1. JUDGMENT MALIK MUHAMMAD QAYYUM, J. - The factual background leading to the filing of this petition is that the petitioner was running a cement plant in Pakistan. Keeping in view the exemption granted by the Government vide Notification No. S.R.O. 484(l)/92, dated 14.5.1992 from the payment of customs duty of sales tax on the import of plant and machinery which was not locally manufactured the petitioner intended to undertake expansion of its plant.
2. The petitioner entered into a contract in May, 1994 for import of machinery and letter of credit was opened on 28.12.1994. Before the goods could reach Pakistan the was opened by the petitioner much after the issuance of C.G.O. i.e. On 28.12.1994. The petitioners were aware of contents of C.G.O.
2. But did not adhere to the same. They are, therefore, not entitled to any relief. The petitioner had been collecting the information from the wrong ministries which had nothing to do in the matter which was in the exclusive domain of the Central Board of Revenue. The petitioner had filed 102 bills of entries out of which 68 bills of entries related to the machinery not being locally manufactured which has since been released. So far as the regulatory duty is concerned learned counsel has relied upon the case of Zaman Paper Mills in which it was ruled that the exemption from payment of duty does not include regulatory duty unless specifically so stated.
5. In reply the learned counsel for the petitioner has stated that the contract was entered into between the petitioner and the foreign supplier in May, 1994 much before C.G.O. No. 17 of 1994 came into force and as such the vested right which had accrued to the petitioner could not be defeated by the aforesaid Customs General Order, It has been emphasised that the representation made by the Ministry of Industries as also the Ministry of Commerce was well within the knowledge of Central Board of Revenue and it was wrong to suggest that the Board was kept in dark.
6. From the above narration, it follows that the dispute before this Court is as to whether the respondents are on the basis of principle of promissory estoppel estopped from taking up the position that the machinery imported by the petitioner was being locally manufactured in view of the representations and assertions made by the respondents to the contrary.
7. The petitioner has placed on record a copy of the judgment of the Division Bench of Peshawar High Court in the case of Lucky Cement Limited, v. The Central Board of Revenue and others (A.W.P.
3. No. 583 of 1995), decided on 3.2.2000 in which the same questions as are arising in this petition came up for consideration before the Peshawar High Court, ln the case too, various letters were written by the Ministry of Industries, Production and Commerce to the [Vol. VI Maple Leaf Cement Factory Ltd. V. Col. Of Customs C.L. 1171 (Malik Muhammad Qayyum, J.J effect that the machinery sought to be imported by the petitioner was not being locally manufactured. Later on, the Central Board of Revenue directed the Collectorate of Customs to take necessary action against six units of Cement including Lucky Cement for realization of the Government due on the component machinery which was confirmed by the State Engineering Corporation to be locally manufactured. This action of the respondents was challenged by the petitioner by filing the Constitutional petition mentioned above in which it was held as under:- As is evident from the letter above that a Standing Committee was set up to identify the machinery to be manufactured locally. The list of such item was never identified by the Committee. The Ministry of Industries vide letter, dated 7.7.1993 confirmed and verified the items enlisted in the attached Appendix to be imported being not manufactured locally. Even Central Board of Revenue, vide letter, dated 11.7.1994 and Ministry of Commerce on the basis of letter, dated 20.1.1994 issued NOC verified such machinery/equipment to be not manufactured locally. We would like to observe with regrets that people sitting at the helm of affairs in Central Board of Revenue and Ministries of the Government are so ignorant and unconcerned that they did not bother to know the decision of the Cabinet meeting held on June 28, 1993 and the recommendation of the Standing Committee.
4. The BOI on the basis of Medio., dated 10.1.1995 authorized by the Ministry of Industries to verify the goods/items which are manufactured locally, furnished report to Central Board of Revenue revalidating the recommendation of Ministry of Industries. To be cognizant of hardships and difficulties to be faced by the importers Ministry of Industries in an urgent letter vide Memo., dated 14.3.1995, of course after reconsidering the matter, directed that letter, dated 7.2.1995 shall not apply to importers of such Cement Plants who have already opened L.Cs. Before 14.3.1995. The r L.Cs. By the petitioner wereadmittedlyopened before this date. After this'letter impugned action vide Memo. (Annexure-N) and (AnnexuTe-Gliwais ; unwarranted. ; , t . - lt is observed from the record that . In this notification no competent Authority has been identified to certify the machinery and equipments that could not be manufactured locally. Even, the Exemption Notification No. 484(l)/92, 't dated 14.5.1992 did not specify the authority/body to authenticate the machinery/plants not to be manufactured locally. While earlier exemption notification such as S.R.O. 286(0/84, dated April 4, 1984, the Heavy Mechanical Complex Taxila was identified to be the authority to certify those plants and machinery which are not manufactured locally.
