KARACHI: The Collectorate of Customs Adjudication-II has issued six show-cause notices to M/s Omar Associates for evading taxes and duties to the tune of Rs 54 million for taking inadmissible DTRE concessions on import of soap stone.
As per details, the PCA Karachi, during scrutiny of DTRE No KEXP/ 3664/ 25052010 dated 25.05.2010, observed that M/s Omar Associates imported 15000 M. Tons Soap Stone under H.S.Code 2526-1010 availing facility of provisions of DTRE Rules notified vide SRO.450(i)/2001 Dated 18-06-2001. The importer imported input material under 65 Goods Declarations during the period 07-07-2010 to 01-11-2010. The DTRE user exported 14588.364 M.Tons of Finished Talc Lumps under 10 Export Goods Declarations during 06-07-2010 to 26-10-2010.
M/s Omar Associate under Rule 302 of DTRE Rules was granted specific contract based DTRE approval for acquisition of duties and taxes suspended input goods for solely use in exports as specified in the application to the Regulatory Collector in the form set out in Appendix I to the DTRE Rules having all required information (Rule 298 of DTRE rules).
This approval is on the basis of declaration of the applicant who stand responsible for fulfillment of these declarations which besides others includes that the input goods acquired under Chapter XII of SRO.450(I)/2001 dated 18-6-2001 shall be utilized in the manufacture and export of output goods within 24 months. The DTRE user submitted reconciliation statement on 27-02-2012 on prescribed form (App-III) in terms of Rule 307-D of the aforesaid Rules.
It is worth mentioning that under Rule 302A, samples of imported input goods and output goods meant for export shall be drawn at the time of import and export so that the same could be used for cross matching or any other purpose as required. Rule 302(c) categorically states that before allowing release of consignments for export under the DTRE facility, compare literature of the imported raw materials, received from relevant Customs import station with the certified ones provided by the DTRE user for finished goods in order to satisfy himself that the finished goods have been manufactured or produced using such imported raw materials and endorse the same in the examination report.
The analysis of import and export documents and the record provided with reconciliation statement revealed that DTRE user has not followed the rules in its true spirit. Port of importation is shown Karachi instead of Torkham in Appendix-I. Similarly the date of import at Torkham is recorded as date of arrival in Karachi. Clearance at Torkham, unloading at Peshawar Terminal, sorting by Labors, reloading and transportation to Karachi will take minimum 10 days.
M/s. Omar Associate (Pvt) Ltd, Karachi, was advised to deposit the short levied amount of Rs. 54 million however the customs authorities received no a detailed response by the importer. However, the reply was not satisfactory and the case was forwarded to the adjudication for further proceeding. In this regard, the customs adjudication-II has issued six showcause notices to M/s Omar Associates.
