or pipes could not be used in building trade‑‑ Asbestos without addition of other materials, could not assume shape of a sheet or pipe‑‑‑Asbestos sheets manufactured by appellant would, thus, clearly fall in the item "asbestos sheets" as listed against Serial No. 62 of the Notification dated 16‑11‑1978‑‑‑Asbestos pipes having not been listed in the Notification, same would not fall in the category of cement pipes listed as against item No. 66 but would fall in the residuary category listed against serial No. 145‑‑‑Respondents, however, having treated such pipes as falling in the items listed against serial No. 62, which involved lesser duty they were bound by their admission and could not wriggle out of it. A.R. Sheikh, Senior Advocate Supreme Court and S. Inayat Hussain, Advocate‑on‑Record for Appellant. S. Abid Nawaz, Advocate‑on‑Record for Respondents. Respondent No.l: Ex parte. Dates of hearing: 9th and 10th March, 1991. RUSTAM S. SIDHWA, J.‑‑‑This is an appeal by M/s. Asbestos Cement Industries Ltd, appellant, against the judgment of a learned Single Judge of the Lahore High Court dismissing their revision petition.

2. The brief facts of the case arc that the appellant manufactures at its factory at Karachi asbestos sheets and asbestos pipes. According to the appellant, these products arc composed of cement to the extent of a little more than 80 per cent, asbestos fibre to the extent of about 15 per cent and a small quantity of other materials like jute, etc. For importing these products into Lahore Municipal Corporation area, the appellant had to pay octroi duty in accordance with Notification No. 78/t:)/IW), dated 16‑11‑1978 (copy Ex. D.W. 1/1). It is the appellant's case that its products fall in the category of articles entered at serial No. 66 of the said notification, whereas the Lahore Municipal Corporation respondent No.l asserts that the products arc covered by the articles listed against serial No.

62. The octroi duty leviable in respect of articles listed against serial No. (ifi is Rs.1.50 per hundred kilogram, while duty payable on articles listed against serial No. 62 is Rs.8.00 per hundred kilogram. To assail the validity of the decision of the Corporation to charge duty at the rate of Rs.8.0n per hundred kilogram by treating the products as falling under serial No.62 and to get recognition of its point of view, the appellant took resort to action in the civil Court. The learned Civil Judge, Lahore, decreed the suit. However, the learned Additional District Judge accepted the appeal preferred by the Corporation against the decree of the learned trial Court and set it aside, holding that the goods fell under serial No.

145. Feeling aggrieved, the appellant filed a revision petition, which was likewise dismissed. The appellant then petitioned this Court for leave to appeal, which leave was granted to consider in which category the products of the appellant fell.

3. On behalf of the appellant it is submitted that in para. 3 of its plaint the appellant submitted that its products were asbesto cement products which was admitted by the respondent‑Corporation in its written statement. It is further submitted that in para. 5 of the plaint the appellant urged that there were two distinct kinds of products, namely, asbesto products which were purely made of asbesto and cement asbestos which were made from a mixture of 82.5 per cent of cement and 14.82 per cent of asbestos fibre which fact was also admitted by the Corporation. It is submitted that the products "asbestos sheets, asbestos packing, asbestos powder "occurring against item No. 62 relate to asbestos products in which the ingredient of asbestos is 100 per cent whereas cement pipes cement, articles made of mixture of cement and iron", as listed against item No. 66, cover the appellant's products which are made of a mixture of cement and asbestos. To show that asbestos sheets and asbestos pipes are made. out of a mixture of 80 per cent (approx) cement and 20 per cent (approx) asbestos, the learned counsel has referred to the Encyclopaedia Britannica, Vol. 11, p. 558, the Chambers Dictionary, New Edition, p.

69. In support of the assertion that the appellant's products in the trade circles are treated as asbestos cement products, the learned counsel has referred to the evidence in this connection. On the strength of this evidence, it is submitted that the appellant's products must be treated as basically cement products and for which the learned counsel has cited Statutory Construction by Craford, page

321. For the proposition that taxing statute should be strictly construed, the learned counsel has referred to Bank of Chettinad Ltd. v. Commissioner of Income Tax (AIR 1940 P.C. 283) and for the proposition that where two interpretations are possible, the one beneficial to the assessee should be applied, he has referred to The Commissioner of Income Tax v. Messrs Hossen Kasam Dada (PLD 1961. SC 375). Nobody has appeared on behalf of the respondents.

