MR. JUSTICE SYED ARSHAD ALI. (1). This is a Sales Tax Reference filed by the petitioner U/S 34A of the Federal Excise Act, 2005 ("the Act") against the order of the learned Appellate Tribunal Inland Revenue, Peshawar dated 15.11.2022 wherein; certain questions of law have been framed and referred for adjudication of this Court.
2. Briefly stated facts of the case are that pursuant to an information received by the respondents relating to the sale of soft drinks through post-mix machine; installed at various points in Peshawar, a team comprising of two officials of the Revenue Department were deputed to submit their report.
The said team accordingly visited the outlet and the manufacturing plant of the petitioner. They provided a report to the relevant, authority wherein; it was observed, "the petitioner/company was supplying cylinders of various flavor like coke, lemon and orange along With carbon dioxide gas (CO2) to KFC and Pizza Hut etc. which are then connected to a specifically designed dispenser, which process and mix up the syrup in cylinder with water in the ratio of 4:11 or 360 glasses of 250ml each of soft drink, therefore, the said supply of syrup is raw material for preparation of soft drinks; hence, the said activity amounts to the supply of concentrates or syrup chargeable to FED at the rate of 50% as per serial No. 3 of table-I of the First Schedule to the Act whereas; the petitioner had paid the excise duty at a reduced rate; thus, a case of short levy of federal excise duty was made out against the petitioner." Accordingly, show cause notice was issued to the petitioner. Defence of the petitioner:-
3. The petitioner/company raised various defenses in its written reply to the show cause notice, however, two essential issues were raised in the defense; firstly, that the petitioner/company was not selling the concentrate to the post-mix machine but sell the syrup in cylinder for the preparation of soft drinks which does not require a manufacturing process and secondly, through Central Excise General Order No. 4 of 2002 issued under the Erstwhile Central Excise Act, 1944 whereby; two options were provided to a company involved in sale of concentrate for beverage to post-mix machine either to pay the excise duty as provided to sale concentrate in Schedule 1 or in alternate that bottling factory shall pay the amount of sales tax at the rate, had the factory manufacture the bottle of 250 ml from the said unit for syrup. Petitioner/company had availed the second option according to which the bottling company on supply of the said syrup paid the excise duty on the aerated water at a reduced ratio of duty.
4. The adjudicating officer through an order dated 30.03.2016 held the contents of show cause notice established and thus directed the petitioner to pay the disputed amount.
5. On appeal, the learned appellate court vacated the order of adjudicating officer upholding the applicability of CEGO No. 4 of 2002 dated 15.06.2002 wherein; it is held that the petitioner has correctly charged/paid the excise duty on syrup supplied for post-mix machine in terms of item at Serial No. 5 of Table-I to the First Schedule of the Federal Excise Act, 2005.
6. Through the impugned order, the worthy Tribunal has held that since CEGO No. 4 of 2002 is in conflict/inconsistent with the elaborate scheme of payment of excise duties as provided in Table-I of the First Schedule to the Federal Excise Act, therefore, the provision of Section 24 of the General Clause Act is not applicable on repeal of Excise and Salt Act, 1944 and its re-enactment through Federal Excise Act, 2005.
7. The essential issue which has been referred to this Court for its opinion is whether the options provided in CEGO No. 4 of 2022 dated 15.06.2022; in any manner is inconsistent with the scheme of payment of excise duties as stipulated in Schedule I of the Federal Excise Act, 2005, therefore, it would also stand repealed on promulgation of Federal Excise Act, 2005 notwithstanding the provision of Section 24 of General Clause Act.
8. Relevant to the present controversy, we have before us a Notification issued by the FBR i.e., Central Excise General Order No. 4 of 2002 dated 15th June, 2002. Since, this Notification is germane to the present issue; therefore, is reproduced as under:- CENTRAL EXCISE GENERAL ORDER NO. 4 OF 2002, DATED 15th JUNE, 2002 Subject: SPECIAL PROCEDURE FOR CLEARANCE OF SYRUPS BY AERATED BEVERGES FACTORIES.
It has come to the notice of the Board that difference procedures are being followed by different bottling plants for clearance of beverages syrups for sale to post mix machines which is, inter alia, causing loss of revenue. Therefore, a uniform procedure is being laid down in this General Order for observance by all the bottling units in the country.
