MUHAMMAD ARIF, J.- The background in which this appeal by leave of the Court has arisen is that the respondent- Khurshid Spinning Mills Ltd., hereinafter referred as the Mills, was engaged in setting up of a Cotton Spinning Mills at Jaranwala. With a view to importing machinery for the said purpose, the Mills opened an irrevocable letter of credit. When the goods arrived in Pakistan, the Mills made a request to Customs Authorities for the placement thereof in a Bonded Warehouse and an in-Bond Bill of Entry was filed by the Mills on 25.5.1988. On the Mills approaching the appellants for the clearance of the goods from the Warehouse for Home Consumption, by filing a Bill of Entry on 28.5.1990, the Mills claimed exemption from payment of customs duties, sales tax, surcharge and iqra surcharge. The appellants allowed 50% rebate in the custom-duties under Notification No. SRO 500(l)/84, dated 14th June, 1984 which reads under: "S.R.O. 500(l)/84.- ln exercise of the powers conferred by section 19 of the Customs Act, 1969 (IV of 1969), and sub-sections (1) and (2) of section 7 of the Sales Tax Act, 1951 (III of 1951), and in supersession of this Ministry's Notification No. S.R.O. 700(l)/80, dated the 26th June, 1980, the Federal Government is pleased: to direct that the plant and machinery which is not manufactured locally shall, if imported for initial installation or for balancing, modernization, replacement or extension of the projects approved by the Government for the areas specified in column (2) of the table below, be exempt from so much of the customs-duties leviable thereon under the First Schedule to the said Act are in excess of the extent specified in the corresponding entries of column (3) of the table and the whole of sales tax subject to the following conditions, namely:-
(1) The plant and machinery shall be those as defined hereunder:- "Machinery means--
(1) Machinery, operated by power of any description, such as is used in any industrial process, including the generation, transmission and distribution of power, or used in process directly connected with the extraction of minerals and timber, construction of building, roads, dams, bridges and similar structures and the manufacture of goods.
(ii) Apparatus and appliances, including metering and testing apparatus and appliance specially adapted for use in conjunction with machinery specified in item
(i) above.
(iii) Mechanical and electrical control and transmission gear adapted for use in item (i) above.
(iv) Component parts of machinery as specified in items (i), (ii) arid (iii) above, identifiable as for use in or with such machinery.
(2) the importer shall, at the time of importation, by documents in his possession, satisfy the Collector of Customs that the plant and machinery have been imported for projects located in the areas specified in the Table and shall furnish an indemnity bond in the form set out below to the extent of customs-duties and sales tax exempted under this Notification. The said indemnity bond will be discharged subsequently on production of a certificate from the Assistant Collector, Customs and Central Excise, the Secretary Kashmir Affairs Division, or an officer authorised by him in this behalf or the Resident Commissioner for Northern Areas, as the case may be, to the effect that the plant and machinery as declared to the customs have been imported for an approved project for initial installation or of balancing, modernisation, replacement or extension of the existing unit and have been duly installed in an area specified in the Table and such other evidence: as the Collector of Customs may require and after such enquiry as he deems fit, in order to establish such installation;
(3) the importer shall, at the time of importation of the plant and machinery, furnish a bond to the Collector of Customs to abide by the conditions laid down in this Notification failing which he would pay the amount of customs-duties and sales tax and make payment of any penalties they may be imposed in this behalf;
(4) the certificate of installation referred to in subparagraph (2) shall be submitted to the Collector of Customs not later than one year from the date of importation of such plant and machinery and if the plant and machinery are removed to another than that for which they have been imported within a period of ten years from the date of installation, the amount of customs-duties and sales tax exempted under section 202 of the Customs Act, 1969 (IV of 1969); Provided that import-substitutions of the plant and machinery as are manufactured locally shall be exempt from so much of customs-duties leviable thereon as are in excess of the aggregate of the sum specified in column 3 of the table of this Notification and 20% ad valorem...."
The appellants held the Mills liable to pay 20% regulatory duty, surcharge and iqra surcharge, ln this way, the amount of duty payable by the Mills was assessed at Rs. 98,59,135/-.
2. The Mills disputed the levy of surcharge, iqra surcharge an^ regulatory duty by filing Constitution Petition bearing W.Pt No.2854/88 in which the Lahore High Court made an interim order for the release of machinery subject to the Mills furnishing bank guarantee to the extent of the disputed amount of regulatory duty. The prayer for stay relating to iqra surcharge was disallowed. The Mills brought that matter to this Court through Civil Petition No. 262-R/88 and the recovery of surcharge was stayed in that cause, subject to the Mills furnishing bank guarantee, on 25.6.1988. The orders of the High Court and this Court were not complied with by the Mills with the result that they never became effective. Writ Petition No. 2854/1988 was subsequently dismissed by the Lahore High Court.
