RUSTAM S. SIDHWA, J.-(1). This judgment will dispose of seven writ petitions W.P. No. 1972 of 1986, W.P. No. 1973 of 1986, W.P. No. 1974 of 1986, W.P. No. 1975 of 1986, W.P. No. 1976 of 1986, W.P. No. 1977 of 1986 and W.P. No. 1978 of 1986 filed by the Lahore Textile and General Mills Ltd., Rawal Textile Mills Ltd., Monnoo Industries Ltd., Jamboor Textile Mills, Margalla Textile Mills, Olympia Blended Fibres Mills Ltd., and Nishat Mills Ltd., petitioners, calling in question the order's of the Assistant Collector of Customs and/or the Deputy Collector of Customs, Lahore, imposing regulatory duty of Rs. 5 per kg.
On viscose fibre imported by them under the various Bills of Entries referred to by the petitioners in their petitions, on the basis of Federal Government's Notification No. S.R.O. 430(I)/86 dated 30.4.1986.
2. The brief facts of the case are that all the seven petitioner Companies imported man-made viscose fibre from Japan under valid licences granted to them for its import. The particulars as regards the dates of the letters of credit opened by the petitioners, the dates when the bills of entries were filed at Karachi for inbonding and the dates when the bills of entries were filed at the Customs Dry Port at Lahore for ex-bonding are as under: Name of Company Date of Letter of CreditDate of in- bonding at KarachiDate of ex- bonding at Lahore M/s. Lahore Textile 5-2-1986 14-4-1986 3-5-1986 M/s. Rawal Textile 3-2-1986 7-4-1986 3-5-1986 M/s. Monnoo Industries 3-2-1986 31-3-1986 3-5-1986 M/s. Jamboor Textile 4-2-1986 14-4-1986 3-5-1986 M/s. Margalla Textile Feb. 1986 4-3-1986 3-5-1986 M/s. Olympia Blended 3-2-1986 7-4-1986 3-5-1986 M/s. Nishat Mills Feb. 1986 2-4-1986 3-5-1986 Under the Pakistan Customs Tariff, Item 56.01, customs duty on man-made viscose fibre is Rs. 20 per kg. The Federal Government, by Notification No. S.R.O. 430(I)/86, dated 30.4.1986, which appeared in the Gazette of Pakistan Extraordinary, dated 30-4-1986, in exercise of the powers conferred by sub-section (2) of Section 18 of the Customs Act, 1969, imposed regulatory duty of Rs.
5 per Kg. On man-made viscose fibre covered inter alia by Item 56.01 of the Pakistan Customs Tariff.
4. When the petitioners applied for the release of their goods from the Customs Dry Port by filing their bills of entries for ex- bonding after 30-4-1986, the Customs authorities claimed the regulatory duty of Rs. 5 per Kg. On the imported goods, in addition to the customs duty at the rate of Rs. 20 per Kg., which is not in dispute. Being aggrieved by the said action, the petitioners filed writ petitions in the High Court, which are now before me for disposal.
5. This case was partly argued on 31-1-1988 by Raja Muhammad Akram, Advocate for the petitioners. Thereafter it was adjourned to 10-2-1988 and then to 20-2-1988, 1-3-1988,20-3-1988 and 18-4-1988, but could not be taken up as the counsel were busy in other Courts. On 12-6-1988, the case was argued by Ch. Muhammad Sadiq, Advocate, on behalf of the petitioners. In the morning, Mr. Qadir Ahmed Siddiqi, Advocate for the Customs Authority, appeared to seek an adjournment, but was informed that as the cases had already been adjourned four to five times, they could not be adjourned. When the cases were taken up, nobody was present on behalf of the Customs.
