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 NOs. 427 & 428 OF 2009 
(On appeal against the judgment dated 27.1.2009 passed by the 
High Court of Sindh, Karachi in Special Customs Reference 
Applications No.348 and 349 of 2007) 
 
Collector of Customs  
 
 
 
 
(In both cases) 
… Appellant 
VERSUS 
 
M/s Best Way Cement  
 
 
(In CA 427/2009) 
M/s Maple Leaf Cement Factory 
 
(In CA 428/2009) 
…Respondents  
 
 
For the Appellants: 
Raja Muhammad Iqbal, ASC 
 
 
 
 
(In both cases) 
 
 
 
 
For the Respondents: 
Mr. Salman Akram Raja, ASC 
 
 
 
 
(In both cases) 
 
Date of Hearing:  
27.04.2016 
 
 
JUDGMENT 
 
 
 
 
FAISAL ARAB, J.- The respondent companies of both 
the connected appeals are cement manufacturing enterprises. The 
respondent company of Civil Appeal No.427 of 2009 imported sixteen 
units of Volvo FM 400 Trucks. Seven of such trucks were imported 
vide IGM No.1151/2006, Index No.20 and Goods Declaration 
No.196467 dated 24.06.2006 and the remaining nine trucks were 
imported vide IGM No.1151/2006, Index No.21 and Goods 
Declaration No.196469 dated 24.06.2006. Similarly, the respondent 
company of Civil Appeal No.428 of 2009 imported two Volvo FM 400 
Trucks vide IGM No.1151/2006, Index No.19 and Goods Declaration 
No.196468 dated 24.06.2006. All eighteen trucks were shipped to 
CIVIL APPEAL NOs. 427/2009 & 428/2009 
 
2
Karachi port on S.S. ‘Iron Butterfly’. Upon arrival of the ship both the 
respondent companies claimed exemption from duty in excess of 5% 
in terms of Serial No.21 of SRO 575(I)/2006 dated 5.6.2006 and 0% 
sales tax in terms of SRO 530(I)/2005 dated 6.6.2005 by declaring 
that the imported trucks fall within the ambit of plant as provided in 
SRO 575(I)/2006 dated 5.6.2006. The entire basis for treating the 
trucks to be part of the plant of their respective cement factories was 
that the imported trucks were Off-Highway trucks imported for their 
utilization in the industrial process of their respective cement 
factories, hence they be regarded as part and parcel of their cement 
manufacturing activity. Upon physical examination of the imported 
trucks, the Custom Examination Staff found the imported vehicles to 
be Volvo FM 400 trucks which were not Off-Highway dump trucks 
but simply On-Highway trucks. After disagreeing with their claim all 
eighteen trucks were classified under PCT Heading 8704.2290 which 
attracted 30% Ad Volerum customs duty and 15% Sales Tax.  
 
2. 
 
Having been denied the claim of exemption under the 
above referred two SROs, the respondent companies challenged the 
decisions of the Appraisement Collectorate before the Collector 
Appeals, who concurred with the decisions of the Appraisement 
Collectorate and dismissed their respective appeals vide orders dated 
14.11.2006. The respondent companies then challenged the appellate 
orders before the Customs and Sales Tax Appellate Tribunal in 
Customs Appeals No. K-01 and K-32/2007 which allowed their 
appeals through a common judgment dated 12.04.2007 after 
following the decision of Sindh High Court in the case of D.G. Khan 
Cement Limited Vs. Deputy Collector of Customs (2003 PTD 986) and 
CIVIL APPEAL NOs. 427/2009 & 428/2009 
 
3
directed that excess duties and charges recovered from the 
respondent companies be refunded. The Collectorate of Customs 
Appraisement was not satisfied with the tribunal’s decisions and 
challenged the same in the High Court of Sindh in two separate 
appeals bearing Special Customs Appeals No. 348 and 349 of 2007. 
The High Court dismissed both the appeals vide impugned judgments 
dated 27.01.2009, also relying on the decision that was rendered in 
the case of D.G. Khan Cement Limited supra. Dissatisfied with the 
common judgments rendered in both the appeals, the appellants filed 
petition for leave to appeal in CPLAs No. 289-K/2009 and 290-
K/2009 in this Court. Both the petitions after grant of leave were 
converted into present appeals.   
 
