' MUHAMMAD SAIR ALI, J.---The appellant is a public company limited by shares, and is engaged in manufacture and supply of sugar. During the years, 1990-91, 1991-92, 1992-93 and 1993-94 season it claimed clearance of sugar on concessional rates as contemplated in S.R.O. 814(1)/85, dated 29-8- 1985. Para 1 of that S.R.O. Reads as under:-- "In exercise of the powers conferred under. Subsection (1) of section 12A of Central Excise and Salt Act, 1.944 (I of 1944), the Federal Government is pleased to exempt new sugar mills, which may commence operation hereafter, from payment of fifty per cent of central excise duty leviable on their production of first two years commencing from the date of operation."
2. The Department however, refused to allow the claimed concession on the ground that the appellant had come into production on 14-2-1990 when the aforesaid notification had already been rescinded through another Notification S.R.O. No, 556(1)/89, dated 3-6-1989.
3. The appellant appears to have approached this Court in Constitutional jurisdiction wherein as a matter of interim relief it was allowed clearance of sugar from 21-5-1992 to 13-1-1994 on payment of 50% of excise duty. For the remaining 50% the appellant was directed to furnish Bank guarantee.
That Constitutional petition was dismissed by this Court on 19-1-1992; while the appeal filed before the Hon'ble apex Court was dismissed. On 1-4-1998. On being served with a notice for recovery of remaining 50% of excise duty amounting to Rs,5,62,14,545, the appellant allegedly filed a civil suit in connivance with the Bank whose guarantee was furnished for 50% of the duty. However, during the pendency of that civil suit against the bank, on 4-6-1998 an interm relief in the form of restraint order against encashment of guarantee was made by the Court. In the meanwhile, on 4-6-1998 the appellant sought permission to make payment of remaining 50% excise duty in. Instalments which was allowed by the Collector through his order, dated 5-6-1998. The application for interim relief filed by the appellant in the civil suit was dismissed on 19-6-1998 whereby on usual proceedings by way of an order-in-original, dated 2-12-2002 the appellant was found liable to pay the aforesaid sum of evaded excise duty of Rs,5,62,14,545 along with additional duty in view of the provisions of section 3-B read with section 2(17) of Central Excise Act, 1944 and Rules 7 and 10 of the Central Excise Rules, 1944. The amount of additional duty was calculated at Rs,4,16,73,357.
4. The Customs, Excise and Sales Tax Appellate Tribunal, Lahore by way of the impugned order, dated 29-1-2003 maintained the order-inoriginal both in respect of the amount of duty evaded as well as additional tax chargeable thereupon.
5. Heard the learned counsel for the parties. It is the case of the petitioner that payment of 50% of the excise duty having been ensured by submitting Bank guarantee the appellant was not liable to pay any sum as additional duty. It is also stated that the appellant cannot be penalized on account of the failure of the Department to encash the Bank guarantee.
6. Learned counsel for the Revenue on the other hand supports the impugned order for the reasons stated therein.
7. Having heard the learned counsel for the parties, we will readily agree with the findings of fact recorded by the forums below. The opinion expressed by the two forums that the appellant was liable to pay full excise duty appears unexceptional. There is no doubt that the appellant was not covered by the aforesaid concessionary notification which was rescinded more than 7 months before the appellant came into production on 14-2-1990. Even if there was an arguable case, the appellant itself demolished its case of good faith by filing a civil suit against the Bank whose guarantee was furnished for payment of the remaining 50% excise duty.
8. Learned counsel for the Revenue is correct in pointing out that the suit in which subsequently interim relief was recalled by this Court was on the face of it mala fide and had been filed in connivance with the bank in order to frustrate the efforts of the Department to encash the bank guarantee. In the given situation, the reliance of the learned counsel for the appellant on a recent judgment of the Hon'ble Supreme Court of Pakistan in re: Shipyard K. Damen International v.
Karachi Shipyard and. Engineering Works Ltd. (PLD 2003 SC 191) is hardly of any avail. The appellant himself having filed a suit and obtained an injunction order against encashment of guarantee cannot seek the benefit of the ratio settled by the apex Court in that case.
9. For what has been stated above, we entertain no doubt that the appellant was not covered by the aforesaid concessionary notification. He failed not only before this Court but also before the Hon'ble apex Court. Thereafter in yet another attempt to delay the payment of the excise duty he filed a suit against the surety-Bank stalling payment of the remaining amount of duty. During all this period the delay was caused intentionally while incidence of excise duty squarely fell, upon the appellant. The imposition of additional tax therefore, cannot be interfered with. However, keeping in view the fact that during the pendency of these proceedings including this appeal the rate for calculation of additional tax has undergone a change, which is favourable to the tax-payer, we will direct that the basis of calculation of additional tax imposed with reference to the aforesaid provisions of law shall be the one which is most beneficial to the appellant coming into force after the issuance of the impugned demand notice. This appeal succeeds to that extent only.