1. JUDGMENT IFTIKHAR MUHAMMAD CHAUDHARY. J.--Petitioner M/s. Usman Enterprises imported a Vessel namely, "T.T. Fortune King", for dismantelling for the purpose of scrapping. A Bill of Entry for clearance of the vessel was submitted on 15.5.1996 before Assistant Collector Customs Qaddani and also opted to pay Import Duty on availing the : facility of deferment on import duty in terms of rules of rules known as "Deferment of Import Duty (On Ships for Scrapping) Rules, 1993. However, before finally clearing v the Import duties a dispute arose between petitioner and respondent concerning the payment of Regulatory Duty at 10% ad valorem imposed by the Federal Government vide SRO No. 1050/95, dated 29.10.1995. It is stated that Importer challenged the demand of Regulatory Duty before this Court by filing C.P. 'No. 85/96 which was dismissed on 1.7.1996 thereafter petitioners approached the honourable Supreme Court by filing Civil Petition No. 359/1996 along with Civil Miscellaneous Application No. 413/1996. On Civil Miscellaneous Application interim relief in the following terms have been granted:- "In the meantime the respondents are hereby , restrained from claiming or collecting or recovery of ^ the impugned Regulatory Duty from the petitioners in relation to respective Vessels and or its scrap realised therefrom provided they have furnished bank guarantee in the High Court or before the Customs Authorities or the 10% of the scrap has been withheld by the Customs Authorities."
2. In the meanwhile vide impugned letter C. No. SI/Misc./99/96(G)/309, dated 4.11.1996 Importer/petitioner was called upon to pay Rs. 46,88,341/- on account of 14% Mark-up plus principal amount Rs. 8,78,015/-. We think it would be appropriate if the impugned letter is re- produced hereinbelow in extension: - M/s. Usman Enterprises, Plots No. 91 Ship Breaking Yard, Gadani.
3. Subject:- PAYMENT OF RS. 46,88,341/- ON ACCOUNT OF 14% MARK-UP PLUS PRINCIPAL AMOUNT RS.
4. 8,78,015/-.
5. In terms of SRO 245(I)/93, dated 31.3.1993 and SRO 27(I)/95, dated 11.1.1995 and read with C.B.R, letter C. No. 1(6) Tar. 11/92, dated 12.3.1996, you were liable to pay duty according to the schedule as outlined in the aforesaid SRO's on T.T. FORTUNE KING on 15.6.1996 but you failed to pay the same, thus holding the Government amount. Therefore, a 14% mark-up has been calculated which has worked out to Rs. 46,88,341/- (subject to proper calculation).
6. You are directed to pay the original balance amount of Rs. 8,78,015/- Plus 19% mark-up i.e. Rs.
7. 46,88,341/- which has been calculated up to 4.11.1996. (Totalling Rs. 55,66,356/-).
8. In case -you fail to deposit the Government Revenue, the same will be recovered under section 202 of the Customs Act, ASSISTANT COLLECTOR CUSTOM HOUSE GADANI Mr. Muhammad Ali Saeed learned counsel for the petitioner precisely contended whether Customs Authorities are empowered to charge mark-up under the Deferment of Import Duty (On Ships for Scrapping) Rules, 1993 in the absence of any provision in the said Rules authorisation application of mark-up. In support of his plea he further argued that a Statute dealing with the fiscal has to be strictly construed and in absence of express provisions any Authority exercising jurisdiction thereunder is not competent either to delete or and any provision therein, if the law has itself not provided so. Reliance was placed on 1973 SGMR 445, PLD 1988 SC 370, PLD 1990 SC 68, 1992 SCM R 663, 1994 SGMR 1393. Learned counsel also made reference to sub-rule (7) of Rule 5 of the Deferment of Import Duty (on Ships for Scrapping) Rules, 1993 and argued that this rule itself has provided penalty if there is a failure on behalf of Importer to make payment in accordance with schedule specified in Rule 4 of stopping breaking the ship forthwith and he shall not be allowed to avail facility of Deferment of Duty etc. We are also informed that so far Bill of Entry has not been finally returned because of adjudication on question of payment of Regulatory Duty, matter in respect whereof petition is pending adjudication before honourable Supreme Court.
9. On the other hand Mr. M.S. Rakhshani learned Deputy Attorney General stated that under sub- section (2) of Section 83 of the Customs Act, on account of default in payment of outstanding amount surcharge of 14% can be imposed by the Competent Authority, therefore, in exercise of such powers vide impugned letter the Importer petitioner has been called upon to make payment of mark-up. Thus the order has been passed with lawful authority and jurisdiction.
10. It may be noted that admittedly Bill of Entry submitted by petitioner has not been returned after final adjustment of taxes etc. As the matter concerning payment of Regulatory Duty between the parties is sub judice before honourable Supreme Court of Pakistan where the civil petition for leave to appeal filed by the Importer is pending. However, interim relief has beep granted vide order dated 22.7.1996, operative para therefrom has already been reproduced hereinabove.
11. Now it would be examined that an Importer who has opted to make payment of Import Duty in instalments under the Deferment of Import Duty (on Ships for Scrapping) Rules, 1993 can be considered a defaulter and mark-up to the tune of Rs. 14% on the outstanding amount can be recovered from him or not. In this behalf cursory perusal of the Deferment Rules reveal that as per Rule 4 Importer has been authorised to pay duties leviable on import of Ships for breaking in the following order,
(a) first inactment of saw within 18 days of filing of the Bill of Entry:
(b) Second instalment of 33% within 30 days of payment of first instalment ;
(c) Third instalment (final payment) of 33% within 30 days of the payment of second instalment; If an Importer fails to make the payment as per the above schedule he is liable for a penal action under sub-rule (7) of Rule 5. For the sake of convenience it is reproduced hereinbelow: - "(7) In case of failure of the Importer to make payment in accordance with schedule specified in Rule 4, he shall be stopped breaking the ship forthwith and shall not be allowed to avail facility of Deferment of Duties payable in respect of the ship for which such Deferment was permissible and no Such Deferment of Duties shall be allowed to him in future".
