JUDGMENT ABDUL QADEER CHAUDHARY. J-1. The petitioner is a limited Company and manufactures dry battery cells. The Government of Pakistan under sub-section (1) of section 12-A of the Central Excises and Salt Act, 1944 exempted dry battery cells from the whole of excise duty with effect from 1st January, 1978 by the notification of that date. The petitioner cleared 57,600 pieces of battery cells on 1st. January, 1978 from its factory warehouse after making payment of excise duty.
Respondent No. 1 on 24th December, 1983 issued a show cause notice claiming a sum of Rs. 32,166 as excise duty on 70,480 pieces of dry battery cells cleared by the petitioner after 1st January, 1978 on the basis of the judgment of the Supreme Court in appeal No. CPSLA No. 468 of 1980. The petitioner replied the notice and contended that the judgment of the Supreme Court was not applicable to the case of the petitioner but the respondent No. 1 rejected the contention of the petitioner. The petitioner thereafter appealed against the decision of the respondent No. 1 to respondent No. 2 but according to the petitioner he was not informed about the date of hearing and his appeal was rejected, but the order of the respondent No. 2 shows that petitioner did not appear inspite of notice.
2. Learned counsel for the petitioner has submitted that the respondent cannot claim excise duty on the stock of battery cells which were cleared from the factory of the petitioner after 1st January, 1978 as the dry battery cell was exempted from the payment of excise duty with effect from this date. Section 3 of the Central Excises and Salt Act provides that there shall be levied and collected in such manner as may be prescribed duties of excise on all excisable goods, produced or manufactured, and on all excisable services provided or rendered, in Pakistan, as, and at the rates, set forth in the First Schedule. Under Section 12-A, the Federal Government may from time to time, by notification in the Official Gazette, exempt subject to such conditions, if any, as may be specified therein, any goods or, 'as of goods from the whole or any part of the duty leviable under the Act. Learned counsel has made emphasis on rule 9-A of the Central Excise Rules, 1944 which provides that the rate of duty and the tariff valuation if any applicable to goods cleared on payment of duty shall be the rate and valuation if any in force on the date on which duty is paid, or, if the goods are cleared from a factory or a warehouse, on the date of the actual removal of such goods from such factory or warehouse, lt is therefore emphasised that as the petitioner had cleared 70,480 pieces of dry battery cell from the factory godown on 16th January, 1978 and 30th May, 1978 subsequent to the issuance of the notification granting exemption therefore the petitioner had a legal right to claim exemption. In such circumstances the issuance of show cause notice by the respondent No. 1 claiming the amount of excise duty after a lapse of 5 years and 11 months was illegal. Perusal of Rule 9-A would prima facie supports the contention of the learned counsel but we are confronted - with the position that the honourable Supreme Court of Pakistan in the case of Central Board of Revenue etc. Vs. Colony Thai Textile Mills Limited reported in 1981 S.C.M.R. 303 observed that the duty would be levied on the date when the goods have been manufactured. After the announcement of this judgment notice impugned in this petition had .
Been issued by the respondent. Learned Counsel has submitted that Rule 9-A of the Central Excise Rules was not considered by their Lordships of the Supreme Court as the Judgment, has referred to rule 9 only. According to us rule 9 will not apply to goods which are exempted from duty of excise under section 12-A of the Excise Act but we cannot accept the contention of the learned counsel that their Lordships of the Supreme Court have not considered rule 9-A of the rules. The judgment reported in 1979 S.C.M.R. 640 (Colony Sarhad Textile Mills Limited, Nowshera vs. Superintendent, Central Excise and Land Customs) was approved wherein it was observed that there remains no ambiguity on the subject that excise duty is essentially a duty on production and manufacture. The Supreme Court thus held that the goods having been manufacrtured prior to the issuance of third notification their liability to be taxed was to be regulated by the second notification which was in force at the time of their manufacture. Learned counsel has stated that the case of the petitioner is distinguishable as a converse decision has been made in the reported case. Though the question before the Supreme Court in that case was about the levy of duty but the principle enunciated in the judgment is the date of levy of duty when goods have been manufactured. In this view of the matter the-respond dents have rightly issued notice to the petitioner. Learned counsel has referred to the case reported in PLD 1978 Lahore 475 but in view of the judgment of the Supreme Court we need not express our view about this judgment. Under Article 189 of the Constitution any decision of the Supreme Court shall, to the extent that it decides a question of law or is based upon or enunciates a principle of law is binding on ail other Courts in Pakistan As the Supreme Court had laid down the law which is binding on this court therefore we have to respectfully follow the dictum laid down by the Supreme Court in the above cited authority.
3. Mr. Wajihuddin learned counsel for the respondents has submitted that on the basis of the judgment of the Supreme Court show cause notice was issued and in some cases the respondents have to bear heavy losses. As the Supreme Court had laid down the law therefore respondents are bound to levy the duty in the light of the judgment of the Supreme Court. This contention finds support from the Exemption order dated 27th December, 1984 wherein the Central Board of Revenue exempted all goods manufactured or produced on or before the 10th February, 1980 from so much of duty as is in excess of duty which was payable at the time of clearance as per the provisions of Rule 9 of the Central Excise Rules, 1944 provided the manufacturer or producer has not received in relation, to such goods any sums' as refund of duty overpaid.
4. In the circumstances explained above, we dismiss the petition with no orders as to costs.