Messrs OLYMPIC INDUSTRIES through Joint Director, Korangi, Karachi vs CUSTOMS, EXCISE AND SALES TAX TRIBUNAL, KARACHI, BENCH and others
This appeal arose from a dispute regarding the classification of imported denatured ethyl alcohol. The appellant imported the consignment under a valid license, classifying it under PCT Heading 2905-1100. Customs authorities reclassified the goods under PCT Heading 2207-2000, placing them on the negative list of the Import Policy Order, 1993, and imposing a fine for release. The appellant challenged this classification and the applicability of exceptions under Note 1(a), Chapter 22 of the Import Trade Control Order, 1991. The Supreme Court affirmed the Tribunal's classification findings, agreeing that the goods fell under the prohibited category and that the claimed exceptions were inapplicable. However, considering the appellant had imported the goods under a valid license for industrial use and faced significant financial loss, the Court exercised its discretion in the interest of justice. The Court held that while the classification was correct, the goods should be released upon payment of leviable taxes and duties, effectively waiving the previously imposed fine to prevent undue hardship to the importer.
- Does the Import Policy Order, 1993 override exceptions provided in the Import Trade Control Order, 1991 regarding the import of prohibited goods?
- Does the exception in Note 1(a) of Chapter 22 of the Import Trade Control Order, 1991 apply to goods not prepared for culinary purposes?
- Can the Supreme Court order the release of confiscated goods on humanitarian grounds despite a valid classification under the negative list?
- Note 1(a), Chapter 22, Import Trade Control Order, 1991
- Import Policy Order, 1993
' RASHID AZIZ KHAN, J.---Facts in brief leading to this appeal are that appellant imported 80 x 189 Kgs. Drugs of Denatured Ethyl Alcohol with 1% Methanol 74 OP Specific Gravity of 0.7896 under the licence. On arrival of the consignment, appellant presented bill of entry under classification of imported goods under PCT Heading No,2905-1100. The Customs Authorities disputed the classification of the goods and treated it under PCT Heading 2207-2000 and held that goods were on the negative list of import policy, therefore, liable to confiscation. However, they were allowed to be released on the payment of fine of Rs,30,000, in view of the fact that goods were imported under import licence duly issued. Appellant seriously disputed the decision and challenged the same in Constitutional petition before the High Court. A Division Bench of the High Court of Sindh, vide its judgment dated 29-1-1997 dismissed the petition in limine. Appellant challenged the said order by filing a petition in this Court.
2. This Court while hearing the petition, came to the conclusion that the Tribunals below in so far classification of imported goods falling under PTC Heading was concerned appears to be correct and needed no interference. However, leave to appeal was granted to consider note 1-A, in Chapter 22 of Import Trade Control Order, 1991.
3. We have heard the learned counsel for the appellant and with his assistance gone through the file as well as the relevant law. The facts which are not disputed are that appellant had imported the consignment on a valid licence. The dispute arose regarding the classification of the goods imported. Appellant while submitting the bill of entry had showed the classification of the imported goods as falling under Heading No,2905-1100, whereas the finding was that it fell under Heading No,2207-2000. As far as this aspect is concerned, it already stands concluded vide this Court's leave granting order.
' In the instant appeal leave was granted by this Court to consider appellants' contention that even if imported goods are classified under PCT Heading No,2207-2000, the same is taken out of prohibition on account of new statutory exceptions added to note 1(a) in Chapter 22 of Import Trade Control Order, 1991.
' The same contention was raised by the appellant before the Customs, Excise and Sales Tax Appellate Tribunal in Appeal No,8(261) of 1995, which was answered by learned Member (Judicial) in paragraph 10 of his judgment as follows:- "I am afraid this contention is without substance. Firstly, preamble to ' the order' makes it clear that its provisions will take effect without prejudice to any restriction, regulation or prohibition for the time being in force relating to the import of goods into Pakistan. The exception will not; therefore, affect the prohibition contained in the Import Policy Order, 1993 even if it is assumed for the sake of argument that it has the effect visualised by the appellants. Secondly, the exception relates to the products of Chapter 22 (other than those of Heading 22.09) for consumption as beverages (generally Heading No,21.03). The goods imported by appellant having not been prepared for culinary purposes, do not attract the said exception."
' We do not find any cogent reason to differ with the findings arrived at by the. Learned Member (Judicial) of the Customs, Excise and Sales Tax Appellate Tribunal in respect of the contention.
' However, the appellant in the end submitted that he has imported the goods under a valid import licence for which he has paid an amount of Rs,24,430 as licence fee and same would be put to industrial use without causing any hazard to human life, therefore, 80 drums of imported goods be ordered to be released subject to payment of customs duty, otherwise he being a poor man would suffer huge losses to the extent of Rs,4,50,000, and thereby he would be ruined.
' In the circumstances, taking sympathetic view of the matter, in the interest of justice, we dispose of this appeal with direction to the respondents to release the imported goods subject to payment of taxes and duties only leviable thereon.