5. Adverting to the rule of locus Poenitentiae, it is general principle that an authority empowered to issue an order has the power to recall or cancel that order unless it has been carried into the effect.
6. Ln other words, power to rescind could be exercised only if the order had not taken into effect,, Once the order became operative, it could not be withdrawn. Acting the NOCs, issued by the respondents 1, 4 and 5, the petitioner opened L.Cs. On 5.12.1993 and 31.5.1994, entered into agreement with the Chinese Suppliers in October, 1993. Ln pursuance thereof, some of the machinery had reached Pakistan and the NOCs had come into effect, the locus Poenitentiae was not left with respondent to initiate actions against the petitioner, lt bas been held in the case of Shahnaz v. The Crown (PLD 1956 FC 46) and Lt. Col. Bhattacharya v. The State (PLD 1964 SC 503) that power to rescind cannot be exercised once order becomes effective................... . , . . ...................... . . . . *... . . .. The Government Ministries/Departments while issuing NOCs had promised and given understanding that machinery imported would be exempted from customs duty The undersigned is directed* to forward herewith a copy of M/s. Maprie Leaf Cement Factory Ltd.
7. Letter No. MLC/P&T/10/3135, dated 25th October, 1995 (with enclosures) on the subject mentioned above and to confirm that the following items/machinery are not being manufactured locally as per specifications furnished by the firm:- #tbs Stack and Reclaimer.
8. Magnetic separator. #the Not manufactured locally, however, following components of the items being manufactured locally.
9. Conveyor structure Travel carriage exel wheel JIB steel structure Throw off car Gangways Plateform Cabins Rail clamps Conveyor pulleys Foundation part of tracks Travel wheels Conveyor belt Idler Hyderaulic part Rails Electric and Control
3. Side Scraper. Not being manufactured locally.
10. However, following parts of (not legible) are being manufactured locally #tbs Not being manufactured locally. However, the part of this item i.e. Rod gates with unit controls, Discharge slides, troughs, Suspension part magnetic viberators, Thyristor units are being manufactured, locally.
11. Not being manufactured iocally. However, following parts of the same are locally supplies. #the #tbs
13. Change over gate. #the #tbs Tools for atox mill.
12. Viberating feeder. #the #tbs Atox raw mill.
13. Rotary separator.
14. Gear unit for atox 40. #the #tbs Though electric motors are being manufactured locally but it is fixed in the system and as such being a compact unit, the gear unit is not manufactured locally. #the #tbs Magnetic Separator.
15. Metal Detector.
16. Phenumatic cylinder solenoid valve.
17. Rotary sluice, dia 1600. #the #tbs {Vol. VI Maple Leaf Cement Factory Ltd. V. Col. Of Customs C.L. 1175 (Malik Muhammad Qayyum, J.) #the #tbs Scraper Elades Roller Chain - Portal frame Travelling Chain. - Discharge table - Housing unit.
18. Foundation parts for tracks.
19. Travel carriage excel wheel. - Cabin Carrying Idlers - Drive unit Rails #the Rotor assembly, base frames, guards, Inlet vane controller actulators, Vibration pads, spun cones, bearing/housings, V-Belts and pulleys. #tbs Fan (large ones like kiln and coller ID, EP and separator fan) #the #tbs Process instruments.
20. Fan. #the Rotor assembly, casing, base frame Guards, Inlet vane controller actulators, vibration pads spun (not legible).
21. Fans (Dust Collector)
22. Fans (Clinker Collector).
2. A copy of IPB'S O.M. No. IPB/IMPL/Maple Leaf Cement/Exp/94, dated 31st March, 1994, is forwarded herewith for further necessary action in the matter.
23. (Sd/-)
24. (S. Zahid Hussain Shah), Section Officer.
25. Mr. Ali Muhammad Sheikh, Secretary (Mach), Central Board of Revenue, Islamabad.
26. Copy forwarded for information to Mr. Muhammad Hanif, Managing Director, M/s. Maple Leaf Cement Factory Ltd., 42-Lawrence Road, Lahore.
27. (Sd/-)
28. (S. Zahid Hussain Shah), Section Officer."
9. Lt is also useful to reproduce the contents of letter, dated 15.5.1994 addressed by the Ministry of Commerce to all Banks with a copy to the Secretary Customs, Central Board of Revenue which reads as uncer:- [Vol. VI Maple Leaf Cement Factory Ltd. V. Col. Of Customs C.L. 1179 (Malik Muhammad Qayyum, J.)
