KARACHI: After complex litigation spreading over two decades, the dispute over exemption came to an end when a custom appellate bench of High Court of Sindh reserved judgment in a Special Customs Reference Application (SCRA) involving a huge amount of rupees 800 million.

Brief crux of the case is that M/s Fauji Cement had imported machinery under SRO 484(I)/1992 dated 14.05.1992 (exemption available for such machinery which are not manufactured locally). The imported consignments contain various items which were manufactured locally as confirmed by the FBR vide letter dated 09.05.1996.

The amount of 15.80 million was adjudicated vide ONO No.02/1997 dated 16.02.1997. The importer filed appeal before the FBR / CBR against the aforesaid ONO. The FBR decided the appeal against the importer, being aggrieved the importer preferred the appeal before the Appellate Tribunal which was also rejected by the Appellate Tribunal. The importer again filed appeal bearing No.66/1998 before the High Court of Sindh against the Order of Appellate Tribunal. The Honourable Appellate Tribunal dismissed the appeal. The importer filed CPLA before the Apex Court, Leave to appeal was granted and filed Civil Appeal which was decided by the Honourable Supreme Court vide Order dated 07.03.2014 in Civil Appeal No.1801/2005. After the matter of SRO 484(I)/1992 finally settled by the Honourable Supreme Court and hold that the claim of importer for exemption under SRO 484(I)/1992 is not admissible. In pursuance of aforesaid Order dated 07.03.2014 passed by the Honourable Supreme Court, the Department issued a Demand Notice dated 28.03.2014 in continuation of demand dated 31.12.1999 for the outstanding payment. M/s. Fauji Cement made payment of Rs. 15 Million which was encashed on Green Challan dated 30.08.2018 in compliance of Honourable Supreme Court’s Order dated 07.03.2014 in Civil Appeal No.1801/2005.

The importer instead of making payment filed Suit No. 517/2014 before the Honorable High Court against aforesaid Demand Notice. The Honorable High Court suspended the Demand Notice vide Order dated 31.03.2014. The suit was heard by the Honourable High Court passed the Order dated 18.04.2018 as under:-

“At the very outset, Mr. Salman Talibuddin, Additional Attorney general has given a proposal that the Plaintiff may be called upon to deposit the amount mentioned in the Paragraph -14 of the Suit Rs. 15,797,423/- and amount mentioned in the Paragraph-21 i.e. Rs. 337,227,068/- and for the balance amount claimed by the department in sum of Rs. 455, 062,962/- plus surcharge to the date, the Plaintiff may approach Tax Department for its determination in accordance with law.”

Subsequently, the importer withdrawn the suit and filed CP No.D-5576/2018 before the Division Bench of Honourable High Court of Sindh.. The Collectorate  raised objection with regard to maintainability of instant petition on the ground that petitioner had filed a Suit No. 517 of 2014 in respect of same subject controversy. After the proceeding in CP No.5576/2018 disposed of the petition vide Order dated 30.08.2018 which is reproduced as under:-

“As regards the recovery of Rs.337 million, which is subject matter of SCRA No. 548/2014, respondents are directed not to enforce such recovery till further orders, which may be passed by this court in SCRA No.548 of  2014 on the next date of hearing whereas, office is directed to fix the said SCRA in court in the first week of October 2018 at 11.00 a.m. when learned counsel for the parties are directed to come prepared with the matter, which may be finally heard and disposed of at Katcha Peshi stage on the next date.

Petition stands disposed of in the above terms alongwith pending applications.”

Thereafter the Collectorate filed CPLA No.1152-K/2018 before the Honourable Supreme Court of Pakistan against the aforesaid of Honourable High Court’s Order dated 30.08.2018. The Apex Court disposed of the CPLA vide Order dated 25.04.2019 which is re-produced as under:-

3. In the circumstances, we consider that since the matter bearing upon the controversy raised before us are still pending before the two fora mentioned above, our adjudication at present would be premature. However, since these are old matters, it is appropriate for the learned Sindh High Court to make an effort to decide the pending customs reference at an early date preferably before the close of the financial year 2019. Insofar as the matters pending before the parties that the same are disposed of in accordance with law within three months from the date hereof.”

In pursuance of Honourable High Court‘s Order dated 30.08.2018 as well as Honourable Apex Court’s order dated 25.04.2019, the case was adjudicated for the amounting to Rs.455,062,962/- in Order-in-Original No.559/2019-2020 dated 18.12.2019. The importer filed appeal before the Appellate Tribunal bearing No.K-162/2020. The Collectorate issued Notice dated 30.06.2020 under Section 202(1) of the Customs Act, 1969. The importer approached the Honourable High Court and filed CP No.D-2818/2020 for suspension of the said Demand Notice on the ground that they have field appeal before the Appellate Tribunal. The Honourable High Court restrained the department for enforce the demand notice. The said CP is fixed for hearing on 26.02.2021 before the Honourable High Court of Sindh.

The SCRA No.548/2014  involving an amount of Rs.337 million was fixed today before Divisional Bench of Honourable High Court of Sindh and the same has been reserved for judgment. Khalid Rajpar Advocate represented the respondent customs department.