KARACHI: Collector of Customs Adjudication-I Dr Wasif Memon has issued Order-in-Original (ONO) against M/s Hudaibia Trading for evasion of duties and taxes to the tune of Rs 1.15 million for availing inadmissible benefits under SRO 1125(I)/2011 dated 31.12.2011.
The Directorate General of Post Clearance Audit Karachi found that M/s Hudaibia Trading imported consignments of wet blue sheep skin, wet blue goat skin, wet blue sawakini, cow split hides under PCT Heading 4105.2100 and 4106.2100.
And whereas audit scrutiny of GDs revealed that M/s Hudaibia Trading illegally availed the zero rating benefits of sales tax and income tax under the aforesaid notification. It also transpired that status of M/s Hudaibia Trading at the time of import was importer, exporter, retailer and not registered as manufacturer. Therefore, the importer short paid/evaded an amount of Rs 1.15 million.
Accordingly, an audit observation was issued to the importer to explain the basis of concession availed by them vide SRO 1125(I)/2011 dated 31.12.2011 when they were not manufacturers at the time of import. The importer however failed to come up with any tangible evidence to refute the charges leveled by the department.
Hence, the importer violated provisions of Section 31(1)(2) & (3A) of the Customs Act, 1969, Sections 3(1), Section 3, 6 and 7 read with section 34 of Sales Tax Act 1990 and Income Tax Ordinance, 2001 punishable under clauses (1), (9) and 14 of section 156(I) of the Customs Act, 1969 read section 33(5) and section 7-A of the Sales Tax Act 1990 read with chapter X of the Sales Tax Special procedure Rules 2007 (Special procedures for payment of sales tax by the importers) and relevant provisions of Income Tax Ordinance, 2001.
