COLLECTOR OF CUSTOMS VS IBRAHIM FIBERS LTD., 2013 PTD-KARACHI-HIGH-COURT-SINDH 2025 (2013)

(a) Customs Act (IV of 1969)---

----Ss. 19(3) [as inserted by Customs (Amendment) Ordinance (XLVIII of 2002) w.e.f. 7-6-2002], 30 & 31-A---Protection of Economic Reforms Act (XII of 1992), S.6---S.R.O.369(I)/2000, dated 17-6-2000---S.R.O. 439(I)/2001, dated 18-6-2001---Polyester Staple Fibre Manufacturing Plant, import of---First unit of such plant arrived in Pakistan in May, 2001 on basis of Bill of Entry dated 10-5-2001---Bill of Entry for second unit of such plant filed after 19-6-2001---S.R.O. 369(I)/2000, dated 17-6-2000 exempting such plant from customs-duty was amended subsequently vide S.R.O.439(I)/2001, dated 18-6-2001---Demand of customs-duty @ 5% ad valorem on import of such second unit of plant under S.R.O. 439(I)/2001---Plea of importer was that second unit being part of one plant was in continuation of first unit, thus second unit was entitled to complete exemption from customs-duty under S.R.O. 369(I)/2000---Validity---Such second unit for being a separate plant could not be regarded as spare parts being imported for use in first imported unit already installed---Import of complete plant in one or successive shipments and its arrival in different lots and at different times would be irrelevant for such S.R.Os.---Shipment of complete unit in different lots would not and could not mean nor did such S.R.Os. require that such shipments be treated or regarded as one composite whole---Both such imported units would be treated and dealt with separately on basis of law applicable at time of filing of Bill of Entry for each unit---Provisions of subsection (3) inserted in S.19 of Customs Act, 1969 w.e.f. 7-6-2002 would not take away benefit accrued to an importer having filed Bill of Entry prior to such date, thus, same would not apply in relation to both such units---S.R.O. 369(I)/2000 for not having a specific term of its duration was not covered by S.6 of Protection of Economic Reforms Act, 1992, thus, protection and benefit provided thereunder would not apply to such S.R.O.---S.R.O. 439(I)/2001 was in force when Bill of Entry for second unit was filed, thus, importer would be entitled to exemption in respect of second unit in terms thereof and not otherwise.

Ibrahim Fibres Ltd. v. Collector of Customs (Appraisement)and another 2009 PTD 1902; Nishat Mills Ltd. v. Federation of Pakistan 2005 PTD 495; Karim Ghee and Oil Mills (Pvt.) Ltd. v. Federation of Pakistan and others 2005 PTD 634; Sitara Chemical Industries Ltd. v. Collector of Customs (Appraisement) and another 2005 PTD 729; Fecto Belarus Ltd. v. Government of Pakistan and others 2009 PTD 390; Molasses Trading and Export (Pvt.) Limited v. Federation of Pakistan and others 1993 SCMR 1905; Al-Hamra Industries v. Federation of Pakistan 2005 PTD 2505; Gatron and Bhadilia Industries Ltd. v. Government of Pakistan and others 1999 MLD 2994; Commissioner of Income Tax v. Gulf Edible Oils (Pvt.) Ltd. 2006 PTD 2854; Elahi Cotton Mills v. Federation of Pakistan PLD 1997 SC 582; Celanese Pakistan Ltd. v. Government of Pakistan and others 2002 PTD 2874 andLucky Cement Ltd. v. Central Board of Revenue and others PLD 2001 Pesh. 7 ref.

(b) Protection of Economic Reforms Act (XII of 1992)---

----S. 6 & Sched.---Protection of fiscal incentives for setting up of industries---Applicability---Such protection would be applicable, if notification issued under fiscal statute had a specific term for its duration, otherwise not---Principles.

Section 6 in relation to "fiscal incentives" provided "for investment" through "statutory orders listed in the Schedule to the Protection of Economic Reforms Act, 1992 "or otherwise". In respect of such fiscal incentives, section 6 provides that they "shall continue in force for the term specified therein" and will not be "altered to the disadvantage of the investors". For section 6 to be applicable, the relevant "statutory order" must have a "term" specified "therein". The reason is obvious. If no such term is specified therein, then the prohibition contained in the Section (which is protection thereby provided) would not be applicable. Thus, in respect of a notification issued under a fiscal statute, it must have a specific term for its duration, as specified therein. It is only then the protection of Section 6 is applicable. This is also clear from the notifications listed in the Schedule to the Act.

