AYESHA A. MALIK J.--- Through this petition, the Petitioner seeks a direction to the Respondents that its import may be cleared, for the purposes of custom duty, under PCT Code 9914 and not under PTC Code 7311.0090.
2. The basic facts of the case are that the Petitioner imported empty oxygen steel cylinders in June, 2016 which goods fell under PCT Code 9914. On 01.07.2016 through Finance Act, 2016 the classification of the goods imported by the Petitioner was amended, such that the goods now fall under PCT Code 7311.0090. The effect of the amended PCT Code is that the Petitioner's goods, which were originally exempt from custom duty became liable to custom duty.
3. The grievance of the Petitioner is that the amendment will not apply to the Petitioner's goods, because at the time of import the relevant PCT Code was 9914 on the basis of which the Petitioner was entitled to exemption. Learned counsel argued that, the goods are liable to custom duty in terms of Section 18 of the Customs Act, 1969 ("Act") meaning thereby that the goods are liable to custom duty on the date when they enter into the territorial waters of Pakistan. Learned counsel, further argued that in this case the goods entered into the territorial waters of Pakistan on 01.06.2016 and the amendment was made on 01.07.2016. Learned counsel stated that this Court has already decided a similar matter in W.P. No, 55114/2017 vide judgment dated 25.09.2017, which is applicable to the facts of the case.
4. Report and parawise comments have been filed by the Respondents. Learned counsel for the Respondents argued that the goods are liable to custom duty when they enter into the territorial waters of Pakistan. However, the rate of duty applicable is in terms of Section 30(a) and Section 30- A of the Act, on the date when Goods Declaration ("GD") is filed. Learned counsel further 'argued that in this case the Import General Manifest ("IGM") number on the GD is 03.10.2016 which is the date which signifies that the goods entered into the territorial' waters of Pakistan. Learned counsel clarified that the first IGM was issued on 01.06.2016 when the goods reached Karachi Seaport and the second IGM was issued on 03.10.2016 when they reached Lahore Dry Port, therefore, for the purposes of determining the rate of duty the relevant date is 03.10.2016.
5. Heard and record perused.
6. The basic issue raised in the instant petition is whether the Petitioner is entitled to an exemption that was granted to goods classified under PCT Code 9914. The Petitioner has been denied the exemption on the ground that PCT Code 9914 was amended vide Finance Act, 2016 on 01.07.2016 such that the goods of the Petitioner no longer fell under PCT Code 9914 but fell under PCT Code 7311.0090.. As per the record the goods were shipped on 27.04.2016 and they reached Karachi Seaport on 01.06.2016, which is evident from the IGM issued on 01.06.2016. It is noted that these dates are not disputed by the Respondents. The Petitioner in this regard relies upon a judgment of this Court dated 25.09.2017 passed in WP No, 55114/2017 wherein it has been held that the relevant Section of the Act is Section 18, which provides that customs duty shall be levied at the prescribed rates on goods being imported into Pakistan. In terms of this provision the liability to pay customs duty shall accrue the moment the goods enter into the territory of Pakistan. This means that the taxable event is the import of goods which has nothing to do with ascertaining the value of the imported goods under Section 25 of the Act or determination of the rate of import duty under Section 30 of the Act. For the purposes of determining whether the exemption is applicable, the relevant date will be the date of import, which is reflected from the date of IGM. In the .case relied upon by the Petitioner, the issue was whether the SRO is applicable on the goods imported by the petitioner in that case, in terms of which the petitioner was entitled to redeem his goods on payment of redemption fine. Accordingly the Court held that in terms of Section 18 of the Act the relevant date for determining chargeability of custom duty is the -date when the goods arrive into the territorial waters of Pakistan. In this case the date of the IGM is 01.06.2016, hence the Petitioner is entitled to the exemption because where its goods arrived into the territorial waters of Pakistan the relevant classification was PCT 9914. The PCT Code was subsequently amended meaning that the amendment took place after the goods reached Karachi. In this regard Section 30(a) and Section 30(A) of the Act are not relevant because they basically provide the date of determination of the rate of the import duty being the date when the GD is filed. In this case, the issue is not with 'reference to the rate..of -duty but whether or' not the Petitioner is entitled to an exemption in terms of the classification of the goods. The applicability of the exemption relates to chargeability of the customs duty or not to the rate of duty. At the time of import being the time when the ship docked in the territorial waters of the Pakistan, the goods fell under PCT Code 9914 for the chargeability to customs duty. Subsequent thereto consequent to an amendment the classification was changed which changed the liability. Hence the amendment will not be applicable to the goods of the Petitioner, as the relevant date to determine chargeability to import duty is when the goods enter into the territorial waters of Pakistan. In this case it is also noted that even though the IGM for arrival at Lahore Dry Port is date 03.10.2016, for the purposes of chargeability of custom duty, the relevant date will be the date when the goods are imported into Pakistan.
7. Under the circumstances, this petition is allowed and the respondents are directed to issue exemption to the goods of the Petitioner for the purposes of custom duty under PCT Code 9914.