KARACHI: The Collectorate of Customs Adjudication-II has issued Order-in-Original (ONO) against the importer M/s Royal Packages (Pvt) Ltd for its involvement in tax evasion to the tune of Rs 438.56 million by taking undue advantage of the concessionary SRO811(I)/2009 read with SRO645(I)/2011 and SRO152(I)/2013.
The Collector of the Collectorate of Customs Adjudication-II Ahmed Mujtaba Memon in his judgment has also imposed a penalty of Rs 40 million on importer M/s Royal Packages (Pvt) Ltd under clauses 10(A) and 14 of the Section 156(1) of the Customs Act, 1969.
According to details, the Research and Development (R&D) Section of MCC-Appraisement (East) had made a contravention report against the importer M/s Royal Packages (Pvt) Ltd in which it alleged that the said importer was involved in evading of leviable taxes including Customs Duty of Rs134,308,792; Sales Tax of Rs179,951,703 and Income Tax of Rs124,296,402 which makes up the total evaded duty/taxes to the tune of Rs438,556,897.
In the ONO, the Collector of Customs Adjudication-II stated that the accused importer violated the Sections 20, 26, 32(1), 32(2), 32(3)A, 32A, 79 and 80 of the Customs Act, 1969 punishable under Clauses 10A, 12, 14, 14A and 43 of the Section 156(1) of the Customs Act, 1969 read with Section 36 of the Sales Tax Act, 1990 punishable under Section 33 of the Sales Tax, 1990 and read with Section 148 of Income Tax Ordinance 2001.
The R&D Section during the investigation found that the importer M/s Royal Packages (Pvt) Limited was availing inadmissible benefit of SRO811(1)/2009 that was amended vide SRO645(I)/2011, whereby exemption of Customs Duty was also made admissible. However; the exemption of Sales Tax was withdrawn subsequently vide amending SRO152(I)/2013.
The R&D Section was of the view that the benefit of SRO811(I)/2009 is only confined to the import and supply of polyethylene and polypropylene falling under PCT heading No.3901.1000, 3901.2000 and 3902.1000 for manufacturing of mono filament yarn and net cloth and supply of Net Cloth to green house farming.
According to the information, the importer M/s Royal Packages (Pvt) Limited is not engaged in manufacturing of mono filament yarn and net cloth, but manufacturing other plastic products, thereby is misusing the concession of exemptions of Customs Duty and Sales Tax.
During the scrutiny of the past clearance data of the importer, it was found that the M/s Royal Packages (Pvt) Limited have got cleared 282 consignments of Polypropylene and Polyethylene through the Collectorate and claimed exemption of Customs Duty, Sales Tax and Income Tax in terms of SRO811(I)/2009 read with SRO645(I)/2011 and SRO152(I)/2013 to the tune of Rs 438.56 million.
The Collectorate of Customs Adjudication-II had issued show-cause notice to the importer M/s Royal Packages (Pvt) Limited and M/s Ghadeer Enterprises on 29-May, 2014 while the hearing of the case was conducted on 12-06-2014, 15-07-2014, 13-08-2014, 04-09-2014 and 19-09-2014.