The protection provided by Section 6 is specifically and directly linked to the requirement that the notification have a specific period or duration specified in it.

Sarfraz Ali Metlo for Appellants.

Kh. Shamsul Islam for Respondent.

Dates of hearing: 12th and 20th March, 2013.

ORDER

MUNIB AKHTAR, J.---The appellants (for convenience, together referred to as the "Department") have preferred this appeal against judgment and decree in Suit 880 of 2001, which had been filed by the respondent company and which was decreed as prayed by the learned single Judge. The impugned judgment is reported as Ibrahim Fibres Ltd. v. Collector of Customs (Appraisement) and another 2009 PTD 1902. The suit was filed, and the appeal arises, in the following circumstances.

2.The petitioner is engaged in the manufacture of polyester staple fiber (PSF), which is a man made fiber used, inter alia, in the making of textile products. It appears that the petitioner imported the necessary plant and machinery and set up its unit in the Punjab in the mid-nineties. The plant and machinery was imported under a notification granting exemption from customs-duty. However that notification is not the subject matter of the present dispute. Subsequently, the petitioner decided to import another plant for the manufacture of PSF, to be installed, it appears, as a unit at its factory premises. The plant was in CKD (completely knocked down) form and was imported in several consignments. Although some of the record appears to indicate that this plain was by way of an expansion of the existing unit, both before us and the learned single Judge, the case was argued (in our view, quite correctly) on the basis that the imported machinery and equipment constituted a separate unit in its own right. The question which requires resolution is as to whether any customs-duty is payable in respect of this second unit. The respondent contends, which was accepted by the learned single Judge, that the entire plant and machinery of the second unit is wholly exempt from payment of any such duty. The Department accepts that the first consignment was wholly exempt from duty, and this is not therefore in dispute. However, the Department contends that the remaining consignments were only partially exempt from duty. These consignments, which would appear to constitute the bulk of the machinery and equipment, total 20 in all.

3.By means of S.R.O. 369(I)/2000 dated 17-6-2000 ("S.R.O. 369"), issued under section 19 of the Customs Act, 1969, the Federal Government was pleased to exempt from customs-duty the plant, machinery and equipment as was imported for use by various industries listed in the three tables of the notification, and as was not manufactured locally. The exemption was to varying degrees, ranging from a complete exemption to a partial exemption of duties in excess of 10% ad valorem. Table II, to which the latter, partial exemption applied, listed different types of chemical industries, and included the following entry: "Petro-chemicals and their down stream products (including fibers)". This is the entry that applies to the respondent. On 29-1-2001, S.R.O. 369 was substantially amended by notification S.R.O. 63(I)/2001 ("Amending Notification"). This notification wholly substituted the existing second and third tables of S.R.O. 369 with completely new tables. The operative or main paragraphs of the notification were also altered. The effect of the Amending Notification (and this is not in dispute) was that the aforementioned entry, relevant for the respondent, was shifted from the original Table II to the newly substituted Table III. The plant and machinery (as before, not locally manufactured) which was imported for purposes of the industries listed in the substituted Table III was wholly exempt from customs-duty. Thus, and this is central to the respondent's claim, from 29-1-2001 onwards, the plant and machinery being imported for the second unit was entirely exempt from customs-duty.

4.The first consignment (or lot) of the plant and machinery arrived in Pakistan in or around May, 2001, and the bill of entry was presented on or about 10-5-2001. The bill of entry had typed on it the following statement (in capital letters): "LOT NO.1. PARTIAL SHIPMENT OF COMPLETE POLYESTER STAPLE FIBER MANUFACTURING PLANT". Exemption from customs-duty was claimed on the basis of S.R.O. 369, as amended by the Amending Notification, and specific reference was made to the entry therein relating to petrochemicals already referred to. As noted, there is no dispute in relation to this consignment.

5.On 18-6-2001, in exercise of its powers under section 19 of the Customs Act, the Federal Government was pleased to issue S.R.O. 439(I)/2001 ("S.R.O. 439"). This superseded S.R.O. 369, as amended. (Henceforth, all references to the latter notification will be as amended.) S.R.O. 439 also granted exemption from customs-duty for the import of plant, machinery and equipment as was not manufactured locally and as used by various industries, as listed in the three tables thereof. However, the major difference between this notification and the earlier one was that now there was no complete exemption from customs-duty. Insofar as is presently relevant, the entry being relied upon by the respondent was in Table II, and this exempted customs-duty as was in excess of 5% ad valorem.

