' QAISER AHMED HAMIDI, J.--Since common questions of law and facts are involved in all these petitions filed under Article 199 of the Constitution of Islamic Republic of Pakistan, 1973, we propose to dispose of them together by this consolidated judgment.
2. It may be stated at the very outset that in the course of this discussion at places reference has been made to the facts in C.P. No,D-707 of 1985 (Pak Noble Enterprises, Karachi v. The Central Board of Revenue and others), merely as illustrative of essential facts common to all these cases.
3. The respective petitioners in each case are registered importers and were granted import licences of various values by Controller of Imports and Exports for importing diesel engines, model 195, for two wheel tractors DONG FEND 12, from China, against import policies for the years 1980-81 and 1981-82, under Sr. Nos.324 and 426 of the "Free List," with following description:- "Parts and accessories of tractors, power tillers, combined harvestors and mechanical farming equipments, including such engines and hydraulic system for tractors as cannot be used in cars, buses and trucks."
4. The Collector of Customs (Appraisment), Karachi, in some other cases raised objection about the import of such engines as tractor engines under the relevant import policies, and made a reference to chief Controller, Imports and Exports, Islamabad, who gave a ruling that these engines were tractor engines and were importable under the import policy, as tractor engines. It is the case of petitioners that although the Customs Authorities agreed that for the purpose of trade and import the engines were tractor engines and no contravention of the import policy was involved, yet they declined to assess the engines as "tractor engines" under appropriate Heading 84.06 C, read with Heading 87.01, to 40$ of customs duty as described in the Pakistan Customs Tariff Schedule and sales tax free, and contrary to the express provision of law classified them under Heading 84.06 FO 20 "other engines" and charged 85-0/0 customs duty and 10% sales tax, which the petitioners had to pay. The petitioners, however, applied for refund to excess amount of'duty and sales tax, but their prayer was refused by respondent No,3. The petitioners appealed against the said orders before respondent No,2, but without any success. The applications for revision filed before respondent No,1 also met the same fate. The petitioners thereafter invoked the constitutional jurisdiction of this Court by filing separate petitions challenging the orders shown against the respective petition.
(a) C.P. No,707/1985.
(i) orders of respondent No,3, dated 9-1-1983 and 26-6-1983.
(ii) orders of respondent No, 2, dated 30-7-1983 and 25-7-1984.
(iii) order of respondent No,1, dated 25-7-1985.
(b) C.P. No,742/1985.
(i) order of respondent No,3, dated 9-1-1983.
(ii) orders of respondent No,2, dated 10-6-1984 and 17-12-1984.
(iii) order of respondent No,1, dated 25-7-1985.
(c) C.P. No,811/1985.
(i) orders of respondent No,3, dated 6-1-1983, 9-1-1983, 12-1-1983 and 13-1-1983.
(ii) order of respondent No,2, dated 30-7-1983.
(iii) order of respondent No,1, dated 21-11-1984.
(d) C.P. No,203/1986.
(i) order of. Respondent No,3, dated 5-10-1983.
(ii) order of respondent No,2, dated 22-5-1984.
(iii) order of respondent No,1, dated 8-12-1985.
(e) C.P No,204/1986.
(i) order of respondent No,3, dated 13-10-1983.
(ii) order of respondent No,2, dated 23-3-1984.
(iii) order of respondent No,1, dated 8-12-1985.
5. The learned counsel for the petitioners has referred to several points. He, however, assailed the impugned orders on the following main grounds:-
(i) The engines belonged to series 195, which were specially manufactured for agricultural tractors DONG-FENG-12. These engines contained a special foundation as required for a tractor engine and the Chinese suppliers and Chinese Commercial Consul in their respective certificates had confirmed that these engines were exclusively meant for tractor DONG-FENG-12.
(ii) Under 195 series 12 H.P. Engines for different applications are manufactured in China, which differ from one another in construction, mechanism, etc, which fact has been confirmed by the Chinese National Machinery Import and Export Corporation.
