MALIK MUHAMMAD QAYYUM, J.- Briefly stated the facts are that the petitioner imported a consignment of 439 cases of Textile Machinery and filed bill of entry for placing these goods in a Customs Bonded Warehouse at Multan, which was approved on 27.11.1990. However, before the goods could be removed to the Bonded Warehouse, 26 cases of machinery were totally quitted and destroyed in a fire on the night between 28/29 November, 1990. The petitioner duly informed the respondents that 26 cases of machinery have been burnt. On 10.10.1991, the petitioner filed an ex-bond bill of entry for the clearance of the 26 cases of burnt and damaged goods claiming that the same were of no commercial value. Out of 439 cases, 416 cases were removed from the warehouse on different dates on payment of leviable tax. However, on 24.10.1993, the petitioner was issued a notice to show cause as to why action be not taken against it for having violated the provisions of sections 32, 86, 98, 100, 101 and 112 of the Customs Act, 1969 by not removing the 26 cases within the time prescribed by section 98 of the Customs Act, 1969. This notice was contested by the petitioner. But the Collector of Customs, Excise and Sales Tax vide order in Original No. 11 of 1994 dated 28.2.1994 held that the petitioner had failed to clear the consignment of 26 cases of textile machinery against the payment of leviable duty and taxes within the statutory period provided by section 98 of the Customs Act, 1969. He consequently directed the petitioner to pay the custom duties and sales tax with surcharge.
2. Feeling aggrieved by this Order, the petitioner filed an appeal which was heard by the Member Judicial, Central Board of Revenue, who vide his order dated 23.12.1994 dismissed the same. The petitioner thereupon filed an application before the Government of Pakistan, Ministry of Finance and Chairman Central Board of Revenue, Islamabad under Section 196 of the Customs Act, which was transferred to the Customs, Excise and Sales Tax Appellate Tribunal, which converted it into an appeal.
3. 0n 6.8.1995, the Tribunal dismissed the appeal so far as the merits were concerned, lt was, however, observed that the case was one of great hardship and the Collector of Customs, Multan would immediately taken up this issue with the Central Board of Revenue for grant of special exemption under the provision of section 20 of the Customs Act, 1969.
4. The petitioner thereafter applied to the Tribunal under Section 196 of the Customs Act for referring the matter to this Court but the application was rejected. The petitioner thereupon filed reference application bearing No. 1 of 1996 which is pending in that Court and is also being disposed of by this judgment.
5. In the meantime, the petitioner received a notice on 14.4.1999 demanding the payment of outstanding amount. The petitioner protested against the demand but having remained un- successful he has now filed this petition under Article 199 of the Constitution of Islamic Republic of Pakistan, 1973.
6. At the very outset, learned counsel for the petitioner has stated that although the matter was pending in the reference application before this Court, but as it was doubtful whether in the application for reference any interim relief could be granted by the High Court, the petitioner was obliged to file this petition.
7. On merits it has been urged that the goods in question was destroyed by fire while lying at the port and before their clearance by this Customs, but at a time when the petitioner had already filed bill of entry for warehousing, the petitioner is entitled to the benefit of section 108 of the Customs Act, 1969. Lt was elaborated that the respondents have acted on erroneous assumption that it was only in case of the goods which are lying in the warehouse that the relief on account of destruction of diminution of value could be granted. The learned counsel maintained that section 108 of the Customs Act makes reference to section 27(2) of the Act and not section 27(1) which has no applicability, lt was pointed out that there was a distinction between the goods which have been entered for warehousing and the goods which are actually lying in the warehouse, in this connection, reference has been made by the learned counsel for the petitioner to section 84 of the Customs Act, 1969.
8. Mr. A. Karim Malik, learned counsel for the respondents submitted that application for reference is pending in this Court, that should be decided before the Constitutional petition is adjudicated upon.
We are, however, of the opinion that as the subject- matter of the application for reference as also the Constitutional petition is the same, it would be advisable to dispose of all the matters together in order to avoid multiplicity of litigation especially when the dispute turns upon the interpretation of relevant provisions of the Customs Act, 1969.
9. From the perusal of the orders passed by different Authorities in the hierarchy of the Customs, it would appear that they have held that the petitioner was not entitled to any relief in respect of the goods burnt by fire as the same had not been warehoused. The contention that there is difference between "entered for warehousing" and "warehoused" was not accepted.
10. According to section 108 of the Customs Act, 1969 if any goods are damaged or deteriorated due to an un-avoidable accident or cause after they have been entered for warehousing and assessed under section 80 and before they are cleared for home-consumption, their value in the damaged state may be appraised, according to either of the methods provided in sub-section (2) of section 27. According to the petitioner, once a bill of entry for warehouse is filed, the goods are deemed to have been entered for warehousing and the actual physical removal of the goods to the warehouse is not essential in order to attract section 108 of the Customs Act, 1969.
11. A cumulative reading of various provisions of the Customs Act, 1969 shows that the terms "warehoused" carries a different meaning from "entered for warehousing" and the two expressions are not inter-changeable, in support of this conclusion, reference may be made to section 84 of the Customs Act, 1969 which reads as under:- " Application to warehouse.-- When any dutiable goods have been entered for warehousing and assessed under section 80, the owner of such goods may apply for leave to deposit the same in any warehouse appointed or licensed under this Act.
Provided that the Collector of Customs, for reasons to be recorded in writing, may disallow the warehousing of goods or any class of goods or goods belonging to a particular importer."
From the above cited provision, it is quite evident that while "entered for warehousing" means that an application for "warehousing" of the goods has been made, the actual "warehousing" takes place once the goods are deposited in the "warehouse". Consequently, since the petitioner had entered the goods for' warehousing before the same were burnt and gutted, the petitioner was entitled to the relief provided by section 108 of the Customs Act, 1969.
12. The other contention raised by the learned counsel for the petitioner that the respondents have acted illegally in applying section 27(1) rather than section 27(2) of the Act, is equally well founded.
Section 108 of the Customs Act, refers to sub-section (2) of section 27 which provides method for valuation of the goods, lt neither refers to subsection (1) nor has the same been made applicable by reference. Section 27(1) of the Act, is, therefore, in any case, not attracted, lt is also pertinent to mention that admittedly 26 cases of machinery which were lying at the port and were destroyed by fire at the time when the petitioner had filed bill of entry but the goods had not been cleared or removed to a warehouse. The petitioner was in no way responsible for the fire which occurred due to some unavoidable circumstances as has been found by the Tribunal itself. The goods were not in possession or control of the petitioner at that time and had, as a matter of fact, not even cleared the customs barrier, in these circumstances, it is highly anomalous to demand the payment of customs duty on the goods which have yet to be cleared either for home-consumption or for warehousing, as the case may be, at a time, when the petitioner was not admittedly, in possession of the goods.
13. in view of what has been stated above, this petition is allowed and the impugned demand of the respondents is declared to be without any lawful authority and of no legal effect. Resultantly, Reference Application No. 1/96 has become infructuous and is disposed of accordingly.