3. On 22.6.1988, the Mills made the deposit of a sum of Rs. 49,29,568/- out of the assessed duties amounting to Rs. 98,59,135/-. The remaining amount was to be paid in the form of debentures.
However, before the Mills could furnish the debentures or have the machinery cleared, a Notification bearing No. 458(1 )/88 was issued by the Federal Government in the exercise of its powers under Section 19 of the Customs Act, 1969 and the Sales Tax Act, 1951 whereby machinery imported for setting up textile industry was exempted from whole of the customs duty and sales tax, in the following terms: "S.R.O. 458(l)/88.- \n exercise of the powers conferred by section 19 of the Customs Act, 1969 (IV of 1969), and sub-sections (1) and (2) of section 7 of the Sales Tax Act, 1951 (III of 1951), the Federal Government is pleased to direct that such plant and machinery as is not manufactured locally shall, if imported, (i) for setting up key industries including industries using more than 70 local raw materials, fertilizer plants, engineering industries, electronics and other high-tech industries as may be notified by the Government, and as are set up before 30th June, 1991, be exempt from the whole of customs duties and sales tax leviable thereof and (ii) for setting up industrial projects approved by the Government for the areas specified in column (2) of the table below exempt from customs- duties and sales tax leviable thereon in excess of the extent specified in the corresponding entries of column of the said table, subject to the conditions specified in this Ministry's Notification No. SRO 500(l)/84, dated the 14th June, 1984 namely:- "
4. The Mills claimed exemption from the payment of customs duty but the appellants refused to allow the benefit of the Notification bearing No. 458(1 )/88 afore-quoted. The reasons advanced by the appellants were that in this case the Mills had not only imported the goods for which duties had been assessed but also made the payment of a party thereof before the issuance of Notification No. 458(l)/88.
5. lt was at this juncture that the Mills made Constitution Petition bearing W.P. No. 4023/88 which was allowed by the learned Judge in Chambers of Lahore High Court, Lahore on 14.7.1992 holding that as the entire duty had not been paid so as to enable the Mills to take the delivery of goods, its case fell under second proviso to section 30 of the Customs Act, 1969 on the eve of issuance of SRO No. 458(l)/88, dated 26.6.1988 and that the furnishing of debentures even if figuratively equated with payment in cash, the date of actual payment within the meaning of said proviso to section 30 would be the date on which debentures are actually furnished along with the documents mentioned in sub-rule (5) of rule 7 of the "Deferment of Import Duty" Rules, 1985 and same are accepted under rule 8. "..There is no dispute in the present case that debentures were admittedly furnished much after notification dated (26th June, 1988) was issued..."
6. Paras 3 and 4 of the Order dated 16.1.1994, read thus:- "3. The learned counsel for the petitioners has contended that the second proviso to section 30 would not be applicable to a case where part of the duty had been paid and that such a situation will be governed by section 30(b) of the Customs Act. On the other hand the learned counsel for the respondent has contended that as the entire duty had not been paid, within seven days of the presentation of the bill of entry, the case was covered by the second proviso to section 30. The learned Judge taking note of the provisions of the Customs Act observed as follows:- "Under section 79 of the Customs Act, 1969, the owner of the imported goods has to file a Bill of Entry either for home consumption or for warehousing. Section 80 provides for assessment of duties and further ordains that the owner of such goods may proceed to clear the same for home consumption or warehouse subject to the provisions contained in the Act. Section 83 deals with clearance of goods for home consumption. The procedure for warehousing is provided by Chapter XI, Section 104 whereof states that any owner of warehoused goods may at any time within the period of warehousing mentioned in section 98 clears the goods for home consumption by paying duty assessed on such goods. Section' 30(b) of the Customs Act, 1969 makes a reference to section 104 of the Act which stipulates that the goods can only be cleared for home consumption by paying duty assessed on the goods under the provisions of the Act along with rent, penalties ^ surcharge and other charges in respect of such goods, lt is thus clear that 'expression duty' in second proviso to section 30 has reference to entire duty assessed on the goods in accordance with the provisions of the Act. "ln the present case, admittedly when the notification dated 28th June, 1990 was issued, only half of the duty had been paid while the remaining was still outstanding and was as a matter of fact paid in the form of debentures after the petition was filed. Consequently, as the entire duty had not been paid so as to enable the petitioner to take the delivery of goods, the case of the petitioner falls under second proviso to section 30. "
"The learned Judge also relied upon Ibrahim Textile Mills Ltd. v. Federation of Pakistan (PLD 1989 Lah.
