' MUHAMMAD NAWAZ ABBASI, J.---These two petitions have been directed against the judgments dated 15-3-2002 and dated 10-10-2001 passed by a Division Bench of High Court of Sindh, at Karachi, in the Constitution Petitions bearing Nos.519, 535. 793 to 795, 797, 856 and 952 of 1997 and Constitution Petition No,787 of 1997 respectively wherein the validity of Notification S.R.O.1050 (1)/95 dated 29-10-1995 by virtue of which the regulatory duty was imposed, was challenged.
2. The writ petitions involving common questions of law and facts were dismissed by the High Court in the light of law laid down by this Court in Collector of Customs v. Ravi Spinning Ltd. (1999 SCM R 412) and Assistant Collector Customs Central Excise and Sales Tax Mardan and 2 others v. M/s. Gadoon Textile Mills Ltd. Swabi through its General Manager (1994 SCM R 712). The High Court while disposing of the matter vide judgment dated 15-3-2002 made the following observation:- "We find substance in the contention of learned counsel for the respondents that the Notification No, S.R.O. 1147(1)/89 with reference to which the applicability of S.R.O.1050(1)/95 is assailed, granted exemption from customs duty as is in excess of 10% ad. Val. Specified in the First Schedule to the Customs Act, 1969 and thus, the dictum laid down by the Hon'ble Supreme Court in the case of Collector of Customs v. Ravi Spinning Mills Ltd. (supra) is fully attracted. We are further of the view that a notification granting exemption is to be seen and applied as it stands at a particular point of time because the Federal Government is admittedly empowered to amend the notifications issued under the Customs Act from time to time and nobody can be allowed to take plea that the S.R.O should be read as it stood at some time in the past or the exemption granted through a preceding notification which stands rescinded should be read in the subsequent notification which is a distinct and independent notification in itself and does not narrate that it is in continuation of the earlier rescinded notification. We would like to observe that Mr. Aziz A. Sheikh, learned counsel for the petitioners, conceded that the law laid down by the Hon'ble Supreme Court in the case of Collector of Customs v. Ravi Spinning Mills Ltd., (supra) is not squarely applicable to the petitioners but he conceded that it is logically applicable to the petitioners."
' In the judgment dated 10-10-2001, the learned Judge in the High Court, observed as under:-- "12. We are, therefore of the view that the benefit of the judgment relied upon by the counsel for the petitioner cannot be given to him. It is very clear that a complete exemption was being enjoyed from payment of all taxes for a specified period and this exemption was granted, through an enactment. Therefore; we have to observe that the Hon'ble Supreme Court of Pakistan had bifurcated such exemption from the rest of the other exemptions that were granted under section 19 of the Customs Act for a temporary period. Since the Notification No,1050(I)/95 has been held by the Hon'ble Supreme Court of Pakistan to be validly promulgated and validly applicable in all cases, where exemption has been granted withOut use of expression "whole of the customs duties" therefore, the petitioner cannot seek refuge and petition is accordingly dismissed."
3. The petitioners have assailed the impugned judgments on the grounds, firstly, that the law laid down by this Court in Collector of Customs v. Ravi Spinning Ltd. Supra, was mis-interpreted and misplaced which would not be strictly applicable to the cases in hand and secondly, the effect of retroactive application of the S.R.O. 1050(I)/95 dated 29-10-1995 on the exemption of the customs duty as a whole already made available under S.R.O. 350(I)/85 dated 15-4-1985 read with S.R.O.1147 (I)/89 dated 27-11-1989 was not properly examined. In nutshell, the grievance of the petitioners was that imposition of regulatory duty by Notification S.R.O. 1050(I)/95 dated 29-10-1995 would amount to withdraw the exemption available to them as the custom duty as a whole including the regulatory duty was exempted under the notifications dated 15-4-1985 and 27-11-1989.
4. The crucial question for consideration would relate to the scope of the section 18(2) of the Customs Act, 1969 under which the power of imposition of regulatory duty is available to the Government and the consequence of the notification dated 29-10-1995 by virtue of which the regulatory duty has been imposed, on the exemption of the customs duty made available under the earlier notifications.
5. Learned counsel for the petitioners have contended that the regulatory duty leviable under section 18(2) of the Customs Act, 1969 is a kind of customs duty and is not a distinct and separate one from the customs duty leviable under subsection (1) of the ibid section, therefore, the exemption granted by the Government from the payment of customs duty wholly or partially, would include the exemption from regulatory duty and subsequent imposition of regulatory duty through another notification, in exercise of powers under section 18(2) of the Act, would amount to the withdrawal of exemption from payment of regulatory duty therefore, the notification dated 29- 10-1995 was not issued in proper exercise of the powers and the goods on which the customs duty as a whole was not payable, would not fall within the ambit of this S.R.O. Dated 29-10-1995.
6. Learned Deputy Attorney General, on the other hand has argued that regulatory duty is undoubtedly a customs duty which is imposed under subsection (2) of section 18 of Customs Act, 1969 and notwithstanding the exemption of the customs duty leviable under section 18(1) of the Customs Act, 1969, the Government is always empowered to impose the regulatory duty in exercise of its powers under subsection (2) of section, 18 of the Customs Act, 1969.
7. The examination of the matter in detail, would reveal that the petitioners raised the controversy on the basis of S.R.Os. No,1146(I)/89 and No,1147(I)/89 issued by the Government on 27-11-1989.
