I. MAHMUD, J.-This constitutional petition seeks to question the legality and validity of orders passed by the respondents Nos. 1, 2 and 3 ordering confiscation of a consignment of air-conditioning machines imported by the petitioner, on the alleged ground that these items were not covered by a valid import licence and also imposing a redemption fine in lieu of confiscation.
2. The petitioner's firm, a registered importer, was granted an import licence No. 172557 by the Chief Controller of Imports and Exports, Karachi, for the import of 'machinery and mill works, N. O. S. (not otherwise specified) and parts and accessories thereof and maintenance spares, all sorts. . " as covered by Serial No. 176 of Annex. I of the Import Policy Order, 1973. The' above-mentioned items of Serial No. 176 included air-conditioning machines falling under heading No. 84-12-III "other air conditioning machines" of the I. T. C. Schedule. The complete heading No. 84-12 of the I. T. C.
Schedule reads as follows :- "84-12. Air conditioning machines, self-contained, comprising a motor driven fan and elements for changing the temperature and humidity of air; I. Domestic air-conditioner requiring for their operation not more than three brake horse power.
II. Car air-conditioners.
III. Other air-conditioning machines."
It is the contention of the respondent Customs Authorities that the air--conditioning machines imported by the petitioner did not fall under the permitted I. T. C. Heading 84-12-III as it was found that these machines required for their operation not more than three brake horsepower and as such, their import was prohibited as they were not covered by the licence granted to the petitioner.
3. The petitioner, as group leader, established Letter of Credit in favour of a United States supplier for the import of self-contained air-conditioning machines suitable for use in commercial and industrial establishments and for maintenance spares thereof. The invoice indicated that "the rated electrical consumption required for operation of the machines was equal to 3.4 brake horsepower."
On arrival of the consignment in question at the port of Karachi, the petitioner filed relevant Bill of Entry supported by shipping documents including the invoice. The machines were physically examined by the Machinery Shed Appraiser of Customs (M. S. A.) who reported the following specifications of goods :-
1. Air-Conditioners "Make Westinghouse U. S. A.
ModelAH-157 P5C-2.
Volts230/50 Cycles.
B.T. U/Hr 14500 Amps11.8 Watts2450 Window type 84-11 A. S. T. 3.0
2. Compressors.
P. C. T.:84-11 B S. T.10 TypeAJ 220 JT-295.
(AJ 5519 B)
Manufacturers name and M. P. Not shown. Seems to be manufacture of Tecumsch, U. S. A. Group may check from Catalogue."
4. On the basis of this data, the Customs Officer declined to release the goods and a show-cause notice dated 26-7-1974 was issued to the petitioner by the Deputy Collector of Customs, respondent No. 3, alleging that the imported machines were of less than 3 H.p. (later corrected to read 3 B. H. P.) and that as their importation was not covered by a valid import licence, the petitioner had contravened the provisions of section 16 of the Customs Act, 1969, read with section 3(1) of the Import and Export (Control) Act, 1950 and that the goods were liable to confiscation, and penalty under section 156(9) of the Customs Act, 1969.
5. In calculating the brake horsepower (B. H. P.) of the machines, the formula adopted in the show- cause notice by the Deputy Collector of Customs, respondent No. 3 as well as by the Board of Revenue, respondent No. 1, in the respective impugned orders, was expressed as follows :--- B. H. P. ---Name Plate Watts x Efficiency/746 Watts.
(Wherein "Name Plate Watts" was the product of "I, Current (11.8 express), "E" Voltage (230 Volts) and "pf" Power Factor (.9)). The Name Plate Watts was 2450 Watts, as shown in the specification of the Inspection report above reproduced.
6. Although the application of the above formula for calculating the brake horsepower of the imported machines, was not questioned by the petitioner, the figure assumed by the Customs Authorities as representing unit of measurement of the `Efficiency' in the numerator of the formula was hotly disputed. While the respondent authorities contended that the percentage of efficiency of the compressor motor was not more than 85 %, the petitioner contended that the efficiency should be taken at least at 92.5 %. In order to persuade the Customs Authorities to accept the higher percentage rate of efficiency, the petitioner produced two expert opinions, one from the Pakistan Council of Scientific and Industrial Research Laboratories (PCSIR) dated 13-9-1974, which was to the effect that the efficiency of a directly coupled compressor motor of a sealed unit at full load, is near about 92.5 %. The other opinion was from a firm of suppliers of electrical and mechanical equipment, Messrs Impaireo of Karachi, dated 20th September, 1974, who opined that losses in hermetic sealed motor used in the air conditioning system should not exceed 50 % as compared to ordinary induction motors. It was contended by the petitioner that the loss of efficiency should not be more than 50 % of the percentage of loss allowed by the Customs authority for ordinary induction motor, which was 15 %. In other words, the loss should be taken to be only 7.5 % and the efficiency of the motor at 92.5 %, which was also the figure mentioned in the opinion of the P. C. S. 1. R. The petitioner contended that if the efficiency is taken at 92.5 %, the brake horsepower (B. H. P.) would come to 3.03 and thus the machines would fall under heading 84-12-III and not under 84-12-1.