29. "No. 24(2)/94-IMP. I, Government of Pakistan, Ministry of Commerce.
30. Islamabad, the 15th May, 1994.
31. All Banks SUBJECT: IMPORT OF CEMENT MACH/NERY.
32. Dear Sir, The ECC of the Cabinet in its meeting held on 28th June, 1993 had directed that Cement and Sugar Plants shall be importable without any NOC. However, plant and equipment manufactured locally will not be importable. The Standing Committee set up by the ECC of the Cabinet identified parts and machinery of Cement plants which are locally manufactured and will not be importable. A copy of the said list is enclosed which will be operative up to 31.12.1994 and would be applicable to the cases of initial installations, BMR and Expansion also. Banks are requested to consult this list before opening of L.Cs. For import of Cement Plant and equipment, etc. Enel: As above.
33. Yours faithfully, (Sd/-)
34. (Muhammad Ashraf Khan), Deputy Secretary.
35. Copy along with a list for necessary action to:-
(1) Secretary Customs, Central Board of Revenue, Islamabad.
(2) Vice-Chairman, Export Promotion Bureau, Karachi.
(3) Ministry of Industries and Production, (Industries Wing), (Mr. S. Zahid Hussain Shah, SO), Islamabad with reference to their No. 3(34)/92-Dev. II (Vol. II), dated 11.4.1994.
36. The Collector of Customs, Customs House, Mabha Road, Lahore.
37. The Collector of Customs and Central Excise, Multan, Hyderabad, Quetta, Faisalabad, Gujranwala, Peshawar and Rawalpindi.
38. SUBJECT: LOCALLY MANUFACTURED MACHINERY- CEMENT PLANT.
39. I am directed to refer to the subject noted above and to enclose herewith lists of locally manufactured goods confirmed by State Engineering Corporation for six units mentioned below:-
(1) M/s. Lucky Cement Ltd. Dated 11,7.1994.
(2) M/s. Saadi Cement Ltd. Dated 10.7.1994 and 23.7.1994.
(3) Hattar Cement Ltd. Dated 13.7.1994.
(4) Khushab Cement Ltd. Dated 13.7.1994.
(5) Panjkoh Cement Ltd. Dated 13.7.1994.
(6) Kohat Cement Ltd. Dated 13.2.1995
(2) For each unit there are two lists as List L-1 and List L-ll. List L-1 indicates the machinery/components locally manufactured and List L-ll shows parts/components manufactured locally in the column of local scope of supply.
(3) You are requested to initiate necessary action for realization of the Government dues immediately on the components/machinery/parts mentioned as locally manufactured of the aforesaid units. Further orders will also follow.
(4) The Board's letter issued after February, 1994, forwarding Ministry of Industries and Board of investment's letters stating that these are not [Vol. VI Maple Leaf Cement Factory Ltd. V. Col. Of Customs C.L. 1183 (Malik Muhammad Qayyum, JJ locally manufactured are hereby withdrawn as on re-checking the above listed items have been confirmed to be locally manufactured.
40. (Sd/-)
41. (MUHAMMAD SULAIMAN), CHIEF (CUSTOMS TARIFF).
15. From the above it is clear that the Central Board of Revenue had itself conceded that some parts of the machinery were being manufactured locally while other parts were not being manufactured here. Therefore, obviously the Customs General Order issued by the Central Board of Revenue had no effect. Furthermore, the determination that the goods were being manufactured locally by the Central Board of Revenue could only be arrived at after a factual inquiry with which the concerned persons should have been associated. (See Suhail Jute Mills Ltd. And others v.
42. Federation of Pakistan and others (PLD 1991 SC 329 - PTCL 1991 CL. 388).
16. Be that as it may, the rights which vested in the petitioner on having entered into a firm contract with the foreign supplier could not be taken away by issuing a Notification or Customs General Order. The petitioner had entered into firm contract with the seller before CGO No. 17 of 1994 was issued and the vested rights which had accrued to the petitioner could not have been taken away by an executive fiat, lt was so held by the Supreme Court of Pakistan in Al-Samrez Enterprises v. The Federation of Pakistan (1986 SGMR 1917 = PTCL 1987 CL. 99), M/s. M. Y. Electronics Industries (Pvt.) Ltd. v. Government of Pakistan and others (1998 SCM R 1404 = PTCL 1998 CL. 450) and Collector of Customs and others v. Ravi Spinning Ltd. And others (1999 SCM R 412 = PTCL 1999 CL. 710). Lt may be mentioned that the provisions of Section 31-A have rightly not been relied upon by the learned counsel for the respondents as the dispute in the present case is not with respect to the withdrawal of exemption but only as to