ISLAMABAD: The Federal Board of Revenue has recovered 5,988 cigarettes packets in a warehouse of Philip Morris Pakistan which is allegedly used as facility for undeclared/concealed production of non tax-paid cigarettes.
According to the FBR’s Regional Taxpayer Office (RTO) Rawalpindi, the officials tracked a vehicle loaded with cigarette of different brands manufacturing by M/s. Philip Morris Pakistan (PMP) Ltd. The vehicle was intercepted soon after its exit from company’s hitherto undeclared warehouse at GT Road, Chakwal Morr, Mandra, Gujjar Khan, Tehsil Gujjar Khan District Rawalpindi.
The PMP’s warehouse staff produced certain record in follow up of seizer of their vehicle for clarification. Examination of record revealed that statutory provision of Federal Excise Act, 2005, Federal Excise Rules, 2005 and SRO 217(I)/2010 dated 31.03.2010 are not being observed.
As a result of this exercise total 132 packets of unmatched cigarette were seized and a separate Contravention Report has already been framed and sent for adjudication to LTU Karachi. However the alarming ratio of mismatched cigarette, unearthed while examining the aforesaid vehicle necessitated & triggered the subsequent action by RTO Rawalpindi wherein the team members were authorised for detail physical checking of undeclared warehouse.
The team accordingly visited the premises and found huge cigarette manufacturing and packing machine were parked at the premises despite the fact that PMP had submitted a categorical report to Directorate General I&I-IR that all machines of Mandra Factory have been scrapped & cut into pieces.
This reply was furnished during an inquiry by I&I-IR wherein one of such PMP’s machines was detected by I&I-IR at an undeclared/illegal cigarette manufacturing unit at Buner, KPK.
Presence of huge plant & machinery not only belies PMP’s statement to I&I its presence poses a potential threat on account of any possible illegal manufacturing. A contravention report in this regards has already been forwarded to LTU Karachi.
Huge stock of 14000 packets of different brands was stored in the warehouse. Detailed stock taking and cross matching of different documents/record (impounded during the said exercise) revealed some serious violation of FED/ST law & procedure, leading to and establishing factum of tax fraud. Some glaring details are given hereunder.
The responded had never declared premises at Mandra as their warehouse to the department as provided under Rule-15 of the Federal Excise Rules, 2005. It was only after the aforesaid operation this warehouse has been added by PMP on its web profile.
The reconciliation of physically available Stock at the premises vis-à-vis Transport Advice-Cigarette SRO 217(I)/2010 dated 31.03.2010 was made in the Philip Morris (Pakistan) Ltd and Muhammad Israr CNIC 16102-2269378-7, Senior Security Supervisor of M/s. Philip Morris (Pakistan) Ltd at Mandra.
This exercise revealed that following 5988 packets of different brands, available in stock did not match with the transport invoices. The above mismatch clearly indicates that aforesaid packets of different brands of cigarette were not transported through prescribed Stock Transport Advice-Cigarette i.e. therefore, neither identifiable nor mentioned in Federal Excise record available in the warehouse.
