IN THE SUPREME COURT OF PAKISTAN 
(APPELLATE JURISDICTION) 
 
 
 
PRESENT: 
MR. JUSTICE MIAN SAQIB NISAR 
MR. JUSTICE SH. AZMAT SAEED 
MR. JUSTICE FAISAL ARAB 
 
 
CIVIL APPEAL NO. 1291 OF 2005 
(On 
appeal 
against 
the 
judgment 
dated 
1.1.2003 passed by the High Court of Sindh, 
Karachi 
in 
Special 
Customs 
Appeal 
No. 
142/2002) 
 
 
Collector of Customs  
 
 
 
… Appellant 
VERSUS 
 
M/s D.G. Khan Cement Co Ltd 
…Respondents  
 
 
For the Appellant:  
Raja Muhammad Iqbal, ASC 
 
 
 
 
For the Respondent: 
Mr. Salman Akram Raja, ASC 
 
 
 
 
 
Dates of Hearing:  
13.04.2016 & 27.04.2016 
 
 
JUDGMENT 
 
 
 
 
FAISAL 
ARAB, 
J.- 
In 
order 
to 
encourage 
industrialization in certain areas of the country, the Federal 
Government from time to time has been granting exemptions from 
customs duty and sales tax. One such incentive was contained in 
SRO 484(I)/92 dated 14.05.1992. Under this notification, plant 
and machinery, not manufactured locally, imported for setting up 
a new unit or for expansion or balancing, modernization and 
replacement of an already existing unit in certain areas was 
granted exemption from the whole of the customs duty and sales 
tax subject to fulfilling certain conditions.  
CIVIL APPEAL NOs. 1291-K/2005, 847/2009, 427-K/2009, 428-K/2009 
2
2. 
 
The respondent company, a cement manufacturing 
enterprise, imported three Caterpillar Off-Highway dump trucks, 
which were shipped to Karachi port through S.S. ‘Chitral’. Letter of 
Credit for the import of such trucks was opened on 27.2.1995 and 
the Bill of Entry was filed on 29.6.1995 i.e. well before the arrival 
of the ship. Upon arrival of the ship on 16.7.1995, benefit of total 
exemption from customs duty and sales tax was sought under 
Notification No. SRO 484(I)/92 dated 14.05.1992, but the same 
was denied to the respondent company for two reasons.  Firstly it 
was maintained that the exemption was applicable only to such 
imports that arrived at the port on or before 30.06.1995 whereas in 
the present case the ship carrying the Off-Highway dump trucks 
arrived on 16.7.1995. The other reason for denying benefit of 
exemption was that the Off-Highway dump truck being mobile 
vehicle, cannot be termed as a plant hence does not fall within the 
ambit of SRO 484(I)/92. The customs authority thus assessed the 
consignment on the basis of PCT Heading that is applicable to 
dump trucks and imposed 30% Ad Volerum duty as well as the 
applicable rate of sales tax and other charges.  
 
3. 
 
Having being denied the benefit of exemption under 
SRO 484(I)/92 dated 14.05.1992, the respondent company 
challenged the assessment of the customs authority in the Lahore 
High Court and on the basis of an interim order obtained release of 
the consignment upon furnishing personal bonds of its directors. 
The Lahore High Court then relegated the respondent company to 
contest the matter before the forum provided under the Customs 
CIVIL APPEAL NOs. 1291-K/2005, 847/2009, 427-K/2009, 428-K/2009 
3
Act. All the three forums upto the Customs and Sales Tax 
Appellate Tribunal held that the exemption cannot be availed on 
Off-Highway dump trucks on the ground that the same being 
vehicles cannot be termed as ‘plant’. The respondent company 
challenged the decision of the Tribunal before the High Court of 
Sindh in Special Customs Appeal No. 142/2002. The High Court 
after framing the question of law “Whether Dump Trucks imported by 
the appellant fall within the purview of plant and machinery as 
contemplated in SRO-484(I)/92 dated 14.5.1992”, vide impugned 
judgment dated 1.1.2003 answered it in the affirmative. Being 
aggrieved by such decision, the appellant filed CPLA No. 256-
K/2003 before this Court giving rise to the present appeal.   
 
4.  
 
