' FAKHRUDDIN H. SHAIKH, J.-The above three constitutional petitions involve common points of law and facts, hence they are being decided by this common judgment.
2. In Constitution Petition No, D-148 of 1982 the petitioner is Messrs Ajaz & Company. This petitioner was granted Import Licence by the Controller of Imports and Exports, Karachi for import of 'Fodder Crushers' from China. In pursuance of the licence the petitioner imported 110 Packages of 'Fodder Crusher' valuing Rs, 2,65,620. After arrival of the goods at Karachi, the petitioner filed necessary documents before the Customs Authorities concerned for release of the goods which, according to the petitioner, had to be assessed under the Heading T.84.28' which relates to a duty free item, on which only 10% sales tax 1 leviable. The Customs Authorities, after physical examination of the said goods, expressed the view that the consignment fell under I. T. C Heading 84.29 and not 84.28. The item under the I. T. C. Heading 84.29 relates to goods which are subject to 40% duty plus 10% sales- tax The goods in question were examined by Machinery Shed Appraise M. S. A.) who had clarified in his report that 'Fodder Crusher' is no 'Chaff Cutter' and that the same were assessable under the I.
T. C Heading 84.29.
3. The Principal Appraiser also examined the goods and was of the opinion that the consignments consisting of 'Fodder Crushers' were liable to be assessed under the I. T. C. Heading 84.28 and submitted such report to the Assistant Collector for his orders. The Assistant Collector of Customs also examined the machines and was of the view that the same were liable to be assessed under the I. T. C. Heading 84.29. H was of the further view that the machines could not be termed as 'Chaff Cutter' which fell under the I. T. C. Heading 84.24 under which the goods were liable to duty of 85% plus 10% as sales-tax.
4. , On 18th January, 1982 the respondent i. e. The Collect of Customs received following telegram from the Central Board o Revenue :- "Definite information alongwith copies of bills of entry in which Fodder Chopper were allowed release free of duty at Lahore Dr Port'. Dry Port Authority were asked to take action in this regard It has now been informed that this item has also been released free of duty from Karachi Customs House. One such case relates t I. G. M. No, 902, dated 11th July, 1981, Index No, 39 and h been dealt in File No, S. 1/Miscellaneous/157/81 Group IV.
(3) Fodder Chopper are specifically classifiable under P. C. T.
84.2 as Chaff Cutters and are chargeable to duty as 85% and 10% sale tax and are also not permissible for import. You are kind! Requested to investigate the case referred to above and all other similar cases under which this item has been allowed duty free release the duty and tax may be recovered under intimation to the C. B. R.
(4) Matter may be dealt with on priority basis."
' On the basis of the above telex the respondent directed the Deputy Collector to examine the goods in the light of the instructions contained in the telex, dated 18th January, 1982. The Deputy Collector examined the goods and submitted report to the effect that "a 'Fodder Crusher' has a Disk and rods attached to it and its function is that of grinding the foodgrain and it cannot be assessed under heading 84.24." However, the respondent was of the view that the C. B. R. Had considered 'Fodder Crusher' as 'Chaff Cutter' which was liable to be assessed under the I. T. C. Heading of 84. 24 and liable to a duty at the rate of 85% plus 10% sales-tax, therefore, the same should be assessed as such.
5. Aggrieved by the above order of the respondent the petitioner filed the above petition seeking, inter alia, the following reliefs :- "(i) To declare that the assessm ent made by the respondent in respect of the petitioner's consignment in question under heading P. C. T.
84.24 is absolutely incorrect, illegal arbitrary and without any jurisdiction.
(ii) and (iii)
(iv) To declare that the petitioner's machinery in question is liable to be assessed under F. C. T.
Heading 84.28, as his machinery fully falls within the provision of P. C. T. Heading 84.28 only.
(v) To declare that the petitioner is entitled to the refund of K. P. T. Demurrage etc. Whatsoever the petitioner had paid to the K. P. T. So far after the decision of this Constitutional Petition."
