TARIQ PARVEZ KHAN, J.--- Through this single judgment we intend to dispose of this Writ Petition No. 1002 of 2000 (Messrs Shahzad Ghee Mills Ltd. v. Pakistan through Secretary Finance Government of Pakistan Islamabad and six others) and Writ Petitions Nos.126 of 2001, 214 of 2001, 234 of 2001, 345 of 2001 and 351 of 2001, as not only because they were heard together but also because point of law involved therein is one and the same.
2. The petitioners are public limited companies and stand duly incorporated under the Companies Ordinance, 1984, and are having their Industrial Units functioning at different parts of the Province.
The petitioners are carrying on the business of manufacturing, distributing and selling Banaspati Ghee and Cooking Oil. For the manufacturing of their products, they import into Pakistan raw materials in the form of RBD Palm Oil, Soyabean Oil, Rap Seed Oil, Cotton Seed Oil, S.F. Oil, Palmoline Oil; and Canola Oil under licenceses issued to them for its import. They are also licence-holders for export of their finished products.
3. It is stated in writ petitions that Central Board of Revenue Islamabad in exercise of powers under section 219 of the Customs Act, 1969 (hereinafter referred to as Act). Section 37 of the Central Excise Act, 1944 and section 15 of the Sales Tax Act, 1990, framed rules called Manufacturing-in-Bond Rules, 1997 (hereinafter referred to as Rules) and in this respect issued S.R.O. No. 1140(1)/97, dated 6- 11-1997. It is stated in the writ petitions that consequent upon this S.R.O. And because the petitioners were holding import licences, they would import raw-materials on furnishing Bank Guarantee against payment of Government dues. That, after they would consume the raw-materials and have prepared Banaspati Ghee and Cooking Oil would approach Collector Customs, Collectorate of Customs and Central Excise, Customs House, Peshawar for permission to export their products to Afghanistan via land route, the Collector with reference to Rule 15(6) of the Rules has refused the permission stating that they are not entitled to export Cooking Oil or Banaspati Ghee to Afghanistan via land route.
4. It is argued before us that rule 15(6) of the Manufacturing Bond was challenged before this Court in number of writ petitions and this Court while deciding Writ Petition No. 1932 of 1.997 (Aryan Petre Chemical Industries v. Pakistan through Secretary Finance, Government of Pakistan Islamabad and five others) vide its judgment, dated 28-4-2000 has declared Rule 15(6) of the Manufacturing Bond as invalid, both on the point of jurisdiction of Central Board of Revenue and also being violative of Article 18 of the Constitution of Islamic Republic of Pakistan, 1973.
It is submitted that in view of Rule 15(6) no longer an existing rule, the Central Board of Revenue or the Collector Customs has got no authority to impose any ban or restriction, on the petitioner on the export of their goods to Afghanistan including through land route:
5. Learned counsel for petitioners have taken us thread-barely through the Rules and state that under the Rules where an Industrial Unit has become a licencee for Manufacturing in Bohd, it would be entitled to import raw---materials as specified in First Schedule to the Act, erciseable goods as specified in First Schedule to the Central Excise Act, 1944 and goods/supplies chargeable to Sales Tax as specified in the Sales Tax Act, 1990, without payment of Custom duty, Central Excise duty and Sales Tax, as the case may be, for the manufacture of goods primarily meant for export.
Learned counsel has referred to Rule 2(d) which defines input goods which means goods required for the manufacture of finished goods meant for export, such as raw-materials, accessories etc. Rule 3 was referred to show that any person desirous to operate the manufacturing bond shall apply to the Collector of Customs in the prescribed form alongwith certain documents mentioned therein and under sub-rule (J) of Rule 3 shall file comprehensive insurance policy covering all risks such as fire, burglary etc. Issued by an Insurance Company in the sum equal to the amount of customs duties, central excise duty and sales tax on the imported input goods, where after a licence for manufacturing in-bond would be issued. Rule 10 has also been referred where a licencee shall obtain the insurance policy in the sum equal to amount of duties and taxes leviable, on the input goods imported. Analysis Certificate under Rule 11 is issued by the Collectorate of Customs verifying the actual quantity of input goods used and wastage occurred in the manufacture. Under Rule 12(1), the input goods may be imported by the licencee without payment of customs duty, central excise duty and sales tax. Rule 15 obliged the licencee to maintain the record of the finished goods manufactured and shall also maintain the record of goods exported and that export of finished goods shall be made against the bill of export prepared by the licensee with endorsement that export is through manufacturing bond.
