' SH. IJAZ NISAR, J.---Bawany Metals Limited, the petitioner herein, seeks leave to appeal against the judgment, dated 23-9-1996, of the High Court of Balochistan, Quetta, passed in C.P.No,104 of 1996.
2. The facts, in brief, are that the petitioner has established a Copper Rod Manufacturing Plant at Hub and imports copper cathode which is a raw material used in the manufacturing of Copper Rod. On the import of raw material the petitioner pays regulatory duty, sales tax and flood relief surcharge. The Government of Balochistan vide Notification dated 11-3-1982 directed that the Town Committee Hub shall impose a tax on the import of goods and animals within its limits on the basis of ad valorem value at the rate of Re.1 per import of Rs,100 under the West Pakistan (Town Committee) Octroi Rules, 1964 w.e.f, 1-7-1982. On 23-3-1996 the representative of respondent No,1 Contractor for collection of octroi for the year 1995-96 required the petitioner to pay octroi on the goods imported into the limits of Hub Town Committee calculated on the basis of C & F, plus duty.
3. The petitioner resisted the demand on the ground that since there was an exemption on the payment of duty under Notification dated 16-6-1994, the Hub Town Committee was not authorized to demand octori. It was further contended that Government of Pakistan had clarified that "value of the supply means the value determined under sections 25 and 25-B of the Customs Act plus the customs duty actually paid and, therefore, the demand in respect of the exempted amount of duty could not be made by Hub Town Committee".
4. The view-point of the petitioner was not accepted by the High Court and by judgment dated 23- 9-1996 a Division Bench dismissed the writ petition. The relevant portion of the impugned judgment is as under:-- "The only inference that can be drawn on the above formulated policy would be that Customs duty irrespective of the fact whether it has been exempted or not being a tax would be included in value for the purpose of Octroi which is to be determined on the basis of value of the goods at Octroi barrier which would include the amount of Customs duty equivalent to which indemnity bond or Bank guarantee has been furnished. There is no cavil to the proposition that Octroi being a provincial tax exclusively leviable by the Provincial Government cannot be exempted by the Federal Government and admittedly no exemption has been given either by the Provincial Government or the concerned department, hence it cannot be claimed by the petitioner. The value as defined under sections 25 and 25 (B) of the Customs Act, 1969 is purely for the purposes as enumerated in the provisions as contained in sections 25 and 25-B of the said Act and has nothing to do with levy of Octroi which is imposed in view of prevalent socio-economic condition of particular case. A similar proposition was discussed in Petition No,D-1307 of 1991 by Sindh High Court and relevant portion whereof is reproduced hereinbelow for ready reference:-- ' We find no merit in this contention, as the stage at which the octroi is determined is the time when the goods passed through the octroi barrier and at that time, the value of the goods would include the price, etc., plus customs duties and sales tax in respect of which a bank guarantee is furnished.
If later on after consumption of the said goods, exemption can be claimed and the bank guarantee is liable to be discharged, the petitioner would not be able to claim that at the time when the goods passed octroi barrier, the value of the goods should not include the quantum of customs duty and sales tax..
' In the circumstances, finding no merit in this petition, this petition is dismissed in limine."
' Hence, this petition.
5. It is contended that the word 'value' under the Customs law excludes the exemption of customs duty granted by the Federal Government on certain categories of the imported goods but the learned High Court has erred in holding that the definition of value given under the Notification, dated 11th March, 1982, would also include the exemption granted on customs duty.
6. For proper appreciation of the controversy, perusal of the notification dated 11-3-1982 issued by the Government of Balochistan Local Government Rural Development and Agrovilles Department is considered necessary, which is reproduced below: "Dated Quetta, the 11th March, 1982, No,5-42/8 (PLGB)/AQ:AQ. In exercise of the powers conferred by subsection (2) of section 137 of the Balochistan Local Government Ordinance, 1980 read with section 70 of the above Ordinance, the Government of Balochistan is pleased to direct that the Town Committee, Hub shall impose a tax on the import of goods and animals within its limits, on the basis of ad valorem at the rate of Re.1 per import of Rs,100 value, under the West Pakistan (Town Committees) Octroi Rules, 1964 with effect from 1-7-1982.
2. The Government is further pleased to direct that ad valorem costs shall include taxes, duties/freight charges.
' BY ORDER GOVERNOR BALOCHSTAN FIROZUDDIN AHMED, SECRETARY LOCAL GOVERNMENT RURAL DEVELOPMENT & AGROVILLES DEPARTMENT GOVERNMENT OF BALOCHISTAN"
7. SRO No,601(1)/83, dated 11-6-1983 issued by the Federal Government granting exemption on the import of raw material under the conditions provided therein would not affect the ad valorem value of the raw material for the purposes of octroi, for, the notification dated 11-3-1982 issued by the Government of Balochistan categorically provides that ad valorem cost shall include taxes, duties/freight charges. In ordinary parlance duty means the customs duty payable on any imported goods. Before the issuance of exemption Notification No,SRO.601(1)/83, dated 11-6-1983 customs duty was leviable on the imported raw material at the rate of 10 per cent. Ad valorem.
However, under certain conditions the industry manufacturing Copper Rod was exempted from whole of the customs duty for the time being which exemption was later withdrawn by the Central Board of Revenue, Government of Pakistan w.e.f, 6-4-1996. The exemption granted to the petitioner by the Federal Government from the payment of customs duty would not prevent the Government of Balochistan from charging octroi in pursuance of Notification dated 11-3-1982 because it had declared that the ad valorem cost shall include taxes, duties/freight charges. The use of word duty does not connote that it would apply only to the duties paid but means the assessable duties. The petitioner cannot avail of the benefit of the exemption granted by the Notification dated 11-6-1983 because it was, a conditional exemption and the petitioner was to furnish a bank guarantee or indemnity bond alongwith post-dated cheque equivalent to customs duty and sales tax leviable on each consignment to the satisfaction of the Collector of Customs. The guarantee furnished by the manufacturer was to be discharged only on furnishing a certificate issued by the Assistant Collector Customs certifying that the raw material which was exempted from customs duty and sales tax had been used by the manufacturer. The rights of the Customs Authorities were secured by the guarantee furnished by the manufacturer because in the event of any violation the customs duty could be recovered from him, but the octroi contractor would have been without any remedy because the term of his contract might have ended when the violation, if any, committed by the manufacturer, could come to light. It was to meet this situation that in the notification dated 11-3- 1982 issued by Government of Balochistan, Local Government, it was mentioned that ad valorem cost shall include taxes, duties/freight charges and the word "paid" was conspicuously missing.
8. In view of the above discussion, we are of the view that the petitioner cannot claim any benefit of the exempted duty while calculating the ad valorem value of the raw material imported by him.
The learned High Court has discussed all the relevant points in the impugned judgment and the conclusion arrived at by it does not call for any interference. In consequence, the petition is dismissed and leave is refused.