WALI MUHAMMAD KHAN, J.-(l). The Assistant Collector, Customs and others seek review of the judgment of this Court dated 28-11-1992, whereby their Petition for Leave to Appeal No. 99-P/92 challenging the judgment of a learned Division Bench of the Peshawar High Court dated 3-3-1992 through which the Writ Petition No. 456/90 filed by M/s. Gadoon Textile Mills Limited was allowed and the orders impugned before them and the action of petitioner No. 1 was declared as without lawful authority and of no legal effect and absolved the respondent from the payment of regulatory duty between the period of issuance of Notification No. S.R.O. 517(I)/89 dated 3-6-1989 and its recession by the Federal Government, was dismissed.
2. We have heard Mr. Mumtaz Ali Mirza, Deputy Attorney- General, for the petitioners, and have perused the record of the case.
3. The learned counsel for the petitioners strenuously argued that the regulatory duty is not covered by the customs duty leviable under section 18 of the Customs Act as it is a special duty levied in the special circumstances and for a specified period as provided in sub-section (4) of Section 18 of the Act and its maximum rate is also given which differentiates it from other levies. He submitted that the notification No. S.R.O. 517(I)/89 dated 3-6-1989 exempted the whole of the customs duty and sales tax leviable; on the goods mentioned in the notification and did not specifically exempt the regulatory duty as well and that the learned High Court legally erred in holding that the regulatory duty was part of the customs duty and that this fact escaped the notice of this Hon'ble Court while delivering the judgment under review. In support of his submissions, he cited the judgment of the Lahore High Court in case Marino Industries Limited v. Federation of Pakistan 1992 CLC 159; Saifi Textile Mills Ltd., Karachi v. Collector Customs (Appraisement), Karachi PLD 1993 Karachi 87 = PTCL 1999 CL. 295 and M/s. Sh. Abdur Rahim, Allah Ditta v. Federation of Pakistan PLD 1988 SC 670 = PTCL 1999 CL 493.
4. We have anxiously considered the arguments of the learned Deputy Attorney-General and have minutely gone through the judgments cited by him. Section IS of the Customs Act, 1969 provides for the levy of customs duty while section 19 makes provision for empowering the Federal Government to exempt any goods from the whole or any part of the customs duty chargeable thereon. It would be profitable to reproduce-both the aforesaid provisions of law:- "18.- (1) Except as hereinafter provided, customs duties shall be levied at such rates as are prescribed in the First Schedule and the Second Schedule or under any other law for the time being in force on-
(a) goods imported into or exported from Pakistan;
(b) goods brought from any foreign country to any customs-station, and without payment of duty , there transhipped or transported for, or thence carried to, and imported at any other customs- station; and
(c) goods brought in bond from one customs-station to another.
(2) the Federal Government may by notification in the official Gazette, levy, subject to such conditions, limitations or restrictions as it may deem fit to impose, a regulatory duty on all or any of the articles specified in the First Schedule at a rate not exceeding hundred per cent of the value of such articles as determined under section 25 or, as the case may be, fixed under section 25-B, and may, by a like notification, levy a regulator}' duty on all or any of the articles exported from Pakistan at a rate not exceeding hundred per cent of the amount which represents the value of such articles as determined or fixed as aforesaid.
(3) The regulatory duty levied under sub-section (2) shall-
(a) be in addition to any duty imposed under subsection (1) or under any other law for the time being in force; and
(b) be leviable on and from the day specified in the notification issued under that sub-section, notwithstanding the fact that the issue of the official Gazette in which such notification appears is published at any time after that day.
(4) Any notification issued under sub-section (2) shall, if not earlier rescinded, stand rescinded on the expiry of the financial year in which it was issued.
19 (1) The Federal Government, subject to such conditions, limitations or restrictions, if any, as it thinks fit to impose, may, by notification in the official Gazette, exempt any goods imported into, or exported from, Pakistan or into or from any specified port or station or area therein, from the whole or any pan of the customs duties chargeable thereon.
(2) A notification issued under sub-section (1) shall be effective from the day specified therein, notwithstanding the fact that the issue of the official Gazette in which such notification appears is published at any time after that day."
The careful perusal of section 18 above makes it clear that customs duties are imposed under section 18, sub-section (1) while regulatory duties are imposed under sub-sections (2). Subsection
(3) thereof clarifies that regulatory duty levied under subsection (2) shall be in addition to any duty levied under subsection (1) or any other law for the time being in force and be levied on and from the date specified in the notification. According to sub-section (4) any notification issued under sub section (2) shall if not earlier rescinded, stand rescinded on the expiry of the financial year in which it was issued. Section 19 confers wide powers on the Government to exempt any goods from the whole or any part of the customs duty chargeable thereon.
5. In the case of Abdur Rahim v. Federation of Pakistan (PLD 1988 SC 670 = PTCL 1999 CL. 493) cited by the learned counsel for the petitioners the questions for consideration were whether the levy of regulatory duty was an abdication of its function by the Legislature or was mere delegation of discretion to achieve the purpose of law. It was also in issue before the Court whether regulatory duty was a part of the customs duty or not. The learned Full Bench seized of the matter held it to be not an abdication of its function by the Legislature but by law a valid delegation of discretion to achieve the purpose of law On the question whether regulatory duty is a part of customs duty or not the following observations were made: - "Referring now to sub-section (2) of section 18 of the Act, "Regulatory duty" is a levy on all or any of the articles specified in the hirst Schedule which are chargeable to customs duty. The First Schedule under its separate heads prescribes the rates of duties chargeable on goods imported into Pakistan. The regulatory duty has, therefore, direct nexus to the goods imported which are liable to customs charge. If one were to give to it dictionary meaning then it nowhere in the context in which it occurs exerts that meaning. In essence, therefore, it can have no other sense, but that of a customs charge imposed to maintain a proper balance in a fluctuating market although it is described by a different nomenclature which does not make it distinct from customs duty. Sub- section (3) of section 18 of the Act further reinforces the concept of its being an additional customs charge."
6. As already mentioned in the judgment under review the estate of Gadoon Amazai was established in merged area of Gadoon Amazai which previously was tribal territory and was governed by customary laws where poppy cultivation was the main source of income of the inhabitants. In order to persuade them to desist from poppy cultivation and to provide them alternative job opportunities the industrial estate of Gadoon Amazai was established and to give incentive to the industrialists for installing various industries there, the Federal Government through the notification in question exempted the raw material and components as are imported for the exclusive manufacture of goods by a recognised industrial unit located in the said estate from whole of the customs duties and sales tax leviable thereon. In this background of the situation, the only interpretation which can be put on the notification is the total exemption from the whole of customs duties and sales tax and not only those mentioned in section 18(1) of the Customs Act. As held by this Court in the cited judgment referred to above, the regulatory duty is an additional customs charge leviable under the various sections of the Customs Act and it may look unreasonable if customs duty leviable under sub-section (1) of section 18 is declared exempted whereas the additional customs charge in the form of regulatory duty is held recoverable. The words used in the notification "whole" and "leviable" suggested that the said industrial estate was exempted from all customs duties leviable in past or in future.
We do not find any error apparent on the face of the record to call for review of the judgment of this Court and accordingly, dismiss the instant review petition.