Model Customs Collectorate (MCC), Gwadar (Gaddani), has won a case of Rs 274 million against M/s Byco Petroleum Pakistan & others relating to import of three tug boats in the Supreme Court of Pakistan.
According to details, M/s Byco Petroleum Pakistan Ltd, Karachi, imported three "tug boats"(PCT heading 8904.0000) on temporary basis for mooring of vessels of POL products (crude oil etc) at Gaddani in 2013 and 2014. The importer sought clearance under clause/condition (vii) of the SRO 678(I)/2004 of August 7, 2004 which specifies that petroleum sector companies, shall be entitled to import machinery, equipment, and seismic (on shore or off shore) vessels etc, on an import-cum-export basis without payment of duties and taxes against a corporate guarantee.
The exemption was denied as the imported "tugs" were/or classifiable under specified PCT heading 8904.0000 as "tugs" hence are/were found to be not covered under the clause/condition vii of the SRO. However, upon importer's request the Board through its letter No. 1(7) Mach/94-Pt3/3932 of January 7, 2013 allowed release of the impugned Tug on temporary basis pending certification from the Regulatory Authority to the effect that the goods are covered under the aforesaid SRO. The Regulatory Authority, however, did not certify that the imported tugs were covered under the SRO. Therefore, the Collectorate made out contravention cases for recovery of duty and taxes amounting to Rs. 274 million (approx) under section 32(3) of the Customs Act, 1969 for violation of SRO 678(I)/2004.
The adjudicating officer vacated the show cause notice, on mere technicalities. Being aggrieved, the Collectorate filed three Customs appeals with Customs Appellate Tribunal, which were dismissed by the Appellate Tribunal. The Collectorate assailed the orders of the Appellate Tribunal by way of filing of three Special Customs reference applications under Section 196 of the Customs Act, 1969 with the Baluchistan High Court Quetta which were also dismissed /decided against the department by the Baluchistan High Court on August 2, 2018.
The Collectorate had thus lost its case before original authority and two Appellate authorities even so, being aggrieved, and in consideration of the fact that huge amount of duty/taxes (Rs 275 million approx) was at stake due to mere technicalities the Collectorate decided to take up the matter at the higher level and filed three CPLAs before the Supreme Court of Pakistan. On the other hand, the importers filed constitution petition No. 192/2019 before the Baluchistan High Court, Quetta seeking immediate implementation of the orders of the Baluchistan High Court passed in references decided in favour of the importers.
The Balochistan High Court issued contempt notice to the Collector of Customs whereby directing to implement the judgment and further directed that "in case of failure collector customs namely Yaqoob Mako should appear in person". The Collector MCC himself appeared in person to seek a month's time for provision of restraining order from the apex court.
The Collectorate then filed Application for urgent hearing before the Supreme Court of Pakistan. The Apex Court granted urgent hearing in the matter and consequently, the Supreme Court of Pakistan on February 12, 2020 and February 13, 2020 allowed the civil appeals field by the Collectorate and categorically held that the tug boats imported by M/s Byco Petroleum were/or not entitled to any exemptions as claimed by the company .
It has been learnt that the then Collector MCC Gwadar who was assisted by the Deputy Collector Dr Jam Muhammad Imran and Principal Appraiser Tariq Aziz played an effective role in the matter and actively persuaded the case before the Baluchistan High Court as well as Apex Court of Pakistan which yielded this landmark decision