' This petition under Article 199 of the Constitution of Islamic Republic of Pakistan, 1973, read with the Laws (Continuance in Force) Order, 1977, is directed against the orders of the Deputy Collector Central Excise and Land Customs, Collector Central Excise and Land Customs, Lahore, and Government of Pakistan' respectively dated 1-7-1975, 23-2-1976 and 24-2-1979.
2. The facts, briefly stated, are that the petitioner is a manufacturer of cotton yarn which was subject to duty under the Excise Duty on Production Capacity (Cotton Yarn) Rules, 1968. On 23-11- 1974, Messrs.',' Muhammad Luqman, Muhammad Hanif Brothers, Karachi, owners of a licensed warehouse, applied to the Superintendent Central Excise and Land Customs, in charge of the petitioner's mills, for permission to remove from the mills 225 bags of Hard Waste. This application was made in Form A.R.-III. In the remarks column the Superintendent Central Excise, Karachi certified that the aforementioned applicants, Messrs.',' Muhammad Luqman, Muhammad Hanif Brothers had furnished a bond within the meaning of rule 153 of the Central Excise Rules, 1944. The Superintendent Central Excise, Lyallpur (Faisalabad) granted permission to the aforementioned Messrs.',' Muhammad Luqman, Muhammad Hanif Brothers for removal of the applied for bags of Hard Waste. It was alleged subsequently that 10 bags of Hard Waste were seized by the Excise Officers on 11-12-1974 from the go down of Allah Rakha and Abdul Salam, who stated that they had purchased 50 bags of Hard Waste from Messrs.',' Muhammad Luqman, Muhammad Hanif Brothers, These bags were taken into possession by the Excise Officers as allegedly the marks and numbers be them were from amongst 225 bags earlier removed from the petitioner's mills.
3. The petitioner was served with a show-cause notice, to which it replied asserting that the bags removed were duly warehoused at Karachi in the warehouse of Messrs. Muhammad Luqman, Muhammad Hanif Brothers on 28-11-1974 under Sr.No,121 and as such the petitioner was not liable any longer. Photostat of certificate of warehousing was also attached
4. The Deputy Collector Central Excise and Land Customs, Lahore however, passed an order on 1st of July, 1975, rejecting the plea of the petitioner and held the .Petitioner responsible for having illegally adjusted the excise duty against their account on Hard Waste and imposed a penalty of Rs,47,500 under rule 8(2) of the Excise Duty oh Production Capacity (Cotton Yarn) Rules, 1968.
5. The petitioner went up in appeal to the Collector Central Excise and Land Customs, Lahore who rejected the same by his Order dated the 23rd of February, 1976.
6. A revision preferred before the Federal Government on 3rd of March, 1976, against the order of the Collector also failed and was dismissed by order dated the 24th of February, 1979. Hence the present petition.
7. The learned counsel for the petitioner contended that a conjunctive reading of rules 153 and 173 (B)(8) of the Central Excise Rules, 1944, clearly shows that the liability of the manufacturer, which the petitioner is, ceases the moment the goods are delivered to an owner of other warehouse under bond and on the basis of Form A.R.-III. It was urged that in the context of the above legal position the imposition of penalty in the presence of a certificate, from the Deputy Superintendent, Central Excise and Land Customs, Karachi, certifying that the yarn removed from the factory of the petitioner had been properly warehoused in the warehouse of Messrs.',' Muhammad Luqman, Muhammad Hanif Brothers, Karachi, was not warranted under the rules.
8. Further elaborating his contention the learned counsel submitted that in the face of Annexures P.1, P.2 and P.9 to the writ petition which show that the warehousing had been done at Karachi; the petitioner could in no manner be saddled with any liability especially when the certification issued by the Superintendent, Central Excise and Land Customs, Karachi, about the' furnishing of a bond and of proper warehousing of the goods at Karachi on 28-11-1974 has in no manner been questioned and there is no action taken against the officials concerned for having issued a false certification.
9. On the contrary the learned counsel for the respondents submitted that the seizure of the bales at Faisalabad which bore the same numbers and marks as of the bales removed from the petitioner's mills establishes the identity of the goods and this being a question of fact could not be question in writ petition. It was urged that since the bales were neither warehoused at Karachi nor exported the petitioner has been justifiably burdened with the liability under rule 8 (2) of the Excise Duty on Production Capacity (Cotton Yarn) Rules, 1968, and the imposition of penalty cannot be questioned.
10. The learned counsel for the respondents has, however, conceded that there was no finding by any of the forums below about the certification of warehousing at Karachi being bogus and also conceded A that no action whatsoever has till date been taken against the officials responsible for having issued the certificate of the goods in question having been properly warehoused at Karachi.
11. The learned counsel for the respondents was asked to show how can a person be held responsible for any act when the principal persons who facilitated the commission of an illegality have not been dealt with and how could a person be saddled with a liability of continuing to ensure the further disposal of the material when the removal had been made authorized under official blessing. The learned counsel only submitted that the certification of warehousing at Karachi was fictitious. He, however, could not refer to any finding by the forums below in this regard and stated that the Assistant Collector who is present wants to make a statement.
12. The Assistant Collector thereafter made a statement as under:- "I have been directed to state that the Collector Central Excise and Land Customs, Lahore, has held as under in regard of this case:- 'Nothing on record shows that the warehousing and export certification documents originating at Karachi were referred to Collector Karachi Central Excise for verification and informing him of the seizure of the bales at Lyallpur now Faisalabad. As regards liability of the petitioner's factory since the goods were cleared on the bond of warehouse-keeper, their responsibility ended after clearance under. Chapter 7 of the Central Excise Rules.'
' I have also been directed to state that in view of this finding of the Collector, this writ petition may be accepted."
13. From the above discussion it is obvious that confronted with the situation that the orders of the forums below are not sustainable and in fact the officials themselves are to be blamed of an illegality that might have been committed, the above statement for allowing the writ petition has been made.
14. In view of the foregoing position, accepting this writ petition with costs, orders dated 1-7-1975, 23-2-1976 and 24-2-1979 respectively passed by the Deputy Collector Central" Excise and Land Customs, Collector Central Excise and Land Customs, Lahore, and Government of Pakistan are declared to be without lawful authority and of no legal consequence.