ZAFFAR HUSSAIN MIRZAJ.-- These four appeals shall be governed by this judgment as common questions of law and fact arise for determination.
2. The question of law which arose for decision, in these cases was whether the Notification No.SRO 605(l)/83 dated 11th June, 1983 issued by due Central Board of Revenue under section 21 of the Customs Act, 1969 hereinafter referred to as the Act) was validly rescinded when the appellants in these appeals, had already established confirmed irrevocable Letters were entered into for the sale of the same. The said notification reads as follows: GOVERNMENT OF PAKISTAN CENTRAL BOARD OF REVENUE NOTIFICATION Islamabad, the 11th June, 1983 CUSTOMS S.R.O. 605(l)/83.-\n exercise of the powers conferred by section 21 of the Customs Act, 1969 (IV of 1969), and in supersession of its Notification No.S.R.0.142(l)/79, dated the 14th February, 1979, the Central Board of Revenue is pleased to allow the delivery without payment of polyprophlene granules imported by a recognized manufacturer of woven polypropylene bags, subject to the following conditions, namely:-
(a) the importer-cum-manufacturer shall furnish to the Chief, Survey and Rebates, Central Board of Revenue or any other officer authorized by the Central Board of Revenue in this behalf, of the total quantity of woven polyropylene bags that he is manufacturing or intends to manufacture manufacture and the Chief or such authorised officer, in consultation with the Collector of Customs or the concerned Government Departments, shall certify the annual capacity of the unit for the manufacture of woven polyproplylene bags and the total annual requirements of polypropylene genules;
(b) the importer-cum-manufacturer shall make a declaration before the Collector of Customs at the time of clearance of imported polypropylene granules that they have been imported for the local manufacture of woven polypropylene bags;
(c) the importer-c/u-manufacturer shall furnish to the Collector of Customs a bank guarantee or instance guarantee equivalent to the duties and tax leviable on every consignment in excess of 50% ad valorem;
(d) the manufacturer shall maintain record of the raw materials and the bags manufactured in such form as may be prescribed by the Central Board of Revenue; and
(e) the importer-cum-manufacturer shall within one year of the date of importation of polypropylene granules, apply to the Collector of Customs for discharging the bank guarantee or insurance guarantee. The application shall be supported by a certificate in the form Set out below issued by the Assistant Collector, Central Excise and Land Customs within whose jurisdiction unit is located.
FORM OF CERTIFICATE I, Assistant Collector, Central Excise and Land Customs.......... Am satisfied that the polypropylene granules which have been released against bank guarantee or insurance guarantee under bill of entry No............ Dated the....... Have been used for the manufacture of (given quantity) woven polyprophylene bags in accordance with the scale laid down by the Chief, Survey and rebates, Central Board of Revenue.
(Assistant Collector)
NASIR AHMAD, Secretary (Customs)
3. In order to bring out the controversy between the parties it would be sufficient to state the facts in Civil Appeal No.540-K of 1990. According to the appellants in the said appeal they are manufacturers of woven polypropylene bags, for which raw material i.e. Polypropylene granules had to be imported, for, this product is not available in Pakistan. According to the appellants when they commenced manufacturing operations duty payable by them was with reference to the aforesaid notification of 11th, June, 1983. In other words a recognized manufactor of woven polypropylene bags was to be allowed delivery without payment of so much of the customs duties as is in excess of 50% ad valorem of the goods imported. This was subject to the conditions as already mentioned in the notification. The appellant then applied for an import licence which was granted to them. On the basis of the import licence they entered into contracts far the import of 6% metric tonnes of polypropylene granules by making payment through confirmed irrevocable arrived at Karachi and after the contracts for the import of the goods had been concluded, the Central Board of Revenue by means of Notification No.S.R. O. 503(1)86 issued on 29th May, 1986 under section 21 rescinded the earlier notification dated 11th June, 1983. The result of the last mentioned notification was that customs duties on the import of goods was enhanced. Accordingly, the Customs Authorities demanded payment of customs duties on the basis of the subsequent notification ignoring the concession granted earlier. The appellants therefore instituted Constitutional petition seeking to challenge the action of the authorities as illegal and claimed that they were entitled to the clearance of the goods on payment of customs duty on the consignment in accordance with the first notification. The respondents contested the Constitutional petition mainly on the plea that the Central Board of Revenue was fully competent to withdraw the concession extended under the first notification, because under section 21 of the Act it was competent to do so in accordance with the modified general policy of the country, to protect the local industry and safeguard the National exchequer. Therefore in accordance with section 30 of the Act whatever duty was payable in terms of the subsequent notification the same was payable, reliance was also placed by the respondents on the newly inserted section 31-A in the Act.
