COLLECTOR, CENTRAL EXCISE AND LAND CUSTOMS, HYDERABAD and another
This civil petition for leave to appeal challenged a judgment of the High Court of Sindh, which had allowed a constitutional petition filed by the respondents regarding the imposition of regulatory duty on imported goods. The core legal question before the Supreme Court was whether the regulatory duty imposed by the petitioners under Section 18(2) of the Customs Act, 1969, exceeded the permissible statutory limits. The High Court, relying on the precedent set in Yousuf Re-Rolling Mills v. Collector of Customs (PLD 1988 SC 232), had concluded that the regulatory duty could not exceed 50% of the customs duty rate specified in the First Schedule. In this case, as the customs duty was 20% ad valorem, the regulatory duty was capped at 10%. The Supreme Court affirmed the High Court's interpretation, finding no legal infirmity in the decision. The Court held that the regulatory duty imposed at 30% was excessive and unlawful, thereby upholding the principle that regulatory duties must strictly adhere to the statutory limitations prescribed in Section 18(2) of the Customs Act, 1969.
- Does Section 18(2) of the Customs Act, 1969, limit the regulatory duty to 50% of the customs duty rate specified in the First Schedule?
- Can a regulatory duty imposed on imported goods exceed the statutory ceiling prescribed by Section 18(2) of the Customs Act, 1969?
- Section 18(2), Customs Act 1969
- Section 25, Customs Act 1969
ORDER
' HAMID ALI MIRZA, J.---This civil petition for leave to appeal is directed against the judgment dated 20-12-1999 in Constitutional Petition No,D-1263 of 1986 (Modern Textile Mills Limited v. Collector of Central Excise and Land Customs and another) passed by a learned Division Bench of the High Court of Sindh, whereby the Constitutional Petition filed by the respondents was allowed to the extent that they are liable to pay regulator duty at the rate of 10% of the import of the goods, i.e, Rs,3,78,885 and Rs,4,48,680 on the two consignments.
2. The facts of the case need not be stated here as they have been elaborately stated in the impugned judgment.
3. We have heard the learned counsel for the parties and perused the record.
4. The contention of the learned counsel for the petitioners is that the learned High Court has not correctly interpreted section 18(2) of the Customs Act, 1969.
5. Section 18(2) of the Customs Act, 1969 reads:-- ' "the Federal Government may, by Notification in the Official Gazette, levy, subject to such conditions, limitations or restrictions as it may deem fit to impose, a regulatory duty on all or any of the articles specified in the First Schedule at a rate not exceeding fifty per cent of the rate, if any, specified therein or at a rate not exceeding hundred per cent of the value of such articles, as determined under section 25 and may by a like notification, levy a regulatory duty on all or any of the articles exported from Pakistan:-
(i) in the case of articles enumerated in the Second Schedule at a rate not exceeding thirty per cent of the rate specified in the Second Schedule or of the amount which would represent the value of such articles as determined under section 25; and
(ii) in the case of article not enumerated in the Second Schedule, at the rate not exceeding thirty per cent of the amount which represents the value of such articles as determined under section 25."
The learned Division Bench of the High Court while relying upon the decision of this Court Yousuf Re-Rolling Mills v. Collector of Customs PLD 1988 SC 232 came to the conclusion that such duty cannot exceed the rate of 50% of the rate of duty mentioned in the Schedule. Admittedly, the rate of customs duty under the Schedule was 20% ad valorem the regulatory duty imposed, therefore, it could not exceed the rate of 10%. Thus, the regulatory duty at the rate of 30% ad valorem could not be claimed by the petitioner/respondent.
6. We do not find any legal infirmity in the impugned judgment. There has been no improper interpretation of section 18(2) of the Customs Act, 1969. Leave is refused and the petition is dismissed.