5. We have heard the arguments of the learned counsel for the appellant and have perused the evidence and the documents. The learned counsel for the appellant has drawn our attention to Encyclopaedia Witannica, Vol. 11, p. 558, Chambers Dictionary, New Edition, 1983, p. fig and the English translation of "Handbuch Fur Asbestzementrohre" by K. Hunerberg, p. 10 to show that abscstos is a mineral that can be easily separated into flexible fibres and can be spun or felted to make non‑combustible fabrics and that certain classes of short absestos fibre used with cement and gypsum can be moulded into various shapes for special purposes or pressed into mill board, wall board or tiles. In short, cement containing absestos fibre can be used to make thin slabs for various purposes in builing industry. There is no dispute as regards this matter and the admission of paras 3 and 5 of the plaint of the appellant also leaves no room for doubt that absestos sheets and pipes manufactured by the appellant contain roughly 80 per cent (approx) cement, 14 per cent (approx) absestos fibre and small quantity of other materials. The documents marked A2, A4 and A6, though not exhibits, but produced by the appellant, clearly speak of A/C sheets and pipes i.e. asbestos cement sheets and pipes. The question therefore that falls in such cases, as mentioned by the learned counsel for the appellant himself, is whether asbestos sheets and pipes have acquired a particular meaning in the building trade and business as implying sheets and pipes made of pure 100 per cent asbestos fibre, as urged by the learned counsel for the appellant, or as covering the sheets and pipes made of the ingredients as stated by him, namely, cement roughly 80 per cent, absestos fibre roughly 14 per cent and other material roughly 6 per cent. In this connection the learned counsel himself has drawn our attention to Statutory Construction by Craford, p. 321, that where names are used in a tariff which have relevancy with commerce or trade, they relate to goods which have acquired that well‑known meaning in trade and commerce circles. In this connection we may state that if the Act, rule or notification is one passed with reference to a particular trade or business and words are used which everybody conversant with that trade or business knows or understands to have a particular meaning., then the words must be construed as having that particular meaning, though it may differ from the common or ordinary meaning of the words. If any authority is required for this view, Pakistan Jute Mills Association v. Collector of Central Excise (PLD 1970 Dacca 136), Civil and Military Members Ltd. v. Pakistan (1985 CLC 1021) and Usmania Glass Sheet Factory Ltd v. Sales Tax Officer (1966 PTD 461) may be referred. The tariff in force relates to goods which traders and businessmen import into and export out of the Corporation limits. Some of the goods obviously are identifiable by the very nature of the raw material used therein, whereas some are identifiable with reference to commercial or trade usage as designating certain kinds of goods where such names have acquired a well‑known meaning in trade and business circles. The question therefore that arises is whether asbestos sheets and pipes have acquired a commercial or business name to designate these goods which are manufactured out of cement and asbestos fibre and these names have acquired a well‑known meaning in trade and business circles. Having read the evidence of the witnesses and particularly of Fayyaz Ahmad D.W.2, who is an independent Civil Engineer, it is clear that the asbestos cement sheets and pipes manufactured out of the raw materials stated by the appellant are treated as asbestos sheets and pipes in the trade and business circles and that they have acquired this meaning in the trade and business circles. The contention of the learned counsel for the appellant that asbestos sheets and pipes can only mean sheets and pipes made out of 100 per cent asbestos fibre for which a person would have to go to the Brandreth Road to buy any of these goods, overlooks the fact that asbestos is not a metal, but a mineral (fibre) and till now no one has heard of a pure 100 per cent asbestos fire sheet or pipe being used in the building trade. Without the addition of other materials, asbestos cannot assume the shape of a sheet or pipe. In these circumstances, the asbestos cement sheets manufactured by the appellant would clearly fall in the item "asbestos sheets" as listed against serial No. 62 of the notification. Since there is no item "asbestos pipes" in the notification, the same would in any case not fall in the category of cement pipes listed as against item No. 66, but would fall in the residuary category listed against serial No. 145, but since the respondents have treated the said pipes as falling in the items listed against Serial No. 62, which involves lesser duty, they are bound by their admission and we would so hold them accordingly.

6. The upshot of the above discussion is that the appellant's suit has no merits and was rightly dismissed. Therefore, whilst dismissing this appeal, we would hold that the respondents shall not charge duty on asbestos pipes at a higher rate than that provided for articles listed against serial No. 62 of the notification. There shall, however, be no order as to costs. AA./A‑1061/S Order accordingly.