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    I.T.R. No.213 of 2011 638342776238471213

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    Muhammad Faizan
    The document discusses a court case regarding a tax dispute between a cement company and tax authorities. The tax authorities sought additional excise duty on cement sales, but the court upheld the tribunal's decision that the duty was correctly paid based on an agreed price and the cement sold was different than retail bags due to being a bulk loose form sale.

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    I.T.R. No.213 of 2011 638342776238471213

    Uploaded by

    Muhammad Faizan
    4 views5 pages
    The document discusses a court case regarding a tax dispute between a cement company and tax authorities. The tax authorities sought additional excise duty on cement sales, but the court upheld the tribunal's decision that the duty was correctly paid based on an agreed price and the cement sold was different than retail bags due to being a bulk loose form sale.

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    I.T.R._No.213_of_2011_638342776238471213

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    The document discusses a court case regarding a tax dispute between a cement company and tax authorities. The tax authorities sought additional excise duty on cement sales, but the court upheld the tribunal's decision that the duty was correctly paid based on an agreed price and the cement sold was different than retail bags due to being a bulk loose form sale.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    4 views5 pages

    I.T.R. No.213 of 2011 638342776238471213

    Uploaded by

    Muhammad Faizan
    The document discusses a court case regarding a tax dispute between a cement company and tax authorities. The tax authorities sought additional excise duty on cement sales, but the court upheld the tribunal's decision that the duty was correctly paid based on an agreed price and the cement sold was different than retail bags due to being a bulk loose form sale.

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    of 5

    HCJD/C-121

    JUDGMENT SHEET
    IN THE ISLAMABAD HIGH COURT, ISLAMABAD

    I.T.R. No.213 of 2011

    Commissioner Inland Revenue, LTU, Islamabad


    Versus
    M/s Askari Cement Limited, Islamabad

    Applicant by : Mr. Mohammad Abdul


    Hassan, Advocate.

    Respondent by : Hafiz Mohammad Idris


    and Syed Farid Bokhari,
    Advocates.

    Date of Decision : 23.10.2023

    Babar Sattar, J:- This reference emanates from order of

    the Appellate Tribunal Inland Revenue, Islamabad (“ATIR”)

    dated 04.10.2010 pursuant to which a demand for collection of

    federal excise duty in the amount of Rs.8,360,553/- pursuant to

    Order-in-Original dated 02.03.2000 were set aside.

    2. Learned counsel for the tax department submitted that

    the matter related to collection of excise duty for sale of bulk

    cement in loose form. The taxpayer sought to pay excise duty

    at the contractual price agreed between the petitioner and the

    purchaser Ghazi Barotha Contractor even though the retail price

    at which the product was available to the general body of retail

    traders at the time was higher. Through the assessment order

    the tax department sought the collection of short payment

    together with an additional duty at the rate of 2% per month

    under section 3(b) of the Central Excise Act, 1944 (“1944

    Act”), and a penalty for Rs.100,000/- for non-compliance with

    provisions of the 1944 Act. The demand was upheld by the

    Tribunal and in a reference filed before the High Court, the High
    2|Page I.T.R No.213/ 2011

    Court by order dated 13.05.2009 remanded the matter back to

    the Tribunal after which it passed the impugned order and set

    aside the assessment order and the demand raised. He

    submitted that such order was not in accordance with section

    4(2) of the 1944 Act.

    3. Learned counsel for the respondent submitted that no

    question of law arose from the order of the Tribunal. In the said

    order the Tribunal had taken into account the fact that the

    product sold by the taxpayer to Ghazi Barotha Contractors was

    a bulk sale of cement in loose form as opposed to sale of

    cement bags and the tribunal while relying on the case law

    including, inter-alia, Crescent Textile Mills Ltd.