6. In Constitutional Petition No, D-235 of 1982 the petitioner is Messrs Maqsood & Company. This petitioner had also imported 'Fodder Crushers' from China comprising of 110 packages valuing Rs, 2,91,273 under an Import Licence granted by the Controller of Imports and Exports. These machines were assessed by the respondent under I. T. C. Heading 84.24 as Chaff Cutter' subjected to and levy of 85% duty with 10% sales-tax. According to the petitioner, similar machines had in the past been assessed under the I. T. C. Heading 84.28 as a duty free item. The petitioner also referred to an earlier case in which the Customs Authorities had assessed similar machines under I. T. C. Heading 84.28. However, in this case also the Customs Authorities followed the instructions contained in the telex of C. B. R. Dated 18th January, 1982, referred to above and treated the 'Fodder Crusher' as 'Chaff Cutter' and assessed the same under I. T. C. Heading 84.24 requiring the petitioner to pay duty at the rate of 85% plus 10% sales tax. The petitioner, therefore, filed the above petition seeking, inter alia, following reliefs ;- "(i) To declare that the assessm ent made by the Respondent in respect of the petitioner's consignment in question under heading P. C. T.
84.24 is absolutely incorrect, illegal, arbitrary and without any jurisdiction.
(ii) To declare that the petitioner is entitled to get the consignment in question released, under heading F. C. T.
84.28 against payment of 10% sales-tax only, as the machinery imported by the petitioner falls within the provision of P. C. T. Heading 84.28 only.
(iv) To declare that the petitioner is entitled to the refund of K. P. T. Demurrage etc., whatsoever the petitioner has paid to the K. P. T. so far after the decision of this Constitutional Petition."
7. In Constitutional Petition No, D-682/1982 the petitioner is Ajaz & Company which is registered as Importer and Exporter with the office of Chief Controller of Imports and Exports, Karachi. This petition was granted an Import Licence for importing items of machinery and mill work from abroad. The license was valid upto 2nd November, 1982. In pursuance of the licence the petitioner imported 'Fodder Crushers' from China. In this case also the Customs Authorities detained the machines treating the same as liable to assessment under I. T. C. Heading 84.24 which related to a banned item liable to 85% duty plus 10% sales tax. The goods in this case consisted of 132 wooden cases of Fodder Crushers'. As these goods were not being released by the Customs Authorities without payment of customs duty, the petitioner was constrained to file in-Bond Bill of Entry for placing the goods in Bonded Warehouse under the charge of the Customs. On the reverse of the Bill of Entry the petitioner specifically stated that the goods fell under the Heading 84.28 of the I. T.
C. For the purpose of assessm ent of duty. The petitioner came to know later that the respondents were assessing the machines under the Heading 84.24 of I. T. C. In pursuance of instructions received from the C. B. R. As the petitioner was suffering loss due to detention of the goods, therefore, he got released 77 wooden cases by paying customs duty at the rate of 85% plus 10% sales-tax as required by the respondent according to assessment under Heading 84.24 of the I. T.
C.
8. The plea of the petitioners in all their cases is that 'Fodder Crushers' imported by them were liable to be assessed under Heading 84.28 of the I. T. C. Schedule while the respondent, assessed the same under Heading 84.24 thus, I. T. C. Schedule requiring the petitioner to pay custom duty at the rate of 85% plus 10% sales-tax.
9. The Collector of Customs, who is respondent in all the three petitions, has contested the above petitions mainly on the ground that the petitions are not maintainable because the petitioners have not exhausted the remedies available to them by way of appeal and revision as provided under the Customs Act of 1969. It is also alleged that there is no difference between 'Fodder Crushers' and 'Chaff Cutters' and as such the goods were rightly assessed under the Heading 84.24 of the I. T. C. Schedule. It is, however, admitted that earlier similar consignments had been assessed under Heading 84.28 of the I. T. C. But that was done by mistake and that the respondent was not liable to commit, the same mistake again by treating the consignments under a wrong Heading.
