Collector also imposes Rs 500,000 fine under Clause 10A of Section 156(I) of Customs Act 1969
KARACHI: Customs Adjudication-II Collector Ahmed Mujtaba Memon has issued order-in-original (ONO) against Lintaz Industries for violation of SRO-327 (I)/2008 and 326(I)/2008 in import of 12 machinery/spare part consignments and 59 raw material consignments without payment of Rs 65.19 million customs duty and taxes.
According to details, the importer was granted licence no PWL-13/20 10-EOU for operating an export oriented unit under SRO-327(I)/2008 read with Section 13 of the Customs Act 1969.
The licence authorised Lintaz Industries to import machinery, equipment and apparatus including capital goods to be used solely within the limits of the export oriented unit under SRO-327(I)/2008 besides import of certain materials like dyes, pigments, chemicals, yarn, fabrics, threads, garments, accessories and packing materials required for production of dyed fabrics and bedding sets for export.
The face value of licensee was approved as Rs 20 million which was renewed provisionally up to 30-06-2012. The licensee imported 12 consignments of machinery/spares and 59 consingments of raw material without paying customs duty and taxes.
As per Sub-Clause (i) of clause (d) in Sub-Rule 2 of SRO- 327(I)/2008, Lintaz Industries being registered under Sales Tax Act 1990 was required to export at least 80 percent of its production to other countries .
A post-export audit was conducted by the collectorate for ascertainment of annual quantum or percentage of annual production exported by Lintaz Industries as an export oriented unit, as prescribed under Clause (d) or Sub-Clause (I) of Rule 2 of SRO-327(I)/2008.
Furthermore, the percent exports from November 2010 to June 2012 made by Lintaz Industries remained considerably less than the target which is 80 percent as prescribed under Clause (d) Sub-Rule 2 of SRO 327(I)/2008.
Failure constituted violation of Clause (i) of Clause (d) in Sub-Rule 2 of SRO- 327(I)/2008 forfeiting thereby the right of availing the benefits of the export oriented unit licence and liable for recovery of overall remission availed by them amounting to Rs 65.19 million.
In his judgement the collector stated, “The importer Lintaz Industries has failed to convince the authorities that they met the export threshold of 80 percent of production as envisaged in Clause (i) of Clause (d) in Sub-Rule 2 of SRO- 327(I)/2008 and therefore they were not entitled to the exemption claimed under SRO-327(I)/2008 and ordered the importer Lintaz Industries to immediately deposit in government treasury customs duty and taxes amounting to Rs65199610 being overall remission availed by them against import of 12 consignments of machinery and 59 consignments of raw materials in EOU under clause 5 of Rule 14 of SRO-327(I)/2008.”
The collector has also imposed Rs 500,000 fine under clause 10A of the Section 156(I) of the Customs Act 1969.
