KARACHI: MCC Peshawar has approached Customs Appellate Tribunal against the order-in-original by the Customs Adjudication in the fake export of sugar to Afghanistan by M/s Chaudry Sugar Mills and M/s Ashraf Sugar Mills, wherein the Adjudication has decided partially in the favor of the sugar millers.
MCC Peshawar constituted a team to scrutinize and reconcile the export data of zero rated regime. The team retrieved the data from M/s Pakistan Revenue Automation Limited ( PRAL) pertaining to the export of sugar during July-August 2015 for cross verification of the exports with manual record maintained by the Customs staff at Torkham. On scrutiny of the PRAL data, it transpired that several GDs were available in the system data but not found in the manual record.
Thus, a Show cause notice was issued to M/s Ashraf Sugar Mills and M/s Chaudry Sugar Mills who appeared and submitted their written reply and thereafter the adjudicating authority decided the case partially in favor of sugar millers.
MCC Peshawar in its appeal notes that the sugar millers with active connivance of clearing agents through e-filing. These GDs were filed for export of sugar under the subsidy scheme of Federal Government vide Economic Coordination Committee Decision. Both the parties are equally involved in the commission of offence but this aspect of the case has not been considered at all by the learned lower forum.
The exporters with connivance of clearing agents filed the export GDs through e-filing but the export was not made physically as there was no consignment on ground for export to Afghanistan. This scam of fake export was discovered as a result of in-house audit after the competition of scheme. Thus they not only committed an offence but also their this act become bad fame for the country, which is not condonable under the law but still undue benefits for which the sugar millers are not entitled has been granted to them.
Under the law Export Development Surcharge (EDS) and Withholding Tax (WHT) already paid through banking channel are liable to forfeiture in favor of the state. The Adjudicating authority has totally fell into error by holding that foreign exchange which was to be earned on export in not recoverable from them.
The Adjudicating Authority has reached to the conclusion that the offence of mis declaration and fiscal fraud had been committed in respect of sugar but still exonerated sugar millers including M/s Chaudry Sugar Mills M/s Ashraf Sugar Mills and for the commission of the same offence, without any proper justification thus the decision is liable to be reversed to this effect as it is very much clear that the name of sugar millers have been specifically mentioned on the GDs.
The name of alleged middleman has not been available on export documents but this aspect has wrongly been decided in favor of exporting sugar mills.
That allegation leveled in the show cause notice that the goods were not actually exported but supplied to the local market, therefore, domestic taxes are payable on part of the manufacturer / exporter, the Federal Excise Duty (FED) is therefore, recoverable but the adjudicating authority without applying its judicious mind decided the issue in favor of accused which is totally against the rules and regulation therefore, the same is liable to be set aside.