' ZAKIUDDIN PAL, J.-The appellants challenge the validity of the judgment, dated 2-2-1980, passed by a learned Single Judge of this Court accepting the appeal filed by the respondent and setting aside the order/ action of the appellants taken for the purpose of recovering duty on the stocks of yarn produced and manufactured earlier than the mid-night between 27/28th June, 1979, at the rate of Re. 1 per kgm.
2. Mr. Irshad Hassan Khan while arguing the case has relied upon the provisions contained in sections 3(1), 12-A, 37 and 38 of The Central Excises and Salt Act, 1944 (Act No, I of 1944) as well as the provisions as contained in rules 9 and 49 of Central Excise Rules, 1944. Section 3(1) provides that there shall be levied and collected, in such manner as may be prescribed duties of excise on all excisable goods, produced or manufactured, and on all excisable services provided or rendered, in Pakistan, as, and at the rates, set forth in the First Schedule. Section 12-A, with regard to Exemptions, provides that the Central Government may from time to time by notification in the official Gazette exempt subject to such conditions, if any as may be specified therein, any goods or class of goods or any services or class of services from the whole or any part of the duty leviable under the Act.
Section 37 empowers the Central Board of Revenue to make rules and section 38 provides that all rules made and notifications issued under the Act shall be made and issued by publication in the official Gazette and all such rules and notifications shall thereupon have effect as if enacted in the Act. Rules 9 prescribes the procedure with regard to time and manner of payment of duty and lays down that no excisable goods shall be removed from any place where they are produced or manufactured or any premises appurtenant thereto, which may be specified by the Collector in this behalf, whether for consumption, export, or manufacture of any other commodity in or outside such place, until the excise duty leviable thereon has been paid at such place and in such manner as is prescribed in the Rules or as the Collector may require. Rule 49 provides that payment of duty shall not be required in respect of excisable goods Made in a factory until they are about to be issued out of the place or premises specified under rule 9 or about to be removed from a store- room or other place of storage approved by the Collector under rule 47.
3. The Ministry of Finance & Economic Affairs by notification dated 28-6-1978, amended its earlier notification, dated 11-5-1977, and exempted cotton yarn, twist and thread, from the levy of duty. It is admitted that this notification remained operative till 18-6-1979 on which date the exemption so granted by the aforesaid notification under section 12-A of the act was withdrawn.
4. It is contended by the learned Deputy Attorney-General while relying upon the provision as contained in rules 9 and 49 that since the goods in question, though manufactured during the period of exemption, were not removed from the stocks of the respondent therefore, under the law duty is leviable thereon and without the payment thereof they cannot be removed as provided in the aforesaid rules. It is contended that the benefit so granted by the exemption having not been availed of both the rules, referred to above, would be operative and the removal of the goods cannot be allowed without payment of duty. According to him, it does not matter whether the goods were manufactured during the exempted period, because they cannot be removed under the aforesaid rules unless duty is paid.
5. We are afraid, the contention of the learned Deputy Attorney-General has no force in the given circumstances. The aforesaid rules cannot be read in isolation of the statutory provisions as contained in sections 3(1) and 12-A o f the Act and even otherwise they are not repugnant to the aforesaid statutory provisions. As mentioned above duty is to be levied and collected on the excisable goods produced or manufactured.' The Federal Government is empowered to exempt levy of duty on the goods or class of goods so manufactured or produced. There is no doubt that rules 9 and 49 provide that the goods so manufactured or produced cannot be removed in the absence of payment of duty, but the question which needs consideration is whether the goods so produced or manufactured during the exemption period are to be levied any duty. The words used in rule 9 as "excisable goods" would mean those goods which were not exempt from the levy A of duty. Since the goods in question were produced or manufactured during the exemption period, therefore, they cannot be called excisable goods.
6. The provision as contained in rule 49, with regard to payment of duty, is also to be read in conjunction with the statutory provision contained in section 3(1) of the Act. Duty is to be paid only in respect of such goods: which are not otherwise exempted from the levy of duty under section 12- A. Since the goods in question were exempted from the levy of duty, therefore under the law they were not excisable during the period in which the notification dated 29-6-1978 remained operative.
7. We need not refer to the case-law as referred to in the impugned judgment because the statutory provisions relied upon by the learned Deputy Attorney-General do not help him.
8. Consequently the appeal having no force is hereby dismissed in limine.