6.It appears that the bills of entry in respect of the remaining consignments of the second unit were filed after 18-6-2001, i.e., after S.R.O. 439 had been issued and replaced S.R.O. 369. These dates ranged from 5-7-2001 to 4-10-2002. In respect of these consignments therefore, the Department demanded customs-duty at 5% ad valorem. The respondent however took the plea that these consignments were but part of one plant and constituted a connected series that was in continuation of the first consignment. Since the latter was admittedly entitled to the benefit of S.R.O. 369 it was claimed that the remaining consignments were also likewise so entitled, with the result that all the lots were wholly exempt from customs-duty. For this claim, the respondent placed reliance on section 6 of the Protection of Economic Reforms Act, 1992 ("1992 Act"). The provision relied upon is as follows:--

"6. Protection of fiscal incentives for setting up of industries.---The fiscal incentives for investment provided by the Government through the statutory orders listed in the schedule or otherwise notified shall continue in force for the term specified therein and shall not be altered to the disadvantage of the investors."

Thus, the respondent's case was that S.R.O. 369 came within the ambit and scope of section 6 and for that reason this notification had to be regarded as continuing in force for all of the remaining consignments as well. It is also pertinent to note that all of the remaining consignments, whose bills of entry were filed after 18-6-2001, had certain declarations typed on them, which stated the respondent's claim in this regard. While the language used in each bill of entry varied somewhat, in substance the declarations remained the same, and were as follows on one of the bills of entry (capital letters being used; typographical errors not corrected):--

"1. THIS CONSIGNMENT SHOULD BE EXEMPTED FROM WHOLE OF CUSTOM DUTY IN CONTINUATION OF OUR PREVIOUS CONSIGNMENT WHICH HAD ALREADY BEEN CLEARED VIDE B/E NO.F-344 DT. 17-6-2000. AS AMENDED VIDE TEMP S.R.O. 9364(I)/2001 DT. 29-1-2001 UNDER ITEM 10 "PETRO CHEMICAL/PETRO CHEMICALS DOWN STREAM PRODUCTS (INCLUDING FIBRES)" OF THE "CATEGORY OF GENERAL/MISC "OF TABLE III, OVER AND ABOVE THE BENEFITS AVAILABLE UNDER THE NEW S.R.O.439(I)/2001 ISSUED ON 18-6-2001.

2. WE FULFILL ALL THE PRECONDITIONS LAID DOWN IN S.R.O. MENTIONED HERE IN ABOVE AT SERIAL NO.1.

3. THE PLANT WILL BE USED FOR THE MANUFACTURING OF FIBRES MORE SPECIFICALLY POLYESTER STAPLE FIBRE.

4. WE ARE MANUFACTURING OF POLYESTER STAPLE FIBRE AND OUR EXISTING PLANT HAS BEEN CLEARED UNDER S.R.O. 484(I)/92 DT. 15-5-1992,THECOMPANYIS EXPANDING ITS CAPACITY BY INSTALLING ADDITIONAL COMPLETE POLYESTER STAPLE FIBRE PLANT WITHIN THE SAME BOUNDARY WALL AT CHAK NO.61/RB TEHSIL JARANWALA DISTRICT FAISALABAD."

7.The Department did not accept the respondent's position. Its stand was that each consignment was to be treated separately and could not be regarded as being in continuation of the first one and hence entitled to the benefit available for the latter. In this regard, reliance was placed on sections 30 and 31-A of the Customs Act. Before us, learned counsel for the Department also relied, inter alia, on subsection (3) of section 19 of the Customs Act to contend that section 6 of the 1992 Act did not have any application. Subsection (3) was added to section 19 by the Customs (Amendment) Ordinance, 2002 promulgated on 7-6-2002. It was provided that subsection (3) was to be deemed always to have been so added to section 19. This provision is as follows:--

"(3) Notwithstanding anything contained in any other law for the time being in force, including but not limited to the Protection of Economic Reforms, 1992 (XII of 1992), and notwithstanding any decision or judgment of any forum, authority or court, no person shall, in the absence of a notification by the Federal Government published in the official Gazette expressly granting and affirming exemption from customs duty, be entitled to or have any right to any such exemption from or refund of customs duty on the basis of the doctrine of promissory estoppel or on account of any correspondence or admission or promise or commitment or concessionary order made or understanding given whether in writing or otherwise, by any government department or authority."

