Dawlance found guilty of revenue evasion

KARACHI: Additional Collector of Customs Adjudication Shafique Ahmed Latki has penalised M/s Dawlance Pvt Ltd and clearing agent for evading government revenue through mis-declaration of classification of goods to claim inadmissible benefit under Free Trade Agreement (FTA).

According to details, Directorate General of Intelligence & Investigation – Enforcement received information that several importers were involved in import and clearance of chemical Wannate PM-2010 (Polymethylene, Polyphenylene, Isocyanate) a polymeric MDL classifiable under PCT 3909.3000 attracting customs duty 20 percent through mis-declaration of PCT 3824.9091 meant for Di-Phenylene Isocyanate.

Two consignments were identified that had been declared to be Wannate PM-2010 (Polymethylene, Polyphenylene, Isocyanate) imported by M/s Dawlance and were cleared through customs agent M/s Omal Sons Corporation under claimed PCT 3824.9091 attracting zero percent customs duty under China FTA through customs computerised system.

The consignments were subsequently detained and were examined by the staff of  Directorate of Customs Intelligence & Investigation. The goods were found to be Wannate PM-2010 (Polymethylene, Polyphenylene, Isocyanate) as marked on the labels of drums contaning goods in form of brown color liquid.

The samples were drawn and sent to HEJ Laboratory for confirmation of description. HEJ reported that goods were not pure MDI but mixture of Methylene Diphenyl Isocyanate (MDI) 37.39 percent, Polymethylene, Polyphenylene, Polyisocyanate (polymeric MDI) 62.61 percent, which is classifiable under PCT 3909.3000. It may be mentioned that such mixture are also referred as crude polymeric MDIs which require further chemical process and distillation to obtain pure MDIs.

It was categorically confirmed that the goods cannot qualify for classification under PCT 3824.9091. The evasion of duty and taxes involved in the se was worked out to be Rs1.262 million.

After due deliberation of the case, Additional Collector Adjudication found the charges levelled against the importer and clearing agent established and ordered recovery of evaded amount. A penalty of Rs0.2 million was also imposed on M/s Dawlance Pvt Ltd. A penalty of Rs50,000 was imposed on clearing agent M/s Omal Sons Corporation.

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