' MALIK MUHAMMAD QAYYUM, J---This judgment shall dispose of I.C.As. Nos.376 and 377 of 1996 brought by Kohinoor Weaving Mills and I.C.As. Nos.356 and 357 of 1997 filed by Central Board ctf Revenue, in all of which the judgment and order, dated 1-8-1996 passed by the learned Single Judge of this Court has been assailed.
2. The facts leading to the filing of this petition need not be recounted as the same have been set out in detail impugned judgment of the learned Single Judge. Suffice it to say that in the two Constitutional petitions filed by the appellant before the learned Single Judge it was prayed for a declaration that the appellant was entitled to the benefits of notifications issued under the Customs Act, 1969, Sales Tax, 1990 and the Central Excises Act, 1944. The details of the notifications have been mentioned in para.1 of the Constitutional petition and are available as Annexures A to A/6 on the record of the Constitutional petition. This claim of the appellant was upheld by the learned Single Judge subject, however, to the condition that the appellant shall restore the benefits derived by it under S.R.O. No,722 of 1989 and the licences thereunder and also under S.R.O. No,962 of 1990.
3. Raja Muhammad Akram, the learned counsel for appellant has argued that the order of the learned Single Judge is self-contradictory in nature inasmuch as the learned Single Judge had himself come to the conclusion that the appellant had not availed of the benefits of Notification No, S.R.O. 722 of 1989 and as such there was no occasion for the learned Single Judge to direct the appellant to restore the benefits .Which it had received under S.R.O. No,962(I)/1990 without any reason. It was' emphasized that the two Notifications namely S.R.O.722(I) of 1989 and S.R.O. 962(I) of 1990 are independent of each.Other and the benefits under S.R.O. 962(I) of 1990 cannot be ordered to be refunded while availing of the benefits of the standardized drawback notification.
4. Mr. Izhar ul Haq, the learned counsel for the Central Board of Revenue on the other hand has argued that the appellant having once opted to be governed by S.R.O. 722 of 1989 and obtained licences thereunder, the learned Single Judge was not justified in holding that the appellant could avail of the benefit of the standardized notification.
5. Before dealing with the arguments raised at the Bar it may be stated as a matter of background that the Government of Pakistan has from time to time been announcing various measures like reduction in the duty of customs, excise as also sales tax and allowance of drawback and rebate on the goods exported abroad. Some of these notifications have been mentioned in para.1 of the Constitutional petition. The Government subsequently introduced a scheme known as Open Bonded Manufacturing Rules, vide S.R.O. 722 of 1989, dispensing with the payment of duties and tax on the raw material purchased from the local market or abroad on the goods meant for export.
However, in those rules, it was provided that the suppliers of raw material would be levied duty at the time of manufacturing and later on they apply for refund of duties and tax paid by them. The appellant had admittedly obtained licences under S.R.O. 722 of 1989 and availed of the benefits of the said notification only to the extent of import of P.V.A. Material and not local raw material.
6. It has been explained by Raja Muhammad Akram that the rules framed under Notification S.R.O.
722(I) of 1989 were unworkable inasmuch as these provided for the payment of the taxes to the Government by the manufacturer and subsequent refund after sale of raw material to the purchaser for production of goods meant for export. According to the learned counsel no manufacturer was willing to pay tax out of his own pocket and later on recover the refund from the Government. It was in this background that the appellant desired to be governed by notifications known as standardized drawback notifications.
7. After hearing the learned counsel for the parties and on the basis of the record available before him, the learned Single Judge came to the conclusion that notwithstanding its registration under S.R.O.722 of 1989 the appellant would validly claim benefits of earlier standardized notifications.
Nothing has been cited or placed before us by the learned counsel for the respondents which could persuade us to take a different view. It is common ground between the parties that even after having obtained licences under Notification S.R.O.722 of 1989, the appellant had been applying for refund of duty under the standardized drawback notification and not S.R.O. 722 of 1989.
The appellant did not avail of any benefit in respect of raw material purchased from the local market. The only concession granted was on the import of P.V.A. Chemical which, as held by the learned Single Judge, the appellant has to restore. If the appellant, while exporting the goods did not claim benefit of S.R.O. 722 of 1989, on no rational principle can the respondents deny the benefits of the standardized drawback notification. The learned Single Judge was, therefore, correct in holding that the appellant was entitled to the benefits of the standardized duty drawback notifications.
7-A. As already observed, the learned Single Judge has allowed the petition subject to the respondents refunding or allowing adjustment of the benefits which the appellant had drawn under Notification S.R.O. 722 of 1989. To this none of the parties has taken exception. The dispute, however, arises as regards the other condition imposed by the learned Single Judge which was that the benefits derived by the appellant under a separate Notification by S.R.O. 962 of 1990 shall also be returned/refunded. According to the learned counsel for the appellant, two Notifications viz. S.R.O. 722(I) of 1989 and S.R.O. 962(I) of 1990 are different in scope and operate in different field and as such the appellant could not be asked to refund the benefits drawn under the latter notification.
8. There is considerable merit in the contention of the learned counsel. A perusal of the aforesaid two Notifications shows that the ekemptions granted thereunder are not interdependent or connected except for the purposes of monitoring under Notification S.R.O.962(I) of 1990. The learned Single Judge in para.9 of his impugned judgment has himself noted that Dr. Muhammad Saeed, A.C., Customs Dry Port and M. Saleem, Superintendent had admitted before him that certain manufacturers were issued licences under S.R.O. 962(I) of 1990, even though they were not registered under S.R.O. 722(I) of 1989. It clearly follows that the registration under S.R.O. 722(I) of '1989 was not a condition for availing of the benefits of S.R.O. 962(I) of '1990. The learned counsel for the appellant has also placed on record a letter issued by the Central Board of Revenue whereby the Board itself had allowed the benefits of Notification S.R.O. 962(I) of 1990 to M/s Sahara Textile without reference to other notification i.e, S.R.O. 722(I) of 1989. The subsequent conduct of the respondents in treating the two notifications as separate as contained in Notification 376(I) of 1996 dated 13-6-1996 also supports this view. We are consequently of the opinion that the learned Single Judge fell into error in directing that as a condition to the grant of benefits under the standardized notification, the appellant should restore the benefits which it had derived under Notification S.R.O.
962(I) of 1990. Such a condition could be placed only in respect of the benefits drawn under the Notification bearing S.R.O. 722(I), of 1989.
' In view of what has been stated above, I.C.As. Nos. 356 and 357 of 1997 are dismissed while I.C.As.
Nos.376 and 377 of 1996 are allowed and the condition imposed by the learned Single Judge regarding restoration of benefits derived under Notification S.R.O.962(I) of 1990 is set aside and it is directed that the appellant shall be entitled to the benefits of standardized duty drawback Notification provided it refunds or restores the benefits which it had received under Notification S.R.O. 722(I) of 1989 on the import of duty from P. V . A. /Chemical.