TASSADUQ HUSSAIN JILANI, J.---Through this appeal the appellant has challenged judgment dated 19-3-2002 vide which the learned Customs, Excise and Sale Tax Appellate Tribunal, Lahore dismissed appellant's appeal in terms as under : In the light of the aforementioned discussion and keeping in view the appellant's declaration on the Bill of Entry No,09633 dated 20-11-99 56 CBU tractors in question were not importable by the appellants and they were also not entitled to the concession of S.R.O. 921(1)/94, dated 22-9-1994.
Since their importation was subject to observance of certain procedures and eligibility to import was by specified persons which the appellants did not qualify, but those were not indicated in the negative list of the Import Policy Order; their outright confiscation is considered harsh order.
Therefore, the appellants are allowed to redeem the said 56 confiscated tractors on payment of fine equal to 25% of the assessed value in lieu of confiscation and in addition to payment of duty/taxes under the law. The penalty of Rs,1,00,000 (one lac)is reduced to Rs,15,000 (fifteen thousand )only.
2 . Facts giving rise to the instant appeal are that 56 Tractors Jaingsu Brand JS-500. 50 HP ware imported from China in CBU condition (completely built up condition), Bill of Entry (No, 09633, dated 20-11-99) was filed and exemption was claimed in terms of Notification bearing No, S.R.O. 921(1)/94 dated 22-9-94 read with order dated 19-1-98 and 30-11-98 passed in Writ Petition No,28300 of 1997.
The case of the appellant before the Collector Adjudication was that in terms of the afore-referred S.R,O. The Ministry of Food. Agriculture and Livestock had granted the requisite authorization to import/that the letter of credit was opened on 30-6-96 for 2000 Tractors, that those were imported in more than one consignments, that the final consignment was imported through letter of credit dated 3-8-99 which is subject-matter of the instant appeal, that including tractors which are sub judice in the instant case the appellant has so far imported 556 tractors. The Collector Adjudication however, vide the judgment dated 25-11-2000 held as follow "the position brought forward in the matter by the Departmental Representative as discussed above, clearly demonstrates that the subject 56 tractors imported by the respondent/importers are independent of the authorization which was accorded to them by the Ministry for importation of 2000 unit. The case is therefore, to be dealt with independently. As these 56 tractors have not been imported against any authorization according to the requirement of the Import Policy Order and that only CKD tractors are importable by the authorized manufacturer, the import made by the respondents constitutes contravention of ITC regulations. Besides exemption of Notification No S.R.O. 921(I)!94 dated 22-9- 94 is also not extendable to the respondents as has been discussed above "In the light of the afore-referred finding the tractors were confiscated and a penalty of Rs,100,000 was also imposed on the appellant. In appeal the order was upheld. However; the appellant was allowed to redeem the tractors on payment of fine equal to 25% assessed value and a penalty of Rs,1,00,000 was reduced to Rs,15,000.
3. Before learned counsel for the appellant could proceed with his submissions learned counsel for the respondent Custom Department fairly conceded that the tractors were importable however, according to him those were not entitled to the exemption under S.R.O. 921/94 dated 22-9-94 as the appellant did not fulfil the conditions without which no exemption could be claimed. In the light of the statement made by learned counsel for the respondent, appellant's learned counsel in support of this appeal made following submissions:
(i) that as it has been very fairly conceded by the respondent's learned counsel the tractors were importable the fine imposed by the Appellate Tribunal cannot be sustained in law;
(ii) that the appellant is fully entitled to the exemption granted in. Terms of the afore-referred S.R.O.
As he was duly authorised by the Ministry of Food and Agriculture to import 2000 tractors of the description mentioned in the agreement, that in terms of the said agreement a letter of credit was opened on 30-6-96, that the letter of credit relatable td the 56 tractors which are subject-matter of this appeal is dated 3-8-99 but the same was in continuation of the earlier letter of credit dated 30-6-96 as the tractors could not be imported in one bulk;
(iii) that the delay in the import of the consignment of tractors under consideration occurred on account of pendency of Writ Petition No,28300 of 1997. The writ was dismissed but 1(.2A was decided in appellantsfavour;
(iv) that the question of withdrawal of the exemption granted in terms of S.R.O. 921/94 dated 22-9- 1994 was considered by the august Supreme Court in Fecto Belarus Tractors Ltd v. Pakistan through Ministry of Finance Economic Affairs (2001 PTD 1829) wherein it was held that the respondent authorities were estopped to withdraw the exemption on the principle of promissory estoppel and canons of justice and equity:
(v) that the appellant imported the tractors under the Awami Tractor Scheme. They were allowed exemption from payment of custom duties and taxes as those tractors had to be sold at a fixed price declared by the Government, that in case the said exemption is refused even now the appellant cannot sell those tractors at the market price. In these circumstances, the appellant is likely to suffer an irreparable loss if this appeal is not allowed.
