MESSRS EXCIDE PAKISTAN LTD. Versus CENTRAL BOARD OF REVENUE

ORDER

1. AJMAL MIAN, J .-- The petitioner through this petition has impugned respondent's action to levy on the lead oxide. The brief facts leading to the filing of the above petition are that the petitioners have been manufacturing batteries and for that purpose have been importing the requisite raw material and one of such raw materials is lead which is converted by chemical process into lead oxide. The lead oxide is used for manufacturing the batteries. The grievance of the petitioner is that for over two decades the petitioners have been manufacturing batteries but at no point of time respondent department demanded excise on lead oxide. In this behalf we may point out that the point raised by the petitioner is covered by a judgment of a Division Bench of this Court namely, in the case of Commissioner of Sales Tax, Central Zone 'A', Karachi v. Messrs Pakistan Cables Limited, Karachi 1988 P T D 54 in which while construing the provision of section 3 of the Sales Tax Act, it has been held that if the manufacturer retains a manufactured item for its further use in terms of clause (d) of subsection (6) of section 3 of the Sales Tax Act (hereinafter referred to as the Act), then by virtue of the proviso clause, the same will amount to a sale and the liability to pay sales tax will accrue at the point of time when the product is used for further manufacture. In the instant case it cannot be denied that lead oxide is a marketable item independently though in the present case, according to the petitioners, they are using the same for their own products.

2. However, Mr. Anwar Mansoor, learned counsel for the petitioner has attempted to distinguish the above-reported case by referring to section 27 of the Act which, according to him, provides for the refund on the partly manufactured goods after their use in case the tax was paid at the time of the importation or purchase.

3. In our view, the above section 27 does not make any difference as it deals with a different situation than what has been provided in clause (d) of subsection (6) of section 3 of the Act.

4. Since we are bound by the above judgment of the Division Bench, we dismiss the above petition in limine.

5. M.B.A./ E-16/ K Petition dismissed.