' The petitioner firm was granted a licence by the Chief Controller of Imports and Exports for the import of "serial No, 156 Machinery and Mill Works not otherwise specified and accessories thereof and maintenance thereof all sorts excluding items notified in Part I of Annexure XII and of the value exceeding Rs, 25,000 . . .
82.02 Saws (non-mechanical) and blades for hand or machine saws (including toothless saw blades) III". The licence was described as 'commercial' and valid for items placed under free list.
The value of the licence was Rs, 1,70,200.
2. The petitioner licence on the basis of this import licence established four letters of credit of the value of Rs, 25,000 each in favour of Janes Neill (Sheffield) Ltd.. England for the supply of Hacksaw Blades of 14' x size 10 teeth to 1' and in various quantities. The imported goods that is Hacksaw Blades are exclusively used in the metal cutting machines operated with power. The consignment of the imported goods was supplied through post parcels and the said consignment arrived at the Lahore General Post Office at various intervals during the months of January and February 1976.
Respondent No, I refused to release the consignment on the ground that the imported goods were not covered by the import licence in question. A show-cause notice dated 27-2.1976 was issued to the petitioner by respondent No, 1 as to why the petitioner should not be penalised and the goods confiscated under section 156(1) of the Customs Act, 1969.
3. The petitioner replied to the show-cause notice but the contention did not find favour with respondent No, 1 and the latter ordered confiscation of the goods. It was also stated that the petitioner could redeem the same on payment of fine of Rs, 503,000 payable within 30 days.
4. Aggrieved by the order of respondent No, 1 dated 29-3.1976 the petitioner filed an appeal before respondent No, 2 which was dismissed on 28-6-1976. The petitioner tiled a revision petition but that too failed on 21.8-1976 but in revisional jurisdiction respondent No, 3 reduced the amount of redemption fine to Rs, 30,000. The petitioner then approached the Chairman, Central Board of Revenue, Islamabad for review of the whole case but that too was dismissed on 6-11-1976 on the ground that there was no provision for review. Then the petitioner tried to approach the Federal Finance Minister for the redress of his grievance but all the efforts proved futile, and, now, the petitioner has challenged the orders of the respondents by way of this writ petition in the High Court.
5. The respondents have classified the Hacksaw Blades under sub-clause 82.02-I which, according to them, is a banned item and could not be imported because the petitioner was given a licence for the import of machinery or accessories thereof under the sub-heading 82.02-111.
' The sole question for determination by this Court is whether the Hacksaw Blades are to be classified under sub-heading 82.024 or under sub-heading 82.02-III ?
6. Under section 3 of the Impbrts and Exports (Control) Act, 1950, the Federal Government promulgated Import Policy Order, 1974 (on 8-7-1974) (hereinafter called the Order). According to para. 3 of the Order, only those items are permissible for import which are included in the two lists, namely, "free list" and "tied list". The items mentioned in Annexure I are the items included in the free list and under Part ABC these items are importable against cash from world-wide sources or under loan, credit or barter from the respective sources.
' Whereas Annexure H enumerates those items which are included in the tied list and are importable exclusively from tied sources under tied, credit, loan, barter or USPL 480.
7. Item No, 156 for which the licence was issued is shown in Annexure of the free list and is covered by the Import Trade Control Schedule Number (hereinafter called I. T. C. No,) 82.02-HI. This would show that if the Hacksaw blade which has been imported by the petitioner is classified under ' I. T. C.
82.02-111 then it cannot be considered as a banned item nor can it be confiscated.
8. Chapter 82 of the Import Trade Control Order (dated 25-6-1973) has classified i. I. C. No, 82.02 into following sub-headings
1. Hacksaw IL Band saws, circular saws and hand saws. III. Of a kind used in machinery. IV. Other.
' Keeping this classification in view it is to be seen whether Hacksaw Blades are to be classified under I. T. C.
82.02-1 or I. T. C.
82.02-III. In order to come to a correct conclusion the rules for the interpretation of I. T. C. Number have to be considered. These rules are mentioned in Schedule II of the Import Trade Control Order which are reproduced below : SCHEDULE II L T. C. SCHEDULE BASED ON B. T. N. RULES FOR THE INTERPRETATION OF THE SCHEDULE ' Interpretation of the Schedule shall be governed by the following principles
(1) The titles of Sections, Chapters and sub-Chapters are provided for case of reference only; for legal purposes, classification shall be determined according to the terms of the headings and any relative Section or Chapter Notes and provided such headings or Notes do not otherwise require, according to the following provisions :- 2 (a) Any reference in a heading to an article shall be taken to include a reference to that article incomplete or unfinished, provided that, as imported, the incomplete or unfinished article has the essential character of the complete or finished article. It shall also be taken to Include a reference to that article complete or finished (or falling to be classified as complete or finished by virtue of this rule), imported, unassembled or disassembled.