4 . Learned counsel for the Custom Department on the other hand defended the impugned judgment by submitting as under:-
(i) that the fiscal statutes have to be construed strictly;
(ii) that the letter of authorization issued in favour of the appellant by the Ministry of Food and Agriculture was conditional i,e,
(a) that the letter of credit shall be established before 30-6-1996;
(b) that the tractors would be sold at 2000 at approved price of Rs,200,000, Ex Karachi and will be caped till 30-12-1996;
(c) he quoted Maxwell Interpretation of Statutes to bring whom the point that the exemptions granted under the taxing statutes cannot be liberally construed.
5. I have heard learned counsel for the parties and have given anxious consideration to the submissions made. Before discussing the merits of the issues raised it is necessary to refer to the relevant provisions of S.R.O. 921(1)/94 and the relevant clauses of agreement between the appellant and the Ministry of Food and Agriculture which have an important bearing on-the case.
The former notification reads as under: EXEMPTION FROM CUSTOMS DUTY ON TRACTORS, IF IMPORTED BY THE AGRICULTURAL DEVELOPMENT BANK OF PAKISTAN OR BY THE IMPORTERS AUTHORIZED BY THE MINISTRY OF FOOD AGRICULTURE AND LIVESTOCK OR THE AGRICULTURAL DEVELOPMENT BANK OF PAKISTAN.
Notification No,S.R.0,921(1)/94 dated 22nd September, 1994. In exercise of the powers conferred by section 19 of the Customs Act, 1969(IV of 1969 (* the Federal Government is pleased to exempt tractors of the following description falling under the Pakistan Customs Tariff Heading No,8701. 9010 and their (*) (***) warranty parts) covered under the warranty given by manufactures (from customs duty (leviable under the First Schedule to the said Act) as is in excess of 10% ad val) if imported by the Agricultural Development Bank of Pakistan or by the importers authorised by the Ministry of Food, Agriculture and Livestock or the Agricultural Development Bank of Pakistan:--- S.No.Description
1. Belarus MTZ 50
2. Ursus 2812
3. Russian Lipetsk LTZ60 V
4. Ursus Model 3512
5. Ursus Model 4512
6. Universal U-530
7. Shanghai Model SH-50
8. Chinese Model JS-500
6. Pursuant to the afore-referred notification appellant and the Ministry of Food, Agriculture and Livestock entered into an agreement whereafter a letter of authorization was sent to the appellant which reads as under: No,F.5-5/96-SAE Government of Pakistan Ministry of Food, Agriculture &Livestock Islamabad the 27th June, 1996 SUBJECT: AUTHORIZATION TO IMPORT TRACTOR IN CBU UNDER 2ND PHASE OF AWAMI TRACTOR SCHEME The undersigned is directed to refer your letter number Nil dated 26th June, 1996 and to convey you the authorization for import of 2000 number of Jiangsu Tractors Model JS-500 under 2nd Phase of Awami Tractor Scheme.
2. It has been desired that an undertaking on the Non-Judicial Stamp Paper will be furnished as per Annexure A to Minfal in order to monitor the implementation of Awami Tractor Scheme. It is desired that guidelines given below will be followed strictly.
(1) The tractor importer will be allowed similar concessions as were allowed under the 1st Phase of Awami Tractor Scheme.
(ii) Letter of credit must be established before the 30th June, 1996
(iii) 'The Ministry will make special allocation and allotment of tractors for delivery to farmers within 30 days of arrival of each consignment which will be honoured by the tractor importers. Thereafter they will be entitled to sell their tractors.
(iv) Tractor will be sold on cash basis to the farmer but not exceeding one unit each
(v) Priority will be given to those who have made booking with ADBP and were declared unsuccessful in the ballot draw.
(vi) Booking should not exceed number of tractors to be imported against established L.C.
