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 NOs. 1812-L TO 1815-L, 1962-L TO 1970-L, 
1981-L TO 1983-L TO OF 2017 
(On appeal against the judgment dated 14.04.2017 passed by the Lahore High Court, 
Lahore in ICA Nos. 1196/2015, 1340/2015, 1344/2015, 1635/2015, 1197/2015, 
1252/2015, 1258/2015, 1300/2015, 1455/2015, 1495/2015, 1500/2015, 1733/2015, 
1821/2015, 1388/2015, 1467/2015 & 1535/2015) 
 
M/s Advance Telecom 
 
 
 
 
(In CP 1812-L/2017) 
M/s M.I. Sanitary Store etc 
 
 
 
(In CP 1813-L/2017) 
M/s Marosh etc 
 
 
 
 
 
(In CP 1814-L/2017) 
M/s Dar Ceramics Trading Co etc 
 
 
(In CP 1815-L/2017) 
M/s Fincera (Pvt) Ltd, Lahore  
 
 
(In CP 1962-L/2017) 
M/s Usman & Umer Enterprises, Lahore etc 
(In CP 1963-L/2017) 
M/s Saad International Lahore etc  
 
(In CP 1964-L/2017) 
M/s Tayyab Traders, Lahore etc 
 
 
(In CP 1965-L/2017) 
M/s Commercial Corporation, Lahore etc  
(In CP 1966-L/2017) 
M/s Waheed Sons, Lahore etc  
 
 
(In CP 1967-L/2017) 
M/s Sara Enterprises, Lahore etc 
 
 
(In CPs 1968 & 1969-L/17) 
M/s Ibrahim Traders, Lahore etc 
 
 
(In CP 1970-L/2017) 
M/s Qureshi Sons, Lahore etc  
 
 
(In CP 1981-L/2017) 
M/s Umair International, Lahore etc  
 
(In CP 1982-L/2017) 
M/s Hussain Traders, Lahore etc  
 
 
(In CP 1983-L/2017) 
… Petitioners 
VERSUS 
 
Federation of Pakistan etc 
 
 
 
(In all cases) 
… Respondents 
 
For the Petitioners: 
Mr. Shafqat Mehmood Chohan, ASC 
 
 
 
 
Mian Muhammad Athar, ASC  
 
For the Respondents: 
Ch. Muhammad Zafar Iqbal, ASC 
 
 
 
 
Mr. Walayat Umar Ch, AOR 
 
Date of Hearing:  
22.09.2017 
 
JUDGMENT 
 
 
 
FAISAL ARAB, J.- Under Article 8 of the Bilateral Free 
Trade Agreement between Pakistan and China, the Customs duty on 
the goods originating in the territories of each country was to be 
progressively 
eliminated. 
Pursuant 
to 
such 
agreement, 
the 
Government 
of 
Pakistan 
issued 
SRO 
No.659(I)/2007 
dated 
30.06.2007 whereby the rate of customs duty was gradually 
CIVIL PETITION NOs. 1812-L TO 1815-L, 1962-L TO 1970-L, 1981-L TO 1983-L TO OF 2017 
2
reduced in four stages and in certain cases goods became duty free. 
Exercising the powers contained in Section 18(3) of the Customs 
Act, 1969, the Federal Government imposed regulatory duty on 397 
goods imported vide SRO No. 869(I)/2008 dated 27.08.2008. 
However, regulatory duty was not chargeable on goods covered 
under Free Trade Agreement. Imposition of regulatory duty was 
again repeated vide SRO No. 482(I)/2009 on the same terms as was 
imposed under SRO 869(I)/2008.  
 
2. 
 
In 2014, the Federal Government issued notification 
bearing SRO No. 568(I)/2014 dated 26.06.2014 whereby regulatory 
duty was imposed but this time no exception was made for the 
goods covered under the Free Trade Agreement. The petitioners, who 
are importers of goods covered under the Free Trade Agreement 
challenged the imposition of regulatory duty in Writ Petitions filed in 
the Lahore High Court on the ground that in the presence of the 
Free Trade Agreement, regulatory duty could not have been charged 
as it amounts to imposing customs duty in the garb of regulatory 
duty. The learned single Judge of the High Court, allowed the Writ 
Petitions on the ground that the regulatory duty being a kind of 
customs duty could not have been validly imposed in violation of the 
provisions of the Free Trade Agreement. It was further held that the 
present bilateral Free Trade Agreement is an offshoot of GATT and, 
therefore, be considered as a multilateral agreement as envisaged 
under the proviso of Section 18(5) of the Customs Act. Aggrieved by 
such decision, the Federation of Pakistan preferred Intra Court 
Appeals before the Division Bench of the Lahore High Court, which 
were allowed and imposition of regulatory duty was declared to be 
CIVIL PETITION NOs. 1812-L TO 1815-L, 1962-L TO 1970-L, 1981-L TO 1983-L TO OF 2017 
3
valid vide impugned judgment dated 14.04.2017. Hence, these 
petitions.  
 
3. 
 
