Nasir-ul-Mulk, J.--The Federation of Pakistan through Secretary Revenue Division Central Board of Revenue, Islamabad and another, have filed this appeal by leave of the Court from the judgment of the Balochistan High Court of 28.2.2002, allowing the writ petition of the respondent, M/s Balochistan Minerals & Oil Private Limited, Quetta, by holding that the respondent was not liable to pay Central Excise Duty (CED) on Mobile and Lubricating Oil, manufactured by it and transported for sale to different parts of the country, as the same, being supplied in bulk, was exempted from the Duty, for it was leviable on such oils only if supplied in packs under SRO. No, 456(I)/96 dated 13.6.1996, which reads:-- Heading/Sub- Conditions Rate of duty heading number
(1) (2) (3) Lubricating Oil, i,e, Oil such as is not ordinarily issued for any other purpose than lubrication which has flash point at or above 200 F by Abel's Close Test 2710.0081 In packs not exceeding 10 litres10 percent of the retail price or seven rupees and fifteen paisa per litre whichever is higher 2710.0082 In packs exceeding 10 litresTen percent of the retail price or seven rupees and fifteen paisa per litre, whichever is higher"
By Finance Ordinance, 2001, the schedule to the Customs Act was replaced and under Heading No, 2710.0083, another item was introduced namely, Lubricating Oil etc. in bulk (vessels, bowzers and lorries etc.). By. SRO No, 685(1)/2001 dated 27.9.2001, this additional item was incorporated, by amendment, in SRO No, 456 levying Central Excise Duty at the rate of Rs, 7.15 per litre. Leave to appeal was granted to consider whether lubricating oil supplied in excess of 10 litres would not be covered by Item No, 2710.0081 of SRO No, 456. Further that whether the levy of Central Excise Duty on bulk by SRO No, 685 was not meant to clarify that the duty thereon was also payable under SRO No, 456.
2. Mr. Raja Muhammad Irshad, learned Deputy Attorney General, ably assisted by Sh. Mumtaz Ahmed, Member Legal (CBR), mainly pressed the argument that the terms 'pack' and in 'bulk' are terms not mutually exclusive and that even oils in bulk, that is in large quantities, can still be packed in big packs for transportation. It was thus contended that lubricating oil in excess of 10 litres supplied by the respondent would fall under Item 2710.0082 of SRO No, 456. It was further pointed out that SRO No, 685 issued on 27.9.2001 was intended to be a clarification, necessitated by an earlier decision of the Sindh High Court similar to the one impugned in this appeal.
3. Mr. Fakharuddin G. Ebrahim, Sr. ASC and Mr. Shehanshah Hussain, ASC, appearing for the respondent, argued that the Sindh High Court as well as the Lahore High Court had earlier held that lubricating oil supplied in bulks was not amenable to levy of Central Excise Duty as under SRO No, 456 only the oil supplied in packs was subject to such levy. That the Central Board of Revenue has not assailed the said judgments before this Court and therefore, the declaration given therein has attained finality. As to the connotation of 'pack' appearing in SOR No, 456, the learned counsel submitted that it would not cover supply in bulks. Elaborating, it was argued that the supply in packs means supplying the contents along with packing whereas the respondent was simply supplying the oil in bulk even if it was to be transported in some containers to the retailers.
4. The dispute relates to the payment of Central Excise Duty by the respondent already made between 13.6.1996, the date of SRO No, 456 and 27.9.2001 on which SRO No, 685 was issued, as after that admittedly the lubricating oil even supplied in bulks by the respondent is validly subjected to payment of they Duty. Though extensive arguments were advanced at the bar by both sides on the exact connotation of the term 'pack' appearing in SRO No, 456, there is no finding by the High Court as to the mode of transportation used by the respondent for supplying the oil, and quite obviously, as there was no such controversy raised. before the Court. The respondent in his writ petition had simply averred in para 5 that "it purchases raw material for manufacturing all lubricating oils from Karachi and after processing the same through plant, the same is transported to various parts of the country". The mode of this transportation was not specified but it .was stated elsewhere that the supply was being made in bulks. The appellants in their parawise comments before the High Court did not make any assertion that the respondent transported the oil in any form of packs, small or large, but defended the levy by pleading that bulk consignments would ,fall under Item No, 7210.008 as the same exceeded 10 litres. In the absence of any factual foundation it would be nothing more that fruitless academic exercise to try. to give meaning to 'pack' in the context used in SRO No, 456.
5. The second column of SRO No, 456 lays down the conditions for levy of Central Excise Duty on lubricating oil. The levy is on the oil 'in pack'. Thus, there is no levy on supply of the oil on any mode other than in packs. It was in this view of the matter that the Sindh High Court in the case "Adam Lubricants Limited vs. Federation of Pakistan & others" (Suit No, 840 of 2001) held on 27.6.2001 that SRO No, 456 imposed Central Excise Duty on lubricating oil only when supplied in packs. This view was followed by the Lahore High Court in "Punjab Petroleum Industries (Pvt.) Limited vs. Collector Central Excise (Writ Petition No, 14312 of 2001, decided on 6.8.2001)". Neither of the two decisions have been questioned before this Court and it seems that it was on account of the judgment of the Sindh High Court that in the following Finance Ordinance of 2001, a provision was made for levy of Duty on bulk supplies of lubricating oil, and the Central Excise Duty was imposed by SRO No, 685 dated 27.9.2001 by the addition of Heading No, 2710.0083. By not challenging the judgments of the Sindh High Court and the Lahore High Court and instead adding another such heading to bring into the regime lubricating oil in bulk, the appellants have accepted the interpretation placed by the two High Courts on the relevant provisions of SRO No, 456.
6. The contention on behalf of the appellants based on the addition of subheading No, 2710.0083 rather supports the case of the respondent. The addition, it seems, became necessary after the Central Board of Revenue, had released that the existing provisions of, SRO No, 456 did not cover the supply of oil in bulks. If the object of this new provision was simply to clarify the situation already in existence, the same would have been incorporated as an explanation to the existing Item No, 2710.0082. The addition of a separate item (No, 2710.0083) by SRO No, 685 in SRO No, 456 amounts to acknowledgement by the legislature that supply of the oil in bulk was not covered by the existing items.
7. In the light of the above, we would maintain the judgment of the Balochistan High Court and subsequently, dismiss the appeal with no order as to costs.