KARACHI: The Sindh High Court (SHC) quashed show cause notices issued by Customs officials to Shaikh Pipe Mills, Imran Pipe Mills and several others over entitlement for exemption under SRO 565(I)/2006 dated 05.06.2006.
On 31 March 2021, a two-member bench, comprising Justice Muhammad Junaid Ghaffar and Justice Faisal Kamal released the details judgment.
Court observed in its order that “it appears that the respondents have seriously erred in interpreting the SRO in question as the exemption with relation to the “description of goods” was admittedly available to the petitioners, which fact has not been controverted; hence, the petitioners case merits consideration and therefore, these petitions are allowed to the extent as above; the impugned show cause notices are hereby quashed, whereas, securities furnished before the Nazir of this court pursuant to ad-interim orders, respectively, are hereby discharged.
Nazir to release the same upon proper identification and verification. Nazir’s fee is settled at Rs.5000/- for each security which shall be paid by the Petitioners before release / discharge of the same”.
Court further observes that in all these petitions, the petitioners were either issued show cause notices or fresh consignments were withheld by the Respondents on the ground that they are not entitled for exemption under SRO 565(I)/2006 dated 05.06.2006 (“SRO 565”), as according to the Respondents the HS Codes CP D 3009 of 2010 and connected petitions Page 2 of 6 claimed in the Goods Declarations were not mentioned against Serial No.88 of Table II to SRO 565.
Learned Counsel appearing for the petitioners have argued that SRO in question refers to exemption on goods specified in Table II to SRO 565 and not to HS Codes as contended by the Department; that subsequently an amending SRO 475(I)/2011 dated 03.06.2011 (“SRO 475”) has been issued, which now covers all HS Codes and can also be given retrospective effect as it is clarificatory in nature and has been issued during pendency of these petitions; that in another exemption SRO 575(I)/2006 dated 5.6.2006 (“SRO 575”) a specific reference has been made to description along with HS Codes, which shows the intention which is lacking in this case.
On the other hand, Mr. Muhammad Khalil Dogar, learned counsel for the Department has filed Vakalatnama in CPs No.D-3545, 3009 and 3269 of 2010 and submits that SRO 475 is of no help to the petitioners’ case, as the goods were imported prior to the said amending Notification, whereas, the HS Codes are admittedly not mentioned against Serial No.88 of Table II to SRO 565; hence, they are not entitled for any exemption
In view of herein above facts and circumstances of the case, it appears that the respondents have seriously erred in interpreting the SRO in question as the exemption with relation to the “description of goods” was admittedly available to the petitioners, which fact has not been controverted; hence, the petitioners case merits consideration and therefore, these petitions are allowed to the extent as above; the impugned show cause notices are hereby quashed, whereas, securities furnished before the Nazir of this court pursuant to ad-interim orders, respectively, are hereby discharged”.
