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Collector Adjudication-I Suraiya Butt issues ONO against M/s Feroz Mills for tax evasion

byAftab Channa
23/10/2016
in Karachi, Latest News
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KARACHI: Collector, Collectorate of Customs Adjudication-I Suraiya Ahmed Butt has issued an Order-in-Original ONO against M/s Feroz Mills Limited for evasion of duties/taxes to the tune of Rs 5,886,459 it is learnt.

The official sources told Customs Today that the collector has also imposed a penalty of 500,000 on the importer. According to sources, the Directorate General of Post Clearance Audit Karachi while scrutinizing import data found that M/s Feroz Mills Limited imported solar LED lights under PCT Heading 9405.1090 through Customs Appraisement West and claimed benefits of Fifth Schedule. However, the exemptions are only available SMD, LEDs with or without ballast with fittings and fixtures for promotion of the renewable energy technologies.

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The examination staff in their examination report has not confirmed that the lights are for solar energy as declared and the scanned images of the imported goods show operative voltage as 220-240 volts (alternating current).

It is also evident that the imported goods are not operative at direct current DC meant for work/operate with the renewable energy sources like solar energy or wind energy. Further it transpires from the web page of the supplier that operative voltage of their products rangers from 90 volts to 250 VAC.

Therefore, the concessions under the claimed notifications are not available to the subject imports.

It is therefore, held that the subject imports of LED lights without fittings and fixtures were not entitled to the claimed exemptions of duty/taxes. In view of the above, the charges leveled in the show cause notice stand established.

An audit observation was issued to M/s Feroz Mills Ltd for explaining and clarifying as to the basis on which concessions were availed by them as the item imported by them is not covered by description and definition under the claimed notification. The importer however failed to come up with any tangible evidence and explanation and they were unable to refute the charges leveled by the Department.

In view of the aforesaid, M/s Feroz Mills Ltd are alleged to have intentionally and willfully caused loss to the government exchequer to the tune of Rs 5,886,459 by misuse of Fifth Schedule which was evidently not admissible to them at the time of import.

I therefore, order for recovery of Rs 5,886,459 along with default surcharge to be determined by the department at the time of payment. A penalty of Rs 500,000 is also imposed on the importer M/s Feroz Mills Ltd.

 

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