KARACHI: The Collectorate of Customs Adjudication-II has issued an Order-in-Original (ONO) against M/s Sarfaraz Abdul Latif Husnain Impex on tax evasion of Rs 1.64 million which was evaded while importing titanium dioxide by availing illegal benefits under SRO 509(1)/2007 and imposed a penalty of Rs 100,000.
According to the details, the Directorate of Post Clearance Audit (PCA), Customs Karachi, vide its contravention report No PCA/1907/2010-Audit/2042 reported that the said importer had imported two consignments of bearing CRN No I-Hc-1601376-020709 and I-Hc-1102892-100809 of Titanium Dioxide ‘Anatase KA-100’ from South Korean.
The importer declared/self assessed the same under PCT Heading 2823.0010 attracting 5 percent custom duty, exemption of sales tax at 0 percent under SRO 509(1)/2007 and concession of withholding tax under SRO 638(1)/2005 dated 27.6.2005 whereas PCT Heading 2823.0010 pertains to purified/untreated Titanium Dioxide.
In the ONO, the Additional Collector Customs Adjudication-II, Syed Mahmood Hassan stated that whereas the test reports and literature read with explanatory notes proved that Titanium Dioxide ‘Anatase KA-100’ is surface treated having deliberate additions of other substances and by virtue of other substances and by virtue of that classifiable under PCT Heading 3206.1100 chargeable to customs duty at 5 and 1 percent special excise duty in terms of SRO 655(1)/2007 dated 29.6.2007. The importer, hence, by mis-declaring the HS code evaded sales tax, income tax and special excise duty amounting to Rs 1.6 million.
The ONO further states, in the light of the afore-stated facts and charges in the show cause notice stand established. In exercise of powers conferred upon me under Section 32(1) &32(3)(A) of the Customs Act, 1969, the respondent namely M/s Sarfaraz Abdul Latif Husnain Impex are directed to deposit the duty/taxes amounting to Rs 1.60 million into the government treasury. A penalty of Rs 100,000 is also imposed on the importer in terms of clause 14 of Section (1) of the Customs Act, 1969.