Thus, the Department's position was, and is, that on any view of the matter, the consignments imported by the respondent (other than, of course, the first) were only entitled to the benefit of the subsequent notification, S.R.O. 439, and hence 5% customs-duty was payable in respect thereof.

8.Being aggrieved by the stand taken by the Department, the respondent filed the suit out of which this appeal arises. The Department filed its written statement, and the following issues were framed by the Court:--

"(1) Whether the suit is not maintainable?

(2) Whether the plaintiff has acquired vested right to clear the suit consignment in terms of S.R.O.369(I)/2000, dated 17-6-2000 as amended vide S.R.O. (sic)(I)/2001, dated 29-1-2001 read with section 6 of the Protection of Economic Reforms Act, 1992 read with Customs General Order No. 12 of 1981?

(3)Whether S.R.O. 439(I)/2001, dated 18-6-2001 is not in accordance with law?

(4)What should the decree be?"

(We may note that the notification identified in issue No. 2 as "S.R.O. (sic)(I)/2001, dated 29-1-2001" is in fact the Amending Notification.) Since the matter turned essentially on an examination of undisputed documents and the law, no evidence as such was led by the parties. After hearing learned counsel and considering the record the learned single Judge was pleased to decide all the issues in favour of the respondent and against the Department. As a result, the suit was decreed as prayed. The respondent was declared entitled to the import of all the consignments without any payment of customs-duty.

9.Learned counsel for the Department, the appellant before us, submitted that the various consignments as imported by the respondent were to be treated on the basis of the exemption notification as applicable on the date on which the relevant bill of entry was presented. This followed directly from sections 30 and 31-A of the Customs Act. Thus, in respect of the consignments, other than the very first, duty was payable (of course at the exempted rate) since at that time S.R.O. 439 held the field, and not the earlier S.R.O. 369. The reliance placed on the latter was contrary to law. Learned counsel submitted that S.R.O. 439 had been lawfully issued and was fully attracted and applicable. S.R.O. 369 had been validly superseded and no longer applied. Insofar as section 6 of the 1992 Act was concerned, learned counsel submitted that it had no application in the facts and circumstances of the case, but that its effect had in any case been nullified by the aforementioned sub-section (3) of section 19. Learned counsel emphasized that by the deeming provision, subsection (3) was to be applied as though it had always been a part of the Customs Act. Learned counsel relied on three Division Bench judgments of this Court reported as Nishat Mills Ltd. v. Federation of Pakistan 2005 PTD 495, Karim Ghee and Oil Mills (Pvt.) Ltd. v. Federation of Pakistan and others 2005 PTD 634 and Sitara Chemical Industries Ltd. v. Collector of Customs (Appraisement) and another 2005 PTD 729 in support of his submissions. Reference was also made to Fecto Belarus Ltd. v. Government of Pakistan and others 2009 PTD 390 (IHC; SB). Learned counsel also submitted that the suit was not maintainable and that the learned single Judge had erred materially in coming to the contrary conclusion. Certain other case-law was also cited by learned counsel in the written synopsis filed by him.

10.Learned counsel for the respondent defended the impugned judgment and decree and submitted that the learned single Judge had rightly decreed the suit as prayed. Learned counsel submitted that the first consignment, as to which there was no dispute that it was wholly exempt from customs-duty, had as it were crystallized the position and the subsequent consignments were to be treated in the same manner as the first one. This was because all the consignments taken together constituted the plant that was being imported by the respondent. Learned counsel, in addition to relying on S.R.O. 369 also referred to the Finance Ordinance, 2001. By this Ordinance, the First Schedule to the Customs Act was substituted in its entirety. Learned counsel referred to Chapter 99 of the substituted First Schedule. This Chapter had many sub-chapters, of which the seventh related to "project imports". Learned counsel referred to the notes of this sub-chapter. His contention was that the concept of the importation of a "plant", which would constitute all the machinery and equipment in relation thereto taken as a whole, was fully recognized by the Customs Act. The respondent's imports had to be treated in like manner, i.e., as a plant and hence the full exemption was available as was being claimed. Learned counsel further submitted that section 6 of the 1992 Act was fully attracted to the facts and circumstances of the present case. Learned counsel also relied on certain case-law, as stated in the written synopsis filed by him.

