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Civil Petition for Special Leave to Appeal Nos. 286 and 287 of 1984, decided on 29th May, 1985.

‑‑‑Art. 185(3)‑‑Imports and Exports (Control) Act (XXXIX of 1950), S.3‑‑Import Trade Control Schedule (Catalogue) No. 40.09‑‑Leave to appeal‑‑Grounds of mala fide action by Customs Authorities‑‑Leave granted to consider whether Customs Authorities, having themselves treated an item under a particular number of Catalogue, acted mala fide in treating same item imported by petitioners as not covered by said number of Catalogue.

Munir Ahmad, Advocate Supreme Court with Tanvir Ahmad, Advocate‑on‑Record for Petitioners.

Nemo for Respondents.

Date of hearing: 29th May, 1985.

‑‑This order will dispose of Civil Petition for Special Leave to Appeal No. 286 of 1984 filed by M/s. Khawaja Brothers, Lahore, and Civil Petition for Special Leave to Appeal No. 287 of 1984 filed by M/s. Manzoor Brothers, Lahore, as they involve the same question of law.

2. Facts giving rise to these petitions are, briefly, that the petitioner in each case imported "black rubber air hoses" from China in length of 50 meters each, under item No. 40.09 of the Catalogue known as Import Trade Control Schedule. The relevant portion thereof reads as follows:‑‑

"Piping and tubing, of unhardened vulcanised rubber.

(a) For machinery.

(b) For motor vehicles.

(c) For domestic electric appliances, and

(d) other."

The Import Trade Control Schedule includes its own rules of interpretation. The following rules are stated to be relevant.

(2) (a) Any reference in a heading to an article shall be taken to include a reference to that article incomplete or unfinished provided that, as imported, the incomplete or unfinished article has the essential character of the complete or finished article. It shall also be taken to include a reference to that article complete or finished (or falling to be classified as complete or finished by virtue of this rule), imported unassembled or disassembled.

(3) The classification of goods within a heading is to be determined by applying as between subheadings the like Rules as are to be applied between headings, and except in so far as the contrary intention appears, terms used in a subheading are to be interpreted in the same way as in the heading."

3. The learned counsel for the petitioners submitted that the item imported by them is covered by these above‑noted rules, specially in view of the fact that even after being cut into smaller pieces, the article has "retained the essential character of the complete or finished article" as required in the proviso to rule 2‑A.

4. Learned counsel submitted secondly that the Custom Authorities have themselves been treating, rubber hoses of the length of 50 meters as falling under sub‑head 'B' of Catalogue No. 40.09, and that in their case the Custom Authorities have acted mala fide in treating the same as not covered by the said Catalogue number. In support of this contention he showed us the photostat copies of licences issued by the Ministry of Commerce treating such rubber hoses as being covered by the said Catalogue number.

5. In view of the above facts we think that the matter needs further consideration. Leave is, therefore, granted for this purpose.

Security in the sum of Rs.2,000 in each case.

To be heard on the same record with permission to file additional documents.

M. I. Leave granted

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