2. A bottling plant clearing concentrate syrup for the post mix machines shall pay duty under one of the two options given below. Option No. 2 is a special procedure aimed at facilitating the bottling plants and their vendors. On the other hand, option No. 1 is a default option which means that it contains the procedure in accordance with the existing law and is required to be followed by the bottling plant which does not opt for option No. 2:- OPTION NO. I
(1) The bottling factory may clear the syrup for sale to post mix machines by paying thereon duty and sales tax at the value and rate of duty applicable to beverage concentrate syrup (PCT 21063.9011).
(2) The bottling factory shall clear this syrup against AR-1 and keep the record thereof in a separate register containing the following columns:-- DateQuantity of syrup clearedName of consigneeLicense no of consigneeAmount of CED paid
(1) (2) (3) (4) (5)
(3) The owner/operator of the post mix machine shall in the capacity of a manufacturer pay central excise duty on the aerated beverages produced and sold by him at the rate applicable to aerated beverages on the price at which they sell the cups to customers.
(4) The owner/operator of post mix machine shall not only obtain central excise license but will also maintain the entire central excise record which is maintained by a bottling plant. He shall, however, operate under self-clearance system given in Chapter XV of the Central Excise Rules, 1944.
OPTION NO. 2
(1) While clearing a unit of concentrate syrup the bottling factory shall pay the same amount of central excise duty as would have been payable had the factory manufactured bottles of 250 ml from the said unit of syrup. The rate of duty shall also be the same as is applicable to aerated beverages. This will absolve the owner/operator of post mix machine of the liability to pay duty on aerated beverages made out of the syrup so cleared.
(2) The bottling factory shall clear this syrup against AR-1 and keep the record thereof in a separate register containing the following columns:-- DateQuantity of syrup clearedName of consigneeLicense no of consigneeAmount of CED paid
(1) (2) (3) (4) (5)
(3) The owner/operator of post mix Machine shall he required to obtain central excise license only if he does not possess sales tar registration. Moreover, he shall not be required to pay any CED on aerated beverages produced in the post mix machines or to maintain any central excise record.
The issue relating to the competence and authority of FBR to have issued the CEGO No. 4 of 2002 has not been raised, however, for the purpose of clarity, we hereby observe; i. The charging section in both the aforesaid Statutes provides for levy of excise duty, inter-alia, payable as per First Schedule to respective Acts. Similarly, Section 3(2) of the Central Excises Act, 1944 envisages that the Central Board of Revenue may, by notification in the official Gazette fix, for the purpose of levying the said duties, either specifically or under general heads, in the First Schedule as chargeable with duty ad valorem and may alter any tariff values for the time being in force. Similarly, under the Federal Excise Act, 2005, subsection (3) of Section 3 somehow similar powers have been conferred upon the Board of Revenue, ii. The Federal Board of Revenue is established under Section 3 of the Federal Board of Revenue Act, 2007 ("Act of 2007"). FBR is the successor of the Central Board of Revenue ("CBR"), which was established on 1st April, 1924 through Central Board of Revenue Act, 1924. In 1944, the CBR was put under the Revenue Division with the Ministry of Finance until 1960, when on the recommendation of "Administrative Reorganization Committee" the CBR was made into a Division of Ministry of Finance.
Under the Act of 2007, indeed FBR is a state instrumentally responsible for enforcing fiscal laws and collecting revenue for the Federation. The perusal of Section 4 of Act of 2007 would show that main functions of FBR, inter alia, are (i) formulation and administration of fiscal policies (ii) to make regulations, policies, programs, strategies in order to carry out the purposes of this Act; (iii) levy and collection of federal duties, taxes and other levies; (iv) quasi-judicial functions of deciding taxation cases/another appeals. iii. Subsection (ii) of Section 4 clearly envisages that the FBR, where it deems appropriate may issue statutory rules and orders (SROs), orders, circulars and instruction for the enforcement of any of the provision of the fiscal law. iv. Likewise, Section 43 of the Federal Excise Act, 2005, envisages that the Federal Board of Revenue may issue a general order or instructions or directions necessary or expedient for the purpose of removing the difficulty or tackling such a situation and every such officer or person shall bound to comply with such instructions or directions. v. Section 41 of the Repealed Central Excise Act, 1944 empowers the Board to issue orders, directions and instructions. vi. Under Sub-Section 2 of Section 3 of the Central Excise Act, 1944, the then Central Board of Revenue now Federal Board of Revenue has the authority to issue notification for the purpose of levying, duties and tariff values of any article enumerated either specifically or under general headings in the First Schedule as chargeable with duty at valorem or on the basis of retail price and may alter any tariff values for the time being in force and under Sub-Section 3, different tariff values may be fixed for different classes of description of the same articles. vii. Similarly, under Sub-Section 4 of Section 3, at the relevant time before amendments through Finance Act, 2018, the Board had the authority to levy and collect duty on any class or classes of goods or services by notification in official Gazette at such higher or lower rate or rates as may be specified in such notification. viii. The CEGO No. 4 of 2002 was issued by the Central Board of Revenue and it is not disputed that the Central Board of Revenue had no jurisdiction to have issued the CEGO No. 4 of 2002.