12. At this juncture it is worth to note that the fiscal statute which also imposes penalties has to be construed strictly and if statute itself does not contain any express provision of recovery of penalty by implication, it would not be advisable to presume that on account of failure in payment of outstanding dues, such and such penalty can be imposed.
13. In order words if there is any deficiency in the statute it cannot be made good by implication nor a fiscal statute admits extension on the basis of analogies. In this behalf the judgments referred by learned counsel Mr. Muhammad Ali Saeed would be advantageous. In 1973 SCM R 445 in the case of Commissioner Agricultural Income East Bangal v. BWM Abdul Rehman's Manager Toki Bara Taraf Wards Estate, it was held as under:- "But indeed in determining whether or not a particular matter comes within a taxing statute, it is only the letter of the law which must be looked to. There is ample authority for the proposition that in a fiscal case, form is of primary importance, the principle being that if the person sought to be taxed comes within the letter of the law, he must be taxed however great a hard ship may thereby be involved but on the other hand if the Crown cannot bring the subject within the letter of the law he is free, however apparent it may be that his case is within what might be called the spirit of law."
14. PLD 1988 SC 370 M/s. Biswill Spinners Ltd v. Superintendent Central Excise & Land Customs Circle Sheikhupura & another, relevant para therefrom is reproduced hereinbelow:- / "There are three principles of interpretation of statutes which have to be kept in view in resolving the controversy railed in this appeal. The first of these has been expressed in Maxwell on the Interpretation of Statues, 12th Edition, p. 256 in the following words:- "Statutes which imposed pecuniary burdens are subject to the same rule of strict construction, it is a well-settled rule of law that all charges upon the subject must be imposed by clear and unambiguous language, because in some degree they operate as penalties: the subject is not to be taxed unless the language of the statute clearly imposes the obligation, and language must not be strained in order to tax a transaction which, had the legislature thought of it, would have been covered by appropriate words, "In a taxing Act," said Rowlatt, J., "one has to look merely at what is clearly said. There is no room for any intendment. There is no equity about a tax. There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language use."
15. PLD 1990 SC 68 Government of Pakistan v. Hashwani Hotel Limited, relevant para therefrom is reproduced as under:- ? 'While dealing with the question of interpreting a taxing Act in the case of Cape Brandy Syndicate v. Inland Revenue Commissioners (1921) 1 K.B. 65 at page 71, Rowlatt, J. Observed as follows:- "It simply means that in Taxing Act one has to look merely at what is clearly said. There is no room for any intendment. There is no equity about a tax. There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied, one can only look fairly at the language used."
16. This is an excellent guideline and can be safely utilized for interpreting a taxing statute.
17. 192 SCMR 663 relevant para therefrom is reproduced hereinbelow:- "If we were to accept the contentions of Mr. Iqbal Naim Pasha, we would have to construe the above unambiguous provision of Item No. 11 of the Fist Schedule to the Central Excises and Salt Act, 1944, in violation of the language used in it by holding that though S. 45 per hundred weight excise duty on the vegetable products has been imposed by it but at it should be read as to include 12- 1/2% of the sales tax on the value of the goods, which is not permissible under the well-settled principles of interpretation . Of statutes. In this behalf, reference may be made to the case of the Commissioner of Agricultural Income Tax, East Bengal v.' B.W.M. Abdul Rahman, Manager, Taki Bara Taraf Wards Estate (1973 SGMR 445), wherein Cornelius, J. (as his Lordship then was) made the following observations: - But indeed, in determining whether or not a particular matter comes within a taking statute, it is only the letter of the law which must be looked to. There is ample authority for the proposition that in a fiscal case, form is of primary importance, the principle being that if the person sought to be taxed comes within the letter of law, he must be taxed, however great a hardship may thereby be involved but on the other hand if the Crown cannot bring the subject within the letter of the law he is free, however apparent it may be that his case is within what might be called the spirit of the Law. As was said by Rowalatt, J., in Cap Brandy Syndicate v. Inland Revenue Commissioner^ 1921) 1.
18. K.B. 64); "In a Taxing Act one has to look merely at what is clearly said. There is no room for any intendment.
19. There is no equity about tax. There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used."
20. In Tenant v. Smith (1892 A.C. 150) Lord Halsbury said: "In a Taxing Act it is impossible, I believe to assume any intention, any governing purpose in the Act, to do more than take such tax as the statute imposes Cases, therefore, under the Taxing Act always resolve themselves into the question whether or not the words of the Act have reached the alleged subject of Taxation."
21. In the light of above decision by superior Courts we examined the provisions of Section 83(2) of the Customs Act. Its plain language suggest that if on the return of Bill of Entry within the period of 30 days outstanding dues have not been paid the Department can claim surcharge at the rate of 14% as it has been observed hereinabove. Admittedly so far Bill of Entry has not been returned to the petitioner, therefore, they even cannot invoke impliedly to the said provision of law, except deterring petitioner/Importer not to carry out the ship breaking and declining him in future not to avail the facility of Deferment Rules no other penalty to recover 14% mark-up dues for Government can be charged from them and the Custom Authorities are not authorised to incorporate such penal clause in Rule 5 of Deferment Rules. Thus the action of respondents claiming 14% mark-up from petitioner is not sustainable.
22. For the foregoing reasons petition is allowed and the demand of respondent No. 3 contained In the impugned letter dated 4.11.1996 is declared without lawful authority. Accordingly in terms of the prayer writ is issued with cost.