KARACHI: The Directorate of Post Clearance Audit (PCA) has detected evasion of duty/taxes of Rs 20.516 million allegedly by M/s Pakistan Telephone Cables Limited by way of mis-declaration.
According to sources, during the audit of import data related to imports/clearances of ‘copper rods/strips in coils/rolls 8.00 mm’ correctly classifiable under PCT heading 7408.1100 chargeable to customs duty @ 10%, it had been observed that certain importers cleared these goods by mis-declaring the same under PCT heading 7407.1020 chargeable to customs duty @ 5%, in order to evade duty/taxes.
M/s Pakistan Telephone Cables Limited imported 13 consignments of ‘copper rod refined and cleared the same from Customs Appraisement (East) Karachi, through their clearing agent M/s Naushad Enterprises by willfully and knowingly mis-declaring the goods under PCT Heading 7407.1020, chargeable to CD @5%, however, copper rods in coils/rolls are correctly classifiable under PCT heading 7408.1100, in terms of Rule 1 of General Rules of Interpretation as well as Chapter Note l (d & f) to Chapter 74 of Pakistan Customs Tariff and are chargeable to CD @10% sales tax. Chapter Notes 1 (d) & (f) defines “bars & rods” and “wires” in following terms:
Bars and Rods: Rolled, extruded, drawn or forged products, not in coils which have a uniform sold cross section along their whole length in the shape of circles, ovals, rectangles (including squares), equilateral triangles or regular convex polygons (including flattened circles” and modified triangles” of which two opposite sides are convex arcs, the other town sides being straight, of equal length and parallel). Products with a rectangular (including square, triangular and polygonal cross-section may have corners rounded along their whole length.
Wires: Rolled, extruded or drawn products, in coils, which have a solid cross-section along their whole length in the shape of circles, ovals, rectangles (including squares), equilateral triangles or regular convex polygons (including flattened circles” and modified triangles” of which two opposite sides are convex areas, the other two sides being straight, of equal length and parallel). Products with a rectangular (including square), triangular and polygonal cross-section may have rounded along their whole length. The thickness of such products which have a rectangular (including “modified rectangular”) cross-section exceeding one-tenth of the width.
Thus, there is strong evidence that, by way of mis-declaration of PCT heading, M/s. Pakistan Telephone Cables Ltd, Karachi, with active connivance of their clearing agents M/s Naushad Enterprises have made a deliberate and willful attempt to evade Rs 20,516,658.
Accordingly, an audit observation was issued to M/s. Pakistan Telephone Cables Ltd, Karachi. The importer however failed to come up with any tangible evidence and explanation and they were also unable to refute the charges leveled by the Department. In view of the aforesaid M/s. Pakistan Telephone Cables Ltd, Karachi, are held to have intentionally & willfully caused loss to the government exchequer amounting to Rs 20,516,658 which was evidently not admissible to them at the time of import. The contravention report is forwarded herewith for initiation of adjudication proceedings in the case.