11.We have heard learned counsel, examined the record with their assistance and considered the case-law relied upon. Before proceeding further, one point can be conveniently disposed off first. Both before the learned single Judge (see issue No. 2) and us, learned counsel for the respondent also relied on Customs General Order (CGO) 12 of 1981. It was submitted that the respondent was entitled to a complete exemption from customs-duty on the basis of this CGO as well, and the learned single Judge accepted this submission. The text of the CGO has been reproduced in the impugned judgment (pg. 1915 of the report). We are of the view that this CGO provides no assistance to the respondent. The reason is that on the face of it the CGO applies in relation to spare parts subsequently imported for plant and machinery already imported and/or installed. The consignments now under consideration constitute a separate plant in its own right (the second unit) and cannot in any manner be regarded as spare parts being imported for use in the first unit already installed. CGO 12/1981 is of no relevance whatsoever.

12.In our view, the following points arise for determination in this appeal:--

(a)Whether the consignments under consideration are to be regarded as part of one connected series and treated as an indivisible whole or as separate lots to which the law would apply as it stood on the date of presentation of the relevant bill of entry?

(b)Whether S.R.O. 369 was entitled to the protection and benefit of section 6 of the 1992 Act?

(c)What was the effect of the insertion of subsection (3) of section 19, especially in view of the deeming provision?

These points are in fact inter-related and are therefore taken up together.

13.In order to determine how the various consignments that were imported are to be treated, one has in the first instance to look at S.R.O. 369. That, after all, is the exemption notification that is being relied upon. In our view, when this notification is read as a whole it applied (as presently relevant) (a) to those industries that were listed in its various tables, (b) in respect of plant, machinery and equipment being imported by those industries, and which (c) was not manufactured locally. In fact, the subsequent S.R.O. 439 also applied in this manner. It is clear that any particular importer of an industry listed in the tables was not limited only to importing an entire unit. The importer could import any plant, machinery and equipment as long as it qualified. Whether the said plant, machinery and equipment came in one consignment or was shipped in successive shipments and hence arrived in different lots at different times was irrelevant. Furthermore, it is clear from the language of the notification that if the importer was bringing an entire plant or unit into the country only so much thereof was entitled to the benefit of the exemption as was not manufactured locally. Thus, for example, if the plant came in five shipments, it could be that the machinery and equipment in three was not manufactured locally and hence entitled to the exemption, whereas that in the remaining two was so manufactured and hence not so entitled. In our view therefore, simply because the respondent was importing a complete unit, shipped in different lots, that did not and could not mean, nor did the notification require, that all the consignments be treated or regarded as one composite whole.

14.The reference made by learned counsel to Chapter 99 of the First Schedule to the Customs Act, as substituted by the Finance Ordinance, 2001 (see para 10 above) is also, with respect, not relevant. The First Schedule of course specifies the duties of customs chargeable in respect of the importation of the various goods as specified therein. What sub-chapter-VII of Chapter 99 did was to recognize that it could be that machinery and equipment was being imported "for setting up of a complete plant" (see Note. 1). If so, then all the machinery and equipment would be chargeable to duty at the rate specified in the sub-chapter even if, had any particular part or component been imported separately, it may have been liable to a higher rate of duty under some other Chapter of the First Schedule. This was certainly of benefit when the duty so chargeable was higher than that provided in the sub-chapter. However, if the duty were lower, the sub-chapter would obviously not have prevented the importer from paying duty at the lower rate in respect of the part or component involved. Likewise, the question of exemption from duty in terms of a notification issued under section 19 could not be determined on the basis of what was stated in the sub-chapter. To put it differently, what the sub chapter, if at all applicable, did was to place a "cap" on the duty. However, it did not determine whether, and if so to what extent, the importer was entitled to an exemption, either in whole or in part, in respect of what was being imported. That is, the sub-chapter did not relate to an issue where the duty was less than the "cap", and this was so regardless of whether this situation arose out of a lower rate of duty being specified elsewhere in the First Schedule or because of an exemption notification.

15.In our view therefore, the various consignments imported by the respondent in the present case were to be treated separately, on the basis of the law as it stood at the time that the relevant bill of entry was presented in respect of the consignment concerned.

