' MANSOOR AHMAD, J.--- This appeal under section 196 of the Customs Act, 1969 arises out from the order, dated 19-3-1998 passed by the Customs, Excise and Sales Tax Appellate Tribunal, Lahore Bench, Lahore.
2. Brief facts of the case are that the appellant vide Bill of Entry No,1996 of 1991, dated 6-11-1991 imported tyres and tubes. The appellant claimed that these tyres and tubes were meant for agricultural Tractors and sought concession under S.R.O. 505(1)88, dated 20-6-1988 read with S.R.O.
500(1)88, dated 26-7-1988. The Customs Department did not accept the version of the appellant and took the view that the tyres and tubes imported by the appellant were essentially for use of vibratory rollers, earth-moving machines and combined harvesters and log skidders and the same were not meant exclusively for agricultural tractors plying in. Pakistan, therefore, the concession to the appellant as envisaged under S.R.Os. Mentioned herein before was denied. A show-cause notice was issued to the appellant on 8-1-1992 stating therein that the appellant was guilty of misdeclaration. #TSE# A reply to the show-cause notice was submitted and the Collector, Appraisement Collectorate, Karachi vide its order in original, dated 13-6-1993 adjudicated the issue.
The imported tyres and tubes were ordered to be confiscated in terms of clause (14) of section 156(1) read with section 32(1) of the Customs Act, 1969. However, the appellant was given an opportunity to get the consignment against the payment of fine equal to 10 per cent. Of the ascertained value thereof plus customs duty and other taxes including surcharges and income- tax at standard rates under P.C.T. Heading 4911.9990.
3. Aggrieved from the order in original, the appellant filed an appeal which was finally disposed of by Member (Judicial), C.B.R., Karachi and upheld the order passed by the Collector (Appraisement). The appellant filed a second appeal before the Customs, Excise and Sales Tax Appellate Tribunal, Lahore Bench, Lahore which was dismissed vide impugned order, dated 19-3- 1998.
4. The learned counsel for the appellant has contended that the imported tyres and tubes were of sizes 23-1-1926 and 28L-26 of "Good year" brand U.S.A. Origin, Tread Pattern, "Special Sure Grip (R- 2)". These tires were meant for agricultural Tractors and descriptively fell under the PCT Head 4011.91110. Adding to his argument the learned counsel stated that concession under S.R.O. 505(1)88, dated 20-6-1988 and S.R.O. 500(1)88, dated 26-7-1988 was available to the appellant but it was erroneously denied to the appellant by the Customs Authorities.
5. Pakistan Customs Tariff described various heads and sub-heads.
40.11 is a main head relating to new penumatic tyres of rubber. It has various sub-heads which deals with various kinds of tyres.
4011.1000 relate to the kind of tyre used on motor cars.
4011. 2000 pertains to the kind used on buses or lorries.
4011.3000 relate to the kind of tyres used on Aircraft 4011.4000 deal with the kind of tyres used on motorcycles.
4011.5000 is a head in respect of kind of tyres used on bicycles. The last sub-head is 4011.9110 which relates to the kind of tyres used on agricultural Tractors. The Government of Pakistan in exercise of powers conferred under section 19 of the Customs Act, 1969 issued S.R.O. 505(1)88, dated 20-6-1988 whereby certain items specified in S.R.O. Were exempted from so much of the customs duty specified in the First Schedule to the Customs Act as was in excess on the rate of duty specified in column 3 of the Table provided in the S.R.O. Tyres and tubes for agricultural Tractors falling under the head 4011.9110 were specified in this S.R.O. And they were made free from the payment of customs duty. Another S.R.O. 500(1)88, dated 20-6-1988 was also issued by the Government of Pakistan in exercise of jurisdiction vested in it under section 7 of the Sales Tax Act, 1951 whereby these tyres were exempted from payment of sales tax. The item falling under the head of 4011.9110 was also made exempt under this S.R.O..
6. After hearing learned counsel for the parties we are of the view that the Department Authorities as well as the learned Revenue did not appreciate the requirements of exemption notifications in their true perspectives. The original as well as the appellate authority refused the claimed exemption by resorting to circumstantial evidence. It was inter alia held that the kinds of tyres were usable in cater pillars as well, and therefore, these could not be used for agricultural Tractors only.
An attempt was also made to hook the appellant on the ground that he had earlier made a bid for supply of tyres for earth-moving bulldozer and other similar machinery. Therefore, in the view of Revenue the appellant had attempted to import the tyres to make the contracted supply and claimed exemption in respect thereof which were usable for different purposes. The learned Member, C.B.R. Also made a specific mention of the fact that the appellant was allowed a number of opportunities to demonstrate that the tyres imported could not be mounted on any of four sizes of Tractors normally in use in Pakistan for agricultural purposes. The learned Tribunal was all the more general in its observations and vehement in its incredulity of the need of the appellant to import the consignment in question. Learned counsel for the petitioner is also correct in pointing out that no single aspect of the consignment having been concealed, there was no question of misdeclaration as found by the Customs Authorities. The claim of exemption in respect of a declared commodity did not all make it a case of misdeclartation if the Revenue Authorities finally go for denying exemption.
7. In case of Taxation Laws no principle is more established than the one that envisages an interpretation in favour of the taxpayers where two equally acceptable interpretations of a statutory provision are possible. The S.R.Os. In question contemplating exemption could be interpreted both ways. The appellant produced sufficient material in the form of booklets and the information provided by the foreign manufacturers/suppliers that the tyres in question were usable for agricultural Tractors as well. Thereafter, it was for the Revenue to establish that these could not be so used. Instead of controverting the material produced by the appellant the Revenue Authorities in order to deny the concession resorted to consider circumstantial evidence which was totally unfair. The fact that only four kinds of Tractors were being used for agricultural purposes in Pakistan was also highlighted. However, that fact alone was not sufficient to disallow the claimed exemption if, as per information supplied by the foreign manufacturers and confirmed by the concerned Association of the United States, these could be used in agricultural Tractors, though not in vogue in Pakistan.
8. Therefore, we will allow this appeal and set aside the impugned orders. The consignment imported by the appellant shall be processed in terms of bill of entry and the declaration made therein for its release free of customs duty and sales tax in terms of the S.R.Os., referred to above. /Order accordingly.