(iii) The engines are fitted with a head lamp, which is a specific requirement for a tractor, being a vehicle for its operation during night time and no industrial engine requires head lamps.
(iv) These engines have built-in cooling system as against other engines meant for cooling the engines from outside storage tanks.
(v) The Chief Controller of Imports and Exports has categorically held that these engines were meant for tractors.
(vi) The primary use of these engines should have been taken into consideration while assessing them to duty.
(vii) The Customs House had been assessing these engines under P.C.T.
84.06 C as engines for tractors but they departed from their previous practice in respect of these cases.
6. On the other hand it was pleaded on behalf of respondents that the structure of engines in dispute is such that it could be put to other use as well, and consequently the respondents were justified in classifying them under Heading 84.05 FO 20 "other engines."
7. The real question which falls for determination in these petitions is whether the engines imported by petitioners were "tractor engines" classifiable under Heading 84.06 C read with Heading 87.01 C 0 1, or were engines classifiable under Heading 84.06 FO 20" other engines."
8. A perusal of Pakistan Customs Tariff (PCT) Schedule shows that Heading 84.06 is sub-divided into seven sub-heads, viz, {{TABLE}} PCT Heading Description 84.06 Internal comubs- tion piston engines. A. Aircraft engines. B. Parts of aircraft engines. C.
Engines for propelling vehicles of Ch. 87.
D. Out board marine engines E. Marine propulsion engines other than out board. F. Other engines.
01 complete horizontal slow speed oil engines upto and including 50 HP and high speed oil engines upto and including 20 HP.
02 others. 40% ad-valorem. G. Parts of the engines of subheading C to F.
' Sub-heads 84.6A to 84.6 E cover engines for specific uses, e.g. Engines for aircrafts, engines for vehicles, marine engines, etc. It will be manifestly clear from these classifications that the engines which do not fall under any sub-head from 84.6A to 84.6 E, would be classified under this residuary sub-head 84.6 F. The Chief Controller of Imports and Exports had expressly described these engines as tractor engines vide (Annexure P/12), and where the goods for the purpose of import were treated as tractor engines there was no legal justification for the respondents to treat them as "other engines" and classify them under a residuary sub-heading. There was again no justification to brush aside the certificates issued by Chinese suppliers, Chinese Commercial Consul and Chinese National Machinery Import and Export Corporation who had confirmed that these engines were exclusively meant for tractor DONG FENG-12.
' The advertisements made by Pakistan Tractor Corporation Ltd., a semi-Government organization about tractor DONG FENG-12, further support the stand taken by the petitioners.
8. Note 5 of Chapter 84 of I.T.C. Schedule of 1981, further provides:- "A machine which is used for more than one purpose is, for the purposes of classification, to be treated as if its principal purpose were its sole purpose."
' Again as observed in Dunlop India Ltd. v. Union of India and others, reported in AIR 1977 SC 597, the meanings given to articles in a fiscal statute must be as people in trade and commerce, conversant with the subject, generally treat and understand them in the usual course. But once an article is classified and put under a distinct entry, the basis of the classification is not open to question.
9. Admittedly, the Customs authorities in the past had classified these engines under P.C.T. Heading 84.06 C, read with Heading 87.01-001 as part of agricultural tractors. It is, therefore, a case of discrimination.
10. For all these reasons, there is good deal of force in the contentions raised by learned counsel for petitioners in para.
5. The prime use of the engines is to be taken into consideration for the purpose of classification as per Note 5 of Chapter 84 of I.T.C. Schedule of 1981 and not any improvised, imaginary and adopted use. We would, therefore, quash the impugned orders passed in all the five petitions shown in para 4 above. We also declare that the tractor engines imported by the petitioners were classifiable under Head 84.06 C, read with Heading 87.01-001 at the material time. The petitioners are thus entitled to the refund of excess duty and sales tax realised from them without any legal authority.
The petitions are accepted, but the parties are left to bear their own costs.