' This petition shall decide Writ Petition No,5662 of 1990 and Writ Petition No,5663 of 1990 as common questions are involved.
2. Show-cause notices were issued to the petitioners on 11-1-1988 and 22-12.4986 respectively alleging that they had evaded payment of Excise Duty for the years 1986-87 and 1984-85. The precise allegation was that whereas they were required to pay Duty at the rate of 5% of the retail price in terms of Item.No,02-01-B(b) of the Schedule to the Central Excise and Salt Act, 1944, they had been paying the said Duty at the. Rate of 0.5% in respect of the Tinned Juices (Grape fruit and Orange juices). The show-cause notices were replied with the averments that the Duty has been paid correctly and in accordance .With law, in terms of Item No,02-01-B((b) read with Exemption B(a)(ii) of the said Schedule to the said Act of 1944. The respondent No,3 conducted proceedings and proceeded to hold that the petitioner were liable to pay Duty at the rate of 5%of the retail price.
Appeals were filed against the said order which were rejected and so was the case with the revision filed by the petitioner.
3. Mr. Ali Sibtain Fazli, Advocate, learned counsel for the petitioner contends that the impugned orders are without lawful authority inasmuch as the respondents have proceeded to deprive the petitioner of the Exemption to which they are lawfully entitled. Mr. A. Karim Malik, Advocate, learned counsel for the respondents on the other hand has tried to support the impugned orders.
4. The precise question involved in these two writ petitions is as to whether the product in question are "Beverages made from Juices" or "Juices". The former stands described in Exemption (B)(a) while the later stands described in Exemption B(b) to Item 02-01 in the First Schedule to the Central Excise and Salt Act, 1944. I deem it proper to reproduce the said descriptions as given in the said schedule hereunder:- B(a) Beverage made wholly from juices or pulp of. Indigenous vegetables; foodgrains or fruits and which do not contain any other ingredient indigenous or imported, other than sugar, colouring materials, preservatives or additives in quantities prescribed under the West Pakistan Pure Food Rules, 1965
(i) If filled in containers containing less than 260 mililitresTen paisa per unit container.
(ii) If filled in containers containing 260 mililitres or moreForty paisa per litre or fractid thereof.
(b) Juices, syrups and squashes, if the retail price and quantity of such items are indelibly, legibly and prominently printed on each container or its cork or lable. 5 % of the retail price.
' According to Mr. Ali Sibtain Fazli, Advocate, the products in question are "Beverages made from Juices" in the manner prescribed under the West Pakistan Pure Food Rules, 1965 and as such are liable to a Duty of Paisa 40 per litre. Mr. A. Karim Malik, Advocate, on the other hand insists that the products are juices as described in the above para.B(b).
5. In view of the said description in B(a) referred to the said West Pakistan Pure Food Rules, 1965, is necessary. Both the learned counsel agree that the relevant rule is rule 85. The same is reproduced here:-- "85. Fruit Beverage or Fruit Drink or Fruit Crush means by any beverage or drink which is purported to be prepared from fruit juice and water or carbonated water, by whatever, name it is called, and ' containing sugar, dextrose, invert sugar, or liquid glucose, either singly or in combination and with or without peel oil, fruit essences or flavours, citric acid, ascorbic acid, permitted preservatives and colours. It shall conform to the following standards : -
(a) Total soluble solids. Not less than 10 per cent.
(b) The beverage prepared artificially by mixing the separate components juices shall be labeled 'Artificial'.
A combined reading of said para.B(a) read with the said rule 85 would show that in case of beverages prepared from fruit juices in the manner prescribed in the said rule 85, it would fall within the ambit of the said para.B(a) and if not then the same would fall in para.B(b). This brings me to the order in original dated 5-1-1989 passed by the Deputy Collector (respondent No,3) which has been upheld in appeal and revision. Now, I find that the said products were got analysed from P.C.S.I.R. Laboratories, Lahore. As per the results of the said test reproduced by the respondent No,3 in para.6 of his order. The following analyses of the contents was given:-- Results Name of sampleWater % Total Acids as citric acidSale % (Nacl) Total soluble solids (%)
Orange Juice 83.55 1.45 0.29 13.78 Grape fruit juice.84.93 1.80 0.64 14.03 ' A bare reading of the said analyses, not otherwise challenged as to the said contents, would show that the products to confirm to the standards prescribed in rule 85 of the Pure Food Rules, 1965.
Pertinent to note would be the contents of "total soluble solids" which is not to be less than 10%. The percentage of the said soluble solids in orange juice is 13.78%, while in Grape fruit juice is 14.03%. The water contents is 83.55% and 84.93% respectively.
6. The respondent No,3 did reproduce the said provisions in para.8 of his order, but then did not care to read the same in conjunction with the said rule 85. On the other hand, he has stated in the order that C.B.R. Has issued directive that juices which require addition of water to make them drinkable fall under Item No,02-01-B while instant drinks are to be treated as "Beverages". I have no hesitation whatsoever in stating that the respondent No,3 has proceeded to act without lawful authority in completely ignoring the said statutory provision and to proceed to follow some directions of C.B.R. Which on the face of it, is against the express letter of the statute. The Appellate Authority faithfully followed the statute and so is the case with the Revisional Authority. In the case of this later Authority, it is with some regret, that I note that the respondent No,1 completely ignored the said provision of law and on the other hand opted to rely on this understanding of a Beverages in common parlence. No gain saying the fact that where the statutory provisions govern a matter, the Authorities appointed to interpret and enforce the same are required to read the said provision properly while deciding matters concerning the application of the same. The respondent No,1 has acted as if he was law unto himself and not to act in accordance with law. I, therefore, do find that respondents Nos.1 to 3 have acted without lawful authority inasmuch as they have proceeded in utter disregard of the said statutory provision while passing the impugned orders. This writ petition is accordingly allowed. The impugned orders passed by respondents Nos.3, 2 and 1 respectively, are set aside and it is hereby declared that the products in question are covered by the said para.B(a) of Exemption to Item No,02-01-B(b) of the Schedule of the Central Excise and Salt Act, 1944 and that the Duty had been correctly paid by the respondents at the rates prescribed therein.
In case, any amount in excess of the same has been recovered by the respondents, the same shall be refunded to the petitioners in these two cases. No order as to costs.