Learned counsel for the petitioners mainly argued two 
points. First, it was contended that while imposing regulatory duty 
under SRO 869(I)/2008, it was clearly mentioned that regulatory 
duty would not be chargeable on the goods imported under the Free 
Trade Agreement and unless this SRO, which created an exception 
to the imposition of regulatory duty on goods covered under Free 
Trade Agreement is withdrawn, such duty could not be validly 
imposed at any subsequent stage. Second, it was argued that 
proviso to Section 18(5) of the Customs Act, 1969 is attracted to the 
case, therefore, duty could not be levied on goods covered under a 
multilateral trade agreements and the Free Trade Agreement being 
an offshoot of General Agreement on Tariff and Trade (GATT), hence 
it is to be regarded as a multilateral agreement for the purposes of 
the proviso to Section 18(5). Thus it was contended that imposition 
of regulatory duty be declared ultra vires of the proviso.  
 
 
 
As regards to the argument that the regulatory duty is 
part of the customs duty and once rate of duty has been reduced or 
became duty free pursuant to the Free Trade Agreement, no further 
regulatory duty could have been imposed, this question stands 
settled by a decision of this Court in the case of Collector of 
Customs and others Vs. Ravi Spinning Ltd and others (1999 SCMR 
412) wherein it has been held as under:- 
“The statutory duty prescribed under the First Schedule to the 
Act has nexus only with the duty levied under section 18(1) of 
the Act. Therefore, on the language of these S.R.Os., it is not 
possible to hold that the exemption granted under these 
notifications also applied to the customs duty levied in 
CIVIL PETITION NOs. 1812-L TO 1815-L, 1962-L TO 1970-L, 1981-L TO 1983-L TO OF 2017 
4
addition to the statutory duty under section 18(2) of the Act or 
under other laws for the time being enforced. We have already 
pointed out earlier in this judgment that in contradiction to the 
customs duty levied under section 18 (1), of the Act, which is 
prescribed and predetermined, the regulatory duty is neither 
prescribed nor pre-determined but is levied at a rate which 
may 
vary 
according 
to 
the 
circumstances. 
Therefore, 
regulatory duty imposed by the Government under section 
18(2) of the Act though a species of customs duty, is a duty in 
addition to the duty prescribed under the First Schedule to the 
Act to meet a particular situation, not covered by the statutory 
duty. (page 458) 
 
14. Regulatory duty, on the other hand, is neither fixed nor 
pre-determined. It is imposed in exercise of the delegated 
authority, by the Government subject to limitations mentioned 
in clauses (2) to (4) of section 18,…. ……………….. The 
regulatory duty, therefore, by its very nature is a transitory 
measure intended to cover and meet a situation or condition 
not covered by the statutory duty prescribed under section 
18(1) of the Act……………” (pages 430-431) 
 
4. 
 
This view was reiterated in another judgment of this 
Court in the case of Indus Trading and Contracting Company Vs. 
Collector of Customs (Preventive) Karachi and others (2016 SCMR 
842). It was held as under:- 
“5.         Under section 18 of the Customs Act, 1969, customs duties 
are levied under different nomenclatures. Under section 18(1) 
statutory customs duty is imposed whereas under section 18(2) (after 
amendment regulatory duty is covered under section 18(3) of the 
Customs Act) the legislature has empowered the Federal Government 
to impose regulatory duty through notifications. Therefore, statutory 
duty under section 18(1) and regulatory duty under section 18(2) are 
two distinct categories of duties. One should not be taken to be the 
same as the other. It is by now well settled by the judicial 
pronouncements of this Court that where import or export of any 
commodity enjoys exemption from statutory customs duty, even then 
the Federal Government can impose regulatory duty, within the 
confines described in section 18(2) of Customs Act through sub-
ordinate legislation. Where the legislature grants exemption from the 
payment of customs duty that falls under section 18(1), the same 
cannot be made basis to avoid payment of regulatory duty imposed 
subsequently unless there is also a promise that such concession 
would also be applied to regulatory duty in case it is levied in future. 
As the exemption in the present case does not contain such a promise 
it is to be applied only to duty that was chargeable under section 
18(2) and not to a duty which can be competently levied under a 
different nomenclature.” 
 
 
5. 
 
Insofar as the proviso to Section 18(5) of the Customs 
Act is concerned, the issue already stands resolved by the judgment 
of this Court in the case of Majeed and Sons Steels (Pvt) Ltd and 
CIVIL PETITION NOs. 1812-L TO 1815-L, 1962-L TO 1970-L, 1981-L TO 1983-L TO OF 2017 
5
others Vs. Federation of Pakistan through Secretary M/o Economic 
Affairs, Islamabad etc. (2016 SCMR 655) wherein it has been held 
that bilateral agreements cannot be read into the proviso of Section 
18(5) of the Customs Act. As to the other argument that under the 
first SRO 896(I)/2008 an exception from regulatory duty was 
created for goods covered under the Free Trade Agreement and as 
long as the exception granted by said SRO is not withdrawn, 
regulatory duty could not be charged, suffice it is to state that the 
earlier SRO was not in relation to grant of exemption from 
regulatory duty on goods covered under Free Trade Agreement. It 
only imposed regulatory duty on certain items which did not cover 
goods that were part of Free Trade Agreement. In these 
circumstances, the Government was well within its right to impose 
regulatory duty on such goods as well at any stage, which it did vide 
SRO 568(I)/2014. It was not necessary at all to first withdraw the 
exception granted earlier in SRO whereby the regulatory duty was 
imposed only on goods not covered under the Free Trade Agreement. 
 
6. 
 
For what has been discussed above, we do not find any 
merit in these petitions, which are accordingly dismissed and leave 
is refused.   
 
CHIEF JUSTICE 
 
JUDGE 
JUDGE 
Islamabad, the 
22nd of September, 2017 
Approved For Reporting 
Khurram 
 