10. So far as the objection of non-maintainability of the petitions is concerned, it has been argued by Mr. Murtuza Hussain learned counsel for the respondent that the petitioners should have first exhausted the remedies provided to them under the Customs Act of 1969 by way of appeals and revisions. This objection has no substance, because it is admitted by the respondents in all the petitions, that they had acted in the matter of deciding the question of classification of the goods under one Head or the other, on the instructions issued by the C. B. R. Under these circumstances it.
Would have been futile for the petitioners to have resorted to the provisions relating to appeal and revision etc. Under the Customs Act, Collector of Customs was the Appellate Authority who had already conveyed the directions of the C. B. R. To his subordinates in respect of the classification of the goods. It would have, therefore, been futile for the petitioners to have filed appeal before the respondent, who had already made up his mind about the question under consideration. Under section 195 of the Customs Act of 1969 the C. B. R. Has been given powers to call for and examine the record of any proceedings under the said Act for the purpose of satisfying itself as to the legality or propriety of any decision. The C. B. R. Has thus a suo motu power of revision. In this case the C. B. R. Itself had taken a decision that the goods under consideration should be classified under the Heading 84.24 of the I. T. C. Treating the `Fodder Crushers' as 'Chaff Cutters', hence there was no question of moving the C. B. R. In this behalf. Learned counsel for the respondent has, however, argued that the petitioners could have filed revision before the Federal Government under section 196 of the said Act. Revision, however, is not an efficacious remedy. Hence in our view the petitioner in all the above petitions were entitled to approach this Court for grant of relief under constitutional jurisdiction.
11. The main question that now requires to be decided is whether the respondent bad rightly treated to 'Fodder Crushers' as 'Chaff Cutters' and classified them under Heading 84.24 of the I. T. C.
Schedule. There is no dispute on the point that 'Fodder Crusher' is an agricultural machinery which is used on the farms. In order to determine the question of classification of the 'Fodder Crusher' under a particular head, it would be advantageous to reproduce the Headings 84.24 and 84.28 as they stood before the same were amended by the Finance Ordinance of 1982. They are reproduced hereunder.
"84.24 Agricultural and horticultural machinery for soil preparation or cultivation (for example, ploughs, harrows, cultivators, seed and fertilizer distributors) ; lawn and sports ground rollers.
A.Ploughs. Free (1)10% F. List-426721.11 B.Seeders planters and transplanters; fertilizer distributors and manure spreaders.Free (2)10% F. List- 426,434721.12 C.Scrifiers, cultivators, weeders, hoes and harrows. Free10% F. List- 426,434721.13 D.Other machinery. 01 Lawn and sports ground rollers.
02 Chaff cutters.
03 OtherFree 85 % ad val. Free10% F. List-412 10% Banned 10% F. List- 412,426721.18 721.18 721.18 E.Parts Free10% F List- 412,426721.19 84.28 Other Agricultural, Horticultural, poultry-keeping and bee-keeping machinery; germination plant fitted with mechanical or thermal equipment; poultry incubators and brooders.
A. Machinery ad val.Free40% F. List-412, 426,434721.97 B. Parts.
Free40% F. List-412,426 721.99"
So far as the Heading 84.29 of the I. T. C. is concerned, that is also relevant because in one of the cases the Machinery Shed Appraiser had classified `Fodder Crushers' under the Heading 84.29. This heading was not amended by the Finance Ordinance referred to above and is to the following effect :- 84.29 Machinery of a kind used in the bread grain milling industry, and other machinery (other than farm type machinery) for the working of cereals or dried leguminous vegetable.
A. Machinery ad val.40%10% F. List-412727.11 B. Parts. ad val.40%10% F. List-412727.19"
It may be stated at the outset that the Customs officials themselves were in doubt as to the actual nature of the machinery and the question of their? Classification under a particular Head. It is also not denied that previously the Customs Authorities had been treating 'Fodder Crushers' as an item falling under Heading 84.28 of the I. T. C. Schedule and had been releasing the goods by charging only the sales-tax. This fact has not been denied by the respondent. It has been alleged that previously the classification was done by inadvertance or by mistake of law.