9. Thus, the essential issue before this Court as to whether CEGO No. 4 of 2022 is inconstant with the enabling provisions of Federal Excise Act, 2005. In order to effectively answer the query, we would like to reproduce Section 48 of the Federal Excise Act, 2005 re-enacted Central Excise Act, 1944 and Section 24 of the General Clause Act:- "48. Repeal.--(1) Subject to the provisions of sub-section (2) the Central Excises Act, 1944 (1 of 1944) shall stand repealed with effect from the date notified under sub-section (3) of Section 1.
(2) Unless otherwise directed by the Federal Government, in case of area where the repealed Act was extended through an order by a Governor of the Province or otherwise through an order by any other authority, the application of the repealed Act shall continue to be in force till this Act is made applicable in that area."
"24. Continuation, of orders, etc. issued under enactments repealed and re-enacted.--Where any Central Act or Regulation is after the commencement of this Act, repealed and re-enacted with or without modification, then, unless it is otherwise expressly provided, any appointment, notification, order, scheme, rule, form or bye-law made or issued under the repealed Act or Regulation, shall, so far as it is not inconsistent with the provisions re-enacted, continue in force, and be deemed to have been made or, issued under the provisions so re-enacted, unless and until it is superseded by an appointment, notification order, scheme, rule, form or bye-law made or issued under the provisions so re-enacted and when any Central Act or Regulation. which, by a notification under section 5 or 5A of the Scheduled Districts Act, 1874 or any, like law, has been extended to any local area, has, by a subsequent notification, been withdrawn from and re- extended to such area or any part thereof the provisions of such Act or Regulation shall he deemed to have been repealed and re-enacted in such area or part within the meaning of this section."
10. Section 48 is silent about the effect of repeal relating to the notifications, orders issued under the repealed Act (Central Excise Act, 1944), therefore, under Section 24 of the General Clauses Act, it is clear that where any Central Act is repealed and re-enacted with or without modification, then unless it is otherwise expressly provided, any notification issued under such repealed Act shall, so far as it is inconsistent with the provisions re-enacted, continue, in force, and be deemed to have been made under the provisions so re-enacted unless it is superseded by any notification or order issued under the provisions so re-enacted. It would be important to note that Section 48 of the re- enacted Act (Federal Excise Act, 2005), nowhere contains any intention to the contrary signifying that the operation of the repealed Act or of a notification issued thereunder was not to continue.
11. In order to appreciate as to whether there is any inconsistency in the levy of excise duty as provided in Central Excise Act, 1944 and the Federal Excise Act, 2005. We would like to produce the charging Sections and the First Schedule made thereunder:- Section 3 of Central Excise Act, 1944
3. Duties specified in First Schedule to be levied.-(1) There shall be levied and collected in such manner as may be prescribed duties of excise on all excisable goods, produced or manufactured in Pakistan or imported into Pakistan and on such goods, as the Federal Government may, by notification in the official Gazette, specify, as are produced or manufactured in the non- tariff areas and are brought to the tariff areas, and on all excisable services, provided or rendered, in Pakistan, as, and at the rates, set forth in the First Schedule.
