IN THE SUPREME COURT OF PAKISTAN 
(APPELLATE JURISDICTION) 
 
 
PRESENT: 
MR. JUSTICE MIAN SAQIB NISAR, HCJ 
MR. JUSTICE UMAR ATA BANDIAL  
MR. JUSTICE FAISAL ARAB 
 
CIVIL PETITION NO. 2226 OF 2016 
(On appeal against the judgment dated 20.04.2016 
passed by the Islamabad High Court, Islamabad in 
Customs Reference Application No. 31/2015) 
 
M/s Al-Haj Enterprises (Pvt) Ltd 
 
 
 
 
… Petitioner 
VERSUS 
 
Collector of Customs, Model Customs Collectorate (MCC) etc 
 
 
 
 
 
… Respondents 
 
For the Petitioner:  
Mr. Wasim Sajjad, Sr. ASC 
 
 
 
 
Mr. Mehr Khan Malik, AOR 
 
For the Respondents: 
Mr. Muhammad Habib Qureshi, ASC 
 
 
 
 
Mr. M.S. Khattak, AOR 
 
 
 
 
Mr. Shahid Jan, Deputy Collector Customs 
 
Date of Hearing: 
 
22.05.2017 
 
JUDGMENT 
 
 
 
 
FAISAL ARAB, J.- Under some arrangement, Attock Petroleum 
Limited exports POL products to International Security Assistance Force (ISAF) 
in Afghanistan, which is transported by road through bonded carriers who hold 
license for such purpose under the Customs Rules, 2001. One such bonded 
carrier is the petitioner who transports POL products on its fleet of tankers. 
Rule 564(4) of the Customs Rules, 2001 requires that in case there is a 
variation of more than one percent in the quantity declared in terms of Rule 
563 of the Custom Rules and the one certified by ISAF at the place of 
destination, action under appropriate provisions of the Customs Act, Sales Tax 
Act and other applicable law shall be taken against the concerned carrier and 
other persons found involved.  
 
2. 
 
In a post export audit of Attock Petroleum Limited, it transpired 
that POL products exported to Afghanistan were short supplied. To be precise, 
CIVIL PETITION 2226/2016 
2
16,985 liters of HSD, 396,921 liters of JP8 and 4083 liters of PMG were short 
delivered that did not reach the destination. These shortages were in excess of 
the one percent permissible under Rule 564(4). This resulted in issuance of 
show cause notices to Attock Petroleum Limited as well as to the petitioner to 
whom Attock Petroleum Limited entrusted the consignments for transportation 
to Afghanistan, which were found short. Thereafter, the matter was adjudicated 
by the Collector of Customs, who passed Order-in-Original dated 28.03.2014 
requiring the petitioner to pay taxes and duties of the short supplies amounting 
to Rs.6,070,342/- along with default surcharge. The petitioner appealed before 
the Customs Appellate Tribunal, Islamabad, which was partially allowed only 
to the extent of downward revision of the quantum of duties and penalty from 
Rs.6,070,342/- to Rs.3,622,683/-. The petitioner then filed Customs Reference 
Application in the Islamabad High Court which upheld the decision of the 
Tribunal. Hence, this petition.  
 
3. 
 
Learned counsel for the petitioner argued that a strict regimented 
procedure is followed for delivery of POL products as the tankers are locked 
and sealed and yet evaporation in hot weather is bound to take place that 
could reach beyond one percent limit for which the petitioner cannot be held 
responsible. With regard to the restriction contained in the provisions of Rule 
564(4) of the Customs Rules, 2001, he submitted that the correct interpretation 
of the Rule ought to be that in case of variation beyond one percent, then there 
should be some adjudication as to the real cause behind the shortage. He 
submitted that in case the carrier justifies the loss for no fault of his own then 
he should not be penalized for the breach of the limit provided in the Rule. He 
lastly submitted that in the present case, in absence of allegation that the locks 
and seals of the tankers were broken or it was a case of pilferage or theft en-
route to Afghanistan then merely on account of excessive evaporation beyond 
the control of the carrier, ought not to have been made basis for imposition of 
liability under the Rules.  
CIVIL PETITION 2226/2016 
3
 
4. 
 
The argument of learned counsel would have been worth 
considering had the consequence for short supply beyond one percent not been 
provided in Rule 564(4) of the Custom Rules, 2001. As the provisions of the 
said Rule were fully attracted to the case of the petitioner and accordingly 
applied in the present case, we find that no legal error was committed by any of 
the forums below, which require interference from this Court. This petition is, 
therefore, dismissed and leave is refused.  
 
 
 
 
 
CHIEF JUSTICE 
JUDGE 
JUDGE 
Islamabad, the  
22nd of May, 2017 
Approved For Reporting 
Khurram