Law: Federal Excise Act, 2005

Section: 3,16,42

Law: Finance Act, 2007

Section: 3(A)

Law: Islamabad Club (Administration) Ordinance, 1978

Section: 6(4)

Federal Excise Act, 2005-- ----Ss. 3, 16 & 42--Invention in Federal Excise Act, 2005--Imposing of special excise duty--Issuance of SRO--Issuance of show cause notice--Appeal--Disposed off--Appeal before Commissioner Inland Revenue--Accepted--Fundamental principle--Show cause notice was issued that since applicant manufactures and produces goods by way of cooking of food and serving to its members hence it falls within purview of Section 3 (a) of Finance, Act, 2007--It is fundamental principle of construction of fiscal statutes that where there is any ambiguity or doubt same has to be resolved in favour of taxpayer/citizen--It cannot be said that applicant is manufacturing or producing goods but rather is offering services to its members, hence is not liable to pay Special Excise Duty (SED)--Federal Board of Revenue while relying upon by opinion of Ministry of law issued a circular that hotels and restaurants are not amenable to Special Excise Duty under Section 42 of Federal Excise Act, 2005--All officers and persons employed in execution of Act are bound to follow orders, directions and instructions of Board, hence circular dated 25.7.2009 was binding on Assistant Commissioner--Reference accordingly disposed off. AIR 1963 SC 791, AIR 1972 SC 1131 & AIR 1970 SC 1212, ref. THIS JUDGMENT DELIVERED BY: AAMER FAROOQ, J.- The facts, in brief, are that through Finance Act, 2007, Section (3)(A) was inserted in the Federal Excise Act, 2005. Under the referred Section a Special Excise Duty was to be imposed at the rate of 1 percent on the following: All goods produced or manufactured in Pakistan; All goods imported into Pakistan. Vide notification dated 29.6.2007 an SRO was issued by the Government under Section 3A read with Section 16 of the Federal Excise Act, 2005, by virtue of which it was specified that Special Excise Duty (SED) shall be levied on all goods mentioned in the first schedule of Customs Act except those which are exempt under the notification. On 27.5.2011 a show-cause notice was issued to the applicant namely M/s. Islamabad Club Murree Road, Islamabad wherein it was alleged that since the Club is supplying food and beverages hence the supply…

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