KARACHI: The Collector of the Collectorate of Customs Adjudication-I Abdul Basit Chaudhary has issued an Order-in-Original against the importer M/s Nizam Energy (Private) Limited due to its alleged involvement in tax evasion of Rs 52.7 million on import of “lead acid batteries” of assorted amperes.
According to details, the case was constituted by the Customs Collectorate Appraisement (West) and nine hearings of the case were held on 17-11-2015; 26-11-2015; 21-12-2015; 21-01-2016; 01-03-2016; 07-03-2016; 16-03-2016 and 22-03-2016.
In the order, the Collector Abdul Basit Chaudhry stated that he examined the case record and heard the arguments of both sides.
The Collector-Collectorate of Customs Adjudication-I was of the view that the S No110 of Table-I to the Sixth Schedule to the Sales Tax Act, 1990, allows exemption for “dedicated use” to be certified by Alternative Energy Development Board (AEDB) and S No. 15(6) of Table-III to the Sixth Schedule to the Sales Tax Act 1990, allows exemption after certification of AEDB with respect to “commensuration of quantities”, hence; the two certifications cover different aspects and are not a substitute to each other.
In the ONO, the Collector further said that the respondent (importer) could not produce AEDB Certificate for dedicated use. adding that the subject GDs comprise of batteries only no other equipment for generating solar energy was included in these GDs. Hence, the dedicated use is not established and therefore, income tax exemption is not available.
The Collector Abdul Basit Chaudhry in the ONO further added that as per Engineering Development Board (EDB) letter C No. EDB-PL/01/14-Tech-II, and CGO No.09/2013, all types of VRLA batteries are excluded, being locally manufactured.
“I also find the department well within its legal right to recover the duty/taxes at post clearance stage. However; as the goods were assessed and released by the department and no penal action was taken on account of mis-declaration at that stage for claiming/availing inadmissible exemption hence; no mens-rea can be attributed. Accordingly, I order for recovery of Rs52771034 as found recoverable in the Show-Cause Notice (SCN).