16.As is obvious, on this basis the consignments other than the first would have to be dealt with in light of S.R.O. 439 since that was in force at the relevant time, and not S.R.O. 369, which was in the field only when the bill of entry for the first consignment was presented. This result would follow from section 30 of the Customs Act (if necessary read with section 31-A). This therefore brings us directly to the question whetherS.R.O. 369 enjoyed the protection of section 6ofthe1992Act (hereinafter "Section 6"),andtherelatedissueofwhetherandifso how and to what extent that benefit was taken away by the addition of subsection (3) to section 19 of the Customs Act (hereinafter "Subsection (3)"). The two provisions have been reproduced above. We start by considering the effect of subsection (3). The reason is that it was deemed always to have been inserted in the Customs Act, and learned counsel for the Department contended that this was a complete answer to the case put forward by the respondent on the basis of section 6.

17.Subsection (3) was inserted by an Ordinance that was promulgated on 7-6-2002. In our view, the deeming provision in respect of subsection (3) is no different from that which was used when section 31-A was inserted into the Customs Act by means of the Finance Act, 1988. The Supreme Court, in Molasses Trading and Export (Pvt.) Ltd. v. Federation of Pakistan andothers 1993 SCMR 1905 ("Molasses Trading") has held in relation to section 31-A that notwithstanding that it was deemed always to have been added to the Customs Act, it could not apply to those bills of entry which had been presented before the date from which the Finance Act became effective. It could not therefore take away any benefit as had accrued to an importer who had filed his bill of entry prior to that date. In our respectful view, subsection (3) is to be treated in the same manner as section 31-A, and therefore, notwithstanding the deeming clause, it could not have effect in relation to those bills of entry that had already been presented before 7-6-2002. It is to be noted that the purpose of section 31-A was to nullify the effect of a principle judicially evolved, namely that established by the well known decision of the Supreme Court in Al Samrez Enterprise v. Federation of Pakistan and others 1986 SCMR 1917. In the present case, the issue relates to section 6 of the 1992 Act, i.e., the question is the extent to which subsection (3) has displaced a protection or benefit conferred by statute itself. In our respectful view, the position in the present case is therefore, if anything, stronger than was the situation in Molasses Trading. Therefore, the principle laid down therein is all the more applicable. In the present case, it appears that in respect of almost all the consignments (excepting perhaps two), the bills of entry were presented well before 7-6-2002. In our view therefore, subsection (3) would not apply in relation to such consignments.

18.The case-law relied upon by learned counsel for the department in relation to subsection (3) (see para 9 above) does not, with respect, provide any assistance. As has been noted, three of the cited decisions are by Division Benches of this Court. We summoned the record of the petitions that were decided by those cases. In Nishat Mills Ltd. v. Federation of Pakistan 2005 PTD 495 ("Nishat Mills"), the record indicated that the relevant acts, such as opening of the letters of credit, etc. and therefore necessarily the presentation of the bills of entry, were done after subsection (3) had come into force. Likewise, in Karim Ghee and Oil Mills (Pvt) Ltd. v. Federation of Pakistan and others 2005 PTD 634 all the relevant acts were done after subsection (3) had come into force. Obviously, the principle laid down by the Supreme Court in Molasses Trading did not apply in these cases and hence it is not surprising that the petitions were dismissed. In Sitara Chemical Industries Ltd. v. Collector of Customs (Appraisement) and another 2005 PTD 729, the bill of entry was presented on 13-7-2001. The attention of the learned Division Bench was not however, drawn to Molasses Trading, and counsel for the petitioner conceded that his petition was covered by the decision in Nishat Mills. On this concession the petition was dismissed. With the utmost respect, this decision does not provide any assistance to learned counsel for the Department nor can it stand in the way of the application of the principle laid down in Molasses Trading to subsection (3), since the Supreme Court decision was not referred to, and the point was in any case conceded by counsel. Insofar as the decision of the Islamabad High Court relied upon is concerned, that turned onitsownfacts,whichwereratherdifferentfromthoseathand.

