' JAVED IQBAL, J.---By this judgment we propose to record reasons of our short order dated 27- 94993.
' The brief facts of the case are that the petitioner's Company having its . Industrial establishment located at Winder Industrial Trading Estate, Tehsil Sommiani, District Lasbella, imported Textile Machinery including Ring Spinning Frames, filed Bills of Entry to get the machinery released for which a total exemption from duties leviable thereon was sought in pursuance of SRO 484(1)-92 dated 14-5-1992. The respondent, however, refused to allow the exemption on the Ring Spinning Frames, on the pretext, that after the issuance of CGO-13 of 1991 by respondent No, 2, the benefit as envisaged in SRO 484(1)-92 dated 14-5-1992, could not be claimed as the locally manufactured Ring Spinning Frames were available. Being aggrieved the petitioner invoked the Constitutional jurisdiction of this Court (C.P. No, 337 of 1992), which was accepted and the back to the Collector Customs Quetta, and a direction was given to conduct a fresh enquiry after giving opportunity to the petitioner in order to determine whether the complete set of Ring Spinning Frames with 384, 440 and 600 Spindles per frame are being locally manufactured or available, and then to pass an order regarding exemption or otherwise of the duty, in accordance with law and with particular reference to Notification dated 14-5-1992.
2. The main thrust of the arguments revolves around the contention that the Collector Customs Quetta, failed to carry out the orders passed in C.P. No,337/92 and totally ignored the import and effect of SRO 484(1)-92 and the fact that the said SRO was never subject to discussion or evaluation before the Collector Customs, Karachi, as is evident from his order dated 15-2-1992. It is also contended that the clear directive, that the matter be adjudicated upon afresh, with particular reference to SRO 484(1)-92 was not complied with in letter and spirit, and it was never considered.
It was also pointed out that an appeal preferred against the abovementioned order passed by learned Collector Customs, Quetta, on 6-2-1993 before Member (Judicial), CBR was also rejected vide order dated 27-9-1993 which was nothing more but a mere reproduction of the observations made by the Collector Customs, Quetta, and recorded in verbatim without an independent application of mind. It is also argued that it was erroneous on the part of respondent No, 3 by holding the case of petitioner as identical to the cases having been adjudicated by Collector (Appraisement), Karachi. It was further argued that the dictum laid down in Suhail Jute Mills case PLD 1991 SC 329 for ascertaining the nature of the machinery has not been considered at all. The expression "such machinery as is locally manufactured" which ought to be given a pragmatic and realistic meaning in the context of industrialization in the country has been misconceived by respondents Nos. 3 and 4. Lastly it was stressed upon that dictates of law have been flouted by disentitling the petitioner, the benefit under the said SRO dated 14-5-1992.
3. The learned Standing Counsel appeared for respondents and questioned the maintainability of this appeal on the ground that available remedies have not been exhausted and the Revisional Authority as provided under section 1% of the Customs Act, 1969, not approached for the redress of grievances if any. It was also contended that the specific order dated 6-2-1993 passed by the Collector Customs, Quetta, should have been challenged and hence the orders passed by learned Member (Judicial), C.B.R. On 29-7-1993 cannot be questioned. It was also argued with vehemence that as the items imported by the petitioner namely "Ring Spinning Frames" are available locally as is evident from CGO No, 13/91, dated 18th November, 1991 and the benefit of exemption from duties cannot be given to the petitioner being not admissible.
4. We have given a thoughtful consideration to the respective contentions, as adduced on behalf of the parties and as mentioned above. The pivotal question to be determined, is whether complete Ring Spinning Frames with 384, 440 and 600 Spindles per frame, were being locally manufactured, or available at the relevant time or otherwise? The question of exemption from duties can only be dealt with after having a reply to the above formulated question and for which of course a thorough probe was considered necessary. In view of the said aspect of the matter, it was decided in C.P. No, 337/92 filed by the present petitioner in respect of the same subject-matter and which is reproduced hereunder for ready reference:-- "In the case in hand, we are also confronted with the situation, where it is necessary to examine "whether the Rings Spinning Frames, of the specification, which the petitioner had imported are locally manufactured or not?" No doubt, to resolve this controversy without holding an enquiry at the departmental level, the dispute cannot be set at naught thus, in such view of the matter we are inclined to accept the petition and remand the case to the Collector, Customs, Quetta, to conduct an enquiry after giving opportunity to the petitioner in order to determine whether the complete Rings Spinning Frames with 384, 440 and 600 Spindles per frame are being locally manufactured, or available and then to pass an order regarding exemption or otherwise of the duty in accordance to law, with particular reference to the Notification issued by the Federal Government, dated 14th May, 1992."