Provided that where any goods are chargeable to duly on the basis of retail price in terms of sub-section (2) of section 4 and the retail price is not printed or embossed in a manner specified in the proviso thereof the duty shall be charged at the rate of--
(a) 500 per cent ad valorem in case of [beverages, cement, and] cigarettes;
(b) 100 per cent ad valorem in case of goods other than [beverages, cement and] cigarettes.] [Provided further that notwithstanding anything contained in this Act, in respect of excisable services which the Federal Government may, by notification in the official Gazette, specify, the duty shall be levied and collected as if it were a tax payable under section 3 of the Sales Tax Act, 1990 and all the provisions of that Act and the rules, notifications, orders and instructions made or issued thereunder shall as far as may be and with necessary modifications, apply.] [Provided further that the duty in respect of goods imported into Pakistan shall be levied and collected in the same manner and at the same time as if it were a duty of customs payable under the Customs Act, 1969 (IV of 1969), andSection 3 of Federal Excise Act, 2005
3. Duties specified in the First Schedule to be levied.--
(1) Subject to the provisions of this Act and rules made thereunder, there shall be levied and collected in such manner as may be prescribed duties of excise on,--
(a) goods produced or manufactured in Pakistan;
(b) goods imported into Pakistan [irrespective of their final destination in territories of Pakistan];
(c) such goods as the [Federal Government] may, by notification in the official Gazette, specify, as are produced or manufactured in the non-tariff areas and are brought to the tariff areas for sale or consumption therein; and
(d) services provided in Pakistan including the services originated outside but rendered in Pakistan; at the rate of fifteen] per cent ad valorem except the goods and services specified in the First Schedule, which shall be charged to Federal excise duty as, and at the rates, set- forth therein.
(2) Duty in respect of good imported into Pakistan shall be levied and collected in the same manner and at the same time as if it were a duty of Customs payable under the Customs Act, 1969 (IV of 1969), and the provisions of the said Act including section 31A thereof shall apply.
(3) The Board may, by notification in the official Gazette, in lieu of levying and collecting under sub-section (I) duties of excise on goods and services, as the case may be, levy and collect duties--
(a) on any goods or class of goods or on any services or class of services, payable by any establishment or undertaking producing or manufacturing such goods or providing or rendering such services.
[(3A) Subject to the provision of sub-section (3) of section 6 or any notification issued thereunder, where excisable goods and services are supplied to a person who has not obtained registration number, the Federal Government may, by notification in the official Gazette, charge, levy and collect, on the excisable goods and services specified in that notification, a further duty at the rate of two per cent of the value in addition to the rate specified in sub-section (1), (3), (4) and (5) of this section.]
(4) Without prejudice to other provisions of this Act, the [Federal Government] may levy and collect duty on any class or classes of goods or services by notification in the provisions of the said Act including section 31-A thereof shall apply.]
(2) The [Central Board of Revenue] may, by notification in the official Gazette fix, for the purpose of levying the said duties, tariff values of any articles enumerated, either specifically or under general headings, in the First Schedule as chargeable with duty ad valorem [or on the basis of retail price] and may alter any tariff values for the time being in force.
(3) different tariff values may be fixed for different classes or descriptions of the same article.
[(4) With the prior approval of the [Federal Government], the Central Board of Revenue may in lieu of levying and collecting under sub-section (1) duties of excise on excisable goods, by notification in the official Gazette, levy and collect duties on the production capacity of plants, machinery, undertakings, establishments or installations producing or manufacturing such goods; and such notifications shall specify--
(a) the guiding principles for the determination of production capacity,
(b) the production capacity, as determined in accordance with such guiding principles, of the plaints, machinery, undertakings, establishments or installations affected by it;
(d) the duty or the rate of duty on production capacity, and
(d) the manner of collection of such duty.] [(5) The production capacity of any plant or machinery or part thereof specified in a notification under sub- section (4) shall, upon an application made to the [Federal Government] within thirty days of the notification by any aggrieved person, be reviewed by [Standing Tribunal] [confirming reducing or increasing the production capacity shall be final];the official Gazette at such higher or lower rate or rates as may be specified in such notification.