Mr. Raja Muhammad Iqbal, learned counsel for the 
appellant, argued that Off-Highway dump trucks imported by the 
respondent company being mobile vehicles, fall under PCT Heading 
8704.1090 and do not fall under any entry listed in PCT Heading 
84 and 85, which lists the items of machinery, appliances and 
equipments, therefore not being part of the plant of respondents’ 
factory it was not entitled to claim exemption under SRO 484(I)/92 
dated 14.05.1992. He next submitted that the power to classify 
any item for customs tariff lies exclusively with the government 
and as the Off-Highway dump truck is separately classified in PCT 
headings and not included in the items of machinery listed in SRO 
484(I)/92, the same does not fall within the ambit of plant. In 
support of this contention he relied upon the case of Big Mak 
Foods Ltd Vs. Deputy Collector of Customs (1994 SCMR 537). He 
CIVIL APPEAL NOs. 1291-K/2005, 847/2009, 427-K/2009, 428-K/2009 
4
next argued that in the present case the Bill of Entry was filed on 
29.6.1995 at the time when the ship carrying the consignment in 
question had not even arrived. The ship arrived on 16.7.1995 and 
at that time the benefit of exemption granted under SRO 484(I)/92 
was no longer available as by that time the period of exemption 
had already expired. He submitted that in terms of the first proviso 
to Section 30 of the Customs Act where Bill of Entry is filed in 
advance of the arrival of the conveyance, the applicable rate of 
duty would be such that was chargeable on the date the manifest 
of the conveyance is delivered, which in the present case was 
16.07.1995. Therefore, he maintained that the filing of Bill of Entry 
before the cut-off date i.e. 30.06.1995 would not bring any benefit 
for the respondent company under SRO No. 484(I)/92. In support 
of this argument, the learned counsel for the appellant relied upon 
the case of Fauji Cement Company Limited Vs. Federation of 
Pakistan (2014 SCMR 994). He also relied upon the cases of 
Pakistan 
Telecommunication 
Corporation 
Vs. 
Federation 
of 
Pakistan (2011 PTD 2175) and Collector of Customs Vs. Ismail & 
Co (2015 SCMR 1383).  
 
5. 
 
In rebuttal, Mr. Salman Akram Raja, learned counsel 
for the respondent company, argued that by definition an 
industrial plant comprises of equipments, machines and apparatus 
that are applied in an industrial process to produce a desired 
result and respondent company’s industrial process of cement 
manufacturing starts from the quarrying of the limestone. He 
explained that the Off-Highway dump trucks are meant for 
CIVIL APPEAL NOs. 1291-K/2005, 847/2009, 427-K/2009, 428-K/2009 
5
transporting the quarried limestone to the place where it is further 
processed, thus being an integral part of industrial process entitled 
the respondent company to avail the benefit of exemption granted 
under SRO 484(I)/92 dated 14.05.1992. In support of his 
argument that even a moving vehicle can be described as part of a 
‘plant’, Mr. Salman Akram Raja placed reliance upon the case of 
Collector of Customs Vs. Fauji Fertilizer Co. Ltd (PLD 2005 
Supreme Court 577) and also on a judgment from English 
jurisdiction rendered way back in the year 1887 and reported as 
Yarmouth Vs. France (1887 LIR. 19 Q.B.D. 647). In this case, the 
plaintiff was an employee of a wharfinger. He brought an action 
against his employer under the Employers’ Liability Act, 1880 after 
being injured by the employer’s horse that pulled the trolley on 
which the plaintiff used to deliver consignments on the 
instructions of his employer. The plaintiff for his injury claimed 
compensation in the suit. The defendant resisted the action on the 
ground that neither the plaintiff was a ‘workman’ nor the horse a 
‘plant’ within the meaning of the Employers’ Liability Act, 1880’ 
therefore, the claim was not maintainable. The Divisional Court, 
while affirming the decision of the Trial Court, held that the horse 
which drove the trolley was the most material part of the 
assignment of the plaintiff and hence can be described as ‘plant’. 
Mr. Salman Akram Raja maintained that if a horse can be 
described as a ‘plant’ then by analogy the moving vehicle Off-
Highway dump trucks engaged in an industrial process can also be 
described as a ‘plant’ and the exemption under SRO 484(I)/92 can 
be sought on their import for use in a cement factory.   
CIVIL APPEAL NOs. 1291-K/2005, 847/2009, 427-K/2009, 428-K/2009 
6
 
6.  
 
