KARACHI: The Customs Appellate Tribunal has set aside the order in appeal of Collector (Appeals) that established the charge against Coca Cola Beverages Ltd for unlawfully obtaining benefit of SRO 575(I)/2006 and defrauding the exchequer of an amount of Rs31,030,950.
The Tribunal remanded the matter to the learned Adjudicating Officer to pass a speaking order afresh by independently stating the facts of the case.
According to details of the case, Coca Cola imported two shipments of machinery for filing, closing, sealing or labeling bottles with all accessories and cleared the same by availing unlawful benefit of the exemption of customs duty mentioned at clause (9) of item (I) of notification SRO 575(I)/2006.
Subsequently, it was discovered by the Directorate General of Intelligence and Investigation-FBR that benefit of the above mentioned notification was not available to the machinery imported in this case as the benefit was specifically meant for agro based industry like the processing of vegetables, fruits, dairy products etc. whereas, the machinery imported in this case was meant for production of soft drinks.
The appellant (Coca Cola) submitted that the machinery imported was also used for the filing, closing, sealing or labeling bottles and or canes of fruit juices. Besides, while bottling the soft drink with more than 90percent solid ingredient consists of sugar which is an agricultural product.
Moreover, the certification by Ministry of Foods and Agriculture and Livestock is based on the Agricultural Policy Support Service of Food and Agricultural Policy Support Service of Food and Agriculture Organization of United Nations.
It was also submitted that Customs Authorities have no power or authority to demand income tax under section 148 of Income Tax Ordinance 2001 much after the release of consignment specifically when the assessment for the subject year has been finalized by a competent officer of the income tax under the Ordinance.
The FBR officials with the support of documents, laws and instances submitted that Coca Cola intentionally mis-declared their unit as agro-based industry to avail illegal exemption of duty and taxes and it was in their knowledge that no agricultural produce is being processed in their industry for the imported machinery.