4. The learned Judges of the Division Bench held that" after enactment ot section 31-A in the Customs Act by the Finance Act of 1988 the rule laid down in Al-Samrez's case (1986 SGMR 1917) is no more applicable in the present case." The contention of the appellants' counsel challenging the validity of section 31-A was also repelled on an earlier decision of the Court in Yaseen Sons v. Federation of Pakistan (PLD 1989 Kar. 361). It was further held by the learned Judges of the Division Bench in one of the Constitutional petitions that section 31-A covers and validates duty payable on account of cancellation of concession or exemption equally. On the aforesaid grounds the Constitutional petition filed by the appellants were dismissed.
As the effect of section 31-A was being considered in a number of appeals, leave was granted in these appeals on the same grounds. Now section 21 of the Act reads as follows:- "21. Power to deliver certain goods without payment of duty and to repay duty on certain goods:- Subject to such conditions, limitations, restrictions as it thinks fit to impose, the Board may, in such general cases as may be prescribed by rules or in particular cases by special order authorize:-
(a) the dejivery without payment of the customs duties chargeable thereon of goods which are imported only temporarily with a view to subsequent exportation;
(b) the delivery without payment of the whole or any part of the customs duties chargeable thereon of imported goods of such classes or description as it may prescribe, intended to be used in the production, manufacture, procession, repair or refitting in Pakistan of goods of such classes or description as it may prescribe; and
(c) the repayment in whole or in part of the customs duties paid on the importation of. Any goods of such classes or description as it may prescribe, which have been used in the production, manufacture*,' processing, repair or refitting in Pakistan of goods of such classes or description as it may prescribe, provided such repayment shall not be made in respect of the class or description of goods for which drawback can be claimed under section."
5. According to the learned counsel for the appellants these cases are governed by clause (b) of section 21. It was contended by the leaned counsel that section 31-A has wrongly been interpreted by the learned Judges of the High Court, to include in it the benefits extended to the appellants under section 21 of the Act by virtue of the ealier notification dated 11th June, 1983. He argued that the benefits extended under the aforesaid notification were not "concession" within the meaning of section 31-A, because clause (b) of section 21 gives inducement to a prospective importer of goods of the class or description prescribed in a special order, which are required for use for the purposes mentioned in the said subsection. In Other words the contention was that the notification provided inducement as distinct from concession, and therefore vested rights could not be taken away by a subsequent notification after firm commitment was made by the appellants with foreign suppliers. It will be convenient to reproduce hereunder the relevant portion of Section 31-A: 31-A Effective Rate of Ditty.-(1) Notwithstanding anything contained in any decision of any Court for the purposes of sections 30 and 31, the rate of duty applicable to any goods shall include any amount of duty imposed under section 18, section 2 of the Finance Ordinance, 1982 (XII of 1982), and section 5 of the Finance Act, 1985 (I of 1985), and the antidumping or countervailing duty imposed under the Import of Goods (Anti- Dumping and Countervaling Duties) Ordinance, 1983 (III of 1983), and the amount of duty that may have become payable in consequence of withdrawal of the whole or any part of the exemption or concession from duty whether before or after the conclusion of contract or agreement for the sale of such goods or opening of a letter of credit thereof."