6. On behalf of the petitioners it is submitted that the Federal Government's Notification No. S.R.O.
430(I)/86 dated 30.4.1986 was not gazetted till 7-5-1986 and that the Gazette of Pakistan, Extraordinary, dated 30-4-1986 purporting to have been printed by the Printing Corporation of Pakistan was printed much later. In this connection it is submitted that when the petitioners filed bills of entries for ex-bonding with the Customs Dry Port at Lahore on 4-5-1986 and were informed of the new regulatory duty of Rs. 5 per kg. Having been imposed, they were shown no Gazette Notification by the Customs authorities at Lahore and when on 7-5-1986 the Additional Secretary of the All Pakistan Textile Mills Association addressed a letter to the Manager, Printing Corporation of Pakistan, Islamabad, to supply the Gazette of Pakistan containing the Notification of 30-4-1986, the Deputy Manager, Printing Corporation of Pakistan Press, Islamabad, by his noting dated 7-5-1986, made on the said letter, stated that he could not supply the Gazette as the Notification would be printed next week. It is, therefore, submitted that the Gazette of Pakistan, containing the said Notification was actually printed after 7-5-1986 and not on 30-4-1986 and therefore, the regulatory duty, at best, could only be claimed from some date after 8-5-1986, depending upon the actual date when the Gazette was actually printed. In this connection Nawab Brothers v. Collector of Customs, Karachi and another (PLD 1977 Kar. 947 at page 948) is relied upon. It is further submitted, relying upon the principle laid down by the Supreme Court in the case of Al-Samrez Enterprise v.
The Federation of Pakistan (1986 SCM R 1917 = PTCL 1987 CL. 99), that the regulatory duty having been imposed after the opening of the letters of credit by the petitioners, they were not leviable to pay the said duty, as a vested right had accrued in favour of the petitioners to import the goods subject to payment of such customs and regulatory duties as were in force on the dates of opening of the letters of credit and not additional customs and regulatory duties that were imposed thereafter.
7. Under section 18(3) of the Customs Act 1969, regulatory duties are leviable from the dates specified in the Notifications issued under section 18(2), notwithstanding the fact that the issue of the official gazettes in which such notifications appear to have been published any time after those dates. In this view of the matter, even assuming that the Gazette of Pakistan Extraordinary was printed on or after 8-5-1986, as suggested by the learned counsel for the petitioners, the regulatory duty would be leviable on and from 30-4-1986, which was the date specified in the notification issued under sub-section (2) of section 18 of the Act. The effective date for the levy of the regulatory duty under Government's Notification S.R.O. 430(I)/86 dated 30-4-1986 is, therefore, 30-4-1986.
8. In order to determine when customs duty is chargeable, when it can be assessed and what is the date for determination of rate of duty applicable, sections 18, 25 and 30 of the Customs Act, which are relevant, may be reproduced hereunder: ''18. Goods dutiable.- (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, impose a regulatory duty on all or any of the articles specified in the First Schedule at a rate not exceeding fifty per cent of the rate, if any, specified therein or at a rate not exceeding hundred per cent of the value of such articles, as determined under section 25 and may, by a like Notification, levy a regulatory duty on all or any of the articles exported from Pakistan,-
(1) in the case of articles enumerated in the Second Schedule at a rate not exceeding thirty per cent of the rate specified in the Second Schedule or of the amount which would represent the value of such articles as determined under section 25; and
(ii) in the case of articles not enumerated in the Second Schedule, at a rate not exceeding thirty per cent of the amount which represents the value of such articles as determined under section 25;
(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 subsection, 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.
25. Value of imported and expired goods.-(1) The value of any imported goods shall be taken to be the normal price, that is to say, the price which they would fetch, on the date referred to in section 30, on a sale in open market between a buyer and a seller independent of each other.
(2) The normal price of any imported goods shall be determined on the following assumptions, namely-
(a) that the goods brought by sea or land are treated as having been delivered to the buyer at the port of place of importation, as the case may be, and that goods brought by air are treated as having been delivered to the buyer at the airport of place where they are unloaded in Pakistan or, if the aircraft first lands in Pakistan at some other airport or place without unloading the goods, at such other airport or place;
(b) that the seller will bear freight, insurance, commission and all other costs, charges and expenses incidental to the sale and the delivery of the goods at that port, airport or place which will be included in the normal price;
(c) that the buyer will bear any duties or taxes applicable in Pakistan which will not be included in the normal price.