7. This contention of the petitioner was rejected by the Deputy Collector of Customs, who passed the first mentioned impugned order dated 16-11-1975.
Allowing for efficiency rate at .8 (80 %) in the accepted formula, 2450 x .8,/745 he found that the B.
H. P. Came to 2.62, which was less than 3 B. H. P. He observed that even if the maximum percentage of efficiency of compressor used in air-conditioning machines is taken at 85 % as shown in standard text-books on Commercial and Industrial Refrigeration, the brake horsepower (B. H. P.) would come to 2.78 only on the accepted formula above-mentioned. He also placed reliance on a leaflet of "G. F." Brand air-conditioner (room type) which indicated B. T. U. Capacity and the respective H. P. And also similar data obtained of "Admiral" brand air-conditioners. After comparing the B. T. U. Data of these brands with the B. T. U. Of the subject machines, he came to the conclusion that the subject machines could not be above 3 B. H. P. He further relied on the fact that the compressor AJ 5529 fitted in the air-conditioners, were manufactured by Tecumach Products Company U. S. A., who had marked their compressors 1 -- H. P. As mentioned in the examination report, and observed that even assuming the blower motor required-- H. P. More, the total H. P.
Which was required for the operation of the machine was 2 H. P. And that, therefore, it was established that these air-conditioners were of less than 3 B. H. P. In the result, he held that the importation of the air conditioners of less than 3 B. H. P. Was not permitted without a valid licence and the offence was fully established. He, therefore, ordered confiscation of the same, but gave an option to the petitioner to pay a fine of Rs. 3 lacs in lieu of confiscation. He also levied a penalty of Rs. 1 lac for the alleged deliberate commission of the offence.
8. Being aggrieved by this order, the petitioner filed an appeal before the Collector of Customs, respondent No. 2. During the course of the hearing of the appeal, the petitioner produced a letter dated 2-1-1975 from Teeumach Products Company of U. S. A., the manufacturer of hermetically sealed motor-driven compressor units fitted in the machines clarifying the use of the term "H. P." in their catalogues. Tecumach in their said letter certified and confirmed that the term "H. P." was their own arbitrary choice of classification meant and used to describe the hermetic size or the capacity of the compressors, and that their arbitrary choice of classification appears to have been misunderstood and misinterpreted by the Customs Department of Pakistan. The respondent No. 2 in his impugned order however, abandoned the application of the accepted formula and in particular, of the efficiency loss factor. He proceeded on a different basis, namely that "H. P.
Required for operation of air-conditioners is the H. P: indicated on the compressor" and relied on the catalogue of the compressor motors which showed the H. P. As 1.75 ignoring the classification given by the manufacturers themselves. In the result he rejected the appeal.
9. The petitioner thereafter filed a revision application under section 196 of the Customs Act, 1969 to the Government of Pakistan. It was disposed of by the Second Secretary, Central Board of Revenue.
It was contended before him by the petitioner that the phrase "requiring for their operation not more than three brake horsepower" was meaningless in so far as a machine requires for its operation "horsepower" and not "brake horsepower". But this contention was overruled. The Member observed :-- "5. There is no dispute about three facts, vie that energy requirement for the air-conditioners was 2,450 watts, that the cooling capacity was 14,500 B. T. U. And that H. P. Required for the operation of the compressor was 1.75.
6. One H. P. Is equivalent to 746 watts. 2.450 watts are thus equivalent to 3.28 H. P. Mechanical efficiency in the case of air-conditioners is generally assumed at 85 Y. Although it can differ from machine to machine. On this basis the brake hourse-power would calculate at 2.79. If the efficiency is taken at 90 %, B. H. P. Would work out at 2.95."
Although he admitted that there was no formula for converting B. T. U. Into H. P., yet he accepted the rating given for "General Electric" brand air-conditioners, which gave equivalents of B. T. U. To H.
P. And held that on that basis, 14,500 B. T. U. Of the subject machines would fall between 1 -- H. P.
And 2 H. P. He also assumed that as the H. P. Of the compressor was indicated by the manufacturers themselves as 1 -- the total energy requirement of the machine would therefore be 2 H. P. And that brake horsepower (B. H. P.) would still be less. In the result, he rejected the revision application of the petitioner. However, he reduced the redemption fine to Rs. 2 lacs and remitted the penalty.
