KARACHI: The Collectorate of Customs Adjudication-I has issued Order-in-Original (ONO) against M/s Lyalpur Chemical and Fertilizer for its alleged involvement in evasion of duty and taxes of Rs 3,235,412 by availing undue benefit of SRO55(I)/2008 on import of chemical “natural rock phosphate 30 percent un-grounded”. The case was constituted by the Directorate of Post Clearance Audit-PCA (Customs), Lahore.
The Collector of the Collectorate of Customs Adjudication-I Abdul Basit Chaudhry in the ONO was also imposed a penalty of Rs 0.3million on the respondent under Clause (14) of Section 156(1) of the Customs Act, 1969.
In the order, the Collector Abdul Basit Chaudhry stated that he was examined the case record and considered written/verbal arguments of the department and the respondent. At the outset, it may be observed that the powers for recovery of any short paid amount of duty/taxes lies with the department under Section-32 and 179 of the Customs Act, 1969. The officers of Post-Clearance Audit-PCA are empowered to exercise the powers and discharge duties of the officers of Customs for the purpose of the Sections 32 and 32-A of the Customs Act, 1969 in terms of SRO500(I)/2009.
The Collector Abdul Basit Chaudhry stated that moreover, the Section 179 of the Customs Act, 1969 clearly describes the jurisdiction of customs officers to recover the duty and other taxes including Income Tax. The claimed SRO551(I)/2008 was issued for Sales Tax exemption under Section13 of the Sales Tax 1990, it does not cover zero rating regime of the Sales Tax for application of Clause 9 of Section 148 of the Income Tax Ordinance-2001 for payment of Income Tax @1per cent.
Therefore, the Collector of Customs Adjudication-I stated that the respondent was required to pay Income Tax @3per cent under Clause 9(a) part-II of the Section 148 of the Income Tax Ordinance-2001. This was resulted in short levy of Income Tax to the tune of Rs2641153 and Anti-Dumping Duty Rs594259 total Rs3235412.
It is pertinent to mention here that the respondent himself imported identical goods vide GD No. KAPR-HC-90909 on payment of 3per cent Income Tax as well as anti-dumping duty @0.45per cent.
Hence, the respondent has violated Section 32(1) (2) of the Customs Act, 1969 and availed inadmissible benefit of SRO 551(I)/2008 punishable under clauses (1) and 14 of Section 156(1) of the Customs Act, 1969. Accordingly, the charges leveled in the Show-Cause Notice stand established.
Therefore, the Collector Abdul Basit Chaudhry has ordered recovery of short paid/evaded amount of duty and taxes to the tune of Rs3235412 from the respondent.
The Collector was also imposed a penalty of Rs0.3million on the respondent under Clause (14) of the Section 156(1) of the Customs Act, 1969.