    Lyallpur Vs. Member, Central Board of Revenue (Central

    Excise), Islamabad (1980 SCMR 773), Crescent Textile

    Mills Ltd. Lyallpur Vs. Member, Central Board of Revenue

    (Central Excise), Islamabad (1989 CLC 2045 Peshawar),

    Souvenir Tobacco Co. Ltd. Vs. Deputy Collector, Central

    Excise and Land Customs (1989 CLC 1134) and

    Government of Pakistan Vs. Hashwani Hote Limited (PLD

    1990 SC 68) found that the packaging of a product was to be

    taken into account while determining the retail price and based

    on packaging there could be a price differential even when the

    underlying product was the same. He further submitted that the

    Tribunal took into account the fact that prior to declaring the

    retail price of cement the taxpayer wrote to the Assistant

    Collector, Federal Excise conveying that the price of the product

    was Rs.2538.45/- per metric ton, which was not agreed to by

    the Assistant Collector. The matter was brought before the


    3|Page I.T.R No.213/ 2011

    Central Board of the Revenue (now Federal Board of Revenue

    “FBR”) and by letter dated 28.09.1996, FBR directed the

    Collector, Rawalpindi to decide the issue in accordance with the

    law. Subsequently by letter dated 18.12.1996 the Assistant

    Collector, Central Excise, Islamabad communicated to the

    taxpayer that the competent authority had been pleased to

    accept the retail price declared for supply of cement to Ghazi

    Barotha Contractors at Rs.2538.48/- per metric ton and directed

    that such price be printed on the bowsers and also be published

    in the National daily newspapers. He submitted that letter dated

    08.12.1996 was issued pursuant to the power vested in the

    Federal Government under section 4(2) of the 1944 Act and it

    was consequently held by the Tribunal that once such price was

    accepted by the Collector and communicated to the taxpayer by

    the Collector, the tax department could not renege on the

    acceptance of the price and seek to charge additional excise

    duty on the basis of retail price for cement bags available to the

    general body of retail traders.

    4. A perusal of the order of the Tribunal reflects that two

    factors prevailed with the Tribunal. One, that the product sold

    by the taxpayer to Ghazi Barotha Contractors was bulk sale of

    cement in loose form (i.e. not bagged), and the Tribunal after

    relying on case law concluded that the said product by virtue of

    not being packaged was different from cement sold in bagged

    form. And by virtue of the difference in packaging it could not

    be said that the retail price of cement in loose form ought to be

    the same as the retail price fixed for sale of cement in bagged

    form. And two, the tax department had accepted the retail price
    4|Page I.T.R No.213/ 2011

    agreed between the taxpayer and Ghazi Barotha Contractors for

    purposes of section 4(2) of the 1944 Act. And the value of the

    product as agreed to by the Federal Government was

    communicated by Assistant Collector through letter dated

    08.12.1996, after which the question of price of the product

    became settled. Therefore, when the show cause notice for

    purposes of collection of federal excise at a higher rate was

    raised on 15.07.1999 the question of price as agreed to by the

    Collector under the direction of FBR was a past and closed

    transaction.

    5. We are not convinced by the arguments of the learned

    counsel for the tax department that there is a question of law

    that emanates from the order of the Tribunal. The Tribunal as a

    factual matter has determined that the product sold by the

    taxpayer to Ghazi Barotha Contractors (i.e. bulk sale of cement

    in loose form) was different from the product the retail price of

    which was being taken into account by the tax department for

    purposes of generating excise duty demand against the

    taxpayer (i.e. cement in bagged form). In our reference

    jurisdiction we cannot second guess a factual determination

    made by the Tribunal. The second factor that prevailed with the

    Tribunal was that FBR had directed the Controller to determine

    the price for bulk supply of un-bagged cement, which was

    determined at Rs.2538.48/- per metric ton as communicated to

    the taxpayer by letter dated 08.12.1996 written by the

    Assistant Collector. This letter states that the competent

    authority has been pleased to accept the retail price for the

    product supplied by the taxpayer. The Tribunal, as a matter of


    5|Page I.T.R No.213/ 2011

    fact, also determined that the competent authority referred to in

    letter dated 08.12.1996 was the Federal Government for

    purposes of section 4(2) of the 1944 Act. The tax department

    now seeks to raise a factual question as to whether the

    Assistant Collector was vested with authority by the FBR at the

    relevant time to issue such letter accepting the retail price of

    cement as proposed by the taxpayer. This once again involves

    determination of a fact which the Court cannot undertake in its

    reference jurisdiction. In the event that any such objection to

    lack of authorization of the Assistant Collector was to be taken,

    it ought to have been done before the Tribunal. This was not

    done as the Tribunal has observed in para-07 of its order that it

    confronted the tax department with the content of the letter of

    Assistant Collector date 08.12.1996 whereby the retail price of

    Rs.2538.48/- per metric ton was accepted and representative of

    the tax department had no explanation to offer in such regard.

    6. For the aforementioned reasons, we find that no question

    of law arises from the order of the Tribunal. The reference is

    without merit and is dismissed. A copy of this order is directed

    to be sent to the Registrar of the Tribunal under the seal of this

    Court.

    (CHIEF JUSTICE) (BABAR SATTAR)


    JUDGE

    *M.A. Raza*

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