It was sub-rule (6) of Rule 15 which stand adjudicated by this Court in its judgment, dated 28-4- 2000.
6. None of the writ petitioners have appended with their petitions the refusal in writing by the Collector Customs denying them to export their goods to Afghanistan via land route but such refusal has not been denied by the learned counsel appearing for the respondents. However, the respondents have set up the case that it is not Rule 15(6) of the Rules that the petitioners cannot export, but it is under para.8 of Export Policy and Procedure Order 2000 (hereinafter referred to as Order) that the petitioners are not entitled to export to Afghanistan via land route.
7. Learned counsel for petitioners state that in view of self-contained provision as embodied in the Rules both covering the Import and Export and where under the petitioners have furnished insurance policy equal to the sum of the Government dues on the input goods, they shall be allowed to export to Afghanistan via land route their produces/manufactured goods and because Rule 15(6) has been declared invalid, I the refusal on the part of the respondents would be illegal and not sustainable.
8. It is argued that under Article 18 of the Constitution of Islamic Republic of Pakistan, 1973 read with Articles 23, 24 and 25 thereof, right of trade cannot be denied to the petitioners.
9. Learned counsel for the petitioners while referring to Order have stated that under para.3 of the Order, the petitioners being covered in sub---para. (a), i.e. Exporters, therefore, they qualify the eligibility and under para.5 all goods shall be allowed to be exported except those as specified in 1st Schedule to the Order.
Referring to the most crucial point involved in the case, learned counsel for the petitioners state that para.8 of the Order is not applicable to the case of the petitioners, as they would be covered under the Rules. We may here reproduce para.8 to understand the stand of the two sides which "Export to Afghanistan --- Export of all commodities produced or manufactured in Pakistan excluding those manufactured in manufacturing bonds, shall be allowed via land route to Afghanistan against Pak-rupees on filing of regular shipping bills without Form ' E'. These exports shall not be entitled to any duty drawback and zero rating of sales tax. Export to Afghanistan and via Afghanistan to the Central Asian Republics effected against advance payment or an irrevocable letter of credit issued by some recognized bank in foreign currency shall be allowed duty drawback as per prevailing schedule subject to a maximum of 7.5% of the F.O.B. Value without zero rating of sales tax. Normal duty drawback shall remain available on exports to Central Asian Republics via Iran."
It is contended on behalf of the petitioners that under this para. Export of commodities produced or manufactured in Pakistan are allowed via land route to Afghanistan with the only condition that if export is made against Pakistani rupees on filing of regular shipping bill, without Form 'E', such Exporters shall not be entitled to any duty drawback and zero rating of sales tax, whereas Exporters against advance payment or an irrevocable letter of credit issued by some recognized Bank in foreign currency are allowed duty drawbacks to the maximum of 7.5% of the F.O.B. Value without zero rating of sales tax. It is, therefore, argued that para.8 is an enabling provision of law and is meant to encourage export. While interpreting the words "excluding" as used in para.8, learned counsel for petitioners have referred to its dictionary meaning as given in Black's Law Dictionary and state that it would mean "to be taken out". It is argued that the Manufacturing in Bonds have been taken out from para.8 and, therefore, they would be entitled to export not on the strength of para.8 but under the provision of Rules.
10. As there was some discussion made by this Court in its judgment, dated 28-4-2000 to sections 35, 37 and 38(2) of the Act and because the petitioners are relying on the said judgment, it was argued that the petitioners on export would be, therefore, entitled to drawbacks as contemplated under the Act:
11. Respondents' side is defending the case through two different counsel, one appearing for Central Board of Revenue and the other for Collector Customs Peshawar. Two of them are, however, not unanimous as to the application of judgment of this Court, dated 28-4-2000 to the case of the petitioners.