(vii) Fortnightly report to Minfal indicating the position of booking L.C. Established tractor delivery schedule and outstanding order will be submitted regularly.
(viii)Tractor will be sold at the approved price i,e, Rs,2,00,000 Ex-Karachi and will be ceased till 31st December, 1996. The request for increase in tractor price after the said date if any due to exchange rate fluctuation over Rs,3572/US Dollar will be allowed after the approval of Minfal.
(Sd.)
(Abdul Karim Chaudhry)
Senior Agricultural Engineer
7. The letter of credit according to the appellant was opened on 30-6-96 in terms of the afore- referred authorization issued by the Ministry of Food, Agriculture and Livestock and in the column relating to description of merchandise. It was specifically mentioned as under:- Description of merchandise 2000 tractors Model Jiangsu Brand JS-500 t USS: 4,60,000 per tractor as per pro forma invoice No, P96201026 dated 27 June, 1996 with technical specification and delivery state mentioned in Annexure B and shipment schedule given in annexure 'c'.
8. The 2000 tractors regarding which the letter of credit was established (referred to above )were not imported in one consignment. Appellant has placed on record another bill of entry (Annexure A) regarding import of 50 tractors in which letter of credit was opened on 27-3-1999 wherein there was specific endorsement/prayer to the following effect.
"With benefits of S.R.O. 921(1)/94, dated 22-9-1994 total exemption of custom duty, sale tax and all other taxes vide Lahore High Court Orders dated 19-1-1998, 30-11-1998 and 25-5-1999 vide Writ Petition No, 28300 of 1997 against bank guarantee."
The Custom Authorities cleared the goods on 17-6-1999 without payment of taxes and custom duties. Even at the time of filing of bill of entry with regard to 56 tractors which are a moot point in the instant appeal, the appellant bad made a similar prayer in the said bill of entry i,e, that the Tractors were part of the same authorization qua 2000 Tractors, that they be granted exemption in terms of S.R.O. No,921(I)/94, dated 22-9-1994 and in the light of the orders passed in Writ Petition No,28300 of 1997. In the said Constitutional petition certain interim orders were passed on the basis of which the Custom Authorities had cleared the goods. The precise prayer made in the petition was that in account of various factors eluded in this petition including delayed letter of authorization by the Ministry 2000 tractors regarding which authorization had been issued could not be imported and that respondent Custom Department be directed not to impose custom duties as well as taxes and other charges on the afore-referred tractors. The prayer was as under: "Therefore, it is respectfully prayed that the respondents Nos.1 and 2 may restrain from attempting to withdraw or amend the concessions granted under the second phase of the Awami Tractor Scheme insofar as they relate to the import of 2,000 tractors by the petitioner as per authorization granted to the petitioner under S.R.O. No,92(I)/94, It is further prayed that the respondents Nos.1 and 2 may be 'directed not to impose any further Customs Duty, Sales Tax, Regulatory Duty, Service Charge and any other tax or duty on the 2,000 tractors being imported by the petitioner in the public interest.
Any other relief which this honourable may find just and necessary may also be granted (underlining is ours).
The Constitutional petition was dismissed. However, a Division Bench of this Court-in I.C.A. No, 551 of 2000 allowed the same on 24-9-2001 and it is conceded before this Court that the goods were released in terms of the judgment passed. The respondent's learned counsel however pointed out that the afore-referred judgment in I.C.A. Has been challenged before Supreme Court but he does not deny that the judgment of this Court passed in I.C.A. No, 551 of 2000 has been suspended. In reply to the show cause with regard to the assessment of the tractors which are subject-matter of this appeal, the precise case of the appellant was "further please note this authorization to import 2000 tractors under Awami Tractor. Scheme was formally agitated with a prayer we may be allowed to import 2000 unit tractors as per provision of the said authorization ".This prayer was reiterated through a letter sent on their behalf to the Collector as far back as on 3-4-2000 in which it was specifically contended as under "
"That our client in the year 1996 was given authorization for the import of 2000 tractors under ,Awami Tractor Scheme (Phase-ii).That subsequently, a dispute arose as regards the validity of the authorization granted to our client to import the above tractors stood expired. Our client filed a Constitutional petition before the Hon'ble Lahore High Court, Writ Petition No,926 of 1996 (copy enclose as Annex-I), wherein our client adopted the stance that the delay was attributable entirely to the acts/omissions of the respondent Ministry of Food. Agriculture and Livestock, Government of Pakistan, and our client could not be penalized for the same. The Hon'ble Lahore High Court vide 'order dated 12-3-1997 (copy enclose as Annex II) was pleased to allow our client to import the tractors as per the original authorization of 2000 tractors. Subsequently at the time of the clearance of the consignment of 200 tractors, a dispute arose as regard the leviable customs duty and sale tax etc. Our client tiled another Constitutional petition before the Hon'ble Lahore High Court, Writ Petition No,28300 of 1997(copy enclosed as Annex-iii and copy of order dated 30-11-1998 is enclosed as annex-iv),which is still pending adjudication. It is respectfully brought to your attention that the Hon'ble Lahore High Court vide order dated 25-5-1999 (copy enclose as Annex- V) was pleased to order the release of another consignment of 56 tractors out of Iota! Authorizes number of 2000 tractors, without the payment of impugned duty and taxes. Further, vide order dated 11-6-1999, the Hon'ble Lahore High Court was pleased to direct that the indemnity bond and post dated cheques of the disputed amount shall be furnished by our client."