47) in which the principles laid down in section 30 regarding the rate of duty to be applied have been reiterated. According to the learned counsel the judgment of the High Court referred to has been confirmed in Federation of Pakistan v. Ibrahim Textile Mills Ltd. (1992 SCMR 1898). ln the judgment of the High Court referred to above the provisions of section 30 have been reiterated, but the controversy before us is completely different. Here the question for consideration would be as follows:- "Where bill of entry for clearance of goods from warehouse has been presented and part of the duty has been paid within seven days and the balance has not been paid within this period, will the value and rate of duty applicable be as provided by the second proviso to section 30?
"4. ln the judgment of this Court referred to above, no observation has been made with regard to this aspect of the case. As the question raised requires interpretation of section 30 of the Customs Act, which is of general importance, leave is granted."
7. lt would thus appear that the case of the Mills found favour with the learned Judge in Chambers of the Lahore High Court who observed that second proviso to section 30(b) of the Customs Act, 1969 was applicable and the new dispensation brought about in terms of Notification dated 26.6.1988 held the field on the day on which the goods were cleared from the bonded warehouses under the orders of the High Court dated 2nd August, 1988 subject to the Mills furnishing debentures, as above.
8. Both, Mr. Yawar Ali Khan, Deputy Attorney-General for Pakistan and Sheikh Izharul Haq, learned counsel for the Customs Department, have simply reiterated the plea raised before the learned Judge in Chambers to the effect that the Mills had imported the goods in question prior to 26th June, 1988, when SRO 458(l)/88 was issued and as a part of duty had also been paid on 22nd June, 1988, the said Notification has no applicability to the goods imported by the Mills. Sh. Izharul Haq had, in fact, argued that the clearance of goods by furnishing debentures for the remainder amount was inconsequential in that such clearance was complete before the date of issue of SRO No. 458(l)/88. He, however, retraced ihis steps when the learned Law Officer interjected to state that the issue of debentures cannot be equated with the payment, of the remaining amount in the form of debentures after the Constitution Petition was filed by the Mills with the result that entire duty had not been paid so as to enable it to take the delivery of goods. According to the learned Law Officer, the date of filing of the Bill of Entry being 16.6.1988 and the date of issue of SRO No. 458(l)/88 being 26.6.1988, the Mill's entitlement thereunder is not in order.
9. Contrarily, Mr. Ashtar Yusaf Ali, learned counsel appearing on behalf of the Mills, has supported the impugned judgment dated 14.7.1992 by pressing into service the following cases:- Federation of Pakistan through Secretary, Finance, Islamabad and 4 others v. Messrs Ibrahim Textile Mills Ltd. and others (1992 SCMR 1898) M/s. Priyanka Overseas PvL Ltd. and another v. Union of India and others (AIR 1991 S.C. 583).
10. We have considered the arguments advanced at the Bar on behalf of the parties and have also perused material referred to by their during arguments. There is no dispute with regard to the relevant dates in the case. Both sides admit the correctness of the contents of the. details in Para- 10 of the impugned judgment which reads thus: "(1) Arrival of goods in Pakistan. May, 1988
(2) In-Bond Bill of Entry filed. 25.05.1988
(3) Ex-Bond Bill for clearance of goods from warehouse filed. 16.06,1988
(4) Custom duty assessed at Rs. 98 59,135/-.
Vr ' 28.05.1988
(5) An amount of Rs. 49,29,568/- was paid. 22.06.1988
(6) Debentures for the remaining.. --.50% amount was furnished. 07.07.1988"
Both sides are also one on the all important question that section 30(b) of the Customs Act rules the tis. The main point of difference between the parties, however, revolves around the treatment to be meted out to the payment of half of the duty in the form of debentures after the institution of Constitution Petition in the High Court. According to the appellants, as the Mills was required to pay only one-half of the duty in cash and the other half in debentures, it should be taken fo have paid the duty on 22.6.1988. Looked at from this angle, it is contended on behalf of the appellants, the Mills is not entitled to the benefit of SRO. No. 458(l)/88\ dated 26.6.1988.
