KARACHI: The Customs Appellate Tribunal dismissed a Pakistan State Oil (PSO) appeal against the recovery of Rs107 million by the Customs authorities the former had not paid in the head of development surcharge on supply of POL products.
It is verdict, the tribunal observed that the appellant could not be allowed to manipulate the provisions of Customs Act, 1969 and Development Surcharge Ordinance, 1961 to avoid tax (PDL Surcharge) which their competitors, were/are paying faithfully. The court ruled that the appellant could not be allowed to illegally enrich itself at the cost of government’s revenue.
It is to be noted that Assistant Collector of Customs (Preventive) Oil Section, Kemari, Karachi finalized a contravention report stating that M/s Pakistan State Oil Limited had supplied POL Products (High Speed Diesel Oil) to Pakistan Navy vessel and declared the goods as ‘duty paid’ on relevant shipping bill cargo and charged the rate of local sale price ‘other than foreign voyage’ as fixed by the Ministry of Petroleum and Natural Resources.
Later the oil company adjusted the local sale price cargo on form AR-3 being a local manufacturers goods and claimed exemption from government levies under SRO 455(I)/96 dated June 13, 1996. The SRO provides exemption from central excise duty in case only “If the goods are supplied to Pakistan Navy for consumption in its vessels.” However, Development Surcharge Ordinance 1961 states “subject to the provisions of the ordinance, every refinery and every company shall pay to the (federal government) a development surcharge equal to the differential margin in respect of petroleum’s products produced or as the case may be purchased by it for resale except for export.
Therefore, exemption from payment of development surcharge on such supplies of POL products to Pakistan Navy vessels are not covered, as the price charged by PSO from Pakistan Navy as local sale price.
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