Customs recover evaded amount of Rs142.39 million from Pakistan Tobacco and Philip Morris

KARACHI: Customs Appraisement has recovered a sum of Rs142.39 million from two major tobacco companies, which were evaded due to mis-classification of artificial acetate tow and availing undue exemption.

It was known that leading cigarette manufacturers M/s Pakistan Tobacco Company and M/s Philip Moris PVT LTD were clearing cellulose acetate tow availing undue exemption. MCC Appraisement East and MCC Appraisement West took a joint initiative to secure government revenue.

Collector MCC Appraisement East Saeed Akram formed a team comprising Appraising Officer Sallem Qaimkhani and Preventive Officer Malak Hashim while Collector Appraisement West Ashad Jawad formed a team comprising Additional Collector Saeed Watto, Deputy Collector Umair siddiqui and Principal Appraiser Qayyum to pursue the case. scrutinized the issue and blocked clearance of pipeline consignments pertaining to both importers of the said item.

Cellulose acetate tow was being regularly cleared by the cigarette industry by mis-classifying it under PCT heading 5502.9090 and availing undue exemption of customs duty in excess of 6.5 percent in terms the 5th Schedule to the Customs Act, 1969. Whereas in order to exclude it from exemption regime of 5th schedule a new single dash tariff heading was created in the last budget as 5502.1000, however the importers, who are enjoying clearance facility under “Green Channel” continued to classify the ‘cellulose acetate tow’ under incorrect PCT heading 5502.9090 and by virtue of that successfully availed inadmissible exemption of Customs Duty in excess of 6.5 percent along with incidental taxes under serial 64 of Table-III of the 5th schedule of the Customs Act, 1969.

Both importers including M/s Pakistan Tobacco Company (PTC) and M/s Philip Moris cumulatively evaded payment of legitimate duty taxes to the tune of over Rs142 million.

The importers were accordingly apprised of their evasions and were demanded to make immediate payments. The companies after taking consultation time made the payments.

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