9. Neither the Collector of Customs nor the learned Appellate Tribunal adverted to this aspect and proceeded to decide the matter on a presumption that these tractors had nothing to do with the authorization issued by the Ministry of Agriculture, Food and Livestock, that the appellant had not imported the Tractors in time and that they could not claim the benefit of those exemptions. The question of withdrawal of the exemptions and the benefit granted under S.R.O'.921(I)/94 dated 22- 9-1994 came up for consideration before the august Supreme Court in Fecto Belarus Tractors Lid. v.
Pakistan (2001 PTD 1829) wherein invoking the doctrine of promissory estoppel and reiterating the law laid down by the said august Court in Pakistan v. Salahuddin etc. (PLD 1991 SC 546). The august Supreme Court at page 1845 held as under:
30. In this view of the matter, we are of the view that import of tractors by petitioner cannot be subject to the customs duty on the principle of promissory estoppel based upon justice and equity inasmuch as under the authorization letter issued the petitioner was bound down to sell the tractors at particular price with exemption from the payment of customs duty and the sales tax.
Obviously petitioner would suffer if on the one hand he has to pay the customs duty and the sales- tax and on the other hand he cannot increase the price of the tractor. The petitioner in such circumstances cannot be allowed to suffer injustice at the hands of the Government in view of its clear representation and fixation of price by the competent Authority.
32. In the case reported as the Factor Cement Ltd. v. The Collector of Customs (Appraisement )and another (1994 M LD 1136) by virtue of notification goods were exempted from the sale tax but the said notification was subsequently withdrawn and was substituted by a subsequent notification.
Petitioners acting upon the initial notification being exempted from the payment of sales tax had opened the letter of credit and imported the goods in question. After withdrawal of the notification, sales tax was demanded which was resisted and the controversy became the subject of adjudication and it was held that petitioners were entitled to avail the benefit under the earlier notification notwithstanding its supersession by subsequent notification for vested right had been acquired by petitioner and the provision of section 31-A of the Customs Act could not be pressed into service nullifying the effect of exemption granted by earlier notification. "
10. Admittedly the Tractors subject-matter of this appeal were sought to be cleared by the appellant as part of the second phase of Awami Tractor Scheme and the tractors subject of the case before the august Supreme Court in the afore-referred precedent case-law pertained to the same; phase of Awami Tractor Scheme. These tractors therefore cannot be treated differently.
For what has been discussed above respectfully following the dictum laid down by the Supreme Court and the judgment of this Court in I.C.A. No,551 of 2000 we allow this appeal set aside the impugned judgment dated 19-3-2002 passed by the Customs, Excise and Sales Tax Appellate Tribunal Lahore as also the judgment of Collector Adjudication dated 25-11-2000 and direct that the tractors subject-matter of this appeal shall be cleared forthwith without payment of custom duties and other charges in terms of S.R.O. 921(1)/94, dated 22-9-94. It is however, made clear and as undertaken by the appellant's learned counsel the appellant shall sell the tractors at a price to which they had agreed in terms of their authorization issued by the Ministry of Agriculture, Food and Livestock. The Secretary of the said. Ministry shall issue the requisite policy/instruction in the spirits of the Awami Tractor Scheme within a month of the receipt of this judgment.