' This order will dispose of the following writ petitions :-
(i) Writ Petition No, 1181 of 1974.
(ii) Writ Petition No, 1599 of 1974.
(iii) Writ Petition No, 2310 of 1974.
(iv) Writ Petition No, 35 of 1975.
(v) Writ Petition No, 1480 of 1975.
(vi) Writ Petition No, 1320 of 1974.
(vii) Writ Petition No, 1170 of 1974 and (viii) Writ Petition No, 1289 of 1974.
' These were heard together with the consent of the parties as they raised common questions of law.
2. The petitioners are manufacturers of sugar and for that purpose own mills situated in different parts of the Province. Sugar being an 'excisable goods' within the meaning of section 2(d) of the Central Excises and Salt Act they are liable to pay excise duty which is charged not on the basis of actual production but in accordance with the production capacity of their factories as fixed in the Schedule to the Excise Duty on Production Capacity (Sugar) Rules, 1972, hereinafter called the Sugar Rules. The rate at which the duty is to be levied is laid down in rule 3(2) of these Rules. This rule draws its force from section 3(4) of the Central Excises and Salt Act which apart from providing for other matters authorises the Central Board of Revenue to prescribe the rate of duty in respect of excisable goods which, are assessed on the basis of the production capacity of the plant or machinery employed to manufacture them. At the beginning of the financial year 1973-74 the said rule prescribed the rate of duty on sugar to be Rs, 14 per hundred weight. Immediately after the start of this financial year the Officers of the Excise Department sent demand notices to the petitioners for the payment of excise duty at the above mentioned rate.
3. In August 1973, there were wide spread floods which created great havoc in the country. To provide relief to the affected the Federal Government decided to generate additional funds through taxation. For this purpose on 15-9-1973 the President promulgated the Finance (Supplementary) Ordinance, XX of 1973. Subsequently, the Parliament converted Ordinance into an Act (See Act V of 1974). By section 4 of the Ordinance, Entry No, 7 in the First Schedule to the Central Excises and Salt Act was amended by the addition of the following paragraph "In addition to the duty leviable aforesaid, a flood relief surcharge shall be levied on sugar at the rat of twenty-seven rupees and fifty paisas per hundred weight"
' To give effect to this provisions, on 15-10.1973 the Central Board of Revenue issued a notification amending rule 3(2) of the Sugar Rules. After the amendment this sub-rule ran as follows.
"Duty shall be levied at the rate of Rs, 14 and a flood relief surcharge at the rate of Rs, 27.50 per hundred weight on annual production capacity stated in the annexed schedule as determined under sub-rule (1)."
' Immediately thereafter the Assistant Collector concerned withdrew the earlier notices, re- calculated the amount of excise duty leviable on the petitioners after including the flood relief surcharge therein and issued fresh demand notices to them. Through these petitions the petitioners have challenged the legality of these fresh notices on the ground that the Board was not competent to recover flood relief surcharge from them.
' It is contended on behalf of the petitioners that the legislative power of the Federal Legislature is confined to the subjects specified in Federal Legislative List as given in the Fourth Schedule to the Constitution and its power of taxation is restricted to Entries Nos. 43 to 53 Part of that List.
Consequently, it cannot impose a tax which is not specifically covered by one or more of these entries. Flood Relief is not a Federal subject nor the Flood Relief Surcharge is relatable to any of the said entries. This being so, the Flood Relief Surcharge is an illegal imposition. It is also submitted that under section 3(4) of the Central Excises and Salt Act only the excise duty can be levied or collected on the basis of production capacity of the plant or machinery producing the excise goods, This method of taxation cannot be extended to flood relief surcharge which in its very nature cannot be equated with excise duty.
5. On his part the learned Deputy Attorney-General has taken the position that the flood relief surcharge is in essence excise duty even though it has been given a separate name. His contention is that ordinarily the Federal Government finalizes its taxation Policy before the beginning of a financial year. Any consequential changes in the then existing taxation are got approved from the Parliament alongwith the Annual Budget Statement. However, in the financial year in question, soon after its start, the great devastation brought by the floods compelled the Federal Government to look for additional funds. One way of doing this was to enhance the existing taxes. The imposition of the flood relief surcharge was a step in this direction. It was just an additional excise duty on sugar and it was wrong to talk of it as an exaction of a different nature. No doubt it was given a separate name but that was only to justify the extraordinary measures taken by the Parliament in enhancing the incidence of a duty midway in a financial year when not many months had passed since the passage of the Annual Budget Statement. It was, therefore, not right for the petitioners to contend that flood relief surcharge was not a tax within the competence of the Federal Legislature or that the provisions of section 3(4) of the Central Excises and Salt Act could not be invoked for its levy or collection.
6. After giving deep consideration to the matter I am inclined to accept the submission of the learned Deputy Attorney-General. It is to be noticed that the word 'surchage' is used in many senses : it is essentially payment which may be exacted either by way of penalty or just simply to raise additional funds. In Corpus Juris Secundum, Volume LXXXIII, it is defined as meaning, generally, a burden greater than the ordinary one, or greater than can well be borne ; an excessive burden, load or charge. However that may be, it presupposes the existence of a liability which is sought to be increased for some reason.
7. The petitioners are quite right in contending that the Federal Legislature cannot impose a tax which is not covered by Entries Nos. 43 to 53 of Part I of the Federal Legislative List for by virtue of Article 142 of the Constitution such taxes as are not mentioned in the said List can be levied only by the Provinces. Duties of excise with the exception of some minor irrelevant subject belong to the Federation. (See Entry No, 44.). Therefore, the question for consideration is whether the flood relief surcharge as levied by the Finance (Supplementary) Ordinance, 1973, is just an additional excise duty on sugar or is it an imposition of although different nature falling within the competence of the Parliament. In this regard it is to be noticed that in describing this levy the Parliament has used the word 'surcharge' which as already pointed out, means additional payment and not the words Flood Relief Tax which would have given the impression that it was an independent, unrelated imposition.
It is also to be noticed that the payment of surcharge has been linked with the payment of the excise duty. It was not contended before me on behalf of the learned Deputy Attorney-General that even in such cases also where the excise duty was for some reason not payable the flood relief surcharge would still be payable by the manufactures. Considering therefore, that the Flood Relief Surcharge is not an independent tax and that its incidence is directly dependent upon the excise duty I am of the view that this too is in essence excise duty even though levied under a different nomenclature.
8. Once it is held that the Flood Relief Surcharge is also excise duty then both the contentions of the petitioners must fail for the levy of the excise duty, as already pointed out, is well within the competence of the Federal Legislature and section 3(4) of the Central Excises and Salt Act, it can be collected on the basis of the production capacity of the plant or machinery manufacturing excisable goods. Consequently, I find no merit in these petitions which I hereby dismiss with costs.