10. Before considering the submission of counsel, it would be helpful to define certain technical terms involved. Horsepower (H. P.) is the unit of mechanical energy that is the rate at which work is done. The British unit of power is equivalent to 33,000 ft-lb/min. The electrical energy, equivalent to 1 H. P., is 746 watts. Brake horsepower (B. H. P.) is the horsepower (H. P.) at the shaft of the engine or motor, i.e. The power actually delivered, which is less than the H. P. By the amount of power lost due to friction, conversion into-heat etc., within the engine itself, the loss varying from machine to machine. Brake horsepower is also spoken of as "output" power as contrasted with "input" power. .
Efficiency of the engine or motor is determined by deducting losses from the input power and is usually expressed in percentage of input. B. T. U. Is the British Thermal Unit of heat and is equal to the amount of heat required to raise the temperature of one pound of water by 1flF. The heat equivalent of H. P. Is 2545 B. T. U. Per hour.
11. The first submission of Mr. Ali Ahmed Fazeel, learned counsel for the petitioner is that the respondents Nos. I to 3 misconstrued and mis--interpreted the heading No. 84-12 of the I. T. C.
Schedule by taking into consideration and applying the requirement of brake horsepower (B. H. P.) instead of horsepower (H. P.). It was contended that the phrase "requiring for their operation not more than three brake horsepower" in the heading 84-12-I, meant the power requirement for the "operation of the air--conditioner" at the input point, i.e. Before the occurrence of losses in the motor and not at the output point. This power requirement is the horse--power (H. P.) of the air- conditioner and can be worked out exactly from the data found. In this case, it was 2,450 watts. As electrical energy of 746 watts is equivalent to 1 H. P., 2450 watts would give a H. P. Of 3.5. The goods would then therefore clearly fall under Heading 84-12-Ill and not 84-12-1. If H. P. Alone-is to be considered, it would not even be necessary to determine the "efficiency" of the machine. In other words, the submission of Mr. Fazeel is that the mention of B. H. P. Against heading 84-12-1 was a clerical error for H. P., on the part of the Legislature. This error, it was urged was corrected by Notification No. SRC-158)(1)/76 dated 17-Z-1976 by which the. Word "brake" wherever appearing against I. T. C. Heading Nos. 84-12I, 84-12-15-1 and II and others in the Import Trade Control Order dated 25-6-1973 were omitted. Mr. Fazeel submitted that mention of B. H. P. For H. P. Being a clerical error, the said correction should be deemed to take effect retrospectively. He referred to the observation of the Supreme Court in "The Burmah Oil Co. Ltd. v. The Trustees for the Port of Chittagong (PLD 1961 SC 452), to the effect that it is an accepted rule of interpretation that an amendment of an accidental omission as opposed to an alteration, is deemed to take effect retrospectively. He submitted that even without the correction of the mistake by the notification, it is permissible to a Court to correct the mistake in order to give effect to the manifest and undoubted intention of the Legislature, as was observed at page 463 of the said judgment of the Supreme Court and again in Lt.-Col. Nawabazada Muhammad Amir Khan v. The Controller of Estate Duty (PLD 1961 SC 119). On the other hand, the submission of Mr. Haider Ali Pirzada is that the amendment of the term B. H. P. By the said Notification was not a correction of clerical error but was in fact a change in policy of the Government. He submitted that the term B. H. P. Held the field for several years and referred to the Pakistan Customs Tariff, 1st July, 1968 to 30th June, 19 9, the draft of the new C.
1. T. Schedule published in Gazette of Pakistan on 19-7-1971 at page 1203 ; the Notification published in the Gazette of Pakistan on 12-8-1973 and finally the Import Policy Order, 1973, 1974 and 1975 in which the term B. H. P. Appears. Further the pointed out that the amendment to the said Notification was made not of the import Policy Order, 1973, but of the earlier Import Trade Control Order, 1973, but of the earlier Import Trade Control Order dated 26-6-1973, which Mr. Pirzada stated announced the general Import Policy, which was to remain in force for a period of five years.
12. We have considered the above submi3sion of Mr. Fazeel, but we are not inclined to accept the same. As rightly submitted by Mr. Pirzada, the amendment by the Notification introduced a change in the import policy with regard to the specification of the power requirement of domestic air- conditioners to be imported in future. The word "brake" in the term B. H. P. Cannot, in our opinion be treated as redundant or a surplusage. The phrase "requiring for their operation" in the T. T. C.