11. Section 30 of the Customs Act, 1969 read thus:- "30. Date of determination of value and rate of import duty. The value of and the rate* of duty applicable to, any imported goods shall be the value and the rate of duty in force-
(a) in the case of goods cleared for home consumption under section 79, on the date on which a bill of entry is presented under that section; and
(b) in the case of goods cleared from a warehouse under section 104; on the date on which a bill of entry for clearance of such goods is presented under that section: Provided that where a bill of entry has been filed in advance of the arrival of the conveyance by which the goods have been imported the relevant date for the purposes of this section shall the date on which the manifest of the conveyance is delivered: Provided further that, in respect of goods for the clearance of which a bill of entry for clearance has been presented under section 104, whether before or after the commencement of the Finance Ordinance, 1979; and the duty is not paid within seven days of the bill of entry being presented, the value and rate of duty applicable shall be the value and rate of duty on the date on which the duty is actually paid: Provided further that the Federal Government may by notification in the official Gazette for any goods or class of goods, specify any other date for the determination of values and rate of duty."
A bare reading of the afore-quoted provision of the Customs Act makes it abundantly clear that if an importer does not pay the duty within seven days of the presentation of the Bill of Entry for clearance from a warehouse, then the rates applicable would be the ones which are extent at the time the duty is actually paid. The plea of the Mills that payment of the duties contemplated in second proviso to section 30(b) ibid means the payment of the entire duty was viewed favourably by the learned Judge in Chambers. Paras 17 and 18 of the impugned judgment read thus:- "17. Under section 79 of the Customs Act, 1969, the owner of the imported goods has to file a Bill of Entry either for home consumption or for warehousing'. Section 80 provides for assessment of duties and further ordains that the owner of such goods may proceed to clear the same for home consumption or warehouse subject to the provisions contained in the Act. Section 83 deals with clearance of goods for home consumption. The procedure for warehousing is provided by Chapter XI. Section 104 whereof states that any owner of warehoused goods may at any time within the period of warehousing mentioned in Section 98 clear the goods for home consumption by paying duty assessed on such goods. Section 30(b) of the Customs Act, 1969 makes a reference to section 104 of the Act which stipulates that the goods can only be cleared for home consumption by paying duty assessed on the goods under the provisions of the Act along with rent, penalties, surcharge and other charges in respect of such goods, lt is thus clear that expression "duty" in second proviso to section 30 has reference to entire duty assessed on the goods in accordance with the provision of the Act.
"18. ln the present case, admittedly when the notification dated 26th June, 1988 was issued, only half of the duty had been paid while the remaining was still outstanding and was as a matter of fact paid in the form of debentures after the petition was filed. Consequently, as the entire duty had not been paid so as to enable the petitioner to take the delivery of goods, the case of the petitioner falls under second proviso to section 30."
12. The learned counsel for the appellants were not in a position to effectively the afore-quoted observations. Their argument that the payment of 50% duty by the Mills on 22.6.1988 should be treated as payment of the entire duty as the payment of the remaining 50% duty by it through debentures will tantamount to payment of duty in its totality, loses sight of the fact that the goods in question were cleared from the bonded warehouse under an order of Lahore High Court, dated 2nd August, 1988.
13. We are not inclined to the view that a litigant pitched against the Customs Department can be denied the benefit of the situation coming about on account of the issue of SRO No. 548(l)/88, dated 26.6.1988, by which date the Mills had not succeeded in taking the delivery of goods from the concerned warehouse. The availability of facility extended to importers under SRO No. 548(l)/88, dated 26.6.1988 is inextricably linked with the preconditions detailed in the second proviso to clause
(b) of section 30 ibid. The case of the Mills is that it did file Ex- Bond bill under section 104 of the Customs Act for clearance of goods and as the duty was not paid by it within seven days of the bill of entry, the Appellants were not left with any authority or power to act contrary to the grant of total exemption from whole of the customs duty and sales tax leviable on importers similarly placed as the Mills, with effect from 26.6.1988. Failure on the part of the appellants to even so much as deny the fact that even debentures were furnished much after the issuance of SRO. 548(l)/88, advances the cause of the Mills. Put differently, it is only one fact of the facility afore-referred which has incidentally favoured the Mills.. There can be an occasion within the contemplation of SRO No. 548(l)/88, dated 26.6.1988 by which enhancement of the duty-amount/s will favour all the appellants when it ordains the importers of that category, to pay duty at the enhanced rate/s in terms of the second proviso to sub-section 30(b) ibid. Looked at from whatever angle, no ground for interfering in the impugned judgment has been made out.
14. Resultantly, this appeal fails and is hereby dismissed with no order as to costs.