We have read the above referred judgment in Yarmouth 
supra case and also the dissenting view of one of the three judges 
and find ourselves to be in agreement with the reasoning given in 
the dissenting note in the above referred English judgment which 
stated that the term ‘plant’ is to be confined to fixtures and others 
unanimated chattels used in trade or business but nothing which 
is animate can be termed as a ‘plant’ as the living creatures can in 
no sense be considered as ‘plant’. The plant as is ordinarily defined 
means machines, apparatus and equipment that are utilized at 
various stages of an industrial process in order to produce some 
industrial product. Nothing that is animate, whether man or 
animal, can be defined as a ‘plant’ even though any machine, 
apparatus or equipment may not become operational without the 
physical labour of a man or an animal. Merely for the reason that 
in the 19th century a carriage could only be driven by a 
domesticated animal like a horse or a donkey does not make that 
animal part of a plant. If the description of a plant is also 
attributed to an animal then a man who pulls a cart would also be 
described as a material part of a plant as he does so by applying 
manual labour. The distinction between the plant and the worker 
or animal that operates it has to be maintained otherwise the 
workers of a factory would also be defined as ‘plant’. Even the land 
on which the ‘plant’ is placed and the building where it is housed 
are not regarded as ‘plant’ then how could anything which is 
animate could be regarded as ‘plant.  
  
CIVIL APPEAL NOs. 1291-K/2005, 847/2009, 427-K/2009, 428-K/2009 
7
7.  
 
Having discussed these two cases, it is pertinent to 
mention here that the basis of respondent company’s claim for 
exemption under SRO 484(I)/92 dated 14.05.1992 was that as the 
Off-Highway dump trucks were imported for their use in the 
industrial process of a cement factory, therefore, the same be 
regarded as part of the plant and machinery of the cement factory. 
In order to make a determination to this effect, we shall firstly 
proceed to examine the function of an Off-Highway dump truck 
and then seek to resolve whether its use in the cement industry 
makes it part of the plant that is engaged in the industrial process 
of producing cement inspite of the fact that such trucks in their 
utilization remain mobile as against other machinery and 
equipment of the plant which, directly or indirectly remains 
fastened to the earth.  
 
8. 
 
The layout plan of a cement factory determines what 
equipment, engineering and construction is required to complete 
the industrial process that is to be undertaken. Ordinarily, a 
cement factory is located where the main raw-material to produce 
cement such as limestone is found in abundance. So the industrial 
process of a cement factory starts from quarrying of the limestone. 
Where the layout of the cement factory is so designed that it starts 
its industrial process from extracting its raw materials from quarry 
then the same has to be hauled to the facility where the raw-
materials are to be first crushed. The entire set of machines used 
in conjunction with other apparatus and electrical and mechanical 
equipments, required for undertaking and completing the 
CIVIL APPEAL NOs. 1291-K/2005, 847/2009, 427-K/2009, 428-K/2009 
8
industrial process, starting right from quarrying till the finished 
product that is produced is to be regarded as part of the plant of 
the respondent company. Off-Highway dump trucks, also called 
Off-Road dump trucks, are specifically designed for use in difficult 
terrain where the activity of mining, quarrying and construction of 
big buildings is carried out. These Off-Highway dump trucks, on 
account of their specific utility, have low payload capacity as well 
as low speed in comparison with the ordinary dump trucks that we 
see every day on roads and highways. Other than such use, the 
Off-Highway dump truck cannot be economically used as an 
ordinary means of transportation of goods.  
 
9. 
 
In cement industry Off-Highway trucks are used at the 
quarries where the predominant raw-material in the cement 
production ‘limestone’ is won from the quarry by either extraction 
or blasting following which it is hauled on Off-Highway dump 
trucks to the place where the second stage in the cement 
manufacturing i.e. crushing of the raw-material takes place. Thus 
there is direct nexus between the use of Off-Highway dump truck 
at the quarry of a cement manufacturing factory with its industrial 
process. This nexus brings the Off-High way dump truck within 
the definition of ‘plant’. When the industrial process of a cement 
factory starts with the quarrying activity of a cement factory, we 
see no reason why Off-Highway dump trucks’ utilization cannot be 
treated as part of the industrial process of a cement factory. Thus 
Off-Highway dump trucks cannot be excluded from being treated 
as part of the plant of a cement factory, where their utility forms 
CIVIL APPEAL NOs. 1291-K/2005, 847/2009, 427-K/2009, 428-K/2009 
9
an integral function in the manufacturing of the cement. So 
irrespective of the fact that Off-Highway dump trucks required to 
be operated at the very first stage in the cement manufacturing 
activity i.e. quarrying of the raw materials, are mobile vehicles, 
nevertheless these trucks are utilized to further the industrial 
process without which the industrial process of a cement factory 
would get interrupted and hindered at the very initial stage.  
 
10. 
 