(3) Where the imported goods to be valued-
(a) are manufactured in accordance with any patented invention or any goods to which any protected design has been applied; or
(b) are imported under a foreign trade mark or are imported for sale, other disposal or use (whether or not after further manufacture) under a foreign trade mark; the normal price shall be determined on the assumption that it includes the value of the right to use the patent, design or trade mark in respect of the goods.
(4) The value of any exported goods shall be taken to be the normal price, that is to say, the price which they would fetch, at the prescribed time, on a sale in open market for exportation to the country to which the goods are consigned between a seller and a buyer independent of each other.
Explanation.-For the purposes of this sub-section, the expression, "prescribed time" shall mean the time when the bill of export is delivered under section 131 or when export of the goods is allowed without a bill of the export or in anticipation of the delivery of a bill of export, the time when export of the goods commences.
(5) The normal price of any exported goods shall be determined on the following assumption, namely-
(a) that the goods are treated as having been delivered to the buyer on board the conveyance in which they are to be exported; and
(b) that the seller will bear all packing, commission transport, loading and all other costs, charges and expenses (including any export duty which may be chargeable) incidental to the sale and to the delivery of the goods on board the conveyance in which they are to be exported and which will be included in the normal price.
(6) Where the exported goods to be valued-
(a) are manufactured in accordance with any patented invention or are goods to which any protected design has been applied; or
(b) are exported for sale, other disposal or use under a Pakistan trade mark or are exported for sale, other disposal or use (whether or not after further manufacture) under a Pakistan trade mark, the normal price shall be determined on the assumption that it includes the value of the right to use the patent, design or trade mark in respect of the goods.
Explanation I.-A sale in open market between a buyer and a seller independent of each other presupposes-
(a) that the price is the sole consideration; and
(b) that the price is not influenced by any commercial, financial or other relationship, whether by contract or otherwise between the seller or any person associated in business with him and the buyer or any person associated in business with him other than the relationship created by the sale itself;
(c) that on part of the proceeds of any subsequent re-sale, other disposal or use of the goods will accrue, either directly or indirectly, to the seller or any person associated in business with him.
Explanation II. - Two persons shall be deemed to be associated in business with one another if, whether directly or indirectly, either of them has any interest in the business or property of the other or both have a common interest in any business or property of some third person has an interest in the business or property of both of them.
30. Date for 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 or 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 be 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 on the date on which the duty is actually paid."
Under sub-sections (1) and (2) of section 18 of the Customs Act customs duties and regulatory duties become leviable no sooner the goods inter alia are imported into Pakistan or exported therefrom. The only question that arises is when can it be said that goods are "imported" into Pakistan. The Suprerne Court of Pakistan in East and West Steamship Company v. The Collector of Customs 'PLD 1976 S.C. 618) held that the word "import" carried the meaning of "bringing in" or "to bear or carry into" and an imported article was one which was brought or carried into a country from abroad and it did not necessarily entail the entire process of filing bill of entry, discharging the goods from the vessel at a wharf, the assessment of the value of the goods and the duty payable on them. No sooner, therefore, the vessel touches a Pakistan Port, the goods can be stated to have been imported. Under section 9 of the Customs Act, the Central Board of Revenue, by a notification, can declare places which can be treated as customs ports or customs airports or land customs stations for the clearance of goods imported. Under section 10 of the Act, the Central Board of Revenue, by notification, can specify the limits of any customs port or station. Under Central Board of Revenue Notification SRO No. 108(I)/83 dated 12-2-1983, the limits of the customs port of Karachi are laid, which extends some miles outside the Karachi harbour. In these circumstances, no sooner a ship enters the territorial waters of the customs port of Karachi, goods can be stated to be imported into Pakistan, irrespective of the fact whether the vessel touches the land mass of Pakistan or discharges its cargo at a wharf. Thus, no sooner the goods have entered the territorial waters of the Pakistani customs ports of Karachi, Pasni, Muhammad Bin Qasim, as specified by the Central Board of Revenue under section 10 of the Customs Act, 1969, the goods become chargeable.