12. In the present cases also the Customs officials would not have treated the 'Fodder Crushers' as 'Chaff Cutters' but for the directions given by the C. B. R. Referred to above. In the case of Aijaz & Company in Constitutional Petition No, D-682/82 three Appraisers had given three different opinions about 'Fodder Crushers' after holding physical examination of the machinery. This fact has been specifically stated in para-6 of the above petition which runs as under :- "(6) That various officials of the Customs Department after physically examining the goods namely, 'Fodder Crushers' had given different opinion which are recorded in Customs File No, S. I./ Miscellaneous/8/82WW and File No, S. I./Miscellaneous/11/ 82WW. The Machinery Shed Appraiser after physically examining the goods gave his opinion as under :- ' The probability of the machine imported falling under heading 84.24 as 'Chaff Cutters' as discussed with A. G. (WW), has also been examined. In my opinion these are not chaff cutters as there is no cutting blade or knife. These are entirely different class of machines 1. e. Grinders or pulverizor, mainly for reducing matarial in lumps to a fine powder.'
' The Principal Appraiser concluded his opinion as under :- `These machines are specifically covered by Heading 84.28 under notes Part (1) Subhead BI-6 pages 1256-1257 which covers Fertilizers, crushing and mixing mill, oilcake breakers, straws or hay cutters, crushing machine for oats, barley and other fodders and farm type machines for grinding or milling wheat, maize, barley and other feeding stuff even farm type flour milling machines fall under I. C. T.
84. 28'.
' The observations of the Deputy Collector (Appraisement) in File No, S. I./Miscellaneous/11/82WW was as under :- 'I have examined the consignment. It has a disk and the rods attached to it, the function being to grind the foodgrain. It cannot be assessed under heading 84.24 as suggested by the Board, 84.29 being the correct heading, we may issue the Telex.' "
' The averments made in the above para. Have not been denied by the respondent in his counter- affidavit. In reply to para. 6 it was stated by the respondent that the subordinate officials had only given their opinions which were not binding on their departmental head. It was further stated in reply that :- "The respondent being their superior and the Departmental Head, after going through the records of the case as well as the literature produced has in exercise of the authority vested in him, ordered classification of the machine under heading 84.24 of I. T. C. As Chaff Cutter in consultation with the Member (Customs), Central Board of Revenue." (Underlining is ours)
It would, therefore, be clear that the subordinates of the respondent i. e.1 the Appraiser, the Principal Appraiser and the Deputy Collector, who had physically examined the machinery, had given different opinions! About the classification of 'Fodder Crushers'. All the above officers are responsible members of the Customs Department and are supposed to have sufficient knowledge about the classification of Machineries under various Heads of the I. T. C. Schedule. Their opinions cannot be brushed aside by the respondent by saying that they were not binding on the respondent or that the respondent had come to its own decision to the contrary in consultation with the C. B. R. This only shows that the respondent himself was not sure about the question of classification of the goods in question under a particular Head, that is why he consulted the C. B. R.
13. It should first be determined whether 'Fodder Crushers' and 'Chaff Cutters' are identical machines and as such are liable to be classified under the same Head.
14. In the case of Aijaz & Company in Constitutional Petition No, D-148/1982 the respondent had come to a definite conclusion that the 'Fodder Crusher' was not a 'Chaff Cutter, but was an industrial machine liable to be classified under Heading 84.29 which envisages Customs duty of 40% plus 10% sales-tax. The Customs Authorities were prepared to release the goods by classifying it under the Heading 84.29, but before that [Here in Italics] ' the Telex referred to hereinabove was received from the C. B. R. With the direction that the 'Fodder Crusher' should be treated as 'Fodder Chopper' or 'Chaff Cutter' classifiable under Heading 84.24.
