KARACHI: Collectorate of Customs Adjudication-I Collector Abdul Basit Chaudhary has issued a show-cause notice to M/S Shahid Brothers for allegedly evading Rs 35.231 million by claiming illegal benefits of Fifth and Sixth Schedule.
According to the details, it has been reported by the Directorate of Post Clearance Audit (PCA) that on scrutiny of import data, it was found that M/s Shahid Brother imported LED lights assorted type/size for solar use and fixture and fittings under PCT Heading 9405.1090 through Appraisement-West and got their consignments released with the claimed benefits of Fifth Schedule Part I-24, Sixth Schedule.
According to the PCA, the exemptions are only available to SMD, LEDs with or without ballast with fittings and fixtures for promotion of the renewable energy technologies, which includes like solar and wind power resources only.
The examination staff in their examination report did not confirm that the imported LED lights, SMD lights and fixtures are for solar use as declared on the GDs/import documents, the PCA stated, adding that it appeared from the examination report that the imported items were for general use operative under normal voltage of 220-240 volts normally used in Pakistan produced by hydel/fuel power sources.
The PCA report said that the images scanned by the examination staff shows operative voltage as 220-240 volts. It is an undeniable proof that the imported goods are not meant for work/operative with the renewable energy sources like solar energy or wind energy.
Further, it transpired that the imported goods operate on alternating current AC voltage rather than on direct current DC which is used and operate in the renewable energy technologies. Therefore, the concessions under the claimed notification are not available to the subject imports, the PCA claimed.
And whereas an amount of Rs 35.231 million has been short paid/evaded on account of custom duty, regulatory duty, sales tax, additional sales tax and withholding income tax by M/s Shahid Brothers.
An audit observation was issued to M/s Shahid Brothers for explaining and clarifying as on what basis concession were availed by them as the item imported by them was not covered by description and definition under the claimed notifications. The importer, however, failed to come up with any tangible evidence and explanation and they were also unable to refute the charges levelled by the department.
In view of the aforesaid M/s Shahid Brothers are held to have intentionally and wilfully caused loss to the government exchequer amounting to Rs 35,231,708 by misuse/claim of inadmissible benefits.
Now therefore, in the light of above reported facts M/s Shahid Brothers has been served a show cause as to why short paid/evaded amount of duty/taxes worth Rs 35,231,708.
Hearing in this case has been fixed for May 30, 2016 wherein the respondents may appear in person or through his authorized representative in the office of Adjudication-I collector.