[(5) The liability to pay duty shall be--
(a) in case of goods produced or manufactured in Pakistan, of the persons manufacturing or producing such goods;
(b) in case of goods imported into Pakistan, of the person importing such goods;
(c) in case of services provided or rendered in Pakistan, of the person providing or rendering in Pakistan, of the person providing or rendering such service [provided where servicers are rendered by the person out of Pakistan, the recipient of such service in Pakistan shall be liable to pay duty]; and
(d) in case of goods produced or manufactured in non- tariff areas and brought to tariff areas for sale or consumption therein, of the person bringing or causing to bring such goods to tariff areas] Explanation.--Subject to sub-section (1), for the purpose of this section, "goods" means the goods specified in CHAPTERS TO 97 and "services" means the services specified in CHAPTER 98 of the First Schedule to the Customs Act, 1969 (IV of 1969).
[(5A) In respect of goods, specified in the Fourth Schedule, the minimum production for a month shall be determined on the basis of a single or more inputs as consumed in the production process as per criterion specified in the Fourth Schedule and if minimum production so determined exceeds the actual supplies for the month, such minimum production shall be treated as quantity supplied during the month and the liability to pay duty shall be discharged accordingly.] First schedule (See Section 3)
TABLE I (Excisable Goods)
S. No.Description of goodsHeading/sub- heading NumberRate of duly (1)(2) (3) (4)
1[ ] 2[] 3Concentrates for aerated beverages in all farms including syrup form2106.9010Fifty, percent ad vat [Provided that, in the case of any plant or machinery used for the manufacture of cotton fabrics or cotton yarn, the production capacity of which was determined before the 30th June, 1970, any aggrieved person may, within such time as the [Federal Government] may, by notification in the official Gazette specify in this behalf make an application in writing to the [Federal Government] for re-examination of the production capacity, and such application shall be referred by [Federal Government] to a [Standing Tribunal constituted under sub-section (6); and the decision of the Standing Tribunal] on such reference shall be final] [(6) [Federal Government] shall, for the purpose of sub-section (5), constitute a [Standing Tribunal] consisting of not less than two persons each of whom may be either an officer not below the rank of a Joint Secretary to the Government of Pakistan or a person who held such rank at the time of his retirement from service.]
(7) The Central Board of Revenue may, by notification in the official Gazette, at any time, cancel a notification under sub-section (4) [or sub-section (8)]; and where a notification is so cancelled or, for any reason whatsoever, cannot be given effect to, the duty under sub- section (1), in lieu whereof the duty under sub-section (4) [or sub-section (8)] was levied by such notification, shall be levied and with necessary adjustment, collected for the financial year during which such notification is cancelled or for the period for which it cannot be given effect to.] [Explanation--For the purpose of this sub-section, an order of a Court suspending or staying the collection of the whole or any part of the duty under sub-section (4) [or sub-section (8)] shall be deemed to be a reason for which a notification under sub-section4 Aerated waters 2201.1020[thirteen] percent of retail price 5Aerated waters, containing added sugar or other sweetening matter of flavored2202.1010[thirteen] per cent of retail price.
6Aerated waters if manufactured wholly from juices or pulp of vegetables, food grains or fruits and which do not contain any other ingredient. indigenous or Imported, other than sugar, coloring materials, preservatives or additives in quantities prescribed under the West Pakistan Pure Food Rules, 1965Respective Headings,[thirteen] percent of retail price.
7Unmanufactured of tobacco24.01[ten] rupee per Kg.
7[8Cigarettes of tobacco or tobacco substitutes excluding locally produced cigarettes24.02Sixty-five percent of retail price or the rate of duty as prescribed against S. No 9 whichever is higher.
8[8aE-liquids by whatsoever name called, for electric cigarette kitsRespective Heading[Rupees Ten thousand per KG]
(4) for sub-section (8)] cannot be given effect to.] [(8) With the prior approval of the Federal Government, the Central Board of Revenue may, in lieu of levying and collecting under sub-section (1) duties of excise on excisable goods and excisable services, by notification in the official Gazette, levy and collect such fixed amount of duties of excise, as it mays deem fit, an any goods or class of goods or on any services or class of services; payable by any establishment or undertaking producing or manufacturing such good & or providing or rendering such services.
