MULTAN: Customs Adjudication Collector Raja Tahir Majeed has issued an Order-in-Original (ONO) against Shujabad Weaving Mills Limited for evading duty/taxes amounting to Rs 4.989 million and imposed a fine equivalent to the value of imported goods.
The factory was approved a quantity of 87552 kilograms cotton yarn for the manufacturing and export of finished goods under DTRE approval by the Multan Customs.
The audit team examined that Shujabad Weaving Mills did not export any quantity of cotton grey fabrics after manufacturing. Thus the company is liable to pay duty/taxes involved on import of raw material, which could not be subsequently exported by the factory.
The audit team formed contravention against it imposing charges of misusing the DTRE facility. The authorities concerned of the factory also admitted that they could not export the finished goods, as the DTRE approval was granted after 45 days from the day of application.
However, they showed willingness to pay leviable duty/taxes i.e. sales taxes and withholding taxes on concessionary rate of duty 3 percent and 1 percent under SRO 1125 and Clause 45-A of Second Scheduled of Income Tax Ordinance, 2001 respectively sales tax at 17 percent and withholding tax at 5.5 percent.
It is observed that DTRE user never claimed the benefit of concessionary rate of sales tax and income tax in the GDs at the time of import in terms of SRO 1125(I)/2011 and provisions of clause 45-A.
The matter has been discussed in the Federal Board of Revenue (FBR) and it is stated that all the concessionary regimes have their own mechanism to facilitate the importer/exporter. Concessionary regimes/exemptions can be withdrawn at any point of time.
During hearing of case in the Customs Adjudication, it was observed that their deliberate act of misusing the facility and depriving the national exchequer of duty taxes cannot be condoned, hence they were not entitled to avail the benefit under another concessionary scheme claimed by the user after the clarification.
The adjudication found that Shujabad Weaving Textile Mills Limited violated the DTRE rules by not exporting a single kg of cotton fabric under DTRE scheme.
Therefore, Collector Raja Tahir Majeed issued direction to Multan Customs for the recovery of Rs 4.989 million from the company under sub section 3 A of Section 32 and Section 219 of the Customs Act, 1969. The collector also imposed penalty equivalent to value of goods imported by Shujabad Weaving Textile Mills Limited.
