KARACHI: The Customs Appellate Tribunal has struck down the additional demand created by Customs Appraisement through Order-in-Original against a fabric and yarn importer. The tribunal also struck down the penalty imposed by the department.
According to the details, an importer M/s Samad Enterprises imported 16 consignments of blended fabrics in 2014 being registered as manufacturer of textiles and claimed benefit of SRO 1125(I)/2011. The consignments were accordingly cleared after due verification.
However, subsequently Customs Appraisement submitted a contravention report on the pretext, that the importer had failed to pay 3.0 percent sales tax, 2.0 percent additional sales tax and 3.0 percent income tax, on the assumption that all the imported consignments were of blended fabrics and that the M/s Samad Enterprises is a commercial importer.
Over this, the importer clarified that only one consignment of blended fabric was imported and the remaining 15 consignments were of assorted yarn against volume the leviable duty and taxes were paid. Documentary evidence were also submitted in this respect that the importer is a manufacturer of textile, and the same was also verifiable on the FBR e-portal.
The Customs however passed the impugned Order-in-Original on the presumption that the importer is a manufacturer of plastic products and thus not entitled to the benefit of SRO 1125(1)/2011. Importer was directed to pay Rs 2.9 million as evaded amount and a penalty of Rs 300,000 was also imposed.
Later, the importer approached Appellate Tribunal. The Tribunal after detailed deliberations of evidence on record and in the absence of any concrete evidence or justification in favor of the additional demand created by Customs struck down the Order-in-Original.