 
 
 
3. 
 
In the cement industry, Off-Highway trucks are used at 
the quarries where the predominant raw-material in the cement 
production ‘limestone’ is won by either extraction or blasting and 
then hauled on Off-Highway dump trucks to the place where the 
second stage in the cement manufacturing activity i.e. crushing of 
the raw-material takes place. In a decision of this Court rendered on 
25.05.2016 in Civil Appeal No. 1291 of 2005 in the case of Collector of 
Customs Vs. D.G. Khan Cement Company Limited heard by us 
alongwith the present appeals, a question arose as to whether the 
use of Off-Highway dump trucks 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 the Off-Highway dump 
trucks in their utilization remain mobile as against other machinery 
and equipment of the plant which directly or indirectly remains 
fastened to the earth. It was on account of the specific design and 
CIVIL APPEAL NOs. 427/2009 & 428/2009 
 
4
utility of Off-Highway Dump Trucks in the industrial process of 
cement production that we broadened the meaning of the term ‘plant’ 
mentioned in SRO 484(I)/92 dated 14.05.1992 bringing the Off-
Highway dump trucks within its ambit and thus answered the 
question in the affirmative. In deciding so, we did not approve the 
judgment of the High Court of Sindh rendered in the case of D.G. 
Khan Cement Limited Vs. Deputy Collector of Customs  (2003 PTD 
986) as it was based on an entirely different reasoning. The judgment 
of this Court in the case of Collector of Customs Vs. D.G. Khan Cement 
Company Limited rendered by us on 25.05.2016 in Civil Appeal No. 
1291/2005 was based on following reasoning:-  
 
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 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.  
 
CIVIL APPEAL NOs. 427/2009 & 428/2009 
 
5
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 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 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 
(crushing, blending, heating, cooling, clinkering and milling) ends with 
CIVIL APPEAL NOs. 427/2009 & 428/2009 
 
6
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.  
 
4. 
 
In the present case, however, all eighteen trucks 
imported by the respondent companies are Volvo FM 400 trucks. 
Volvo is a world renowned truck manufacturing company. It 
manufactures many kinds of trucks, which include both Off-Highway 
and On-Highway trucks. Volvo FM 400 trucks that were imported by 
the respondent companies being On-Highway trucks are designed for 
long distance highway transportation. These trucks can mount 
container on its chassis for loading goods. As On-Highway truck is 
meant for long hauls, it also has a bunk in its cabin for its use as 
driver’s sleeping area. In contrast to such utility, the Off-Highway 
dump truck, as decided by us in the case of Collector of Customs Vs. 
D.G. Khan Cement Company Limited is specifically designed for use in 
difficult terrains where the activities of mining, quarrying or 
construction of big buildings are carried out. Purely on account of the 
specific design and utility of Off-Highway dump trucks in the 
industrial process of cement production that the same were brought 
within the ambit of plant. On the other hand, Volvo FM 400 trucks 
that were imported by the respondent companies, being On-Highway 
trucks and not Off-Highway dump trucks, were rightly treated by the 
Appraisement Collectorate of the Customs as not being a part of the 
plant of a cement factory.  
CIVIL APPEAL NOs. 427/2009 & 428/2009 
 
7
 
5. 
 
In view of the above discussion, we hold that the 
respondent companies were not entitled to claim exemption under 
SRO 575(I)/2006 dated 5.6.2006 and SRO 530(I)/2005 dated 
6.6.2005 on Volvo FM 400 trucks that were imported by them as the 
same were found to be On-Highway trucks and not Off-Highway 
dump trucks. The customs authorities shall recover the customs 
duties and Sales Tax on all eighteen Volvo FM 400 trucks imported 
by both the respondent companies in terms of PCT Heading 
8704.2290. These appeals are allowed in the above terms.  
 
JUDGE 
 
 
 
JUDGE 
 
 
 
JUDGE 
 
 
Islamabad, the 
Announced on ______________ by Hon’ble Mr. Justice Faisal Arab 
 
Approved For Reporting 
Khurram