It may not be out of place to mention here that 
extracting limestone and clay from the quarry can itself be a 
complete industrial process undertaken only to sell limestone in 
the market as its finished product. The customer of such 
enterprise could be a cement factory which is either not designed 
to start its industrial process from extracting limestone or for some 
reason the quarrying facility of a cement factory may have become 
dysfunctional and has to purchase limestone from elsewhere and 
transport it to its crushing facility. In such a situation the activity 
of transportation of raw-materials from the place of procurement to 
the place of crushing facility of a cement factory, would not make 
such activity part of cement factory’s industrial process as mere 
transportation of a product from one facility to another, where it is 
utilized as raw material, does not make the act of transportation 
part of the industrial process of either of the two enterprises. 
However this does not seem to be the case with the respondent 
company as since in the present case the quarrying of materials is 
undertaken by one and the same enterprise which after completion 
of the remaining stages involved in the manufacturing of cement 
CIVIL APPEAL NOs. 1291-K/2005, 847/2009, 427-K/2009, 428-K/2009 
10
(crushing, blending, heating, cooling, clinkering and milling) ends 
with the portable cement being produced in bulk or bags for 
consumption. The respondent company in the present case seems 
to be so designed that its’ Off-Highway dump trucks involved in the 
industrial process are to be regarded as part of the ‘plant’ of the 
cement factory. We are therefore left with no other option other 
than to hold that the very use of Off-Highway dump trucks at the 
quarries make them part and parcel of the industrial process of a 
cement factory and thus such trucks fall within the definition of 
the respondent company’s cement plant.  
 
11. 
 
The matter with regard to grant of exemption under 
SRO 484(I)/92 dated 14.05.1992 however does not end here. It is 
an admitted position that the respondent company opened the 
letter of credit on 27.2.1995 well within cut-off date mentioned in 
SRO 484(I)/92 whereas the consignment was delivered at Karachi 
port after the cut-off date. Learned counsel for the appellant had 
argued that in terms of the first proviso to Section 30 of the 
Customs Act where the Bill of Entry (now called Goods Declaration) 
is filed in advance of the arrival of the conveyance, the relevant 
date for the purposes of rate of duty would be when the manifest of 
the conveyance is delivered at the port of first entry and mere filing 
of Bill of Entry when the SRO 484(I)/92 was applicable was not 
sufficient as the goods had not arrived by the cut-off date of 
30.06.1995. In support of this argument learned counsel for the 
appellant relied upon the case of Fauji Cement Company Limited 
Vs. Federation of Pakistan (2014 SCMR 994) wherein this Court 
CIVIL APPEAL NOs. 1291-K/2005, 847/2009, 427-K/2009, 428-K/2009 
11
while dealing with the imports under the same SRO which is 
subject matter of these proceedings i.e. SRO No. 484(I)/92 held 
that date on which ‘Letter of Credit’ was established or steps were 
taken in respect of import of machinery are not relevant and it is 
the date of import which determines applicability of the customs 
duty. In response to this, learned counsel for the respondent 
company relied upon another Notification No. SRO No. 978(I)/95 
dated 4.12.1995 which gives continuity to the benefit of exemption 
granted under SRO 484(I)/92 dated 14.05.1992 to a certain extent. 
This notification provides that where Letter of Credit for the import 
of plant and machinery, intended to be cleared under the 
notification No. SRO 484(I)/92, had already been opened prior to 
the cut-off date i.e. 30.6.1995 but the consignment was delivered 
at the port after the expiry of such cut-off date, then the benefit of 
exemption granted under Notification No. SRO 484(I)/92 can be 
availed. We are of the view that in terms of the decision of this 
Court in the case of Fauji Cement supra, the respondent company 
was not entitled to seek exemption granted under SRO 484(I)/92 in 
its entirety. However, the respondent company was entitled to 
exemption to a limited extent on the import of Off-Highway dump 
trucks by virtue of SRO No. 978(I)/95 which exempts duties and 
charges over and above 25% of the leviable customs duty and sales 
tax and no more. To such extent the impugned judgment stands 
modified. The customs authority shall be justified in recovering 
customs dues and Sales Tax on the imported Off-Highway dump 
trucks accordingly. 
 
CIVIL APPEAL NOs. 1291-K/2005, 847/2009, 427-K/2009, 428-K/2009 
12
12. 
 
This appeal is disposed off in light of the discussion 
undertaken above. 
 
 
JUDGE 
 
 
 
JUDGE 
 
 
  
JUDGE 
 
Islamabad, the 
 
Announced on ______________ by Hon’ble Mr. Justice Faisal Arab 
 
Approved For Reporting 
Khurram