G. A. JAHANGIR, ADDITIONAL SECRETARY.-1. .This revision application is directed against Order-in- Appeal No. CE-33 of 1984 dated 19th February, 1984 passed by the Collector (Appeals), Southern Zone, Karachi. (Now reported as PTCL 1990 CL. 761).
2. Mr. Mehmood Mirza, Advocate, appeared before me on 18th July, 1988 and advanced the arguments as given in the revision application and urged before the appellate authority. He contended that the applicants M/s. Bata Pakistan Ltd., Lahore had purchased the subject shoes valued at less than Rs. 125/- ppr pair from different manufacturers working under the sphere of cottage industry. The applicants had supplied only shoes-lasts, designs and their labels to the manufacturers of the shoes in question. The manufacturers used the trade mark of Bata and not the patent rights which are used in relation to some invention. He therefore pleaded that the applicants did not fall within the definition of producer or manufacturer under section 2(11) of Sales Tax Act, 1951, and were not liable to pay sales tax on the subject shoes which were otherwise manufactured by small independent manufacturers operating as cottage industry, entitled to exemption from sales tax. He therefore prayed that demand raised against the applicants for payment of sales tax on the goods under reference should be vacated and impugned order set aside.
3. Perusal of the case record reveals that the shoes in question were manufactured by small shoe makers, working within the sphere of cottage industry. They manufactured the shoes in accordance with the design and specifications and shoe lasts supplied to them b$ the applicants namely M/s. 'Bata' (Pak.) Ltd., whose trade mark "Bata" was also embossed on the shoes, conspicuously. The applicants sold these shoes under their trade mark at the rate of Rs. 140/- per pair to different customers. Since the shoes in question were manufactured by independent shoe makers who were neither surrogate nor set up by the applicants, they constituted the true manufactures of the shoes, within the meaning of section 2(11) of the Sales Tax Act, 1951. The goods were cleared from their premises as such they were liable to. Pay sales tax on the shoes under dispute at the time of their removal from their small factories. It is, therefore, evident that M/s. Bata Ltd. Did not fall within the category of manufacturers for the levy of sales tax with reference to the shoes in question. As such demand raised against them on the above count is vacated. The revision application is admitted accordingly.