LAHORE: The Customs Appellate Tribunal has dismissed a case of M/s Siara Textile Mills against Customs Adjudication collector, additional collector and Air Freight Unit (AFU), Lahore, and ordered the customs authorities to recover the outstanding taxes.
Technical Member Imran Tariq heard the case and said that the customs authorities should recover the default amount of taxes along with default surcharge under appropriate section of the Sales Tax Act, 1990 and Income Tax Ordinance, 2001. The tribunal also waived off penalty of Rs 15,000 on the appellant, M/s Siara and clearing agent.
As per precise fact of the case, the customs superintendent learned that M/s Siara Textile imported a consignment of Indian raw cotton and claimed two percent sales tax instead of 16 percent under SRO 1125(I)/2011.
During the course of audit, the customs officers observed that the consignment of raw cotton imported by the appellant was liable for payment of 16 percent sales tax not two percent and the importer was not entitled to the benefits of the said SRO.
After the showcase notice and complete examination of the record, the adjudication authorities passed the Order-in-Original and imposed Rs 2.5 million in the wake of sales tax and Rs 2.4 million as income tax on the mills.
The appellant challenged the order before the Customs Appellate Tribunal and claimed the benefits of SRO 1125(I)/2011. The appellant also argued that the respondent department did not have jurisdiction to recover the short payment of income tax and sales tax and the show cause notice was vague and suffered with defects.
On the other side, representative of the department denied all the allegations. After hearing the final arguments from both sides, the tribunals waived off penalty on the Siara Textile Mills and clearing agent and also ordered the Customs Department to collect taxes and duties from the appellant. The tribunal also dismissed the case with no further order.
