' The applicant/respondent Flying Kraft Paper Mills (Pvt.) Limited, Charsadda, prays that the appellants in the main appeal be restrained from recovering in any manner the disputed excise duty from the applicant during the pendency of the appeal.
2. The brief facts are that the Lahore High Court disposed of Writ Petition No,967 of 1995 vide order dated 1-4-1996. During the pendency of the writ petition, vide interim order dated 13-8-1995, the proceedings regarding recovery of excise duty, were suspended. This order admittedly held the field till 30-4-1996. It was further extended upto 7-5-1996. At the instance of the appellants, leave to appeal was granted by this Court against the judgment dated 1-4-1996, passed by the High Court vide order dated 26-11-1997 and the order dated 7-5-1996 earlier passed in Chambers suspending the operation of the impugned order, made further operative till final disposal of the appeal.
3. Subsequent to the grant of leave, the Deputy Collector, Central Excise Division, Peshawar, issued Notice No,C.NO.IV-CE (F.K.P.M.)/97/451, dated 24-12-1997, to the applicant for recovery of Rs,3,36,30,320 towards the outstanding excise duty. All the Customs, Central Excise, Sales Tax and Income Tax Authorities were directed to deduct the aforesaid amount from any money owing to the applicant which may be under the control of respective authorities in the form of refund/rebate/bank guarantee or any other fiscal documents.
4. Mr. Aitzaz Ahsan, learned counsel for the applicant/respondent argued that during the period when order of stay was issued by the High Court on 13-8-1995 against the recovery of the excise duty by the Government and which enured for the benefit of the applicant till 7=5-1996, not only protected the applicant from paying any Excise Duty to the Government but it was on account of the said stay order, the applicant had not charged any excise duty from its customers, therefore, it could not be penalised for the act of the Court. He further argued that the nature of excise duty is such that it is not levied upon the assets of manufacturers but it is a levy which the manufacturer charges from its customers and transmit it onwards to the Government. He next submitted that the stay order granted by the High Court was unconditional and not subject to any security for recovery of the dues during the period the stay order remained operative in the event of dismissal of the writ petition. The High Court, however, accepted the writ petition, therefore, suspension of the operation of the High Court's final judgment impugned in the main appeal before this Court would not affect transactions past and closed during the period covered by the stay order. Reliance was also placed on Messrs R.C.D. Ball Bearing Limited v.
Sindh Employees' Social Security Institution, Karachi (PLD 1991 SC 308),. To contend that the applicant was not liable to pay the excise duty during the period in which the stay order granted by the High Court was in force, and, therefore, the same cannot be recovered from the applicant. In the precedent case, a dispute arose with regard to leviability of the contribution in respect of certain items, in terms of sections 64 and 23 of the West Pakistan Employees' Social Security Ordinance, (X of 1965) (hereinafter called the Ordinance), during the period covered by the stay order. It was held by this Court that the appellant therein was not liable to pay increase during the period in which the stay order granted by the High Court was in force. The relevant passage reads thus:-- "Before concluding we would like to refer to an argument advanced by Mr. Sarwana that the stay order passed by the High Court related to the amount then due and payable on the date of the order with regard to the past dues, that is why the security in the sum of Rs,6,000 was obtained. In the submission of the learned counsel, therefore, the amount of contribution on the disputed items falling due subsequently in the future was not covered by the stay, and therefore, increase was payable on the failure to pay the same. We are unable to accept this contention for the simple reason that the dispute was not with regard to the quantum of contribution but the leviability of the contribution in respect of certain items. Therefore, the grant of stay in terms of the prayer made in the application for the same covered the recovery of the contribution in respect of the items, namely, special expenses which was the subject-matter of the appeals, even in the future until the decision of the appeal. The extent and scope of the stay is not, therefore, subject to any doubt. It was for the respondent to have asked the Court for further security to cover the future dues during the pendency of the appeal to protect their interest. This argument is also devoid of substance.
' To sum up our conclusion we hold that the appellant was not liable to pay increase in terms of section 23 of the Ordinance during the period in which the stay order granted by the High Court was in force, and therefore, the same cannot be recovered from the appellant."
5. Mr. K.G. Sabir, learned counsel for the appellants/caveators argued that the writ petition relating to excise duty was dismissed by the High Court, therefore, the applicant is not entitled to the interim relief claimed in this petition. The contention is devoid of any force. Clearly, the High Court allowed the writ petition against which leave to appeal has been granted by this Court as stated above. So far as the merits of the case are concerned, the same will be examined exhaustively when the appeal comes up for final decision. We find that the applicant has an arguable case for the grant of interim relief prayed for. The, balance of convenience also lies in its favour. We, therefore, direct that the show-cause notice dated 24-12-1997 (supra) is suspended till the final disposal of the appeal by this Court, subject to the furnishing security to the satisfaction of the Collector Customs, Excise and Sales Tax, Peshawar that in the event of the appeal being decided against the applicant it shall reimburse the amount found due and recoverable from it. Resultantly, the recovery of disputed amount for the period from 13-8-1995 to 7-5-1996, during which the stay order was granted by the High Court, is stayed on the above terms.
6. With the above observation the civil miscellaneous application is allowed.