15. It may be pointed out that there is vast difference between a 'Fodder Crusher' and a 'Chaff Cutter'. From the record it would transpire that ,Fodder Crusher' consists of Disc and Rod and is used as grinding machine. On the contrary 'Chaff Cutter' consists of blades and is used for cutting fodder. A 'Fodder Crusher' is a pulverizer which grinds and crushes the fodder and other foodstuffs like wheat, maize, barley etc. Into fine particles of powder form. This averment has been specifically made by Messrs Aijaz and Company in para. 3 of their Petition No, D-682/1982. In reply the respondent has vaguely denied the averment, but admitted that "in fact the 'Fodder Crusher' grinds oilcake, barley, maize etc. And in a nutshell it is an animal fodder making machine". From this reply it would appear that the averment made in para. 3 of its petition by Messrs Aijaz & Company is almost admitted. This being the case, a 'Fodder Chisher' cannot be equated with a 'Chaff Cutter' which consists of blades and is used for cutting fodder for animals. It is also not disputed that both the 'Fodder Crusher' and the 'Chaff Cutter' are small machines and cannot, by any stretch of imagination, be classified as industrial machines so as to fall 'under the Heading 84.29. The respondent himself has not, after holding thorough examination, classified these machines as industrial machinery envisaged by Heading 84.29.
16. We are, therefore, of the view that 'Fodder Crusher' has wrongly been equated with 'Chaff Cutter' by the respondent. It would be advantageous to refer in this connection to "Explanatory Notes to the Brussels Nomenclature" about the various machineries falling under the Headings 84.24 and 84.28. On page 1244 of the Notes relating to June, 1969 it has been stated that the items failing under Heading 84.24 are "Agricultural and horticultural machinery for soil preparation or cultivation (for example, ploughs, harrows, cultivators, seed and fertilizer distributors) ; lawn and sports ground rollers". The Explanatory Notes' have further given description of the machines which could be classified under Heading 84.24. It is as under :- "Machines designed to be hauled by, or mounted as interchangeable equipment on a tractor.
' Some agricultural and horticultural machines (e. g., ploughs and harrows) are designed solely to be hauled or pushed by the tractor, to which they are linked by a coupling device (whether or not with a lifting mechanism). Others (e. g., rotating hoes) are operated by a general-purpose power take-off on the tractor. Such machines are mounted and changed in the fields or the farm yard. All these machines remain within the present heading even if they are imported with (and whether or not mounted on) the tractor. The tractor itself is separately classifiable in Heading 87.01.
' The same classification principle applies where another type of hauling device is substituted for the tractor (e.g., one classifiable in heading 87.02), or where a rotary hoe is mounted on the driving axle of a walking tractor in place of the wheels, so that it acts both as an implement and as driving wheels carrying the whole.
' Self-propelled agricultural and horticultural machines.
' In these machines the tractive part and the machine make up one integral unit (e. g., motorised ploughs). Such machines are classified in the present heading.
' But the heading excludes fertilizer, etc., spreading lorries which are classified with other special purpose motor vehicles in heading 87.03.
' The smaller types of agricultural machines designed to be drawn or rolled by manual power (e. g., ploughs, harrows, cultivators, hoes, rollers and seeders) also fall within the present heading. The numerous machines falling within this heading include :-
(1) Machines for clearing scrub, undergrowth, stalks of former crops, roots, etc. They generally consist of two large wheels and a drum fitted with cutting blades.
(2) Stone-removing machines, similar to a harrow but fitted with hooked teeth set in two rows converging towards an open-slatted container.
(3) Ploughs for all soil working purposes, e. g., mouldboard ploughs (single or multi-share and reversible types), sub-soil ploughs (usually without mouldboards) and disc-ploughs.
(4) Scarifiers, cultivators, weeders and hoes are used for working, weeding or smoothing the oil after ploughing, or during the growth of the crops. These machines usually consist of a horizontal frame fitted with several rows of various types of tools (shares, discs, teeth, etc.), which may be rigid or springy, fixed or movable, and are sometimes interchangeable.
(5) Harrows are mainly used for breaking up the soil after ploughing. In the toothed harrow the teeth are fitted to a rigid, articulated or chain-mesh framework, or sometimes to a drum or rollers.