Learned counsel appearing for the Central Board of Revenue is of the view that the judgment is applicable to the case of the petitioners but in his view this judgment has not been correctly delivered because when declared Rule 15(6) invalid this Court has not taken into consideration the entire rules and sub-rule (6) was held invalid only on the ground of being inconsistent to section 16 of the Act. It is argued that this Court can review its judgment dated 28-4-2000 notwithstanding the pendency of the petition before the Supreme Court. It is submitted that on the re-analysis of the entire rules seen in the light of sections 35, 37 and 38(2) of the Act, reasonable restriction as contained in Rule '15(6) could have been imposed by the Central Board of Revenue. What we gather from the submissions of learned counsel for C.B.R. Is that the petitioners cannot export its products to Afghanistan via land route in view of Rule 15(6) and that para.8 of the Order is not applicable.
12. Mr. Abdul Latif Yousafzai, Advocate who appeared for the Collector Customs stated that finding of this Court regarding invalidity of para. 15(6) or its application to the case of the petitioners should not be considered in this writ petition, Firstly because this Court is seized of the jurisdiction on the judgment already delivered, Secondly such judgment is not under review and Thirdly because it is now pending before the august Supreme Court of Pakistan. He is of the view that case of the petitioners squarely falls under para.8 of the Order where there is express exclusion of the manufacturer of manufacturing-in-bonds to export to Afghanistan via land route. Learned counsel for the Customs Collectorate submits that Manufacturing-in-Bonds Rules are meant for simplifying the procedure for the import of input goods facilitating the Importers not 'to pay Government dues on goods primarily meant for export. He is of the view that Rules are applicable for the clearance of imported goods and they are not relevant for the export and for the export, the provisions of Order would be applicable. He has referred to sub-rule (2) of Rule 1 and states that they shall apply to the clearance of imported goods.
It is next contended that under para.8 of the Order, other Exporters are allowed to export to Afghanistan via land route but to the exclusion of goods manufactured in manufacturing-in- bonds.
It is also submitted that reasonable restriction under the law can be imposed on the trade if in the opinion of the Government a particular route can be harmful to the Government Exchequer, i.e. Public at large.
13. After hearing the learned counsel for the parties, we are of the view that there are three main questions before us. First whether petitioners' case would fall under para.8 of the Order or they would be covered under the Rules. Second would be the effect of judgment of this Court, dated 28- 4-2000 and Third if any restriction on trade to Afghanistan via land route would be violative of Articles 18, 23 and 24 of the Constitution of Islamic Republic of Pakistan, 1973.
14. Rules were framed on 6th of November, 1997 and were framed by the Central Board of Revenue while exercising powers conferred on it under section 219 of the Act read with section 37 of the Central Excise Act and section 50 of the Sales Tax Act and were in supercession of certain S.R.Os.
Mentioned therein with a view to simplify the procedure for import of the input goods as has been held by a Division Bench of this Court in its judgment, dated 28-4-2000 .
Sub-rule (2) of Rule 1 expressly mention that these Rules were applicable to the clearance of imported goods, without payment of Customs Duty, Central Excise Duty and Sales Tax for the manufacture of goods primarily meant for export meaning thereby that the scope of the Rules is to lay down the procedure in order to facilitate the Importers to import input goods which are primarily meant for export without payment of duties at the time of import but against Insurance Policy in the sum equal to the amount of duties and taxes leviable on the input imported goods.
The object is that under section 35 read with section 37 of the Act at the time of export, there should be left no question of drawbacks.
15. Under the Rules; all the activities of the petitioners after they have been issued the licence for manufacturing-in-bond, in the process of such manufacturing remains under the control and supervision of the Customs Staff and, therefore, it is necessary to obtain Analysis Certificate showing that how much of the raw-materials was imported, was used, gone waste and how much goods were produced for export. Even the export is to be regulated by procedure as given in Rule 15(1) to (5).
The perusal of Order would show that it was issued on 11th July, 2000 by the Federal Government in exercise of powers conferred on it by subsection (1) of section 3 of the Import and Export (Control)
Act, 1950. It prescribes the eligibility as to who can export under the Order, basis of export and kind of goods which can be exported. It is special law dealing with the export. Under para.8, it deals with export to Afghanistan specifically. The words "excluding" as used in para.8 even if taken as learned counsel for the petitioners wants us, i.e. "taken out" would mean that goods produced or manufactured in manufacturing-in-bonds have been excluded from this para. This shows express intention on the part of the Legislature not to allow goods manufactured in the manufacturing-in- bonds to be exported to Afghanistan via land route. This para. Allows other Exporters to export commodities produced or manufactured in Pakistan to Afghanistan via land route, but where the export is made against Pakistani rupees, Exporters will not be entitled to any duty drawback and zero rating of sales tax and where the export is made against foreign currency, they would be allowed duty drawback to a maximum of 7.5% of the F. O. B. Value without zero rating of sales tax.