6. Mr.. Khalid Anwar's arguments on the question whether section 31-A effectively nullifies the dictum laid down in the case of Al-Samrez Enterprise v. Federation of Pakistan (1986 SGMR 1917) have been dealt with and overruled in Civil Appeal No.V15-K of 1990, decided on 14th September, 1991, It is therefore not necessary to reproduce the reasons recorded therein. He is right that in these cases there is no question of the exemption under section 19 of the Act from the payment of customs duties, being withdrawn or modified. Therefore the limited question is whether section 31-A covers modification or decision of a special order issued under section 21 of the Act which in turn depend upon the answer to the question whether the term "concession" as used in the said section includes the benefit extended under section 21(b) of the Act.
7. On a plain reading of section 21, it appears that the provisions' contained therein at the highest authorise the delivery of goods imported without payment ol whole or any part of the customs duties chargeable thereon on the principle that the goods are intended to be used, inter alia, in the manufacture of the prescribe gods.
Therefore there appears nothing in these provisions which has the effect ol exempting the payment-of customs duty for all limes in the sense ol discharging the liability for the payment of customs duty. Learned counsel for the appellants also did not claim anything higher than that. In other words the section authorises the clearance of goods without immediate payment of customs duties chargeable on the goods, so that the payment is deferred. This is also reflected by the conditions appended to the initial notification which required the furnishing of a bank guarantee equal to the amount of. Duties and taxes leviable on every consignment in exces of 50% ad valorem. In this perspective the matter appears quite simply to be that the benefit extended under section 21(b) is a concession and not an exemption. The word " concession" some of the recognized dictionaries has the following meangings:
(1) Black's Law Dictionary, fifth Edition: Concession A giant, ordinarily applied to be grant of specific privileges by a Government; e.g. French and Spanish grants in Lousiana. A voluntary grant, or a yielding to a claim or demand; rebate; abatement.
(2) The American Heritage Dictionary of the English Language Concession something granted by a Government or controlling authority, such as a land tract or franchise, to be used for a specific purpose.
(3) The Shorter Oxford English Dictionary, Volume I: Concession A grant by Government of a right or privilege, or of land.
8. Learned counsel in support of his arguments has also placed reliance on Federation of Pakistan v.
Muhammad Aslam (1986 SCMR 916), Union of India v. Anglo Afghan Agenncies (AIR 1968 SC 718) and Motilal Padampat Sugar Mill Co. Ltd. v. The State of Uttar Pradesh (AIR 1979 SC 621). The two Indian decisions proceed on the basis of promissory estoppel in respect of governmental action, In the case of M.P. Sugar Mills the question was whether a representation made with regard to the exemption from payment of sales tax, which was acted upon could be withdrawn to the detriment of the person so acting. The case of Anglo Afghan Agencies also dealt with the question of promissory estoppel in relation to import trade policy notified under section 3 of the Imports and Exports (control), Act, 1947. A Distinction was drawn in these cases between actions or representation of the government which are in the domain of executive or administrative authority and those that are legislative in character. In a recent case which specifically dealt with the doctrine of promissory estoppel this Court in Pakistan V. Salahuddin (PLD 1991 SC 546 has held that the same cannot be invoked against Legislature or laws framed by it because the Legistature cannot make a representation. The case of Muhammad Aslam from this Court also dealt with the Import Policy and the right to obtain an import licence, therefore the cases relied upon are distinguishable. In the case in hand the question is whether a concession once extended under section 21 on the basis of which contract was entered into, created vested rights so as to deprive the competent authority from rescinding such a special order. As it is not disputed that the payment of duty is not discharged in such a case, it is idle to pursue the matter, because no vested right would accrue in favour of an importer to refuse payment of duty subsequently upon recission or revocation of such an order.
Additionaly as discussed hereinabove, section 31-A now clearly stipulates that any amount of duty which becomes payable in consequence of withdrawal of a concession from duty, even though such withdrawal takes place after the conclusion of a contract for the sale of goods or opening of a Idler of credit, would not be payable in terms of section 30 with reference to the date of filing of the Bill of Entry.
9. For the foregoing reasons we uphold the decision of the High Court, albeit on different grounds and dismiss these appeals with costs.