10. Section 18 of the Customs Act does not state how and in what manner the value of the goods imported is to be assessed and at what point of time the chargeability or leviability of the duty arises. What it only says is that the customs duties and regulatory duties, at rates prescribed in the Act, are to be levied on inter alia goods imported into or exported from Pakistan.
Under the Customs Act, chargeability is under section 18, valuation of goods is under section 25 and rate at which the duty is to be assessed is under section 30. These different events may occur at different epochs of time, but unless the goods are chargeable to duty and the taxable event occurs under section 18, the question of valuation of goods under section 25 and calculation of duty payable at any particular rate under section 30 does not arise. The chargeability is dependent upon the import of goods. Chargeability is not postponed, but what is postponed is valuation and collection at particular rate at a later date. (See Apar Private Limited v. Union of India 1986 Tax L.R.
2022). Thus, imported goods become chargeable to duty under section 18 when they enter the territorial waters of the customs ports of Pakistan, but their value for the purposes of determining the amount of duty payable under section 25 arid the rate at which duty is payable, has to be determined under section 30 of the Customs Act. The reason why chargeability impinges on one day and valuation and rate of duty payable is left to another later date, is because a mass of goods come into the country in bulk and have to be off-loaded from vessels, then checked and temporarily stored and delivered to the importers, after further checking, at an early date, if the importer desires home clearance, or at some appreciably later date, if the importer desires in- bonding and clearance later from the warehouse. Since it is easy to check the goods at the final stage of delivery, their valuation for the purposes of determining duty payable and the rate of duty applicable is made counterminous with the date the bill of entry is presented for home clearance or ex-bonding from warehouse. Thus, if on the date the goods reach the territorial waters of the customs ports of Pakistan, no customs duty or surcharge is leviable, or if any duty or surcharge is leviable, but the same stands totally exempted, the goods would not be chargeable to duty or surcharge. If, therefore, at a later date the importer submits his bill of entry for home clearance or ex- bonding from warehouse and by this date some customs or regulatory duty is imposed, or the total exemption is partially or totally withdrawn, the importer would not be liable for the payment of any customs or regulatory duty, as the goods initially were not chargeable. See Shawhney v.
Sylvania & Laxman 1975- 77 Bom. L.R. 380 and Synthetics & Chemicals v. SC Countinho, 1981, ELT 414.
If, however, on the date of import, some customs or regulatory duty is leviable, the goods are chargeable under section 18 and if, therefore, at a later date the importer submits his bill of entry for home consumption or ex-bonding from warehouse and by this date the customs or regulatory duty is enhanced, the importer would be liable for the higher customs or regulatory duty as was prevalent on the date when he submitted the bill of entry for home delivery or ex-bonding from warehouse. (See Apar Private Limited and another v. Union of India 1986 Tax. L.R. 2022).