(9) For the levy and collection of a fixed amount of duties of excise under sub- section (8), the Board may--
(a) prescribe, inter-alia,-- i. the manner and the time at which such amount shall be payable; ii. the period for which the amount so fixed shall be effective; and
(b) appoint, empower or constitute any agency, authority or committee, as it may deem fit, to receive, gather, collate and analyze such information or documents, and summon any person, as may be necessary, for making recommendations for consideration of the Board] [(10) Nothing contained in this section or section 4 shall limit the powers of the Federal Government to charge duty on any class or classes of goods or services at the rates specified by a notification in the official Gazette and determined on the basis of weight, quantity, number, volume and measurement.] [(11) Notwithstanding anything contained in this Act, with the prior approval of the Federal Government, the Central Board of Revenue may, subject to such conditions, limitations or restrictions as it may deem fit to impose, by notification in the official Gazette, specify goods or class of goods, services or class of services for the purposes of allowing credit of any duty of excise, whole or in part, paid on such inputs, as it may specify, against the final liability of day].
[Provided that in case of excisable services notified under the third proviso to sub-section (1)--
(a) a registered service provider shall be entitled to deduct input tax paid during the tax period from the amount of duty of excise due from him on such services in respect of that tax period;
(b) a registered person shall be entitled to deduct the amount of duty of excise paid on such services as are received by him during the tax period from the output tax due from him in respect of that tax period; and
(c) a registered service provider shall be entitled to deduct duty of excise paid on such services as are received by him during the tax period from the amount of duty of excise due from him on such services as are provided or rendered by him during that period.
Explanation.--For the purpose of this proviso,--
(a) the expression "registered service provider" means a person registered under the Sales Tax Act, 1990, providing or rendering excisable services notified under the third proviso to sub-section (1) of section 3: and
(b) the expressions "input tax", "out tax", "registered person" and "tax period" shall have the same meanings as are assigned to them in the Sales Tax Act, 1990] First schedule (See Section 3)
1. This Schedule shall comprise:-
1. The First Schedule to the Customs Act, 1969 (IV of 1969), (CHAPTERS 1 to 97); and ii. Chapter 98 hereinafter following:--
2. Provided that the rates of central excise duty under this Act on all items specified in CHAPTERS 1 to 97 of the Customs Act, 1969, shall be 50% ad valorem except on following items the rates shall be as indicated against each, namely:-- HeadingDescription of goodsRate of duty [20 09Fruit juices (including grape must) and vegetable juices, unfermented and not containing added spirit, whether or not containing added sugar or other sweetening matter50 percent of the retail price 21.06Food preparations not elsewhere specified or included200 percent ad vat 22.01Waters including natural or artificial mineral waters and aerated waters containing added sugar or other sweetening matter nor flavored ice and snow50 percent of the retail price
12. Central excise duty under the both statutes is an indirect tax, the incidence whereof is to be passed on to the consumer. During the relevant period, the governing law was the Central Excise Act, which had four essential facets: first, the subject matter; second, the taxing event; third; the person who would be liable to pay the tax; and fourth, the rate of the tax. The subject matter is the specified 'excisable goods' and 'excisable services', as provided in the First Schedule thereto; the 'taxing event' is when the 'excisable goods' are produced or manufactured, or when the 'excisable services' are provided or rendered; the person liable to pay the tax is who produces or manufactures the 'excisable goods', or the one who provides or renders the 'excisable services'; and the extent of liability, that is the rate of excise duty, is specified in the First Schedule to the Central Excises Act. It is only when the first two essential conditions are fulfilled that the excise duty at the rate specified under the Central Excise Act would be chargeable to the person who manufactured the 'excisable goods', or the person who provided the 'excisable services'. "Messrs Pakistan WAPDA Foundation Vs. The Collector of Custom, Sales Tax Lahore & others (2023 SCMR 79)."
13. The 1st Schedule under the repealed Act and that of re-enacted Act relevant to a bottling company would show that the rate of duty for a bottling company on manufacturing of concentrate in all forms including syrup were governed under PCT Heading No. 2106.9010 whereas; the aerated water containing added sugar or other sweetening matter of flavored is described under PCT Heading No. 2202.1010. The later attracts reduce rate of duty. Central Excise General Order No. 4 of 2002 has given option to the bottling companies either to avail option No. 1 i.e., to pay duty applicable on beverage concentrate syrup PCT Heading No. 21063.9011 and in that event, the recipient of the concentrate i.e., owner/operator of post machine shall in the capacity of manufacturer pay central excise duty on the aerated beverages produced and sold by him at the rate applicable to aerated beverages on the price at which they sell the cups to customer. The owner of post machine was also required to obtain central excise license and will maintain excise record. The alternate option No. 2 was that the bottling factory shall pay the same amount of central excise duty as would have been payable, had the factory manufactured bottles of 250 ml from the said unit of syrup by paying the duty applicable to aerated beverages. The 2nd option absolves the owners of the post mix machine of the liability to pay duty on aerated beverages made out of the syrup so cleared. In the said event, the recipient of concentrate syrup i.e., owner/operator of post machine was not required to obtain central excise license if it/he is otherwise a registered person. However, the important feature of this 2nd option was that the owner/operator of post mix machine shall not be required to pay any central excise duty on aerated beverages produced in the post mix machines or to maintain any central excise record.