Heading No. 84-12-I, is to be construed in its ordinary and general sense and could also mean the power required for operation of the machine as a whole and not necessarily at the point of input of the power. Moreover, it is accepted A rule of interpretation of statutes that no word in a statute is to be lightly inferred as a surplusage or as redundant, as observed by the Supreme Court in Muhammad Nasim Ahmad v. Azra Khanam (PLD 1968 SC 37). In our opinion, the B amendment introduced a change in the import trade policy for the future and the amendment was to be prospective. Moreover, a notification is generally to be construed as prospective unless otherwise expressly stated. The notification was also issued after the last impugned order was passed on 28- 10-1973 and also after the present petition was presented. In the circumstances, the position has to be considered as at the date of importation of the goods and not with reference to the law as amended thereafter.
13. The next submission of Mr. Fazeel was that the respondent Nos. 1 to 3 wrongly assumed the efficiency of the compressor motor in the air--conditioners at the figure 80% or even at 95%. This assumption was not based on any actual experiment and was theoretical and conjectural. The assumption was not even consistent. Mr. Fazeel submitted that the percentage of efficiency of a motor or engine and the corresponding loss of efficiency, must very from machine to machine and depends on several factors which it is generally not possible to calculate at a precise figure, and certain amount of guesswo rk is also involved. This uncertainty as to the figure of efficiency of a machine is reflected in the orders passed by the respondents themselves. The Deputy Collector of Customs assumed that the efficiency of an induction motor may be taken at 80% giving B. H. P'. Of 2.62 on the accepted formula, but was prepared to concede a higher figure of 85 %, giving B. H. P. At 2.78. He even went so far as to ignore efficiency and based his opinion on the date of 1. T. U. Of other brands of air-conditions, namely, "General Electric" and "Admiral" brands. He also based his opinion on the H. P. Of the compressor motor indicated by Tecumach, the manufacturers. The Collector of Customs, on the other hand, abandoned consideration of the efficiency of the machine altogether and was content to rely on the H. P. Of the compressor. In his opinion, "H. P. Requirement for operation of an air-conditioner is the H. P. Indicated on the compressor". Finally the Member, Central Board of Revenue, was prepared to concede that if mechanical efficiency in the case of air-conditioners is generally assumed at 85 %, but if taken at 20 Y. The B. H. P. Would work out at 2.95. Mr. Fazeel's contention is that in this state of uncertainty, the figure of efficiency of 92.8 per cent. Put forward by the petitioner in the light of the opinions of the P. C. S. I. R. And impaired could not be brushed aside. These opinions were more relevant as they took into consideration the efficiency of a hermetically sealed motor compressor. Mr. Fazeel submitted that the impugned orders do not indicate that they took into consideration this aspect of the case.
14. Mr. Pirzada's submission was that the figure of efficiency as well as the B. H. P. Of the machines were questions of fact and could not be investigated in a constitutional petition. But, as rightly submitted by Mr. Fazeel the Court has power to review, in the exercise of constitutional jurisdiction, the decision of a subordinate authority if it based on an erreonous assumption or an erroneous interpretation and in this connection referred to the observations of the Supreme Court in Malik Khizar Hayat Tiwana and others v. Mst. Zainab Begum (PLD 1967 SC 402) and Noora v. The Settlement and Rehabilitation Commissioner and another (1969 SCMR 517). We are inclined to agree with Mr. Fazeel. It appears to us that respondent Customs authorities assumed the efficiency of the machines imported by the petitioner at a figure which, by its very nature, is to ascertain precisely, without a practical experiment if that was possible, or if it is otherwise admitted by the suppliers themselves.
Instead, they referred to extraneous material such as standard Engineers handbooks on air- conditioning and refrigeration, which were also referred to in greater detail by Mr. Pirzada before us.
The respondents also relied on leaflets and fate concerning other brands of air-conditioners. It must be borne in mind that the provisions of the Customs Act, 1969, have to be, strictly construed, as their infriction involves penal consequences and therefore, the burden of proving unlawful import was on the customs authorities which, in our opinion, they have failed to discharge. The benefit of doubt must therefore go to the petitioner.
15. For the foregoing reasons, we would allow this petition and declare the impugned orders passed by the respondents Nos. 1 to 3, respectively as without lawful authority and void and we set aside the same. We would direct that upon payment of the customs and other dues by the petitioner, the respondents shall permit the petitioner to clear the goods. We would also direct the concerned respondents r, 2, or 3 to issue a Delay Certificate to the petitioner certifying that delay in the clearance of the goods, was no account of unavoidable requirements of the Customs for assessm ent' of goods as stated in para. 98 of the K. P. T. Manual. In the circumstances we would make no order as to costs.