FAZAL ELAHI Versus FEDERATION OF PAKISTAN

ORDER

S.A. NUSRAT, J .‑‑The judgment of the Lahore High Court dated 13th September, 1978, which is sought to be challenged in this petition for leave to appeal, was passed in the background of the following facts.

2. The petitioner company is engaged in the manufacture of nylon guts from an imported raw material known as 'caprolactum'. At an earlier 'stage of production from the same item the petitioner's factory turned out 'nylon chips' on which for quite some time no excise duty was paid. In June, 1960 it came to the notice of the Excise Authorities that the petitioners were keeping a large stock of nylon chips which was not accounted for in the relevant register maintained under the Excise Rules. This was considered to be a case of evasion of excise duty and accordingly a show‑cause notice was served upon the petitioners on 7th September, 1968. The explanation furnished by the petitioners was found unsatisfactory and the Deputy Collector, Central Excise and Land Customs, Lahore declined to withdraw the demand of Rs.49,036 for the quantity of chips consumed in the manufacture of guts from 11th June, 1966 to 11th June, 1968. The petitioners appeal against the said order was dismissed by the Collector of Customs and a revision petition to the Board of Revenue was also finally turned down on 9th January, 1973. This led to the filing of Constitutional Petition in the High Court which was dismissed as per impugned judgment.

3. The case of the petitioners shortly stated is that they are engaged in the manufacture of nylon guts from an imported raw material called caprolactum and nylon chips are an intermediary product and hence not liable to excise duty. In any case it is alleged that, levy of duty on nylon chips as well as nylon guts will tantamount to levy of double excise duty. In support of their case reliance was placed by the petitioners on certain circulars issued by the Board of Revenue.

4. We heard the learned counsel and have gone through the impugned judgment. The contentions raised on behalf of the petitioners have been thoroughly examined in the impugned judgment of the learned High Court, and the learned counsel was unable to persuade us to form a different view of the factual and legal position in the case. As a matter of fact the petitioners' case was nullified by certain admissions made by them. As for instance in one of the documents! (Annexure F) dated 25th June, 1966 it was admitted by the petitioners that nylon chips were fit to be sold and were in fact sold. Thus the plea of nylon chips forming part of an intermediary process in a continuous process in the course of production of nylon guts has no force. Reliance was finally placed by the learned counsel on a letter of the Board of Revenue dated 6th February 1975 whereby the petitioners were advised that no duty shall be demanded on nylon chips manufactured by them in use for the production of Guts within the same premises with effect from 1st September, 1973. As rightly pointed out by the learned Deputy Attorney General this letter has no retrospective effect and cannot be said to take away the force of the earlier demand. The said letter was issued in exercise of the powers of exemption vested in Board of Revenue and petitioners cannot base a right on such a concession.

5. We find that the judgment of the learned High Court is unexceptionable. The petition therefore, fails and is accordingly dismissed.

M.Y.H./F‑72/S Petition dismissed.