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 Courts'"from the judgment of the Baluchistan High Court of 28.2.2002, allowing the writ petition of the respondent, Messrs Baluchistan Minerals and Oil Private Limited, Quetta, by holding that the respondent was not liable to pay Central Excise Duty (CED) on Mobil Oil 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 S.R.O. No. 456(l)/96, dated 13.6.1996, which reads:-- "Heading/sub- heading number Conditi&ns Rate of duty(1)
(2)
(3) 2710.0081 Lubricating Oil, i.e. Oil such as is not ordinarily used for any other purpose than 10 percent of the retail price of or seven rupees and fifteen paisa per liter. ............................................................................ I lubrication which has flash point at or above 200 F by Abel's Close Test.
In packs not exceeding 10 liters whichever is higher.
2710.0082 In packs exceeding 10 liters Ten percent of the retail price or seven rupees and fifteen paisa per liter, ' 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 S.R.O. No, 685(!)/2001, dated 27.9.2001, this additional item was incorporated, by amendment, in S.R.O. No. 456 levying Central Excise Duty at the rate of Rs. 7.15 per liter. Leave to appeal was granted, to consider whether lubricating oil supplied in excess of 10 liters would not be covered by Item No. 271.0081 of S.R.O. No. 456. Further.That whether the levy of Central Excise Duty on bulk by S.R.O. No. 685 was not meant to clarify that the duty thereon was also payable under S.R.O. No. 456.
2. Mr. Raja Muhammad Irshad, learned Deputy Attorney General, only assisted by Sh. Mumtaz Ahmed, Member Legal (C.B.R.), 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 liters supplied by the respondent would fall , under Item No. 2710.0082 of S.R.O. No. 456. It was further pointed out that S.R.O. No. 685 issued on 27.9.2001 was intended to be a clarification, necessitated by an earlier decision of the Sind High Court similar to the one impugned in this appeal.
3. Mr. Fakharuddin G. Ebrahim, Senior Advocate Supreme Court and Mr. Shehanshah Hussain, Advocate Supreme Court, appearing for the respondent, argued that the Sind High Court as well as the Lahore High Court had earlier held that lubricating oil supplied in bulk was not amenable to levy of Central Excise Duty as under S.R.O. 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 S.R.O. 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 aldngwith 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 between13.6.1996, the date of S.R.O. No. 456 and 27.9.2001 on which S.R.O. No. 685 was issued, as after that admittedly the lubricating oil even supplied in bulks by the respondent is validly subjected to payment of the Duty. Though extensive arguments were advanced at the bar by both sides on the exact connotation of the term 'pack' appearing in S.R.O. 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 para wise 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 bypleading that bulk consignments would fall under Item No. 2710.008 as the same exceeded 10 liters, 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 S.R.O. No. 456.
5. The second column.Of S>.R.O. 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 Sind High Court in the case "Adam Lubricants Limited v. Federation of Pakistan and others" (Suit No. 840 of 2001) held oh 27.6.2001 that S.R.O. 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 v. 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 Sind 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 S.R.O. No. 685, dated 27.9.2001 by the addition of Heading No. 2710.0083 by not challenging the judgments of the Sind High Court and the Laho're 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 S.R.O. No. 456.
6. The contention on behalf of the appellants based on the addition of Sub-Heading 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 S.R.O. 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 S.R.O. No. 685 in S.R.O. No. 456 amounts to acknowledgment 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 Baluchistan High Court and subsequently, dismiss the appeal with no order as to costs.