Under SRO 1147 (1)/89 customs duty on the import of material specified in the annexures thereto for the use of manufacturing the drugs registered under Drugs Act,1976 (Act III of 1976), subject to the condition specified therein, was exempted and S.R.O. No,1146(I)/89 of the even date was issued to rescind S.R.O. 350(1)/85 dated 15-4-1985 in relation to such material. The contention of the learned counsel that notwithstanding the rescinding of S.R.O. 350(1)/85 dated 15-4-1985 by virtue of S.R.O.
No,1146 (1)/89 dated 27-11-1989 the effect of S.R.O. No,1147(I)/89 issued on the same dated would be that the exemption available to them under S.R.O. 350(I)/85 dated 15-4-1985 would continue, has no substance. The second limb of the argument of learned counsel that notwithstanding the issue of S.R.O. 1050(1)/95 dated 29-10-1995 by virtue of which regulatory duty has been imposed under section 18(2) of Customs Act, 1969 the regulatory duty is also defined as customs duty, therefore, the goods on which customs duty was exempted if already imported under the S.R.O. 1147(I)/89 dated 27-11-1989, would not be liable to the payment of regulatory duty under notification dated 29-10-1995 also has no force.
8. Ch. Mushtaq Ahmed Khan, learned Senior Advocate Supreme Court, has submitted that S.R.O.
No,387(I)/96 dated 13-6-1996 by virtue of which S.R.O. 1147(1)/89 dated 27-11-1989 was amended, would take effect from the date of its issue, therefore, the goods which were imported before the issue of the amended notification, would remain exempted from payment of all customs duties including the regulatory duty.
9. There is no cavil to the proposition that the regulatory duty is also a customs duty and the purpose of imposing the regulatory duty under subsection (2) of section 18 of the Customs Act, 1969 is to meet a A situation or a condition which is not covered by the customs duty leviable under subsection (1) of the ibid section. The scope of the authority of the Government to levy regulatory duty was examined by this Court in detail in Ravi Spinning Mill's case supra, Abdur Rahim v.
Federation of Pakistan (PLD 1988 SC 670), Yousuf Re-rolling Mills v. Collector of Customs and another (PLD 1989 SC 232) in Messrs Qaiser Brother (Pvt) Ltd. v. Government of Pakistan and others (PLD 1991 SC 884) and M/s. Godon Textile Mills (1996 SCMR 712). There is no cavil to the legal position that a tax or a duty cannot be imposed except under the authority of an act of Parliament as provided in Article 77 of the Constitution and this legislative power cannot be delegated to the executive authorities but the power of allowing the exemption can be B conferred on the executive authorities, and the Federal Government in view of its power under subsection (2) of section 18 of Customs Act, 1969, can levy the regulatory duty without any limitation or restriction as it may deem fit at such rate as may be specified in the notification. The examination of the proposition in the light of substantive provisions of law on the subject, would show that the regulatory duty on the articles mentioned in the notification dated 29-10-1995 was imposed in accordance with the manner and method of imposition of said duty under the law. The regulatory duty falls within the expression 'customs duties' which in substance is not different from customs duty defined under subsection (1) of section 18 of the Customs Act, 1969 and since the provisions of section 19(1) of the Customs Act, 1969 are equally 'applicable to subsection (2) of section 18 of the ibid Act, therefore, the regulatory duty can be levied on the articles which may or may not carry the liability of payment of any other customs duty, on the basis of criteria provided under subsection (2) of section 18 of Customs Act, 1969. It is well settled that all exemptions from the payment of customs duty as a whole or partially, must be strictly construed and must not be extended beyond the express language used in the notification. This is c also settled proposition of law that taxing statutes are construed strictly in favour of subjects whereas the provisions relating to exemptions are construed in favour of the Government as taxing authority and the Government while exercising the power of exemption of duty on a particular article, may impose such condition, limitation and restriction as it deems fit and if the notification of such exemption does not operate retrospectively the goods imported prior to the issue of notification would not qualify for exemption.
The power of grant of exemption of customs duty on a particular article and the power of withdrawal of such exemption, subject to reasonable restriction, is always available to the Government under the law, therefore, it is not open to the Courts to go behind the notification issued by the Government is this behalf, on the ground that the power was improperly exercised unless it is shown that the grant of exemption of specific duty was subject to the existence of certain conditions. The object of exemption of duty and tax, is to provide protection to the manufacturers or importers or exporters of specified goods consumed in the country, in context of the public policy and not for the benefit of individuals, therefore, the withdrawal of an exemption, would not be applicable to the goods which were imported between the date of grant of exemption and the date of the withdrawal of the exemption but this is subject to the condition that bill of entry was filed before the date of withdrawal because the exemption on the particular item is made available from the date of actual import and not from the date of registration of goods for the purpose of import. The net result of the above discussion is that the Government if is empowered to issue a notification for grant of exemption of customs duty, it can also withdraw an exemption wholly or partially. In light of the legal position discussed above, we find that notwithstanding the issue of earlier notification under section 18(1) of the Customs Act, 1969, the Government was fully empowered to issue notification dated 29-10-1995 under section 18(2) of the said Act and the objection of the petitioners was misconceived. In view of the above, we find no substance in the contention raised by Ch. Mushtaq Ahmed Khan, learned Advocate Supreme Court, that the effect of notification dated 13-6-1996 by virtue of which notification dated 27-11-1989 was amended, would be that the regulatory duty on the goods exempted from customs duty under notification dated 27-11-1989 would not be leviable.
10. In the light of foregoing discussion, we have found no substance in the arguments of the learned counsel for the petitioners, would take no exception to the impugned judgment and dismiss these petitions. Leave is refused.