In discharrows the teeth are replaced by one or more rows of concave discs with cutting edges.
(6) Rollers, mainly used to pack the soil ; they include smooth, corrugated, disc, packer wheel rollers, etc. The heading also includes rollers for gardens, lawns, sports grounds, grass tracks, etc.
(7) Fertiliser distributors and manual spreaders. Distributors for spreading manure or solid fertilisers usually consist of long box hoppers mounted on wheels and fitted with a distributing mechanism such as sliding floor plates, worm feed, endless chains or revolving star discs. Detachable fertiliser drills, intended for hitching to a plough, and usually consisting of a conical hopper fitted with a star wheel ejector mechanism, are also classified in the present heading. Portable machines for spreading solid fertilisers also fall within this heading. '
' Moving-floor trailers with a chopper/distributor attachment enabling them to operate, while unloading, as much spreaders and cart o; ' trailer type liquid fertiliser spreaders consisting of a sheeled container usually equipped with simple spreading plates or troughs, fall to be classified in heading 87.14.
' Portable injectors for forcing fertilising liquids into the soil, also fall within the present heading. They consist of a long hollow rod, through which the fertiliser is pumped into the soil by a hand or mechanical pump.
(8) Seeders, planters and transplanters consist of boxes or hoppers mounted on wheels, and fitted with devices for setting seeds, bulbs, tubers, plants, etc., in a soil. They may also include devices for opening and recovering the furrow.
(9) Thinning-out machines (e. g., beet separators) used for separating young plants ; these may be very complex machines controlled by photo-electric devices.
(10) Machines for cutting back the tops or shoots of plaints."
' From the above it would appear that 'Fodder Crusher' does not find place among the machines which are classifiable under the Heading 84.24.
' On page 1256 of the same 'Explanatory Notes' we find description of the machinery falling under the Heading 84.28. It is as under :- "Other agricultural, horticultural, Poultry-keeping and Bee-keeping machinery : germination plant fitted with mechanical or thermal equipment poultry incubators and brooders."
' The numerous machines which fall under the above Heading have also been summarised in the note relating to the above Head. Of the various items which fall under the above Heading, item (E) of this note is relevant for our purpose which refers to following types of machines :-- "(E) Machines and appliances for preparing fodder, etc., such as :
(1) Oilcake breakers.
(2) Cabbage-cutters and other machines for chopping greenstuffs.
(3) Root slicers or crushers for beet, turnips, carrots, fodder, etc.
(4) Straw, hay and silage cutters, whether or not incorporating a conveyor for filling the silo.
(5) Crushing machines for preparing oats, barley etc., as fodder for horses.
(6) Farm type machines for grinding or milling wheat, maize, barley and other feeding stuffs ; farm type flour-milling machines."
17. From the above 'Explanatory Notes' which have been recognised internationally for the purpose of determining classification of the machinery (see the case of Collector of Customs v. Abdul Majid Khan (I). We come to the definite conclusion that a 'Fodder Crusher' is a small sized farm machinery which is materially different from 'Chaff Cutter' and
(2) 1977 SCMR 371 ' is not liable to be classified under the Heading 84.24, but should be classified under Heading 84.28, which relates to duty free item liable to be cleared by the respondent by charging only 10 sales tax on the Invoice value of the goods. Since all their consignments of 'Fodder Crushers' were imported against licences issued under Import Policy for the period of 1980-81 these goods would be classified under Heading 84.28 and the amendment brought by Finance Ordinance of 1982 will not be applicable to the cases.
18. For the above reasons we allow all the three petitions and set aside the impugned orders of the respondent regarding classification of `Fodder Crushers' under Heading 84.28 of the I. T. C.
Schedule as illegal and without lawful authority and declare that the machineries in question are classifiable under the Heading 84.28 as a duty free item. We further direct that the Customs Duty recovered from the petitioners, if any, shall be refunded to them and so also the difference of sales-tax in addition to the 10% tax on the invoice value of the goods. There shall be no order as to costs.