11. Notwithstanding the above view, my attention stands drawn to the case of Al-Samrez Enterprise v. The Federation of Pakistan (1986 SCM R 1917 = PTCL 1987 CL. 99), where the rule as stated in Shawhney's case and Synthetic and Chemicals' case (supra) has not been followed. In Al-Samrez's case a notification of the Federal Government issued on 8-6-1972 exempted all customs duties in excess of 20% ad valorem on imports of certain machinery and spare parts covered by the said notification. By a further notification dated 29-6-1970, the Federal Government exempted sales tax payable on such machinery and spare parts. The petitioner-company by a contract confirmed in writing on 7.6.1988, agreed to import 100 metric tons of strained copper wire, subject to letter of credit being opened by or before 15-6-1977. Pursuant to the agreement, the petitioner-company obtained necessary import licence and opened the letter of credit on 15-6-1977. On 11-6-1977, the Federal Government amended the earlier notification by raising the ceiling of customs duty payable from 20% to 25% and also imposed a condition that the exemption would only be available on goods imported against an industrial licence. By yet another notification dated 4-8-1977, the Federal Government withdrew the exemption from sales tax. The petitioner's goods arrived at Karachi port on 13-9-1977. They were cleared on some date after this date. The Customs claimed customs duty at 25% ad valorem and the sales tax. The Supreme Court of Pakistan held that the petitioner-company was not liable to pay anything more than 20% customs duty, on the basis that the petitioner-company had acquired a vested right to the exemptions in terms of the earlier notification and they were not liable to be deprived of the same by virtue of subsequent notifications that appeared after the contract stood concluded. In this case, the attention of the Supreme Court was not drawn to the underlying principles flowing out of sections 18, 25 and 30 of the Customs Act, 1969 nor were Shawhney's case, Synthetic & Chemical's case and Apar Private Limited Company's case cited before it, If the fate of the present petitions had depended only on the rule stated in these three Indian cases, I would have followed the obiter dicta laid down by the Supreme Court of Pakistan in Al-Samrez's case, but since the fate of these petitions is not dependent on the rule stated in the Indian cases, I would leave the matter as it stands, hoping that the Supreme Court of Pakistan at some future date will resolve this matter.
11-A. A reference to Chapter XI of the Customs Act shows that an importer may choose to have his goods released for home consumption within thirty days they are off-loaded at the port at Karachi or are received at the Customs Dry Port at Lahore, or have them in-bonded (stored) in a warehouse at Karachi or Lahore for some length of time and take delivery thereafter within a year, or such extended time as may be granted by the Collector or the Central Board of Revenue. Where he desires to have the goods released for home consumption, he presents the bill of entry for home clearance within the aforesaid thirty days and no sooner the duties and penalties are paid thereon, the goods are released. In case goods are cleared for home consumption, the rate of duty leviable is that on the date on which the bill of entry for home clearance is presented. In case goods are in- bonded (stored) in the warehouse for some length of time, the goods are released from the warehouse when an application for ex-bonding is made in that behalf under section 104 of the Act.
In such a case, the rate of duty leviable is that which is in force on the date on which the bill of entry for clearance of such goods is presented under section 104. In the instant case, bills of entry for in- bonding were filed. Goods were transported to the Customs Dry Port at Lahore, from where they were cleared, when bills of entry for ex-bonding were filed. In all these cases the bills of entry for ex- bonding were filed on 3-5-1986. In view of clause (b) of section 30 of the Customs Act, 1969, the value of, and the rate of duty applicable to, the imported goods were the value and the rate of duty in force on the date on which the bills of entry for clearance of the goods from the warehouse under section 104 were presented. This date being 3-5-1986, rate of duty as applicable on the said date was leviable, which included the regulatory duty of Rs. 5 per kg. The petitioners, therefore, are liable for the payment of regulatory duty. If any authority is required for this view, Messrs Parkash Cotton Mills (P) Ltd. v. B. Sen and others (AIR 1979 SC 675) may be referred.
12. With regard to the rule stated in the case of Al-Samrez Enterprise, the same is not applicable to the cases in hand. Al- Samrez's case relates to the benefit accruing to an importer through an exemption notification. In the instant cases there is no exemption notification from which the petitioners can derive any benefit. The case is simply one where regulatory duty has been imposed, in addition to the Customs and other duties already in force, and the question only is from which date the regulatory duty is applicable. The case of Al-Samrez Enterprise, therefore, does not assist the petitioners.
13. For the foregoing reasons, the orders of the Customs authorities imposing regulatory duty are legal and proper and no interference in the constitutional jurisdiction is called for. The seven writ petitions are dismissed with costs. Rupees Two Thousand (Rs. 2, 000) is fixed as counsel's fee in each case, which shall be paid to the respondents.