MULTAN: Collector Customs Adjudication has issued Order in Original against Reliance Weaving Mills (Pvt.) Limited in the tax evasion of Rs 3.268 million.
The Reliance Weaving Mills imported 516,429 kilograms of the polyester staple fibre under the facility of DTRE. However, during the passage of audit conducted by Audit team of Directorate General, Audit Customs and Petroleum (North) Lahore of DTRE, it was observed that the mills had failed to consume polyester staple fiber imported free of duty and taxes under DTRE.
The Reliance Weaving Mills Limited was directed to pay duty taxes from Customs on unconsumed Polyester Fibre falling under HS code 5503.2010 and Reliance Weaving Mills was liable to pay the customs duties at the rate of 10 percent. But Reliance Weaving Mills has paid the customs duty @ 6 percent under SRO 567(I)/2006 on dated 5/6/2006 instead of payment at statutory rate of Customs duty.
The omission of customs duty paid with the 6 percent resulted in short realisation of government revenue of Rs 3.168 million in the import of polyester staple fibre.
Customs argued that Reliance Weaving Mills has neither consumed nor exported the goods allowed against the import quantity of 516429 kilograms of the polyester staple fibre under DTRE facility. However, Reliance Weaving Mills have paid duty taxes on the concessionary rate of customs duty under SRO 567(I)/2006.The main argument was comprehensively done on the exactly availed the exemption under SRO 567(I)/2006 from Reliance Weaving Mills that customs duty and taxes on local scale of polyester filber were also allowed with written permission of regulatory collector.
Perusal of record reveals during hearing that Model of Customs Collectorate asked the Federal Board of Revenue for the clarification of customs duty @ 10% according to Pakistan Customs tariff which is a legal document wherein rate of customs duty and taxes are incorporated according to customs act 1969.
The matter has been examined in the Federal Board of Revenue and it is stated that the entire concessionary regime have their own mechanism to facilitate the importer or exporter. Similarly, the export oriented schemes have also self-oriented mechanism to facilitate the importer and exporter so these concessionary regimes can be withdrawn at any point. In this matter Federal Board of Revenue clarify that applicable exemptions for exports like DTRE, manufacturing bonds, temporary importation means leviable duty, taxes shall be paid according to tariff structure.
Collector Customs Adjudication have given the final conclusion in the Reliance Weaving Mills in the light of clarification of Federal Board of Revenue that they required to pay the customs duty according to tariff structure. Based on the above facts they were directed to pay an amount of Rs 3268523/-along with other leviable taxes which may be calculated at the time of deposit. Collector Customs Adjudication have also imposed penalty of Rs 50, 000 on Reliance Weaving Mills for the violation of provisions of customs act under clause 10-A of section 156 (I) of the Customs act 1969.