(b) Any reference in a heading to a material or substance shall be taken to include a reference to mixtures or combinations of that material or substance with other materials or substances. Any reference to goods of a given material or substance shall be taken to include a reference to goods' consisting wholly or partly of such material or substance. The classification of goods consisting of more than one material or substance shall be according to the principles of rule 3.
3. When, for any reason, goods are, prima fade, classifiable under two or more headings, classification shall be effected as follows
(a) The heading which provides the most specific description shall be preferred to headings providing a more general description.
(b) Mixtures and composite goods which consist of different materials or are made up of different components and which cannot be classified by reference to (a) shall be classified as if they consisted of the material or component which give the goods their essential character, in so far as this criterion is applicable.
(c) When goods cannot be classified by reference to Via) or (b), they shall be classified under the heading which involves the highest rate of duty.
(4) Goods not falling within any heading of the Nomenclatures shall be classified under the heading appropriate to the goods to which they are most akin.
(5) The classification of goods within a heading is to be determined by applying as between sub- headings the like Rules as are to be applied between headings, and except in so far as the contrary intention appears, terms used in a sub-heading are to be interpreted in the same way as in the heading."
A perusal of these Rules would show that under para. 3(a) of the rules referred to above, the blades are to be classified either under sub-clause I, III or IV. Sub-heading t is a complete Hacksaw machine and sub-heading deals with saws of different kinds, i,e, band saws, circular saws and hand saws whereas sub-clause ill deals with "of a kind used in machinery". The word "of a kind" is important to be interpreted. When referred to t main heading the word "of a kind" would mean either saw or blade which is used in machinery, or, in other words, it would mean a kind of "saw" or "blade" to be used in machinery. According to this interpretation of the word "of kind", Hacksaw Blade can be classified under sub-heading 82.02-III.
9. The learned counsel for the respondents has referred to para. 3(a) of the Interpretation Rules and argues that the beading of Hacksaw provides more specific description to Hacksaw blades so the latter must be classified under 1. T. C. Schedule No, 82.02-I instead of sub-heading 82.02.III. The contention of the learned counsel appears to be devoid of force because sub-heading 82.02-I deals with Hacksaw machine only, whether operated mechanically or non-mechanically. If this was not the intention of the framer of the Import Trade Control Order, then in sub-heading 82.02-I it should have been mentioned as "Hacksaws and parts or accessories", but only Hacksaws have been shown against I. T. C. No, 82.02-1. It cannot be considered to include any part of Hacksaw i,e, Hacksaw blade and on this basis cannot be classified under sub-heading 82.024. This argument is open to criticism from another aspect of the case. Hacksaw machine consists normally of Hacksaw frame, Hacksaw blade, electric motor etc. If any part of the Hacksaw machine is to be classified under the sub-heading 82.02-I where only Hacksaw is mentioned, it would mean that other parts would also be classified under the same heading and sub-headings 82 02-111 and 82.02-IV would become redundant.
10. Hacksaw frame (hand) is no doubt a component part of Hacksaws. On the basis of the reasoning of the learned counsel for the respondents it must be classified under sub-heading 82.02-I but at Serial No, xxii of the tied list, it has been classified under 1, T. C.
82.024V. This would further indicate that any part of Hacksaw, may be frame or blade of Hacksaw, cannot be classified under sub-heading 82,024.
Para. 3(a) of the Interpretation Rules can be pressed into service in order to ascertain whether Hacksaw blade would fall under subheading 82.02-111 or 82.02-1V and on the basis of that interpretation it would appear that sub-heading 82.e2-IV relates to general sub-heading and is to be ignored. Sub-heading 82.02-HI provides more specific description for the same and has to be adopted.
11. Para. 3(c) could also be pressed into service to find out the exact classification which says that if there is any ambiguity as far as the exact classification then the item shall be classified under the heading which involves the highest rate of duty. Under the Customs Tariff. Hacksaw machine and Hacksaw blades are assessable to the same duty. So this para. Is of no avail in this connection.
12. The learned Collector, Central Excise and Land Customs has relied on the advisory opinion of the Assistant Controller of Imports and Exports for Chief Controller of Imports and Exports who has classified Hacksaw blade under I. T. C. 8102-1 and it has been stated, relying on Notification No, S. R.
0. 311 (1)/70 dated 2942-1970, that the interpretation given by the Chief Controller of Imports and Exports is binding, which reads as under "The competent authority to give ruling on I. T. C. Classification is the Chief Controller of Imports and Exports. The ruling of the Chief Controller of Imports and Exports in respect of I. T. C. Classification is subject to review and appeal under the Review, Appeal and Revision Order, 1957. Prior to 29th December 1970, when clause 3 of the Review, Appeal and Revision Order, 1957 was amended by Notification No, S. R.
