1. ' Listed Applications filed by the Petitioners seek direction for the release of 700 Metric Tons of Cargo/RBD Oil to the Petitioners which was imported by the Respondents and so also the contempt is alleged to have been committed by the Respondent/Contemner, Muhammad Afzal Bhatti, who declined to release the same, without payment of 6% Income Tax. Counter-Affidavit and Rajoinder have already been exchanged in this matter.
2. ' Briefly stated the facts of case are that Petitioner's imported Oil which was subject to detention, at the behest of the Special Army Monitoring Team, on the allegation of substandard oil not fit for human consumption. The detention was declared to be illegal in C.Ps. Nos.D-413 and 414 of 2000. It was, however, ordered that since the question of fitness or otherwise of the subject oil for human consumption related to the Public importance, matter was left to be decided by the Appellate Tribunal before whom the controversy was pending at the time of filing Petition, it appears that the decision of the. Appellate Tribunal was further assailed in Special Custom Appeals Nos. 18 and 19 of 2000 before this Court in its Special Appellate jurisdiction under the Customs Act, 1969. Learned Division Bench disposed of the Appeal vide order, dated 30-5-2000.
3. ' Mr. S. Ali Bin Adam Jafri, learned counsel for the Petitioners submitted that the subject goods being edible attracts payment of Income Tax at the rate of 3% whereas, the Respondents/Contemners are demanding the Income Tax at the rate of 6% which is against the final verdict recorded by this Court. He contended that Income Tax Authorities ar the request of the Petitioner had opined that edible Palm Oil was subject to 3% Income Tax. It was, therefore, argued that Customs Authority which was acting as a collecting agency could not demand Income Tax in excess of what was actually leviable.
4. ' The Respondents/alleged Contemnors are present in person along with Mr. Raja Muhammad Iqbal, learned counsel submitted that the subject consignment was inedible oil and was covered by PCT Heading 1511. 9010 and attracted payment of 6% Income Tax. Exemption or concession of tax at the rate of 3% was extended under S.R.O. No,324/(I)/99, dated 8th July, 1999 as amended by the Finance Act of 2000 only in respect of edible oils. According to Respondents oil imported by the Petitioner was declared to be unfit for human consumption, as such it was to be treated as inedible oil falling under PCT Heading 1511.9010 which required charge of 6% Income Tax and Petitioners were liable to pay 6% Income Tax on the entire quantity including the one already cleared by the Customs under the indemnity, bond.
5. ' We have heard the arguments of learned counsel for the parties at great length and perused the material brought on record.
6. ' From the record, it appears that the subject consignment was ordered to be released on payment of redemption fine up to 100% in addition to payment of leviable duties and Taxes etc. By the Collector Customs vide Order-in-Original, dated 10-3-2000, which matter was agitated before the Tribunal and finally came up before this Court in its Special Appellate Jurisdiction under the Customs Act. In Special Appeals Nos.18 and 19 of 2000, while disposing of the Appeals in para.8 following observation was made:-- "Having carefully considered the arguments advanced and find substance in Mr. Usmani contention that having held that the appeals preferred by the Department and the Monitoring Team were not maintainable the learned Tribunal could not indirectly grant the relief sought by them by remanding the case to the Collector for fresh testing. It may he observed that there seems to be no real controversy between the parties as to the fact that the imported goods in their present form are not fit for human consumption. Indeed a finding of fact to this effect has been recorded by the Collector of Customs and the appellants do not seriously dispute the same. They have already paid the amount of duties and leviable taxes as well as redemption fine and filed an appeal only for remission of the aforesaid fact.
7. ' Learned counsel for the Petitioners was not able to controvert the factual position stated in above referred order "that subject oil is not fit for human consumption in its present form". Even the case of the Petitioners is that after processing, the oil become fit for human consumption. It may be observed that after, blending and reprocessing it was made fit for human consumption, and Petitioners were allowed to market the same only upon certification as directed under the Standing Orders II of 2000.
8. The incidence of levy of duties and other charges are attracted on the basis of description of the consignment at the time of import and not after it is processed, refined or modified, as such exercise would tend to change the nature and description of the goods and they might fall under different PCT Heading. Even the clarification, dated 19-4-2002 issued by the Income Tax Department was to the effect that rate of 6% Income tax has been relaxed in case of Industrial undertaking importingEdible Oil as raw material on which tax was deductible @ 3% as per Clause (6-A) of Part II of Second Schedule to the Income Tax Ordinance, 1979.
9. In Special Customs Appeals Nos. 18 and 19 of 2000, it was observed the consignment in question was found to be not fit for human consumption in its present form when imported. Such finding is sufficient to hold that same fell under PCT Heading 1511.9010, inedible oil and was chargeable to Income Tax at the rate of 6%. Accordingly, we do not see any contempt or error on the part of the Respondents/ alleged Contemners charging/levying Income Tax at the rate of 6%.
10. ' For the foregoing reasons and discussion, we do not find any merit in the aforementioned listed Applications which stand dismissed.