1. ' NASIR ASLAM ZAHID, J.--This Constitutional petition has challenged the notification, dated 2nd October, 1972 issued by the Central Board of Revenue under section 3(4) of the Central Excises and Salt Act,1944. Previously excise duty was charged from the petitioner on the basis of actual production but through the aforesaid notification, the Central Board of Revenue inter alia decided to charge excise duty on the basis of production capacity of the petitioner's mill, which capacity Was fixed by the said notification. This petition was admitted by order, dated 21st May, 1975. An interim stay was granted by order dated .25th July, 1975 and the stay was later on confirmed on certain conditions. On 1st March, 1983 when this matter came up for regular hearing, both the learned counsel stated that Supreme Court of Pakistan had reserved judgment in an appeal, in which identical point was involved and a request was made that the case be adjourned.
2. Accordingly, the case was adjourned. The Supreme Court judgment has now come and it is in the case of Zaibtun Textile Mills Ltd. v C. B. R. (1). In view of the law enunciated in the said judgment of the Supreme Court, the present petition is liable to be dismissed.
3. ' However, it is contended by the learned counsel for the petitioner that as a stay was operating in this case against the Excise authorities, during the period of stay, recovery of excise duty could be effected only
(1) PLD 1983 SC 358 ' on the actual production of petitioner's mills and not on the basis of petitioner's production capacity fixed by the Central Board of Revenue. Reliance is placed on the explanation to subsection (7) of section 3 of the Central Excises and Salt Act 1 of 1944. Subsection (7) of section 3 with the Explanation is reproduced hereinbelow :- "4(').-The Central Board of Revenue may, by notification in the official gazette, at any time, cancel a notification under subsection (4); and where a notification is so cancelled or, for any reason whatsoever, cannot be given effect to, the duty under subsection (1), in lieu, whereof the duty under subsection (4) 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.
4. Explanation.-For the purpose of this subsection an order of a Court suspending or staying the collection of the whole or any part of the duty under subsection (4), shall be deemed to be a reason for which a notification under subsection (4) cannot be given effect to.
5. It was contended by the learned counsel for the petitioner that in view of the stay order granted in this case by this Court, the notification regarding levy on the basis of fixed capacity of petitioner's mills could not be given effect to and as such the Excise authorities could only recover excise duty from the petitioner on the basis of actual production of the petitioner's mills during the period the stay was operating in this Constitutional petition.
6. We are not inclined to accept the contention of the learned counsel for the petitioner. The obvious support of subsection (7) of section 3 of the Act of 1944 and its Explanation is that in case the production capacity of any plant or machinery has been fixed under subsection (4) of section 3 and the owner of that plant/machinery is liable to pay excise duty on the production capacity so fixed, and if for a certain period the recovery of excise duty on production capacity is stayed by the order of a Court, the party concerned would be liable to pay duty on actual production during the period of stay. But from this it does not follow that if in such a case the levy on the basis of production capacity is upheld by the Court and the stay is recalled, the assessee will not be liable for excise duty on the basis of production capacity for the period of stay. During the period stay remained in operation, the party will be liable to pay duty on actual production and in case the stay order is later on recalled and the Court upholds the levy of excise duty on production capacity of the plant machinery concerned, the assessee will be liable to pay excise duty on production capacity for the period of stay with judgment being granted to the party for the amount paid as excise duty on actual production.
7. ' Constitutional Petition No, 478 of 1975 is dismissed and the stay granted in this petition is recalled.
8. There will, however, be no order as to costs.