0. 311(1)/70 dated the 29th December 1970, such ruling was final."
According to this notification, although a power has been given to the Chief Controller of Imports and Exports but he cannot give arbitrary interpretation. The interpretation given by the Chief Controller must b objective in nature and not of subjective satisfaction because it affects the right of the party. The advisory opinion of the Assistant Controller of Imports and Exports does not indicate as to how he came to this conclusion. The opinion is as under.
"No, 1(27)/76-CL Government of Pakistan ' Office of the Chief Controller of Imports and Exports Islamabad, the 15th May 1976.
Memorandum ' Subject-Import status of hacksaw blades ' The undersigned is directed to 'refer to the Assistant Collector of Central Excise and Land Customs, Division II, Lahore's letter No, V(15)/43/76/605 dated 21-4-76 on the above subject and to state that hacksaw blade is also , classifiable as a hacksaw under S. No, 82.02-I of the I. T. C. Schedule.
Hacksaw frames, being neither complete hacksaws nor hacksaw blades, fall under Part IV of I. T. C.
Schedule No, 82-02.
' It may be added that import of hacksaw blades is not allowed at the present, #TBS The Assistant Collector, (Mr. Syed Mohsin Asad), Central Excise and Land Customs, Division II, Nabha Road, Lahore." #TBE #TBS (Sd. )
(Ahmad Assistant Controller, for Chief Controller of Imports and Exports #TBE ' This opinion would indicate that the Assistant Controller is himself inconsistent in his opinion.
Hackeaw blade is a part of Hacksaw machine. Similarly Hacksaw frame is also a part of the Hacksaw machine. It according to his opinion Hacksaw frame is to be classified under sub.
Heading 82 02-1V how Hacksaw blade could be classified under sub-heading 82.02-I? If the frame cannot be classified under subheading 82.02-I the blade, which is also a component part of the Hacksaw machine, should not be classified under sub-heading 82.02-I. So the opinion given by the Assistant Controller is not in accordance with the Rules of Interpretation and the Customs authorities who hare the exclusive Jurisdiction to decide the matter should have decided independently with the help of the rules for the interpretation of the schedule. I therefore hold that the opinion given by the Assistant Controller of Imports and Exports is not only erroneous but also inconsistent and should have not been accepted by the Customs authorities.
13. The learned counsel for the respondents has emphasised that in view of para. 5 of the Import Policy Order, which reads as under :- "Items not included in Annexe. I and II shall be ineligible for import unless specifically authorised."
Only those items which are included in Annex. I, which is called a free list, or Annex. II, which is called tied list, can be imported and no other item is importable unless specifically authorised meaning thereby that if Hacksaw blade is shown in Annexes. I and II, then it cannot be considered as a banned item. Item (XL) of the Tied List reads as under "(x) Wood working machines, 82.02 II, III, 84.47 hand saws, circular saws, planers, and other special machines except high speed tacksaw machines up to 17 inches and blade length 18 inches.
A perusal of it would show that Hacksaw machine and the blade are no shown as banned item.
They are importable on the I. T. C. Number allotted F to them as 82.02 II and 82.02-III and not 82.02-I which further indicate that Hacksaw blade can neither be termed as a banned item nor can it be classified under I. T. C. Schedule No, 82.02-I.
14. The learned counsel for the respondents had laid emphasis on a public notice issued by the Chief Controller of Imports and Exports dated 8.7-1974. This order was promulgated, as stated earlier, under section 3 of the Imports and Exports Control Act, 1950 by the Federal Government, whereas the public notice has been issued by the Controller of Imports and Exports. Para. 16 of the Control Order reads as under : "16. Import for production requirements of Experts.-(1) Import of raw materials on Tied List or those which are banned for import, if required for actual use in the manufacture of goods for export, may, on application, be licensed from world-wide sources against cash up to the specified percentage to the F.
0. B. Value of export fixed and announced, and subject to the conditions hid down by the Chief Controller from time to time."
' A bare reading of this section would indicate that this para. Deals with import of "raw materials" on tied list or those which are banned for import if they are required for the manufacture of goods for export. An analysis of this para. Would show that only "raw material" is to be imported. "Raw material" has been defined in the Chambers Twentieth Century Dictionary, p. 1122, to mean that "serves as the starting point of a manufacturing or technical process: that out of which something is made, or makable, or may develop."
' Para. 16 of the Import Policy Order, 1974 can be bifurcated into two parts-the first part deals with the import of raw materials on the tied list and the second part deals with import of those raw materials which are banned for import and both of these can be imported if they are required for actual use in the manufacture of goods for export. So whatever is imported in the form of raw material whether on the tied list or on the banned list must be exported one way or the other.