We need not go into the factual controversy as to -why the Government has excluded the commodities not to be exported to Afghanistan via land route which are manufactured in the manufacturing bonds as same has not been agitated before us by either side.
The vires of para.8 of the Order enforced through S.R.O. No.482(I)/2000, dated 11-7-2000 have not been challenged before us. When questioned, learned counsel for the petitioners replied that they did not challenge the vires of the Order because in their view they are not controlled by para.8 of the Order but by Rules and because Rule 15(6) of the Act has been declared invalid by this Court, they would be entitled by this Court, they would be entitled to export to Afghanistan via land route.
But because we have held that there is express exclusion of the goods manufactured in manufacturing bonds which activity the petitioners are carrying out, they cannot compel the respondents to allow them the export nor they can claim any drawback thereon in view of para.8.
The petitioners are given the facility of import of input goods without payment of any Government dues and, as such, they are placed in a better position as against their counterparts who are manufacturing otherwise then in the manufacturing bonds. They cannot be given two advantages, one --at the time of import and the other at the time of export.
16. Rules have been framed as mentioned in the preceding paras. Under the Act, whereas the Order has been issued under the Import and Export (Control) Act, 1950.
Rule 15(6) was held invalid because the same was issued by the Central Board of Revenue, whereas the Order has been issued by the Federal Government. Under section 16 of the Act, the Federal Government may, from time to time, by notification in the official gazette prohibit or restrict bringing into or taking out of Pakistan of any goods by air, sea or land. Similar provisions are also available under section 3 of the Import and Export (Control) Act, 1950. Such powers of the Federal Government have not been assailed before us.
Even otherwise, the Order is, dated 11th July, 2000, while the Rules were framed on 6th November, 1997. On general plea of interpretation, the latter intention of the Legislature should prevail.
Judgment of this Court was delivered on 28-4-2000, therefore, it should be presumed that the same was in the knowledge of the Federal Government while issuing the Order and it is, therefore, that in para.8, the commodities manufactured in manufacturing bonds were expressly excluded.
17. As for reference to sections 35, 37 and 38(2) of the Act is concerned, in view of what we have held above, would not be relevant. Section 35 of the Act appears under the heading "drawbacks" in Chapter-VI of the Act, where goods imported in Pakistan are capable of being easily identified and on which custom duties have been paid on importation, when exported to any place outside Pakistan, 7/8th of such duties are paid as drawback, while made section 37, the Central Board of Revenue is empowered to allow drawbacks on goods manufactured in Pakistan and later exported.
Section 38(2) is the power of the Federal Government to prohibit the payment of drawback upon exportation of goods to any foreign territory.
18. As for effect of judgment of this Court delivered on 28-4-2000 is concerned where the vires of Rule 15(b) were challenged and this Court considering the powers of rule making under section 219 of the Act and the Rules made thereunder being in violation of section 16 of the Act has declared Rule 15(b) as invalid meaning thereby that it was not the authority of the Federal Government which was under challenge but the jurisdiction of Central Board of Revenue to issue Rules whereby restriction was placed on export via land route to any of the country. Order, to the contrary, has been issued under Import and Export (Control) Act, 1950 by the Federal Government and para.8 specifically deals with export to Afghanistan.
19. There is no violation of any fundamental right of the petitioners either of Article 18 or Articles 23, 24 and 25 of the Constitution of Islamic Republic of Pakistan, 1973 as, in our view, the restriction imposed on the Manufacturing-in-Bonds manufactured goods has not been challenged as in para. 8 of the Order before us and even otherwise, such restriction is not unreasonable and is within the competence of the Federal Government.
20. The upshot of the above discussion is that this writ petition and all, the connected writ petitions are, therefore, dismissed.
Interim order dated 31-8-2000 and all other interim orders passed by this Court in this writ petition or in the connected writ petitions shall stand withdrawn.
However, the petitioners who have exported their manufactured goods to Afghanistan via land route under the orders of this Court uptodate, the respondents would be entitled to claim all Government dues leviable on such goods and shall recover them in accordance with law.