19.Since in our view subsection (3) did not apply in respect ofthose bills of entry which had already been filed before 7-6-2002, and almost all the consignments fell in this category, this leads directly to the third issue, namely whether S.R.O. 369 enjoyed the protection of section 6 of the 1992 Act. Section 6 applies in relation to "fiscal incentives" provided "for investment" through "the statutory orders listed in the Schedule" to the 1992 Act "or otherwise". In respect of such fiscal incentives, the section provides that they "shall continue in force for the term specified therein" and will not be "altered to the disadvantage of the investors". As presently relevant, for section 6 to be applicable, the relevant "statutory order" must have a "term" specified "therein". The reason is obvious. If no such term is specified therein, then the prohibition contained in the section (which is the protection thereby provided) would not be applicable. Thus, in respect of a notification issued under a fiscal statute, it must have a specific term for its duration, as specified therein. It is only then that the protection of Section 6 is applicable. This is also clear from the notifications listed in the Schedule to the 1992 Act. These were S.R.O. 1283(I)/90 and S.R.O. 1284(I)/90, both dated 13-12-1990. The first had been issued under the Income Tax Ordinance, 1979 and the second under the Customs Act. Both had specific durations expressly stated therein: from 1-12-1990 to 30-6-1995. An example of how section 6 applies is also provided by another notification, in which the period of duration was specifically stated. This was S.R.O. 508(I)/1995 dated 14-6-1995, issued under the Customs Act, which specifically provided that it was to remain in force till 30-6-1996. Section 6 was held applicable in relation to this notification by a Division Bench of this Court in Al-Hamra Industries v. Federation of Pakistan 2005 PTD 2505. The relevant facts were that letters of credit for the import of certain goods were opened on 14-4-1996 and 25-4-1996. The goods arrived in Pakistan on 15 and 17-6-1996. In between, S.R.O. 508 had been superseded and replaced by S.R.O. 444(I)/96 dated 13-6-1996 (which also granted an exemption but on less advantageous terms). It was held that notwithstanding this, the importer was entitled to the benefit S.R.O. 508 by reason of section 6. (We may note that although reported in 2005, the judgment in Al-Hamra Industries was announced on 3-10-2000, i.e. long before the insertion of subsection (3).)

20.The key question therefore is whether S.R.O. 369 had a specific term or period or duration specified in it? To this question, the answer must be in the negative. We can find no such provision in the notification. Thus, one of the key ingredients of section 6 is missing. As noted, the protection provided by section 6 is specifically and directly linked to the requirement that the notification have a specific period or duration specified in it. It therefore necessarily follows that S.R.O. 369 was not covered by section 6, and the protection and benefit provided by the latter did not extend to this notification.

21.Some of the case-law relied upon by learned counsel for the respondent may also be considered. Gatron and Bhadelia Industries Ltd. v. Government of Pakistan and others 1999 MLD 2994 (SHC; DB) involved consideration of S.R.O. 1284(I)/90 dated 13-12-1990, the very notification mentioned in the Schedule to the 1992 Act. This obviously is not the case here and therefore this decision provides no assistance. CommissionerofIncomeTaxv.Gulf Edible Oils (Pvt.)Ltd.2006PTD 2854 involved an issue of income tax, and the applicability of section 80-D of the Income Tax Ordinance, 1979 in view of section 6. The learned Division Bench applied the relevant observations of the Supreme Court in Elahi Cotton Mills v. Federation of Pakistan PLD 1997 SC 582 in this regard. The facts and issues involved in the cited decision were thus quite different from those at hand. Celanese Pakistan Ltd. v. Government of Pakistan and others 2002 PTD 2874 involved resolution of an issue that is unrelated to the dispute at hand. Lucky Cement Ltd. v. Central Board of Revenue and others PLD 2001 Peshawar 7 did not raise any issues relating to or under the 1992 Act, although we may note in passing that the notification involved apparently was for a specific duration (see at pg. 10).

22.In view of the foregoing discussion, we conclude that S.R.O. 369, the notification relied upon by the respondent was not protected or covered by section 6 of the 1992 Act. Furthermore, the various consignments in terms of which the second unit was imported were to be treated and dealt with separately on the basis of the law as it stood on the date that the relevant bill of entry was filed for each consignment. Other than the very first consignment, the notification in force on the relevant dates was S.R.O. 439 and therefore the exemption to which the respondent was entitled in respect of those consignments was in terms thereof and not otherwise. This appeal must therefore succeed. Since we have concluded that the respondent has been unable to make out a case on the merits, it is not necessary for us to consider whether the suit was maintainable and we do not therefore express any view on this issue. This should not however, be taken as either an affirmation or a rejection of what was said in this regard in the impugned judgment. We leave the point open for consideration in an appropriate case.

23.Accordingly, this appeal is allowed. The impugned judgment and decree are set aside and the suit is dismissed. There will be no order as to costs, both here and in the suit below.

SAK/C-10/KAppeal accepted.