5. The above reproduced para. Is indicative of the fact that it was directed in an unequivocal term that Collector Customs, Quetta, would conduct an enquiry after affording full opportunity to the petitioner to determine as to whether the Ring Spinning Frames as per specification were being manufactured locally or otherwise to assess the leviable duties or exemption as prayed for in the light of SRO dated 14-5-1992. It is quite astonishing that instead of strict compliance of the said order and independent thorough probe as directed, the Collector Customs, Quetta, had preferred to rely upon the enquiry conducted by Collector (Appraisement), Customs Rouse, Karachi, in several other cases of identical nature remanded by the Hon'ble Supreme Court, merely on the presumption that it would be a futile exercise to conduct afresh enquiry into the matter as it tentamounts to delay the matter, as Collector (Appraisement), Karachi, had already enquired into the matter after giving an opportunity of hearing to the parties. The Collector Customs, Quetta, while arriving at the said conclusion mentioned in his order as under:-- "Notwithstanding the above fact a detailed investigation has already been conducted by the Collector (Appraisement), Custom House, Karachi in several identical cases remanded to him by the Supreme Court of Pakistan. During the course of adjudication of the referred cases the representative of M/s. SMC was cross-examined by the Advocates of the petitioners who were also given full opportunity of representing their cases. The representative of the manufacturers of Ring Spinning Frames in Pakistan had proved beyond doubt that the manufacture of Ring Spinning Frames was started by them and 221 frames were supplied by them to dozens of Textile Mills during the period from 1982 to 1990. The frames supplied by them were working satisfactorily with purchasers as is evident from the performance certificates issued by them to the manufacturers of the frames. The manufacturers further submitted that they have still with them complete components and raw material to manufacture 70 spinning frames of 476 spindles each, except that they had to suspend manufacture for want of orders from the entrepreneures. There is, however, no confusion for them to place order for the purchase of ring spinning frames with M/s. SMC and are at liberty to import the same from any country, yet cannot claim exemption under SRO 484(1)-92 dated 14-5-1992 which is conditional that the same is not locally manufactured.
' As regards the request by the counsel for the petitioners regarding cross-examination etc., of the witnesses and rebuttal of the evidence, it is unwarranted in face of established facts as contained in the Collector (Appraisement), Karachi's Order-in-Original No, SI/Misc/ DP/528/90-VI dated 15-2- 1992 and would be a futile effort to delay the adjudication of the case and complete the adjudication proceedings within the time frame prescribed by Honourable High Court.
' In face of the above conclusion, I order enforcement of the bank guarantee relating to the consignments of Ring Spinning Frames imported by the petitioners."
6. A bare perusal of the above-referred to order would indicate that no independent enquiry was conducted to determine whether the requisite/ imported Ring Spinning Frames with 384, 440 and 600 spindles, per frame were being manufactured by M/s. Spinning Machinery Company (Pvt.)
Limited, Kot Lakhpat (S.M.C.) at relevant time and during the period for which an exemption sought from the leviable duties by the petitioner. The order is also silent regarding the capability of S.M.C.
Manufactured Ring Spinning Frames with 384, 440 and 600 spindles as the said order only speaks about the frames of 476 spindles. The said order is also lacunic from another point as proper opportunity of hearing was not given to the petitioner for the rebuttal of evidence adduced on behalf of S.M.C., and the reasoning put forth by the learned Collector Customs, Quetta, in this regard seems to be devoid of merits, that it was "unwarranted in force of establishment facts as contained in the Collector (Appraisement), Karachi's order dated 15-2-1992". Let we make it clear without any hesitation that this was quasi-judicial proceedings of which the substance of fair hearing and opportunity for defence at appropriate stage are essential incidents. It is apparent that at the time of disposal of appeal this function cannot be discharged unless the appellant is given an opportunity of hearing and also producing or rebutting any evidence in the course of enquiry by the appellate forum. In case of failure the order so passed is no order in the eyes of law as it was made in total disregard of the principles of natural justice. It is clear that when there is any doubt as to whether an article is dutiable or not burden of proof lies on the importer to show that article in question has been exempted from duty. If he failed to prove his entitlement for the exemptions the leviable duties will have to be paid subject to condition that a fair chance was given to prove his entitlement so claimed. It seems appropriate here to point out that the object of granting exemption should not be ignored which is two-fold i,e,, to give protection to small manufacturers to minimize the monopoly and to equalize them as against persons having large scale establishments and full control over production. It should always be kept in mind by the concerned Customs Authorities that:-- "Tax exemptions are founded on public policy such as the encouragement of manufacturing and other industries or trades. They are granted on the theory that they will benefit the public generally or are awarded as compensation for service rendered in the performance of some function deemed socially desirable. Therefore, the exemption notification is basically addressed to public- at-large or in any case to prospective importers." (1986 SCM R 1917).
We are, therefore, of the view that such matters should not be d with in a casual and cursory manner but due care and attention always paid.
7. It has also been noted with grave concern that the learned Collector Customs, Quetta, had not applied his mind independently and a complete , reliance placed on the verdict given by the Collector (Appraisement) Customs, Karachi, without appreciating the apparent difference in- between the cases remanded by the Hon'ble Supreme Court of Pakistan and that of the petitioner.
It is quite amazing that the learned Collector Customs Quetta, had ordered enforcement of the Bank Guarantee relating to the consignment of the Ring Spinning Frames, whereas the same are still in the possession of Customs Authorities. It can, thus, be safely presumed that either the case of the petitioner was not understood properly or the entire record pertaining to the matter was not scanned thoroughly. We have also perused the orders of learned Member (Judicial), CBR which hardly needs any further comments in the light of abovementioned discussion as the same was mainly based upon the conclusions arrived at by the Collector (Appraisement), Customs, Karachi, and the case of the petitioner was never considered separately.
8. Consequently the impugned orders dated 6-2-1993 and 29-7-1993 passed by the Collector Customs, Quetta, and Member (Judicial), CBR respectively are set aside and the case is remanded to the Collector Customs, Quetta, to conduct enquiry himseff in order to determine the question as observed in this order within a maximum period of one month. He shall also provide the petitioner, the opportunity to produce in rebuttal any material which it may wish to produce. Whatever may be the position the Collector Customs, Quetta, shall pass fresh orders in accordance with law and as directed above. The petitioner shall have the right to prefer an appeal or take-up other proceedings which may be available under the Customs Act, 1969 before the forums which are competent, in case it is aggrieved by the fresh order. There shall be no order as to cost.