The mechanism and dispensation of two separate rate of duties relating to the sale of concentrate viz-a-viz aerated water was available under repealed Act as well as the re-enacted Act. The learned Tribunal was of the view that since the re-enacted Act has provided a separate rate of duty for concentrate, therefore, the options No. 2 available under the CEGO was inconsistent with the 1st Schedule of the re-enacted Act.
14. In our humble view, the Tribunal has erred by referring the said inconsistency because the word occurring "inconsistent" in Section 24 of the General Clauses Act would obviously refer to the inconsistency in the scope, theme and object of the entire two statutes i.e., repealed and the re- enacted Acts. We could not come across any case law on the subject explaining the meaning of "inconsistency" in reference to Section 24 of the Act, however, we are fortified of the relevant paragraph explaining the word "inconsistent" of Stroud's Judicial Dictionary of Words and Phase.
(Fourth Edition) which is reproduced as under:- "Inconsistent. (1) When a statute says that its provisions are to obtain as regards its subject matter, except so far as they may be "inconsistent" with a previous statute, the inconsistency connoted must be one "so at variance with the machinery and procedure indicated by the previous Act that if that obligation are added, the machinery of the previous Act would not work"
(per Fry L.J, Re knight and Tabernacle Building Society, 60 L.J.Q.B 633; see Every). Therefore, it was held in that case that the power to state a case under Arbitration Act 1889 (c49), s.19, applies to a building society arbitration, and is not "inconsistent" with Building Societies Act 1874 (C.42). S.36, which makes an arbitration thereunder "binding and conclusive" and 7inal to all intent and purposes"; for on a case staled the court only instructs the arbitrator as to the law and does not destroy the finality of their award which they make after receiving the instruction; affirmed in HL. sub nom, Tabernacle Building Society vs. Knight [1892] A.C. 298 (on this case, see per Farewell L.J, Re Holland Steamship Co; 95 L.J, 769. applied Cogstad V. Newsum [1921] 2 A.C. 528) See also Galashiels Magistrates Vs. Schulze, 33 Sc L.R 94; Sub nom. Schulze V. Galashiels [1895] AC. 666."
15. The phrase "so far as it is inconsistent with the provision of re-enacted" occurring in Section 24 of the General Clauses Act, 1956 refers to the inconsistency in the entire scheme of both the repealed and re-enacted Act and thus; if any notification order has been issued under a repealed Act and unless the re-enacted Act otherwise provide in clear terms, the said notification will be alive until rescinded under the re-enacted Act. In order to sum up the issue, we hold that/since two different rates of duties were provided under the repealed as well as the re-enacted Act relating to the payment of excise duties on sale of concentrate viz-a-viz aerated water containing added sugar or other sweetening matter of flavoreds in the 1st Schedule of both the Acts and keeping in view the said two different rates, the Federal Board of Revenue in its own wisdom had allowed the botting factories to pay the excise duties as per the rates applicable to the concentrate or avail the 2nd option as stated above, therefore, we could not find any inconsistency in the scheme procedure and the mechanism of levying duties on concentrate viz-a-viz aerated water in both the sets, therefore, keeping in view the mandate of Section 24 of the Act, the CEGO No. 4 of 2002 would still be alive and enforceable on repeal of the repealed Act (Central Excise Act, 1944) through the re- enacted Act (Federal Excise Act, 2005) and would continue so unless it is rescinded or recalled by the appropriate and competent forum under the scheme of the re-enacted Act (Federal Excise Act, 2005).
16. This Sales Tax Reference is answered in positive. Copy of this judgment be sent to the Appellate Tribunal in terms of Section 86(5) of the Act.