GOVERNMENT OF PAKISTAN through Additional Secretary, Ministry of Finance, Islamabad and 3 others vs SANDOZ (PAKISTAN) LIMITED, BAHRIA COMPLEX, KARACHI
The respondent, Sandoz (Pakistan) Limited, manufactures a product named 'Leucophor'. The Central Excise Department, after allowing the clearance of this product for many years without excise duty, subsequently classified it under Entry No. 4.3 of the 1st Schedule to the Central Excise and Salt Act, 1944, and initiated a claim for excise duty. The core legal questions for the Supreme Court to determine involve whether 'Leucophor' falls within the ambit of Entry No. 4.3 of the 1st Schedule, which covers glazes, lusterers, lacquers, polishes, and their ancillaries; whether the respondent contravened specific provisions of the Central Excise Rules, 1944; and whether 'Leucophor' and 'Tenophal CBS-X' are comparable commodities that should be treated alike for taxation purposes. The Supreme Court granted leave to appeal to address these classification and compliance issues. The judgment establishes that the classification of goods for excise purposes and the alleged contravention of excise rules are matters requiring judicial determination by the apex court.
- Does 'Leucophor' fall within the ambit of Entry No. 4.3 of the 1st Schedule to the Central Excise and Salt Act, 1944?
- Whether the respondent contravened rules 7, 9, 52, 236, and 238 of the Central Excise Rules, 1944?
- Are 'Leucophor' and 'Tenophal CBS-X' comparable commodities that must be treated alike for excise duty purposes?
- Entry No. 4.3, 1st Schedule, Central Excise and Salt Act, 1944
- Rule 7, Central Excise Rules, 1944
- Rule 9, Central Excise Rules, 1944
- Rule 52, Central Excise Rules, 1944
- Rule 236, Central Excise Rules, 1944
- Rule 238, Central Excise Rules, 1944
ORDER
1. ' NAZIM HUSSAIN SIDDIQUI, J.---Respondent-Sandoz (Pakistan) Limited is manufacturer of product called `Leucophor'. It is alleged that the goods produced under above name were being cleared by the Excise Department without any demand of excise duty and, after lapse of many years, Central Excise Department classified said product under Entry No,4.3 of the 1st Schedule to the Central Excise and Salt Act, 1944. Excise Department set up a claim for excise duty payable thereon. Leave to appeal is granted to consider the following:--
(i) As per Entry No,4.3 glazes, lusterers, lacquers and polishes and their ancillaries in any form fall within the ambit of said entry and such are chargeable to excise duty and whether leucophor being of this category also falls within the scope of said entry.
(ii) Whether the respondent contravened rules 7, 9, 52, 236 and 238 of Central Excise Rules, 1944?
(iii) Whether `Leucophoe and Tenophal CBS-X' are comparable commodities and are to be treated alike?