' For example, second item on the Schedule of public notice authorises the import of harar (green), (mkt (green) for the export of achar, muraba of harar or amla, So this would in licate that harar (green) could be imported as "raw material" and after preparation of muraba of harar (gre en) the same could be exported. On this analogy the Hacksaw Wades could not be included in the Schedule, firstly because they are not "raw material", and secondly, they cannot be made component part of the manufactured goods meant for export. It is admitted by both the parties that Hacksaw blades are used for cutting metal. The inclusion of these blades in the Schedul under banned items is against the letter and spirit of para. 16 of the Import Policy Order, 1974.
15. Now it is to be ascertained whether they are the banned items. Section 3 of the Imports and Exports (Control) Act, 1950 empowers the Central Government to publish in the official Gazette by an order, prohibit, restrict or otherwise control the imports and exports of goods of any specific description. It is admitted by the learned counsel for the parties that there is no such prohibition or restriction by the Central Government for the import of Hacksaw blades. Similarly section 16 of the Customs Act, 1969 also empowers the Central Government to notify the prohibition or restriction in the official Gazette for the import or export of any goods. No such notification has been made with respect to Hacksaw blade. But in the, public notice against Serial No, 3 Hacksaw blade has been classified by' the Chief Controller of Imports and Exports under I. T. C. No, 82.024 and the same has been shown as banned item.
16. As stated earlier, the Central Government has not banned this item and there is no notification to this effect. Neither the Cent Government has delegated this power to the Chief Controller of Imports and Exports. In the public notice it could not be shown as a banned item. As far as classification is concerned, I have already observed above that it has not been correctly classified.
The Chief Controller of Imports and Exports is not competent to declare any item as "banned item" in the public notice. I accordingly hold that entries in such public notice and classification of the Hacksaw blade under I. T. C. Schedule No, 82.02-I Is without jurisdiction.
17. It has been admitted by both the parties that previously four consignments of Hacksaw blades were released by the Customs authorities as they were classified under I. T. C. No, 82.02,III, but, for the first time, the Customs authorities, most probably on the advisory opinion of the Chief Controller of Imports and Exports, changed the interpretation at the time when the consignment was received at the General Post Office, Lahore The Customs authorities are supposed to adhere to their own precedents in administering taxing statute involving the very basis of taxation in respect of particular articles. They should not have modified their own previous decision without any lawful justification whether the doctrine of precedent applies in its full vigor to administrative agencies and officers or whether a reasonable latitude should be given to these administrative Tribunals to correct or modify their previous decision is somewhat doubtful but it is desirable that the principal appraiser or the Collector of Customs should not change their minds from time to time in respect of the same article by classifying it in one sub-heading and subsequently giving a radically different opinion. If the Customs authorities are allowed to change their decision frequently it would lead to utter confusion in the very basis and principles of classification and assessment to Customs duty. I therefore hold that the Customs authorities are bound by their own precedents in the classification and administering taxing statute involving the very basis of taxation in respect of Hacksaw blades and particularly this change could not be made after the consignment was imported into Pakistan.
18. The learned counsel for the respondents has raised an objection of laches on the ground that the revision of the petitioner was dismissed by the Central Board of Revenue on 22-9-1976 and the writ petition was filed on 29-3-1977. The objection appears to be unfounded. The petitioner filed a review petition before the Central Board of Revenue and it was dismissed on 6-11-1976 on the ground that there is no provision for review and this must have been communicated subsequently.
The petitioner has given a satisfactory explanation that he was trying to approach the Federal Finance Minister, that previously consignments of Hacksaw blades were released and were classified under I. T. C. No, 82.02-111. And for the first time when the consignment reached Pakistan, the Customs authorities had changed their decision and after realizing that all these efforts were futile, the orders were challenged in writ petition. It appears that the petitioner has been very diligently pursuing the case before the various authorities and has not been indolent. Even otherwise six months delay in filing the petition cannot be considered as a sufficient ground for non-suiting a party in a proceeding of this nature. If the delay is accompanied by the circumstances which indicate clear negligence on the part of the applicant to pursue his remedy with due diligence or acquiescence in the adverse order made against him that may be a good ground for denying that extraordinary remedy. In context of the circumstances stated above it cannot be held that the writ petition suffers from laches.
19. In view of what has been observed above, I accept the writ petition with costs, declare the orders of respondent. No, 1 dated 29-3.1976, of respondent No, 2 dated 28-6-1976, and that of respondent No, 3 dated 22-9-1976 as without lawful authority and of no legal effect and direct that Hacksaw blades are to be classified under I. T. C. Schedule 82.02.11 and the consignment is to be released forthwith.